Brand Power

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In the late 1970s, when Hewlett-Packard wrote the HP-12c, copyright laws were different. If a company or individual didn’t expressly exert their right then the code was freely available for anyone to use. To copyright software, the copyright notice had to appear visibly to the user on the device and it must be noted in the source code. HP failed to do this with their calculators.

What has transpired over the years is a plethora of HP scientific and financial calculator emulators based on the late-70s products, that actually use HP’s original source code. These emulators have been released for every platform you could possibly think of, including at least four HP-12c emulators for the iPhone.

Because there is little difference between these various 12c emulators in the App Store, the Hewlett-Packard official version released last week and the “knock-offs”, I have watched these apps with great interest. It has proven to be an amazing lesson on the power of brand.

The most expensive of these products pre-HP release was the most popular, peaking in the high-20s for Finance Top Paid Apps. The developer was charging $19.99 for it. When HP came on the scene a week or so ago, with a $14.99 price point, the knock-off apps dropped like a rock while HP sky-rocketed, topping out at #1 in Finance Top Paid Apps. (The knock-offs have since recovered somewhat with much lower prices.) No multi-featured calculator product, in the six months I’ve been watching, has been ranked higher than 11 before the official HP-12c release, and that was a $0.99 application.

What has struck me is the power of the brand. Again, there is no discernible difference between HP’s version of the 12c and the knock-offs yet HP was able to run them off. Second, I’m amazed at the power of this ancient brand. It has been able to propel it to the top of the Finance category when far more interesting products have never gotten as close.

And the buzz for the HP-12c has been fantastic. Before HP released the 12c, most of the calculator conversation on the web had been about the built-in calculator’s ability to be turned into a scientific calculator by turning the device sideways. (Or, more worrying, the propensity of iPhone users trying to dial with their calculator.)

While I’m not convinced that brand building happens in the App Store, I am convinced that a powerful brand makes all the difference. The question I ask myself, of course, is how do I build such a powerful brand with FastFigures? Working on this and other questions as you read.

 

[Note 1: I convinced HP to develop the 12c emulator for iPhone. I was not involved with the development and never asked for nor received compensation for my consulting time with HP. If, however, HP wants to throw some money my way, I’d be happy to take it.]

[Note 2: In case you are wondering, HP’s release of the 12c has not had a negative impact on my sales. FastFigures is not an emulator but instead takes a fresh and truely smartphone look at calculating on the go. If anything our Top Paid position has actually improved over this time period.]

Is The Sky Really Falling?

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I had the opportunity to give my Building an iPhone Business presentation to a group of graduate entrepreneurship students a few weeks ago. It was a lot of fun and they are a bunch of smart people. They quickly understood the problems and formulated solutions. There was a lot blue sky there, which I expected, but they didn’t miss anything major either.

In the middle of class the professors and I deserted the class and went out to dinner. It was a pretty heavy hitting group. Melissa Appleyard is well published and was taught by some outstanding Economics professors at Berkley; Wilf Pinfold is director of Extreme Scale Programs at Intel and has been chair of the Supercomputer Conference; and Bill Newman, an MIT graduate and a very well respected local venture capitalist. We got into a fascinating conversation about U.S. world dominance, economic success and the future.

I constantly find that my opinion is contrarian when it comes to long-term economics and I thought it might spark a conversation here. It seems like the main opinion in the United States is that US economic dominance is a thing of the past, soon to be surplanted by China and India.

The problems are well documented: too much debt, too little investment in education, corrupt or incompetitent leadership, foreign students going home after graduate school, relatively small population. I’m sure I missed a dozen reasons why we have reached our economic peak and falling off that I haven’t mentioned.

It’s fairly clear how we became dominant. After World War II we were pretty much the only market-oriented country standing. Europe was a mess. The Soviet Union was focused on communism. China was focused inward. We had all the money to lend and the industrial complex to support it.

But our advantage has disintegrated as outlined above. And most seem to think that that deterioration is about to escalate. I’m not convinced.

There are a number of world events that are working in our favor:

  • We are a resource-rich nation. In the future I think it will be important for us to supply our own natural resources, whether for power and transportation or for building and construction. Few countries in the world have the same advantages.
  • We have a reasonable number of mouth’s to feed. I’d hate to be China or India, trying to figure out how to handle 4.5 billion people. I think this will dampen growth over time.
  • As costs to transport goods becomes a major factor with increasing oil costs, I believe more manufacturing will come back to the US. The price gap between manufacturing in China and paying transportation costs and manufacturing in the US with none will close.
  • If we can figure out how to manage costs through the baby boomer retirement years — not a given — we will come out the other side with a younger and more balanced work force.

Do we have major problems? Of course. But everyone does. In my opinion, the biggest problem is managing the triple whammy of health care costs, social security insolvency, and mounting debt.

But if we can find our way through that problem, I think we’ll be in pretty good shape.

And as I said at that dinner to conclude my comments… what do I know? I’m an entrepreneur and by nature entrepreneurs are optimists. On the other hand, when everyone says the sky is falling, it’s most definitely not.

Spreadsheet Redux

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I’ve always taken the quote “Those who cannot remember the past are condemned to repeat it” (George Santayana) phrase to heart.

I’ve been doing a lot of reading on the early history of the spreadsheet. I believe that the process and capabilities apply to Infinity Softworks’ work with FastFigures. And I think, like the creator’s and publisher’s of VisiCalc, it’s something new and different that is defying standard definitions.

The following includes selected thoughts on this complicated story: Dan Bricklin’s thinking around the design of VisiCalc, how they marketed the product, the relationship with their software publisher, and how Lotus 1-2-3 replaced VisiCalc as the de facto standard in spreadsheets.

  • The real power of the spreadsheet was not it’s calculating capabilities but the fact that an end-user, with no programming skills, could write a program for the first time.
  • Everyone struggled to describe the spreadsheet in the early going. “Though hard to describe in words,” starts the musings of a Morgan Stanley analyst, “VisiCalc comes alive visually. In minutes, people who have never used a computer are writing and using programs.”
  • We think of the spreadsheet as a calculating tool. But many people use it for data collection and charting as well. It really is a broad and powerful toolset.
  • What’s amazing about the spreadsheet is that fundamentally, even today, it hasn’t strayed from Dan Bricklin’s design. He conceived a mouse-driven scratch pad. You type stuff into cells and then create formulas by pointing to other cells. He conceived of features like split screen (implemented in version 1.0), graphing, and basic data collection.
  • You have to be there to play. Lotus 1-2-3 picked the winning platform for its time — MS-DOS — and then improved the speed and performance. It also integrated features customers wanted but never implemented into VisiCalc: basic databases and charting/graphing capabilities (with calculation making up the 1, 2 and 3 in the name).
  • Lotus lost out to Excel not for a feature set but because they didn’t move fast enough to Windows. Lotus picked the wrong horse, staying loyal to IBM and OS/2. By the time 1-2-3 was ported, it was too late.

And finally, a few conclusions:

  • It strikes me that every change in standard platform has resulted in a change in standard-bearer for calculating tool. Before PCs, it was the calculator. With the rise of the Apple II, it was VisiCalc. With the rise of DOS, it was Lotus 1-2-3. And then windows interfaces — Mac and Windows — precipitated the switch to Excel.
  • Platform evolution seems to take on the following software curve: small applications, custom development, specialized applications, software platforms. Right now, small applications and custom development are dominating mobile, with specialized apps starting to rise in popularity.
  • I’m not convinced the spreadsheets make sense on mobile devices. Do I want to see my spreadsheets? Sure. But it’s not the way I think most people will use calculation on a mobile device. Of course, I’m betting everything that I’m right.

CubeSpace: Two Lessons from a Failed Endeavor

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A few years ago, two people founded a work arrangement suite. The idea is that you’d have a place to plop down and work, renting a cube for all the small start-ups and companies here in Portland. You could have a conference room if you need it and meet-up space if you need that. They called it CubeSpace and poured their hearts and souls into it.

CubeSpace died yesterday. First the bank tried to take it out, since the owner’s weren’t able to keep up with their lease payments, then the community rallied to try to save it, then the owner’s had enough. (Stories are here, here and here.)

I tell you this story not to tell you about CubeSpace, per say, but to warn against two things that have come out of this story. The first is not paying yourself. The second is not charging for services.

The first is tricky. How do you start something? Keep expenses low. And a big expense is payroll. So people don’t pay themselves. That’s okay. The problem is that not paying oneself gives a false sense of the break even point. If you are not paying yourself or paying other expenses out of pocket, at least accrue the expense. Put it on the books. Know that there is a cost there. Because it’s easy to look down and say “if we can just make it to $5k per month, we’ll be fine” and it’s easy to forget that that number’s really $10k with a (very) modest salary.

I once let a very capable and competent employee go over this situation. He thought he was doing the right thing: he wasn’t turning in expense reports as he planned on eating the costs out of his own pocket to help the company get to break even. It was a very nice thing to do. But he also distorted the full costs of the business. I had been operating with one assumption about break even and my assumptions were wrong.

Without understanding the costs of running the business, there was no way to make smart decisions based on the data.

The second issue is also important: if you are providing services then charge for those services. It turns out CubeSpace was offering free meeting space in the evenings for tech groups around Portland. I’m sure CubeSpace’s director’s thought the service would pay for itself in new renters. But CubeSpace’s business was all about providing a place for people to work and meet. If that’s the value they are providing then they need to charge for it. If they were making their money on something else — say consulting services — it would have been different. The meet up space would have been a loss leader for creating consulting gigs.

I feel sorry for the good people who ran CubeSpace. While I never met either of them, they were very well respected in the community. I wish them all the best during their recovery and next endeavors.

FastFigures v2: From Good to Great

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Version 1.0 is always so hard. When we wrote version 1.0 of FastFigures Finance Calculator and released it in February, we really didn’t know what we were doing. We were trying to figure out everything from what Objective-C is all about to how to make the user interface do the things we want it to do. Even worse, we hadn’t used the iPhone enough to have a clear understanding of how we should interact with it.

So we create and change and throw out and create some more and over the course of a few months — from November to February — we refine it enough to have something decent. Decent, mind you. Not great, but good.

Should we continue on for another month or two and keep creating and changing and throwing out until we approach great? Of course. Would it have been better if we could roll out a beta program to a few hundred, get their input, and keep refining until we are closer to great than good? Yes.

But after four or five months of staring at the same code, good feels good enough. So we shipped. And the response was solid. In the first few months, we sold a few thousand units, tried to manage the unmanageable (Top Paid position and search), and learned a ton from talking with and listening to customers who were using it every day in the field.

And with a break, we were ready for our next try. We took all those suggestions and all that feedback, took our new-found experience with iPhone development, boiled it down to a couple of things that we could do in a few months, and got to work. What did we add to FastFigures version 2? The following, all focused on speed, accuracy and ease-of-use:

  • Pop-up editors for improved data entry in the templates
  • Start-up options to get you where you want to go quicker
  • Faster navigation to the calculator
  • Improved button sizes and layouts for easier data entry in the calculator and templates
  • Memory locations and constants
  • Integrated help

In general, the application feels more like an iPhone application, it acts the way I’d expect, and I’ve already heard from a number of customers who dropped their other products to solely use FastFigures. We didn’t ship ‘good’ this time. We waited for great.

And now, with the learning curve behind us and the core in place, we can really get to work. The plans are exciting: template creation, add-ons, saving data, syncing to the web site, report generation… I can’t wait to get started.