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I think history is actually on Apple’s side. (And Microsoft’s apparently as they are planning on the same closed store infrastructure for Win Phone 7.)

At the turn of the 20th century you had to be very wealthy and a tinkerer to own an automobile. Most layman owned horses and they were relatively low maintenance (feed a horse and it could pull your family around for a decade or more) in comparison, and I would bet most layman said what do I need an automobile for? Starting a car was silly, right? Get out of the car, go to the front, and crank this metal poll around. There were no mechanics so you had to fix it yourself. The first autos catered to the 1% of the world’s population that liked this kind of thing.

Then along came Ford and brought the prices down. More people bought them, they became easier to use and with more people using them, mechanics and others who specialized in understanding the internal workings of an auto came about. While there were some changes for the next 60 years, none effected the auto like the computer, which basically made the home mechanic obsolete. It is unusual to see someone even change their own oil now, let alone fix more complicated things. But almost everyone drives a car today, or knows how.

As the system became more complicated and the tinkerer was boxed out, ironically, more people became users because the entire system became more accessible.

I think the same is happening in computing. Apple isn’t making a smartphone/tablet/entertainment device for you and me, the 1% of the world that are technologists. They are making a smartphone and tablet and entertainment device for the 99% of people worldwide who don’t know an Ethernet cable from a power cord.

I’ll be honest. The past few years have been a struggle. And this last year — falling prices, crazy device sales and increased competition — has been particularly taxing. But it’s forced me to really think and one question has been circulating through my head: why do people buy our products? I think we’ve been asking this question for years without fully understanding the answer.

When we started out there were so many things different about powerOne than any other: the template format made seeing and entering data on a smartphone so much easier, many of the included calculations are designed in terminology for the market (i.e., mortgages) versus terminology for the technical (i.e., TVM), you can add-on calculations, you can create calculator templates, and you can share the results.

It took me 12+ years but it’s clear to me now why people buy powerOne: it’s programmable. You can create your own — as simple as entering a formula in a spreadsheet cell — or copy one that’s already made at our community site.

That’s its differentiator: creation. The rest are just facilitators  — amplifiers, if you will — to that differentiator.

There are lots of products that can calculate — there must be 2,000 calculators in the App Store alone — and there are lots of products that send results and use your industry’s vernacular. But there are few that use customizability to combine all these elements together.

It’s funny how this happens. Differentiation is one of those funny things. I always thought I knew. But until we got into the hyper-competitive world of iPhone applications and had our brains beat in for a year, I didn’t know what I didn’t know. Well, now I do. And when it comes to product and brand building, I’ll never lose site of that differentiator again.

“As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. This is to say we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know we don’t know.”

- Donald Rumsfeld
former Dept of Defense chairman
George W. Bush Administration

A week ago I was asked to give a presentation to a local meet-up mobile group called Mobile Portland about my 12 years in mobile and how that relates to the iPhone App Store. I decided to focus this on some conclusions I came to regarding building an iPhone business instead of being specific to Infinity Softworks.

I then gave the same presentation earlier this week at OTBC, a local tech incubator that I’ve been involved with the past few years, for a Lunch-and-Learn. In total over 100 saw my presentation in person or streamed across the web.

I’ve included both the slides and video here for your review. I think I’m taking a very realistic look at the challenges. Most of the popular press and blogs have been so overwhelmingly positive about the App Store and its impact for developers. But the make-up of the App Store is far more complicated than that for the vast majority of us, and the opportunities have morphed substantially over the last nine months.

I hope this helps you with your business decisions, giving you a little more insight into the opportunities and challenges with Apple’s App Store itself. My goal was to analyze this from a business perspective. Obviously my own experiences influence the slides but feel that the presentation is broader than any one company’s experience.

Video

This video was shot with the second presentation at OTBC. The first half, 27 minutes, is my presentation. The second half is Q&A.

You can see it here if you can’t see the embedded video:http://blip.tv/file/2080839/

Slides

If you’d prefer to peruse the slides instead, please keep in mind that the video tells a much fuller story than the slides do:

Finally, the cards changed in my favor. With only a handful of chips left, I bluffed my way to a solid pot then started drawing good cards. Before I knew it I reeled off seven or eight winning hands in a row, riding them to a nice pile of chips, and putting everyone else at the table on the defensive.

It dawned on me recently that I have been running Infinity Softworks the same way the last few years. As with cards I didn’t play this strategy on purpose. Instead, my cautious nature led me to it, going after small pots, biding my time for the right opening, staying in the game. Waiting. Other companies were betting all in — on mobile, on the web — and I was starting to wonder if I’d lost my nerve, if I’d be able to see the big opportunity when it hit. And frankly, I almost missed it.

This past summer and fall turned into what I thought was going to happen in 2001: the mobile software market is finally becoming a reality. Amazing hardware powered by Apple, RIM and Google is coming to fruition. The innovation curve is accelerating. Reasonable software distribution is coming back. And all of these devices are web-enabled, connecting our customers to the world.

I have found kindred spirits, people who also see great opportunities and have stuck with me for years. Years of caution finally paid off. Infinity Softworks closed a round of funding that will kick start our FastFigures and FastFigures Mobile efforts, giving us a solid foundation to build from and the ability to power through these tough economic times. (Read the release here.) This, the first winning pot in the latest of Infinity’s card games. I smell a streak coming on.

Money

A company is only as good as it has money in the bank to strategize and execute. This has been Infinity Softworks’ problem the past few years. We never had enough money in the bank to give us enough time to build a comprehensive strategy and execute to it.

In 2001 and 2002, we raised $550,000 but because of the economic downturn at the time money was very hard to come by and we raised it in drips and drabs. The mistake I made was we used the money to meet current obligations rather than executing to a comprehensive plan. At least until the end, when we raised a large chunk all at one time and we used that chunk to build our education plan and go after it. In that case it didn’t work out, but that was because of timing not money.

Don’t take this the wrong way. I’m not saying how much money needs to be raised; I am saying that money gives a company time to plan and execute. When Infinity Softworks started in 1997, we had only a few thousand dollars to build the company with, not many dollars (particularly for the kinds of money being tossed around in those days). But we had time. We were are all young and had very low overhead. This gave us the time we needed to bring out our first products and start to generate cash.

As mentioned, money has been an issue the past few years. We took part-time jobs working for others so we could continue to build FastFigures. Now, we are in the process of completing a small round of funding. It will give us the ability to focus on building our strategy and executing to it effectively.

Strategic Vision

It is imperative that a company understand what it is doing and what it is aiming for. Customers, partners and employees all need to understand it. A vision for what the company can be makes everyone excited to work with you. I have to admit that Infinity Softworks was aimless for a while. I had a better strategic vision in 1998-2000 (the next generation of financial calculators) than I had in 2001-2002 when we raised money. The vision became muddied.

Finally in 2003, we focused on revolutionizing math education (focusing our class time on key concepts instead of keystrokes). It brought partners out of the woodwork. Customers understood it. And the company’s employees all had common purpose. We knew what we needed to do and, importantly, we knew what we should not do. When it fell apart in 2006 (see Timing below), we were aimless again for a couple of years while the vision around FastFigures formulated. Now we are back on track. I can see excitement in the emails and conversations with beta and other customers, and see potential partners becoming excited about it.

Timing

With all the money in the world and the perfect strategy, none of it will matter without the right timing. This was the doom for our education business. The timing was wrong. Monies for technology in the classroom were drying up at the same time that Palm was struggling and decided to get out of the handheld business. We tried to switch course, to move to the web, but we took with the move the same strategic vision. It didn’t fit with how technology was used in the classroom. So we struggled to find partners and customers who bought into our vision. It just didn’t match the market.

The timing has to be right. I was too early and customers weren’t ready to hear my message. If I was too late, then my customers would have found a good enough solution already.

I think our timing is right for FastFigures. From a technical perspective the confluence of mobile computing and web-based computing are making a lot of things possible that just weren’t even two or three years ago. Fine, as my customers have pounded into me, it doesn’t mean web-based apps running on smartphones. But it does mean an improved method for sharing data and interacting between the two.

From a business perspective the economic meltdown has made professionals the world over have to understand the numbers before doing a deal or giving an answer, something missing over the past few years. Are we too early? I hope not but I can only know this one in retrospect.