Category Archives: Startups

The Trouble with MOOCs

12 Thursday Dec 2013

Posted by in Startups, Technology

≈ Leave a comment

Tags

,

OK, just to get it out of the way: Curious.com is not a MOOC (as you think of them) and is not competitive with MOOCs. We have lessons on crocheting a chunky cowl (I learned what that is!), bike repair, how to bluff in poker, and even more stuff than you can shake a stick at (if you’re into shaking sticks at things).

An article just came out describing the struggles the MOOCs you know about (Coursera, Udacity, etc.) are having getting students to successfully complete their courses. Very (in)famously, a pilot program between San Jose State and Udacity spectacularly crashed and burned.

So what’s all the anxiety about? I think it’s two things: a lack of imagination and some unrealistic expectations.

A lack of imagination

You see, the first courses on these sites were direct translations of college courses onto the web. It started with a camcorder on a tripod in a lecture hall, and assignments uploaded to the server. I get the thinking: “We have an articulate professor! And a camera! Let’s go!”

The problem is the standard 10-12 week college course (1-2 hours of lecture a week, some assignments and office hours) probably isn’t even the optimal way to teach on a college campus, let alone online. At a college, you have a captive audience of people who have years of I-must-go-to-college on their brains and $10,000s of skin in the game. Online, you have the competing distraction of exploding coffee creamer.

Seriously, you gotta check that video out. I’ll wait. (I originally had the note to check out the video in a parenthetical, but it’s so important, it got its own paragraph.)

Since then, the video production has improved dramatically and online assignments are better, but there’s a LONG way to go before you can make 100 hours (10 weeks x 10-12 hours/week) of Computational Methods for Data Analysis palatable to most people online.

Someone’s gonna figure it out. There’s enough buzz and momentum around MOOCs that someone’s going to figure it out, but we’re going to have to be patient.

But this difference between the standard in-college student and the online student is why we have…

Unrealistic expectations

Did people really think we’d have even remotely similar successful completion rates online? The article says 4% of users who registered completed their course. Let’s see: 4% of online users who registered for a free possibly-100-hour course completed it? That’s actually incredible by online standards.

This is an industry where if you can get 10% of your visitors to give you an email address, you’re doing really well.

 

I don’t think MOOCs are doing that poorly, really. It’s really early and the companies, investors, and media are still trying to figure out what it’s all about. Ultimately, I’m bullish on the whole thing. College courses are way too expensive and inaccessible; the current system is unsustainable. Eventually, product innovation will improve registration and completion rates, and all the hype will be replaced by reasonable expectations of what will probably still be a really large online industry.

And after that, it’ll be all rainbows, unicorns, and lollipops. Just in time for me to not have to sell my organs to educate my kids.

Advertisement

Launching a new startup

01 Wednesday May 2013

Posted by in Startups

≈ 2 Comments

Tags

, ,

Today, we officially launched the new startup I’ve been working on for over a year.

Curious.com was born from sunlight-fueled conversations with Justin and John, then nurtured by some of the best people I’ve ever met. This could be a post about how you should launch a startup, or how you should coordinate a PR launch, or what tech stack you should use, or how awesome cloud servers are (answer: incredibly awesome).

But this post is none of those things.

This post is about what makes working way too many hours at a startup worth it.

This post is about the people who could go home, but choose to stick around to give you support.

This post is about the people who know that even under tight deadlines, you have to take time to play ultimate frisbee.

This post is about the people who are always ready with a smile and an answer even when they know that that will just lead to more questions.

This post is about the people who jam on Rock Band with you while waiting for the build to deploy, and more importantly, the people who are OK with you playing Rock Band while waiting for the build to deploy.

This post is about the people who help in any way they can because they know job descriptions don’t matter.

This post is about the people who want to come in at 5am for the PR launch even though they don’t have to.

Startups claim all time that they have the smartest people (and we’d claim the same thing). But this is a post that says we have the best people, in all senses of the word “best”.

So to the team at Curious.com, congratulations and thank you!

Startup Stories: Healthcare Insurance for your startup

04 Wednesday Jan 2012

Posted by in Startups

≈ 9 Comments

Tags

, , , , , ,

If you hang out on Techmeme or Hacker News, you’ll get your expected flood of startup stories about funding events, new tech wizardry, and product launches. When we started our startup, the thing we needed was… healthcare. I (was) volunteered to be HR, and so the journey began. Here are the hard-earned drops of knowledge that would be helpful to any startup looking to offer medical insurance in California.

First things first: Why should we offer healthcare?

You’re not legally obligated to provide healthcare, so why bother? When we started, each person was on still on COBRA from our previous company, Intuit (if you don’t know, that means we were paying out of pocket for the entire health insurance premiums for same plan that we had while at Intuit) or had their own individual plan. So what’s the benefit of the company offering medical insurance?

  • Cheaper premiums: Intuit basically offered only high end plans (no deductibles, cheap prescriptions, etc.) because they use good medical benefits as a recruiting tool. So now that we were paying out of pocket, we were paying the high premiums that went with it. If your startup can choose your own health care plans, you can choose from any plans the insurance carrier offers, including the (much, much) cheaper plans.
    • But… the premiums are not necessarily cheaper than individual plans. A couple brokers told me that at a small group size, the rates are basically the same. We knew we wanted to offer a group plan at some point, so we just bit the bullet now.
  • Guaranteed coverage: The main difference between an individual plan and a group plan is that a group plan has guaranteed coverage; i.e., you can’t be denied for preexisting conditions.  In fact, if you have an employee with a serious (i.e., expensive) preexisting condition, a group plan might be cheaper because your rate is (basically) determined by your age and gender, not your medical history.
  • It’s the right thing to do: I was going to write something about the sad political environment we live in, blah, blah, blah, but ’nuff said. We’ll move on.

Can we offer health care insurance?

Luckily, a group plan really only requires the minimum number of people that would define a “group”: 2 people. After that, it gets a bit complicated:

  • You need to have at least 2 “eligible” employees to qualify for a group plan. An “eligible” employee is one who is working full-time, which is defined as at least 30 hours/week for minimum wage ($8/hr in California).
  • To prove that you’re a real company, you have to have those 2 “eligible”, paid employees on payroll for at least 6 weeks in the quarter prior to the quarter you’re starting coverage. E.g., if you want to start coverage on April 1, you need to have at least two employees on payroll February 15.
  • Only people “associated” with the company can be offered health care from the group. The easiest way to associate someone with the company is to pay them for full-time (minimum 30 hrs/week, $8/hr). Basically, the insurance carriers don’t want to open up group policies to everyone so you don’t just add your Aunt Mildred with her needs-to-replaced hip even though she has nothing to do with the business.
    • But what if you’re not taking salary (which happened in our case)? Owners of a company are associated with the company, but to prove you’re an owner takes documents stamped by the state and possibly proof that the owners are making income (i.e., share of profits) from the business. The threshold of proof varies for the different carriers. If you can’t meet the threshold of documentation, that employee will have to find an individual plan, or you have to put that employee on full-time payroll. Note: unpaid employees, like owners, do not count toward your 2 “eligible” paid employees from the first bullet above.

What can we offer?

Only some insurance carriers will offer policies for really small companies. Some require a minimum of 25 or 50 employees. Some only have competitive rates at those higher numbers. Our broker gave us quotes from Anthem Blue Cross, Blue Shield, and United because those were the best options for a group our size (4 employees at the time of quote).

Each of these major carriers require a minimum percentage of a small business’ eligible employees to enroll with the carrier, and that percentage is greater than 50%. And that means… do the math… you can only offer one carrier.  So you’ll pick one.

The exception is Kaiser Permanente which does not have a similar requirement (or the minimum percentage is much lower). In the end, we’re offering one major carrier and Kaiser.

Once you’ve selected an insurance carrier, you can (basically) offer as many of their plans as you want to your employees. It doesn’t cost you any more, but it’s just a management headache offer 30 plans. We chose a decent mix of low, mid, and high end plans, in both HMO and PPO varieties.

How much does it cost?

We don’t have a lot of cash (what startup does?) and we don’t intend to use “Great Benefits!” as a major recruiting tag line (we just want to do really important stuff with really cool people). So we wanted to keep it inexpensive to the company; we can always increase our contribution the better we do financially or the more important benefits are to retention and recruiting.

The cost to the company doesn’t actually have to be that much. The minimum employer contribution is 50% of the employee’s cheapest available premium or $100/month (details of that rule vary slightly for different insurance carriers but that’s basically it).

For example, let’s say you offer three plans and Joe’s premiums for just himself on this three plans is $200, $300, and $400/month. Regardless of which plan he chooses, the company’s minimum contribution is 50% of the lowest plan, so $100.  Let’s say Joe has a family he wants to insure, so his premiums are $700, $1000, and $1300.  The company’s minimum contribution is still $100 because the minimum is based on just the employee’s portion of the premium, not the spouse or family.

Of course, you can offer to pay for more than that, based on any formula you want. We chose to pay for 100% of the employee premium.

So you can reduce the minimum employer contribution by offering the lowest package possible. But don’t be a jerk; pick a lowest package that someone would actually take.

We chose not to offer HSA-based packages or other really low end packages, but we still offer a pretty cheap plan (along with the higher end plans).  Our employee premium is ~$250/month/employee and, again, we chose to pay for 100% of it. The rates were based on the fact that we’re a group of 30-something males in the California Bay Area.

All the caveats you can think of apply when you see prices on the Internet; your mileage may vary.

What do I do?

OK, if you’re like me, you probably don’t want to talk on the phone with people more than you have to when buying something.  You want to fill out a form online, get a page of options, select some, put in a credit card or account number, and be done with it.  So if you want, you can sort of do that.  You can go to each of the insurance carriers’ sites and do it.  Or you can go to eHealthInsurance and fill one form to get multiple quotes.

Don’t bother. Get an insurance broker. Why?

  • It’s no more expensive. Either the broker gets the commission or the carrier keeps the commission.
  • You get to deal with one person instead of different sales contacts at different carriers.
  • The health insurance is still all about forms, signatures, faxes, etc. You don’t want to deal with that.  You have a business to run!

What did I look for in a broker? Remember, regardless of the broker, your premiums will be the same, so pick someone you can work with.

  • Responsiveness, responsiveness, responsiveness. Duh.
  • Tech savvy enough to deal with emails, scans, pdfs, etc. Even with online fax services, who wants to deal with that?
  • Experienced in small businesses in your industry in your area.  Brokers don’t make a lot of money from commissions on small group policies, so many don’t bother with them; they’re hoping to make more as your company grows. Also, I didn’t have to explain why multiple employees in the company are taking no salary and why we have no revenue or income.  They get it.

I just Googled around my area for insurance brokers, sent emails to a few, then spoke to a few on the phone. Only one called me back regularly and sent me emails to remind me to send in my forms. And we had a winner!

But wait, there’s more!

There’s a lot of I’ve learned in selecting and signing us up for medical benefits, but this post is too long already.  I’ll cover more in follow up posts, including: dental/vision/life insurance coverage, worker’s comp, health statements, etc.

(photo by Adrian Clark)

A Brand New Startup’s Tech Stack

22 Thursday Sep 2011

Posted by in Software Development, Startups, Technology

≈ 5 Comments

Update: It’s been over a year, so I’m back to update the list of what we’re using…

Launching a startup is incredibly fun: everyday is dreaming, everything has infinite potential, and you get to leave behind all the baggage of the past. John Tokash and I recently enjoyed the party when we decided on what tech products/services to use. (Props to Nat Friedman for his list which gave me the idea to share our choices.)

We had some general, unstated criteria that guided us:

  • Community is incredibly important: In most cases, use what most other companies are using because you know it’ll be around, and there will be people out there to help you.
  • Be cheap, but not too cheap: We have to run a tight ship, but where it helps productivity, pay for it.
  • Lean towards what you know: We have to focus on the business, not on learning the tools.
  • Cloud, when you can: It might be cheaper to host things yourself, but we don’t want to be IT guys and we want to work on the fly from any computer.
  • Don’t waste too much time thinking about it: Just do it. Sometimes, you gotta just go.
And away we go:
  • Web framework: Ruby on Rails. This was a tough one. We argued long and hard about Ruby vs. Python, Rails vs. Django. Both communities are strong, and depending on who you ask, both argue that their community is stronger. Both have their technical trade-offs. I will be the first to admit that after learning some RoR, I’m incredibly disturbed by the “magic” in it (if you name this method in this way, magically this property will be attached to this other thing). But then one day, we just turned to each other and said: “Let’s just call it. Ruby. Done.”When it came down to it, there were three deciding factors: 1. we happened to know more people who know RoR; 2. we happened to start learning RoR first; 3. we didn’t want to talk about it anymore. C’mon, we have a company to build here.
  • IDE: Aptana RadRails.  John’s a big TextMate fan, so that’s what he was using, but I decided to take a tour around the options. MacVim: didn’t want to invest the time into learning all the key commands. Komodo Edit: had crashing problems. NetBeans: dropped official support for Rails and I couldn’t get the community Rails plugin to use a specific version of Rails. Aptana did it all cleanly, with autocomplete, decent project management, integrated terminal. We haven’t lived it with it very long, but it looks good so far. Update:  So we have a split jury here now. A few of us are on RubyMine, a few are on Sublime Text, and a few are on TextMate. RadRails died a quick death.
  • Source control: Github. Never really considered anything else. Cloud all the way, baby.
  • Database: Though we haven’t actually created any databases yet, I’d be surprised if we don’t do MySQL.
  • Hosting: Undecided. We haven’t really addressed this yet, though we’re considering Heroku and Rackspace, among others. We’re not IT guys, and we don’t want to be, so we’ll definitely be looking for a lot of support. I imagine that if we end up going with Heroku, we’ll move off with any reasonable success. We also know that Heroku uses PostgresQL, so given our leaning to MySQL, we’ll have to figure this out later. Update: AWS all the way! AWS is simply amazing (though it could be simpler to manage). Fortunately or unfortunately, we’re bought in hook line and sinker with EC2 with EBS, S3, RDS, Route 53, ElastiCache, pretty much everything. They make it, frankly, incredibly compelling.
  • Analytics: Google Analytics. We haven’t even started plugging this in yet, but this is clearly what we’re going to do until we run into problems. I have experience with Omniture and while it’s powerful, it’s very expensive and a bit of a pain to integrate. Maybe later.
  • Wireframing: Omnigraffle (Mac only). We tried Balsamiq first and we liked it quite a bit. I even liked the commune, hippy vibe of the company. Unfortunately, we actually outgrew it pretty quickly, even before the trial ran out. The biggest slam against Balsamiq for me was the rather sad collection of community widgets/stencils available. Omnigraffle kicks its behind in that area and in advanced features (layers are really nice to have).
  • Email, Calendar: Google Apps. We never considered anything else. Really, who wants to run Exchange anymore? The key reason is that a Gmail account has become the de facto standard email account for integration into devices and other services. I expect that we’ll end up using Google Sites for intranet, but we haven’t really run across that yet.
  • Documents Sharing: Dropbox. We considered Google Docs, and we’ve even used Google Docs to collaboratively edit documents, but at the end of the day, Dropbox is just so much easier. Update: With the release of Google Drive, we moved over. I love the seamless integration with Google Apps (which we use for tons of stuff) and that the fact that file storage only counts against the quota of the file owner. With Dropbox, every file hit everyone’s quota. Sucks. Like a Hoover.
  • Office suite: Microsoft Office. Yeah, that may seem obvious, but I really wanted to like OpenOffice or LibreOffice. I used them both, for a long time, and they kind of worked. Then, after some particularly frustrating lost formatting in their PPT knock-off, I downloaded the trial for MS Office and it was, frankly, beautiful and painless. Sorry, open source fans, it’s not even close.
  • Group Bookmarking: Diigo. We discovered early on that we were sending a lot of links to each other with posts, sites, companies that we want to share with each other. I really wish Del.icio.us had private group bookmark sharing; unfortunately, it doesn’t.  We’ve settled on Diigo, but the UI is too clunky for what I want it for.  Hopefully, something better will come soon; I’m not happy with this one yet. Update: We don’t use Diigo anymore. Just too clunky. I haven’t found anything better: we just end up emailing links back and forth. Then you have to search back through your email to find the link someone sent you. Not cool. Isn’t there a startup out there who wants to fix this?!
  • Project Management: Basecamp. We actually didn’t default to Basecamp; we went around and looked at many competitors, including ManyMoon (it has a Google Apps plugin), Apollo, and Trello. We ended up with Basecamp because it was fully featured for what we want, but wasn’t cluttered a lot of things we didn’t want (time tracking, proposal creation, etc.). After playing with Trello though, Basecamp’s UI feels dated. I’m thinking we could end up switching if something better comes along. Update: We went around and around and ended up with Planbox for sprint planning and Assembla for bugs. I then mandated that we use only one system for both and went over to Assembla. And you know what? Yup; we’re still unhappy. This sucks. Where is there a good combined sprint planning/bug tracking system? Help!
  • Messaging: Google Talk with Adium. Amazingly, we’re using an AOL product. But it practically doesn’t matter; we just happen to all have AIM accounts. I believe we’re all using Adium clients, but the protocol itself doesn’t matter. Definitely a case where it’s not worth even looking around for anything else.  Update: We switched over to use the Google Talk protocol with our Google Apps domain accounts, but still using Adium. Primary benefit: we can stay logged out of our other instant messaging accounts so we’re not pinged when we don’t want to be.
That’s it for now. I’ll keep this updated with the changes and other decisions we make. Of course, I’d love to hear if we’re missing out on something; a lot of these decisions were “path of least resistance” choices (as they frankly should be). But if we’re totally missing the boat on something, let me know!

7 Things you can’t think when brainstorming startup ideas

19 Monday Sep 2011

Posted by in Patents, Startups, Technology

≈ Leave a comment

Tags

, , ,

A couple weeks ago, I wrote up several things to keep in mind when you’re dreaming of your next (or first) Internet startup.  Now’s here’s the other side of the story.  Here are things you might find yourself saying or find your co-founder/best-bud saying during your fantastical dreaming.  If you do, stop, back up, and try again.

  1. “I just found out that Apple/Google/NewShinyStartup.com is already doing that; we can’t do that.”
    Everyone in the valley says this so often, it’s completely trite, but it still catches people all the time: ideas are pretty much worthless.  It doesn’t matter if someone else has already done it or is about to do it; if you think you can do it better, it’s still a good idea.And doing something better doesn’t necessarily mean that the product is better. You just have to believe that you can beat the competition in one business dimension: product (Apple), price (Walmart), marketing (Coca Cola), service (Zappos), etc.  If you can beat the competition in a business dimension that matters for your chosen product/service, then you’ve got something.Then there’s the flip side to this…
  2.  “NewShinyStartup.com and AnotherStartup.com are doing something like this. This validates the space.”
    Startups are a dime a dozen; they’re falling out of trees, coming up from storm drains, like zombies that you can’t shoot in the head.  And like zombies, they take up all available space, even it doesn’t make any sense. You don’t need me to rattle off hot-to-trot startups that claimed to find a new market only to run out of money in months.You need to do enough research to believe that your market exists and is big. That research might include other competitors in the space, but that is only one factor. Those competitors may be on to something or just may be smoking something…
  3. “We’ve come up with this cool new technology/design/product that does ____.”
    This one’s a bit tricky because that statement sounds pretty good on its own. That is, until you realize that you haven’t said that your market actually needs or wants to do _____. This is the trap of coming up with a solution that’s looking for a problem, and many, many, many companies with really smart designers/engineers/business people failed here.Remember all of those browsers that showed your search results in a mind map you could fly through? Cool demo, didn’t solve a problem. And my latest predictions on failure on this one? Latest Techcrunch Disrupt winner Shaker. But I could be totally wrong: I didn’t think Twitter solved any problems either.
  4. “You know what (insert major product/service here) needs? A better way to do ____.”
    This one’s also tricky, because what you may have discovered is an opportunity to disrupt a major player. Or you may have discovered a missing feature, not a product. It’s happened so many times: a better way to organize your contacts, absorbed into your email service; a better way to backup your computer, absorbed into your OS.My latest prediction on failure here? Lytro.  Very cool, but are you going to buy a camera from an otherwise unknown camera maker because of it?
  5.  “Our product will post to the user’s wall/tweet something out on the user’s Twitter account every time they finish a task and then all their friends will try it!”
    Just read that again. Now with feeling. Realize how silly it sounds. Move on.
  6. “We just have to get the product right, and it’ll take off!”
    A lot of companies, big and small, have somehow developed a build-it-and-they-will-come attitude. Homestead had a lot of that problem early on. I saw many examples of that at Intuit. We want to be product companies, and we want to believe that in the end, the best product (design and technology) wins.This thinking often sneaks up on you because you don’t think you’re that naive. But watch out for signs: if your growth plan is based mostly on word-of-mouth, you might be headed for trouble. If you’re focusing almost all your energy on net promoter scores and user surveys, you may not grow at all.So come up with a launch plan and a growth plan. And, please, “marketing” isn’t a bad word. And that’s coming from a CTO.
  7. “We’ve got a patent on it.”
    Can you tell I have issues with patents?
Got anymore? Any good examples of companies that failed for any of these reasons?

7 Things to assume when brainstorming startup ideas

30 Tuesday Aug 2011

Posted by in Startups, Technology

≈ 2 Comments

Tags

, , ,

This really is the fun time in a startup’s life; figuring out what you’re going to do.  You get to throw ideas around, you get to dream, and nothing feels like work. The sky’s the limit. And we don’t have to worry about silly things like failing yet.

While throwing around ideas in an early stage, you have to remind yourself to assume a few things:

  1. If you can imagine an interface for it, it can be built.
    OK, maybe we haven’t figured out teleportation yet, but in general, this is a great thing to remind yourself when your team starts spiraling into technical details.
  2. Disk space is infinite and free.
    Also not entirely true, but close enough to true and heading that way.
  3. Bandwidth is infinite and free.
    Like disk space, not entirely true, but it’s close enough for brainstorming purposes. I should add, though, that this is a good assumption for your online business, though not necessarily for your users, especially if your product/service is to be used on a mobile device.

    You may think that disk space and bandwidth isn’t free for little startups with no money. Even if it isn’t for you, it will be essentially free for your competitors. I can guarantee you Google and Facebook don’t think about those limitations.

  4. Patent? What patent?
    Obviously, don’t dump an idea because someone else has a patent on something similar. Note I said “patent” and not “copyright”. If your idea is based on plastering Mickey Mouses all over the place, good luck with that one.
  5. Consumers don’t worry about security too much.
    Unless your idea is specifically about security, I wouldn’t worry about users’ apprehensions about security. Mint.com got millions of people to give them their most sensitive credentials (financials) and weren’t backed by a big behemoth with a strong security reputation. People will give you whatever information you want, as long as they see value in your product and you look trustworthy.
  6. You can get more investment than you think.
    The VCs aren’t going to throw money at anything, but they all want to find the next big thing. If they put $100K into your company, and you get acquired for $10M, they’ll be happy for you, but they’re not going to do any backflips. They’re dying to put in $100M and you getting acquired/IPOing for $10B. You just have to give them a reason to do it.
  7. Think bigger.
    That all leads to the most obvious, but still understated point. Think (realistically) bigger.
Definitely leave comments if you have more.  I’ll follow this up soon with the 7 (or so) things I think you can’t assume when brainstorming ideas for your next startup.

Lean Startup in a Large Corporation

05 Wednesday May 2010

Posted by in Intuit, Software Development, Startups, Technology, Web 2.0 Expo

≈ Leave a comment

Tags

, ,

I’ve seen Eric Ries speak before; Scott Cook brought him into Intuit to go over his Lean Startup message (http://www.startuplessonslearned.com/2010/05/lean-startup-intensive-is-tomorrow-at.html) that he’s been pushing around. It’s really good stuff and as someone who’s made all of the mistakes he talks about I highly recommend it.

In the keynote he gave at Web 2.0 Expo yesterday, he added something I don’t remember seeing the first time. He said the goal is to minimize the total time for one “pivot” cycle.

The important thing is the definition of a “pivot”. Paraphrasing and interpreting, a pivot here is a change in direction caused by something you’ve learned about your business, be it your market, product, customer, whatever. And there are three steps in the cycle: build (the product), measure (the result), and learn (the reasons behind the result).

This helps illustrate the problem I’ve experienced in a large company. Minimizing time through this loop requires cross functional thinking and objectives that is ubiquitous in startups but is disappointingly rare in larger corporations where employees tend to be over-specialized.

For instance, at Intuit, there is a lot of focus in the engineering community around faster build and launch cycles. It’s all about continuous deployment, unit testing, server virtualization, etc. All good stuff, but it’s all focused on pure product cycles and not business cycles. Tracking is an afterthought.

For many designers and engineers, there’s a mental milestone (and thus, relief) when the product/version/build launches. The real milestone for the business (and so it should be as well for all employees) is when we’ve learned what we need to learn and made the right business decision on the next step.

We’re getting better. Tracking and data are beginning to play a larger role, and business interests are creeping their way into product conversations (“No!!!”). The key for any org, large or small, in minimizing the time through the loop is focusing all employees on the higher level business objective and Eric’s framework is a great way to have that conversation.

The Commoditization of Technology

24 Wednesday Mar 2010

Posted by in Software Development, Startups, Technology, Uncategorized

≈ 4 Comments

Tags

, , ,

I’m a software engineer by training, somewhat by practice, and, in a sadly diminishing way, by mindset.  Maybe some of the real engineers around me can back me up on some of that. (Please?)

So it is with a heavy heart that I say that software technology has become a commodity.  Evidence is everywhere:

  • Increasingly, technical work is contracted out to third-party developers, sometimes offshore.  “Here’s a spec; how cheaply can you build it?”
  • Platforms are getting faster every day.  You can stand up a Rails site now orders of magnitude faster than what you could do just a few years ago.  Hell, you can configure a WordPress site to do almost anything you want orders of magnitude faster than a Rails site, for free.  Why stop there?  You can pick-and-click your way to a Ning site orders of magnitude faster than configuring a WordPress site.  (I know all those technologies/platforms don’t serve the same need, but you get the idea.)
  • Software technologist supply is increasing; i.e., there are more software developers now than ever.  The ease of building things is dropping the bar so low that a 17-year old kid can build Chatroulette in a few days.  Culture and technology is changing so that everyone can be, and is becoming, a technologist.
  • Costs of apps are dropping.  Mobile apps cost $0.99, not per use, not monthly, but once ever.  That’s because it takes a 17-year old a few days to build it.  If you make $500 on your app, you’re ecstatic.

There’s nothing terribly radical about this observation; I’m sure it’s out there everywhere.  It is very interesting to me, though, to take it to its logical conclusion.

Imagine if technology becomes so easy, so ubiquitous, so accessible that if you can imagine it, you can build it (or have it built) for nearly free.  I think we would all agree that that’s where we’re headed, amazingly quickly.  How would the software/internet industry change?

My take (thanks for asking) is you end up with something like the mass-market clothing industry (forget haute couture for this comparison).

Stick with me for a bit. Now, I won’t pretend to really know the clothing industry, but my naïve view is that it’s driven by designers and marketers.  The “builders” are outsourced to the cheapest suppliers possible such that if a designer can imagine it, they could have 20,000 units drop shipped to their warehouse in a week.  The success of a designer or a retailer or a brand is never about whether it can be built, or how efficiently it can be built, or how cheaply can it be built, but is only about whether enough people will buy it.

You can already say the exact same thing about the software industry, and I run into this all the time at Intuit.  An engineer or architect will have or hear about an idea and jump straight to the standard question: how are we going to build it?  They start thinking about data models, class structures, engineering processes, etc., stuff that I personally love arguing about.

But whenever I’m in these conversations I ask the same questions: what is the big unknown about whether or not this will be a successful idea? “Can it be built?” or “How efficiently can it be built?” is almost never the issue.  Put another way: if you ask the engineer/architect if they think it can be built, their answer is always “Of course”; if you ask them if people will actually use it/pay for it, the answer is typically “I don’t know”.  Voila, your big unknown.

I’ve rambled on for long enough, but I’d love to know what people think.  I actually have many, many more thoughts of what the software/internet world would be like with free technology, but strangely, they all have one common theme: we’re here already.