SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Feedly Progress Report: Not So Good

Posted by Bob Warfield on August 30, 2013

SadFeedlyI’ve been using Feedly since the demise of Google Reader and wanted to give a progress report on how that’s going.  Not that you won’t have already had to make a decision on an alternate, but perhaps this will be helpful for Feedly if not everyone else.

First the good news:  Feedly is great as a desktop browser app.  I am very satisfied, and if it weren’t for the mobile issues I’ll get to momentarily, I would be a committed and enthusiastic paying customers.

The bad news is all about the Mobile App.  Put simply:  it doesn’t work.  I started out fairly unhappy with Feedly’s mobile app, and I have written about it before.  Initially, it didn’t work at all.  Eventually, they fixed that bug, and now the mobile app doesn’t work because it is too frustrating to be useful.  I waited a reasonable interval before writing this to see if a fix would be forthcoming and whether it was just me.  No, and no are the answers.  You can Google “Feedly Mobile Crashes” and find plenty of references to this–there are even people commenting on Feedly’s Blog about it.

The problem is it crashes frequently.  If I click on every article I want to read, it will easily have crashed at least once every 10 articles.  The problem is, when it crashes, you lose the article you were trying to read.  The sequence goes like this:

1.  Click on article to read it.

2.  It starts loading.

3.  At some point, it may even look like you are done loading the article, Feedly crashes and you’re left staring at the iPad desktop.

4.  You go back into Feedly, and it has already marked the article as “read”.  It’s gone, long gone, and you’ve missed your chance to read it.

At this stage, the Feedly Mobile App is really only useful for clearing out articles you don’t want to read.  You don’t dare try to use it for reading articles you’re interested in, because sooner or later (and mostly sooner in my experience), it’s going to zap your article before you’ve had a chance to read it.  DOH!

It’s annoying as heck, though it hasn’t quite risen to the level where I am ready to drop Feedly altogether.  What it has done is made me spend less and less time reading feeds on my mobile devices (iPad mostly).

The thing that puzzles me is why they haven’t fixed it.  Even if they can’t fix the crashing (looks an awful lot like Safari crashing, which also happens a lot if you try to read Google News), they could change the software so it doesn’t mark the article as “read” until you get safely back into the list of articles without crashing.  That would make it dramatically less frustrating and stressful to use.

Of course I could also ask one more time (as many commenters on other posts about this have), why doesn’t feedly make it possible to simply use their browser version?

I recommend not paying Feedly for their enhanced version until they make a decent mobile app or get out of the way and let us access the service via browser.

Posted in customer service | 1 Comment »

The Trend to Part-Timers, Freelancing, and Consultants Over Full-Time Employees

Posted by Bob Warfield on August 8, 2013

FreelancerOffshoring, Outsourcing, the switch to freelancers instead of full-time employees, and all of the other ways big business wants to shed expenses at no apparent cost is a trend that’s well underway.

Shortcuts all have a price of one kind or another. Usually that price is hidden from the bean counters that wanted to do these things for short term profit bumps regardless of the impact on quality, visibility into what was being done on behalf of a company, actually creating value that belongs to a company and is reproducible, making sure that talent is loyal and believes in the company and its goals, and so on.

As for freelancing, when you force someone to stand on their own two feet, when they have to learn to fish for themselves, suddenly, they get a much clearer picture of their real value to the organization and of the organization’s value to them. Successful freelancers are some of the hardest people to recruit on the planet because they know the organization doesn’t bring them much value while they are creating a great deal of the real value.  That’s why you have to pay consultants more.

If you find yourself having to go it alone, it will start out very scary.  You’re going to have to stretch to learn to wear more hats.  You have to learn to market yourself, for example, and to network to find business.  Cast off your fears and welcome those challenges.  Quit trying to join a large organization or get Big VC to back your idea.  You can go it alone more than well enough to come out way ahead.  After all, business wouldn’t be doing this to you unless they didn’t value you all that much.  That tells you something about how they will treat you if they did decide to hire you.  OTOH, you are also undervaluing yourself.

Why make the same mistake as the business whose decision you so disagree with?  Recognize your inestimable value and get to work for yourself.  Enjoy being your own boss.  Embrace the change and use it to improve your life.

Posted in bootstrapping, business, strategy | Leave a Comment »

It’s In Google’s Best Interest to Kill Marketing Channels They Don’t Own

Posted by Bob Warfield on July 24, 2013

The folks at MailChimp recently did an article that analyzed open rates for emails and how they were affected by Google’s new Gmail tabbed user interface.  There’s not a huge amount of data yet, but there are 3 consecutive weeks of reduced open rates in the wake of the new tabbed interface.  Here’s the graph from the MailChimp article:

Gmail tab open rates

There’s no question that open rates are down in the wake of the tabbed UI for Gmail…

This is not particularly surprising.  Personally, I don’t find the tabbed interface useful at all–it just means I have to look in more places to finish reading through my inbox.  If I do run short of time, it is the promotions tab that suffers.  The MailChimp folks say that it is very hard to write email that doesn’t get stuffed into the promotions tab too.  What a pity Google didn’t put Google Reader on a tab instead of Promotions and Social.  It wouldn’t been a lot more useful, but that’s beating a dead horse.

Marketers are going to be disappointed by this development because email remains one of the most powerful weapons in there arsenal.  Unfortunately, here is a newsflash:

It’s in Google’s best interest to kill or damage any marketing channels they don’t own.

They don’t really help in any way with email marketing, so anything they can do to reduce its efficacy means you’re that much more likely to shift dollars to areas they do own.  They get nothing when your successful SEO leads to lots of results through good organic search results so they’re only to happy to limit the information you can get about how people found your site and thereby make your SEO that much less effective.  In fact, they’ve basically declared all out war on SEO’s.  They are the enemy because they reduce your need to spend ad dollars with Google.

Expect more of this as time goes on.  Big companies can’t resist using their clout to do this kind of Evil.  In the original PC days, the Evil was perpetrated by controlling shelf space.  If you owned all the shelf space, nobody would ever see the Little Guy’s innovative new products.  In today’s world, they want your eyeballs focused entirely on parts of the Internet that contain their ads.  As their growth and profitability slow down, they’re only going to play these kinds of games more often to try to prop things up.

Posted in business, Marketing, strategy | Leave a Comment »

Don’t Bury the Map With the Treasure: Thin Clients Trump Apps in Walled Gardens

Posted by Bob Warfield on July 10, 2013

FeedlyBugOne of the questions every SaaS company will have to be able to answer for their customers is, “What happens if you go under?”  It’s actually a fascinating question, and one you have a chance as a vendor to think about and turn to your advantage.  For example, one of my SaaS ventures was Helpstream.  We had the unpleasant experience of being shut down by our VC’s shortly after the 2008 crash, but we tried to do well by our customers.  As it turned out, our architecture made it very straightforward for us to offer those folks the chance to host their own Helpstream instance and keep going rather than have to stop cold turkey.  There are still customers live on the software as a result.  I won’t go into all the details of how this was accomplished, but suffice it to say our architecture made us very nimble about being able to create multi-tenant apartment complexes that could house anywhere from 1 to a couple of thousand tenants on standard Amazon EC2 + S3 infrastructure.  Thus it was trivial for us to set up a customer as their own tenant in their own apartment house and hand them the keys.  This is not something you could say about something like, say, Salesforce.com, or many other SaaS offerings.  Building on a commodity cloud like Amazon can have its virtues.

In the perpetual on-premises license days, we had source code escrows.  In the SaaS/Cloud era, it makes sense to codify what happens in the event of a dissolution of some sort.  As the Helpstream example shows, it’s possible to do something that makes enormous sense for customers and thereby give them a greater sense of security, something that the Cloud is not often known for.

Unfortunately, things also go on in the Cloud that have nothing to do with a particular vendor, but that actually make things much worse for customers.  I present the example of Feedly and the Apple App Store.

As most of you will know, Google discontinued Google Reader, forcing those of us who need such a thing to seek alternatives.  I looked at a good half dozen during the warning period and eventually settled on Feedly.  Let me be clear that this is still not a decision I regret, but I am forced to endure a not so pleasant aspect of the way Feedly works on my iPad.  There is a problem in that Feedly is set up to seamlessly transfer you from Google Reader to Feedly.  That part is good.  What is less good is that Google changed some aspects of the API and created a little problem for the Feedly app.  Feedly works great for me on my desktop, because I can access it via web browser as a thin client.  It is dead to me on my iPad because of this problem.  Feedly mistakenly thinks it is overloaded with users, a surprisingly plausible story in the wake of Google Reader shutting down.  In fact, this is not the case.  There is simply a bug that causes the iOS Feedly app to mistakenly report this problem.

Now here is the problem:

Since iOS is a walled garden, and Feedly has to wait until Apple approves a fixed version of the app, they are stuck.  It’s been 7 days and the app still doesn’t work and a fix has not been approved.  As my headline says, the map is buried with the treasure because Apple is presenting them from fixing a very obvious problem.  Feedly has no real answer for this, and Apple isn’t telling them an ETA on approval either.  It’s hard to be impressed with either Apple or Feedly based on how all of this is rolling out.  You’d think whatever process Apple uses would be aware of how many people use Feedly (it’s millions) and could find a way to expedite an obvious fix.  Apparently the Monarchy of Cupertino cannot be bothered with such mundane details as customer happiness.

Meanwhile, I have to ask myself, “Why can’t I run the Feedly thin client in the Safari browser on iOS?”  That would be so handy right about now.  Yet, they seem to have been at pains to ensure that if you are on an iPad, you surely must use their app and are to be prevented from accessing the thin client that works so well on my desktop and that would have prevented this nuisance.

Folks, the next time you’re using your tablet and you go to some website and it offers to download an app, skip it.  That app is not going to improve your user experience enough to be worth the trouble.  You are only going to encourage them not to keep their thin client working well on your platform.  And someday, you may wish the map hadn’t been buried with the treasure the way the Feedly guys did it.  Don’t frequent the Walled Garden.  Don’t encourage it at all unless you absolutely must.

This was all tragically avoidable, and I hope Feedly will take note and pave the way for their thin client to work on iOS so the next time they don’t have to wait on Apple.  Those of you at other companies, don’t let this happen to your customers!

Posted in apple, cloud, saas, service, strategy | 3 Comments »

What If You Fired Your 8 Million Most Influential Users?

Posted by Bob Warfield on June 19, 2013

trumpfiresyouWhat if you were running a big web business and you fired your 8 million most influential users?

Would that be a smart thing to do?  Would your shareholders be happy?  Would your board be happy?  What possible reason could you have to do such a thing?  What perceived advantage would offset the cost of annoying your 8 million most influential users?

Lest you think this is some imaginary scenario, firing 8 million influential users is exactly what Google is doing as it shelves Google Reader in less than a month.  Google is firing the likes of Om Malik, for example, and Seth Godin who says RSS is still the most efficient way of reading blogs.  Google says they’re doing it for lack of traffic, but as I’ve written before, that’s a bogus argument.

Let’s start with how I get to 8 million.  That number is from an email I just got from Feed.ly, who are introducing a Cloud version and say that since the Google announcement they’ve gone from 4 million to 12 million users.  Even better is that these are not just looky-loos–Feed.ly says that 68% are accessing the service on a weekly basis so they’re real users.  That’s 8 million right there, but the truth is the numbers are probably much higher for a number of reasons:

-  There are bound to be quite a few that will wait to the bitter end to migrate off Google Reader.

-  There are a lot of other services besides Feed.ly that have gotten their share of defectors.  Feed.ly happens to be my current favorite alternative, but I have no doubt the others are successful growing from the Google debacle too.

-  There are potentially even larger players in the offing, with Digg about to offer up its alternative and there is even a rumor Facebook may make it possible to bring your feeds into Facebook for reading (smart move on their part if so).

With Google Reader shutting down July 1 (just 10 days) and some of these big new players getting here only slightly before the shutdown, it should be no surprise that there’ll be a lot of last minute jockeying before the post-Google Reader market has stabilized.  One thing seems certain–with this many people moving around and this many companies putting forward products, RSS is far from the dead duck Google and some others have claimed it to be.   That’s great news for bloggers, many of whom depend on RSS driven traffic to keep growing their readership through compound interest.

Okay, we’ve established there are millions of people Google is firing, but are they “their most influential users?”  That all depends on how you define “influential”, but I look at it this way:

-  They’re people that consume a lot of content and are savvy users of the web else they wouldn’t bother with the complexity of an RSS Reader.  In other words, these are the web’s power users.

-  They are Bloggers, Journalists, and Influencers.  These people need a power tool like RSS to be able to consume the Firehose of Information they need to be on top of their games.

I don’t know why you wouldn’t call such people the most influential users Google has available to it.  If you have any doubt, go to virtually any post about the Google Reader debacle and read the comments (I should add that the Google Reader audience are hugely more likely to participate via comments and other means).  I just picked a few examples to show:

-  Wired’s Christina Bonnington writes that Google Reader was axed because people no longer consume the news that way.  It’s too old-fashioned.  Instead they want the “push” delivery that services like Google+ can offer.   The comments are virtual explosion decrying that notion and you don’t have to get far before someone says they don’t want to read the news Google thinks they should read, they want to read the news they want to read.  It’s also funny to read in this article an others the guess that Reader had “several million users” when we now now it was much greater than that.  Google simply let people believe the service wasn’t popular because it served their purposes.

-  Andrew Chen says he is dropping RSS and his readers need to sign up to his email list.  His article purports to show the death of RSS in a single graph, which is of the number of people searching for RSS.  It’s telling that the very first comment is from Seth Godin who tells him in no uncertain terms he has a bad idea there (“The patient is dying, and you’re busy telling his loved ones to put their feet on the respirator hose.”).  Godin goes on to explain in detail why Chen is wrong and commented on Chen’s other post about RSS too.  Nearly all the many commenters disagree with his analysis and tell him they’ll miss him and won’t sign onto the emails.  I left him a comment myself on the fallacy of using Google searches for RSS to decide the issue.  As far as I know, he is sticking to his guns though.  If you’re a blogger, you’d be silly cutting off your nose to spite your face like this.  I also think it’s interesting that as I write this, Andrew hasn’t gotten a single comment on any of his subsequent posts.  I don’t know if that means his audience doesn’t find them interesting or if they moved on with his RSS feed antics.

- Moz.com’s Reader-A-Week post in search of alternatives has great commentary on the alternatives and a great comment thread that shows the reactions of ordinary users.  If nothing else, it shows how many alternatives are available and how many readers are interested.

Most of these kinds of articles get more comments and engagement than the average for the blogs hosting them, which is just another indication that these are influential, or at least highly engaged users.

So why would Google fire 8 million of its most influential users?

Many have expressed opinions and many are wrong.

Forget the articles that say it happened because RSS was dying.  RSS is a power user niche offering that is alive and well as the millions of users and dozen odd companies scrambling to take over for Google show.  Google wanted people to believe that usage had dwindled to a few million but in fact it’s much larger than that and likely larger than usage for Google+.

Forget the articles like Bonnington’s Wired piece or How-to-Geek’s piece that claimed the model is old and dying and that there are better alternatives.  The truth is that there aren’t any better alternatives for efficiently consuming large amounts of news, at least not yet.  There are, however, alternatives for people who want to do something other than efficiently consume a firehose of information.  That’s okay, we like choices.  It’s when companies and marketers insist things have to be black and white in order to further their agendas that we should be annoyed.

Here’s the real reason, and it is a simple, typical-big-company sort of thing:

Google Reader is being shuttered because Google thinks that will help a more strategic product (Google+) to be more successful.  They want to force us to chose and rely on inertia and their brand to shift people to Google+.  They’ve convinced themselves that Google+ is so much better strategically, that they don’t care if they lose a lot of people along the way.  They don’t value those people and generating any kind of growth for G+ through reduction in expense elsewhere is a good thing according to the way Big Co’s keep score and run their internal politics.

Writer’s like Victoria McNally call it out like it is, but the majority seem to have bought Google’s story that RSS simply died out too fast.  Keep that in mind the next time some pundit is predicting the demise of a thing.  It may only have entered what Gartner calls the “Trough of Disillusionment”, which is only a trough compared to the ridiculous peak of any hype cycle.

What will this mean going forward?

Watching my own usage patterns, it will mean I spend less time in the Google Empire.  That’ll be a bit of a disappointment for them, because they’re looking to grab more mindshare through this move, but I think they’re going to be rudely surprised.  I used to alternate between shutting down all news and interruption driven sources to get real work done and going through my sources of news and interruption:

- GMail for email

- Google Reader for RSS and specifically for news and information most relevant to my work and interests

- Facebook for casual news and information about friends

- Google News for general news about what’s going on in the world

You can see that Google had me pretty solid except for their arch-nemesis Facebook.  This is where introducing an RSS Reader that integrates in a sensible way with Facebook would be awesome.  I am only too happy to flip between tabs on a single app to access these sources.  If we think about what’s stick or not, Google doesn’t own much that is sticky because they don’t own the sources of the content.  Facebook actually owns the sources of their postings.  So, if they were to add email, RSS, and general news, it would be a pretty compelling news portal.  They could lock up a lot of eyeballs for long periods of time.  The cost to add such capabilities should be fairly low.

Yahoo is another organization that ought to be on top of this stuff, though it isn’t at all clear they can think clearly enough and respond quickly enough to get there.  Newcomers and smaller players like Feed.ly and Digg have an opportunity to land and expand in their ability to give people access to more and more news sources.

If any of these players can actually get together a coherent strategy and deliver, shutting down Google Reader could turn out to be Google’s biggest strategic error to date.  Especially because all those millions of influencers they fired will be telling others who believe in them exactly what the best alternatives to Google are.

Posted in business, Marketing, strategy | 8 Comments »

Too Many Would-Be Entrepreneurs Are Thinking About Their Ideas, Companies, and Investors All Wrong

Posted by Bob Warfield on April 19, 2013

snake-oilAs so often happens, the serendipitous intersection of one too many notes from the same chord in a short time have prompted me to post.  In this case, I am seeing a lot of evidence that would-be entrepreneurs just don’t think about their ideas, their companies, or investors as they should.

Case in point: I recently had dinner with a friend to do some catching up.  He explained that another mutual acquaintance had an absolutely brilliant idea for a startup.  My friend really wanted to be a part of it, and he confided that they were thinking of going the Y-Combinator route.  I’m sure it’s annoying to my pals (especially the ones who are themselves Angel or professional VC investors), but any conversation that focuses more on the investors than the idea and business models immediately launches me down a set path that the recipient often finds a little bewildering if not downright antagonistic.  Despite all that, I asked my friend why he wanted to go with Y-Combinator?  Why get any invested capital at all?

He spent quite a while, too long really so it only lit my fire brighter, talking about the $30,000 they would receive in exchange for 15% of the company.  I asked him to explain what the $30,000 would allow him to do that he couldn’t otherwise accomplish on his own.  After all, $30,000 is really not very much money.  This goes to the heart of one way Entrepreneurs don’t think right about their plans.  If $30,000 seems like a lot of money to you, if it seems like an enabler of some kind, it’s my belief you’re using it to solve the wrong problems, and that in fact, they aren’t real problems to start.  You’re thinking of using it to quit your Day Job, to hire others, or to pay for advertising.  You don’t need to do any of that, as it turns out.

Let me explain–I’m a firm believer in Bootstrapping ala 37Signals.  Their formula is pretty simple–you can build a company on 10 hours a week while you keep your day job.  David HH wrote a great post on this not too long ago entitled “All or Something “.  The gist is that you don’t need to adopt an all-consuming commitment to get something interesting done.  The intro to his article is worth reading carefully:

One of the most pervasive myths of startup life is that it has to be all consuming. That unless you can give your business all your thoughts and hours, you don’t deserve success. You are unworthy of the startup call.

This myth neatly identifies those fit for mission: Young, without obligations, and few if any extra-curricular interests. The perfect cannon fodder for 10:1 VC long shots.

They’re also easier to rile up with tales of milk and honey at the end of the rainbow, or the modern equivalents, “compressing your working life into a few years” and “billon dollar waves”.

But running your life in perpetual crunch mode until the buy-out or bullshit-IPO fairy stops by your door is not surprisingly unappealing to lots of people.

In fact, what you do might even be better and more successful if you take your time by only working 10 hours a week on the idea.  I’ve seen this for myself with my CNCCookbook bootstrap.  The problem is you think you know exactly the right thing to build and if you could only get it done, riches would be yours overnight.  The reality is that nobody knows exactly the right thing to build in a vacuum.  You benefit by interacting with the market, and it takes time for the market’s message to come back to you and be properly infused in what you’re building.  You can’t infuse it at a 100 hour a week pace because it simply doesn’t come to you fast enough.  It requires a feedback loop and a little more gradual change.  This applies not just to the product itself, but to achieving a content-audience fit and then growing that audience to an interesting stage.  If you think otherwise, then you’re not being realistic.  You’re looking for that long-shot of completely unbridled demand that will seize your company and carry it in the vortex to the Land of Oz.  You’re looking for that 10:1 VC long shot.  Unfortunately, you don’t have a portfolio so that the 10 that didn’t work before the 1 that did doesn’t sink you.

Here’s the other issue–if you can’t overcome the kinds of problems $30,000 will solve without the $30K, you may not have the right idea or you may not have the right team for the idea.  Creating a successful multi-million dollar company is a big accomplishment.  If all it took was $30K, a little advice, and some networking, there’d be a lot more people with their own multi-million dollar companies.  There’s a set of skills your team must have.  There’s a set of qualities your idea and market must have.  Without them, $30,000 won’t begin to fix the shortfall.  $30K is just a convenience, not a solution.  It’s not even aspirin, it’s a vitamin pill.

So $30,000 is actually not really very useful to someone that is focused on the 10 hour a week plan.  Certainly it isn’t worth giving up say 15% of your company and potentially a lot more than that in terms of control and heartache that will still be there long after the $30,000 has been spent.  To his credit, my friend did get off the $30K after a little while and suggest that having all that networking and mentoring would be worthwhile.  That’s actually something I see as being much more valuable, but in truth, it actually isn’t all that hard to come by in Silicon Valley.  After all, the networking is one reason why we put up with so much cost to live here, isn’t it?  If you think you need an incubator to be mentored, to ask questions, and to learn how to do it, ask yourself how that’s any different than signing up for a bunch of the Anthony Robbins-style self-help seminars?  You know the kind–some flashy personality is telling you they have all the answers and they’re willing to share them so that you too can be a multi-bazzillionaire loved by everyone.  All for a price.  Guess what, this works for some people, but for most, they could’ve had the same answers without much effort.  I told my friend I’d be happy to help him understand how to launch and build a business having founded 4 software companies and been involved in 7 software startups.  I also told him the cautionary tale of those making their livings off such advice.

Hacker News is a good place to find such people, and I’m not picking on HN for it, that’s just where the paying customers are for these peddlers.  I call them the Entrepreneur’s Self-Help Gurus.  Don’t get me wrong–there are some dynamite folks out there who can and will help you, but I’m referring to a different sort of group.  These are folks who did something that if examined closely, was not an especially big deal.  Yet now they’re making more than they ever did on the not-especially-big-deal telling other people how they did it.  “I’ve got the secrets, and I’ll share them for just a small fee.”  Perhaps they created a software company in an odd little niche, never cleared more than $100K with it, but now they’re making $200K and more telling others how to do it.  To me, there is something wrong with that picture.  Just for kicks, I signed up for a bunch of the more popular pay-for-content mailing lists.  You can get them on sale all the time from AppSumo, for example.  After going through about four of them promising everything from SEO expertise to how to get 10,000 Facebook followers, I finally quit.  I hadn’t managed to learn a single useful thing from them.  In fairness, if I had been at the very beginning of my journey, they might have helped a little, but everything they had to say that was useful was available for free on some blog somewhere on the Internet that I had already read.  FWIW, I keep a clipping blog of such information I call Firehose Press.

I finally realized, that what these people were selling, was not the information, but the confidence to use the information.  That’s not something I really needed, and I hate to be a wet blanket, but if that’s what you need, are you sure you’re ready to be an entrepreneur?

One more thing on the subject of networking–you can go have coffee with so many extremely talented and successful people in Silicon Valley at the drop of a hat that it’s ridiculous.  People here are incredibly generous with their time.  Heck, if Y-Combinator fascinates you, go look up the Alumni and go ask them what they learned there and what they got out of it.  You just need to find a friend of a friend to introduce you and most decent people will share a cuppa joe with you.  Why not?  I often do.

Okay, so maybe the networking mentoring isn’t the thing.  What about all those juicy introductions to VC’s?  I have several problems with this one too, being the VC Curmudgeon and all.  It isn’t that I haven’t dealt with the VC’s.  In fact, they’ve been involved with every company I’ve been with until this latest one.  Let’s start with the intro process.  It’s not hard.  You need a CEO who they would want to talk to and an intro from someone they know.  If you have such a CEO, they can get that VC intro from someone they know.  VC’s actually want to meet people, they just want to meet people who won’t waste their time.  Same with Angels only it’s even easier to meet one of them and you might not need that CEO quite yet (but you will, so may as well find them so they can help you from going too far astray).  You don’t need Y-Combinator to meet these people.  What you need to meet a VC is pretty simple:

-  A product finished enough to be sold.

-  Real paying customers who will say extraordinary things about your product.

-  Traction.  The amount varies with the space, but there needs to be evidence that pouring gasoline on the fire will make it bigger in a hurry.

Too many entrepreneurs think investors want to give them cash to make some or all of those three things happen.  I won’t say it can’t work that way, but it works less and less that way every day in the Valley.  Y-Combinator, for example, used to invest more than $30K.  Most of the VC startups I’ve done raised a couple million dollars on a slide show and a team.  Those days are long gone.  You’re going to have to bootstrap to a greater or lesser degree (and mostly greater) anyway, so you may as well get started learning how to do it, even on 10 hours a week.  In fact it’ll be better if you limit yourself to 10 hours a week–it will teach you to focus.  The realization that I had to bootstrap to raise VC is what set me on the bootstrapping path, by the way.

Too many entrepreneurs think they need something to be able to be entrepreneurs.  They need money, advice, connections, confidence, permission, or at the very least, a guru they pay to tell them how it’s done.  But here is the amazing thing: you don’t need any of those things.  You can do everything that needs to be done in 10 hours a week to build a very successful multi-million dollar a year company.  Do that first, ahead of worrying about investors, and you will be 10x better off.  Because, here’s the thing, if that company explodes with a growth rate beyond your wildest dreams and you need a lot of capital right now just to keep the site up and running, that’s not a crazy home run extraordinary case for the VC’s.  That’s what they expect to see.  That’s what they’re looking for to get their checkbooks out.  That’s table stakes and we’ll see where it goes from there, whether you can monetize it, whether you’re the right ones to run it, and whether it is a passing fad.  If you have a deal at that stage, congratulations.  You’ll have to beat the VC’s off with a stick, and you’ll be able to dictate your terms.

But what if you don’t have one of those?

Don’t despair.  Remember:  an Enterprise Software Company that puts together a steady-but-not-sexy business and manages to get to $100M in revenue and an IPO is often seen as a failure in VC portolios.  They want the $1 Billion deals.  But you?  Heck, you’d be thrilled to be the 100% owner of a $15 million dollar a year software business with 20 employees that was throwing off cash like crazy and whose customers loved you.  That is unless you are that rare Zuck/Gates/Ellison/Brin type that really does care more for power than money or lifestyle, of course.

One last reference to recent influences that spurred this post.  I saw Jake Lodwick’s post in Pando Daily, “An Acquisition is Always a Failure.”  I understand exactly where this guy is coming from having had 2 of the companies I founded acquired.  Surpass was acquired by Borland and that was the Quattro Pro product and Integrity QA was acquired by Pure Atria.  Surpass was a great acquisition.  I joined Borland, we sold over $100M of Quattro Pro the first year, I moved up through the ranks to eventually run R&D for Borland in its heyday, and it was a fabulous company to be a part of.  I learned a lot.  Pure Atria was a great company too, but it didn’t last.  Six months after I got there it was gobbled up by Rational.  They already had a product with a brand that competed with Integrity QA’s product and it was based in Boston, not Silicon Valley.  Despite Integrity’s product being one of the most innovative things I have ever worked on (Genetic Algorithm-Based Software Testing), it basically never went anywhere because politically, it was stuck in a closet where there was no light.  It exists today as an IBM product called TestFactory, but it’s growth was stunted and it never recovered.

It’s fascinating to read the comments in Lodwick’s article and contrast them with where Jake is coming from.  He says:

Whereas we’d once been free to work on whatever seemed interesting, we now found ourselves in vaguely defined middle-management roles, sitting through pointless meetings where older doofuses who didn’t understand the Web challenged our intuitions and trivialized our ambitions.

That was basically my experience working for Oracle, where I learned a lot, but couldn’t accomplish much.  Similar with Rational.  Big Companies do work much differently than smaller ones, or as Jake says:

They’re another class of entity entirely, more concerned with sustaining their own rhythms and control structures than experimenting with strange ideas from acquired ex-founders. It wasn’t long before I was ejected like a virus.

Then he describes the frustration of being loose with money, but without company all founders who get acquired feel:

With a fat bank account, I was pretty set to do whatever I wanted for a long time. The sale afforded me the ability to make art, invest in other companies, and unwind. But it didn’t take long to realize that my new life was a hell of a lot less exciting than running an independent company had been.

So true.  Then we have the commenters, and as I read through them, it’s hard to see them as being focused on much but the money, whether this is an indictment of what they need to do (investors need an exit/cash out), or whether there aren’t a few examples where an acquisition made a thing far greater than it otherwise would have been (Android).  Most of them missed Jake’s message and wisdom entirely.

Here’s the thing.  At one point Jake talks about getting $50,000 checks each month.  Do the math carefully before you decide you need a VC-scale company to make enough money.  I went through one of those VC-backed Enterprise Software IPO’s, and while I made good money, it was #3 on my hit parade of exits.  Owning a business 100% that plops $50K checks on my desk each month would’ve been a much better deal, and this is to say nothing of all the deals that crash and burn because the VC was driving for a 10:1 Long Shot.  You have to live through a lot of Ramen noodles on the long shots, then maybe you’ll see that big payoff.  Or maybe you’ll have been diluted out of your mind and it won’t be such a big deal.  I’d have been much better off owning that $50K/month business that I could keep on running that doing the IPO I did.

In the end of the Day, as an Entrepreneur, you need to get crystal clear about a few things:

-  How much money do you need to get from your venture?  If $1M a year is a happy number, the chance is a bootstrap is much less risky than a VC deal.  Remember, income equates to investment portfolio about 20X.  That $1M a year income stream requires a $20M liquidity event after taxes before you can live like that without working.

-  How much control do you have to have?  Hey forget whether you’re an ego maniac.  I’m talking of control more akin to artistic control.  The control to deliver on what you do well.  On why everyone always says they love you, but that Boards, CEO’s, and Professional Managers are only too quick to override if it suits their agenda.  If that artistic control to do what you do best is important, adding people who own significant parts of your company can only dilute that control and maybe even result in your being “ejected like a virus.”  OTOH, if you want Bill Gates or Steve Jobs-style control over an industry, you’re gonna need VC’s.  If you want to change the world with Electric Cars and Private Spacecraft like Elon Musk, you’re gonna need VC’s.  Just be really honest with yourself about what you need versus what might be nice to have.

-  Most importantly, how will your venture change your life?  What does it have to accomplish to make you happy?

Too many entrepreneurs get signed up for the promise of (to quote David HH’s article), “compressing your working life into a few years.”  Sounds great, but it better be just a few years to put up with the amount of BS that kind of pressure cooker entails.  And the truth is, it is never just a few years.  It’ll be 10 long years to reach the conclusion, assuming it is a happy one.

Why not start out with a venture that makes you happy every single day you pursue it?  If it has VC potential, you’ll know soon enough and you can decide then what path to take.  If it doesn’t have VC potential, you may still wind up realizing everything you’d hoped for and more.  Even better, it may be at much lower risk.

 

Posted in bootstrapping, business, strategy, venture | 6 Comments »

Om Malik Boycotting Google Keep Because of Google Reader

Posted by Bob Warfield on March 21, 2013

Om’s boycotting Google Keep, and he’s damned right–every word he wrote.

Here’s the money quote for me:

It might actually be good, or even better than Evernote. But I still won’t use Keep. You know why? Google Reader.

I spent about seven years of my online life on that service. I sent feedback, used it to annotate information and they killed it like a butcher slaughters a chicken. No conversation — dead. The service that drives more traffic than Google+ was sacrificed because it didn’t meet some vague corporate goals; users — many of them life long — be damned.

Looking from that perspective, it is hard to trust Google to keep an app alive.

Google is now squarely in the Evil Doing Business, and it will cost them over time to get back out of that penalty box.  Regardless of how well Google Reader may have been doing in terms of revenue and strategic objectives, it was doing what it did for the wrong people to be messing with, starting with Om Malik.  I say that because the primary users were the very people who write the news on the web.  That’s a tough audience to make angry.

If Google was as smart as they claim to be, they’d issue an apology to everyone involved and make Google Reader promise to keep Google Reader happy and healthy for at least 5 more years before evaluating the decision again.

Posted in business, strategy | 4 Comments »

Google’s Story That Google Reader Traffic Declined Is BS When You Put That Traffic Alongside Google+

Posted by Bob Warfield on March 15, 2013

It wasn’t hard to read between the lines–I’ve been calling Google’s decision to drop Google Reader a Microsoft-esque decision made to try to push customers to their other products, and especially to Google+.  Google’s story that it needed to be done because of declining traffic is BS when you look at the real numbers.  Buzz Feed took care of that for us very nicely:

enhanced-buzz-13120-1363274183-3

Not only was it not declining, it was actively growing, while Google+ stayed flat.  Cancelling projects like this is what happens when politically unpopular projects start to make the higher up’s projects look like failures.  It’s one of the many ways Big Companies manage to shoot themselves in the foot every day.  It isn’t a stretch to believe that somebody got concerned there might even be a resurgence in Google Reader’s popularity underway.

Posted in business | 7 Comments »

6 Ways The Pundits Are Dazed and Confused About Google Reader and RSS

Posted by Bob Warfield on March 14, 2013

mainstream-mediaOne of the you-betcha-surefire Pundit strategies is that when something is getting a lot of heat, like the current flap over Google dropping Google Reader, you can get a lot of attention by disagreeing with the crowd.  You want to do so in the most colorful possible way, in fact.  It’s a common form of link baiting and mild trollership.  So long as all that’s happening is they’re family the flames of emotion for their own benefit and to gain attention, I couldn’t care less.  But, along with this behavior, comes the risk that someone will actually take some of what’s said seriously and be confused about it.  That’s to be avoided.  Hence my list of 6 ways the Pundits are confused about Google Reader and RSS:

1.  Just use Twitter

There are so many problems with Twitter as a replacement for Google Reader that I’ll only list a few of the most important:

-  You can only search 140 characters when looking for meaning, whereas with RSS/Reader you get to search the title and the full contents of a blog post.

-  The signal to noise ration on Twitter is terrible.  Save one silly article where the ZDNet writer said he had failed to organize his RSS feeds but had very carefully tended to his Twitter followings, this is not something many disagree with.  Twitter is overrun by chittering twirping bots.

-  What signal that does exist on Twitter is largely coming from people who use RSS Readers to curate what they pass along.

-  Twitter is the poster child of a company that frequently upsets and destroys its ecosystem in its own self-interest.  If you think that is bad while it’s been private, just wait until it is under the publicly traded spotlight to show growth to sustain its ridiculous multiples.  Why would you trust that whatever you value about Twitter has any permanence at all?  Particularly after watching the Google Reader-you-are-products-not-customers drama unfold?  As the saying goes, fool me once…

-  Twitter has all the problems of the River of News Metaphor, which is next up.

2.  The River of News is a Better Metaphor

I can’t avoid addressing the “River of News” metaphor when RSS inventor Dave Winer says that’s the better mousetrap and when so many who prefer Twitter think they want the River of News.

My problem with the River of News is not that it isn’t a good metaphor.  Rather it’s that Google Reader could function just fine as a River of News (you don’t have to care about unread vs read or put anything in folders, just reader the latest arrivals as you wish) and that the River of News doesn’t solve the problem Google Reader is ideally suited for.  More on that problem below, but right here, let’s focus on what problem the River of News does solve.  It’s the problem of Finding Something Current of Interest Right Now.  That’s a useful problem to solve for many people.  If you just want to be on top of the latest industry gossip so you don’t feel silly at lunch, it works.  If you just need to kill a little time and want to learn something new, it works.  However, if you actually want to solve the Real Problem that Google Reader was the best at solving, the River of News is useless.  The River of News is what True Google Reader Users spent their time trying to get past.  Let me illustrate.

I used Google Reader in some specific ways precisely because I was trying to avoid the River of News.  The River views that the most important dimension is arrival time.  The more recent, the better.  Consequently, I used Reader’s folders to group noisy sites under a category I called “Bulk Feeds”.  These were the general purpose news sources like Techmeme, ZDNet, GigaOm, or (back when I cared) TechCrunch.  Every single day I would start the morning by marking all read except today’s entries in the Bulk Feeds folder.  I wish I could’ve automated it by saying, in essence, “For this folder I only care about what came out in the last 24 hours and you can delete the rest.”

I had a second group of folders I called “A-List”.  This was a group of very very good bloggers who were more likely to be worth wading through more articles than the Bulk Feeds, but who were still extremely general in terms of their content.  Seth Godin would be a good example.  It would’ve been nice to be able to mark these as read if older than a week.

Every thing else went into a folder by subject, because these were blogs that were highly focused on deep areas (outbound marketing, seo, UX design, etc.) and that wrote content that was essentially Evergreen.  Any blogger or SEO marketer knows what Evergreen content is–it’s content that is not perishable and that you’ll get value out of for years.  This is content that I explicitly do not want to see lost in a River of News, that I do want to be able to read through over time so I will not mark it as read without at least skimming it.  This is the content Google Reader is really the best tool for curating, and it is the content that River of News substitutes are the absolute worst at helping me acquire, manage, and consume.

3.  Google Reader Was Preventing Innovation

Mark Masterson gets my award for silliest and most confused outlook on Google Reader.   His long and bizarre rant against it seems to boil down to it being bad for any software to be around for too long, apparently because it stifles innovation.  Apparently it is some sort of impediment to evolution.  Baloney.  There’s been plenty of misguided evolution going on and none of it has solved the problems Google Reader solves.  There are cases where there isn’t any particular benefit to be gained by trying to evolve further solutions to a particular problem.  When that happens, it’s a good thing if the solution has commanding market share and is allowed to stand while others see clearly the ecological niche related to that market is now filled.  Aside from a desire to keep enough competition to avoid monopolistic price gouging, there’s no real evolution needed.

One of the biggest risks is that in their effort to fill the gaping Google Reader void with something new, New, NEW, we will lose sight of what Google Reader did well.  By deciding to fix its shortcomings, we’ll get a magazine like Flipboard, a way to read something later like Instapaper, or an ambient noise generator like Twitter.  These are not innovations on Reader, they’re different eco-niches entirely.

4.  RSS is Dying Because It’s Not Social Enough

We’ve all met people that approach “friends” in one of two ways.  There are those people that form extremely deep and long-lasting friendships.  Then there are those who will refer to anyone they’ve met as a friend.  Certainly there are possibilities between these extremes, but on the whole, people tend to fall more at one end or the other than not.  Those people that argue RSS is not social enough are from the “If I’ve met you, you’re my friend” extreme.  They have a zillion follows on Twitter, a zillion friends on Facebook, and a zillion more connections on LinkedIn.  Or, perhaps their bipolarity is a function of type of relationship, with a zillion business-related connections and relatively few personal connections.

But here is the thing–RSS is for those people that want to form extremely deep and long-lasting connections.  That’s what the RSS experience is all about–I don’t want to miss anything you’re saying so I will subscribe to you in my Reader, and once there, you’ll probably stay there for quite some time.  The River of News crowd thinks that because they’ve exchanged the occasional Tweet with someone they don’t really know and may never Tweet with again, that’s being more Social.  No, not at all–they’re different kinds of Social and we’re losing essentially half of the Social spectrum when we walk away from RSS.

That same ZDNet writer who never organized his RSS feeds but carefully curated his Twitter and then complained RSS was too noisy claimed:

SS readers don’t exactly lend themselves to conversations either — the sorts of conversations that happen quite naturally on social media (including social bookmarking/linking sites like Reddit).

Yet, he has 33 comments on that post as I write this, and I’m sure there’ll be many more before people quit commenting on it.  Many of the comments are more thoughtful than 140 characters can support.  Ironically, so far this year he has had exactly one post (on why the cost of the 128 GB iPad doesn’t matter) that had more comments.  I’m not going to bother counting how many of his Tweets had more conversation as the point is made that he couldn’t hope for a more social medium than RSS and blog comments.  There isn’t one that exists.  I doubt even Fred Wilson could claim otherwise given how his blog comment ecosystem works even though he is an investor in Twitter.

5.  Since Google Reader Was Never Profitable, It’s Best To Shut It Down

This is a popular refrain:

Google is a business it has to make money and it has every right to shut Google Reader down because it wasn’t making money and you have no right to complain about it because it was free.

Bollocks.  If Google was Walmart choosing not to carry some product or other that I used to be able to buy there cheaply, that’d be one thing.  But here is the difference:  Google is igniting real negative sentiment towards the Google Empire as a result of this decision.  They’re making a mockery of their business motto of, “Do no evil.”  In fact, I would argue that very root of the Evil they claim to want to avoid stems from the idea that most of the people who use their software (I am carefully not calling that software “products”) are not their customers.  Google’s Customers pay for advertising and give them money.  Rather, those of us who use their software are in fact the real “products” Google has to sell.  When you look at it that way, any massive sentiment issue among the “products” is a defect that is ultimately bad for the business.  You can only mistreat the “products” for so long before they revolt.  Unfortunately, these “products” are fickle and don’t have to stay with Google.  They can be “products” for lots of others.

Closely related is Google’s Valuation.  It is unnaturally high for a reason–because people believe in them.  Actions like sunsetting Google Reader damage that belief right at its core.  This is a grass roots problem that ultimately leaves only the role of commoditizer open to Google, and this is not good for their long term valuation prospects.

6.  RSS and Reader Are In Decline and the Average Consumer Never Used It, So Why Bother?

Let’s leave aside for the moment that some of the folks who worked with it say this has little to do with decline and everything to do with trying to prop up Google+.  While I find that notion entirely plausible and painfully Microsoft-like in its execution, it’s worth musing about the “decline” of RSS.  It’s a bit like saying that since so many Prius’s have been sold Porsche’s are in decline.  Porsche’s were never meant to take the place of the Prius.  It is not unusual for the power tool to come along first followed by the tool the mere mortals can use, but that does not in any way diminish the value of the power tools.  Look, we started with HTML and people had to know it and deal with it to have a web presence.  Then we got some better tools such as blogs.  Eventually we made it all the way to things like Twitter and Facebook, where anyone can have a web presence very easily with absolutely no need of technical knowledge or even the creative ability to write more than 140 characters or so of text.  That’s great, but it in no way means that since we can create 140 character messages easily we’ve no need of static HTML pages or blogs.  It’s fuzzy thinking.

I have no problem believing the number of people who engage in use of the power tool may have declined a bit, but as I mentioned on the Twitter note above, these other tools remain vitally dependent on the power tools users who are curating content.  It’s less a decline and more of a saturation.  This is the same fuzzy thinking that leads us to declare that since people are buying smartphones and tablets like there is no tomorrow the desktop PC must be dead.

The idea that the only thing that matters is what appeals to the lowest common denominator is what’s wrong with the news today in general.  It’s why there’s a more enlightened crowd out there that very much wants to seek the Long Tail, needs Google Reader to do it, and couldn’t care less about USA Today, Fox News, Huffington Post, or Techcrunch.

What Google Reader Really Was:  Super High Octane Page Rank

Laura Hazard Owen’s, “Google Reader, Please Don’t Go — I Need You To Do My Job” is one of the best takes on what Google Reader really does I have seen.  She makes her case well:

-  Twitter is no substitute for RSS:  The best thing about Google Reader, from my point of view, is that it allows me to scan a lot of information quickly, with the assurance that I’m not missing anything.  Exactly what I’m saying about Twitter and the River of News metaphor.

-  Neither is Flipboard:  Services like Flipboard are great if you want to see the most popular stories on a given topic. But as someone who really geeks out digital book publishing, I don’t just want to see the stories that an aggregator recommends for me because they’ve reached a critical mass.  Amen, sister!  I want to lever myself as far out onto the Long Tail as possible because that’s where the real action is.  Everything else is processed and homogenized for mass consumption.

Let me go beyond what Laura has to say to cut through to essence of what I think Reader is.  Laura talks about it being for someone who wants to, “…keep track of what’s going on at the roots of my beat” or to “…really geek out” on some subject or other.  It solves a very deep Search problem by facilitating a connection between the consumers of the information who want to get it in as dense and pure a form as possible, uncut on the street with the baby laxative the various aggregators use to define what will be popular.  It is information curation in its purest form.  If we once manage to find the true experts in the subjects we thrive on, the very wellsprings from which the best ideas flow, how could we not want to establish a permanent pipeline into those cognitive reservoirs?  How else to do so than by use of a tool like Google Reader.  This is the Super High Octane driven by true Human Intelligence alternative to Page Rank.  It’s Quora done more deeply than a single question at a time.  It’s more deeply Social than anything seen since for those who genuinely want to be a part of a select community of Thinkers.  It is Ernest Hemingway and all of the others in Paris.  It’s plugging directly into particular cyber-cognitive neighborhoods the way only Gibson and Stephenson could imagine before it came along.  And Google wants to burn it down.

Try asking Ernest Hemingway to communicate with his peers 140 characters at a time while anyone who wants can crash the party and conversation.  Writing is a lonely business, but it doesn’t have to be that lonely.

Posted in user interface, Web 2.0 | 5 Comments »

Google, If You Think I’ll Move From Reader to Another Google Product, Drop Dead

Posted by Bob Warfield on March 14, 2013

rssJust got the news that Google Reader will be turned off July 1.  Realistically, I should’ve moved after the first time they brain-damaged it and I railed about it, but I stupidly stuck to it.  Now I’m sorry.

I’m not the only one, Om Malik says it is his second most used Google application after Gmail.  Ditto for me.  I’d like to see Google publish the real figures on the supposed decline in Reader usage.  I bet it was still huge.  This is just a typical big company move to push their customers, I mean products, into toeing the line they’ve drawn.  They want us to go to Google+ or some darned thing where they can sell more ads or beat some competitor into submission.

What will be next, Google, turning off GMail?  Or are you too intent on bashing Microsoft over the head with it?

I’m tired of companies treating me like the product instead of the customer when they’re ad-driven.  It’s a sham and a bait-and-switch.  It is the root of all the evil Google claims they will never do, and keep doing with ever increasing frequency.

If you think I’ll move from Reader to some other Google product, drop dead.  It ain’t gonna happen.  From here on out, I will look to minimize my involvement with anything new from Google.  In fact, I’m shutting down my PPC advertising as soon as I am done here.  At least where that is concerned, I am a customer, and I can vote with my pocket book.  Learn how to save your data out of reader here.

This is bad news indeed for bloggers all over the world, who should find their own ways of letting Google know they’re not pleased.

A Modest Proposal

What Google should have done, is ceded Reader, source code and all, to a company that actually values Blogs and Bloggers.  How about the WordPress folks?  They should take it up, or failing that, create a WordPress theme that emulates reader and make it available for free via WordPress.com.  Matt Mullenweg, are you listening?

Failing WordPress, either Microsoft or Yahoo should dive onto this just for the customer goodwill.  I bet both companies would get back folks who haven’t been enthusiastic about them for years if they could field a good replacement within 3 years.

Postscript

A quick perusal of the comments in these various blog (blog == duh!) posts about Google Reader tells me there are lots of unhappy products, um customers, out there when it comes to this latest Google decree:

GigaOm

Techcrunch

Gizmodo

LifeHacker

And, here is a list of potential alternatives:

OldReader:  Very slow as I write this.

NewsBlur:  Down as I write this.

Rolio:  Awesomely slow as I write this.

GoodNoows:  Performance not too bad.

There are likely more, but I am too disgusted to root around for them right now.  Notice I’ve commented on site status, which has been poor this afternoon, no doubt due to the tiny few who still used Reader (yeah, right, there are zillions of us) looking for alternatives.  I haven’t looked into any of them yet, so I have no favorites to recommend.  These sites are all about to get a huge windfall of users as they choose alternatives, but it remains to be seen which ones can really take up the exodus.

There’s also things like Feedly, NetVibes and Flipboard, but I don’t want that ilk.  I don’t want a magazine.  I subscribe to nearly 200 blogs and need a power tool that lets me triage minimalist summary lists the way Reader did so I can get right to the good stuff.  I also don’t need an iOS or other mobile app.  While I often access Reader via my iPad, I also want desktop access without the nuisance of an app.

Posted in strategy | 9 Comments »

 
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