Tell Me It Can’t Be Done

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I found this quote at Bryce.vc this morning and just love it:

“Being an entrepreneur is like being a juvenile delinquent. The more you tell us that we can’t do it, the more we want to prove you wrong.”

– Elim Chew

I was far from a juvenile delinquent. To be honest, I was probably the opposite: too afraid to do anything that would get me into trouble.

But this perfectly describes how I work and live now. And, looking back, always had this streak in me.

Sure, go ahead. Tell me it can’t be done. At least you will get me motivated.

Why RIM Is Flailing

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Mike Mace has done an excellent job of breaking down the financials on RIM and has gotten a lot of press for it recently. His two core articles are here and here, well worth the time to read them. His facts back up my beliefs about RIM: that there is something seriously wrong with the company and the BlackBerry platform even though their numbers look good on the surface. What I have been trying to figure out is why.

A product is only as good as those willing to advocate for it. Flipboard and Instagram are two recent examples of this and both have found a very strong user segment to advocate for them. The advocates for Flipboard, a media app in essence, was media folks who consume tons of data and spend tons of time on Facebook and Twitter. Instagram was picked up by photography/social stalwarts in the tech community. Consumer apps/technology that doen’t appeal to that tech advocate crowd don’t seem to do as well, at least not here in the States.

So, RIM… RIM has failed to enlighten the imagination of the tech crowd and now the company is paying for it, at least in North America. As Mike shows, North America sales are near 0% growth and new customer subscriptions are trending downward.

Why? RIM’s products feel stale compared to iOS, Android and Win Phone 7 devices. The perception is that enterprise users would use something else if only the IT departments would let them. So the influencers, the tech paparazzi, doesn’t talk about them in glowing terms. A second group of influencers, developers, have continually been treated like second class citizens by RIM: horrible (there isn’t a word for how bad) developer tools, constant switches in OS strategy (non-touchscreen, touchscreen, QNX), and zero marketing support from the company itself, even for its paying partner companies. Thus, the crowds that usually kicks off technology products is paying zero attention to the company.

Internationally, however, there is a different story going on. A group unswayed by media punditry, teens who text, are dying for the BlackBerry due to its well-done BlackBerry Messenger app and excellent keyboards. This group doesn’t care what the tech crowd thinks, doesn’t care that the developer infrastructure stinks, only cares what their friends do, and that is text with BBM.

So I can see how RIM’s sales have split, how they have flattened in the US and how they have exploded overseas.

The problem is I don’t see it as sustainable. RIMs key customer bases are de-stabilizing. Teens grow older and move onto different technology or something else becomes the hot texting tool. And with that the International gains disappear. And here in the States? The tech crowd is waiting for something amazing, something new and modern. A transition to QNX feels imperative but that has been downplayed by the company’s co-CEOs. And the developers don’t pay much attention because the customers either don’t buy software or are behind IT-constructed walls.

So things can get worse, much worse, if RIM is not careful. 2011 will be a critical year.

 

Are You the Customer or the Product?

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If you aren’t paying then you aren’t the customer, you are the product.

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A customer emailed me last evening and asked me to justify the price of powerOne for iPhone, iPod touch and iPad. At first, I have to admit, I was a little insulted but as I thought about it more I decided it was a legitimate question. In this day and age where every software product seems to be free, why should he pay?

And my answer was pretty straight forward: if you aren’t paying then you aren’t the customer, you are the product.

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The Wall Street Journal recently studied 101 iPhone and Android apps and found these apps were commonly relaying personal data about the user, in some cases current location and in others age, gender, even a user’s contact list, to third parties. In almost all of these cases the WSJ was looking at free apps.

Am I surprised? Of course not. Because if you didn’t pay then someone else did, and that someone else wants as much information as possible. My role as a developer is to satisfy my customer to get more of them to pay me money. If you aren’t my customer then someone else is, and then my job is to satisfy them. And that means providing them with what they need to make decisions, even if it isn’t in your, the users, best interest.

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Google, I think, thrives beautifully in this system. You get free stuff (hurray!) and they get money from advertisers. Google is in the business of collecting every scrap of information they can about you so they can do a better job of selling to advertisers.

There is another benefit to Google: since you aren’t paying for the software then Google doesn’t need to support you. Since you aren’t paying for the software than Google can cancel products at any time without worrying about what you think. After all their customers — advertisers — just shift their dollars to a different Google product.

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But wait, you say! If I don’t use these free products than they don’t have the customer base to sell to advertisers. I’m their customer, too.

Sure, you are. Kind of. But in reality you aren’t. It is in Facebook’s best interest, for example, to keep you engaged but they will only do this to the extent you leave their free service. This means that they will push the boundary of what they can get away with. It means they will, as the saying goes, implement today and ask for forgiveness later.

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There are lots of reasons to pay for software. You want to get support, you want to reward the developer, you want to make sure that the app keeps improving. But the most important one is that you want me, the developer, beholden to you and not to some third-party that doesn’t have your interests in mind.

Always remember: If you aren’t the customer, you are the product. And the customer is the one who pays for it.

Will 2011 Be Good To BlackBerry?

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I have been following Horace Didieu over at Asymco for some time. He has been consistently writing some of the highest quality analysis on the smartphone and mobile device industry for a while now.

One of his recent posts was on the growing smartphone market and a look ahead to 2011. In short, he predicts, half of all US cell phone customers will have smartphones by the end of 2011! That, in and of itself, is an amazing thing from where I sit. Seems like yesterday the whole industry was at 5 million units per year, US and international.

While I am usually dubious of such claims by analysts, Horace’s posts have been spot on and jive very well with my own perspective on the market. His belief: Android and iOS will be the leaders with Windows Phone 7 will gain market share ground. BlackBerry, still #3, will lose share. The rest of the gains will come from new adopters. Finally, Android will grow the fastest and be the largest by the end of the year.

I see the same thing in the US market. RIM, though, is my wildcard. I think this will be a make or break year for the BlackBerry. If the company can transition to a modern operating system in 2011 and keep developers in tow then the company will have a fighting chance. Otherwise, I believe the company will fade very fast in 2012.

If you are a BlackBerry fan, you better hope Co-CEO Mike Lazaridis’ incoherent, rambling interview at AllThingsD.com’s Dive Into Mobile conference isn’t a harbinger of things to come.

Palm To Partners: Bend Over

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Looks like Palm is up to their old tricks: screwing their partners.

I have a long history with Palm, for good and for bad. In about a one year period, Palm screwed Infinity Softworks three times, costing us millions in revenues.

The first time was when Palm dropped their education team. Palm had a very experienced, excellent team focused on the education market and handhelds as a a 1-to-1 solution. We made a bet-the-company decision and focused on graphing calculators in the 6-12 grades. In order for us to be successful, though, we needed acceptance on the College Board’s Advanced Placement Calculus exam. With that we had two states and lots of districts ready to put us on the approved list. We spent two years gaining acceptance on the exam, with Palm’s help, and just as we were approved for trials Palm fired their education team and the College Board backed out.

The second time was when Palm switched their backend software service from Handango to PalmGear, at that time the two primary leaders in mobile software sales. It wasn’t the switch but instead the terms: Palm + PalmGear started taking 65% of the MSRP for themselves and wanted us to develop a custom version of the software for their site without any urls, email address, etc., that could link back to our own web site. (When Apple entered the app market it was still like this. 30% margins felt like heaven!)

The third time is when Palm stopped bundling powerOne Personal. We had bundled an app with almost every Palm device for 7+ years, always giving them a product for free (we made our money on upsells). As we approached the release of a new device, Palm kept changing the requirements. Finally, with one week to final build, Palm asked us to localize our app into five languages. We lost 75% of our revenue within months, practically killing the company and any attempt to recover from the education bet.

I was hoping, with their downfall and the return of some great people from the early days of Palm, that the stripes had changed over there. But it looks like that is for naught. Palm had a deal with Motion Apps to provide a Palm OS simulator. While the simulator was not bundled it did require a ROM bundled with the device, which Palm has removed with webOS 2.0, apparently in breach of contract.

What a shame. Palm, in its early days, was an amazing company with incredible people. I know a number of those people are still there or returned but it is sad that the company DNA has been corrupted and destroyed. I have every right to be mad at Palm and wish for its demise, but instead I look back at that company and the work we did there and am just saddened that all that potential was tossed away.