You Built A Feature, Not A Business

June 2, 2011 in Miscellaneous, The Internet with 0 Comments


Blindsided. “@twitter: We’re rolling out an email notification that lets you know if someone you follow retweets or favorites you”Tim Haines
timhaines

Really dude? Blindsided? C’mon…

Tim Haines is the founder of Favstar, which in late May, took it on the chin when Twitter announced that they were launching a feature set that was essentially a repackaging of what Favstar does. Except that it was now built natively into Twitter. Boom, goodnight Favstar.

Now Tim is more than likely a good dude with whom I’d have a lot in common. And I have no particular disrespect for him, or for his products. But I do think that if you build a feeder business, on the back of another host business, it’s just a matter of time before you get smooshed by the host. Particularly if the core of your business, is to essentially provide a missing feature that the host business hasn’t yet released themselves.

So not only should Tim here not have been blindsided by this, he should have been expecting it from day one. As traffic was ramping up on Favstar, all on the back of Twitter users wanting these particular features, he and the team should have been frantically thinking about ways to leverage this traffic and user-base to launch new products, that were not so dependent on the whims of a third party.

It’s more than fine to launch a business like this (in fact, some would say that this api-driven, build on top of other products ecosystem actually drives the web), but to think that this type of business is sustainable in the long term, is (in my opinion) delusional. When you build on the back of another platform, you unfortunately serve at the pleasure of that platform.

Companies like Twitter and Facebook are businesses. They have boards, and employees, and investors, all of whom have reasonable expectations that their respective companies will continue to evolve and innovate. And at various points within these evolutionary paths, it’s going to be their growth or yours. And who do you think Twitter or Facebook is going to go with? Trust me, they aren’t going to forgo launching essential features, native to their own platforms, in order to keep your little app in business.

COOL APP, BRO.

And it isn’t just Tim and Favstar (I really don’t mean to pick on him, just needed an example here). Ubermedia had a gut-punch moment earlier this year, and now guys like Twitpic and YFrog are getting steamrolled too.

So if you are an entrepreneur whose business lives or dies by the access to (and benevolence from) another business, beware. And start thinking more long-view. Don’t wait until it’s too late.

The Talent Market

May 17, 2011 in Miscellaneous with 0 Comments

I’ve been thinking a lot about talent lately. Finding talent, being talent, harnessing talent, etc etc.

It’s very strange to watch national news reports on widespread joblessness, and then at the same time, see the absolute fever within the online space, to try and hire anything or anyone that knows how to output “hello world” onto a screen.

The juxtaposition is awkward and hard to reconcile at times.

Anyways…on the topic of talent, this posting from Eric Paley (The Curve of Talent), is wonderfully written. The following passage stuck out to me above everything else.

The large company corporate world is filled with C players. The term “Peter Principle” was coined to describe this phenomenon in which people in large companies are promoted exactly one pay grade beyond what they can competently do and then stay in that role for the rest of their careers. Large companies thrive on inertia and the core job description of a large company employee is to keep that inertia going and do nothing to screw it up. If last year’s top line grew 8%, the job is to grow it 8% again, not to figure out how to make a step function change and grow it 20%. In attempting to achieve that 20% step function change, there is high risk of a misstep that could lead to a decline in sales. That’s simply unacceptable.

Large companies fire those who get F grades, because they are not at all productive. They accept C players, because they are somewhat productive with guidance and B players are hard to find. It is very easy for a C player to seem moderately successful when progress is largely based on inertia. Large corporations celebrate B players who can competently complete their job with minimum coaching and maintain inertia. These are the heroes of large corporations. Innovation within a function is risky and can threaten inertia.

Large companies have very few A players. A players don’t want to be at large companies because, more often than not, corporate bureaucracy and process not only fail to reward, but actually punish A players. By putting the objectives ahead of process and politics, A players step on bureaucratic toes and don’t retreat based on false territorial claims. Though there are exceptions, few large corporations create cultures that give A players room to win. It’s not fun trying to innovate at a large company when co-workers feel that you’re threatening the core inertia on which the business is based. They’ll say things like “that’s just not the way things work around here.”

Read the entire post here.

Let’s Get Real About Online Privacy

April 20, 2011 in The Internet with 0 Comments

As an online marketer, I tend to be more amazed than creeped out by what can be done with the mountains of data generated by web users every day. And even as a user, I am generally ok with being tracked to bits by marketers and websites. The way I see it is, I am going to see an ad anyways, so it may as well be an ad that is targeted to my interests. I mean, imagine if every commercial you saw on television, was ONLY about the things you bought and liked? It would be awesome.

But lately, some of our favorite politicians out there have realized that drafting legislation around this “privacy issue” is just the type of fight that can curry favor with average Joe voter. Take one part scary scenario (THE INTERNET BAD GUYS ARE WATCHING YOU), one part headline grabbing company (FACEBOOK or GOOGLE), and one part we’re-here-to-save-the-day (THE GOVERNMENT IS HERE TO RESCUE YOU!), and you’ve got yourself a bill that everyone loves. John Kerry and John McCain know that if they can draft up some really vague, uninformed, knee-jerk legislation that sufficiently sounds like it will stop all of the scary boogeyman scenarios that they’ve trumped up, voters will love it.

This Cat Wants To Target An Ad To You

To hell with whether it actually does anything substantive, that’s not the point.

Anyhow, what irks me in all of this, is how poor a job the online marketing industry is doing here to counter this paranoia, and really re-frame the discussion with some…um…I don’t know, FACTS? How about highlighting what really is going on in the world of tracking and privacy, and discussing what is tracked, generally how anonymous it is, and how this tracking really improves those web experiences that we’ve all come to take for granted?

An article in Slate last week, really did a nice job of explaining this whole situation in less than scary terms.

Broadly speaking, there are two types of data that Web companies keep on us—personally identifiable information (like your name and list of friends), and information that can’t be tied to you as an individual. In our discussions about privacy, we rarely make this important distinction. While we focus on the disadvantages of companies collecting our information, we rarely look at the innovations that wouldn’t be possible without our personal data. This is especially true when it comes to anonymous data—information that can’t be used to identify you, but which serves as the building blocks of amazing things.

The entire thing is here, and it’s worth a read.

I guess if I had to make a prediction here, it’s that there will be some sort of goofy legislation passed, Kerry and McCain will get some political high-fives, and then the online/tracking/marketing industry will just make adjustments and find a new way to do what they were already doing. Problem not really solved…but problem not really problem to begin with right?

I mean, does anyone remember CAN-SPAM back in 2003? How’d that work out? Spam eradicated, right? Yah, that’s what I thought. CAN-SPAM just gave the spammers a nice rule book to work around, and allowed them to go about their spamming business as usual. Why do we think this situation will play out any differently?

And lastly, do people not realize that far more personal data (social security numbers, purchase history and spending habits, credit information, etc) have all been out there to be bought and sold now for years? Why aren’t we all up in arms about that? Long before the internet, our good friends at places like Experian and Acxiom have been tracking way more than Facebook, and selling real personal information to anyone with a nickel to spend.

Run some queries here, and then let’s talk about how scary it is or isn’t that Zappos shows you an ad because you looked at some sneakers.

Android vs iPhone

April 5, 2011 in Miscellaneous with 0 Comments

Despite my recent iPad purchase, and much to the surprise of many people I talk to, I am not an iPhone owner. I am an Android guy, and have been since 2009. I don’t think that the Android OS or the Android devices are materially better or worse than the iPhone, it’s just what I prefer, and it’s what I went with on my carrier (T-Mobile) when it came time to ditch my Blackberry for something more…modern.

However, when I’ve had the Android vs iPhone debate in the past, I’ve always maintained that at some point the operating systems and devices will somewhat be equal, and that the distribution of the respective operating systems is what will matter. Specifically, when it comes to apps. One HUGE selling point for iPhone, has always been the apps. Bazillions of apps.

But developers ultimately go where the distribution is. At some point, the market shares will change in such a way that developers will see the value in developing for Android first, and iPhone second, because that’s where the distribution is. There will simply be more Android devices than iPhone devices, which means more potential installs and more potential revenue.

The Android gains matter because technology platform markets tend to standardize around a single dominant platform (see Windows in PCs, Facebook in social, Google in search). And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward for building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them. (more here)

Now this certainly ignores what I think is Android’s largest problem right now, and that is a fragmented set of OS versions, which make it really painful to develop for Android. If they can get this sorted out, and unify the operating system versions across carriers and devices, they (in my opinion) will be well positioned to leverage this network effect.

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