What I Learned As An Oompa Loompa

Interesting post from Elaine Wherry discussing her time helping her husband get a chocolates business up and running.

My husband, Todd, and his co-founder, Cam, had spent the last few years building chocolate machines and scouting the world for great cocoa beans in an effort to open a micro-batchchocolate factory in San Francisco’s Mission District. The construction crew finished converting the brick automotive garage to a food-safe bean-to-bar workshop and it was time to figure out the nitty gritty details like moving, merchandising, and designing the café & retail space. Todd needed all the help he could get and I was happy to pitch in during those critical months. Now that I’ve come up for air and returned to tech projects, I’ve had time to reflect on what I learned from brick-and-mortar operations:

What follows are her lessons learned. In short, why she won’t complain about writing code ever again.

I particularly liked lesson #6:

With Meebo, our business model went something like this: we built a product that people like. We monetized a fraction of those eyeballs with brand advertising. We tracked the percentage of users who clicked an ad and logged their engagement times. However, since correlating brand advertising with bottom line revenue is nearly impossible online, we also monitored ad partnership renewals. If all of those metrics were healthy, we were happy. (~60 words)

At Dandelion Chocolate, the business model is: we make and sell chocolate. (5 words)

It’s so much easier to build a sustainable organization around a simple revenue model. There are no tensions between ad partners, distribution sites, engineering, and sales teams. There are fewer points of failure. Instead, everyone is aligned towards a simple goal: make something people want.

Yeah… our best models do tend to get a little convoluted here in tech world.

Android Unlocked, Carriers Locked Out

There’s been a meme going around the Internet recently about how rich people are the beta testers for the rest of us. The example most people pull is from the movie Wall Street. The scene is Michael Douglas walking around the beach with a big honkin’ cell phone in his hand.

This is true for far more than just technology though. My wife and I have been watching Ken Burn’s documentary National Parks: America’s Best Ideas. Rich people were the first to go to national parks, too. The train ride was expensive, the time was not there for normal people, and even getting into the park was insane. In 1890 it cost $40 to get into Yosemite. That’s the equivalent of $1500 in today’s dollars. (For the record, it costs $20 per car today.)

So when I saw the news that Google was expanding the number of devices they will sell direct with a standard version of Android installed on it, this is exactly what I thought of. In the coming weeks, the HTC One will be available this way, the Samsung S4 will be available this way, and the Nexus 4, Nexus 7 and Nexus 10 already ship this way.

Why do we care? Because Google is quietly building a collection of devices that customers can buy off-contract and with the standard Android user interface experience. These devices are also immediately updated to the latest version of Android when it ships.

Sure, $650 is a lot today compared to the $0-200 we pay on-contract, but that won’t last long. As prices drop to $200 or $100 over the next years, I suspect more people will opt to buy these devices directly rather than through a carrier and on-contract. This will give us constantly updated devices without all the garbage on them? Sign me up!

New Tech Means New Winners

Chris Dixon wrote a very smart piece on mobile this weekend. A lot of the things he talked about are things I’ve talked about. One I haven’t talked about as much, but have been thinking about, is based on this excerpt:

If you go back and look at the history of productivity apps you’ll see that each major user interface shift led to new classes of productivity apps.

Actually, each generation of technology has meant a new winner, not just new apps. In the hardware days, it was HP calculators. In the DOS prompt days it was Lotus 1-2-3. In the mouse days it was Excel. Something will dominate in the touch era.

Same is true for word processing. In the DOS days it was Wordperfect and in the mouse days it was Word.

Hardware’s Impact on Software Pricing

There has been a lot of discussion lately on app prices and the ability to price sustainably in the App Store. Michael Jurewitz has a nice 5-part series on the basics starting here, Marco Arment discussed it (and I rebutted), and Ben Thompson wrote about subscriptions (where I also added my two cents).

I have been contemplating another factor, though, in average software prices: the price of hardware. When systems cost thousands of dollars, spending a few hundred per title was no big deal. In those days, I believe, Lotus 1-2-3 was somewhere around $400. But as the systems dropped in price so did software prices. The Office suite went from $200 per app to $200 for four apps, and then the basics (Word, Excel, Powerpoint) were available for  $100 (Home and Student edition).

The same is true for mobile software. When devices were $500-1000 spending $30-100 for a software product was no big deal. But now smartphones are free to $200 (user perspective, with contract). The expected price of software also dropped. Now high end prices are $4.99. Furthermore, I believe this effect is only pertinent for traditional software purchases, those one-off buys that made up the software world all those years. Other models may be immune.

There have always been very expensive software packages as well, mostly because there was either limited competition or aimed at a niche that would pay or both.

How Different Would iOS Development Be If Apple Hadn’t Given In To Native Apps?

Steve Jobs, in 2007, stood on stage and announced the iPhone. Developers everywhere drooled. We all wanted to write apps for this thing. After all it was the smartphone we had all dreamed of. But there was no discussion at all of a developer toolkit. Afterward someone must have asked. I remember the shockwaves reverberating through the developer community when it was announced there wouldn’t be one.

Well, less than a year later, we had a developer toolkit and the race to develop native apps was on. Even I recognized, someone who had done very little web development, that in some ways that was a huge step backward. Of course few of us discussed it at the time. We were too busy rushing to get our apps in the App Store.

As I now dig into HTML5 — and am loving every second of it — I can’t help but wonder what would have been different if Apple had stuck to their guns. What if Apple had stuck with that initial proclamation? What if the only tools we had, as developers, was web apps? What would be different today?

I started a list.

  • Access to a wider array of sensors via JS
  • Other devices would be more standards compliant to keep up with Apple
  • Extra JS libraries to bridge to Apple’s graphics packages
  • No App Store, possibly better ways to market our apps?
  • More websites that have pretty icons when you save them to your home screen
  • Monetization provided by Apple like Stripe or Braintree, leaving us to have an actual customer relationship
  • Universal logins
  • More developers doing web (meaning open) development, able to develop both local and server solutions
  • Native code (C/C++) in more browsers
  • Much of the same code (responsive) would run on Mac, Windows and mobile
  • Better usage analytics
  • Much better JS animations

Have any to add?