I had the priveldge of sitting on a panel yesterday called the Apps Privacy Panel, put on by Silicon Flatirons and the App Developers Alliance.  When I was first asked to sit on the panel, I wasn’t sure what value I could add.  I’m not technical and I don’t follow the field of privacy and data security closely.  But Brad Bernthal said he was looking for someone with an entrepreneur’s perspective, so I agreed.  We were joined by a couple of attorneys including Bryan Cave’s Jason Haislmaier, and most interestingly by Julie Brill of the Federal Trade Commission.  The conversation was more stimulating that I expected.  Intriguing in fact.

Privacy and security are things like – what data are people allowed to collect about us?  What can they do with it?  Who can they share it with or sell it to?  For instance, we’ve all seen the Google ads, when you’re in your Gmail inbox, for products that relate to the topic of an email you’re reading.  Google is using data in your email to display relavant ads to you.  So maybe if you’re pregnant, and you’re talking about it with your friend in an email, Google might display an ad for a crib.  But can Google share info about your pregnancy with others? Can they tie it back to you as an individual?  Can they sell that data to potential employers who might not hire you if they knew you were pregnant?

The landscape of privacy and security is not well regulated YET.  There are mostly just some common sense guidelines to keep us doing the right thing.  But data privacy is a massive concern, so I believe it’s only time before legislation kicks in to regulate it to death.  This is good news/bad news for entrepreneurs.  The good news is that it’s not regulated yet, thus expenses dedicated to following law here are minimal.  Regulation = overhead/infrastructure, and when you’re a startup, you really want to be focusing on your product or service, not on overhead and infrastructure. I think (maybe naively)  if we, as software engineers and companies, can do the right thing with data and privacy, there will be little reason for the government (like the FTC) to step in and regulate it.   So – DO THE RIGHT THING PEOPLE!

The bad news is that b/c it’s not regulated yet, there are a lot of gray areas around what the right thing is – and it only takes one or two bad players to spoil it for everyone.

I won’t rehash the entire panel’s conversation for you, but I thought I’d share a few key takeaways from my perspective.  Here’s generally what I learned to help guide you in making sure you do the right thing.

• If you’re developing an app or website that is involved with youth, medical, financial, or employment information, or your selling data you collect to a third party, get yourself a good attorney that understands the landscape.  Let them be your guide.  Don’t try to learn it on your own.
• Better yet, everyone should just talk with an attorney around best practices for data privacy and security.  If you build it into your app early on, it’s much less costly to fix retroactively.
• Be transparent about what data you’re collecting and what you’re doing with it.
• Use easy to understand & clear UI/UX practices to effectively communicate to your users what data you’re collecting and what you’re doing with it.  READ – 31 page privacy policies and terms of service agreements don’t count.
• Ask for permission to collect sensitive information, and protect that sensitive information securely.
• Honor your data promises to your customers.
• When it doubt, ask around.  If you’re not sure of the ‘creep factor’ of your app or data collection/storage/usage features, ask around.  If it creeps people out, figure out how to communicate the WOW of your app and take care not to sell that data or use it in ways that would upset your customers.

Now go code something.

A common funding mistake that I see many entrepreneurs make is a lack of communication with their potential investors.  It’s becoming prolific, so I felt inclined to write about it.

If you’re raising capital, and you’ve got a handful of investors who are committed, its imperative that you communicate with them in a frequent and regular manner.  You can talk about progress you’re making in fundraising, growth in the business, any struggles you’re having, and any help you need.  The last 2 are pretty important because they show your investors you’re thinking clearly about your business and will be honest with your investors about the ups AND the downs.  Transparency is key.  Your investors can be your biggest supporters and can help out many ways, but if you don’t keep them in your circle of trust, they won’t help, they might be surprised with things turn south, and they’ll feel misled.  Clearly you should choose your investors well, but if you treat them like the partners they are, you’ll build a business from the same side of the table.  Good investors know how sausage is made.

But I digress.  The message here is to communicate with regularity and frequency.  An email about once a week is the right rhythm (for me anyway).  If you go completely silent on an investor, then 4 weeks later provide wire instructions and signature pages, they might back out.  Here are some of the reasons I’m used to hearing:

• I found another deal that was more interesting.
• I didn’t feel a sense of urgency.
• I felt like the founders were shopping around to get a better offer.
• When the closing docs came, I asked for an update and the company looked very different then when I committed.
• What company?  I don’t remember even giving them a commitment

There are probably other reasons too.

This is such an easy problem to fix, it saddens me to see it happen all-to-often.  Here’s your 2 step plan to ensure it doesn’t happen to you.

1. Communicate with your investors weekly and transparently – ask for help, report progress, identify areas of weakness.
2. Close your round quickly – no later than about 45 days after the ‘start’ of fundraising.

See, easy.  Now go close your rounds people.

Back in March at SXSW, I had the pleasure of an interview with Frank Gruber of TechCocktail.  It’s always fun to talk with him, especially when we chat about my favorite topic, entrepreneurship.  In a little shameless self-promotion, watch the video here!  And Frank –  looking forward to seeing you again at SXSW 2012…

My old (uh, meaning longtime, not age) friend Su Hawk has really transformed the local tech association called Colorado Technology Association.  It’s grown rapidly over the last few years and I’m impressed with what she’s done with it.

They have a group called Women In Technology, and its having throwing its’ first ever holiday and benefit party, Thursday, November 3rd, 2011 at 18th Street Atrium, 1621 18th Street, Denver, from 5:30 – 9:00 PM.

WIT is not only a fantastic opportunity to find new mentors and to network, but this holiday party is also a benefit for the Women’s Bean Project (WBP) – a nonprofit organization that helps break the cycle of poverty and unemployment for women in need by teaching job skills and self-sufficiency.  If you’ve never had a WBP soup mix, grab one the next time you’re at the grocery store (in the dried bean section).  They’re REALLY good, super healthy, make for an excellent quick meal, and are a sustainable way for the WBP to keep revenue up and continue supporting at-risk women.

There is a discount for attending the WIT holiday party, so if you’re considering going, reach out to me and I’ll get you details.

I spent some time talking to my friend Rich Grote, a local entrepreneur, at TechCocktail in Boulder last night.  He mentioned that they’re struggling with pricing options, something that all entrepreneurs struggle with at some point in their lives.  He started throwing out a bunch of ideas and my head began to swim.  I thought WHOA… too many options!

I always struggle with options.  Give me 3-4 options, but definitely no more than 5 or 6, and I’m happy.  Any more than that and I get analysis paralysis and immediately move on to something else.  My brain has a visceral reaction against too many options, it shuts down.  Call it toddler + new baby + full time job + social life + extended family life brain cram and there just isn’t room in my head to be thinking critically about your product.

Having coffee today with Seth Levine reminded me he has some thoughts on this topic, so I went searching his blog and found this post on pricing tiers which warns of too many pricing tiers.  I did a little more research and learned that there is some science behind this.  Turns out that if you offer a a ton of options, you’ll get a lot of people’s attention, but very few will convert into customers.  If you offer fewer options, (4-6 actually), you’ll get less attention but tons more conversion into paying customers.  In fact, more than 10 TIMES the amount of customers than with too many options.  Melikes, less work for more money.

Interestingly, the magic number is somewhere between 4-6 options.  I vaguely remember something from my psych class in college that says when given a random string of numbers or letters, the brain can only remember about 5 -+ 2 items – somewhere between 3 to 7 items easily.  Which is why you can probably remember the new pin code of your ATM card easier than you can remember your new friend’s phone number (not that you would have to remember that anyway these days).  I wonder if that has anything to do with it.

So, I guess the old adage still holds, true.  Keep it simple, stupid so I can avoid analysis paralysis and actually buy something from you instead of moving on to your competition.

I’ve been looking at TechStars applications basically nonstop for the last couple of days.  I thought I would put together some tips on my dream application video for teams that are still applying – since I know how much effort everyone puts into these!

1.  SHORT.  < 2 minutes short.  Maybe go for 3 minutes, but that’s the max.  A majority of the videos I’ve been watching are +5 minutes – let’s do a little math…  Let’s say I get 500 applicants (expecting much much more), and 85% of them have videos.  That’s 2,125 minutes or nearly 40 hours of just watching videos.  That’s not including the time to read your application, think about what you’ve written, or click through and play with your site.  I tend to not watch longer videos – I skip through to find the important parts and am probably missing some gem of information.

2.  I want to see the team, get a feeling for the personality of the founders, and see a demo of the product.  This is hard to do in 2 minutes, but you can do it.  I’ve seen lots of great videos accomplish this;  the time makes you focus on what matters.  Take a look at TechStars Boulder 2010 company, ScriptPad’s video.  While you can’t see the founders in this video, it didn’t matter because they were renting space from the Bunker at the time, so I saw them nearly every day.

3.  Use humor!  Well, unless you don’t have a sense of humor.  Don’t be something that you’re not.  But I’m looking at a lot of videos, help me enjoy yours.  My favorites include founders showing their personalities.

4.  If you password protect the video, please include the password in the app.  Seems like common sense, but it’s amazing how many people forget, and it makes me do one extra step.

5.  Don’t spend time on things like advanced animation and fancy screens.  Sure, it makes it look pretty, but all that tells me is that you know how to do video.  Spend time where it matters, on the team and on the product.  🙂

6.  A small pet peeve of mine – please don’t demo your login screen unless its something other than username/password.  I’m going to watch 500 videos and every single login process is identical (unless of course you’re doing some fancy retinal scan with your webcam, THAT would be sweet!)  Save me the 10 seconds.

7.  Have fun doing it!