Managing Risk

I’ve spent a massive amount of my time while running Infinity Softworks managing risk. In this case I’m talking about business and technical risk. When do I count revenues? How reliant am I on a partner? How reliant am I on a technology sticking around?

Sometimes I’ve been good at this. I’m conservative about deals, for instance, never adding cash expectations to my budget until the contracts are signed. Sometimes I’ve been bad at this. We were extremely reliant on Palm in 2004 and didn’t even understand how reliant we were. When the relationship failed 70% of our revenue disappeared at the same time.

Yesterday App.net announced that renewals didn’t meet expectations and that the product would continue but that the team developing it would no longer be full-time. Development would be open sourced.

This doesn’t bode well for those that rely on ADN for log in and syncing services, the developer back-ends. If I did, I would be looking for an alternative right now. In managing a business it seems that I am always surrounded by risk. My goal is to minimize it as much as possible where possible.

This is one of the reasons we don’t do log ins with Facebook or Twitter or Google. This is one of the reasons we prefer to manage our own servers. This is one of the reasons we have multiple revenue sources. As I was planning Equals one of the things I thought about was all of these risks. It is one of the reasons we chose to develop the web version first and mobile-specific versions later. Relying on Apple, Google, Samsung and Amazon to provide us customers is dangerous, especially if we factor in the rules that go along with participating in someone else’s store.

Honestly, it isn’t possible to get rid of all risk. But it is important to consider which risks are worth taking and eliminate all the rest.

Kindle Paperwhite

I’ve had the Amazon Kindle Paperwhite for about a week now and have used it every day. As background, my first Kindle was the Kindle Touch released last year. I found it to be deficient in two significant ways: 1) its touch interface was not very responsive and 2) in order to read in even a shaded room I needed an external light.

On last year’s Touch model the responsiveness of the user interface was horrible, even after the update. It was typical to tap the screen and have it not react for multiple seconds. Often times I would tap a second time thinking I didn’t hit it correctly and then it would do whatever I asked, like flip the page, twice.

The need for a light, even when the room was just a little dark, was another pet peeve. Not only did I have to carry an external light with me, but I would have to attach this clunky thing that always got in the way of the screen (shadows or the light’s arm) in some way. The light, by the way, had two settings: bright and blaring. I read a lot in bed at 3am, trying to clear my head so I can fall back to sleep. My goal is to not wake my wife. I couldn’t make the old light dim enough.

Amazon pushed the Touches e-ink display as a replacement for paper but it really wasn’t. In every way — resolution to coloring — that e-ink display was pretty mediocre. Speaking of color, the e-ink displays were significantly darker than paper so reading in a room with a little natural light but not a direct light on the screen made the e-ink impossible to read even when paper was readable.

I can report in every way that the Paperwhite is superior to the previous Touch model. It is very responsive to screen taps, for one. I no longer am left wondering whether my selection registered or not. Furthermore, the screen with lighting on is excellent. It solves all of the problems I had with the previous model (while introducing one nitpick). The controls are quickly available and it is easy enough to turn the screen down to its lowest settings.

At the low end, the screen replicates the color of paper much closer. And with a simple adjustment, making the light brighter by just a few notches, I get plenty of light to read at 3am without disturbing my wife sleeping next to me. We are both a lot happier!

My nitpick is that the backlighting leaves a slight shadow at the bottom of the screen. At first I noticed it readily but after a few days it faded into the background.

The Paperwhite is much closer to my ideal reading device than the Touch was. I’m quite happy to have paid the $119.

Business In A Bubble

I want to relay a theory I have about starting a business but in order to do so I want you to envision something: a person in a translucent bubble. The person is right in the middle, somehow floating there, able to see in all directions (at least to some degree). That’s the start-up.

In order to grow the business the person in the bubble needs to push as hard as it can on a spot in the bubble. It doesn’t move easily nor does it expand easily. One person can only push so hard, two people can push a little better, but adding too many people into the bubble means no one can move or push as there are too many people in there.┬áThe goal at this stage is to move the bubble and at some point grow the bubble so more people can push it in the right direction.

The beauty of the bubble is that it can go in any direction at this stage. It is standing still and any path might be the right one.

So I was thinking about the magazine and newspaper industry this morning and thinking that this is an industry that has too many people in the bubble and their momentum has carried them down the wrong path. Now, they are trying to reverse course, move in a new direction, and in many cases trying to do it with all these people.

Another problem for the industry though is that their backs are against the wall. I take this analogy quite literally — the bubble is pushed up against a wall. That limits the directions the business can go, hemming them in.

One final thought: better to burst your own bubble then let someone else do it. Better to force a change in direction before your back is against the wall.

BlackoutSOPA

I’ve changed my Twitter profile picture to include a “Stop SOPA” badge. The goal is to see this badge completely populate my Twitter feed (and everyone else’s) and then maybe Congress will realize that they should drop this damaging legislation.

Go here to do it. It only takes a second (and the site even makes it simple to switch back): http://www.blackoutsopa.org

WWDC 2010/Predicting Apple’s Future

I am at Apple’s Worldwide Developer Conference (WWDC) this week. On Monday, Steve Jobs gave his keynote where he focused exclusively on iPhone 4 and iOS 4. (Apple changed the OS name from iPhone OS to iOS.) The new device looks nice: camera, video in HD, new OS features, beautiful and innovative device design and the new open sourced FaceTime for video chat.

But what was more interesting was what wasn’t mentioned. No discussion of Mac computers at all. Most of the rumors turned out to be false: no Apple TV, no MacBook refresh, no fancy mice. (Really? Mice? Since when does that merit keynote mention?)

But my question to all those lementing is, why would Apple announce all these now? Apple never makes announcements until the products are ready to go. The company does not believe in vaporware at all. And if anything, Apple knows how to keep the focus on it. As far as I can tell, I am expecting a major new Apple announcement every couple of months for the next year. Let me outline them for you:

July: Mac event
This is where we hear about the MacBook and MacMini refreshes, potentially new monitors and the new mouse, if it exists. Perfect for those back to school shoppers, especially those who are sending their kids off to college.

October: “Music”event
Every year Apple does a music event with iPod refreshes for the holiday season. I think this will be a very special announcement that advances Apple’s strategic goals. The center piece of this event will be the new iPod touch with optional 3G. The reason this will be special is because optional 3G+wifi devices coupled with multitasking in iOS4 will make it possible to use Skype or another VoIP service for all your phone calls, bi-passing the carriers all together (except to act as a pipe). Both Google and Apple have this important goal in common.

February: Connected Life event
Apple has made a number of acquisitions and is doing a number of things behind the scenes that will set up this event. What am I talking about? How about a massive, $1 billion data center in North Carolina, purchases of Siri and LaLa, and very old Apple TV. This will be Apple’s web strategy coming out party, where all of your devices – iPad, iPhone, laptops and desktops, Apple TV (which must be re-branded iTV and will now be powered by iOS)– and all of your files are connected via one cloud-based account that is tied into iTunes and based on MobileMe.

March: iPad 2
The iPad is updated to take advantage of iPhone 4 innovations: forward and backward facing cameras, video recording, and higher resolution “retina” displays. It will be magical… all over again!

April: iOS5
The next rev of the operating system that powers iPhone, iPod touch, iPad and iTV will be introduced with betas ready for us developers right after Steve Jobs’ keynote.

June: iPhone 4G
Apple’s next generation phone will be LTE compatible, which means you can use it with any carrier, and will be 4G compatible. Good-bye AT&T hell. Hello Verizon hell.