Category Archives: tech

Can You Handle the Truth? Advice for Founders

Always tell the truth, its the easiest thing to remember. — Glengarry Glen Ross

I have started my second semester at the Founder Institute, Adeo Ressi‘s awesome incubator.  It has been a blast so far, in my view, a lot of really strong founders wiht great, viable business ideas. It has been a lot of fun to be involved, and it is as always humbling to have smart, passionate people asking for my input.

As it is still early in this group’s process, some of the ideas are a little earlier on, still in “ideation” (terrible word) mode.  This is of course a natural state of being in a startups life, that early stage when you’re still not even sure you’ve got a good idea.  Its an exhilirating time–you’ve not made any mistakes (yet) and the world seems ripe to take on your vision, while at the same time, you definitely have those soul-shaking moments of doubt as to whether you’ll ever be able to turn your idea into reality.

Int this stew, founders will come to me to ask my advice on their idea, and I’m happy to try to take the time to listen and provide a few minutes of helpful input.

A question I have had and answered for myself is how hard core or harsh to be on someone’s idea when it is still on the drawing board.  Although it certainly has its risks and drawbacks, I’ve decided that this is a time to be very blunt and hardcore.  The risk is that this approach dissuades someone or that it gives them an impression that I’m a jerk.   This is the last thing any founder wants to become–the startup world is too small afor people t get such an impression.

The counter argument is that by being hard core you toughen up a founder, you help him or her focus on the key challenges in their business, and  at an extreme, you convince the founder that the idea is not worth investing time and life in.  At the ideation phase, the costs of switching an idea are low.  I have become comfortable with this being on balance the preferred approach–the pain is worth the value.  I also try to remind the founder whenever I do this that my opinion is just one, and I’m certainly perfectly happy to have the founder prove me wrong and make a boatload of money doing just that.  In other words, its not personal, and I’m hopeful that it does help.

I have come to believe passionately that this is the only appropriate response for founders asking for advice.  My input is not costing anything, and if I’m off by a mile, there’s no reason that a founder should listen to me.  You asked and I answered.  No harm, no foul.  Totally makes sense, right?

Right.  As founders we should all be pushing each other in as hard core a way to make our businesses kick ass and take names.  Give the advice, hit hard.

Reblog this post [with Zemanta]
Advertisements

1 Comment

Filed under bootstrapping, entrepreneurship, free stuff for startups, tech, technology

Startup Revenue: Moats & Models

I’m giving a speech tomorrow at the Founder Showcase in Santa Clara.  The topic is around building revenue for startups.  The slides are here:

These build on a prior talk I gave in 2009 on this topic, and I’m looking forward to it.

To give my cliff notes here of the speech, it’s basically:

Revenue is the lifeblood, getting to revenue is nice, very nice. 

Some advise not to think about revenue too early on in the life of a startup.  The thinking goes: focus entirely on building something great, get an audience, then the revenue pieces will start to work themselves out.  I disagree with this philosophy in part. 

I totally agree with the idea that 100% of your focus needs to be on building something people want and driving to iterate, iterate, iterate.  At the same time, I advocate thinking about revenue–at least a little bit–early in the lifecycle of starting a company. Don’t get derailed, but at the same time, don’t avoid the topic entirely.  My rationale is simple—you never know what small thing will someday be the determiner of success or failure, so thinking about something important like revenue is a good thing to at least wrap your head around. 

The talk then goes into two parts.  Part 1 is about building out a business to think about how you’ll establish moats and drive traction.  This is about defensibility in part; its also, however about driving distribution (at least in internet businesses).  I argue that any founder should likely try to draw out the model that I’m advocating here—may not be relevant to you, but I’d think you’d at least want to try. 

Then Part II is about models.  I’ll talk about my thoughts on types of revenue models, a sort of revenue model 101.  Nothing too revolutionary here, but hopefully a useful primer if you’ve not thought through a business model before.  I then finish off with a brief description of how to think about your market as a whole.  An industry or market model, i.e., the macro picture of the environment in which you operate is something that entrepreneurs will very likely need to be able to grasp and exercise their minds about. I’ll provide some quick thoughts on how I view that as working well and not well. 

Hope to see you there!

2 Comments

Filed under business, internet, tech

Apple’s Dr. Jeckyl & Mr. Hyde Routine with Developers Continues

TechCrunch just announced that this is the year for Flash to come to the IPhone.  (Oh, wait, it’s already kind of been there with YouTube, the world’s largest flash app, for the past 2 years, but whatever.)

TC’s Erick Schonfeld rightly points out that this is a big, big deal for users as well as for Flash Developers, as they can build once (in Flash) and have the app automatically turn into an IPhone application:

Once Adobe publicly releases CS5, Flash apps and video still won’t run on the iPhone. But those 2 million developers will be able to keep working with Adobe tools and simply turn them into iPhone apps automatically. In contrast, there are only an estimated 125,000 or so iPhone developers. This will lower the barriers to making iPhone apps even more than they are today, which may ormay not be a good thing. But if you thought there were a lot of iPhone apps now, just wait until the Flash floodgates are open.

I think this is right on.

For me, though, the thing is that this will further weaken the IPhone as a specific developer platform–meaning using the Apple SDK exclusively.

Apple enthralled developers with the opportunity and promise of the IPhone, and for the past 2+ years, they’ve basically run the table.  Any developer who was building a cool mobile app had to look at the Iphone first.  The Palm thing isn’t viable, Android wasn’t quite there.   But Apple’s treatment of developers has been so poor on the dimensions developers care most about–specifically being able to build, ship and update code quickly and hassle free–that there is a lot of badwill out there.  I’d be willing to bet, though can’t prove, that the quantity of badwill is proportional to the skill of the developers working with Apple.

I’ve written earlier about my thinking that Google’s Nexus One and Android strategy throw one very large shot over the bow of Apple’s IPhone ecosystem strategy.  With Adobe opening the gates for its developers, it will help Apple get even more apps, a good thing.  But it will likely marginalize Apple’s own developer efforts even further.

Strategically, it seems Apple has some decisions to make.  First is whether it wants exclusive app content, or whether it wants to be one of several mobile platforms for which all app developers build.  This is just like the game console business in my mind–you’ve got the PS3 and the XBOX–they will each fight for a few exclusives, but most apps are on both.  Iphone and Droid will likely end up in this position for mobile apps.  In this case, then, Apple then has to think about how it wants to retain that–on its own SDK or with Flash or other platforms.  Probably some mixture of a few.  And finally, it will be forced (i’d think) to revisit its approval process–its ability to retain control is correlated to the momentum it has.  As the momentum fades, so does its leverage on the app approvals.

4 Comments

Filed under tech, technology

The Google Phone: The Empire Strikes Back

This week, with much ballyho, Google announced its new superduperphone, the Nexus One.  The product reviews are favorable, broadly speaking.  This is particularly notable when one considers that it will invariably get compared with the iPhone (“have you friggin heard of it?”). 

I’ve used and watched closely the Iphone and its ecosystem for some time and I think this could turn out to be a massive strategic strike by Google against Apple.  Surely the smartphone market remains small as a percentage of the total mobile market, and it will grow.  Both and others like Palm and Windows Mobile will likely find healthy niches.  Still I think there are major elements Google has put into place that make it potentially very advantaged over the medium and long-term against Apple’s Iphone strategy.  Here’s what I mean…

To have done so much in a v1 hardware product, purely on a design and functionality perspective, is an audacious achievement for Google.  Few would have predicted that v1 would have reviewed as potentially competitive on a design front to the iPhone.  For example, just recently, Paul Graham predicted that no one would have a chance to touch Apple in terms of mobile device design, that:

It’s unlikely you could make something better designed. Apple leaves no room there.

I’m not arguing that the Nexus One would win hands-down on a design side-by-side, but it is has enough to likely hold its own on this vector of competition.

So now Apple’s advantages are:

  • a clear (though slim) advantage on design
  • a strong integration with media (mostly music)
  • a strong lead in terms of applications and current application developer mindshare
  • tight integration particularly with MacOS computers
  • maybe its customer loyalty.  obviously many are quite loyal to Apple, but Google also has world-class customer loyalty.  I’m not sure I’d give Apple much of a lead on this front.

The relative advantages that Google brings to the table include:

  • a strong advantage in business model—this was discussed very well by Benchmark’s Bill Gurley here.  Google will pay carriers to carry their phone; Apple gets a fee from AT&T.  This is a very significant difference, and it will have an impact.
  • an model for handset diversity. this will basically enable handset makers to pick off other segments of the smartphone market. 
  • a vastly more favorable approach to application developers. 

How will this net out?  My early prediction is that Google has a chance to do to the IPhone what Microsoft Windows did to the Mac—it’s the Return of the Empire. 

Why will it play out this way?  Two key reasons will drive this. 

First, the business model advantage that Mr. Gurley talks about in his posting is one that has an impact.  Apple is strong, for certain, but putting a business model that’s cheaper than free in front of their carrier customers is one that will have a result. 

Second, if the business model is the tops-down strategy to win against Apple, the friendliness to application developers is one that works from the bottoms up.  Apple’s attitude and approach to developers is a clear opening to Google, and Google’s approach to date is clearly going to exploit this. 

So most everyone knows that billions and billions of apps have been downloaded for the Iphone.  (3B at latest count.)  Apple created an ecosystem with a speed and breadth of distribution that the world has never before seen.  It is geek magic.  Application developers *love* having the opportunity to develop apps for mobile smartphones like the IPhone.  Small teams of really smart developers can build apps for little money.  There’s distribution through the Apple ITunes App Store, and they can even make money.  It’s a hacker’s paradise, a wet dream, the land of milk and honey….  except when it’s not. 

Apple’s approval process is one that is byzantine and lengthy.  For serious developers, used to working at web speed where they can do daily, hourly, or by the minute updates to their products, resubmitting to Apple for a lengthy review every time they update their app is ridiculous.  It’s boooogus, and everyone knows it.  Great developers won’t stand for it for long, *if* Google can get traction. 

Despite its 3B applications that have been downloaded, Apple’s approach puts its at strong risk of losing developers’ hearts, minds, and their coding fingers.  All these developers figured out how to start building apps—remember, basically no one was building apps for Iphone even 3 years ago—and they realize it just doesn’t cost that much.  (Interestingly as a side note, no one seems to care that Apple takes like 30% of the revenue—a king’s ransom.  No one really complains about this—what is complained about are all the restrictions in shipping an app on the Apple Iphone.)

Developers want a platform that has no hassles—let’em build and ship code and get customers our latest work.  Apple’s choice to impose its will is holding back a community that can and will move quickly to an alternative.

In my view, this is a dangerous approach for Apple at this time.  If they maintain the stance and if Google can get any kind of traction in the next 6 months, I look to Google to gain a vast uptick in developer apps, likely at the medium term detriment of Apple.  As with the early innings in the PC/Mac wars, Mac showed the way, and the PC built the ecosystem and rode the 90’s to glory.  We may see the same thing on a smartphone, 20 years later.  The Empire, this time Google, is well positioned to strike back. 

 

 

Reblog this post [with Zemanta]

3 Comments

Filed under google, internet, iphone, mobile, tech

How *NOT* to demo a product: Bezos’ Kindle 2 Demo on Jon Stewart

I can *totally see* his marketing people pitching Amazon Founder & CEO on the brilliance of the idea.  Pitch the Kindle 2 on Jon Stewart.  The audience demographic is spot on – smart, relatively wealthier 18-34 year old males.  The show oozes cool.  Jon Stewart’s funny and well-read.  And Jeff Bezos is an articulate, engaging fellow.   And—best of all—the Kindle ROCKS—what a product, it’s awesome.   What a perfect way to take the Kindle 2 beyond its early adopter roots into the early majority. 

What could possibly go wrong???  Well, it turns out quite a lot. 

Words can barely do all this justice, so I’ve embedded it in an articel below.  

http://mediamemo.allthingsd.com/20090224/jeff-bezos-sells-the-kindle-to-jon-stewart-wed-make-it-cheaper-if-we-could/ 

The key issues that I saw were:

  • There was no interesting content on the Kindle for Jeff to show Jon.  Jon picked up the reader and all he saw were those ‘screensaver’ photos of authors that the Kindle scrolls through. 
  • Jeff had very weak messages on the Kindle’s benefits.  The key benefit Jeff promoted was that the Kindle let you ‘read one handed.’  WTF?  WTFF?
  • Jeff jumped the shark or whatever you call it when he said this was unlike other interviews he’d done.  This was the kiss of death, the coup de grace, the creme de la creme, when Jeff remarked (nicely, mind you) that this wasn’t like other interviews.  This was the silent but deadly!  Jon Stewart’s interview was straight-forward for Jon—what is this thing?  why is it good?  and I’ll make of you if your answers suck!!!  Jeff didn’t have a fawning press hack asking him about the future, just basic, Product Manager 101 questions.  To say this was unlike other interviews, having watched it, is nuts.

Ok, so what would I do differently.  Pretty simple:

  • Have an interesting demo, get an “Ooooooh/Aaaaaah” out of the audience.  Oprah may love your thing, but Stewart’s never seen it.  If you’re going to show someone for the first time in front of an audience, then actually demo the damn thing so that people can be wowed and give you some ooooh factor.  Then Jon Stewart can’t quite rag on you so bad.  Cripes with a Kindle, you have to figure some folks in the audience love the dang thing and would hoot for it even with a crappy demo—make that a part of the thing.  I’m still shocked that Bezos didn’t demo the thing.
  • Speak about the benefits your product provides as if you were a human being.  The Kindle is such an awesome product, even with all its shortcomings.  Saying it’s benefit is that you can read one-handed is almost criminal.  B- entries would include: say you travel a lot and you like to read.  Now instead of carrying along a set of books, you just carry this.  IMagine you’re someone who likes to read 6 books at any one period of time, alternating between them.  Customers tell us its great to have one device to switch between them, not look all around the house for the book they want right now.  Finally, for the future, imagine you go to college and you have 440 pounds worth of books, imagine what this might someday be able to do for you—we’re working on it. 
  • NEVER say on camera that this is unlike any other interview you’ve ever done, unless it’s for your child’s elementary school newsletter.  This showed me that Bezos hadn’t prepared, or his marketing people hadn’t build a set of talking points, whatever.  The net was it was clear that this was off script.  It made Jeff look like a tourist in the land of Stewart.  This is unfortunate, as I really really like what Amazon is doing.  I’m a happy Kindle customer.  Good cautionary tale.

1 Comment

Filed under business, marketing, tech, technology

Do the ad campaign first

Seth Godin discusses an interesting question today on his blog: “Which comes first, the product or the marketing?”

He argues that marketing (broadly defined) should come before the product.  In other words, define marketing by Peter Drucker’s standard of “creating a customer,” and then and only then build the product.

This is hard to argue with–of course, you need to know who your customer is and what their pain points are before you go off burning time and money building a product for them.

Sure thing, makes total sense.

I would go a step further though.  I suggest that a team start with the marketing (as Seth advocates), with the explicit goal of being able to create the ad campaign that would exist when the product was in market.

Now, I know many people think Big Media / Old Marketing advertising is dead (see Seth Godin’s Meatball Sundae, e.g.).  And it may well be that you are designing a product that will never have a TV ad run for it.

I don’t really care about what ads you end up running, instead, I’m advocating that you sketch out the ads you would run if you were going to run them.  Here’s why: the marketing task of building an advertisement forces you to develop several key elements of your marketing thinking.  For example, advertising forces you to develop (and stick to) a single main idea for what it is that your product is all about.  BUilding an ad requires you to articulate what are the truly compelling benefits? And, finally, an ad forces you to communicate those benefits or your positioning in a cogent, concrete, and brief way.

For those reasons, I am a big believer in doing the work to build the ad campaign first, based on the marketing work that goes into it.

A great example of this, is the MacBook Air.  Here’s an excerpt from a Steve Jobs interview on the MacBook Air and it’s development:

We decided a few years ago to build the world’s thinnest notebook. And so, it started in the design phase, figuring out how small we could make things,” Jobs told CNBCs Jim Goldman. “And we probably built 100 models to get to this. So the first step was just holding a model in your hand and saying, ‘if we could make this real, we would all just lust after this.’ And, we did! So its been about two years of work to make this…

It’s [takes] precision machined aluminum to get it this light and this thin.”

Now look at the ad.  I would be willing to bet a lot of money that execs at Apple had the vision of an ad with a beautiful Apple Laptop sliding out of an inter-office envelope very, very early in the design phase.

It clearly articulates to the marketing and engineering teams what the vision of the product is all about.  And when it comes time to launch the thing, you know exactly what your single big idea is all about, you know how to communicate it cogently etc.

Now the counter to this is to do “the marketing first” and then build the product, and the heck with the ads.  This is ok, but it has risk.  Notably, if the product teams start making compromises along the way, if there’s feature creep, etc., then you start losing site of precisely what the single main idea of the product is.  The product limps across the finish line with nothing distinct, nothing unique, and the marketing guys then get out the lipstick and start doing  pig dressing.  This happens all the time, not because people are stupid or incompetent, but because there was never a flag stuck quite deeply enough in the ground at the beginning to state what the product was and who it really was for.

Having lived through that a few times, without naming the specific products, I’ll tell you that nothing is worse as a marketer to have a product that lacks a single main idea or cogent set of benefits.  No one’s happy–the engineers think you suck as a marketer.  The partners think you’ve built a crumby product.  And you have nothing to do but stand fast and just pitch, pitch, pitch.

Force your team to do the ads first.  Having them early will help everyone stay synched on what the core benefits are that you’re building.  And if the team can’t agree on the benefits to customers that you’re trying to build at the outset, well, that should be a pretty good indicator that the team doesn’t know what its trying to do.

Technorati Tags: ,,

1 Comment

Filed under business, marketing, tech, technology

New FriendFeed Search bring FF a lot of promise

FriendFeed launched a new advanced search capability today, reported on here.   I think it opens up the promise of FriendFeed to expand into something far more impactful and useful than it already was.

To date, I’ll confess that I’ve not been a heavy user of FF.  It was awesome in terms of its sheer conversational (and other) data that would go through there.  But in terms of usability, it seemed like people could get really, really drawn into threads and discussions that went way past their usefulness.  A bit like those email threads that just won’t die.  Prominent tech bloggers were getting sucked into the FriendFeed vortex, and interventions were being publicly advocated.

Yep, as someone who needs to stay productive, I had to stay away from FriendFeed.

Now along comes the Advanced Search, and now, all these conversations become something that I can go and pull stuff out of.  I can choose to be part of the whitewater rapids of conversations flowing through FriendFeed, or I can drop my search in and fish out whatever I want.  I’m more of a fisher, and this feature’s great.  Obviously a ton of different scenarios could be useful as Marshall’s article mentions.  But this feels to me like FF could become a pretty strong platform where vertical searches on all sorts of stuff becomes important.

I’d watched FF from a distance, admiring it and thinking that it was pretty ingenious.  Now I’d say I’m pretty excited about their prospects indeed. 

 

Technorati Tags: ,

Leave a comment

Filed under internet, tech, technology