Giving Up On My Dreams

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Elia at Fenway

Since I was a little kid I wanted to play Major League Baseball. I dreamt about it, I went out in the yard and pitched to a pitch back or through a tire swing. At my dad’s house I drove the neighbors crazy by throwing a ball against the steps for hours at a time.

I loved baseball. Even when I wasn’t playing I was playing. When I wasn’t outside playing ball, I loved to pretend to be the GM in simulated dice games. I even got into programming because I wanted to figure out how to simulate real-life. I quit playing the violin, which I was pretty good at, because I didn’t want it to interfere with me playing baseball.

I was a decent player but not incredible. I was a decent fielder but didn’t hit a ton. I played a solid catcher for a few years and was a decent pitcher but didn’t throw particularly hard. I tried hard, though.

In tenth grade I moved to Florida and made the varsity team. I played a little centerfield, got one chance to pitch (off a mound, which I had never done before), and came up to bat a few times but didn’t hit much. I was overmatched by the older kids and, it appears, needed glasses.

I played part of one season and quit.

That was the end of my playing days, at least baseball. (I played softball starting at age 19 until I had kids in my early 30s. It wasn’t the same, though.)

Quitting baseball is my one regret in life. I didn’t want it bad enough, I didn’t want to work at it, to become a better player, to suffer for the sport I loved.

My quitting baseball motivates me to this day. I recognize that if I want something bad enough I
need to keep working at it. No wall should be able to contain me. And talent alone doesn’t dictate success or failure. Effort has far more to do with it.

I went to Boston last week where my cousin works for the Red Sox and saw the second game of the World Series. Before the game started, he walked me to all corners of the stadium and even, at one point, into the outfield on the warning track near the centerfield wall.

It rekindled a lot of feelings in me about how badly I wanted to play pro ball and how I quit the minute it became hard. I’ll never let that happen again.

Fenway Outfield

The iPad 2 and Education

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John Gruber in his Apple iPad/Macbook event observations said:

Why would anyone buy [an iPad 2]? That’s a better question. Two groups that I know are buying it are businesses using iPads for things like cash registers … and schools. For the cash register scenario, it’s perfectly rational for the business to want the cheapest full-size iPad they can get. They don’t need retina, they don’t need more than 16 GB of storage, and they don’t need cutting edge performance. For schools, the logic seems unclear to me.

John went on to say that he has heard schools want the cheapest full-sized iPads they can get. I’m sure that’s true but that isn’t the underlying factor that drives educational technology buying decisions nor why Apple is keeping around a three-year-old device. After all, Apple could take last year’s iPad and drop it to $399 instead.

I spent years talking to schools and teachers in the Palm OS days and only because of that experience do I feel even remotely qualified to talk about this topic [1]. The educational system here in the US works under a very different set of guidelines than what the business world does.

The basics of educational buying are pretty straight forward. Will the technology provide an appropriate educational environment for students? Can schools control the devices as much or as little as they’d like? Is the cost within the budget of the grant or purchasing agent who will spend the money? (I say this oddly only because in many cases it is not the school or district purchasing but the purchase is made through a parent organization, grant or other funding body.) Is there training (professional development) for teachers? Is there education materials available for the technology?

The iPad, iOS and App Store have nailed all of these [2].

In addition to the multitude of decisions I listed above — and that is only a subset — there are two other considerations for any hardware company that I want to talk specifically about today: time and equity.

Time

First, time. In most educational technology purchases it takes years to make a buying decision. In my experience the process looks something like this:

  • In year one, a teacher or two who are technologically advanced get devices and check out the educational applicability of the systems. This includes writing some curriculum around it or downloading apps to play with, etc. Maybe these get used a little in class, maybe not.
  • In year two, the school will try the devices in a classroom with a handful of devices. Traditionally these have been shared devices but sometimes schools can get a cart (20-30 devices in a rolling box that can be moved from classroom to classroom).
  • If that goes well then grants are prepared in the third year.
  • By the fourth year, assuming the grants are received, then the school can purchase more of these devices, either to be used across multiple classrooms in carts or one per student. There have been very few technology roll-outs on a one-to-one basis so far in the US. The most successful technology roll-out in education ever has been TI calculators.
  • If it is very successful in schools, then other schools or even the district will consider purchases.

This is a generalized schedule, of course, but should give you an idea. The trick is that they are evaluating a certain piece of hardware. It is not easy for a school to suddenly have to buy a different system model three or four years into the decision process. When confronted with this problem, most schools just don’t make a purchase decision.

Look at what is the most successful technology roll-out in US educational history: TI calculators. These devices began appearing in schools in the early 90s and are as close as we have to a device that every (high school) student carries. The TI-81 shipped in 1991. The TI-84 ships today. That’s four generations in almost 25 years, and all of those devices look and act almost identically when considering core functionality:

ti-calculators-then-and-now

Where does this leave the iPad? Somewhere in the middle of the buying cycle. While the iPad mini and iPad air keep changing on schools and forcing them to consider new devices during the period they are trying to purchase, the iPad 2 remains beautifully the same, keeping a reliable device on hand for them to consider. Even with that iPads look amazingly like TI calculators from the consistency perspective:

ipads-gen-1-5

It is hard to tell the first generation device from the fourth generation device. On top of that OS 7 runs on almost every one of them.

This isn’t the only time consideration, by the way. Once the devices are purchased they have to work for years afterward. My daughters’ elementary school is using six-year-old laptops for students. The money just isn’t there to buy replacement systems every couple of years.

This, too, is a mark in Apple’s favor. The devices will keep functioning years down the line [3].

Equity

As if the buying cycle wasn’t hard enough on companies trying to sell to schools, there is another issue in schools that generally goes unmentioned: equity. In the US our educational system does not make choices for the students, or at least tries not to. We generally believe that a failing student today could be a straight-A student tomorrow if the right motivations are applied. We don’t decide that a student who is behind in mathematics in seventh grade is not allowed to take the AP Calculus exam as an eleventh grader.

This is US education’s blessing and curse. And when it is applied to technology it adds an extra strain on the company providing it.

In US schools we don’t say a certain group of students get to use technology and another group do not for academic reasons. We generally say that technological curriculum is appropriate at a certain academic level instead. That means all devices for a specific academic level must be the same.

My daughters’ elementary school bought 40 iPad minis at the end of last year and those systems have mostly been used by the fourth and fifth grade classrooms. Realizing they could use about 10 more devices, the school moved forward with purchasing this fall. I advised the principal to wait until after the October 22 event, believing that retina iPads would replace non-retina iPads and be better bang for the buck, so to speak.

Our principal reminded me that that didn’t matter. What did matter is that all students were using the same devices, that teachers didn’t have to know one thing for one group of devices and another thing for another group of devices. Even more important, she didn’t want students fighting over who gets to use the nicer devices. [4]

I had completely forgotten about the importance of equity, the importance of schools not deciding for their students what the future will be, and that plays out in everything the school’s do, to the point of inspiring a school to spend on last year’s technology rather than today’s.

Palm’s Failure, Apple’s Win

I learned in my years of selling to schools these important lessons. This was a major problem for Palm in education. Every time a school was ready to make a purchase decision, the devices they were evaluating were gone and new devices took their place. A whole new decision needed to be made. To make matters even worse, the devices changed drastically from generation to generation, with different connectors, device sizes and layouts. Even three devices all shipping at the same time would have completely incompatible connectors.

While decisions based around timing and equity generally don’t play out in the business world, they play a major part in education purchase decisions. Apple, who has sold to education a lot longer than Palm did, clearly understands this. Connectors have remained relatively stable, every iPad basically look and function the same, devices are kept around for multiple years to facilitate the purchase decision, and they function for years afterward so schools can get their money’s worth [5].

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[1] I spent four years or so pitching schools on the idea of replacing TI calculators with Palm devices with powerOne Graph calculator software.

[2] Although there have been hiccups.

[3] A lot of districts have purchase contracts with Apple, too. Those schools won’t consider non-Apple hardware. This is done to minimize the training, repair and support needs across the district.

[4] It turns out she didn’t get the PO in before October 22nd, which worked out as we save $30 or so per device since the non-retina devices stick around.

[5] Yes, Apple changed connectors but offers an adapter to keep using the old ones. This is a knock against buying the iPad 2, though, and am surprised that Apple hasn’t at least swapped out for the new connector. And yes iOS 7 is a huge change for schools. Again, since iPads are relatively new in education, I’d bet Apple doesn’t see this as a huge problem. Almost all purchase decisions will occur with iOS 7 or later.

Commoditize Everyone Else’s Business

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That’s the phrase I kept thinking of over and over again as I watched Apple’s keynote yesterday: commoditize everyone else’s business. Apple makes its money on hardware. To make hardware more valuable, Apple needs a series of products and services around it that are cheap or free. This includes content, apps,  accessories and services.

Watch Apple in action. Apps are moving toward free (or at least freemium). Apple has repeatedly fought to keep music and book prices lower than the publishers of said content want, going so far as to be sued by the US Government over its position. iCloud, Apple’s services offering, is free. Now OS X Maverick, iWork and iLife apps all join iOS 7 as free software. This is some amazingly powerful and capable products, all at no charge for customers… except you have to buy the hardware.

Apple isn’t alone. Microsoft mastered this approach for years, making software valuable while commoditizing the hardware business. This is why no Windows computer manufacturers are making any money on the hardware. And of course Google has been playing its own commoditization game, making operating systems and apps free while maximizing the value of ads.

It’s important to note that each of these three are staring at each other’s businesses, each trying to outdo the others. When it comes to building a successful business (meaning revenues and profits, not market share) the question is which will win. Microsoft clearly is losing out right now in the mobile space while Google and Apple take charge. It is no coincidence that the two companies who are winning in the mobile market are primarily aiming to commoditize Microsoft’s software business.

But Google really hasn’t aimed at Apple yet and Apple really hasn’t aimed at Google yet. Do one of them win? Or does it open the door for a third-party — say Amazon — to step in and make content king while commoditizing everything else?

Accidental Meetings

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So I wrote yesterday about the influence that Steve Blank’s book had on me and that I was in Bend, Oregon, at the venture conference. The night before the conference itself is a networking event. I went, talked to some people I knew, met a few others. Across the room was Steve Blank so I went over to introduce myself and, if he was interested, tell him the story I told you yesterday. (People love to hear how influential they are so I thought it’d be a good icebreaker.)

Steve was deep in conversation with someone else — although he did take enough time to say hi and introduce himself. I waited patiently for 20 minutes and the minute he was done, he turned and walked away so quickly I didn’t even get the chance to say anything [1].

I kind of stood there dumb-founded, not just because of how abruptly he left but also a little mad at myself for having stood there for 20 minutes like some idiotic fanboy.

So I started talking to the guy Steve was talking to and it turned out that he was a fascinating guy. Tim Gieseler started a small company to sell telescopes to hobbyists. He grew the business first by selling other people’s telescopes and eventually building their own. He ran Orion for over 30 years before selling it, by which point it had become the largest creator and seller of telescopes and accessories to amateur astronomers.

We had an amazing and long conversation about his business, about Equals, about the ups and downs of running businesses over the long-term, something that is neither talked about nor celebrated much in today’s get-rich-quick start-up culture.

The serendipity was overwhelming to me. Now I was thankful that I stood there like an idiotic fanboy for 20 minutes. It just turns out I was waiting there to talk with the wrong person. Luckily fate stepped in.

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[1] I did meet him again the next day and got the chance to tell him my story.

The Seminal Works Of Steve Blank

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I went to Bend for a few days last week primarily for one purpose: to hear Steve Blank speak. If you are not familiar, Steve wrote a book called Four Steps to the Epiphany, which had a huge influence over me.

In 2002 the handheld market was shrinking and we were looking for a vertical market. We had a number of calculator products, including a graphing calculator that had gained some traction in math education. In order to gain broad adoption, though, the product needed to be accepted on the AP Calculus exam. No software product had ever been available for it before and the rules for acceptance were specifically designed to eliminate handhelds and other computers.

Over the next few years we did the impossible: got powerOne Graph into trials for the AP exam. Then disaster happened. Right as we gained acceptance Palm fired their education team, focusing on smartphones instead, and we lost the deal.

By this time it is 2005 and we are trying to figure out where to go. The College Board said they were looking at laptops instead so we hunkered down with our now really small team (three of us from 11 or 12 before) and worked on a toolset that would run across the web. There were some interesting ideas in there but we didn’t stop to think about the product or business or how the alternative environment would impact the service. I spoke to a handful of educators, all of whom were encouraging, but that was as far as I took it. We charged ahead with a complete product.

Two years later we were ready for beta, released it to the world, and no one cared. Even the teachers who had been encouraging didn’t use it. I was devastated. All that work ended in failure, all that wasted time and money. We were done.

At this point I started consulting at an incubator, helping other start-ups, hoping to get a spark for what I wanted to do next. Shortly after this failure happened I was consulting with one of the companies in the incubator when I told him the story I just told you. He reached into his pile of books and threw Four Steps at me. He said read this and maybe it will help.

I couldn’t put it down. I remember reading and re-reading it, especially the sections on customer discovery and customer validation. Suddenly I understood where I failed.

That set me on a path to figure out what makes start-ups start-ups. I wanted to understand why they were a big mystery, why some succeeded and some failed. I found the Lean Startup movement, read a lot of the stuff happening there, and came to understand it well enough to know what I wanted to keep and what I didn’t.

Steve’s work has been extremely important in the start-up world. If you ever get a chance to hear him speak I hope you will take advantage.