Why you owe Apple

Look, I’m not going to make the case that Apple isn’t an arrogant, elitist company. You can argue all about their products being overpriced and lacking in functionality and that’s fine. But you can’t argue this:

Apple forces other companies to innovate.

iPhone: Is there any doubt that the functionality provided by cell phones today is far and above where it was even three years ago? Before the iPhone, you had aging Windows Mobile, BlackBerries, a declining Palm Treo line ( some of which were powered by Windows Mobile ) and a smattering of 3rd party OSs. Same shit, different models. Yes, HTC was making some noise, but that was just a theme on top of Windows Mobile and it felt that way. Everything was consistently bad: crappy web browsers, few 3rd party apps and awkward, stylus based UIs. Even if you hate the iPhone and all it stands for, it’s hard not to see that with the new Windows Mobile, Android, BlackBerry releases, marketplaces and UIs, Apple has sparked innovation in companies.

Flash: Look, we get it, you want Flash on the iPhone / iPad. Move past that for now. Is there any doubt that Apple rebuffing Adobe will force them to address the long standing issues w/ Flash on OS X? That’s already happening with some of the latest betas: the number of fixes happening to Flash in the past 2-3 years is huge compared to the previous 4-6. The same thing is going to happen with HTML5. The increased focus on the “Apple vs. Flash” war will do nothing if not light a fire under the HTML5 guys to make things better. All of this is good news for the end user.

Love them or hate them, it’s hard not to want to praise Apple as one of the few companies spurring on innovation. The technology community as a whole moves according to Apple, either with them or against them. You can argue that one company shouldn’t have that much power and you’d be right. However, at least these companies are moving. I’d rather have that a bunch of stagnant technology companies looking to squeeze a few more cents out of their dying product lines.

A Key to Product Development

A few years ago, I was working at a company that built document management software. Our hook was that your upstream and downstream customers didn’t need to interact with our system for you to get the benefits. We could accept inbound emails, faxes and even scanned paper images and we could do the same for the outbound channels. It was actually a pretty good system. However, we weren’t getting much traction from our sales pipeline. Everyone loved us, agreed we solved a problem, but just wouldn’t sign on as a customer. We couldn’t figure out why. That is, until one sobering conversation with a very large chemical distributor:

Us: So you see, with our system we can take the 4 hours that Mary spends processing documents every day and cut it down to 1.

Them: That’s interesting, but what do we do with those extra 3 hours?

Us: What do you mean? Anything else you need her to do.

Them: Well, we still have to pay Mary for all 8 hours since we need the work she does in the other 4. So we’d have to pay her existing salary, pay for your product and find Mary work those extra 3 hours a day.

Us: (paraphrased) Uhhh…

See, what we didn’t realize is that while we solved a problem, it wasn’t enough of a problem for our customers to warrant our solution. We didn’t meet the threshold required for them to introduce a new piece of technology into their everyday workflow.

This was especially evident since we were selling to non-technology based companies. We were a bunch of technology guys who were used to working and selling to other technology companies. When we stepped outside of that realm, we found that non-technology people interact with computers in radically different ways on a day to day basis. I know, “no shit” kind of stuff, but many years ago, it was new to us, but not to our potential customers.

Sadly, this critical fact is lost on many entrepreneurs. They have ideas for products that, while they solve a problem, they don’t solve enough of a problem to really elicit that stickiness that many products need to become successful with non-technology customer segments.

Case in point: I recently had a new analytics package, let’s call it NA, demoed to me. While NA is very new and still evolving, it was very, very slick and incredibly optimized at performing a single analytical function well. NA is positioned as performing this function better than the 800 lb. gorilla in the analytics space, Google Analytics (GA). While GA performed the function, it was one of many that was part of GA and wasn’t really that easy to use. However, while NA performed this function better than GA, it was still the ONLY function NA performed. So their users would have to do two things:

  • Use NA and only NA for their analytics needs ( unlikely )
  • Use both NA & GA and somehow manage two analytics packages ( also unlikely )

You can probably guess which direction I would learn towards: GA is good enough in this case. The new product doesn’t solve enough of my problems to warrant the additional overhead and problems it would introduce.

So whenever I talk to a startup about their product, helping out from a CTO perspective or just chatting over drinks, I always ask myself two questions:

  • How big of a problem are they solving for their users?
  • Could this pass a minimum threshold for a user to integrate it into their daily/weekly/monthly workflow?

By answering those questions, you’ll go a long way towards achieving a product/market fit that can turn into quite a successful business.

Why are you starting a company?

Ask most people who want to start a company why they’re doing it and you’ll like get this as an answer:

Freedom

It’s an awesome reason to start a company. Starting & running your own company is an incredibly liberating experience and one that I think people should try once in their life, just to see if it’s for them or not.

However, hot on the heels of yesterday’s post about VCs & funding, I’ve discussions with some people about VCs being the only logical path for funding. Their point is that they’d rather own 10% of a $10,000,000 company then 100% of a company worth $0. Not only is there a HUGE gap in that logic ( I know plenty of funded companies with penny options and plenty of profitable companies controlled by a majority owner ), but it also revels someones TRUE motives for starting a company.

It doesn’t take long for a proponent of “VC as the only funding choice” logic to use the following line of logic:

A) A business needs money to scale an operation up to millions of customers / users
B) Only VCs can provide a business with money needed ( $1,000,000+ ).
C) Ergo, a business needs to get funded by a VC.

Now, that logic isn’t flawed. VCs provide capital that can accelerate and scale an operation up to points unreachable without said capital. However, buried in the lead of those assumptions is the idea that a business needs / wants to / should scale up into infinity. If you start to question that, people look at you like you’re nuts.

“Of COURSE a company should get bigger.”

After some back and forth, most entrepreneurs finally revel WHY a company should grow and grow and grow:

“So that I can sell it to someone.”

Ah ha….now we’re at the real answer to the question of “Why do you want to start a company?”

Money

or more specifically Fuck You Money.

And there it is. Many entrepreneurs wouldn’t be happy with a business that makes them $100,000/yr for their lives. They want to build something, sell it for millions and then build another thing and sell that for millions too. Lost in all of that is the continual churn of trying to win the lotto. On the other hand, not many people come right out and say they’re not for sale. It’s considered novice and amateur. You’re building a “lifestyle” company.

Bullshit

There is no holy grail. If you’re chasing something, if you get it, you’ll only want more or something different. Money, cars and material things won’t suddenly make you happy. True happiness is being content who you are and what makes you happy, not constantly yearning for a more and more of something. There’s a lot of happiness to be found within a company that provides you a full life and makes you happy each day. So if the majority of people out there don’t want to so called “lifestyle companies” them, that’s cool. That just leaves more opportunity for people who want to build actual businesses, not constantly chase the lotto of false promises.

In the end, if your life is built on “Just a little more money and THEN I’ll truly be happy,” then you’ve already lost.

Lack of VC forcing bootstrappers?

Spending the last ~1.5 years immersed in the startup scene here in Chicago, I’ve come across a recurring theme. Whenever I discuss the surge in interest in running a lean or bootstrapped startup, I’m told that it’s only because VC funding has dried up and that’s forced entrepreneurs hands. The discussion usually goes like this:

Them: So how are you funding 1530?
Me: I’m bootstrapping it.
Them: I see. So do you want to grow business profit-wise or remain just you?
Me: You know, those aren’t actually opposite goals.

I find this line of thinking completely cynical and pretty baseless. The days of profitability being tied to physical size are so far gone, anyone suggesting otherwise is almost naive. It makes several assumptions: that you can only build a profitable company by starting with large amounts of capital, that you need to grow your company headcount as quickly as possible, etc… Basically, that to “succeed,” you need a big office and lots of employees. In short, you need investors, typically a VC.

The problem with this line of thinking is that it completely ignores a) the number of companies that have taken VC funding and failed and b) operate for years and don’t take on any funding. That’s no shock, though, since these companies make for poor headlines. The external world places a large emphasis on starting a company and less emphasis on sustaining a company. Big splashy rounds of funding, lavish office parties and an Aeron in every cube.

I’ve had stranger discussions with other entrepreneurs who can’t even name a reason why they want funding in the first place. They just assume “it’s what companies do”:

Me: So how are you funding X?
Them: I’m looking for $1.5 million in funding.
Me: Why $1.5?
Them:I don’t know, I think that’s what it will take to get us to beta.

Huh?

For the record, there’s nothing wrong with starting a company that relies on customers and revenue. It provides a lot of freedom. There are also several ways to get a company off the ground by yourself. The “bigger == better” reasoning is just an extension of our societies focus on consumerism, debt accumulation and a coupling of size and quality for no reason other than vanity. Everyone wants to be the guy that just got funded for $10 million. No one wants to be the guy who’s working away on his idea after his wife and kids go to sleep.

If you’re starting a company, or even if you’re not, do yourself a favor: reduce everything and focus on the bare basics needed. If your company needs several million to get off the ground, go after it. If it doesn’t, then don’t. Part of owning your own company is understanding WHY you’re making decisions, not just making them.

The Essences of Visualization & Simplicity

The defining challenge of data visualization is projecting high dimensional data onto a low dimensional canvas. (As a rule, one should never do the reverse: visualize more dimensions than what already exist in the data)

– Michael E. Driscoll ( Dataspora Blog )
This holds for several other things too. You should never try and add something ( words, slides, features, etc… ) when it’s not required.

iPad, Children & the Wii

Taking my family out for lunch today, I noticed something interesting. While waiting to sit down, my 2.5 yr old nephew asked for my sisters iPhone. He grabbed it, unlocked it and proceeded to navigate to the SpongeBob Square Pants game that she had on there. Sitting there quietly, he played until we had to move.

Now, tell me what other full blown computing device you could put in front of a young kid and have him use. Think about what it takes to even launch a game on Windows or Mac OS X.

What I just described is exactly what people are missing from the iPad announcements. The iPad is not aimed at ‘us’ as in techies, developers and people generally comfortable ( to some extent ) with computers as they are. It’s aimed at people who would otherwise not be using computers. Such as children and the elderly. People who either a ) missed out on the ‘computer’ generation or b ) haven’t been exposed to the current file / folder / desktop metaphor of computers.

Frankly, it’s the ‘Wii’ of computers. Just like the Wii found a largely untapped market of people who would never buy a video game system, the iPad will become the computer for generations ( young and old ) and demographics ( soccer moms, travelers, etc.. ) that normally wouldn’t buy one. The computer that is useful enough to carry with them, while at the same time being fun and easy to use. No drivers. No disks. No hassle. No confusion.

Just functionality & simplicity.