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A poster for the interactive movie "Turbulence"

“All filmmaking is based on a lie,” says Israeli Professor Nitzan Ben-Shaul. “In the narrative structure of a movie, it appears that there is only one possible ending – that the way it’s presented is the way it has to be. But in life there are always options.”

To demonstrate his argument, Ben-Shaul of the Film and Television Department at Tel Aviv University has created the world’s first, fully interactive feature film where the viewer gets to decide at various points, in real time, how the action will progress. “It’s nothing short of revolutionary,” he says. “It has the possibility of turning every one of us into potential film directors.”

Ben-Shaul is not a technologist – he teaches classes in cinema studies at Tel Aviv University and has written several books including Mythical Expressions of Siege in Israeli Films and Hyper-Narrative Interactive Cinema: Problems and Solution. So to create his interactive movie, he partnered with Guy Avneyon who built a sophisticated patent-pending movie editor and standalone player.

The technology is still under construction, as is the company. Turbulence (also the name of Ben-Shaul’s interactive film) is just now being incorporated and seeking angel investment. For Ben-Shaul, that’s less important. His focus is the process of thinking through the making of an interactive movie.

Ben-Shaul points to the Gwyneth Paltrow hit Sliding Doors which presented two alternative paths that intersected, diverged and eventually arrived at a single conclusion.

Turbulence the film is similar, except that the viewer controls the points of departure. The 83-minute suspense/thriller is about three friends who meet by chance in New York 20 years after they participated in a demonstration in Israel and were arrested. At the time, the police pitted the three against each other, which led to accusations of betrayal. There is also a love story that is rekindled.

The interaction takes the form of “hot spots” that glow when the viewer can make a choice. At one point, for example, one of the Israelis has written a message to his lover on his cell phone. The viewer can click “Send” or “Cancel”. If the viewer hesitates too long, the action continues according to a pre-determined narrative path.

Unlike previous interactive attempts, the transitions in Turbulence are seamless, which means there is no point where the movie stops and a flashing button appears with big icons to click. Once a choice is made, the film immediately cuts to a new scene. “That’s the language of movies,” Ben-Shaul explains. “There could be 4,000 cuts in a film, but if you cut on motion, people don’t see the transition, they just see the flow.”

While viewers make choices throughout the viewing experience, the film regularly returns to the main narrative. This means the writers don’t have to create 10 entirely different scripts (although in Turbulence there are several alternate endings).

Ben-Shaul is adamant that interactivity is not a gimmick – like the first attempts at 3D in the 1950s and 1960s. But he warns that interactive films must be carefully planned to avoid the errors of more primitive experiments in the past.

These mistakes include what he refers to as the ‘computerization trap’. “Computers can generate endless possibilities, but that doesn’t help the viewer in terms of drama. It interests computers, but not humans!” he says. Good interactive drama, he adds, is actually about “option restriction”.

Interactive movie producers should also not try to emulate the gaming world, he cautions. “It’s not about scoring and puzzle-solving,” Ben-Shaul says. “It’s about creating real, life-like situations.”

Turbulence can currently be viewed on either a Mac or PC. But Ben-Shaul is most excited about the red-hot Apple iPad. With its touch screen and media consumption emphasis, “it’s the perfect device. The iPad is a main target,” Ben-Shaul says.

Behind the scenes at Turbulence

The technological secret behind the film comprises an editor that will be familiar to anyone who’s ever created a movie, with a timeline, audio control, and multiple tracks. There are various additions such as a library of clips and hot spots that can be easily inserted.

The aim is to sell a standalone version as well as plug-ins for professional editing systems such as Final Cut Pro, Adobe Premiere and Avid. Ben-Shaul and his team are also developing a scriptwriting tool that will ease the creation of a hyper-narrative.

Both grassroots and professional filmmakers should be empowered. “We’re not aiming toward automatic storytelling,” he says. “That’s like robots today, which are so far off from what humans can do.”

Turbulence isn’t the only software company making interactive movies. Israeli alternative rock sensation Yoni Bloch owns a company called Interlude, which is moving in the same direction. Earlier this year, Interlude produced a music video by pop singer Andy Grammar that includes seamless interactivity. YouTube also has its own very simple interactive functionality.

Ben-Shaul acknowledges the competition but says his system is further along, not to mention patented. Turbulence also gives viewers the ability to actually move an object on screen (for example, to slide a letter out of a drawer) rather than just click or touch a point on the screen.

The idea for Turbulence was hatched in response to one of Ben-Shaul’s courses about the “siege mentality in Israeli cinema.” The professor explains: “Israeli movies are very close-minded. It comes from the society and the political situation; from war and ethnic tensions. Interactivity and giving people options is the opposite.”

Interactive movies are primarily intended for an audience of one. But Ben-Shaul says it’s possible for an entire audience to get in on the fun. Turbulence was premiered at the Berkeley Film Festival this year where it won the prize for “best experimental feature.”

In a demonstration of the interactivity at the showing, Ben-Shaul’s wife (who also works at the company) canvassed the audience at each decision point. Ben-Shaul then clicked the viewer’s choice from his computer backstage.

In the future, Ben-Shaul would like to build a system where everyone in the audience has a controller, allowing the movie to move in the direction dictated by a majority vote. In the meantime, Ben-Shaul says the showing at Berkeley was “very successful. People loved it.”

Ben-Shaul hopes to show Turbulence in Israel, perhaps at one of the country’s Cinematheques, though nothing has been finalized yet. For now, interactive movie fans will have to visit Ben-Shaul in his office at Tel Aviv University or watch a TV news clip and interview with Ben-Shaul on Israel’s Channel 10 which provides a hint of the richness of interactive moviemaking.

Beyond entertainment, interactive video might even help to solve the Israeli-Palestinian conflict, Ben-Shaul suggests. Interactivity, he says, “develops thinking for people who are in what seems like an intractable conflict. It can be a real therapeutic tool.”

This article originally appeared on Israel21c.

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From ‘Facebook-like’ buttons to embedded YouTube videos and interactive chat, it’s rare to find a website these days that doesn’t beckon you to share your thoughts with everyone you’re connected to.

But for website owners, adding all that social interaction takes time and, if you’re not a programmer, copying and pasting esoteric HTML and JavaScript code into your site’s header or widget boxes can be a technically daunting task.

Wibiya from Israel is a hot start-up that aims to streamline the process. The company, which raised $2 million a few months back from Primera Capital and counts as one of its seed investors the ubiquitous Israeli angel and Internet guru Yossi Vardi, has built a popular toolbar that consolidates dozens of social media functions into a single space-saving strip at the bottom of your website. Wibiya’s aim is to make adding new apps and functionality as easy as a one-click install.

Among the useful Web functions that Wibiya incorporates are the ability to instantly “like” a company’s fan page on Facebook and write on its Wall without leaving the website you’re looking at; see how many other people are online and looking at the same page you are; translate the site into one of more than 40 languages; and chat with your social media friends directly from within the Wibiya bar.

Taking a cue from Apple, Wibiya has created its own app ecosystem, allowing third party developers to add their Web products to the toolbar at no cost. This has led to an eclectic range of functionality built by enthusiastic supporters that Wibiya co-founder and CEO Dror Cedar never expected.

For example, there’s an app that allows website owners to pop-up targeted messages filtered to the specific person visiting. This could be based on the page a visitor is currently viewing (say, a message about the Middle East peace process) or could kick in only after a user has been on at least five pages of the site.

Another popular app automatically turns all links on a website into “affiliate ads.” If a visitor to the site buys a product via that link, the website publisher keeps 70 percent of the revenue. Amazon is one of 25,000 merchants included in the program.

Want to raise money? Wibiya has apps for that, too. One puts a link on the toolbar to your organization’s Causes page on Facebook; another allows visitors to use PayPal to make donations a snap.

Wibiya is on the verge of releasing a developer website with an open API (Application Programming Interface) to make it even easier for developers to build Wibiya-compatible apps, Cedar says.

For publishers, Wibiya provides detailed analytics showing, for example, how many clicks the toolbar is receiving or how many Twitter updates have been tweeted via the Wibiya service. The toolbar itself is tiny – only 17K. And it plays nicely with all the leading blogging platforms, including WordPress, Blogger and Ning.

Since the toolbar is free to both third party developers and publishers, how does Wibiya intend to make money? “We work with high end publishers including Philly.com, Playboy and even the (confectionery vendor) Jellybelly.com on either a revenue-share model or one that’s based on performance,” Cedar explains. “We deal with them directly to build a tailor-made solution.”

For everyone else – the so-called “long tail” of web publishers, as Cedar describes them – Wibiya will soon introduce premium paid packages with “for example, the ability to integrate your own advertisements into the toolbar.”

Cedar didn’t start out with the intention to build Wibiya. He and his co-founders Daniel Tal and Avi Smila were working on a travel-related product called Joongle. “If you wanted to search for a flight from Tel Aviv to New York, our toolbar would give you the top 10 websites, like Kayak and Priceline, with flights to that country,” Cedar says. “Then each time you clicked, it would do the search for you.”

But when the team showed the product, potential clients kept saying “wouldn’t it be great to have another button that would show my most recent posts, or one that displays photos,” Cedar recounts. Realizing that there was an even bigger market beyond travel, the company quickly switched gears. “After the 10th time, we said okay. The demand came from the publishers themselves. People really wanted it.”

One concern we had was whether creating yet another way to share information across the Web would cause alarm, much in the way that Facebook has taken a drumming recently for its fungible privacy policies. Moreover, will users be paranoid that Wibiya may follow them around, tracking what they’re doing on the Web?

Cedar assures us that Wibiya is just “an enabler. We don’t do anything automatically and we don’t save your information. We’re completely transparent.” Still, Wibiya may have to be more proactive in spelling things out to put visitors at their ease.

As for the name Wibiya, it’s a play on words – a “wib” is a widget bar. “We didn’t like ‘widget,’ ” Cedar says.”That implies a static component.”

Indeed, with Wibiya’s functionality, financing and future prospects, the company is anything but static.

This article originally appeared on the Israel21c website.

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Multitasking in Tel Aviv

by Brian Blum on July 14, 2010

in Entrepreneurs,Social Media

From right to left: me, Benjy Lovitt, Lior Manor and his iPad

From right to left: me, Benjy Lovitt, Lior Manor and his iPad

A recent episode of the NPR program Science Friday featured an interview with Clifford Nass, the author of the forthcoming book “The Man Who Lied to His Laptop,” about whether human beings are truly able to multitask. His conclusion: not really.

Nass says that we have the illusion of multitasking, but in reality, we are switching from one task to another so quickly it seems like we’re doing more than one thing at once. The problem is that, every time we switch, there is a micro-millisecond delay and that teeny tiny pause causes us to be less productive even when we feel we’re sailing high.

I had a chance to experience the woes of obsessive multitasking first hand earlier this week when I attended the 140 Characters conference in Tel Aviv. The event, produced all over the world – including Israel – by social media and VoIP guru Jeff Pulver, is dedicated to exploring the “real time web” (a fancy way of referring to web and mobile services that let you follow a stream of never ending status updates as they happen).

As I sat in the lecture hall at Tel Aviv’s Afeka College listening to the lectures (which, in true short attention span spirit, were allotted on average no more than 10-15 minutes each), I had my laptop with me open to TweetDeck, a Twitter desktop client where I could follow along as much of the room was “live tweeting” what was happening on stage; Gmail – which I checked incessantly while simultaneously chatting with people both in and outside of the room itself; Facebook – of course (just for fun); an Excel spreadsheet of all the attendees sent by Pulver – so I could scope out who to approach during the networking breaks; a live video stream of the conference itself (with a slight time delay); and Evernote – a application I used to take notes on my laptop which were then automatically synched to my home computer, iPhone and (when I get one) iPad.

And if the lectures ever got boring, I’d brought with me a copy of an article I was working on that needed an edit.

By the time the conference was over, I actually breathed a sigh of relief as I finally caught a break in the long drive back to Jerusalem.

Not so for Michael Matias, a 14-year-old who took the stage for his 10 minutes of fame to tell us about “growing up in real-time.” My multitasking experience is his daily reality. He adds to the mix doing homework while simultaneously watching TV on his laptop (42-inch flat screens are so 2006) and playing online chess and poker. He says he spends at least 5 hours a day online, not including class when he often uses the school computers. When he needs to study, it’s as likely to be via video conference than an in-person cram session.

Matias is a relative pauper when it comes to Facebook friends – he only has 300 and says he only accepts someone he’s met in person. Although he does spend time with people in the so-called “real world,” he told the audience that in some ways he actually prefers his online world. “It brings me closer to them. I can hang out with more than one person at the same time.” No, he doesn’t think he spends too much time online and, when asked which of his real-time tools he’d give up if necessary, he quipped that he couldn’t. “It would be like choosing between my mom and my dad.”

The rest of the conference was interesting (if less shocking). Israeli comedian Lior Manor did “Twitter magic” – he asked the audience to tweet a number between one and 140 (get it, the 140 character maximum Twitter imposes), then he picked a number from his real-time Twitter stream and did a card trick in person – no different than what magicians have been doing for years except that he used an iPad to display the input.

Yossi Taguri talked about his latest startup Fiidme which lets you “share your satisfaction” about food. “If you’re in a restaurant,” he explained, “you can ask your friends what’s good on the menu and they’ll tweet you their recommendations.” With a grin, he added that they also “thought it would help us get free lunches.” His business partner Lior commented that being in a restaurant “without wireless is very frustrating.” (Whatever happened to the romantic candlelit dinner?)

There was also a session on using Twitter to do good in the world: an Israeli company called JustCoz lets you “donate” your Twitter status to organizations to raise awareness about their causes. In just under a month online, 100 organizations have signed up for the free service, gathering 1,200 supporters which provide re-tweeting access to more than a million people.

Now that’s a great idea from the real time web…if we can actually take a moment away from our incessant multitasking to participate.

Oh, and about that article I was writing? I guess I succeeded because you’re reading it now.

This article was originally posted at Israelity last week immediately following the 140 conference.

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PokeTalk Woman on Phone

Do blondes have more fun on PokeTalk?

In January 2009, I wrote an article for Israel21c about PokeTalk, a then new startup offering free VoIP calls using regular phone lines. I bumped into the company’s founders Shai Genish and Boaz Bahar Wednesday night at a meeting of the TechAviv Founder’s Forum and I thought I’d share the original article with you here on the Blum Interactive Media along with some company updates.

The 2009 article was topical, coming in the midst of Israel’s Operation Cast Lead operation in Gaza. Since then, the company has expanded its offerings to include paid calls that can last longer than the free service’s maximum 10 minutes duration, along with many other cool features such as web callback and analytics.

But I also heard some disturbing news: PokeTalk has been hit by a significant amount of fraud where unscrupulous hackers have redirected calls, resulting in tens of thousands of dollars in charges for PokeTalk. The situation has gotten so bad that the company is now investing in building its own security software which will also be available to other VoIP services and not just PokeTalk.

Shai and Boaz are both very sincere and enthusiastic Israel entrepreneurs who I like a lot. So, here’s the original article without changes.

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Residents of the southern part of Israel in range of missiles from Gaza can now make phone calls up to 30 minutes to their friends and relatives entirely for free, thanks to a new Israeli startup called PokeTalk. The service, which is already operational in 60 countries around the world, is good for any calls between two phone numbers in Israel’s 08 area code.

PokeTalk has been flying high since its launch three months ago. The company, founded by two 25-year-olds in Tel Aviv – Shai Genish and Boaz Bahar – has signed up 70,000 users nearly entirely on word of mouth and viral marketing alone.

The service, like fellow Israeli-founded company Jajah, uses voice-over-IP to connect regular phones, not just two computers.

As with any good idea, though, there’s a catch: calls are limited to 10 minutes. The promotion on Israel’s front lines triples that amount.

Ten minutes (or even 30) may seem like a deal breaker but, says Genish, the average call placed is only two minutes and 40 seconds. And 70 percent of calls from a mobile phone are a mere 80 seconds. “Other than for business calls, 10 minutes is usually more than enough.”

PokeTalk is essentially an automated version of the call back systems that were once popular in Israel as a way of saving money. But rather than calling a certain phone number, with PokeTalk you enter your number and the number you want to call on the PokeTalk site. A few seconds later, your phone rings. You pick up and PokeTalk places the call.

I took a test drive and the quality is quite good – certainly on a par with other voice-over-IP systems like Vonage, Gizmo5 or even Skype.

So how can PokeTalk offer even 10 minutes of talk time for free? On-site advertising. Since you’re required to initiate your call from the web, PokeTalk can show you advertisements on screen. That’s a whole lot less annoying than some other free phone systems that put 10-second audio ads before a call is connected.

After only three months in operation, PokeTalk is far from profitable – only 50 percent of calls are covered by ad revenue – but the small eight-person company has raised $1.25 million from Maayan Ventures and private investors. Genish says he hopes to be in the black by the end of 2009.

PokeTalk calls can originate from 13 countries – including Israel, the US, Canada and Germany, though notably not the UK – and can be connected to 60 nations, from Kazakhstan to New Zealand. Mobile phones are supported in nine countries.

Of PokeTalk’s 70,000 users, 40,000 are in Israel. A viral “refer a friend” program has been successful at recruiting new users too (if your friend signs up, you receive an extra 10 minutes on your next call).

On an average day, up to 7,000 users login and make close to 18,000 calls.

The company has been featured on Israel’s Channel 10 news and in The Marker and Globes business supplements. Genish estimates that a series of interviews that appeared in the “VoIP Guides” online publication led to some 10,000 new users.

The company’s current promotion in the south of Israel probably won’t generate a significant number of new customers, but it’s a noble gesture that helps local residents in tough times.

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A Neat Trick for Scheduling Meetings

by Brian Blum on March 21, 2010

in Israel,Products

neatcalltNew startups have the best shot at success when they address a “pain point” – an issue that causes discomfort, annoyance or even loss of business.

Tel Aviv-based Neatcall targets just such a situation, one that will be immediately familiar to anyone who’s ever tried to schedule a meeting with two or more participants: Seemingly endless phone or email tag.

Neatcall’s solution is to marry mobile technology with a seemingly simple voting system. But as with any good start up, there’s a lot more under the hood.

“On average, setting up a meeting with more than two participants is a process that can take between half to a whole working day,” Neatcall CEO Dan Benger says.

We’ve all been there. A meeting initiator calls or sends out a message to the people who are required to attend. The respondents reply with their availability and the initiator then tries to find a time that works for everyone. Automated services, such as Microsoft Exchange, can speed things up, but they don’t eliminate the essential “trial and error” nature of a task that often seems to stretch on forever, especially if not all the participants are sitting at their computers at the moment the message is sent.

This is how it works: The initiator selects several free time slots from his or her calendar. A message is sent out to all attendees who then vote on which slots work best for them, in their order of preference. The Neatcall system tallies up the votes and shoots back the optimal time. If all agree, Neatcall books the meeting, sends out a confirmation notice, and follows up closer to the meeting’s actual time.

So far, the system is neat, so to speak, but not a major breakthrough. But Neatcall has another trick up its digital sleeve. It sends out its messages via multiple mobile formats – email, SMS, WAP, instant message or via the browser to a smart device like the iPhone or Palm Pre. Even on a basic phone, people can vote by simply responding to an SMS – “send S to select the first date, T for the second date” and so on.

Neatcall also offers location management so that scheduling requests are sent to attendees in the appropriate time zone. For iPhone users, there’s an app available from the Apple App Store.

It’s no surprise that Benger was the man to recognize the need for Neatcall, seeing as he previously served as VP of international marketing and business development at web and video conference call solutions company Interwise. Customers were satisfied with the quality of the conference calls, he says, but they frequently complained about how difficult it was to set up those calls. Interwise was purchased by AT&T in 2007 for $121 million.

In addition to its innovative approach to scheduling meetings, Neatcall also offers to conduct your meetings for you, with a package that comprises chat, audio and video conferencing from a single unified site.

While Neatcall’s basic innovation should help to solve an existing problem, it may be difficult for the company to make headway with the rest of its package, given that the market is already saturated with conferencing companies such as Webex and GoToMeeting which lead the space.

Benger is hoping that the fact that Neatcall’s service is entirely browser-based, unlike competing software which requires users to download an application, will make the difference.

Neatcall sells its service directly to companies – Benger says there are several deals in the pipeline but won’t reveal their names – for up to $12 per user per month, with the price depending on whether Neatcall is handling just the scheduling or total conferencing delivery. About 200 corporate users in Israel, Europe, Australia and the US have already tried the system.

With only four employees, a few contractors and an investment of $500,000 from the Netanya-based incubator Targetech and Israel’s Chief Scientist’s Office, Neatcall is small, but looking to grow.

When I set up my interview with Benger, he used Neatcall to handle the scheduling. I received confirmation and reminders via both email SMS. And that was just, well (wait for it)… really neat.

I wrote this article last year for Israel21c – here’s the link.

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Great Deals or Hidden Scam?

by Brian Blum on February 21, 2010

in Entrepreneurs,Media,Products,Startups

Free Israel logo 2The courts have ruled that the service is legal, but it still leaves a muddled taste in my mouth. I’m talking about Free.co.il, a popular Israeli auction site that works more like the Lotto than eBay.

You can’t help but be drawn in by Free.co.il’s home page which promises a Sony Playstation for NIS 99 ($26), a MacBook Air for NIS 299 ($79), and even a brand new Mazda 3 for a steal at only NIS 899 ($237). Who wouldn’t want to play with deals like these?

At first, it would be hard to distinguish Free.co.il from a traditional eBay-style auction site: you place your bids on items for sale and the highest bidder within the auction’s time frame wins. Unlike eBay, though, you have to pay for your bids. The cost of each bid varies; for the MacBook, it’s NIS 20 (about $5). It’s higher for bigger ticket items.

So, let’s say you bid 20 times to win that MacBook. You’ll pay NIS 20 x 20 or NIS 400 ($105). Then you pay the price of the unit, plus shipping of NIS 75 ($20) – written in tiny letters on a separate page you have to click to see. Your total cost: NIS 774 ($206). That’s still way less than the retail price of NIS 8,899 ($2,400) at Apple’s Tel Aviv outlet, but it’s not the NIS 299 that was initially advertised.

And what if you don’t win? Then you lose the NIS 400 entirely. That’s how Free.co.il can offer such low prices.

Still, if you place your bids right (and there is a whole section on “bidding strategies” on the site), and you’re willing to stick with it and spend hours aggressively placing last minute bets, you will win eventually (hopefully for an item you actually want). So, even if you wind up spending NIS 2,000 bidding on several items before winning one that’s valued at NIS 10,000, you’re still getting the product at an 80% discount.

There’s one other trick Free.co.il has up its digital sleeve. If two people bid the same amount, both bids are canceled. That means that the highest “unique” bid wins. You can see who’s placing what bids, their initials and even where they live, but not the amount they’re spending. So you never really know if your bid is being burned or not.

Free.co.il is entirely in Hebrew, but there’s a thriving market of overseas competitors. Is this a good business? Investors seem to think so. One of Free.co.il’s rivals, Swoopo, has raised an astonishing $14 million. Another – BigDeal – has a $4 million war chest and some Silicon Valley luminaries at the helm.

It’s certainly compelling – who wouldn’t want an iPhone at a tenth of the retail price – though I don’t think I’d have the stomach for it (I usually chicken out and click the “Buy it Now” button on eBay). And it peeves me that Free.co.il buries those hefty shipping fees in hard-to-find small print – it makes me wonder what else are they hiding.

But if you’re willing to play by the rules, and you enjoy the thrill of the game, Free.co.il could be the 21st century version of “The Price is Right.” All we need now is our own Israeli version of Bob Barker.

This article originally appeared on the Israelity blog.

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Sweatshops and Social Justice

by Brian Blum on February 3, 2010

in Employment,Entrepreneurs

sweatshopI’ve apparently started running a sweatshop. I didn’t mean to. It’s just what the market seems willing to bear.

It began with a small task. I wanted to move the content on my personal blog from one platform to another. Over the last 7 years, I’ve written well over 400 articles for This Normal Life.

I estimated that it would take between 3-5 minutes per post to transfer. That involved copying and pasting, adding categories and tags, and downloading and then re-uploading any images.

I was able to cut some of that time off by exporting from the original site into an XML format, but the process was flaky and many posts were just dropped indiscriminately.

I didn’t relish the idea of spending hours at a mind-numbing task. So I set out to find a “virtual assistant” who could do the job for me. I initially thought about posting an ad on eLance or oDesk but I really preferred to give it to someone local.

I was thinking that it would be a perfect job for a high school student, so I priced it at NIS 20 (about $5.00) an hour. The candidate who won the job was not a teenager, though. She was a mature adult whose hours working in the office of a major Jewish Federation had just been cut.

I felt terrible about employing someone so competent for such a paltry sum. But she’d accepted the offer willingly.

A week later, I put out another ad, this time for voice talent to record a number of dialogues for a language learning project I was hired to produce. I offered 50% more that my first go – NIS 30 ($8)/hour for about 3 hours of work. I was inundated by calls and emails – close to 50 within two days – including semi-professional actors, singers and performers with TV and radio experience. No one was balking at the low pay even though a proper rate for this kind of work would be 3-4 times higher.

The whole issue has given me pause for concern. Is the economy so bad that people are willing to settle for so little? And is it right for me to offer such rates?

And yet, if I outsourced the work to India or Malaysia, I would be a fool to pay Western salaries. And indeed, I recently had a logo designed via the Internet for the ridiculously low price of $30. A highly qualified local designer quoted me $700 for full branding.

The sweatshops where many of our grandparents worked on the Lower East Side of New York could get away with near slave labor prices, but that wasn’t good for the workers, nor would I say for the souls of their employers. A socially just policy should have the boss paying a fair rate, regardless of what the market can bear.

I’ll probably send my artwork requirements overseas again. But when it comes to my virtual assistant, I’m doubling her pay next time. There’s more to business than bragging over a bargain.

A shorter version of this article originally appeared on the Israelity blog.

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When I spoke with Amit Elisha of OutBrain a few weeks ago, we discussed the company’s software release strategy.

OutBrain operates under what’s considered the new Gospel of product development: get a basic version out there with a minimum number of features and maybe even a few known bugs, make it free, then let your users flood you with feedback so you can iterate and build your next version better.

Continue this process until you climb out of alpha into beta and eventually to a fully functional product (which, to follow Google’s prolonged beta label example, could take many years).

Jason Cohen

Jason Cohen

An interesting article by Jason Cohen, the founder of Smart Bear Software, on the On Startups blog challenges this methodology. Releasing too early and relying on the power of the crowd, he suggests, can potentially harm your reputation and potentially kill your product.

He uses the iPod as an example. Apple designed its game changing music device far away from the public eye. If it had been part of a release-and-iterate cycle, he says, could Apple possibly have gotten away with building a battery-powered device where you can’t change the battery! Or one without an FM radio (which was already included in many early iPod competitors – it’s finally been added to the new iPod Nano years later).

“Disruptive products by definition cannot be built by consensus,” he writes. “’’Design by committee’ is a sure-fire way to get mediocre design.”

Cohen presents additional points to back up his hypothesis.

  • Startups often invoke the 80/20 rule that says you can implement just 20% of your features because that’s what 80% of your users want anyway. But Cohen says that doesn’t apply the way you think it does. The truth is that 80% of your customers use a different 20% from each other. So you need to push out more features, not less, to satisfy a larger cross-section.
  • Twitter is often trotted out as a classic example of “get it out fast,” but it’s a bad one. While the service quickly gained a large and rabid following, it has been suffering from backend scalability problems ever since. Twitter has sufficient capital and some super-smart engineers who can work around the clock to fix what ails it, but your two-person startup may not be so lucky if you release before you’re ready.
  • Customers don’t actually know what they want. “They’re much better at describing what’s difficult in their life, what frustrates them, or what takes up a lot of their time,” Cohen writes. But did anyone ever say “gee, I wish that I could send a video ringtone to my friends” (this is an idea that only a couple of smart entrepreneurs could think up).

Over the last 20 years, I’ve built or been a part of a team building a number of products. When I was working at CD-ROM developer Mindscape, I got into a huge fight with my boss over when to release a product that I had been toiling over for the better part of a year. The company had sales orders from its distributors, but I knew the product was still buggy and wasn’t ready.

Even worse, this was in the pre-Internet days; once the CD was shipped, it would take a new budget allocation to fix it, which I knew would be hard to obtain. When I was essentially given a choice – ship the product or pack your bags – I opted for prudence.

More recently, though, I fell victim to my own emotional involvement with a product that would have done better to release early and iterate. I got so caught up in getting it right, I didn’t realize that the business model was wrong, something that would have become apparent if users had a chance to kick the tires.

Two other examples from opposite poles:

1) Craigslist – if ever there was a bottom up, build it fast and they will come approach to web development, Craigslist would be the poster child. Of course, Craigslist got stuck after the first round of iteration – the site hasn’t been functionally updated for years, but it works and no one’s complaining.

2) The Apple Newton – this is not so much an example of slapped together product development, but it nevertheless demonstrates how a bad start can sink a product. The world’s first PDA came out in the early 1990s. It was a revolutionary product but “the handwriting recognition sucked and there weren’t a lot of apps,” Cohen explains. The public’s response: “it doesn’t do a lot and what it does do doesn’t work well.” By the time Apple addressed its myriad problems, it was too late.

Ultimately, there’s no clear-cut approach. I tend to lean towards the “you’ve got only one chance to make a first impression” direction but, as a number of comments on Cohen’s blog post argued, not every company is Apple.

“They have the money and market control needed to focus on building a complete product at the expense of time to market,” writes Paul May. “Few startups have this luxury.”

What do you think? Which direction is more likely to lead to success…or kill a company? I’d love to hear from you in the comments to this post.

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