Day 2 notes from Web 2.0 Summit in San Francisco, CA:
[my analysis and notes are in these square brackets.]
“What GoDaddy Knows” by Bob Parson, CEO of Godaddy
- You need to be careful about who to listen to – like analysts who don’t understand basic business.
- www.bobparsons.com – he talked about why they filed for and then withdrew their S1 application to become a public company. It cost him $3M to realize that once he went public he would have to listen to the advice of a lot of people who had no clue about his business.
- “I met a lot of analysts who didn’t know the basics and who focused on short-term financials rather than on good solid business basics.”
- Here’s the lesson: “people love the convenience and speed of transacting business over the internet but when it comes to resolving problems and learning features, people much prefer to deal with other people.” 920 of our people are in customer support. But analysts would ask: when are you going to move your customers to self-service? Ummm. Never.
- Cashflow is WAY more important than paper profits.
- [I agree wholeheartedly with Parsons here and this is one of the top lessons I drill into the startups I work with. For a small company, cashflow is life & breath!!]
- We will have $340M revenue and cash of $50M (?) of cash flow ($1M free cashflow PER WEEK) so I think we’re doing okay.
- When it comes to promoting your company, everybody wants you to fall in line and offend nobody. That’s just the wrong idea. To be different you have to be polarizing. Market analysts asked “when you go public, will you stop being so offensive?” Hah!!!!! So I found an offensive ad agency and forced them to make me an ad with a buxom brunette with Godaddy.com written across her chest. Their ads can be found here. We have been promoting our business with “GoDaddyesque ads” – which is now defined as: “somewhat tasteless and slightly inappropriate.” The biggest mistake you can make is to please everyone – particularly investment analysts. It’s much better to alienate 10% of your audience and have the other 90% pay attention.
- [There have been multiple studies in the automotive industry that seem to show the same thing. Cars that polarized their audience into love/hate like the Beetle, the Mini, and other memorable cars, performed better than the average cars that people couldn’t tell apart from each other. The summary lesson was: build interesting vehicles that people will either love or hate, don’t try to please everybody.]
- we let podcasters create their own ads for us – they’re weird and crazy and even a bit “off” but they’re specific to their audiences so in that way, they were perfect each and every time.
- FINAL MESSAGE: Don’t forget the fundamentals and be VERY careful who you listen to.
- [Dan Pena uses the phrase – “Don’t listen to the morons” where “moron” is defined as anybody who hasn’t done what you’re trying to do – which is most people. I tend to agree with Pena on that point so I appreciated Parson’s talk and thought it was the most grounded back-to-basics talk of the day. Thanks Bob!]