#96/111: Conversion Optimization

What is it about?

Increase your profit by 40% just be changing your slogan. Sounds suspicious but it is possible. You’ll just need tons of good ideas, some time and testing. Saleh & Shukairy talk about conversion optimization and how you can increase your profit over time.

What can I learn?

Personas: I talked about personas some time ago but this book used them really in detail, which was refreshing. The idea is that you define imaginative customers and think about them if you do any decisions in marketing/sales. This will help you especially if you got different types of customers. However, it is important that you do your market research first. Lots of people fall into the trap that they just make up personas without knowing their prospects/customers.

FUDs: Fear, uncertainty and doubt. This is why people won’t buy from you even when you got a product they would buy. You can use your personas here, again. Think about their fears, uncertainties and doubts when browsing your website, e.g. “is my data secure?”, “what happens if I want to return the product?” or “does this work on my computer?”. You probably can’t convince people that they should buy your product if they don’t like it. But you can help people buy your product if they are afflicted by FUDs.

Iterative testing: I talked about testing some weeks ago in detail, so I won’t say that much about its basics. After initial testing, you shouldn’t just assume that now everything is perfect. The idea behind iterative testing is that you design your product and presentation and slowly change it element by element. This will improve your presentation and product step by step. Amazon does a great job doing this. They won’t relaunch every few years with a completely new design. Rather they change just some elements a time.

Conclusion

I don’t like this book as much as Always Be Testing, mainly because most content is in both books. Conversion Optimization doesn’t really bring new concepts in the game which aren’t already known. The book is OK. If you haven’t read anything about testing or conversion optimization, I would recommend Always Be Testing.

The Algorithm Design Manual: Chapter 4

4-1. The Grinch is given the job of partitioning 2n players into two teams of n players each. Each player has a numerical rating that measures how good he/she is at the game. He seeks to divide the players as unfairly as possible, so as to create the biggest possible talent imbalance between team A and team B. Show how the Grinch can do the job in O(n \log n) time.

Solution
First sort the players with an algorithm which runs in O(n \log n) time and afterwards form two teams with the first n player in the first team and the last n players in the second team.

4-3. Take a sequence of 2n real numbers as input.Design an O(n \log n) algorithm that partitions the numbers into n pairs, with the property that the partition minimizes the maximum sum of a pair. For example, say we are given the numbers (1,3,5,9). The possible partitions are ((1,3),(5,9)), ((1,5),(3,9)), and ((1,9),(3,5)). The pair sums for these partitions are (4,14), (6,12), and (10,8). Thus the third partition has 10 as its maximum sum, which is the minimum over the three partitions.

Solution We can minimize the maximum sum if we pair up the lowest and the highest element. But first we have to sort our numbers which takes O(2n \log n) and create the pairs which takes O(2n).

4-6. Given two sets S_1 and S_2 (each of size n), and a number x, describe an O(n \log n) algorithm for finding whether there exists a pair of elements, one from S_1 and one from S_2, that add up to x. (For partial credit, give a \Theta (n^2) algorithm for this problem.)

Solution We could sort S_2 and then iterate through S_1 and calculate the second number s_1 + s_2 = x \Leftrightarrow s_2 = x - s_1. Now we just have to search for s_2 in S_2 which takes O(\log n) time. Therefore we take O(2n \log 2n) + O(n \log n) = O(n \log n) time.

4-7. Outline a reasonable method of solving each of the following problems. Give the order of the worst-case complexity of your methods.
(a) You are given a pile of thousands of telephone bills and thousands of checks sent in to pay the bills. Find out who did not pay.
(b) You are given a list containing the title, author, call number and publisher of all the books in a school library and another list of 30 publishers. Find out how many of the books in the library were published by each company.
(c) You are given all the book checkout cards used in the campus library during the past year, each of which contains the name of the person who took out the book. Determine how many distinct people checked out at least one book.

Solution (a) We can use quick sort in this scenario which works in expected O(n \log n) time and match the ith bill with the ith check which takes O(n) time.

(b) We can use a dictionary quite easily which counts the books by publisher. This takes O(k ^cdot n) where k=30 time.

(c) We can sort the list by name and then iterate through it and count each different name. This takes about O(n \log n) + O(n) = O(n \log n) time.

4-9. Give an efficient algorithm to compute the union of sets A and B, where n = max(|A|,|B|). The output should be an array of distinct elements that form the union of the sets, such that they appear more than once in the union.
(a) Assume that A and B are unsorted. Give an O(n \log n) algorithm for the problem.
(b) Assume that A and B are sorted. Give an O(n) algorithm for the problem.

Solution
(a) We can create one array with every element of A and B. Afterwards we sort this array and iterate through it. In this iteration we just have to check if ith item differs from the (i+1)th item which takes O(n) therefore we need O(n \log n) + O(n) = O(n \log n).

(b)

4-12. Devise an algorithm for finding the k smallest elements of an unsorted set of n integers in O(n + k \log n).

Solution We can build an “unsorted” heap in O(n), i.e. only bring the smallest item at the top. Now we can extract k times the smallest item which takes $O(k \log n)$ time.

4-13. You wish to store a set of n numbers in either a max-heap or a sorted array. For each application below, state which data structure is better, or if it does not matter. Explain your answers.
(a) Want to find the maximum element quickly.
(b) Want to be able to delete an element quickly.
(c) Want to be able to form the structure quickly.
(d) Want to find the minimum element quickly.

Solution (a) They are both equally fast. In the max-heap it’s the first element in the sorted array the last one.
(b) A max-heap is here better because it takes only O(\log n) instead of O(n) for a sorted array.

(c) Both the heap and the sorted array take O(n \log n) time to be formed.

(d) The minimum element in a sorted array is the first. In a max-heap every leaf could be the minimum element, therefore it takes O(n).

4-14. Give an O(n \log k)-time algorithm that merges k sorted lists with a total of n elements into one sorted list. (Hint: use a heap to speed up the elementary O(kn)– time algorithm).

Solution We can basically do an heap sort on these lists. We iterate from i := 1 to n and select the smallest item from the head of each list which takes O(1) + O(\log n) time. Therefore the algorithm takes O(n \log n) time.

4-15. (a) Give an efficient algorithm to find the second-largest key among n keys. You can do better than 2n - 3 comparisons.
(b) Then, give an efficient algorithm to find the third-largest key among n keys. How many key comparisons does your algorithm do in the worst case? Must your algorithm determine which key is largest and second-largest in the process?

Solution (a) There’s a faster method for construction heaps which runs in O(n). Afterwards we just have to call find-min two times which takes O(\log n).

(b) We can use the same method here as well. The largest second-largest key is implicitly found by constructing the heap.

4-16. Use the partitioning idea of quicksort to give an algorithm that finds the median element of an array of n integers in expected O(n) time.

Solution The partition part of quicksort basically can help us. It determines partitions which are bigger respectively smaller than the pivot element. We just have to find n/2 elements which are smaller or equal to our element m which is then the median. This takes expected O(n) time.

4-19. An inversion of a permutation is a pair of elements that are out of order.
(a) Show that a permutation of n items has at most n(n-1) / 2 inversions. Which permutation(s) have exactly n(n-1) / 2 inversions?
(b) Let P be a permutation and Pr be the reversal of this permutation. Show that P and P^r have a total of exactly n(n-1) / 2 inversions.
(c) Use the previous result to argue that the expected number of inversions in a random permutation is n(n-1) / 4.

Solution (a) Let’s take for example the items 1..5. We can get the maximum inversions if we reverse this list, i.e. [5, 4, 3, 2, 1] or more general [n, n-1, …, 1]. Now we can start at the right and count the inversions.

Therefore we got sum_{i=0}^{n} (i-1) = \frac{n(n-1)}{2} inversions at most.

(b) Let’s prove this relation. Assume we got a permutation with n items. Let’s add an other item. The reversal for the old permutation got \frac{n(n-1)}{2} inversions. The (n+1)th item adds n inversions which are:
(n+1, n), (n+1, n-1), .... (n+1, 1). Therefore we get \frac{n(n-1)}{2} + n = \frac{n^2 - n + 2n}{2} = \frac{n(n+1)}{2} and we’re done.

(c) A rough approach is to take the smallest and the highest value and assume that inversions are uniformly distribute. Therefore we get \frac{0 + \frac{n(n-1)}{2}}{2} = \frac{n(n+1)}{4}

4-24. Let A[1..n] be an array such that the first n - sqrt{n} elements are already sorted (though we know nothing about the remaining elements). Give an algorithm that sorts A in substantially better than n \log n steps.

Solution Merge sort can used quite nicely. We need to sort the remaining sqrt{n} which takes sqrt{n} \log sqrt{n} time. Afterwards we have to use merge on our old and new sorted lists which takes O(n) time.

4-29.
Mr. B. C. Dull claims to have developed a new data structure for priority queues that supports the operations Insert, Maximum, and Extract-Max—all in O(1) worst-case time. Prove that he is mistaken. (Hint: the argument does not involve a lot of gory details—just think about what this would imply about the Omega(n \log n) lower bound for sorting.)

Solution If insert, maximum and extract-max would be possible in O(1) we could use the following algorithm to sort data.

This would sort data in O(2n) = O(n) which is smaller than lower bound Theta(n \log n).

4-30. A company database consists of 10,000 sorted names, 40% of whom are known as good customers and who together account for 60% of the accesses to the database. There are two data structure options to consider for representing the database:
• Put all the names in a single array and use binary search.
• Put the good customers in one array and the rest of them in a second array. Only if we do not find the query name on a binary search of the first array do we do a binary search of the second array.
Demonstrate which option gives better expected performance. Does this change if linear search on an unsorted array is used instead of binary search for both options?

Solution Single array, binary search: \log 10000 = 4
Good and bad, binary search: 0.6 cdot \log 4000 + 0.4 cdot (\log 4000 + \log 6000) approx 5.11
The first variant is a bit faster here.

Single array, unsorted: 10000
Good and bad, unsorted: 0.6 cdot 4000 + 0.4 cdot (4000 + 6000) = 6400
However in this case the second variant is far superior.

4-32. Consider the numerical 20 Questions game. In this game, Player 1 thinks of a number in the range 1 to n. Player 2 has to figure out this number by asking the fewest number of true/false questions. Assume that nobody cheats.
(a) What is an optimal strategy if n in known?
(b) What is a good strategy is n is not known?

Solution (a) Binary search.
(b) We can start asking if the number is between 1 and two. If not we can double our range from two to four, four and eight, etc.

4-35. Let M be an n x m integer matrix in which the entries of each row are sorted in increasing order (from left to right) and the entries in each column are in increasing order (from top to bottom). Give an efficient algorithm to find the position of an integer x in M, or to determine that x is not there. How many comparisons of x with matrix entries does your algorithm use in worst case?

Solution

This algorithm runs in O(m\log n) time.

4-39. Design and implement a parallel sorting algorithm that distributes data across several processors. An appropriate variation of mergesort is a likely candidate. Mea- sure the speedup of this algorithm as the number of processors increases. Later, compare the execution time to that of a purely sequential mergesort implementation. What are your experiences?

Solution Non-threaded version:

Threaded version:

For small to medium sizes the threaded version is a bit slower than the non-threaded one. However, for very big sizes the threaded version works faster.

4-45. Given a search string of three words, find the smallest snippet of the document that contains all three of the search words—i.e. , the snippet with smallest number of words in it. You are given the index positions where these words in occur search strings, such as word1: (1, 4, 5), word2: (4, 9, 10), and word3: (5, 6, 15). Each of the lists are in sorted order, as above.

Solution We can sort these positions with its identifier. Afterwards we iterative through the list and put identifiers on a stack. If we got all of them, we found the snippet. We replace each identifier if we find a nearer one. At the end, we just have to search for the smallest snippet in all snippets.

#95/111: Do More Faster

What is it about?

The techstars program is famous and so are Brad Feld and David Cohen. They talked to lots of members and mentors of the techstars program and let them write small articles on different subjects. How did it work out?

What can I learn?

Concentrate on doing one thing good: So you work on your product and want to compete with some big company. What will you do? Provide more features than their product? Nice try, you already lost the battle. Mature products, like Microsoft Office or Matlab are crowded with features. If you want to compete then you should focus on doing one thing unexceptionally great. You don’t have to resources to implement millions of features and you won’t stand out.

Decide and execute fast: What is the huge advantage of startups / small companies against big corps? Agility. If you can decide and execute fast, you should. I saw small companies which had structures like big corps. This lead to slow deciding and executing and killed them, at last. Don’t waste time on bureaucracy and execute now.

You don’t need VC: Some people think that you aren’t a real tech company if you don’t get any VC money. That’s not true. Firstly, you have to understand if you need money and what the implications are. No outside money means more freedom later on. You may start faster at the beginning but it can happen that you build your product, get lots of customers and then get kicked by your VCs and get $100k for three years work.

Conclusion

I’m frankly disappointed by this book. It got great names on and in it but it doesn’t reach my expectations. It’s hasn’t much substance, most tips are superficial. The format isn’t the problem here, other books like Joel’s Best of Software Writing I did a great job in collecting articles and publishing them. No recommendation.

#94/111: Don’t Just Roll the Dice

What is it about?

Pricing is highly critical and an in-depth topic. Can such a short book fulfill your needs? We will see. Neil Davidson is also famous for hosting Business of Software.

What can I learn?

Know your market segment: People work with relatives. If your competitor’s products cost between $10 and $20, you have a hard time sell yours for $2000. The first thing is to learn about your market segment. How high are competitor’s prices and why are they what they are. Learn about your customers. For example, software that cost less than $10 will be easily bought  by nearly anybody. If your software costs more than $50 some personal customers may get nervous. If you product costs more than $1000 your customer probably needs to talk to his superior. Even $1, $999 vs. $1000 can make a huge difference! Ideally, you should know about this by customer development.

Think about presentation:  Pricing is not just about setting a price. It’s also about product presentation, e.g. bundling. Do you sell other software? Which alternatives are there? Maybe you could sell with an complementary product? There are lots of different possibilities. Generally, selling just one product will produce a higher price.

Test, Test, Test: The most important thing, like expected, is testing your pricing. The best way to do so is by features. Take a look at software from 37signals or Microsoft. They got different product packages. For small and large businesses or personal users. You should avoid to charge different prices for the same product. This can really annoy users. One idea is that you sell your product for $x but display $x resp. $(x+y) as price. If enough users were willing to buy for $(x+y) you can increase your price and use this event as a nice marketing tool.

Conclusion

Firstly, you can read Don’t Just Roll the Dice for free! I liked the book, however it is just 80 pages or so. I think it got some nice ideas and is more to get a overview over the topic than really learning about it. You will find lots of articles on pricing on sites like Hacker News. In conclusion, great book for learning the basics but later you should look for other resources.