Victus Spiritus » startups

Enough with the Dead End Apps

Mark Essel — Tue, 19 Jul 2011 11:39:02 +0000

In the tech world there’s a surreal level of hype surrounding mobile and tablet applications. The source of the hype wave comes from users, developers, and even investors. But mobile is just one edge or surface of network applications, and it’s thin valued novelty will quickly wane. It’s frustrating to see the majority of developer creativity and energy going into dead end apps which pander to the lowest common denominator.

What I value in service apps today are hyper specialization or a wholistic cross platform approach.

Platform Specific

Hyper specialization refers to apps that only make sense for dedicated devices. For instance, Augmented Reality requires a camera or other sensory data as well as ancillary knowledge of observer position and orientation. If developers feel they can’t deliver the same quality on multiple platforms the dedicated app provides a clear product path. TextMate is a potent Mac developer tool, yet its creators have decided not to spread this incredible app to other platforms. I’d surely buy it at work for Windows and Linux systems.

The app triumvirate

It’s practical to begin building on one edge, and strong applications sprout up from single platforms. After proving app value with traction and revenue, it’s an ideal opportunity to deliver that experience on all the devices where active users expect and need it. A sign of technical competence and business savvy is presence on all the platforms where your market expects you to be. One critical value I seek in apps is a common configuration home, and a web app is the platform of choice for maximum accessibility.

For information services, multiplayer games and social apps I loathe synchronizing settings across dozens of apps on a handful of devices. Thanks but no thanks, none of us need an unpaid side job that never ends. That doesn’t mean I’d prefer a single solution, but I’d certainly appreciate much greater client approved data portability between apps.

A single product champion is capable of only so much crazy

Mark Essel — Mon, 18 Jul 2011 13:23:30 +0000

Product Engineering, Messier in Practice

Got a brilliant concept which early feedback reveals as a huge market opportunity? [check]
Have the sharpest minds and the most adept hands in the industry ready to execute a polished design and beta? [check]
Turn the crank and toil away to a product success story right? [keep dreaming]

Just because you can envision a clear working model in your mind’s eye, doesn’t mean reality will be so pliable.

Real products have anything but tidy backgrounds. Their disheveled stories revolve about uncertain resources, unproven markets, near mad visionaries, driven designers, and exhausted engineers struggling to make an abstract concept into a practical product. History has a way of painting a smooth surface on the chaos that is a breakout product’s origin.

Product life cycles are born out of the relentless will of champions whether they turn out to be shining successes or catastrophic flops. In the startup world we call these folks founders, and their roles often grow beyond caretakers of a single product line. Likewise mature businesses have internal leaders which champion new products.

The company born product champion trades off ownership, control, and freedom from layers of management and bureaucracy (aka bullshit) for the security of a steady paycheck. In theory the company insider has a softer landing in case of project fails, but I’m not confident this holds true in practice. The founder of a failed venture can jump into a cash rich startup, land a corporate gig, or dust themselves off and take another swing at their own startup.

Whether inside a company or on their own, champions are the first kick into the product evolutionary funnel. From the outside looking in, this first stage of development is often associated with the greatest disorder. Although the product development cycle is perceived as trending from chaotic to ordered, in my sixty seasons as an engineer I can vouch for the disorder growing and simply spreading out to inhabit unseen regions of a larger system.

A single product champion is capable of only so much crazy.

Things don’t get really interesting until you add the combinatoric entropy of designers, developers and engineers throwing in their lot of dementia to the early product bonfire.

The Prototypical Grind House

Professional developers and engineers tend towards austere work environments to balance the complexity of state that their work demands.

The stark contrast between clean modern offices and erratic hardware labs belies the erratic processes which give rise to stable products. My hardware experience is limited to time served in a chip wafer plant in 1995, where yields were anything but predictable. A quasi stable equilibrium takes hold in functioning product design labs.

More subtle yet just as disruptive are the raw codes bristling with untested edge cases as they churn on volumes of data quietly commanded by calm keystrokes. Regression testing can hardly keep pace with rapidly shifting and uncertain requirements. Dev teams dance their way to product releases, monkey patching freshly discovered flaws as they go. It’s common for a few design errors to be beyond the team’s limited resources to refactor, and work documented work arounds are a fall back. Good enough wins every time over perfect in the blistering world of product engineering.

Songify delights as a mobile app

Mark Essel — Mon, 11 Jul 2011 11:51:45 +0000

Add…

one part nonsense

two parts mobile voice recorder and portable synthesizer

a silly but popular vocal effect

a handful of simple algorithms to sample and partition a recording

one part mini game to blindly time your lyrics to the automated loops

and a team sharp enough to recognize and build a micro business

This weekend my bro, wife and myself all goofed off with the Songify app for iOS which I eagerly downloaded during our Hibachi/Sushi combination dinner on Friday. The app samples a recording, chops it up, and mixes the results with premade loops. The company behind the app put together a fun YouTube channel.

Some may say that an app like Songify won’t hold folks’ attention for more than a day or two, and they’d be right. But the app is the only the leading edge of a tsunami of automated music generation based based on minimal inputs. If Songify doesn’t capitalize on the market for light music creation, inevitably other companies will rise to the challenge.

Imagine an app that provides a series of algorithmic transformations combined with beautifully composed random elements. Anyone and everyone can create and share music without detailed knowledge of tracks, timing, melody and rhythm. The quality of the produced music will vary drastically all over the spectrum from brilliant to dismal. The beauty of the app is that it encourages the creation of music and relies only on voice for control.

Far Out PB&J Combo

I was inspired by otomata not long back as well as the broader field of cellular automata, and see another opportunity for it’s simplistic music synthesis. That web app provided a grid of boxes with initial cell directions. When cells collide they both turn 90 degrees and generate sound, and when active cells hit the field edge they reflect and generate sound. The initial manual (or random) arrangement of elements places the system on a trajectory into an unpredictable future state, sometimes converging and other times on an indefinite series of unbounded novelty.

Sun in your eyes

Mark Essel — Wed, 06 Jul 2011 14:20:58 +0000

Too focused

For a guy who’s attention drifts like a summer breeze, I had thought it impossible to be too focused. But I was wrong. While strolling in the southern outskirts of Tucson’s desert this morning and quietly listening to the chorus of birds and crickets, I could clearly see the drawbacks of getting lost in the details.

The idea for this morning’s riff was born in a place far from the quiet desert dawn, in the chaotic realm of startups. The concept coalesced as a pattern between technical founders and naive business plans, which I admit to observing in my own startup thinking. The recognition was triggered by Patrick McKenzie’s well thought and articulated analysis of customer acquisition channels. Fellow Hacker News regulars might recognize Mr. McKenzie’s handle there, he’s patio11. Here’s an excerpt from Patrick’s post which describes the naivete of technical founders when it comes to business strategy:

Taking A Hack From Tactic To Strategy
I think this isn’t exactly a new insight. There are lots of folks who, when asked for their marketing plan, will say “Oh, we’re going to get lots of search traffic” (indeed, that is probably second only to “it will grow virally” in terms of signaling “has probably not thought this through.”) What separates hopes and dreams of future success from very valuable businesses is a strategy which, with execution and refinement over time, will actually achieve the goals.

We often hear products described using something like “It’s like Facebook, except for dogs.” How about, instead, describing businesses like “It’s like Quicken, except Quicken sells primarily through boxed software channels and we’re going to sell primarily through banks which will deal with us for a cut of the sale price and the ability to deepen relations with small business customers, who consume lots of high margin services and stay locked in for decades at at time.” (That may or may not actually be true.)

We often accept previous experience or minimal proof-of-concept prototypes/MVPs in lieu of a functioning product when evaluating whether someone is capable of executing on building something. Why not do essentially the same for proving that one is likely to get customers? A previous background in revenue maximization through negotiating cross selling deals for banks, or evidence that you have enthusiasm from a few bankers who like the concept and want to hear more when you have something to show, demonstrates a certain likelihood that marketing challenges will be overcome like technical challenges will be overcome.

Similarly, for a startup hoping to make inroads for SEO, I’d be thinking less along the lines of “we’ll sprinkle some SEO on our website” and more along the lines of specific plans for scalable content generation, securing backlinks at scale, and winning the support of influencers either in the niche or in other addressable niches which your competition may not be aware are relevant to that facet of their business.

My take on this: as one’s perception bends more heavily towards technology, they are apt to see every problem solved by a technical solution. After reading that passage I shared feedback on the importance of learning from experimentation and discovering a signal of success, then left to go out on a walk wondering where my search for a MVP would take me.

By and large I’m thankful to have streaks of hyper focus where I get a lot of work done in a short period of time, but this extreme form of productivity comes at a cost.

It is eerie how concentration steals away moments. Time flows endlessly while we are in the zone. The rest of the world fades into the background as all attention zeroes in on a single task. Concerns outside of the zone of concentration are inconsequential, the universe becomes a solipsist existence of action. We become blind to broader perspectives. Tunnel vision leads to trivial solutions falling just outside the horizon of our perception.

Instead of focusing too tightly on a single task, a more stable and effective approach is to drift one’s attention about focus points. The pattern of that lens motion is a function of the observer’s expertise and style. By nutating our perception and balancing our understanding, we increase the likelihood of recognizing resilient multidisciplinary approaches.

Mark Suster on Funding in a Frothy Market

Mark Essel — Wed, 22 Jun 2011 19:51:40 +0000

Fred raised my attention to Mark Suster’s recent post Funding in a frothy market. Both posts are well worth the read, and make sure to go through Mark’s slides embedded below.

VC Funding in a Frothy Market

Blinded by VC tinted goggles, we missed the birth of a new corporate archetype

Mark Essel — Tue, 21 Jun 2011 13:23:26 +0000

Oceans of Kool Aid

If like myself you enjoy reading a bucket full of venture capitalist blogs, then you’re apt to develop a distorted view of the world. The blogs I explore capture a mix of experiential wisdom, sharp perspectives, and an impeccable sense of critical value¹.

Yet there are only a handful of business archetypes that interest professional investors, and they all share the trait of massive scalability. The investor bloggers I tune into don’t conceal this fact, in fact they go out of their way to educate readers about the nuances of the types of business that they invest in.

For VC fueled rocket ships features aren’t crafted to satisfy specific customers, they require strategic integration to attract the largest possible market. VC grade companies espouse their superior customer service, yet investors and entrepreneurs both know that talking to millions of customers on the phone doesn’t scale for a lean operation.

Complex analytics systems iteratively guide synthesis of the simplest interfaces possible. The sole goal of design is to yield maximum positive emotional impact with the smallest amount of development time and service required².

There are human elements in UI/UX design, but you can confidently wager that any element which raises even a moderate amount of uncertainty for users will be remorselessly culled. This machine like design philosophy of matching the product to the broadest market results in millions of marginally satisfied clients, and that’s good enough for VC backed companies racing to own a space.

Markets: Scale vs Specialization

Let’s quickly review service and VC backed product businesses, afterwards I’ll leave you with an open question about another type of company, the tool specialist.

Product BigCo

These businesses may start small but somewhere along their journey they realized and focused on massive growth. Venture Capital enables explosive growth before sufficient revenue streams are in place. Littered among the feet of titanic successes like Amazon and Google are hundreds of companies that reached for the stars and fell short. Large market product plays are a darling target of investors.

Service Companies

Clearly service based operations cater to client needs. These organizations subsist by charging a premium on labor, and may only grow revenue as fast as they can add and train more employees

For example, the company I work for can’t replicate my work a hundred let alone a million times. I may spend months writing software that only a few people will ever use to create a solitary chart, in a single presentation! Each project is a highly specialized custom job, yet there are a few products that took hold in my industry:

Power Point: painful, but a few exceptional artisans have made it sparkle (fairly cheap in the enterprise world at roughly $200 packaged with office)
Matlab from Mathworks: think really expensive ruby or python interpreter with a numerical and graphing library. Engineers coming from C/Java like languages leap at the chance to work in Matlab (a few thousand dollars per license and toolkit).
On windows systems I find it easier to do simple scripting and visualization in Matlab, even though I much prefer Ruby or Python on *nix platforms where I can easily install utilities
Satellite Toolkit: nifty object propagator and field of view visual tool. High end expensive licenses (30-60k+)

These utilities hint at the third big opportunity business type I perceive.

The Tool Specialist

The consensus I picked up among professional investors and entrepreneurs at numerous blogs, is that a business can either be a service or a product based company.

The rationale is that if a company allows product decisions to be guided by the changing needs of a handful of customers, that it will miss the opportunity to satisfy a much larger market. These types of businesses inevitably spin towards service companies or close down altogether.

Yet the above polar business archetypes left me wondering whether there is room for a new type of high value, scalable organization, the tool specialist. As tool builders and utility providers, software companies can craft solutions for diverse industries by leveraging a rich common library, development kit, framework, or language.

I’ve witnessed and developed with brilliant platforms like Rails that were extracted out of a custom web server. I’ve experienced the liberation of developing in CoffeeScript after a couple years of struggling to read through complicated JavaScript object context³. It’s possible to create high impact technologies while not strictly adhering to a product or service approach.

The supreme challenge of the specialist is to build such magnificent tools, that people will trip over themselves to use them no matter what type of work they do. The tools must be cheap or better yet free on their own. The utilities must also be generally applicable to broad markets. Monetization of ground breaking tools can come in a number of forms such as technical documentation, professional (expensive) training, subscrition based support contracts, etc. For examples explore the industry surrounding Linux or on a smaller scale discover what 37 signals is doing in a post Rails world.

Notes:

Fred Wilson’s AVC

Mark Suster
Charlie O’Donnell
Brad Feld

Bijan Sabet

I refer to the Von Neumann minimax shuffle once again. This maximum gains for minimum energy or Pareto’s 80/20 rule is getting monotonous. I’ll take the sunrise anytime.
JavaScript code can quickly converge on a labyrinth of implicit scope, clojures, function callbacks, and JSON structures. CoffeeScript helps me read through existing code faster, and focus on data and algorithm flow, instead of the syntax

How does creativity relate to divinity?

Mark Essel — Mon, 16 May 2011 13:00:52 +0000

You Lot

and the movie scene that inspired the title of the song:

This morning’s riff is centered about the creative power of an individual as a measure of divinity. In retrospect it’s mostly about the term divinity, but I’ll ~~tack on some nonsense~~ add something brilliant about creativity and startups to conclude the post.

Regular readers at Victus Spiritus will recognize that although agnostic¹, I enjoy leveraging the supernatural much like any other mundane concept. Belief is a profoundly human topic worth exploring for it’s affect on social evolution². Where would the awe and majesty of the word divine be without belief?

What is Divine?

I’ll dive into the divine by throwing a few definitions against the wall and see if any of them stick. You are invited to object to any subjective bias I place on the term, and enlighten fellow readers about your preferred definition of divinity in the comments. I’m in the fortunate position of having readers far wiser and smarter than myself, who chip in with helpful feedback and guidance.

“This meal is divine.”
“Your dancing is divine.”
“(Insert preferred deity/ies here) is divine.”

A person who embodies the latter phrase may label folks who speak the first gluttonous, and those who say the second hedonistic. Yet the truth of the word is wrapped within the emotional context of each expressed sentiment.

Divinity is almost certainly a positive affirmation except when combined with follow on action verbs like “damn”. Use of the word suggests an other worldly quality that cannot be captured by mundane descriptors, and is highly resistant to quantification³.

divinity – any supernatural being worshipped as controlling some part of the world or some aspect of life or who is the personification of a force (source)

Divinity and divine (sometimes “the Divinity” or “the Divine” ) are broadly applied but loosely defined terms, used variously within different faiths and belief systems — and even by different individuals within a given faith — to refer to some transcendent or transcendental power or deity, or its attributes or manifestations in the world. The root of the words is literally “godlike” (from the Latin deus, cf. Dyaus, closely related to Greek zeus, div in Persian and deva in Sanskrit), but the use varies significantly depending on which god is being discussed.
(source)

Don’t like any of the above definitions for divinity? There are plenty of interpretations for your eyes and mind to feast on.

How does creativity relate to divinity?

Just about every religion has a creation myth (even cosmology). The mystery of cultural and human origin and the mysterious power of creation are often mixed together in lore. It’s not at all surprising that practitioners in creative fields have their greatest work attached with a divine quality. Creative careers range from the arts to the sciences, but the profession I’m most fanatic about of late is entrepreneurship.

The brightest minds I read on the web today are struggling to capture and cultivate successful patterns in startups, yet their best efforts have emptied entire clips of novel systematic approaches and hit nothing but air. As much as I admire the scientific approach Steve Blank, Eric Ries, and Paul Graham take towards startups, I haven’t seen compelling statistical evidence that startups find greater success when following customer driven development, agile design patterns, or incubator advice.

When young companies are accepted to elite incubators there are network and signal affects which mask beneficial patterns. It’s also impossible to know how successful the same companies would have been if they declined membership or ignored popular startup best practices.

Due to the survivor bias we are inclined to attach deific qualities to successful entrepreneurs and investors. It’s difficult to see past prior success and judge whether the individual’s decision making process will lead to future positive outcomes. How long will an investment thesis hold? How rapidly will entrepreneurs adapt to a mismodel? Founders undoubtably figure it out on their own, with the help of mentors, punch out of the cockpit, or crash and burn.

Notes

My understanding of agnosticism: Believe what I repeatedly observe but with caution, and don’t allow that belief to deny me access to greater knowledge and beauty
Belief and social evolution: “I believe doing odd things with c++ simulations at work will lead to a payment of currency, which I believe will enable me to buy food, pay a mortgage, and buy nice things.”
As to the quantification of the divine, I’ve never heard of a holy leader refer to divinity in the following light, “It’s over 9000!”.

When to go out of book

Mark Essel — Wed, 20 Apr 2011 12:38:09 +0000

Risk Reduction from Day 1

Regardless of your specific team role, there is a familiar pattern to breaking ground on a new program. Each time you create or join a fresh project it’s common to go through a ramp up phase which may last minutes or a few weeks depending on project maturity, complexity, and schedule.

During the learning phase it’s customary to understand the project goal(s), what’s already been accomplished, and what other sharp folks have done to address similar tasks (research). Then based on loose to well defined requirements, a good enough approach is executed and examined. For a given task successive satisfaction tests are applied by the individual, team and leadership until one of several conditions are met:

the task is judged complete
the task is handed over to someone else who can better execute
the task is determined to be too challenging, impractical, or ineffectual and is cancelled
the plug is pulled, and the project is cancelled

What are the outcomes of the above options? The first results in moderate success, the second occurs when leadership overestimates individual strength in a particular area, the third happens when a team is learning and isn’t afraid to change direction, and the final option is all too likely in large organizations where lower priority projects are killed off regularly.

Recipes vs Improvisation

The above case is generic, by the book, and is absolutely horse shit if you are building anything novel. The risk reduction strategy is a recipe for minimizing failure, not for succeeding brilliantly. There is no cookbook for creativity.

If you’re the type of person that relishes in well defined objectives and organized execution, you’ll embrace and adhere to strict recipes which result in predictable results of limited productivity. If you prefer stomaching huge risk and the unknown just for the chance at bringing a brilliant solution to life, then you’ll lean far more heavily towards improvisation. Real projects lie in the region between polar extremes, requiring adept skill to keep in harmony or purposefully out of balance.

Joel’s Split, Early Equity Distribution

Mark Essel — Fri, 15 Apr 2011 09:25:31 +0000

Joel Spolsky gives a strong case in favor of fairness for early startup equity distribution. Thanks to Fred Wilson for pointing out Joel’s answer. I pickup plenty of great startup advice from the AVC community, and on this particular post more than usual. I’ve extracted a few key points from Joel’s post below, but if you’re interested in startups I suggest you read his entire answer.

Here’s the principle. As your company grows, you tend to add people in “layers”.

The top layer is the first founder or founders. There may be 1, 2, 3, or more of you, but you all start working about the same time, and you all take the same risk… quitting your jobs to go work for a new and unproven company.

The second layer is the first real employees. By the time you hire this layer, you’ve got cash coming in from somewhere (investors or customers–doesn’t matter). These people didn’t take as much risk because they got a salary from day one, and honestly, they didn’t start the company, they joined it as a job.

The third layer are later employees. By the time they joined the company, it was going pretty well.

What happens if you raise an investment? The investment can come from anywhere… an angel, a VC, or someone’s dad. Basically, the answer is simple: the investment just dilutes everyone.

Using the example from above… we’re two founders, we gave ourselves 2500 shares each, so we each own 50%, and now we go to a VC and he offers to give us a million dollars in exchange for 1/3rd of the company.

1/3rd of the company is 2500 shares. So you make another 2500 shares and give them to the VC. He owns 1/3rd and you each own 1/3rd. That’s all there is to it.

What if one of the founders doesn’t work full time on the company? Then they’re not a founder. In my book nobody who is not working full time counts as a founder. Anyone who holds on to their day job gets a salary or IOUs, but not equity. If they hang onto that day job until the VC puts in funding and then comes to work for the company full time, they didn’t take nearly as much risk and they deserve to receive equity along with the first layer of employees.

What I really appreciated about Joel’s equity split:

It cuts quickly past the immeasurable contribution arguments and focuses on a balanced split
It has tiered layers of dilution as the company grows
Investors act as just another dilution layer

But there was one detail of Joel’s split I couldn’t fully comprehend. He labels any early team member with alternative income creating responsibilities as a non cofounder. Instead of an equity split, he suggests these contributions be rewarded with IOUs, or the promise of future compensation when the company is capable of paying. I described why I took issue with this arbitrary time boundary in my comment on AVC which is copied below:

Joel mentions other sources of income as a decision boundary for rewarding effort with IOUs or the possibility of future cash, instead of equity. What about cofounders with other responsibilities like family, dependents, an active social life, a longer sleep cycle or health issues that require time. Isn’t Joel stating that all early team member’s time should be valued equally? If so then almost no one qualifies as a founder and we should all write each other IOUs for cash.

How many early startup investors take IOUs for the possibility of future fixed percent gains? They buy equity with their dollars, why should the risk of contributing time be rewarded any less so?

If perceived fairness is the bullseye, we must agree on what it means to be fair. Experience shows we tend to shift fairness in favor of the guy or gal with control or capital.

Mobility may be Marvelous but Ubiquitous Access is Disruptive

Mark Essel — Tue, 12 Apr 2011 13:20:13 +0000

This morning’s riff targets the opportunity of liberating activities that were once shackled to desktops and laptops by making them accessible anywhere. The massive shift to mobile is but one small step along the long road to ubiquitous access. By no means are mobile apps and phones the end form of access, instead they are a taste of what’s to come¹.

The form factor of a mobile phone, iPod or Tablet is inconsequential. Touching screens doesn’t cause my mind to release endorphins like some Pavlovian dog². Rapidly organizing data, molding information, extracting and visualizing analysis products from any location are the essential ingredients to ubiquitous access.

Whether I’m on the streets of Manhattan, deep in the Appalachian trails or on a tropical beach my need for unlimited access remains, and I don’t believe I’m alone. Access isn’t limited to or defined by an Internet connection, it is information liberation. Beyond data, access includes all the tools that we rely on to summon structure from chaotic data. Applying these tools from any location or development environment leads to greater understanding and yields informed action.

Access converges with personal freedom and promotes competition

The concepts of access, privacy, and information asymmetries are interrelated. Not only do we require access, but in order to uphold a free society we must respect personal privacy. Access without the right to privacy removes any notion of security, empowering anyone who would abuse this information³.

Potential manipulation of asymmetric information through artificial scarcity is a constant threat. Much like choice and liquidity in a free market economy, access promotes healthy competition between sources of data and custom services. If personal access is artificially restricted, it leads to an unbalanced relationship between the provider and its dependent clients⁴. This type of controlling relationship bears undeniable resemblance to agencies who achieve goals through force (the stick).

Asymmetric access isn’t all doom and gloom. There’s also great opportunity in disrupting asymmetric information barriers. Much like providing liquidity between steep value discrepancies, providing access to locked up personal data will be highly values by consumers and businesses alike.

Notes:

Imagine our minds without bounds
It’s possible that a combination of touch gestures could induce a little drool, but only after 1 am , my sleep cycle is 10pm-4:30am
Respecting privacy implies requiring warrants to go through personal data, tapping streams, etc. Examples of agencies who may abuse private information include corporations, criminals, and governments
Asymmetric access due to information monopolies and parasitic relationships