- How to sell “around the product” for more coverage.
- The three necessary types of media exposure.
- Real-world tipping points from the launch of The 4-Hour Workweek
- How to increase website conversion 80%.

It pulls from real case studies, including my own experience and tech start-ups I advise…

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Ferriss – Le Web 2

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Before I had to establish my no-blurb/no-review policy for books due to volume (picture: one day’s mail), I received an e-mail from Rick Smith, the founding CEO of the World 50, one of the most exclusive senior executive networking companies on the planet, with members and contributors like Bono, Francis Ford Coppola, and Phil Knight…

He was interested in having me look at his new book Leap, and I suggested he send it along with the understanding that I might not have the time to read it. To tell the truth, it took me a looong time to bother flipping it open, as the subtitle “How 3 Simple Changes Can Propel Your Career from Good to Great” is–in my opinion–devoid of sex appeal and misleading. It should be subtitled “How to Propel Your Life from Good to Great.” “Career” is not the right word at all.

I finished the book in two sittings.

Finally, here was a book that destroyed the myth of entrepreneur as risk taker, using case studies ranging from start-ups that became Fortune 100 companies, to Live Aid and the Girl Scouts.

One of the most frustrating types of resistance I encounter when talking about lifestyle design or entrepreneurship is a general response along the lines of: “That’s great for you, but I have kids and a mortgage. I’m not a risk-taker.”

The fact of the matter is, most of the uber-successful entrepreneurs I know hedge their bets and place small bets while keeping one foot on secure ground. This often includes testing the waters while employed full-time, as Rick himself did before creating World 50 from nothing. Most of them never gamble in real-life, and a decent percentage don’t invest in the public market (like me) because of the lack of control. Are there mavericks who lay it all on the table for the big win or cataclysmic loss? Sure. But don’t believe, just because the media likes to highlight such daredevils, that they are the majority of kick-ass founders. They aren’t.

Here is an excerpt from Leap that shows just how far off most perceptions of entrepreneurs are.

In this case, we start with Bill Gates.

Putting All the Chips on the Table?

Growing up as I did, with an early interest in business, it was almost impossible not to envy people like Gates, and even measure myself against them. Gates had placed all his chips on the table at one time and walked away richer than Croesus. And me? Well, I’d never even sat down at the table. The way I saw it, I couldn’t.

I graduated from a state university with a stack of loans to repay. No sooner had I begun to dig my way out of personal debt than I met my wife (who failed to bring her own shovel). I remember her father joking with me soon after we got engaged. “Son,” he said, “I want to let you know about Lori’s dowry—you get her student loans and her bad teeth!” He laughed from deep in his chest. I moaned from the same spot. Add to that three children born within five years, and I felt like I was slogging through quicksand.

If only I was in a different position, I used to think. If only I had the courage to take on more risk, like Bill Gates, like lots of others I used to list to myself. And then finally, years later, I realized that that’s not how it happened at all.

William Henry Gates III was born October 28, 1955, in Seattle, Washington, to a family with a rich history in business, politics, and community service. His great-grandfather had been a state legislator and mayor, his grandfather was the vice president of a national bank, and his father was a prominent and very wealthy lawyer.

Because young Bill excelled from his earliest school days, especially in science and math, his parents saw that he was enrolled in prestigious Lakeside Prep, known for its intense academic environment. This was in the late 1960s, when the world of computing was just beginning to peek over the horizon and carried a golden price tag. But no problem. To assure Lakeside’s students wouldn’t be left behind, the school held a fund-raiser and, with the proceeds, rented what it thought would be a year’s worth of time on a computer owned by General Electric.

Bill Gates, his close friend Paul Allen, and a few others torpedoed that plan in a big hurry. They started hanging out in the computer room day and night, learning everything they could, even to the detriment of their other academic obligations. Within a matter of weeks, the expected year’s worth of allotted computer time was gone, but that was no problem either. The school simply struck a new deal, this one with Seattle-based Computer Center Corporation, to get additional computer time at good rates.

That might have worked if young Gates and his friends hadn’t immediately started (a) hacking into CCC’s security system so they could reset the meter that tracked computer use and (b) crashing the system just for fun. They were caught, and the company banned Gates and his cohorts from its computers for several weeks. (The thought of Gates and Allen as the godfathers of a hacking subculture that has cost Microsoft and the world overall hundreds of billions of dollars does indeed boggle the mind.) But again, the exile was only temporary.

CCC’s business was beginning to suffer from the system’s weak security and the frequency with which it crashed—many of the same flaws Gates and his friends had been exploiting—so the company offered the gang a deal: find the bugs and pinpoint the weaknesses in the system, and they could have unlimited use of the computer.

In 1970, Computer Center Corporation ran into financial trouble that would eventually put it out of business, but by then, Gates and Allen had found a new computer home at the University of Washington, where Allen’s father worked. Lakeside also pitched in: during Gates’s junior year at the prep school, the administration offered him a job computerizing the scheduling system. Over the summer, Gates and Allen wrote the program, which coincidentally assured that Gates was assigned to classes with mostly girls—a sequence straight out of a nerd’s revenge movie.

In the fall of 1973, Gates left Seattle to begin his freshman year at Harvard, part of his preprogrammed life plan. Allen, who almost certainly could have been admitted to Harvard along with his pal, chose a different route. He wanted hands-on experience, but the two remained in close contact, often discussing the potential of one day starting a company, and at the end of Gates’s first year at Harvard, Allen moved closer to Boston so they could continue to pursue the still-vague possibilities. Then, in December of Gates’s sophomore year, the vague future began to take on a more exact face.

On a visit to Harvard, Allen stopped at a convenience store and noticed the current issue of Popular Electronics magazine. On the cover, under the title “World’s First Microcomputer Kit to Rival Commercial Models,” was a picture of the Altair 8800. Energized as he had never been, Allen showed the magazine to Gates, and within a few days Gates had called the maker of the computer, Micro Instrumentation Telemetry Systems (MITS), and told them that he had written a BASIC computer program that could be used on the Altair.

This was a lie. Gates and Allen were just trying to gauge interest from the company. But MITS was deep in its own deception: the computer shown on the cover had not been developed yet, and even the prototype had been lost in shipping. Still, the magazine article had generated interest far exceeding expectations, so MITS asked Gates and Allen to come in and demonstrate what they were thinking. Only then did the two set out to write the code. Gates focused on programming while Allen worked on simulating how it would work on an Altair 8800, which they didn’t have.

At the meeting eight weeks later, the program worked perfectly, and MITS arranged a deal to purchase the rights to Gates’s BASIC. Gates would later say that it was at this moment he knew the software market had been born. Yet, despite his growing certainty of the opportunity in front of him, Bill Gates waited another 12 months, until his junior year, to drop out of school and, with Allen, form Micro-Soft. And even then, the company might have amounted to little more than a footnote in the history of software without Bill Gates’s mother.

Long active in community service in the Seattle area, Mary Maxwell Gates became the first female president of the United Way of King County and eventually chair of the executive committee of the national United Way, then one of the most influential nonprofit positions in the world. Serving on the exec committee with her back in the early seventies were, among others, John Akers, who would later become the CEO and chairman of International Business Machines (IBM), and John Opel, who preceded Akers in both positions.

Mary Gates mentioned her son’s new business to Opel, who by many accounts then relayed this information to other top IBM executives. There’s no definitive record of what got said when to whom, but only a few weeks after Mary Gates got the ball rolling, IBM took a huge chance by contracting with Bill Gates’s fledgling company to develop an operating system for the company’s first personal computer. The success of both the IBM PC and the Microsoft Disc Operating System (or MS-DOS)—and the sweetheart deal that let Microsoft retain rights to its software—is what ultimately made Bill Gates the richest man on the planet.

Experience, Not Faith

So, did Bill Gates walk away from one of the world’s most coveted degrees toward an uncertain path? Well, he did ultimately make decisions from which there would be no turning back. That part of the myth is dead on. But was Gates a great risk taker? That’s a more complicated story.

His family’s money and position provided cover for his youthful computing hijinks and helped assure that he would have the best education available. As for the famous Harvard dropout story, he didn’t really. Rather, he took a formal “leave of absence,” a kind of emotional umbilical cord that kept him tied to Harvard long after he had vacated the campus, just in case things didn’t work out. But by then, he had already turned the odds in his favor. After half a decade of dancing with the opportunity, beginning early in high school, he had already covered most of his downside risks. He knew, for example, that he loved the work, and the early Micro-Soft had projects in the pipeline.

What’s more, Gates had validation that both he and Allen were highly competent with this new technology, and he could see that the topside potential was huge. The industry was just emerging, and his mother was in the particularly influential position of head of a United Way executive committee that also included two future CEOs of the world’s dominant computer company. As they say, it’s often not what you know but who your mother knows that can land you billion-dollar contracts.

Far from being one of the world’s great risk takers, Bill Gates might more accurately be thought of as one of the world’s greatest risk mitigators. And in that, he is not alone. The simple fact is that everyone is afraid of risk at some level, including everyone I interviewed for this book. That’s a given of human nature. But the further fact is that Door No. 3 is a myth, whether we’re talking about the myth of Bill Gates or the myths that we privately tell ourselves.

You don’t have to be fearless to make dramatic changes in your life. Transformative change isn’t propelled by raw courage. It’s “sparked” by a series of events that build exposure and experience, both of which help to create asymmetric risk. Through sparking, the upside opportunity is confirmed while downside risk is mitigated. Ultimately, the leap—when it comes—is not one of faith but of experience, even of comfort, just as it was for Gates.

###

Interested in more behind-the-scenes stories? Check out Leap. It can be read in two quick sittings and will get you off your ass to do whatever it is that you aspire to do.

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This pre-China trip includes the below:

- Personal experiences with Y-Combinator, demo days, and pitching new ideas through avenues like YC.

- Five things you can do as a new startup to get your ideas, app, or product in front of influencers.

- Tweaking your website: per-user metrics, cost per acquisition, lifetime value of the customer, etc..

- The iPhone 3GS, talking some about the new updates and then a short comparison with the Palm Pre.

- Learning new languages and reactivating old ones (in this case, Mandarin Chinese).

The above list is taken from Glenn McElhose’s blog, where you can also find links to all of the sites and products mentioned in the show.

Once reading this, you will know more about split-testing than 90%+ of the consultants who get paid to do it…

There are a few advanced concepts, but don’t be intimidated; just use what you can and ignore the rest.

—

Along with Founders Fund (Dave McClure), Garrett Camp (CEO, StumbleUpon), and others, I am an investor in Daily Burn, one of the premier diet and exercise tracking sites.

Following investing, first priorities included introducing them to Jamie Siminoff, who taught them how to purchase the domain name for DailyBurn (Jamie’s method is described here), and look at their conversion rates for the homepage and sign-up process (sign-up flow to completion of sign-up). This post will look at the former, since the latter cannot happen without the former.

The first step was simple: remove paradox of choice issues.

Below is the homepage prior to tweaking. The bottom of the screen–the “fold”–was right around the second user under the running calorie counter.

Click here for larger version.

Offering two options instead of six, for example, can increase sales 300% or more, as seen in the print advertising example of Joe Sugarman from The 4-Hour Workweek. Joe was, at one time, the highest-paid copywriter in the world, and one of his tenets was: fewer options for the consumer.

DailyBurn (DB) was two founders at that point in our conversation, so instead of suggesting time-consuming redesigns, I proposed a few cuts of HTML, temporarily eliminating as much as possible that distracted from the most valuable click: the sign-up button.

Here is the homepage after reducing from 25 above-the-fold options to 5 options and raising the media credibility indicators. Note the removal of a horizontal navigation bar. The “fold” now ends just under the “Featured On”:

The results?

Test 1 Conversion Rates: Original (24.4%), Simplified (29.6%), Observed Improvement (21.1%)
Test 2 Conversion Rates: Original (18.9%), Simplified (22.7%), Observed Improvement (19.8%)

Conclusion: Simplified design improved conversion by an average of 20.45%.

To further optimize the homepage, I then introduced them to Trevor Claiborne on the Google Website Optimizer (GWO) team, as I felt DB would make a compelling before-and-after example for the product. Trevor then introduced DB and me to David Booth at one of GWO’s top integration and testing firms, WebShare Design.

Why not just use Google Analytics?

David will address this in some detail at the end of this post, but here are the three benefits that Google Website Optimizer (GWO) offers over Google Analytics (GA):

- GWO offers integrated statistics – is new version B better by chance or better because it’s better?
- GWO splits traffic – half traffic runs to A, half of traffic runs to B (if A/B test); it also ensures, using cookies, that a returning visitor will see same the same variation
- GWO really tracks visitors – GA works on idea of a session (a person bounces around on the site for a bit and leaves, which is considered a “session”); if they return, that is generally a new session); GWO uses unique visitors (no matter how many visits, they’re counted as one visitor, assuming they don’t delete cookies). On a fundamental level, it’s the difference between visits and visitors. This is critically important for determining if your result in statistically valid, as ten people and ten visits by one person are not the same.

GA can do a lot of what GWO does, but you need to do a lot of custom work and intricate number crunching to make it work.

Enter Google Website Optimizer

The following is a report of the WebShare / Gyminee Website Optimizer landing page test, and includes a description of the test that was run as well as analysis of the test results. This report was authored by David Booth, to whom, and to whose team, DB and I owe a debt of gratitude. I’ve included my (Tim’s) notes in brackets [ ]. Don’t be concerned if some of the graphics are hard to read, as the text explains the findings.

1. Test Description

The landing page identified for this test was identified as:
http://www.gyminee.com

This A/B/C test included three distinct page versions, including the original (control) homepage as well as two variations designed with conversion marketing best practices in mind:

Original (control)

[same as simplified version above]

Variation B

Variation C

2. Test Results and Analysis

During the first run of the experiment the test saw ~7500 unique visitors and just under 2,000 conversions over the course of about 2 weeks. When the experiment was concluded, both variations B and C had outperformed the original version, and specifically Version B left little statistical doubt that it had substantially increased the likelihood that a visitor would convert, or sign up for the Gyminee service.

Larger version here.

We can see from the analysis of the data that Variation B had a large and significant effect on improving conversion rate. The winning version outperformed by the original by 12.7%, with a statistical confidence level of better than 98%. [This means there is less than a 2% likelihood that you would duplicate these results by chance, which can also be called a p-value of <0.02]

Interesting to note is that the B version, which does not have a “take a tour” button, nor horizontal navigation bar, performed a few percentage points better than their current, more polished design which does offer both.

A follow up experiment was then launched in order to provide more data and ensure that these results were repeatable. The follow up experiment was conducted as an A/B experiment between the original and Variation B, and ran for approximately 1 week, over which time almost 6,000 unique visitors and ~1,400 conversions were recorded.

The results of this follow up experiment showed that Variation B outperformed the original by 16.2%, with a statistical confidence level of better than 99%.

Further analysis concludes the following:

* The absolute difference in conversion rates between Variation B and the original during the test was 3.7%.
* During the test, Variation B’s conversion rate was 16.17% greater than that of the Original design.
* The p-value used in these calculations was <0.01, corresponding to a confidence level of >99%.

The Bottom Line: The results of this experiment were extremely successful.

Putting these test results into plain terms in another way, there is a 98% chance that the true difference between the conversion rates of these versions is between 7.8% (1.8% raw) and 24.5% (5.6% raw).

3. Supporting Analysis (A/B/C Test Only)

A Pearson Chi Square test answers the question: “Out of all the combinations, is any one combination better than another?”

The values here tell us that with >95% confidence, at least one variation was statistically better than another. This further validates the conclusions drawn by Google Website Optimizer.

Was Version C statistically better than the Original?

At an acceptable level of statistical confidence, it was not. However, had we continued to run this test for a longer time period, it is very likely that we would have eventually proven that it was indeed better than the original with >95% statistical confidence. The estimated sample size needed to prove this would have been an additional ~21,000 unique visitors (~7,000 for each variation).

The table below shows you the various sample sizes you would need at different confidence levels to show different relative improvements [Tim: this is my favorite table in this analysis]:

Was Version B statistically better than Version C?

We can be approximately 94.1% certain that Version B is also better than Version C. After applying a Bonferroni correction for the test set, we would still be >90% confident that Version B is better than Version C. The p-value for these calculations is 0.059.

Recommendations:

As Version C did test well, and we believe would have eventually proven itself better than the Original, it is very likely that certain elements of Version C resonated well with visitors to the Gyminee website.

To continue down this path of testing, we would recommend using the winning Version B as a test page for a multivariate experiment. In this experiment, we would suggest testing certain page elements from Version C in the framework of Version B.

Additionally, as testing only covered the homepage, we would highly suggest performing testing on the form found at:
https://www.dailyburn.com/signup

Many concepts such as calls to action, layout, design, contrast, point of action assurances, forms & error handling, and more could be used to increase the likelihood that a user enters information and submits the form.

Lastly, it may be beneficial to begin running tests where the conversion is measured as the paid upgrade. As this conversion rate is much lower than the free sign-up, it should be understood that all other things held equal these tests could take significantly longer to run to completion.

Google Website Optimizer vs. Google Analytics – Parting Thoughts

From David Booth, whose team performed and compiled the above:

1) GA doesn’t have any capability of doing statistical analysis to compare two groups (and it’s not meant to), but it can collect all the data you would need with the best of them. GWO records data very differently and is not meant as (and should never be used as) an analytics package. It runs the stats for you and tells you when you have a statistically significant difference between variations/combinations, but is limited to a single goal or test.

2) The real beauty is to integrate GWO with GA – this gives you the best of both worlds by letting each tool do what they were built to do. You can use GWO to create the test, split traffic, and crunch the numbers for your primary goal, and you can then pull the data out of GA on anything you have configured and run the numbers in a stats package like JMP or Minitab. A very useful case for this is an ecommerce purchase: GWO can tell you if one version / combination was more likely to get an ecommerce purchase (binary – they either purchase or they don’t), while GA data can record things like revenue, and running a different statistical analysis can tell you if one version was more likely to make you more money.

###

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How to Tim Ferriss Your Love Life

The above video is one of my favorite presentations I’ve given in 2009, an opening keynote at the last San Francisco WordCamp, titled “How to Blog without Killing Yourself”. More than 700 people from 32 countries were in attendance, which made for a wonderful experience.

The original title was “Scalable Blogging Behaviors: How to Grow from 1 to 1,000,000 Readers” and the content did not change.

In the above presentation, including detailed screenshots, I cover…

- Why I blog
- How I blog and select best practices
- Frequency and tools — best times and days to post
- Blogging myths and how to harness data for better results
- Testing design and surprising findings that can be copied
- How I address comments and community building
- How I write and research for good social media response
- 20 minutes of audience Q&A on Twitter, branding, outsourcing, and much more

I hope you enjoy it as much as I enjoyed giving it.

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