In my piece from yesterday, in talking about Microsoft Azure, I said that I was not particularly excited, but that I did feel the announcement was important and the services are needed.
One of my commenters asked what would excite me from Microsoft.
My answer: the unexpected.
It is not exciting when Microsoft delivers something that we have been expecting, or needing for a long time. This may not be fair, because perhaps what we expect from Microsoft is unreasonable. But what excites me, what excites us, fair or not, is software that delights – software that does something impactful in a way that no one else has done before.
But this is hard. It’s hard because Microsoft has so many fish to fry, so many products to complete, and so much cross-divisional impact to manage. They can’t just let a bunch of skunk works go and disrupt their corporate vision with something that does not fit into the family tree.
Microsoft’s problem is that they have this huge franchise that they feel the need to bring everywhere they go. Everything is Windows. And they are porting around many of the same APIs and platforms that they have supported since DOS. Now obviously Windows for Smartphones does not support DOS, but they have tried to bring as much of the API and the UI as they can. They believe that the franchise, and the historical developer support makes it critical that they make changes slowly.
This type of thinking yields a desktop-style Windows OS on a cell phone, which is a bit like trying to squeeze an elephant into a thimble, and in the end it just doesn’t work.
The point is that Microsoft carries both burdensome luggage, and simultaneously has rocket boosters strapped to its back. The Windows franchise is both a curse and a blessing. And Microsoft has to figure out when to abandon it, and when to steadfastly support and embrace it.
But yesterday when I said that Microsoft did not innovate, I have to admit it is not true. They do innovate sometimes, it’s just not nearly enough for a company with the kind of resources they have. And when they do innovate, it almost seems like they don’t even realize it.
As an example of great innovation, Microsoft Surface is stunning. It is a platform that makes everything in the computing space tactile. It is at the heart of the election coverage where states are being shown flying around from toss up to leaning Obama. But there, Microsoft is launching it in this really anemic way, as a part of a $10,000+ computer system, instead of establishing it as a new, broad metaphor for computing. And so even when they innovate, they do it in a way that almost makes you feel like they are ashamed to be doing something that doesn’t say “WINDOWS!!!!”
As I see it, Surface should be the interface to a new operating system. It should be a new computing platform, and not one in $10,000 computers, but in desktops and laptops of today. The iPhone is no more revolutionary than Surface, but Microsoft has a way of convincing us that some of its best work is almost irrelevant.
In short the fact that Microsoft is a laggard and not an innovator is part truth, and part a fiction supported by the fact that they seem to have a hard time, as a culture, figuring out how to trigger an adrenaline rush. And so they just don’t inspire.
Wednesday, October 29, 2008
Tuesday, October 28, 2008
Microsoft Announces Web Office... Google Has Decisions To Make
As I wrote long ago, Google Documents has an inferior user experience because it tries to do word processing in the browser without a plug-in such as Flash. Now, Microsoft is announcing that they will be bringing Office to the browser. Rest assured, that Microsoft's new web Office suite will use Silverlight, their Flash competitor, and will therefore not be hamstrung by the insufficiency of standard browser rendering.
Unless HTML is changed radically, (and given the politics of HTML 5 that seems unlikely in my lifetime) it will be impossible to build a good word processor based on HTML.
Google has been almost religiously opposed to using Adobe Flash for anything but video. But now that Microsoft is about to bring out a web based office suite, Google is going to have to decide what to do here. If they remain on their current, pure HTML-based course, and Microsoft moves to Silverlight, Microsoft will eat Google's lunch. There is absolutely no reason to use Google's platform if Microsoft's web Office does what Google's apps do, but behaves more like real desktop applications - and in fact behaves more like the real office. Google can never achieve this type of user experience with an HTML only strategy.
The stakes here are significant. Google wants to be competitive in the office document business, but adheres to a religious philosophy that almost guarantee's long term failure. But Google has become a very big, much slower moving company. I am curious to see if they can adjust their religious phliosophy sufficiently to play in this market once Microsoft launches their web Office products.
Unless HTML is changed radically, (and given the politics of HTML 5 that seems unlikely in my lifetime) it will be impossible to build a good word processor based on HTML.
Google has been almost religiously opposed to using Adobe Flash for anything but video. But now that Microsoft is about to bring out a web based office suite, Google is going to have to decide what to do here. If they remain on their current, pure HTML-based course, and Microsoft moves to Silverlight, Microsoft will eat Google's lunch. There is absolutely no reason to use Google's platform if Microsoft's web Office does what Google's apps do, but behaves more like real desktop applications - and in fact behaves more like the real office. Google can never achieve this type of user experience with an HTML only strategy.
The stakes here are significant. Google wants to be competitive in the office document business, but adheres to a religious philosophy that almost guarantee's long term failure. But Google has become a very big, much slower moving company. I am curious to see if they can adjust their religious phliosophy sufficiently to play in this market once Microsoft launches their web Office products.
Microsoft's Role Is Not to Innovate... But That's OK
I was reviewing yesterday's coverage of the Microsoft Azure platform for cloud computing and trying to decide what to make of it. I was admittedly underwhelmed, but I really didn't think that was appropriate to write, because it is obviously a major piece of engineering, and it is indeed solving a relevant problem.
After thinking about it, I realized why I had the reaction I did. I have an expectation that Microsoft *should* innovate. After all Bill Gates talks much about "innovation". But despite the fact that Microsoft presents itself as an innovator, anyone paying close attention knows this is not true. Microsoft is not an innovator. But the truth is they have an important, and perhaps even more difficult job. Microsoft provides more infrastructure for computing than any other company. And infrastructure just isn't sexy.
Azure is perhaps the perfect example of this. Despite a bit of fawning over it from some people that can't help but fawn over all things Microsoft, the truth is it isn't that exciting. But that does not mean it is not important.
Essentially, what Azure is is a collection of web-based services that make it possible to take applications built with the Microsoft stack and move them to the cloud. This is plumbing. It is foundational. But it is not at all exciting. There is little that comes from this that will create new categories of applications, or that will cause us to think differently about what cloud based applications can offer us. But Azure will let millions of people move what they are doing right now onto the cloud.
For me that is not exciting. But that says more about me than it does about the importance of their work. Because for all those people developing applications that want an easy way to get their apps into the cloud, Azure is a godsend.
This brings me back to my core point. Microsoft is not in the business of showing us how to do new things. They are in the business of providing broad platforms for us to do things. These are platforms that can make us feel, by virtue of familiarity, safe and comfortable. And they are platforms that, if you are part of the Microsoft "Visual" religion, are very easy to adopt.
Comparing Microsoft to Apple, they are in very different businesses. Microsoft is about broad ubiquitous platforms, and Apple is about limited but perfected platforms. That's not to say that Apple ever achieves perfection. But Apple is more focused on experience and is wholly uninterested in breadth. Microsoft must, by virtue of its broad customer base, always sacrifice innovation and experience, in favor of bringing everybody along for the ride.
And so Azure, as a platform for bringing everybody along, will be a smashing success. But as a paradigm shifting platform for computing, not so much. As I see it that is a reasonable, even needed trade-off.
After thinking about it, I realized why I had the reaction I did. I have an expectation that Microsoft *should* innovate. After all Bill Gates talks much about "innovation". But despite the fact that Microsoft presents itself as an innovator, anyone paying close attention knows this is not true. Microsoft is not an innovator. But the truth is they have an important, and perhaps even more difficult job. Microsoft provides more infrastructure for computing than any other company. And infrastructure just isn't sexy.
Azure is perhaps the perfect example of this. Despite a bit of fawning over it from some people that can't help but fawn over all things Microsoft, the truth is it isn't that exciting. But that does not mean it is not important.
Essentially, what Azure is is a collection of web-based services that make it possible to take applications built with the Microsoft stack and move them to the cloud. This is plumbing. It is foundational. But it is not at all exciting. There is little that comes from this that will create new categories of applications, or that will cause us to think differently about what cloud based applications can offer us. But Azure will let millions of people move what they are doing right now onto the cloud.
For me that is not exciting. But that says more about me than it does about the importance of their work. Because for all those people developing applications that want an easy way to get their apps into the cloud, Azure is a godsend.
This brings me back to my core point. Microsoft is not in the business of showing us how to do new things. They are in the business of providing broad platforms for us to do things. These are platforms that can make us feel, by virtue of familiarity, safe and comfortable. And they are platforms that, if you are part of the Microsoft "Visual" religion, are very easy to adopt.
Comparing Microsoft to Apple, they are in very different businesses. Microsoft is about broad ubiquitous platforms, and Apple is about limited but perfected platforms. That's not to say that Apple ever achieves perfection. But Apple is more focused on experience and is wholly uninterested in breadth. Microsoft must, by virtue of its broad customer base, always sacrifice innovation and experience, in favor of bringing everybody along for the ride.
And so Azure, as a platform for bringing everybody along, will be a smashing success. But as a paradigm shifting platform for computing, not so much. As I see it that is a reasonable, even needed trade-off.
Thursday, October 23, 2008
Fixing Firefox and Adapting to It
At Kloudshare, we are developing a platform that, among other things, pushes the web browser further than most applications, and perhaps further than almost any application has yet pushed the browser. When I say push I don't mean in the sense that we expect it to go particularly faster than others do, but that the way that we are exercising it is that we are using things in presumably unexpected combinations.
Up until now, Firefox has been OK, but there had been some visual glitches that we would like to eliminate. This is hard because, as far as we can tell, we are doing everything exactly right in a standards compliant sort of way. The bugs of most concern seem not to have any obvious thread, and most tellingly, they do not appear in other browsers.
The visual glitches are a bit annoying, but can be lived with. But yesterday we hit one that is really weird. When changing the source of an iframe, the browser seems to change its zoom level. Everything gets bigger. When you click to another tab and then come back, everything goes back to normal. This is a real killer for us. Its not just a few pixels intermittently out of place, and so it makes the experience unusable. The problem is not consistent in the sense that on my Mac it seems to happen every time, but on our Linux machine the problem is more intermittent.
The thing I have been struggling with is trying to figure out how to both report this and whether there are ways to work around this. We are not live yet so we can't provide some kind of public link on Bugzilla. We have thought about trying to capture the HTML but many of these bugs require interaction. More troublingly we really want to do more than just provide information that helps make the next version of the browser better, though obviously that would be great. Ideally we'd like to know what is going on internally, and if there is a way to avoid or work around these problems so that we can satisfy the existing installed base without removing important features.
So the real question here is, what is the right strategy to resolve this. Is there a proper procedure for resolving such problems? I suppose we could try to develop a specific use case outside our software that reproduces the bug. But given the highly circumstantial nature, this would be a huge burden on us, given our small size. Another thought is that we could hire someone who is a contributor to see if s/he can reproduce the bug and help us both identify the bug and, if possible, find a work around. The problem with this solution is I am not sure where to find such contributors. I guess I could try hanging out on IRC, but that seems pretty inefficient. Then again perhaps not.
Anyway, this post is more of a call for help and suggestions. Any ideas greatly appreciated.
Up until now, Firefox has been OK, but there had been some visual glitches that we would like to eliminate. This is hard because, as far as we can tell, we are doing everything exactly right in a standards compliant sort of way. The bugs of most concern seem not to have any obvious thread, and most tellingly, they do not appear in other browsers.
The visual glitches are a bit annoying, but can be lived with. But yesterday we hit one that is really weird. When changing the source of an iframe, the browser seems to change its zoom level. Everything gets bigger. When you click to another tab and then come back, everything goes back to normal. This is a real killer for us. Its not just a few pixels intermittently out of place, and so it makes the experience unusable. The problem is not consistent in the sense that on my Mac it seems to happen every time, but on our Linux machine the problem is more intermittent.
The thing I have been struggling with is trying to figure out how to both report this and whether there are ways to work around this. We are not live yet so we can't provide some kind of public link on Bugzilla. We have thought about trying to capture the HTML but many of these bugs require interaction. More troublingly we really want to do more than just provide information that helps make the next version of the browser better, though obviously that would be great. Ideally we'd like to know what is going on internally, and if there is a way to avoid or work around these problems so that we can satisfy the existing installed base without removing important features.
So the real question here is, what is the right strategy to resolve this. Is there a proper procedure for resolving such problems? I suppose we could try to develop a specific use case outside our software that reproduces the bug. But given the highly circumstantial nature, this would be a huge burden on us, given our small size. Another thought is that we could hire someone who is a contributor to see if s/he can reproduce the bug and help us both identify the bug and, if possible, find a work around. The problem with this solution is I am not sure where to find such contributors. I guess I could try hanging out on IRC, but that seems pretty inefficient. Then again perhaps not.
Anyway, this post is more of a call for help and suggestions. Any ideas greatly appreciated.
Wednesday, October 22, 2008
New York VC Slim Pickings
My company, Kloudshare, is engaging in discussions with venture capital firms regarding a potential fund raising round. As many of you know, my philosophy about venture capital is to not pursue it but to sort of let it come to you. I believe you can spend an enormous amount of time raising money and never succeed if you don't have the right story, plan, and product. By spending time focused on raising money you are not spending time adding real value to your business. And so it is critical to structure yourself in such a way that you can get to market without raising either any money, or without raising money outside friends and family.
And so my philosophy is to raise money by not raising money. I believe the best way to build value is by doing good work, and letting people find out about it.
The point of this preamble is that at Kloudshare we have not directly solicited any investors at all. My view is it is too much work, and will likely not be fruitful. And so the way it has worked is that people hear little bits and pieces about what we are up to and tend to ask questions, or get intoduced to us through other people and then inquire etc.
This process for us has lead to an interesting insight that might not be possible if we had attempted to directly target VC funds. Because we only engaged in conversations with people that initially expressed interest in us, we have been able to organically gauge the types of funds that would be most naturally interested in a company like ours.
The upshot of this process is that we are engaged in discussions with about six venture funds, all of them "a-list" and *none* of them are in our home town of New York. To be clear, the conversations are in various stages, and I am not here to suggest anything is at all imminent. But the fact that there are no conversations at any stage with any New York funds is, to me, surpising, even though it probably shouldn't be.
The point of this is not to bash New York VC funds who are obviously engaged in what they believe to be their own economic self interest. But it is to suggest that if you are an early stage tech company, while New York may very well be the right place for your business, it may not be the right place to raise money. If you are in New York, and you are going to at some point want to raise money, you should be agressively building an out of state network. Otherwise the early stage fund raising odds are radically stacked against you.
And so my philosophy is to raise money by not raising money. I believe the best way to build value is by doing good work, and letting people find out about it.
The point of this preamble is that at Kloudshare we have not directly solicited any investors at all. My view is it is too much work, and will likely not be fruitful. And so the way it has worked is that people hear little bits and pieces about what we are up to and tend to ask questions, or get intoduced to us through other people and then inquire etc.
This process for us has lead to an interesting insight that might not be possible if we had attempted to directly target VC funds. Because we only engaged in conversations with people that initially expressed interest in us, we have been able to organically gauge the types of funds that would be most naturally interested in a company like ours.
The upshot of this process is that we are engaged in discussions with about six venture funds, all of them "a-list" and *none* of them are in our home town of New York. To be clear, the conversations are in various stages, and I am not here to suggest anything is at all imminent. But the fact that there are no conversations at any stage with any New York funds is, to me, surpising, even though it probably shouldn't be.
The point of this is not to bash New York VC funds who are obviously engaged in what they believe to be their own economic self interest. But it is to suggest that if you are an early stage tech company, while New York may very well be the right place for your business, it may not be the right place to raise money. If you are in New York, and you are going to at some point want to raise money, you should be agressively building an out of state network. Otherwise the early stage fund raising odds are radically stacked against you.
Tuesday, October 21, 2008
The NY Tech Meetup & Charles Forman
Two weeks ago a controversy erupted when Allen Stern of CenterNetworks wrote a critical piece about the New York Tech Meetup which appeared both in CenterNetworks and Silicon Alley Insider. The NY Tech Meetup is the premier platform for New York Tech companies, primarily Internet companies, to demo their products to the New York community. It also is a great networking venue and has an active, though at times poorly behaved mailing list.
Allen's criticism is a feeling that, in essence, there is not sufficient openness in the management of the events. He even has the feeling that the process of selections may favor friends of the organizers. Allen has written several posts to the mailing list of the group asking to discuss certain issues about group organization and has been frustrated by lack of response.
My view is that some of Allen's criticisms may be valid, particularly as it relates to the appearance of fairness and openness. On the other hand I have 100% confidence that Scott Heiferman, the group's organizer and also the CEO of Meetup, has nothing but honorable intentions. To that end, today, Scott has called an organizational meeting for the group with the intent of opening a discussion about management, direction, and a larger purpose for the group. I think this direction is commendable.
Unfortunately, somewhere along the way, this discussion has gotten hijacked by perhaps one of the most disgusting and despicable displays I can recollect by a purportedly manistream executive in our business. The details follow.
One of the focal point's of Allen's criticism was that Charles Forman from iminlikewithyou has been allowed to present three times in the last year or so. Interestingly, this was not a criticism of Forman, but of the meetup organizers. Personally, I can understand the organizer's perspective that Forman had something compelling to say. But I also understand the argument that three times in such a short time is too much, and that he was allowed to break the cardinal rule of the meetup which is to actually demo something rather that just show a slide deck. It does seem to me that the rules here should be one size fits all.
Unfortunately, when Forman weighed in with his comments, the discussion went off the rails and was no longer about the merits at all.
Charles Forman left a comment on Stern's post on Silicon Alley Insider that read as follows:
As far as I am concerned, this is one of the most despicable displays I have ever seen in any supposed professional space. Forman is CEO of a venture funded tech company. And this kind of personally denigrating talk is just shy of the hateful filth spewed by Loren Feldman. But Forman doesn't even have the patina of deniability which might be afforded to someone like Feldman who *claims* to be a comedian. Forman is obviously obsessed with his self-perception of his own physical beauty, but apparently totally tone deaf regarding the perception of his words. Even strategically, to say such things in public, even if you unrepentantly believe and feel them is, if nothing else, incredibly stupid. But then again, Forman doesnt claim to be smart, just capable of dating hot (presumably even more stupid) girls.
And so I have a newsflash for Charles. No matter how many times you appear in Esquire (yes he did), and no matter how many people may reinforce your enormous, but presumably incredibly fragile ego, the truth is crystal clear and cannot be denied. Nothing about your outward appearance can mitigate the reality of an incredibly flawed character. For your investors sake, I hope you can develop some kind of filter, because this is really not a great way to get people to be "in like with you."
Allen's criticism is a feeling that, in essence, there is not sufficient openness in the management of the events. He even has the feeling that the process of selections may favor friends of the organizers. Allen has written several posts to the mailing list of the group asking to discuss certain issues about group organization and has been frustrated by lack of response.
My view is that some of Allen's criticisms may be valid, particularly as it relates to the appearance of fairness and openness. On the other hand I have 100% confidence that Scott Heiferman, the group's organizer and also the CEO of Meetup, has nothing but honorable intentions. To that end, today, Scott has called an organizational meeting for the group with the intent of opening a discussion about management, direction, and a larger purpose for the group. I think this direction is commendable.
Unfortunately, somewhere along the way, this discussion has gotten hijacked by perhaps one of the most disgusting and despicable displays I can recollect by a purportedly manistream executive in our business. The details follow.
One of the focal point's of Allen's criticism was that Charles Forman from iminlikewithyou has been allowed to present three times in the last year or so. Interestingly, this was not a criticism of Forman, but of the meetup organizers. Personally, I can understand the organizer's perspective that Forman had something compelling to say. But I also understand the argument that three times in such a short time is too much, and that he was allowed to break the cardinal rule of the meetup which is to actually demo something rather that just show a slide deck. It does seem to me that the rules here should be one size fits all.
Unfortunately, when Forman weighed in with his comments, the discussion went off the rails and was no longer about the merits at all.
Charles Forman left a comment on Stern's post on Silicon Alley Insider that read as follows:
Charles Forman (URL) said:Oct. 13, 5:59 PM
I don't like my name being dropped this many times without a picture of my pretty face attached.
Ah yes. The alley insider is up to rousing rabble for page views from my Google Alerts? Awesome. What's this? Detective Retardo is on the case - the champion of the underdog, and the morbidly obese? Totally fucking awesome.
Did I fail to entertain you? Did I fail to show something interesting? Of
I spent 2 days preparing my presentation so everyone wouldn't be bored to death. I doubt there has been another presenter that has put as much love into their presentations as I have.
Do you not understand what we am trying to do? Of course you do. You know how difficult and truly amazing it is.
I think the real problem is that you are jealous of my ability to run a mile in under 3 days. Maybe its that I date hot girls? Honestly, I don't understand how your beef with me - or your petty, passive aggressive approach.
If you have a problem with fairness, why aren't you paying $20? You very realistically take up 2 seats.
Seriously, if you have such a problem, why don't you just do your own democratic tech meetup and watch as no one shows up?
You are a sad, lonely, disgusting man. I hope you don't die of a coronary before we have a chance to patch things up.
*Kisses*
As far as I am concerned, this is one of the most despicable displays I have ever seen in any supposed professional space. Forman is CEO of a venture funded tech company. And this kind of personally denigrating talk is just shy of the hateful filth spewed by Loren Feldman. But Forman doesn't even have the patina of deniability which might be afforded to someone like Feldman who *claims* to be a comedian. Forman is obviously obsessed with his self-perception of his own physical beauty, but apparently totally tone deaf regarding the perception of his words. Even strategically, to say such things in public, even if you unrepentantly believe and feel them is, if nothing else, incredibly stupid. But then again, Forman doesnt claim to be smart, just capable of dating hot (presumably even more stupid) girls.
And so I have a newsflash for Charles. No matter how many times you appear in Esquire (yes he did), and no matter how many people may reinforce your enormous, but presumably incredibly fragile ego, the truth is crystal clear and cannot be denied. Nothing about your outward appearance can mitigate the reality of an incredibly flawed character. For your investors sake, I hope you can develop some kind of filter, because this is really not a great way to get people to be "in like with you."
Monday, October 20, 2008
I'm Back
I spent all of last week out in California. The first part of the week was spent in San Francisco at meetings, and the second half of the week was at our Web 3.0 Conference & Expo.
The trip was incredibly fruitful. I met some great new companies that will I think be great partners for Kloudshare, including Eric Marcoullier at Gnip. I also reconnected with some great friends.
The conference was fantastic, and we are planning the next one in New York around April. In the aftermath, there was an interesting debate in the comments in a ReadWriteWeb article about the conference keynote, about the definition of Web 3.0 and whether it is at all valid to term the space that the semantic web inhabits as being Web 3.0. Personally I don't care what people say about name as long as they keep talking about it.
There was also some other coverage of the conference at RWW including an article about my panel discussion with Yahoo about their open strategy.
Unfortunately, I returned to a cold which I seemed to get either on the plane, or just after landing and switching from the warm California air to the chilly New York air. As such my post here is decidedly short. I also returned to read about iminlikewithyou.com's Charles Forman and his nasty "fat" comments directed at Allen Stern from CenterNetworks. Forman's comments were triggered by Allen's critique of the New York Tech Meetup and the fact that Forman has presented three times in the last year or so, which Allen considers to be more than his fair share.
Forman's comments were horrific, and deserve a full post, but you can imagine that I might have something fairly substantial to say about this. But I want to be at full strength when I air this one out.
Anyway, the trip reminded me of the value of staying connected to the west coast. There is a whole other eco-system out there, and for us east coast folks, it makes no sense not to be connected to it. While it is certainly true that there can be a bit of a west coast echo chamber, not having a visceral sense of what is going on out there is definitely sub-optimal.
Anyway, more later. I have lots to say but it will probably take a week or so to get it all out so please be patient.
The trip was incredibly fruitful. I met some great new companies that will I think be great partners for Kloudshare, including Eric Marcoullier at Gnip. I also reconnected with some great friends.
The conference was fantastic, and we are planning the next one in New York around April. In the aftermath, there was an interesting debate in the comments in a ReadWriteWeb article about the conference keynote, about the definition of Web 3.0 and whether it is at all valid to term the space that the semantic web inhabits as being Web 3.0. Personally I don't care what people say about name as long as they keep talking about it.
There was also some other coverage of the conference at RWW including an article about my panel discussion with Yahoo about their open strategy.
Unfortunately, I returned to a cold which I seemed to get either on the plane, or just after landing and switching from the warm California air to the chilly New York air. As such my post here is decidedly short. I also returned to read about iminlikewithyou.com's Charles Forman and his nasty "fat" comments directed at Allen Stern from CenterNetworks. Forman's comments were triggered by Allen's critique of the New York Tech Meetup and the fact that Forman has presented three times in the last year or so, which Allen considers to be more than his fair share.
Forman's comments were horrific, and deserve a full post, but you can imagine that I might have something fairly substantial to say about this. But I want to be at full strength when I air this one out.
Anyway, the trip reminded me of the value of staying connected to the west coast. There is a whole other eco-system out there, and for us east coast folks, it makes no sense not to be connected to it. While it is certainly true that there can be a bit of a west coast echo chamber, not having a visceral sense of what is going on out there is definitely sub-optimal.
Anyway, more later. I have lots to say but it will probably take a week or so to get it all out so please be patient.
Saturday, October 11, 2008
Did Some Insider Just Spill The Beans On New Apple Laptop?
by Galaxy5 October 10, 2008 12:03 PM PDT
Sure would be cool if they sold a product that could be used as a laptop or a desktop, a la Mac Mini. $600.00 for the 'brick' and you get what's essentially a Mac Mini. $800 gets you the same thing with a bright, sharp, fully detachable 13" display. Not that I would be in a position to know...I just like leaving cryptic comments. And I drink beer at B.J.s on DeAnza a lot.
Fascinating. People may not have picked up the reference, but DeAnza is one of the main streets running through Apple's cupertino campus. The implication is that he is in the know. A detachable desktop/portable Mac as implied here for $800 would be awesome.
Friday, October 10, 2008
So Tell Me Again Why You Don’t Pay A Dividend?
In one respect the stock market has often baffled me. I understand what stock ownership in a private company means. And I even understand what stock ownership in a publicly traded low growth dividend earning stock means.
What I don’t understand is why a reasonably mature public stock that generates no dividend is worth anything to anybody. Ok that’s not quite true. I understand why a company might be strategic to another company and so, in that context, to have substantial value even if not producing revenue, or even profit. But owning a stock in the hope that someone else will see it as strategic ain't no way to manage a portfolio.
In the tech market, most companies are considered “growth” stocks, and so do not pay a dividend. As the most insane and absurd example, Microsoft only felt it appropriate to start paying a dividend in 2003. In the case of a no-dividend company, what you are doing when you buy their stock is absolutely nothing more than gambling that some other guy is going to think, in the future, that the given stock has more value than you believe it does today, probably based on some nebulous metrics. But if your intent is to hold that stock for a long period of time, how are you getting a return on investment if there is no dividend? As I see it, investing in publicly traded mature stocks that don’t offer a dividend is the most pure (and ridiculous) form of gambling.
As I see it, the stock market ought to work a lot more like private stock ownership. If you own stock in a private company, unless you are in a massive early stage growth phase, the value in owning the stock is that it generates revenue for you. A dividend. This is no different than how you should feel as the holder of a relatively mature private company.
The reason I started thinking about this is I, like everyone else, have been wondering where the bottom of the market is. And in tech, i.e. growth stocks, I have been wondering how you select a bottom for companies that pay nothing to their shareholders.
I think one of the repercussions of this crash is that at all but the earliest stage companies will have to consider a dividend strategy that makes sense not just for the companies but for their shareholders and the stock market as a whole. This may be the only real way of re-establishing underlying value for equities.
What I don’t understand is why a reasonably mature public stock that generates no dividend is worth anything to anybody. Ok that’s not quite true. I understand why a company might be strategic to another company and so, in that context, to have substantial value even if not producing revenue, or even profit. But owning a stock in the hope that someone else will see it as strategic ain't no way to manage a portfolio.
In the tech market, most companies are considered “growth” stocks, and so do not pay a dividend. As the most insane and absurd example, Microsoft only felt it appropriate to start paying a dividend in 2003. In the case of a no-dividend company, what you are doing when you buy their stock is absolutely nothing more than gambling that some other guy is going to think, in the future, that the given stock has more value than you believe it does today, probably based on some nebulous metrics. But if your intent is to hold that stock for a long period of time, how are you getting a return on investment if there is no dividend? As I see it, investing in publicly traded mature stocks that don’t offer a dividend is the most pure (and ridiculous) form of gambling.
As I see it, the stock market ought to work a lot more like private stock ownership. If you own stock in a private company, unless you are in a massive early stage growth phase, the value in owning the stock is that it generates revenue for you. A dividend. This is no different than how you should feel as the holder of a relatively mature private company.
The reason I started thinking about this is I, like everyone else, have been wondering where the bottom of the market is. And in tech, i.e. growth stocks, I have been wondering how you select a bottom for companies that pay nothing to their shareholders.
I think one of the repercussions of this crash is that at all but the earliest stage companies will have to consider a dividend strategy that makes sense not just for the companies but for their shareholders and the stock market as a whole. This may be the only real way of re-establishing underlying value for equities.
Thursday, October 9, 2008
The Veruca Salt Economy
I want it now daddy!
That is what drives us. It is what drives every financial meltdown. It is the gorging on stuff that is trivially accessible, while foregoing that which, regardless of value, presents too much challenge. It is the seeking of the low hanging, but tasteless, while eschewing the slightly beyond easy reach but ever so much more delicious. At some point the market always figures out if you have a basketful of flavorless fruit. The apples look like apples, but taste like cardboard. And no matter how easy they were to pick, no one wants cardboard apples.
But the easy way out is, unfortunately, vastly more appealing than the more circuitous route. And so it is with the crisis of confidence in the banking system, and the much less discussed crisis of ideas in the tech economy. Why put several years of design and re-thinking and engineering into something when you can graduate with your freshly minted MBA, partner with some PHP hack, and join the Web 2.0 generation. After all its what all the cool kids are doing.
The market should have punished this trend long ago. And it did briefly after the Web 1.0 bubble burst. But then we got stupid and we forgot how ridiculous we thought the quest for revenue-less eyeballs seemed in the last tech melt down.
So what is worrying me is that there is lots of talk in the tech community about impending danger, but as I see it the focus is all wrong. Yes, in these times it is always prudent to cut expenses to maximize your runway. But the problem is not running out of money. The problem is not doing something that is worth any money. And truth be told, its not that hard to figure that out. The problem is the incredible denial that so many people engage in when they are picking all those cardboard apples. Just because your buddy sold a bucket of cardboard apples to someone who P.T. Barnum might call a sucker, doesn't mean you can too. Its like musical chairs. When the music stops there will be more people than chairs and if you have a basketful of cardboard apples, you are going to be left standing.
And so my message now is about patience and quality. Stop focusing on getting rich, and start focusing on doing something that makes a real difference to someone in the real world. And while you are at it, building something that cannot be copied by a couple of teenage PHP coders over a few weekends would probably be smart too.
That is what drives us. It is what drives every financial meltdown. It is the gorging on stuff that is trivially accessible, while foregoing that which, regardless of value, presents too much challenge. It is the seeking of the low hanging, but tasteless, while eschewing the slightly beyond easy reach but ever so much more delicious. At some point the market always figures out if you have a basketful of flavorless fruit. The apples look like apples, but taste like cardboard. And no matter how easy they were to pick, no one wants cardboard apples.
But the easy way out is, unfortunately, vastly more appealing than the more circuitous route. And so it is with the crisis of confidence in the banking system, and the much less discussed crisis of ideas in the tech economy. Why put several years of design and re-thinking and engineering into something when you can graduate with your freshly minted MBA, partner with some PHP hack, and join the Web 2.0 generation. After all its what all the cool kids are doing.
The market should have punished this trend long ago. And it did briefly after the Web 1.0 bubble burst. But then we got stupid and we forgot how ridiculous we thought the quest for revenue-less eyeballs seemed in the last tech melt down.
So what is worrying me is that there is lots of talk in the tech community about impending danger, but as I see it the focus is all wrong. Yes, in these times it is always prudent to cut expenses to maximize your runway. But the problem is not running out of money. The problem is not doing something that is worth any money. And truth be told, its not that hard to figure that out. The problem is the incredible denial that so many people engage in when they are picking all those cardboard apples. Just because your buddy sold a bucket of cardboard apples to someone who P.T. Barnum might call a sucker, doesn't mean you can too. Its like musical chairs. When the music stops there will be more people than chairs and if you have a basketful of cardboard apples, you are going to be left standing.
And so my message now is about patience and quality. Stop focusing on getting rich, and start focusing on doing something that makes a real difference to someone in the real world. And while you are at it, building something that cannot be copied by a couple of teenage PHP coders over a few weekends would probably be smart too.
Wednesday, October 8, 2008
Inside Out vs. Outside In
I like to read code on paper. Some people only read code on the screen. I have at times wondered what drives each coding style. The reason I like to code on paper is because it helps me see the big picture. I get to take in all of the code. And it allows me to change venues when looking at code. For example I can print out a big piece of code and go sit in the park or lay on my bed, or sit in the kitchen, or whatever.
I find that being able to flip between pages and mark things and take notes on paper is invaluable for seeing the big picture, or what I would call “outside in” coding. I tend to code outside in, and I think screen only coders write “inside out”. When you write code inside out it means you start writing small functions and you just keep putting them together until you have something useful. Looking at the big picture is less important because you are always focused on one little section at a time and your project grows this way.
Inside out coding is great because you always have something working. The downside is that it doesn’t necessarily help you get to a radically different place. It is harder to chart a course this way. Similarly, writing code outside in has the downside of not necessarily having the benefit of rapid iterative development, and not necessarily seeing all of the opportunities and patterns that may arise from deep in the structure of the code.
I have come to believe that both styles of development are important, and that it is in fact helpful to have a mix of styles on a team. The idea is that inside out is great for creating building blocks, and the outside in thinking provides form structure and direction.
Part of the reason I am thinking about this is because there is a very popular school of thought that currently promotes iterative development, which is often synonymous with inside out development. I believe iterative development is great when you don’t have too far to go. But I think that big picture thinking, as opposed to a purely iterative process is invaluable to certain types of innovation and to getting to a less obvious place. Properly managed, inside out and outside in together can be a very effective combination.
I find that being able to flip between pages and mark things and take notes on paper is invaluable for seeing the big picture, or what I would call “outside in” coding. I tend to code outside in, and I think screen only coders write “inside out”. When you write code inside out it means you start writing small functions and you just keep putting them together until you have something useful. Looking at the big picture is less important because you are always focused on one little section at a time and your project grows this way.
Inside out coding is great because you always have something working. The downside is that it doesn’t necessarily help you get to a radically different place. It is harder to chart a course this way. Similarly, writing code outside in has the downside of not necessarily having the benefit of rapid iterative development, and not necessarily seeing all of the opportunities and patterns that may arise from deep in the structure of the code.
I have come to believe that both styles of development are important, and that it is in fact helpful to have a mix of styles on a team. The idea is that inside out is great for creating building blocks, and the outside in thinking provides form structure and direction.
Part of the reason I am thinking about this is because there is a very popular school of thought that currently promotes iterative development, which is often synonymous with inside out development. I believe iterative development is great when you don’t have too far to go. But I think that big picture thinking, as opposed to a purely iterative process is invaluable to certain types of innovation and to getting to a less obvious place. Properly managed, inside out and outside in together can be a very effective combination.
Monday, October 6, 2008
The Tech Market: A Failure of Ideas, Not Execution
I have been having an online discussion with my friend Andrew Badera, who wrote the initial “idea = 1% execution = 99%” posting on the NextNY mailing list that I blogged about last week. His position is that execution is worth far more than ideas. We have been going back and forth in the comments of that article, and in the process I realized something I think is significant enough to elevate to a blog post.
The sorry state of tech entrepreneurship is not a failure of execution, but a failure of ideas. In the last four or five years, the Web 2.0 market has seemed explosively successful. But I would say that from an economic perspective it has been a failure. Because at the end of the day, a market cannot be judged by how much VC has been raised, but by how much actual revenue the companies are making either independently or after acquisition, as parts of larger companies.
The truth is that as it relates to generating revenue, Web 2.0 has been a bust. This is intuitively obvious, but unfortunately I don’t have any hard statistics to back it up. But the clearest indicator is that startups are not being acquired. If the best of the best were accretive to earnings for the acquirer they would be. The idea that the raft of social media companies with no revenue model was going to somehow “figure revenue out later” after building up large audiences of free users has, I think been debunked. Web 2.0 is old enough that there should be way more companies making lots of money.
Which brings me back to the idea vs. execution argument. In the Web 2.0 era, there have been lots of excellent entrepreneurs. The failure of the overall market is not because no entrepreneurs are executing, but because they are, by and large, trying to execute bad ideas. We are currently living through the fallout of that. Yes the overall economy is obviously bad, but this trend is not a new one. It has been clear for at least a year and probably longer.
What the Web 2.0 market actually confirms for us is that bad ideas cannot be overcome with excellent execution. Otherwise we would be seeing lots of hugely profitable social media startups. The proof is in the (lack of) profit.
The sorry state of tech entrepreneurship is not a failure of execution, but a failure of ideas. In the last four or five years, the Web 2.0 market has seemed explosively successful. But I would say that from an economic perspective it has been a failure. Because at the end of the day, a market cannot be judged by how much VC has been raised, but by how much actual revenue the companies are making either independently or after acquisition, as parts of larger companies.
The truth is that as it relates to generating revenue, Web 2.0 has been a bust. This is intuitively obvious, but unfortunately I don’t have any hard statistics to back it up. But the clearest indicator is that startups are not being acquired. If the best of the best were accretive to earnings for the acquirer they would be. The idea that the raft of social media companies with no revenue model was going to somehow “figure revenue out later” after building up large audiences of free users has, I think been debunked. Web 2.0 is old enough that there should be way more companies making lots of money.
Which brings me back to the idea vs. execution argument. In the Web 2.0 era, there have been lots of excellent entrepreneurs. The failure of the overall market is not because no entrepreneurs are executing, but because they are, by and large, trying to execute bad ideas. We are currently living through the fallout of that. Yes the overall economy is obviously bad, but this trend is not a new one. It has been clear for at least a year and probably longer.
What the Web 2.0 market actually confirms for us is that bad ideas cannot be overcome with excellent execution. Otherwise we would be seeing lots of hugely profitable social media startups. The proof is in the (lack of) profit.
Friday, October 3, 2008
What Is An Idea Worth?
I am a member of the NextNY mailing list which is a group of New York folks that talk about tech business and entrepreneurship. A recent conversation and actually a persistent theme in that group is that in a startup, an idea is worth 1% and execution is worth 99% or some other highly disproportionate ratio.
I take issue with the concept.
Here’s the problem with the formulation. It belies a misunderstanding of what an actionable “idea” really is. A good idea is almost never some light bulb moment that occurs where you realize some insight that no one else has seen. In truth there are few of those. Very, very few people are that smart or that lucky. Great actionable ideas are really a collection of much smaller ideas, weaved together in such a way as to create something useful unique and compelling. There are few actionable “aha” moments.
In other words, to me, coming up with great actionable ideas requires lots of perspiration, iteration, and ideation. However, once you have an actionable idea that has been achieved through this process it is worth *way* more than 1%. I would say getting to this point is worth easily 50% and perhaps well more than 50% of the value of your enterprise. Actionable and truly compelling business ideas are incredibly valuable. And most people that say otherwise probably don’t have them. For example if you open up a shoe store on Amazon, there is likely no “idea” there. But if you have developed a set of insights which allows you to develop a cost effective and safe hovercraft, that is certainly a valuable idea.
The problem is that people confuse the idea creation process with the execution process. They are different. I think one can, at times, blend the idea creation process with the *development* process, but there are important distinctions. When development is just execution of some defined idea, that is not idea creation. That is part of execution.
On the other hand, when the development process is part of the ideation process, you have set the stage for an environment where real creativity is possible. But in order for this to work, the development process must be more interactive and less goal-oriented. Great ideas come from having a bit of a “lab-like” environment in the early stages of your process. This is because exploration is almost always required to achieve a great compelling concept. Few of us has the ability to see with clarity a really useful idea from the beginning of the process, which is why iteration and stepwise refinement is so important.
This leads to what I think is a very important issue in the idea development process. There are lots of people who strongly suggest that you should do your development in public. It is part of the “release early and often” concept. But I also believe that this concept is not effective in developing great ideas because it is limiting. The minute that you get real customers involved, their needs become much more pedestrian. They will yell loudly about things that may be important to their use of the product, but they will rarely yell about some new game-changing concept. In fact they will resist radical change and rethinking because it messes with their now committed workflow. And now you are comitted to supporting them.
To be clear, I am not saying that a mediocre idea can't be a good business. But good businesses are not all great ideas.
So as I see it, if you want to do something great, you should strongly consider whether you have enough meat on your conceptual bone before you decide to release publicly. Because when you get users involved, it is the equivalent of putting the saw and the screwdriver down and grabbing the sand paper. There will likely be few additional big ideas after that point.
And so the point of all of this is that I feel few people really respect the process of creating big ideas. Compelling idea creation is hard and it is incredibly valuable. And as I see it, the “release early and often” meme is a reflection of a broad-based acceptance of incrementalism, in lieu of real creativity. In truth some of these incredibly popular concepts may be behind the incredible slow down we have seen in real innovation in the tech economy in the last decade.
I take issue with the concept.
Here’s the problem with the formulation. It belies a misunderstanding of what an actionable “idea” really is. A good idea is almost never some light bulb moment that occurs where you realize some insight that no one else has seen. In truth there are few of those. Very, very few people are that smart or that lucky. Great actionable ideas are really a collection of much smaller ideas, weaved together in such a way as to create something useful unique and compelling. There are few actionable “aha” moments.
In other words, to me, coming up with great actionable ideas requires lots of perspiration, iteration, and ideation. However, once you have an actionable idea that has been achieved through this process it is worth *way* more than 1%. I would say getting to this point is worth easily 50% and perhaps well more than 50% of the value of your enterprise. Actionable and truly compelling business ideas are incredibly valuable. And most people that say otherwise probably don’t have them. For example if you open up a shoe store on Amazon, there is likely no “idea” there. But if you have developed a set of insights which allows you to develop a cost effective and safe hovercraft, that is certainly a valuable idea.
The problem is that people confuse the idea creation process with the execution process. They are different. I think one can, at times, blend the idea creation process with the *development* process, but there are important distinctions. When development is just execution of some defined idea, that is not idea creation. That is part of execution.
On the other hand, when the development process is part of the ideation process, you have set the stage for an environment where real creativity is possible. But in order for this to work, the development process must be more interactive and less goal-oriented. Great ideas come from having a bit of a “lab-like” environment in the early stages of your process. This is because exploration is almost always required to achieve a great compelling concept. Few of us has the ability to see with clarity a really useful idea from the beginning of the process, which is why iteration and stepwise refinement is so important.
This leads to what I think is a very important issue in the idea development process. There are lots of people who strongly suggest that you should do your development in public. It is part of the “release early and often” concept. But I also believe that this concept is not effective in developing great ideas because it is limiting. The minute that you get real customers involved, their needs become much more pedestrian. They will yell loudly about things that may be important to their use of the product, but they will rarely yell about some new game-changing concept. In fact they will resist radical change and rethinking because it messes with their now committed workflow. And now you are comitted to supporting them.
To be clear, I am not saying that a mediocre idea can't be a good business. But good businesses are not all great ideas.
So as I see it, if you want to do something great, you should strongly consider whether you have enough meat on your conceptual bone before you decide to release publicly. Because when you get users involved, it is the equivalent of putting the saw and the screwdriver down and grabbing the sand paper. There will likely be few additional big ideas after that point.
And so the point of all of this is that I feel few people really respect the process of creating big ideas. Compelling idea creation is hard and it is incredibly valuable. And as I see it, the “release early and often” meme is a reflection of a broad-based acceptance of incrementalism, in lieu of real creativity. In truth some of these incredibly popular concepts may be behind the incredible slow down we have seen in real innovation in the tech economy in the last decade.
Wednesday, October 1, 2008
A Moment Of Silence For Our Economy
Please read this article and this article both from the New York Times. I cannot say it better and so I refer you to people who do say it better. Tell your wacky friends that just want Wall Street to burn to read them too. Apparently calls are flowing in 200 to 1 against doing anything so its time to mobilize. Its one thing to be for something else. Its another to be for nothing. Its not the public's job to understand the importance of credit, but members of The House of Representatives reflect an ignorance that is just a little too representative of Main Street. Please help me turn these articles into email chain letters. Our stupid, craven, spineless politicians need help.
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