Venture Geek

I enjoy listening to This American Life. I don’t often get to it on a Saturday afternoon (when it’s on my local public radio station), but today I happened to catch it. It was all about the people who come in and out of a diner called The Golden Apple in Chicago over a 24-hour period. But, that’s not what this post is about.

No, this post is about rotating desserts. You see, on the day the This American Life crew was in the Golden Apple the dessert case that would normally be spinning desserts around and around was broken. You know, the kind of thing that looks like this:

So, yeah, it was broken — the desserts weren’t spinning. When the desserts weren’t spinning the Golden Apple sold 50% fewer desserts. Think about that for a moment. Take stationary desserts and start them rotating slowly and double your sales.

Why do I care about desserts, rotating or otherwise?

Because this is such a great lesson in why details matter. They matter in retail environments, and they matter in software — and from now on I think I will always think of that as “The Rotating Dessert Issue”. When I used to build custom web applications for a living we were constantly faced with clients looking at the “buy vs. build” decision. One of our strongest pitches was that off-the-shelf systems may get most of it right, but it’s the details that really end up mattering. Now, of course we had a vested interest in taking that stance, and there are plenty of good arguments against building custom software in many situations, but it doesn’t change the fact that details matter.

I first heard about Zappos when Mark Kvamme came to speak in a class I took at Haas. At the time I remember being surprised that such a high profile VC fund was so interested in selling shoes.

I ordered my first couple pairs of shoes from Zappos (for my son) yesterday, and I can say that it was an excellent shopping experience. The speed of the shipping was astonishing — I placed my order at 6pm Wednesday evening and had the shoes at my home at 9am on Thursday morning — and all at a price comparable to other retailers without paying anything extra for shipping (and apparently they will pay to have it shipped back if it doesn’t fit). I haven’t dug into how they manage to do this profitably (perhaps they don’t?). Zappos also does a nice job of both the search and browse functionality with all of the various slice-and-dice options I could think to use, and they have the most comprehensive pictures of shoes of the few sites I have tried out in this category — every shoe seems to have photos from every angle at a magnification sufficient to feel like you know how it will actually look.

Anyway, I figure such a positive shopping experience deserves some word-of-mouth and link love.

In Silicon Valley, if you’re still working when you’re in your late-40s or 50s (and you’re not a VC), it means you’re not among the smart ones. The smart ones have made something worthwhile or joined the right startup when it was small and made enough to retire by the time they’re “old.” The older execs are basically the ones who were the lower-50% when they were young, and are the ones left working now that their smarter peers have long since retired….

From a comment by “Davion” on Valleywag’s coverage of Mark Zuckerberg’s comments that people under 30 are smarter, better employees.

Food for thought (via Scott Mcleod)…

I don’t know how reliable the ratings are anymore. I’m among those who cast a skeptical eye at the Nielsen Co. and the demographics and ratings they deliver. The fragmentation of the audience is so profound I don’t know how the samples can even tell me how many people are watching my show anymore. It seems like such a crap shoot. It’s like where the music industry used to be a few years ago, before they got — what’s that thing called? — SoundScan. Before they got that it was like Nielsen; they called up store owners and asked them what was selling and what wasn’t. When they shifted to a legitimate way of tracking each and every sale, it upended the charts. Suddenly, country music was huge, much bigger than anyone had thought. I think TV is in the same ballpark. We’re relying on a really old system based on this sample of people, and it’s not really accurate anymore. God knows how many Nielsen families are sci-fi fans.

– Ron Moore, creator of Battlestar Galactica, quoted at Salon.com.

I have been spending a bit more time on Facebook lately, mostly out of curiosity — every time I go there I feel old. I seem to be on the cusp of the Facebook generational divide, and that seems to be mostly because I happened to have been back in school over the last couple years. If I had been out of school I may not even be in the gray area.

The Facebook generational divide can be summed up easily: If you are in college or graduated college in the last two years you are very likely to have a Facebook account. If you graduated college more than two years ago you are, on average, not that likely to have a Facebook account. Now, this is based on purely anecdotal evidence, and it seems to be changing a bit as Facebook gets so much attention in the “mass” media.

In my world, LinkedIn is much more popular — on Facebook I currently have 9 “friends”, but on LinkedIn I have over 200 contacts. And that’s not because I haven’t bothered to connect with those same 191 people on Facebook — most of them simply aren’t there. But, for the people I know under 25 or who are still in school, Facebook is an integral part of their daily lives. When I look up my college or my high school or other interest groups I might associate with, the vast majority are people basically of college age. Even in my MBA class, only a handful of my class of 2006 classmates seem to be on Facebook, but nearly all of them are on LinkedIn. But, when I look up the MBA classes still in school today, the numbers go way up — that single year makes a huge difference in Facebook adoption, and that’s why I feel I’m on the cusp of the generational divide.

The fact that all of those people are unlikely to just jettison their Facebook accounts after they graduate is a big part of why the valuation of Facebook is often quoted as a ten figure number. To me, the question is whether Facebook can maintain its dominance as THE place to be for the college and high school crowd, or whether it will suffer from the all-to-common issue of the next generation wanting something fresh and new.

The concept of population pyramids is how I think about this. I first learned about population pyramids in a geography class in college (yeah, they actually taught a geography class in college). Here is what a population pyramid looks like:

In brief, a population pyramid shows the distribution of age groups inside a broader population, where the two sides represent males and females. The question is can the Facebook graph stay triangular (or least rectangular), growing the total population over time, or will it look more like a diamond, as the next generation falls off in their adoption in favor of the next new thing?

I say, let a billion diamonds bloom.

There is a broader question here of whether the low barriers to entry that made Facebook possible in the first place will continue on the Internet, or whether increasing expectations of the kinds of experiences we expect combined with any number of market-based or regulatory hurdles make it tough for the next group of kids with an idea and a computer to create something millions of people use. The whole Net neutrality debate plays into that question in a big way, but that’s another post for another time.

[After writing this I realized that I didn’t bother to explain a lot of things to those of you who might not be web geeks — and really, if aren’t one you probably aren’t going to be interested in this topic anyway….]

I haven’t read a lot of the coverage of Apollo in the last couple days, but I have been following the project for a few months (I remain in the Macromedia, now Adobe, ecosystem from my ColdFusion development days). I think Apollo has some tremendous potential to unleash a new wave of products that will change the way we think about the distinctions between “web-based” and “client-based” applications. Apollo seems like it may be the perfect platform to build really great online/offline applications that interface with existing services — and with such an accessible yet rich and network-friendly environment for building client-side applications I think the uses of web services (in the SOAP/REST/etc. sense) will really start to mature. Time will tell whether penetration of the Apollo runtime can ramp quickly enough to make deploying such applications a no-brainer, and with all of the major investments in AJAX-based tools there will certainly continue to be interested applications deployed in “pure web” environments.

But, others have written at greater length with more thought on those topics.

What I find quite interesting but seemingly under-covered is that Adobe chose WebKit as their HTML rendering engine in Apollo. WebKit is Apple’s branching of KHTML (for those who know what that means I don’t need to go into details, and for those who don’t, you won’t care about the details). WebKit is what Apple uses in their Safari browser (and as the underlying set of APIs provided to all OS X developers).

I have been a regular Safari user more or less since I bought my first OS X machine in 2003. I have had a love-hate relationship with Safari. I love the way it supports RSS, and I generally find it to be a perfectly good browser — but, it can’t keep up with my browsing habits of having lots of windows with lots of tabs open. To be fair, when I have tried Firefox and Camino and Flock, all Gecko-based browsers, they also couldn’t keep up. The bigger issue with Safari is that given its low penetration many developers don’t bother doing QA on their sites using Safari, or, more commonly, make a conscious decision to not bother supporting Safari (especially for the initial launch of new companies). I now usually have both Safari and Camino open (and often another browser or two), using Safari as my “main” browser and Camino when Safari is being too slow or I run across a site that isn’t rendering properly in Safari (most developers these days will make their site work in Firefox — and Camino uses most of the same underlying technologies).

But, now that Apollo is using WebKit and Adobe is getting ready to throw some serious muscle behind getting massive adoption of the Apollo runtime (which you will need to install to use an Apollo application) the overall market share of WebKit should rise dramatically — perhaps so dramatically that developers will no longer be able to ignore it, creating three major platforms to support (Microsoft being the obvious other one) when launching a web-based service. Of course, with Adobe contributing code WebKit will also hopefully do a better job of being compatible with the way Firefox does things (and yes, I know that many in the WebKit community claim that WebKit is doing it the “right” way now — but, adoption matters more than standards in such disputes).

As a Safari user this is potentially a great thing because if Apollo takes off (as many think it will) developers will no longer be able to flash up their “You Are Using an Unsupported Browser” message. But, as a web developer, this creates yet another layer of debugging and support that will probably need to be addressed even for new applications. I remember when Microsoft was declared to have “won” the browser wars, and although few were rooting for them there was some sense of relief that we’d no longer need to worry about the vagaries of different browsers — with the ever-increasing share of Firefox and now the advent of WebKit in Apollo the browser wars seem to be heating up, albeit more quietly this time.

At the STIRR PitchLab I spend a lot of time working with mostly first-time entrepreneurs to help them think about their business concepts and how best to articulate their visions. Probably the most common theme in those conversations is getting folks to go from product-based thinking to market-based thinking. In short, entrepreneurs in very new companies typically spend most of their time heads down building a product — it is very natural for them to think about the features of that product as the thing to talk about when describing what they are doing. But, more often than not such entrepreneurs spend far too much time talking about product features and far too little time talking about their business.

Ultimately, the product is a means to an end — building a great business. That doesn’t mean the product and its great features aren’t important, but history is filled with lots of great technologies/products that never made it over the hump to be great companies (and plenty of great companies are built, at least initially, on products that aren’t necessarily all that great from a features/technology standpoint).

But, that’s what this post is about.

At the last PitchLab, after close to an hour of discussion mostly on the theme of market-based vs. product-based thinking, the founder I was helping wanted to know where he could turn to go deeper. He wanted to know which books, which blogs, which podcasts, etc. were great resources for engineers who want to become entrepreneurs to turn to help them add market-based thinking to their repertoires. I should have had a better answer than I gave him. I suggested a book or two, and I could have come up with a couple decent blogs that sometimes cover such issues, but I ought to have a nice list of resources people can turn to, and I intend to create one.

So, know any good resources on helping entrepreneurs, especially those from engineering backgrounds, get some basics of how to approach customer segmentation, brand strategy, and market positioning?

This is old news to lots of folks who might read this blog, but I just keep really enjoying Dick Costolo’s blog Ask the Wizard. If you are an entrepreneur this blog should be in your feed list…