The mistakes that killed my startup

28 Aug

Not too many times you hear about startup failures though most of them fail. Mine failed and I decided to enlist all the mistakes I made that led to my startup failure. It’s not easy to write such a post, but I think that we, in the startup/entrepreneurship industry, should embrace failure and learn from it.

So, here’s the list, in no particular order:

Money

  • Our first round of funding was a convertible note with impossible maturity date terms. Convertible note is a double edged sword. You should use it wisely and have a clear vision of what happens when maturity date comes knocking on your door.
  • Joined an accelerator program too soon. As a first time entrepreneur, your point of view about accelerators is shaped by what you hear in the media. And you usually read about Y Combinator, 500 startups and alikes. You end up believing accelerators are a magic pill for startups. If you don’t have a prototype, not sure about the market you’re in or still haven’t talked to potential customers, most likely that an accelerator program won’t help you.
  • Should have continued working at our day job until we get to a first version with some traction. Quitting your day job too soon lays a huge financial burden on your company and forces you to look for money and waste precious time. In the early days you should speak to your potential customers, not investors.
  • Focused too much on funding instead of acquiring customers.
  • Trying to raise money solely on vision can maybe lead to a pre-seed/seed round but not to an A round. We got addicted to the vision, we forgot about the numbers.
  • After we got funded, we didn’t spend enough money. At some point this wasn’t a mistake. But there were times that we should’ve pulled the marketing lever and didn’t.
  • When we did spend money it was only on coding hands.
  • We incorporated way too soon. Incorporation comes with costs that you shouldn’t have. Focus on your customers and the problem you’re solving. Nothing else matters in the early days.
  • Not understanding the size of your market. And not just the total size of the market, that’s an easy one, but the addressable market. How much money can your company make in a best/worst case scenario? You should answer this question regardless to investors because you need to know if your company is a fundable startup or a lifestyle business.

Product

  • We built too many features. We felt it made the product awesome. The truth was that it confused our customers. Focus is an important aspect of product management.
  • Being too much engineer-ish in our thinking. We were able to acquire a few customers pretty fast, but we were afraid to on board more customers because we felt the product is not ready yet. The truth was that the customers who already used the product were really happy with it. Don’t wait for a perfect product in order to sell. Perfect will never happen.
  • Didn’t invest enough in turning Licensario into a low/no touch sell. Every customer that wanted to start using Licensario took too many resources out of our already too busy engineers.
  • We fell in love in the core idea of Licensario and were afraid to change. With this much love to your baby, you sometimes can’t see that he’s really ugly and a plastic surgery is a must. Today.
  • Educating the market is an expensive and risky play. In the beginning you should fall into categories people know so it’ll be easy for them to compare you to things they already know. We spent too much time educating, telling the world we’re a completely new breed.
  • Not investing enough in ROI design. By ROI design I mean letting the user know exactly what he gets back if he’ll use your product. Users don’t have patience to fully understand and read how awesome your product is. You need to show them, not tell. The best thing you can do is show them the amount of money they save/gain by using your product.
  • We didn’t charge most of our customers. For some reason we always felt that we shouldn’t piss them off with charging them. At least until all of their feature requests are live. If you feel this way, that’s a huge red flag. Either your product isn’t providing enough value, and you’re afraid that adding payments will make your customers leave, or you don’t appreciate your product enough and how it solves the problem it intended to solve.
  • We outsourced some core features. Even though both Igor (my co-founder) and I are programmers, we wanted to move faster and we outsourced some parts of our product. It was a bad decision that cost us time and money. If you have to outsource, never never never outsource anything that’s core to your business.
  • We didn’t invest enough in analytics in the early days. You should know the KPIs (Key Performance Indicators) that matter to your business from the get-go and track them from the beginning.
  • We didn’t fail fast enough. Each experiment we conducted took too much time.
  • We didn’t experiment enough.

Marketing/Sales

  • We did only direct sales for too long.
  • We had the false thinking that to do marketing we need a huge budget. It took us too much time to understand that we can do awesome things without spending a dime (other than the time of our engineers).
  • Our messaging was too broad. At the beginning, we thought we should target the whole world. We were afraid that we’ll miss a customer if our messaging won’t be broad enough to catch everyone: SaaS/mobile/desktop/web/ROR/PHP/Pascal developers, executives, marketers… We wanted to catch them all. Guess what happened? We didn’t catch anyone. Our bounce rate was so high that Google Analytics was too embarrassed to show it…
  • Not using social media as we should have. A lot of people will argue about the effectiveness of social media on B2B companies, but IMHO, social networks are free marketing and an awesome way to reach out to influencers in your space, and it’s just foolishness not to use them. You just need to use them the right way.
  • We tried channels before we got to product/market fit. In the early days, founders should do sales. If you can’t sell your product, no one will be able to.
  • Our sales model was too “enterprisy” on one hand and the price was too low on the other. It made no sense. The price of the sale and the sale cycle length must be aligned.

Team

  • Our first hire was an engineer. Again, too much focus on features instead of letting people know we exist.
  • We made compromises with our first hires because it was important for us to stay lean. Eventually, we had to let them go. If you can’t afford good people, don’t hire. It will cost you more to hire the wrong people.
  • We didn’t split the equity equally between the founders.
  • We didn’t sit in the same office. This led to poor communication between the team members. Sitting at the same office is not a must. You have great tools like Sqwiggle to help you manage remote work. But it was just not right for our team. You should know what’s best for your team and if you see that work just doesn’t get done when everyone works from home, stop that and see if an office works better.

Personal

The following personal mistakes didn’t necessarily bring to Licensario’s failure, but they are things that I feel I should’ve done better:

  • I should have worked less hours.
  • I should have slept more.
  • I should have said “no” much more.
  • I should have answered more questions on Quora, Tweet more, write more blogs and generally be a more social CEO.
  • I should have asked for help than going at it alone.
  • I should have started younger.

Even though I wish that this post will help entrepreneurs avoid these mistakes, I still believe that the only way to learn is by making mistakes. You have to get burned in order to know that there’s fire out there.

And me? I hope to make a whole new set of mistakes :).

I’d love to hear what mistakes you’ve done along the way in the comments.

Thanks for reading and feel free to share.

Great Tips for Increasing Unproductivity

19 Sep

For the past month or so I was working with my awesome team on releasing a new product – Slik.IO (go try it. Now! Seriously!). It was a stressful month. A month I tried to get my productivity to the max. Most of the time it went pretty well. But some days, I just couldn’t get shit done.

And then you come across yet another post about how to increase your productivity. Everyone is so damn productive and only you feel like your body weighs 50 tons, your mind can’t even solve 1+1 and all you want to do is sleep. Are these people really that productive? I doubt it. They just seem like robots but I’m telling you a secret now. Hold on tight. They too have days that they just can’t get shit done.

This post is for the human beings amongst us, that occasionally feel like even the simplest task seems like climbing the Everest. So when you’re felling like that, I say take this feeling to the max and let go completely. Here are a few tips that will help you increase your unproductivity:

  1. When you feel that unproductivity arrives, fight it not my friend. On such days, unleash your worthless self and just be unproductive. The same tasks will be there tomorrow. With a fresher you to solve them.
  2.  Don’t use time tracking tools. The one I don’t use is Harvest.
  3. Multi task. Do as many tasks as you can. Simultaneously.
  4. Don’t focus on important tasks in the morning.
  5. Don’t focus at all. Think about the future, the past, your kids, your wife, your last vacation.
  6. Turn on notifications from all your electronic devices so they could comfortably distract you.
  7. Allow meetings to take forever. Convince everyone that Titanic encapsulates some meaningful insights about the business and that you must watch it all together, right now. On a second thought, convincing everyone to watch Titanic might result in everyone committing suicide. On a third thought, it might be a good exercise to test who’s the weak link in your team. Fire all the team members that didn’t commit suicide. You don’t want to work with people that like this movie.
  8. Do more meetings.
  9. Get up late.
  10. Drink alcohol. A lot.
  11. If not alcohol, don’t be tempted to drink water. Drink anything that can get you dehydrated. Or don’t drink at all. It’s a known fact that when you’re dehydrated you do less.
  12. Don’t exercise. They  say it makes you happier and more productive.
  13. Watch a lot of TV. Especially reality shows. It will get you addicted and ensure a long, unproductive period of time.
  14. Don’t organize anything. Allow mess.
  15.  Don’t stop hesitating.

And now, if you want to be productive read the following great posts about productivity. Believe me, they help a lot.

And some tips to make you happier (which eventually improve your productivity).

What about you? Any un/productivity tips I missed? Leave a comment and let’s discuss.

Tips for the newbie entrepreneur in San Francisco

15 Aug

 

Oh, San Francisco. The heaven for startups. The place where tech is the air people breath. The place that tech companies advertise on buses.

Box advertisement on a bus

Box advertisement on a bus just outside my apartment

I just came back from a trip to the Bay Area. I just love this city. Clear the fog and you’ll get one of the best places to live in.
During my last stay I met a lot of awesome people and companies (in the order I met them): KeenIO, CircleCI, Heavybit, StartupMonthly, Totango, Buffer, Stripe, Synqy, Envoy, Stride, Sqwiggle, PayPal, Chegg, ImportIO, StartupCompass and many more. I want to point 2 companies that made my stay even more perfect: WisePricer and LocBox. So thanks to both of them and if you’re a retailer, selling online, you should really check them both.

During my last visit I started assembling a list of tips/facts/things to expect/you name it, for the newbie entrepreneur in town (not saying that I’m not newbie…). Here’s the list (in no particular order):

  1. It’s all about tech. If you’re not in tech you’re an alien.
  2. People work standing up. I guess someone wrote that it’s healthy…

    Standing working station

    The image is not too good, I know. It was a lousy attempt to use Android Photosphere

  3. It’s ok to be rich here. You’ll have a lot of rich friends.
  4. On weekends with great weather the place to be at is Dolores park.

    Dolores Park

    Dolores Park on a sunny Sunday. You will never guess but what you see is a square Hula Hoop… Only god knows how to use this. More on god later…

  5. Yosemite Park is not that close to SF as it seems. Driving all the way only to spend there one day is not such a great idea…

    Yosemite Park

    Yosemite Park

  6. Be prepared for a lot of Asian food. If you want to get lunch at a decent price, $6-$9, around SOMA, Asian is the default option.
  7. SF is fu#%#$^ expensive. Rent is insane.
  8. I found that GetAround and Lyft are better options than ZipCar (a lot of the times).
  9. There’s always a trendy blog post that everybody’s talking about. Nowadays it’s Do things that don’t scale by Paul Graham. A must read btw.
  10. If you’re using .NET, get the fu@% out of here. You’re not welcome.
  11. And if we’re talking about Microsoft and Windows, if you’re planning on coming to meetings with a Windows machine it’s like you’re underdressed. Go get yourself a MacBook and we’ll talk.
  12. Public transit suck. At least I wish it was better. If you’re going out of the city, rent a car (see tip #8)
  13. Forget about parking.
  14. You probably won’t meet anyone who was born and raised in SF.
  15. Tons of great music in SF. From the weirdest shit to mainstream. You’ll find it all.
  16. Engineers are scarce. If you’re a good engineer, come work for a company in the Bay Area. I promise you’ll get paid more than you get paid now outside startups kingdom.
  17. The same goes for great designers.
  18. And really good sales people.
  19. If you’ll drive 45 minutes in any direction (except the ocean…) the weather will be just great. When you get back to the city, check out the clouds. They are only above SF. It’s like god is saying: “well, you can’t get it all…”. BTW, I’m sure god lives in SF. And he’s got a startup. Maybe something with cloud…

    Clouds over San Francisco

    Clouds over SF. On the way back from the Valley

  20. Speaking about god, everyone I met here is an atheist. I wonder if god joined the trend…
  21. Go to meetups. Connect with people. Talk with everyone. People are welcoming (usually…). The guy seating next to you in a coffee shop can be your next customer.
  22. People are willing to help. The SF tech scene works on a pay-it-forward model. So ask for advice and reach out to people. You’ll be surprised by people’s willingness to help. Just don’t forget to pay it forward.
  23. Coffee shops are a great place to work from if you’re coming for a short period. My favorite one is Wichcraft on 868 Mission st. But there are many great ones that won’t just kick you out because you’re costing them more than what you ordered…
  24. If you’re coming for a longer period coffee shops won’t do. Try one of the million co-working places around town. But even better, try to get a place at a growing startup. Usually they take more space than what they currently need because they leave space for growth. That’s where I worked from. My awesome friends from WisePricer (a growing startup) hosted me in their place which they rent from a larger startup, LocBox. This way you’ll get to see how these great startups you read about at TechCrunch run. It’s fascinating to see.
  25. Lastly, something general about the US which really annoys me. When you pay for stuff. The price you see is not the price you’re going to pay (because of tax addition). It doesn’t make any sense. I always feel like I’m being ripped off. Anchoring my brain on one price and then paying more.

Feel free to comment and add things to this list. I promise I’ll add the best ones to the post.

 

7 day trip to Portugal

30 Jun

Recently I got back from a 7 day trip to Portugal with my wife. I decided I’ll start sharing my trips as well. Kind of a reminder from the trip because that in this era we’re not printing photos anymore and what you have left from a trip is a Dropbox folder full of photos no one will ever see again. For the first time, I’m going to use DoAlbums for creating a digital album. It’s an awesome app my friends Eyal Keren and Erez Rusovsky are developing.

As for every blog post I write, this one will start with the soundtrack. This one is from a concert we’ve seen during the trip, Nick Cave at the Optimus Primavera Sound festival in Porto. Here he plays Stagger Lee. One of the craziest moments in one of the craziest concerts…

Day 1 – Sintra

SIntra

We landed in Lisbon, rented a car and drove straight to Sintra. Sintra is a beautiful town just an hour drive from Lisbon. It’s full with romantic architecture from the 19th century, places on top of the hills with great views and alleys full of restaurants and places to drink Sangria. When you walk down the streets of Sintra one might feel he’s walking in a ferry tale… We took a room in Oh Casa Sintra. The hosts are warm and friendly and it’s a lovely place to stay.

What to see: Palacio de Monserrate, Quinta da Regaleira, Castelo dos Mouros

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Day 2 – Heading north to Arganil

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On day 2 we started heading north. Before arriving in Portugal we read about (this one’s in Hebrew…) a place that we must visit. It’s a small farm called Quinta de Cadafaz. It’s a few minutes drive from a small village called Arganil. It’s in the middle of nowhere. Only forest around you. You hear only birdsong and the sound of a stream nearby. It’s so quiet you hear your own ear buzz… If you’re visiting Portugal you shouldn’t miss this place. The host, Sebastiaan, has an interesting life story and he’ll tell you all about it over a homemade, delicious dinner and a bottle of a Vino Tinto (red wine in Portuguese :).

Sebastiaan has a huge Rottweiler that will take you out for a hike around the beautiful nature. Yes, you heard it right, the Rottweiler (it’s a dog!!!) takes you hiking. Sebastiaan just tells him “to the river!” and the dog starts walking you to the river. If you take the wrong path he just stops, looks at you with an angry face and then you know, you shouldn’t mess with him…

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Day 3 & 4 – Porto

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We arrived at Porto in the afternoon. We found an apartment with Go2Oporto. It’s right in the center of Porto. It’s really nice, decent and clean.

In the evening we went to the Primavera Sound Festival which was disappointing. We were at a Nick Cave concert that was awesome. Nick just exploded on the stage. But it was really short. Other than that we wanted to see Rodriguez but he cancelled. Out of 3 nights of the festival we were there only 1 night…

In the next day we walked the streets of Porto and enjoyed the city very much. It’s one of the oldest cities in Europe. It’s at the Douro river estuary. The Douro river splits Porto to the Porto city and Vila Nova de Gaia. On both sides of the river you’ll find good places to eat and on the Vila Nova de Gaia side you’ll find a lot of places to taste wine. Especially Port wine which is one of Portugal’s most famous export.

Things to see: walk along the Douro river on both sides, drink a lot of wine, Palácio da Bolsa, Casa da Música, Dom Luís Bridge. If you’re there in time, go see a soccer match of Porto. I didn’t get the chance…

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Day 5 – Alto Douro

Alto Douro

From Porto, we started heading east along the Douro river. It’s a magical area, filled with wineries (they call them Quinta) and beautiful scenery. It’s just a heaven. If you’re in Portugal, you must go there and drink gallons of wine. It’s one of the oldest places for making wine and it entered the Unesco world heritage list in 2001.

I recommend doing this road in 2 days accompanied with a driver that doesn’t drink…

We slept at Casa do Visconde de Chanceleiros. It’s a beautiful place that won TripAdvisor’s Travellers’ Choice award in 2013. This is the view from the terrace in our villa:

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And another photo of the Douro river:

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Day 6 – Driving to Lisbon

On the 6th day we mainly drove south, towards Lisbon. We passed through a town called Aviero and continued south on the road near the ocean. We made a quick stop at Figueira da Foz which is a small, touristic town by the ocean. We went there only because I had a huge craving for putting my feet in the ocean… I live near the sea but still the ocean has its effect on me. It’s kind of endless and mysterious.

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The beaches in Portugal are strange. From the coastline, you have to walk a long distance  until you reach the water. I guess it’s good because they’re not building “on the water” and ruining their beaches.

In the evening we arrived at Lisbon. We found a place to stay through Airbnb. An awesome apartment in the Baixa district which is the heart of Lisbon.

Lisbon is pretty different from how we experienced Portugal till then. Within just a 5 minutes walk in the streets of Lisbon I was approached a few times by drug dealers and people who tried to hook me up with prostitutes… We planned to tour Lisbon in the next day but pretty soon we made a decision to pass on Lisbon and drive 270km to the south of Portugal and see its amazing beaches.

 

Day 7 – South of Portugal

So, we bought a few Pastel de Nata, which is a local, very delicious pastry, and we headed south.

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Portugal was blessed with some of the most beautiful beaches in Europe. While seeing these amazing beaches, we knew we made the right decision to pass on Lisbon and continue with Portugal’s nature.

For the beaches trip we used a list we found on TripAdvisor – top 10 beaches in Portugal.

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In the evening we got back to Lisbon and did get the chance to experience the city. It seems like a lovely city and I hope that one day I’ll have more time to explore Lisbon. Anyway, we did enjoy from it in the short period we were there.

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Conclusion

Portugal sounded like a nice place to travel to but we haven’t heard about people who went there thus we didn’t have high expectations. But it turned out to be one of the best places to travel at in Europe. The weather is perfect, the people are warm and welcoming, the food is awesome and the country is just beautiful. And of course there’s the wine thing :). Oh, and another important thing. It’s quite cheap to travel there. So just go.

 

I would love to hear your feedback in the comments or if you have any questions.

 

The best music of 2012

5 Jan

I’ll first admit. The title is a bit misleading. You know, SEO and shit :). This post is about the best music I heard in 2012. 2012 is long gone (a week already!) but I still wanted to share with you people the music that rocked my world in the past year. It’s not necessarily music that was created or released in 2012. Just good music I heard this year. You can hear everything in a playlist. So, without further ado, here it is:

Bill Fay – This World

One of the best albums of the year. Take the time to listen to all of it. I promise you won’t be disappointed.

 

Of Monsters & Men – Mountain Sound

 

Edward Sharpe & The Magnetic Zeros – Man On Fire

 

Alexander Ebert – Million Years

Alexander is the lead singer of Edward Sharpe & The Magnetic Zeros.

 

alt-J – Tessellate

 

City and Colour – The Grand Optimist

 

Shearwater – Home Life

This band really reminds me of Talk Talk (great band from the 80’s). I’m sure they were influenced by them to some extent.

 

Flotation Toy Warning – Donald Pleasance

 

Daughter – Smother

 

Explosions in the Sky – Your Hand in Mine

 

Cherry Ghost – People help the people

 

The Lumineers – Scotland

 

R.E.M & Neil Young – Country Feedback

This one’s from 1998 but I just found it this year and I think it’s great.

 

John Martyn – Glory Box

This is also something I’m pretty ashamed to admit that I only found this year. I say it’s better than the original. What do you say?

 

Sun Kil Moon – Tonight The Sky

One of my favorite bands ever that I finally got the chance to see live this year. Everything that Mark Kozelek ever touched is pure gold.

 

Daniela Spector – Hiroshima

Something in Hebrew for the end. The amazing Daniela Spector.

 

There are so many songs I wanted to add to the list but decided it’s getting too long. Maybe I’ll do a second part. 2012 was a really good music year. Let’s hope 2013 will be even better.

Have a great 2013 and let me know what was your best music of 2012 by leaving a comment. Feel free to subscribe to my channel on YouTube here: http://www.youtube.com/user/gilsaaaaa. Thanks!

 

 

2012 in review – great report on my blog by WordPress

31 Dec

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 8,000 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 13 years to get that many views.

Click here to see the complete report.

Followups are key for success

6 Nov

As  always I’ll start with the soundtrack to this post. You can read about why I add soundtrack to every post I write. This is this post’s soundtrack:

A few days ago I followed up with a friend of mine (Eran Gilad, CEO of Tracx, a great tool for social media management). Just an arbitrary catching up. In his response he wrote something that hung in my head for a few days. He said “followups are key for success”. And as much as it’s an obvious thing to say I think that people are underestimating followups. Here I’ll give a few tips on how to remind yourself to followup, after every meeting. Even if the meeting is not that important for you. You can never know. Always remember that you have to be nice to people and appreciate the time they spent to meet you. Exactly the way you expect people to treat you. People are busy and they are not sitting around waiting for you to have a meeting with them. And after a meeting you have to followup again and again to make sure that shit gets done the way you discussed in the meeting.

I won’t go over on how to followup. There are tons of posts out there that tackle exactly that. I’ll just share how do I remind myself to followup and catch up with people:

  1. Don’t mark the reminder for the meeting as read

    If you’re used to remind yourself about meetings with an email then don’t mark this email as read until you send a followup email. Other reminders people use are SMSs or notifications on their Smartphone. The same can be applied to these reminders. Don’t clear the reminder until you followed up  to every meeting you attend!

  2. Put the business card you got on your screen

    Silly, but it works. Sometimes, after a day full of back-to-back meetings, half of my screen is covered with business cards.
    It reminds me of how my parents browser looks like because they somehow installed too many toolbars and now they have a thin strip that actually shows the website content…

    Too mant toolbars

  3. Use a CRM

    Use a tool that will manage for you all your sales leads, investors, advisors and  generally all your contacts. While SalesForce is the leading CRM software out there I prefer something much simpler. I use Streak. Streak turns your Gmail into a CRM and it’s doing it great. You can put your contacts in boxes such as Sales or BizDev and add reminders so you’ll not forget to catch up with people. If you’re using other CRM you can use Ecquire to capture contacts in your Gmail and send them to your CRM.

  4. Find out if people are reading your followup emails

    A great tool I love to use from time to time is Bananatag. Bananatag lets you know if people are opening your emails and if they clicked on links. This tool lets you know that your message arrived and was read by the people you send emails to. Sometimes email gets into people’s spam folder and not a lot of people will check there for your email so a lot of times you’ll have to make sure that people got your email. It also lets you know if people are interested in what you’re offering. A lot of times it helped me figure out if I need to send another email or just get the message that the person is not interested.

  5. Every meeting should have action items

    Every meeting you make should have action items after it. For all the parties at the meeting. Without action items the meeting is a waste of time. And action items are the best way to remind you to followup. This is your motivator. You want the people in the meeting to execute on their action items because they’re probably things that will help you. That’s got to make you want to followup, summarize the meeting and let everybody know what their action items are. Add a reminder with Streak to followup again after a few days.

I’ll be happy to hear if you have any other tips for following up and recommendations on tools that might help.

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