The “Blah Blah Blah on Steroids”

Posted on by

Great post from investor Bijan Sabet. In short, less is more:

Over the years I’ve seen pitches for YouTube on steroids, Flickr on steroids, WordPress on steroids, yahoo shopping on steroids, google search on steroids and many many more.

But here’s the thing. Steroids aren’t good for you.

The best way to deal with YouTube is Vine and Snapchat.

Flickr on steroids is a mistake. Instagram was the answer.

…

Less is more is a powerful notion. But it’s deeper than that. Redefining an experience in a unique way is how you beat the market leader. 

And that’s when you put a dent in the universe.

I, too, like businesses that carve out a small piece of a larger one, redefining it in the process. I heard someone recently say that the only way to kill Excel is to build something bigger and better than Excel. I disagree. The only way to kill Excel is to peel off a small part of Excel and do that better than Excel can. In the process, hypothetically, we make customers who would never use Excel use the new service. Snapchat and Instagram, for instance, peeled off a small subset of Youtube and Flickr, made those pieces better, and in the process made creators out of non-creators.

Here’s another way to think about. Every political poll conducted always queries likely voters. And in every one of those polls, any independents are trounced. But here’s the thing: if an independent wins election it is because he or she appealed to unlikely voters.

I can’t win by attracting the power users of Excel, the equivalent of die-hard Republicans and Democrats. I win by making those without allegiance — the independents — vote with their dollars for my products and services.

A Personal Transformation

Posted on by

The last few years have been the hardest of my professional life. The entire world I grew up in — one of software development and sales — had transformed into something completely different. I realized that to stay relevant I needed to rethink everything I knew.

It’s hard to explain to someone who didn’t live through this change how hard it really has been. In my personal life, the only comparison I can make is the upheaval of having my first child. I went from ignorantly self-centered one day to having a dependent the next, one that required nurturing and training and food and time. It changed everything.

The software world I grew up in was pretty straight-forward. I wrote an app, I sold an app. I made changes to the app and sold those changes. We gave people time to try it. It was my relationship with the customer. I took direct orders and orders through resellers, all of whom shared that customer’s information with me. Retail sales, while slightly different, still meant the customer was my customer as much as it was the retail store’s customer. I gave the customer a little card in the box and asked them to register. If they filled it in they got discounts and upgrades. And no one told me what my product could and could not do. That was between me and my customer.

This world existed long before I started selling software myself, of course. When I bought AppleWorks in middle school, we went to a store and bought the discs (floppy!). In college I ordered software through company’s websites and online outlet malls. When I started Infinity Softworks in 1997 there was little question about the business model. I charged a price and sold our software to customers. That’s how all software was sold. Outside of AOL there was still little conversation about subscriptions and ads in apps.

While the Internet world was causing upheaval, the Mobile world remained in ignorant bliss. For the most part we still couldn’t connect to anyone anyway so business models mimicked the previously disconnected desktop market. In the Internet world entirely new business models were being explored. Advertising, two-way markets, three-way markets, networks effects, subscriptions, freemium, servers, bandwidth, space … it was an orgy of possibilities. But in mobile? Give away trials, sell a product, sell an upgrade. Yes, we did freemium, too, but I’m not certain anyone thought of it in those terms. It just meant the trial was indefinite.

My personal transformation began a few years before the iPhone and App Store. In 2006 we had spent two years developing a new education product — my first specifically developed for the web — and upon release found no buyers. I’d never had that happen before. Every major product I had ever created was met with love and at least a little cash. But not FastFigures. It was met with crickets.

When FastFigures fell apart I knew the company was in trouble. We had nothing else. Our dominant platforms — Palm and Windows Mobile — were stagnant at best and our sales had fallen 80% in the previous two years. So I started talking to a friend about an acquisition. His growing web-based education company needed product management help and was considering moving from grades 2-4 education into higher levels. I had technology and experience that could help.

During the acquisition discussions we had many conversations about web apps and education on the Internet and how that world was different from mobile. I also started exploring lean startup concepts. My transformation had begun.

The deal eventually went south and my lessons eventually went to the back-burner when the App Store launched and the gold rush ensued. It was so easy! Just build an app, put it in the App Store, and let massive volumes take over. Never mind that prices had dropped below the cost to market them. Never mind that connected devices meant different products. Never mind that English-speaking nations were no longer the dominant markets. Never mind that no customer information was being shared with us and we had no insight into how we were discovered.

We did okay for a while. Our sales grew and then the iPad happened and they grew more. We started experimenting with all the new-fangled ways to sell a product: freemium, in app purchase, multiple apps, multiple platforms, white labeling (developing our software in someone else’s name).

I knew we were in trouble, though, when everything we tried meant no increase in sales, just stagnation. We needed to do something else. We needed to get back to basics. Build a company, I told myself. So I started to reconnect with what that means and had meant on the web. I revisited my lessons. I researched the companies and businesses that were making it work and what they were doing right. I read about the failures and where they went wrong. I re-read Moore and Christensen and Blank and tried to digest old learnings with new eyes. We began re-thinking everything we knew, including the very product that had been apart of my soul for almost two decades. What does this mean in the modern era? What job are our customers trying to solve? Is it still relevant?

I won’t sit here and tell you it has been an easy journey. I have made many wrong turns that needed to be retraced. I ran into more than my share of walls that I have had to walk around, tunnel under or climb over. And I’ve done all this while trying to stay in business, doing anything we needed to fight another day, taking deals that helped pay the bills and other deals that helped teach us the technology.

I’m certain I hurt myself. I talked about Equals too early to certain people who I thought could help. I sent emails to customers far too long before we were actually ready. But I tried to learn from every one of these situations, striking up conversations with customers and engaging others who could help over and over again to expand and improve my thinking.

It’s been three years since I started this process in earnest, this transformation. And while I haven’t spent every waking moment on it — and not certain it could have been faster if I had — I feel that the corner has been turned. I have this theory that businesses move slow until they move fast. The whole point is to be ready to move fast when the business is ready.

I’m finally ready for the business to move fast. My transformation is complete.

Editorially and Disruption Theory

Posted on by

I received an email yesterday that the web service Editorially is shutting down May 30th. Editorially was a collaborative word processor with markdown support. I played around with it a few times but would not consider myself a regular user.

There are too many thoughts here to organize coherently — from a pendulum swing between bundling and unbundling to jobs to be done theory — but today I want to focus on disruption. This is the realm of Clayton Christensen, who was one of the first to write about how disruption occurs. In short, disruption is the act of small companies taking away pieces of a big company’s business a little bit at a time and how that big company is so busy trying to make profits that it is willing to go upstream and let the little company have those small pieces. Eventually, there isn’t enough left to sustain the big company.

What does strike me, though, is how many companies are attacking the Office suite of products in this way. Editorially was attacking the collaborative editing (track changes) capabilities of Word. In this case disruption didn’t work.

Others have attacked pieces of the calendar, email, contacts, memo pad, presentation, spreadsheet and database applications with varying success. Even obscure uses have been peeled off and made their own categories. Once upon a time, if I saw something interesting I wanted to save and read later, I’d save it to a Word document. Now I use Evernote.

Sometimes it works. Quickbooks, I’d argue, is a very fancy database application, one I could have written at the time I started. Now services like Freshbooks are attempting to disrupt Quickbooks by focusing on one aspect of that business — billing — and peeling that off into a new service.

A few years ago when it became obvious to me that the old way of developing and selling software would no longer work [1], we started designing and prototyping all kinds of ideas. In almost every case I was employing disruption theory, looking at how each of the Office products were being used (what job it was hired for) and attempting to imagine ways in which web, connected devices and modern technologies could improve those processes. Ironically the one I didn’t originally see as disruptive — Equals — is the one we chose to pursue.

—

[1] One-time sale at a sustainably high price with upgrades. See my Mobile Portland presentation for details.

Why Indie Developers Go Insane

Posted on by

Jeff Vogel wrote this incredibly awesome post about sanity and development within small (indie) companies. He particularly focused on gaming but its applicable across the board:

The Internet exists to crap all over everything. And Flappy Bird is simple, silly, derivative, and casual-friendly, so it was sure to bring the self-styled Defenders of Gaming out of the woodwork.

…

Dong Nguyen quit. A fortune coming through the door, and he walked away. As I write this, Flappy Bird has been removed from app stores.

Think about this. I mean you, personally. Think about what it would take to make you run from a gold mine like this. Really. Think about why someone would do this.

This is not about money.

If you’ve experienced any time as a public figure, especially one that is mainly hated on, it makes a lot of sense.

Dong Nguyen is a young guy. He wrote a game for fun, put it out there, and found himself at the target end of a massive wave of attention, much of it negative. I can’t stress enough how insanely terrifying this can be, and he wasn’t ready.

There’s a reason most companies put other people in charge of answering customer questions, not the people that wrote the app. Customers, frankly, forget that there are people on the other end of that line. They forget that while they may not like the decisions made, there is a person on the other end who did like the decision and worked his or her butt off to make it work as well as they possibly can.

I incurred this wrath when we launched powerOne version 4. Some of the emails were scathing, hateful pieces of junk that really didn’t deserve a response. They were completely disrespectful of the company and product, assuming we didn’t give a crap about our customers and were pissing on them on purpose. They were also disrespectful to me personally since I wrote the app. In my case I was lucky as I understood that these customers were upset with change, period, and were upset because a product they loved was changed [1].

Yes, it was on a much smaller scale than Flappy Birds’ “feedback.” But it didn’t make the vitriol hurt any less.

—

[1] I was able to adjust the app and satisfy those who didn’t like the changes.

via David Smith

Competing For Consumer Dollars

Posted on by

Fascinating comment from Arnold Waldstein in relation to a Fred Wilson blog post regarding conflict and the perception of conflict:

Marketplaces are all about competition for consumers’ dollars. In new segments it’s all about creating a market and consumer behavior. More generalized segments, you end up both slicing off pieces of the incumbent and doing end runs.

Interesting thought that leaves me thinking today. Here’s my take-away: when doing something new, I can’t just think about the new thing and the customers I’m serving — the job to be done — but I also must think about what I am pulling customers away from and the job they hired that product or service to do. While I’ve been thinking about this issue, I haven’t quite thought about it that succinctly.