Author Archives: Elia Freedman

Company Foundations: Money, Vision and Timing

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I have been thinking a lot about the keys to success for a company. In short order, they are money, strategic vision, and timing. If those three aren’t in place, then nothing else the company does will be successful. What I mean is without these three, excellent execution will mean nothing. Let me explain each.

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.

Rating Mobile Platforms for Development

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So I need to make a business decision about which platforms to develop for, and that decision almost always comes to how many potential customers versus the cost to develop and distribute for the platform. I’ve broken each down based on recent events.

Potential Customers

The first step is to see what the potential revenue is based on the number of people buying a platform and likely to buy one in the future. The numbers of unit sales are readily available. Of course, this doesn’t actually tell you the number of users since those who stick with a platform tend to buy into each subsequent generation of products. In the smartphone space, this number is easy since most users stick with their current device for the duration of their contract. Of course we never really know how many people are new and how many people are buying the next generation.

Given all this, it is just the baseline. If there aren’t enough units sold and those customers don’t seem to be the kinds of customers that would want to buy my products, then I’m not going to develop for it. The real decision point comes once the cost components are analyzed. How do I view the major platforms (from within North America)?

  1. Hot: Apple iPhone/iPod Touch, RIM BlackBerry
  2. Simmering: Microsoft Windows Mobile
  3. Cool: Nokia Symbian, Google Android

Surprised? Remember, I am looking at units sold and the kinds of users being attracted to the platforms (relative interest in my products). Symbian devices have not made much of a dent here in North America and Android is too new. An International discussion would be completely different. But I believe if I can’t make money in my home country then I can’t make it overseas, particularly given the added costs of product localization and foreign distribution. As for Microsoft, they always seem to be there but that’s it. People buy their products but no one seems to love them. It’s a real shame.

Distribution

The next major decision point is distribution. Generally, I only care about distribution in terms of costs to reach customers. I don’t really see distribution as a means of getting to the customer — that’s what marketing is for. Instead, distribution is all about product delivery. How easy is it for people to find my products once they want to buy them? How easy is it to purchase, download and install? And how much is it going to cost me as the company to do it?

This is where the wheels have started to fall off the bus in the mobile business over the past 6 years. Costs have been through the roof (67% of product price in some instances) and it hasn’t eliminated any of my install and reinstall issues.

And then comes Apple. Charging 30% and eliminating all install and reinstall issues in the process, we finally have a channel of interest. On top of that, Apple is doing a ton to raise the interest and awareness of third-party applications, a huge added bonus.

And Apple started an avalanche: Google and now RIM have announced their own stores, and Microsoft is rumored to have one in the works. All have roughly the same terms (20-30% of retail price) and the same promise.

So how do the major platforms shake out?

  1. Hot: Apple, Google
  2. Simmering: RIM
  3. Cool: Nokia, Microsoft

Until those rumors play out for Microsoft and Nokia, they will stay on the backburner when it comes to distribution, at least. As for RIM, the devil is in the details. Some we know (20% cost to developers) but many more we don’t (how will partners be treated, will it be on the devices, will anyone care).

Development

This is where mobile computing development gets really hard. Every platform takes its own custom development. Fine, they all are either C-based or Java-based, but every user interface is different. The costs to develop for a subsequent platform are staggering, particularly when the size of smartphone software development companies are taken into consideration.

I have been hearing a lot of noise in dev communities about Android lately. These old-time developers, who developed in C on Palm and Windows Mobile, are now faced with moving their applications to Java on RIM and Android. (iPhone and Nokia are C-based.) Even if all devices used only Java or C, it would still be a daunting task to redevelop the user interface layer of the application for every device.

The other big announcement in the previous weeks is RIM’s support for Google Gears. Google Gears allows a web site to be used even if there is no web connection. So as a developer, we can hypothetically write a web-based application and then run it locally (without an Internet connection) on supported platforms. With RIM’s announcement, that means that RIM, Android, Windows Mobile, Windows, Mac and Linux systems all support Google Gears now.

Hot, simmering and cool? I can’t rate them. Every platform takes custom development still. At some point, hypothetically, we could support iPhone native along with BlackBerry, Android, and Windows Mobile with Gears, but not today. Today, the other factors have to be considered first.

Conclusion

If I’m a developer today, I am looking very hard at iPhone (as we are). They have the distribution channel and unit sales to be exciting. If I came from the Palm world (as we did), I also have some code that can translate over. It’s still a custom development job, but at least not a complete one depending on how much back-end programming has to be done.

My next decision is harder: do I leverage my C code base and develop for Microsoft’s multiple variations of Windows Mobile or do I jump to the hotter platform with better distribution promise in RIM? And my answer to that one is: follow your customers.

Is Google Gears A Mobile Development Game-Changer?

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Google Gears could be a major advancement for third-party, mobile developers.

RIM announced last week support for Google Gears on future devices, Windows Mobile devices already support it, and I’m sure Android devices are not far behind.

Why’s that such a big deal? Because the promise of writing once (for the web) and running everywhere is actually coming to fruition. And for developers, this is a big deal. One of the major cost factors in mobile software development is picking which platforms to write for. If we no longer have to make that decision and we can write for all platforms without having to re-write for all platforms, we will finally be freed to make a profit. What a novel idea!

On top of that, as I noted in my article regarding how other mobile companies can beat Apple, I spoke about how a company that enables web developers to write local applications easily for their device will have the inside track. Is someone at RIM listening? I hope so because Apple will be better for the competition.

Government Spending Through Business Eyes

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I know my articles have been vaguely political lately, or at least it is political issues inspiring me to write. I have this odd personal mix of social libertarianism and fiscal conservatism that I find fits poorly into our two party system. So I keep trying to make sense of the issues facing our country and struggle with a decision about who is right to run our country at what feels like a very critical juncture.

Pertaining to the economy, I finally got it, partly from the debate last night and partly from a Fareed Zakaria Newsweek article. If we think of the government as a business, then we need to think in terms of total revenues and cash flow. Total revenues is the same as GDP; cash flow is our budget deficit. As in any business, there are two ways to grow a business: we either cut costs or grow revenues. The idea behind cutting costs is that we can trim fat from the budget and thus make the business more profitable. The idea behind growing revenues is that if we invest in the business we can grow revenues faster than expenses and thus become more profitable.

GDP (Revenue) Growth
1993-2000: grew $2,280B (that’s $2.3 trillion dollars, 29.7% total)
2001-2008: grew $1,930B (18.8% total,estimated 2008 numbers)

Budget Deficit (Cash Flow) Growth
1993-2000: grew -$320B
2001-2008: grew -$2,000B

So why did 2001-8 explode the national debt? Our economy grew slower (we took in less revenues) and we spent more. And why did 1993-2000 work out well for our country’s cash flow? Because our economy grew while we cut expenses. 2001-8’s spending spree would be fine if we were investing in the future, but I don’t think anyone feels that way these days (with the possible exception of the “War on Terror,”  which can be viewed as an investment in our future).

As all of us who run businesses know, there is a time for cutting costs and a time for growing revenues (hopefully you are doing both at the same time but I don’t think that generally happens. The goal should actually be to increase revenues faster than we increase expenses). Senators McCain and Obama are presenting opposite approaches to this fundamental question. Senator McCain has a ‘cut fat to control costs’ perspective: spending freeze, move education and health care off the federal books, investment in US energy production. Senator Obama has an ‘invest to grow revenue’ perspective: invest in education, US energy production and health care (a competitive issue for US businesses and a sap of potential better uses of our revenue dollars), using a scalple instead of a hatchet on costs.

There is no doubt that investment has worked at times. Our economic success in the 1960s to 1990s (I try to forget about the 70s) has been built on the backs of huge government outlays in the 1930s (electricity) and 1950s (roads) coupled with private investment in technology (1980s-1990s). The question for election day: is it time to invest to grow revenues or is it time to cut expenses?

Thankless Job of Playing Cop

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There has been a lot written recently about how Apple’s police officer role in the AppStore. It’s true: Apple has taken some applications out for various reasons. Why? Who knows. But there has been plenty of speculation and “better than thou” thinking on this topic, to be sure.

Today, a story surfaced about an application from Coors called iPint, a free application that simulates drinking a beer on the iPhone. It is exactly like an application called iBeer, a $3 application. The iBeer developer is suing Coors. Apple, playing cop, chose to take down the iPint app (Coors’ application) from the US store. The story is here.

I don’t envy Apple. Playing cop is a thankless job.

Here’s where it pays: A developer in England had developed an application with a very similar name to FastFigures. Of course, I want to protect our brand name. I contacted my lawyer and contacted Apple, who I knew would want to know about the issue. After consulting with each, I also contacted the developer. A nice guy. He was more than willing to change the product name and the application was re-posted this week. Apple stood by, monitored the situation, and made sure everything was done correctly and to everyone’s satisfaction.

What could have been an ugly situation was handled smoothly and professionally. So here is a public thanks to Apple for playing the thankless job that no one else — save the legal system — wants.