I was lucky enough to get to act as an advisor at USV on Saturday as part of Gary Chou’s great weekend program that allows startups to get three perspectives from field experts on the products they are planning to release.  I say lucky enough because as Matt Smith of Shutterstock pointed out, being an advisor forces you to articulate your perspective.

Which was actually a big part of my advice to startups: have a perspective.  All three of the products I was assigned to review were taking giant stabs at a market, building platforms on an internet that is increasingly becoming about niches.  If you don’t know what you want your users to do, chances are they won’t either.  They were almost all trying to be everything to everyone, and in each case it hampered them from actually launching.

You see it in the UX.  When you’re trying to be everything, users tend to get just dumped into results or dashboards.  If there isn’t a wizard flow, at least for the first time user, than you probably haven’t articulated a clear enough vision.  Even Twitter, the great unwashed platform, onboards users by trying to get them to follow people initially.  “Oh, this is a thing for following what people say” leads to “Oh, and people will follow me and I can say things too”.  Even in the most indefinite product there is, still you find a coherent perspective.

You see it in engineering.  Every engineer everywhere should force their product team to articulate a coherent product perspective and refuse to build new features until they do.  Otherwise, you will either end up building the entire world or you’ll start building the entire world and then watch them cut code as they drop features to pivot into having a narrative.  Engineering time is the most valuable, most expensive time a startup spends, and running down blind alleys is the product team’s fault.

You see it in bizdev.  Having a business model isn’t enough: you need to know who your customer is and what they want.  If you aren’t meeting their need and either taking their perspective or incorporating their needs into your perspective, you will produce a product that no one will pay for and that does nothing.  The greatest fear of every bizdev person, and therefore the thing to fight hardest against, is that they will build a product that everyone “likes” and no one uses.

While I’ve never been big on Powerpoint decks, I do like elevator pitches.  And it is precisely because of the requirement of perspective: a very quick summary forces people to say “what does my product do?” and provide a coherent answer.  It is tremendously hard to face a blank page and come up with something, and dramatically easier to respond to a question, and yet we always think of the marketing of a product from the blank perspective.  The very first expectation I have as a user after learning the name of something is what it does.  Is it a game?  A utility?  Again, you can pull up examples where it is tough to do this, but those are mostly just foils: a large majority of products are defined by their function.

Think of your product like a person.  My name is BRAND and I…?  Now fill it in.

The New York Times recently wrote about variable price shopping: the idea that some grocery stores are starting to think about changing the price of items depending on your individual purchase patterns.  And this is a spectacularly bad idea.

I’ve spoken in the media about the psychological consequences of dynamic pricing before, particularly in relation to Groupon and other deal sites.  The basic argument from stores is this: pricing in capitalism is built on a demand curve – the more you want it, the more you will pay – so by moving from understand the demands of the groups to the demands of the individual will allow for a closer fit to the true underlying demand.  It is a perfectly rational economic argument, and one that was used with Groupon: if your current demand is low, make it cheaper so that people sample your product, which increases their demand, which allows you to charge them the non-discounted price next time.

The problem is that it is a spectacularly bad psychological argument (which is why economists created behavioral economics in the first place).  Our willingness to pay for something depends not just on our absolute need for it, but also our understanding of it in a complex web of other prices and other motivations, including powerful anchors.  Which many merchants using Groupon’s found out: giving people something at a discounted price made them anchor their demand on that price and made it “not worth it” at a higher, non-discounted price.

The grocery plan suffers from this problem: you don’t gain nearly as many new loyal customers for an item by making it temporarily cheaper, especially if every other item in your category is also doing the same thing.  Indeed, let’s imagine that this became highly successful.  I don’t normally drink bottled water but I have bought Brand A juice, so Brand A offers it to me cheap ($1) to see if they can get me to buy it more regularly at a higher price ($1.50).

So I buy a case of discounted water from Brand A at $1.  Now Brand B, seeing that I’m a water buyer, offers me a discounted case at $1 to get me to switch to Brand B.  Brand A has gone back up to regular price ($1.50) and my setpoint for water is now $1, so I buy Brand B.  Which Brand C notices and…you get the idea.

But why isn’t this good for the consumer?  After all, I now get water for a constantly discounted price, if I play the game correctly.  And that’s the problem: I have to play the game.

The most volatile current pricing in a grocery store centers around produce and it is one of the things that people hate shopping for the most.  Indeed, stores sell much larger quantities of more stable-priced produce (like apples) than volatile-priced produce (like peaches) because of simple expectations.  I can go to the store and buy an apple with very few psychological ramifications: apples are mostly always the same price, I don’t feel like I’m getting swindled by my desire for it when out of season, and so I have very little regret.  But beware of falling in love with berries, which fluctuate wildly in price depending on season.  I’m happy, very happy, when they happen to be particularly cheap but otherwise tend to ignore them, because I fixate on the higher price: seasonal goods, in essence, have become premium goods.

So now apply that model to everything in the store.  If everything I love becomes more expensive the more I love it, suddenly I’m playing a vast and constantly shifting game of regret balancing.  I really want the cereal, but because I have bought it before and not this other cereal, the other cereal is now “discounted” to a significantly lower price and I constantly have to be making the tradeoff calculations of my want against this new and shifting price.  And what’s more, I know if I don’t buy the cereal I actually like for awhile, they’ll offer me a lower price at some point, so I should resist my urge to buy it now so that it comes down in price.

It doesn’t take a psychologist to figure out that is not a world anyone wants to live in.  Stability is a human component of human happiness, and while the occasional seasonal fruit might make me enjoy a particular day, the world is mostly powered by apples: price stable, quality stable, and thus the staple of the lunch bag.

There has been a lot of griping about Facebook lately.  IPO trouble, privacy concerns, the “what is this doing to society and do I really want to contribute?” crowd.  They’re getting slaughtered in the press, on Wall Street, and in the court of public opinion, and they seem to be doing shockingly little about it.

I’m not a heavy Facebook user; I go on mostly to answer messages or, if I’m travelling, to see which friends are in town (I can never keep track of where people are).  And as a social psychologist, I have serious reservations about any system that propagates a curated life, because people start thinking that it is reality and wonder why their life sucks in comparison.

But all that said, I’m not trying to burn Facebook to the ground.  So here’s my tip for making the world not hate them: tell us, in several very short sentences, how you make money.

I actually think the business model mystery is a huge part of Facebook’s PR nightmare.  A good friend recently pointed out that Amazon also has a ton of data about us, but we’re not concerned, and that point is fundamental to my theory here: people hate Facebook because they have no idea how it works and yet it is big and important.  So they invent bogeymen.

If you ask the average person on the street how Amazon makes money, they’ll tell you.  Sure, it might not be in incredible detail and they may not have a great understand of why they are a high volume, low margin business (they may not even know what volume and margin are).  But they still essentially understand how stores work: they sell us stuff for more than they buy it for, and the difference is profit.  They get why it is a $100B company.

Ditto Google, which may be a more fair comparison.  Google is a huge internet name that confounds most folks, but when you ask my parents how it makes money, they’ll blind stab “advertising”.  And they’d be right; that’s a huge source of revenue for Google.  $200B, lots and lots of advertising, scary because they are big but not because we don’t understand them.

Advertising is a huge source of revenue for Facebook as well.  85% vs Google’s 95%.  But how many people in America can tell you that?  Facebook never says “we’re an advertiser” in the same way Google does and consequently, people can let their mind run wild.  Maybe they are selling our data!  Maybe it is the next credit score or background check!  Maybe they are simply going to blackmail everyone!  $50B market cap, smaller than either other country, but entirely black ops.  And entirely scary.

There is abundant psych literature that should remind Facebook that faced by the unknown, people will get scared, hostile, and generate “things that go bump in the night” pretty quickly.  The best thing they could do right now?  A simple infographic and a short statement that says “this is how we make money now, and how we plan to make money, and anytime you have questions, let us know”.  People know who Zuckerberg is, so make him deliver it.  The Facebook fireside chat.

I got invited to talk to a group of 90 high schoolers at Columbia yesterday, and as usual, I didn’t prepare slides but just took a walk and thought about the things I’ve learned (and repeatedly not learned) along the way.

For one, I’ve learned always to curse when talking to either high school or college students.  They’re old enough to hear it and it makes them pay attention.  In this case, I somehow also managed to work in a comment about breast implants during this talk.

It made sense at the time.  One student asked what the hardest thing about being an entrepreneur is and I replied that, for me, it is knowing something that can make the world better and simply not having the resources to get it implemented.  To which another student followed up: when that happens, how do you get the attention of the people with resources?  I talked a bit about sources of resources, how pitching works, and then…breast implants.  As in “don’t get breast implants to impress a guy, don’t change your morals to get an investor.  Do, however, take showers and wash your clothes and be willing to be more conventional than you might want to be in order to fit in well enough to get heard.”

I also talked a lot about the fact that startups aren’t just their CEOs.  The media tends to talk a lot about the public faces of companies, because they are public and because we like our heroes.  But the majority of people at startups are not founders or CEOs.  They are employees who found a niche and learned to fill it well.  Startups are a collective endeavor and we need to get serious about training the next generation of employees.  Not just founders – employees.

My point to the students was to find what you’re naturally good at and do that.  Don’t just pick a title off the board and say “marketing sounds cool, I’ll do that.”  Actually look at what you are uniquely suited to do.  And of course, because I didn’t talk enough about how to do that, one girl actually wrote me afterward to ask how to know what you’re good at in the first place.

Which is actually a tremendously hard question.  Until you get into college and are able to experiment with different areas of curriculum, it can be very difficult to know where you fit into the workplace.  Which is why internships play such a critical part of our tech employment ecosystem: they allow people to see what different roles at a company actually do, day-to-day.  Education needs to look more like internships, and until it does, the only recommendations I can make are about experiencing as much (with as much diversity) as possible, listening to where people give you positive feedback, and carefully looking at your own projects for where they have succeeded and failed.

In some ways, that is also a challenge to innovators, HR people, and the entire adult community.  While education sorts itself out, try to create at least one new internship every quarter and do your best to make those valuable, not just “copy this” jobs.  People in tech complain there isn’t enough talent around?  If you can’t find it, make it.

I caught up on the first three episodes of The Newsroom over the weekend and it has been fertile ground for reflection (which, besides strict entertainment, is the thing I love most about good stories).  But one theme has preoccupied me more than most: Newsroom’s reflections on the modern American working relationship.

I don’t mean the romantic underpinnings of the show, which I’m entirely uninterested in.  I mean the actual relationships that grow between people working together on a project, and in particular the primary importance of having a good boss.  Whatever his personal faults, newsman Will McAvoy is meant to be the show’s lodestone, its anchor as much figuratively as literally.  The show may be just a smug opportunity for Aaron Sorkin to tell us how to get America right, but he certainly gets one thing right: we all want to work for a badass.

Everyone on the show works for a badass; they all think their immediate boss is awesome.  And that’s something I think has been missing from all the recent interest in the workplace as a creator of meaning.  People have latched onto the psych research that shows that mission, more than money, keeps people happy and satisfied at their jobs but I’m willing to bet that looking up to your boss is a surprisingly large component of that.

After six months of relaxing, I’ve been starting to look at jobs again.  Having said “maybe” to a bunch of offers, I’m trying to get good at saying “no” and narrowing them down.  And I’m finding that the primary factor in my decision is precisely my estimation of the quality of that relationship: is this a job where I get to work for someone I believe in?

I’m a Mac, not a Will.  Which is to say that while I will certainly lead a team within a larger organization, I have no desire to be the man at the top.  Consequently, I need someone at the top that I can trust and respect and encourage to fulfill both the potential of the product and their own potential.  And I don’t think I’m alone in that job desire.

Asking “what makes a good boss?” may be a bit like asking “what makes a good teacher?”, in that it may vary largely with the person you’re asking.  But before we even start thinking about what makes someone a good boss, I think we have to start asking why so few bosses actually think about their role.  That is, most bosses in the American workplace have to manage both up and down: they are simultaneously someone’s boss and someone’s employee, and it is the employee role that tends to take up the majority of their energy.  Even when they are managing those below them, it is with the purpose of impressing those above them.

So maybe that’s the call to action: be a better boss.  Or at least think about what being a boss means, and how you can serve those who you manage.  What kind of leader would you like your boss to be?  Who would you follow?

Side note: instead of saying “someone’s employee”, I almost said “someone’s bitch”.  Isn’t it odd that we don’t have a nice word for someone who reports to someone.  The thesaurus suggests: aide, assistant, attendant, deputy, flunky, gofer, helper, inferior, lackey, minion, peon, scrub, second, second fiddle, second stringer, serf, servant, slave.  With the possible exception of deputy, I don’t want to be any of those.