SmoothSpan Blog

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

Archive for September, 2010

6 Bullet Points of Shame for BI Endeavors

Posted by Bob Warfield on September 13, 2010

Fellow Enterprise Irregular Vinnie Merchandani’s “You Can’t Handle the Truth” post on BI is excellent.  He identifies what I call 6 bullet points of shame for BI endeavors that are brilliantly on the money:

1.  Most companies don’t seek out primary, real-time data.

Rinse that same old data through 8 or 10 times, surface it in multiple systems, and then pat yourself on the back because the answers all match.  That’s the GIGO pig wearing a whole lotta lipstick.

2.  Most enterprises are too impatient to deal with contradictory models.

If you are doing it right, your BI systems are going to give you some contradictions.  Instead of realizing the contradictions are gems that tell you something you didn’t already know, most organizations mobilize against them out of fear.  Somebody has to be wrong.

3.  Most enterprises keep looking for the elusive “universal report writer.”

Yes and it shall be 26 dimensions of spinning hypercube doom!

Swiss Army knives are neat.  The more blades, the neater.  Ever notice how many of them sit in the drawer when you get done looking them over?  Reach for the right tool, not the right-for-every-purpose tool.

4.  Most analysts focus on slice and dice, not decisions. Most vendors sell slice and dice.

That would be the BI equivalent of confusing activity with results.

5.  Historical data keeps exploding and is mostly worthless.

Is the answer that we keep too much worthless data, or not enough?  Something is clearly wrong.  If nothing else, great care must be taken that long term historical data is actually what it seems to be as we subtly change over time how the data is gathered, cleansed, and what it means.  So many systems lack Effective Dates, for example.  They cannot see how the data looked at a particular point in time, only how that point in time is reported today.  Those are very different things as anyone who has read 1984 and knows about rewriting history books can tell you.

6.  Few enterprises have the right analytical talent

I was musing not long ago with VC and fellow EI Evangelos Simoudis that very few people actually know how to ask questions in a way that solves problems.  It is something of a Sherlock Holmes conundrum.  All the data is available.  It is shatteringly obvious once someone connects the dots.  Yet, very few know how to step across the stones that peek above the raging torrent of data to get to the other side where the answer lies without falling in and getting wet.

“You see Watson, but you do not observe.”

Check out Vinnie’s post.  Lots more than what I’ve commented on here!

Posted in business | Leave a Comment »

Software Patents Should Be Abolished

Posted by Bob Warfield on September 12, 2010

Still think patents are about protecting the little guy?

The USPTO now takes an average of 6 years to grant a patent (hat tip to Techmeme).  In the long run, you’ll likely get your patent since almost anything is patentable these days, however outlandish it may be.  But in the long run, we’re all dead, and six years is forever to a small innovator hoping the patent will protect it from some big interloper.  OTOH, the asymmetrical nature of costs for plaintiffs (lower costs) versus defendants (very high costs) makes it easy to stop innovation dead in its tracks with a few overly broad patents in the hands of unscrupulous patent trolls.

Software patents should be abolished.  They’ve gotten to be a travesty of what they pretend to be, and much as we might like to try to protect the “little guy” innovator, they do no good for that purpose at all.  Largely, they fatten the pocketbooks of patent trolls and tax innovation to death.  If not abolished, then at the very least they should be “use it or lose it.”  If they’re not part of an ongoing business of some minimum scale (small enough for the little guy but large enough not to be abused), they go to the public domain.  Given that it takes 6 years to get the silly patent in the first place, the minimum scale ought to be at least half a million dollars in revenue for the preceeding 12 months.  If you can’t get it to half a million in revenue after 6 years, it’s dead, Jim.

Posted in business | 2 Comments »

Wrapping Up the Warfield/Lucchini/Flex/Javascript Smackdown

Posted by Bob Warfield on September 11, 2010

Come on, admit it, we all love a good smackdown!  In response to my article about Flash coming back to the iPhone, Bill Lucchini wrote a well-reasoned rebuttal:  5 Reasons Adobe Flex is Doomed.  Here they are, paraphrased for brevity:

–  Flex creates an unnatural and dilutive web user experience.

–  Flex performs poorly relative to Javascript.

–  Steve Jobs argument that you can’t trust a 3rd party platform to reliably keep up with the features of the underlying device.  This results in sub-standard apps in Steve’s mind.

–  Bill doesn’t buy the “apps are where it’s at” argument.  In his words, “Some things like games seem much more appropriate as apps, but for many apps, mobile web seems more appropriate.”

–  AJAX toolkits are so much better these days as insulating developers from platform and browser issues that the relative advantage of Flex as eroded.

Point-by-point, let’s have at it!

Flex creates an unnatural and dilutive web user experience

Sorry Bill, I’ve got to call total BS on this.  Flex and Flash have been used to create some totally crazy web sites that are very annoying to use.  But that just reflects the poor UX taste of those authors.  Flex is perfectly capable of creating very mainstream UX as well.  As you would expect for a platform created with tons of designer (e.g Flash/Flex) as opposed to hacker (e.g. Javascript) input it’s set up to be able to push the envelope of User Experience, and some designers love to do that (been to a Museum of Modern Art lately?).

BTW, you can create crazy UI to your heart’s content in an AJAX app too, it’s just a lot easier to do so with Flex.  I can’t hold that against the platform.

Flex performs poorly relative to Javascript

Bill saw this in the form of complaints from his last gig with the Intuit Partner Platform.  I think it is important to look at his money quote for the insight:

Despite our research that showed that Flex had really great performance characteristics, we saw development team after development team struggle to get their apps to perform as fast as they needed to…

The italics are mine because I wanted to call out that obviously Intuit’s own development staff anticipated this and concluded there wasn’t a problem with Flex.  In fact, there isn’t.  I write 3D graphics code in it for CAD/CAM applications that just simply wouldn’t even be feasible otherwise.  Flex looks to me like it can support more of the cpu capacity of your machine because of how the Flash engine works, and the JIT compiler is excellent.  I spent time reviewing tons of benchmarks via Google, and didn’t find any counters.  I will tell you that some of the Flex components can bog down.  It’s hard to use the TextArea with files of many megabytes, for example.  OTOH, there are straightforward ways to work around that.

In the end, I really don’t buy the argument that Flex is slow.  But, I will tell you what argument I would buy:

It takes a better grade of developer to get the best performance from Flex than it does from Javascript.  If you have a developer who is up to speed, Flex is faster.  If you don’t (well if you don’t, you may be doomed anyway), it’s easier to get Javascript to perform decently, in part because the lesser developer won’t even be tempted to do a lot of things they are tempted by in Flex (image manipulation, fancy video, and the like are all performance intensive).

Sorry, I know “them’s fightin’ words” to someone out there (probably annoys both camps, actually), but Flex has a couple idiosyncracies that can be both strengths and weaknesses.  I also know I can’t leave that grenade on the table sans pin without elaborating a bit. 

There are two areas that seem likely to trip up less capable developers in Flex:  the validation model and the elastic racetrack.  If you properly harness both of them, you can get pretty amazing performance from your application–much better than Javascript in my experience.  If you don’t, and you try to ask the application for too much, things can get so bad you will think the app has crashed.  I want to emphasize that for most garden-variety work, you’ll never have to worry about it, and, validation and the elastic racetrack are not secrets or arcane.  But, if you’re making the app struggle with either large data volumes or a lot of manipulation pushed down onto the client, you have to deal with them properly.  I don’t want to spend a lot of time here, in what is really more of a business blog, debating the technical details behind this further.  I have been toying with the idea of starting yet another blog for the really Geeky stuff, but I don’t know that I have time for a third blog!

Bill doesn’t buy the “apps are where it’s at” argument

I broke this out into a whole other blog post, because it is a fascinating and deep topic.  Suffice it to say that Bill and I seem to agree both models are needed.  Where we may differ is in how often the app model has to come up, and perhaps on the relative monetizability of the two, which I also think is very important.  To paraphrase, the point from the other post is that the app model comes up a lot.  You can’t just shoehorn any old thing into a browsing experience and expect a good experience.  There are sound cognitive reasons why sometimes an app is better.  I argue that if what you’re about is creating something, the manipulative orientation of an app is far more intuitive than the navigational orientation of browsing.  

Apps are not just about games, Bill, though they are another excellent example.  All that stuff you’re browsing around in with your web experience had to get created somewhere, and that somewhere is best expressed as an app.  Sure, that app need not be installed on your machine AIR-style (though many will benefit from that and AIR is one more thing Flex has over Javascript that is very important), but once you pass through the login gateway (ala your favorite SaaS app), it had better start looking less and less like web browsing.  As it does so, it will get easier and easier to deliver a great User Experience via Flex versus Javascript.

The other thing about apps is people are predisposed towards monetization of them versus the browse.  It’s very easy for a paid for browsing experience to cross the line to looking like a pay wall, and that’s not a happy thing.  It’s been tried and found wanting. 

I do notice that Bill isn’t arguing Javascript is a better tool for building apps, so there again, we have a point of agreement.

 AJAX toolkits are so much better these days as insulating developers from platform and browser issues

Bill, I just haven’t seen much evidence of this, either in my recent Helpstream experience where it was a pain, or in the conversations I have daily all over the Valley when this topic comes up, let alone in the further research I did before writing this post.  AJAX is a pain in the keyster for cross-platform and cross-browser.  Ain’t no two ways about it.  There are some limited cures like GDT that help, but GDT is more Java than Javascript as far as that cure goes, so I’m not buying GDT as portability saviour.  Moreover, none of the AJAX toolkits are nearly as complete as Adobe’s toolset and Flex framework.  Not even close.  So even in the best of circumstances and giving the full benefit of a doubt, you’re going to pick an AJAX framework, and then all the code you still have to write that isn’t handled by the framework is still going to be very platform and browser dependent.

I was recently chatting with VC Bruce Cleveland at Interwest about this very topic and he was lamenting that no sooner had we reached a point of write once run everywhere for the server and on PC clients than the mobile world was plunged back into the old “port for every platform with long-term maintenance pain” headache we’d just gotten away from.  His portfolio was not very happy about that.

You can’t trust a 3rd party platform to reliably keep up with the features of the underlying device

I had to save this one for last because it is so richly ironic it is silly.  Here is Steve Jobs lamenting that 3rd parties might make arbitrary decisions that affect the User Experience on his platform.  That would be the same Steve Jobs whose arbitrary decisions (among many many other deleterious effects over the years) kicked Flash right off his platform and then suddenly brought it back again.  Or the Steve Jobs that won’t really give Adobe the same access to the underlying hardware to make Flash Player better as they can get on other platforms.  I have to admit, if I was Steve Jobs, I would be terrified at the prospect of doing business with myself!

But everyone isn’t Steve Jobs.  In fact, most are not, and most think about products and going to market very differently.  Some actually understand that platforms have to be Switzerland.  More importantly, as my first post that started this smackdown made abundantly clear, it is competition that benefits the consumer, not arbitrary decisions by Steve Jobs, Adobe, or any other entity, however enlightened and brilliant they may be.  If the platform or toolset owner ignores the wishes of its audience, and there is competition, that platform owner will lose. 

In this case, I think our little smackdown shows that there is wonderful healthy competition between Flex and AJAX/Javascript/HTML 5.  Flex is not the incumbent or default choice by any stretch.  It is not the lowest common denominator “easy choice.”  It takes a little more skill to really make it sing.  But I don’t think it is anywhere close to being “doomed.”  Markets like choices.  It’s why we have chocolate (Flex) and vanilla (Javascript) or BMW (Flex) and Lexus (Javascript).

One last point I want to raise is that we may be having the wrong smackdown.  If I have to create an app (or a particularly rich browsing experience), I want to use Flex to do that.  It really is a “LAMP stack for UI”.  But let’s go back to the Apple mobile platforms.  If I couldn’t use Flex there, I think the Objective-C environment, from all I have heard from developers, makes a much better solution than Javascript.  Perhaps from that standpoint, setting Flex and Javascript at each other’s throats is picking the wrong battle.  There’s a whole ‘nother post here somewhere to talk about these new webby apps and something I call “Fat SaaS”. 

Thanks to Bill Lucchini for the excellent debate.  He raised a lot of interesting points and sharpened my thinking.  In many ways, I think we are in peculiar agreement!


Posted in user interface | 8 Comments »

Browsers for Navigation, Apps for Manipulation, Social Media for Relationships

Posted by Bob Warfield on September 10, 2010

Some say the online world is headed for apps because people prefer apps.  Some say they hate apps and prefer everything to be as browser-like as possible, even if that means a return to 3270 green-screen UI.

I got to thinking about this issue as part of my response to Bill Lucchini’s rebuttal of my recent Flash article.  I’ll provide most of my response to Bill in a future post, but this apps versus browsing thing deserves a deeper drill down.  Bill doesn’t buy my argument about apps.  He says:

I don’t buy that “apps are where it’s at”  (  I think that the reason apps are surging is because of app stores.  As you know, building a business is only partly about the product.  If you don’t have a great channel to reach your customers you won’t get anywhere.  Mobile web implementations can be very compelling and so I think apps are winning because they have a channel.  Some things like games seem much more appropriate as apps, but for many apps, mobile web seems more appropriate.  Now, if we can deliver mobile web through an app store channel, I think you’ll see a much better split.

I did mention that apps were more monetizable, and I think Bill picked up on that, but it isn’t the monetization alone that’s driving apps.  People actually like them quite a lot.  And, I think if you try to have web pages that are behind pay walls, that is fraught with peril as has been discussed in so many other places.  Pay walls have been tried and found wanting because they just don’t feel right. 

What is that fundamental difference between apps and browsing?  How do we know when to pick one or the other so it will feel “right”?

We are the end result of evolution, despite a certain amount of protestation from some quarters.  As such, our minds have very powerful patterns active in them that were set into place long ago.  It is no secret that a powerful mnemonic device is to tie the items you’re trying to memorize into a memory of a physical place.  Try to make it as concrete as possible, remembering how that place looks, how it smells, how it sounds, how it feels, and how to get there.  Lock it into the senses.  This was a trick of the Ancient Greeks and Romans, who would talk about a journey they would take on foot frequently.  You have a detailed memory of such a journey and can position the items you’re memorizing at specific places along the path to help you remember simply by playing back the journey in your mind’s eye.

The understanding we seek about applications versus browsing is tied to these sorts of mental constructs.  Browsing is essentially an act of navigation, and navigation is something that got baked in as a basic task our minds are well constructed to grasp long ago.  The more the metaphor can fit the idea of going to a place, the more comfortable it is.  Hence URL’s are addresses and we can bookmark places to return to.  We “search” for the right places to browse.  It all hangs together very very well.

Yet navigation is not the only such hardwire capacity our minds have available.  Whether we’re flaking obsidian to make spearheads for hunting Mastodons or polishing up a PowerPoint for hunting Venture Capital (it’s a pretty scary process up until you succeed either way!), we are making something.  Making things requires manipulation.  It is an act of manual dexterity, at least when we think of which part of our brains are wired to deal with it.  As you use editors and especially things like drawing programs, it is surprising how much these acts of manipulation come into the picture.  We cut and paste.  We borrow tools from tool palettes that have to be picked up and carried over to the work.  We even scrub away physically at the work with various kinds of these tools.  It really isn’t about navigating our way along a journey, it’s about transforming some sort of raw material (a file, an image, a blank canvas) into something else of (hopefully) higher value.  The more the software captures this manipulative character of the task, the more naturally we just snap into the model and start using it.

I commented on Bill’s post that while I would be responding (and I owe a response to the rest of the post), I suspected we would wind up agreeing in various peculiar ways.  This is the first such.  Bill is right that apps are not going to take over from browsing, but I am also right in that all user Experience should not be transformed into browsing.  You have to pick the model that fits best.  It may be, BTW, that Flex is best at manipulative or non-browsing tasks.  This may be why when a web site gets too “over the top” with Flash, it’s not a happy thing.  It just feels like too weird an experience.  You don’t need Flex to deliver the browsing experience (though it can), because HTML is good enough.  I’m fine with that, but HTML is not so hot at all with the manipulative app experience.  It takes the mountain of hacks we call AJAX to even begin to get there, and it is often not a very happy journey.  More on our other points of contention in a future post.

Meanwhile, I’ll leave my last example, Social Media and Relationships as an exercise for the reader.  Surely, relationships among people are another area that is strongly hardwired into our “mindware” since very early times.  It has to be tied up in the very creation of speech itself.  Lots of abstract thinking there as well.  And in fact, Social Software is not very much like either browsing (navigation) or apps (manipulation).  It’s another category, and a very interesting and fairly recent one.  I would say we still have a lot to learn about how to make it feel completely natural, but at the same time, it’s come a long ways and feels pretty good.

What other deep patterns of our minds are out there waiting to be exploited for new kinds of User Experience?  Augmented Reality as the act of seeing by scanning our environment?  How about hunting and gathering?  There has to be quite a lot of untapped potential yet to come!

Posted in user interface | 2 Comments »

Android is so Open, it got Flash Back on the iPhone

Posted by Bob Warfield on September 9, 2010

How ironic.  On the same day that MG Seigler was penning one of his characteristically snarky posts (snark is one of the ways Techcrunch pursues its Follower Economy) about how Android isn’t really open, Apple announces the return of Flash to the iWorld.

Adobe’s stock price is cooking this morning as a result (I wonder if 10% of Adobe’s revenue is even traceable to Mobile Flash? Maybe), and I have to admit, being the Adobe Flex fanboy that I am, I’m chortling over my morning cafe mocha too!

A couple of things to talk about on this news.

First, why do I award credit for this to Android?  Peeps, come on–Steve Jobs didn’t just wake up from his hissy fit about Flash (thanks for that link, Larry!) and decide, “Oh darn, I was wrong.”  No, no, no, not happening.  Something grabbed Steve Jobs by the throat and shook him right out of his reality distortion field.  That something was competition.  Not only has Android been selling extremely well, but the Bastiches have even been using Apple’s, “Hey, we’re not the Man, we’re Cool“, marketing tactics.  Dude, what’s next, Android thinking differently (I can’t see Google having the populist moxie to get that grammar wrong the way Apple did, all those PhD nerds just couldn’t handle it).

Competition is what forced this change, MG Seigler.  Android’s “We’re more open than open can be” pitch was working.  In fact, this Apple announcement sweeps away most of what one would’ve argued were barriers to openness.  It isn’t just Flash that benefits.  Besides which, a heck of a lot of people love their iDevices (3 out of 4 of our whole family have iPhones and we share an iPad) but want Flash access.  Forget movies, they can change.  I can’t even see the stock graphs on Yahoo because they’re Flash.

Gordon Gecko was wrong when he said, “Greed is good.”  It pains me as a person often described as being slightly to the right of Attila the Hun to reach that realization.  What Gordon should have said was this:

Competition, for lack of a better word, is good. Competition is right, Competition works. Competition clarifies, cuts through, and captures the essence of the evolutionary spirit. Competition, in all of its forms; Competition for life, for money, for love, knowledge has marked the upward surge of mankind.

And here, it has let Flash back into the iWorld.  Good job, Android!

Second, I want to take a few lines to talk about why I think Flash is so important.  Much has been made of how the LAMP stack has transformed web development.  Companies can now create products without requiring millions of dollars in R&D expense.  But the LAMP stack primarily benefit the back-end, in other words the server-side.  What about the client?  What is the equivalent of a LAMP stack for client development?  Unless you’re a tremendous fan of 3270 green screen UI, and I know some are even in this day and age, you need the equivalent of the LAMP stack to efficiently product great clients.  Here is the secret:  Flash is the LAMP stack of UI development!  Yes, there are some Flash wannabes out there, specifically Silverlight.  So what?  Microsoft would love for .NET to be the LAMP alternative too.  Flash is it for these simple reasons:

–  It is ubiquitious.  Aside from the iWorld, and that changes today, the vast majority of the world has already installed Flash and it runs in their browsers.  That’s 99.3% penetration in mature markets.  Essentially, everyone has it.

–  It is a write once run anywhere tool that really works.  You write your Flash code and all 99.3% of users can run it without you needing to give it another thought. 

–  AJAX and Javascript, the alternative, is riddled with browser dependencies.  Any dev team that has tried to get even simple rich UI like a Wiki-style rich text editor to work understands this.  It’s a huge overhead to keep up with all of these browser dependencies, and a constantly moving target.  With Flash, Adobe does that work for you so you can get on with building your app.

–  Flash has amazing graphical power and Job’s protestations to the contrary is actually quite fast.  People are writing 3D games in it, for example.

–  Flash can transcend the browser to create apps via AIR, and as we’ve discovered in the mobile world, apps are where it’s at.  Google used to offer Gears for this purpose, but pulled the plug on it.  Silverlight?  Hey, competition is good, bring it.  But they aren’t really there yet.

This all adds up to something that’s very important to the ongoing evolution of User Experience across all devices.  Simply put, Flash deserves to keep going and to be available on all those devices.  Thank you, Steve Jobs, for relenting, even if it took a gun to your head.  Adobe: now is not the time to rest on your Laurels.  There are some issues here and there in the House of Flash that you still need to attend to.

Posted in apple, platforms, ria, software development, strategy, user interface | 6 Comments »

Google Instant Search = Instant Echo Chamber

Posted by Bob Warfield on September 8, 2010

The Internet is a Mighty Echo Chamber, and with one fell swoop, Google Instant Search has added a big ole’ Marshall Stack to turn the Echo levels all the way up to 11

Google reports that Instant Search will save 350 million hours of user time per year.  What isn’t reported is how it will cut off the Long Tail where it starts by promoting banal sameness for searchers.  This is great for Google.  After all, keeping up with every last oddball search someone may want to do costs them more infrastructure money.  At their scale, it is significant.  So, corralling everyone into fewer more common searches is a good thing. 

“What the heck is Bob on about here?” you ask.  Well Google Instant Search is adding more people to the ranks that the lovely lady with the sledgehammer is trying to shake up.  Let me explain:

The Long Tail is a delicate thing.  We love the romantic notion that the Internet enables the Long Tail, and it does, to an extent.  But it is also toxic to the Long Tail in many ways.  The Long Tail is all about access, awareness, and distribution.  There are many strange and wonderful things waiting for us (that link from this fascinating Seth Godin post), if we can explore the Long Tail.  It makes the Internet a much richer place.  Some view them as no more than tourist traps along the Information Superhighway, but if you hunger to Escape the Follower Economy, they are much beloved oases from the Madding Rush that is the Crowd and Internet Homogeneity.  The Internet enables the Long Tail by making it possible for people to find these oddities in large enough numbers that they can survive.  Simultaneously, the Internet provides the means to kill the Long Tail by siphoning off that traffic through the Echo Chamber.  The Echo Chamber amplifies homogeneity.  It gives power to the most popular at the expense of the more obscure.  It homogenizes and pasteurizes away what’s interesting, wholesome, and unique in favor of what’s trendy, salacious, and boring.

How does Google Instant Search contribute to the Echo Chamber?  Well anyone who has bothered to look through keyword information on their website will see that people find sites through a bewildering array of queries.  Some might even say much of it is accidental, but looking over these lists gives a wonderful window onto how your content is found and perceived by others.  How often do we get to commit such telepathy with our followers?  Rarely.  Yet, Instant Search will substitute popular searches for those individually created.  More people will be driven off the back roads search trails and onto the superhighways that lead to whomever controls the first few search results connected to the Instant Searches Google is recommending at the time.

A few people are getting past the breathlessness of simply reporting what Google had to say, and they’re seeing with good insight what it really means.  Steve Rubel (hat tip to Techmeme) reports it is the end of SEO.  Steve is right in his conclusion about SEO, but not about why.  He provides the money quote from Google:

“Smarter Predictions: Even when you don’t know exactly what you’re looking for, predictions help guide your search. The top prediction is shown in grey text directly in the search box, so you can stop typing as soon as you see what you need.”

From that, Rubel argues:

Here’s what this means: no two people will see the same web. Once a single search would do the trick – and everyone saw the same results. That’s what made search engine optimization work. Now, with this, everyone is going to start tweaking their searches in real-time. The reason this is a game changer is feedback. When you get feedback, you change your behaviors. 

The trouble is, we may paraphrase the Google Smarter Predictions quote as, “Even when you don’t know exactly what you’re looking for, we will push you in the direction of what the masses are looking for.  We will perturb search in the direction of sameness.” 

If, instead of feedback changing behaviors to be less predictable as Rubel implies, it actually makes the behaviors more predictable because we are guided to sameness, SEO is still dead, but for a much less interesting reason.  This sameness makes it much harder to game.  You can no longer count on the Long Tail queries to help you out when you can’t secure the top spots on the common queries.  It is a repressive tax on the Long Tail, in other words.

Is it good or bad for Google?  According to one of the commenters on Rubel’s post, Google has said (I don’t have a better reference) that 75% of searches are common and 25% are unique.  That’s certainly true if I look at the logs of access to my web properties via keywords.  One can only assume that Google views this as a margin play.  If they can cut out the Long Tail which is bid low click prices, and get more people flowing on the Short Tail, the 75%, that Short Tail traffic now has to pay more.  It’s like eBay getting more people to bid on fewer items.  Supply and Demand.  Perhaps their analysis is that they own so much market share and the volume of search is growing so slowly that it’s time to crank the margins.  Whatever the reasons, I am saddened at the inevitable strengthening of the Echo Chamber at the expense of the Long Tail. 

I’ve written on the Echo Chamber many times in the past (Mediocrity Amplifier, Echo Chamber FailLouis Gray Resonation, Deconstructing Techmeme), and all of it negatively.  For me, the most interesting search results are almost never on the first page Google hands back, nor do they show up on my first query.  I religiously ferret out blogs that are no of the Echo Chamber Aggregator variety.  Those are the ones I read.  The EC Aggregators go into a single Reader folder and I scan them to make sure I haven’t missed something of rising popularity.  I do miss things with my Long Tail readings, but not much, and the effort I have to spend just sorting through the Echo Chamber is barely worth it.  Those are the first items I will delete if they sit too long without being read.

Google, while I know there was no malice with forethought, this Instant Search thing just might qualify as Evil when we look at the consequences…

Related Articles

“The normative influence of Google just got a lot stronger.”  — Exactly what I’m saying about amplifying the Echo Chamber!

The status of the long-tail query is my biggest concern in the paid search world.” — Amen.

Posted in user interface | 13 Comments »

Contrarian VC’s: Good Idea!

Posted by Bob Warfield on September 7, 2010

VC’s have a real reputation for having a herd mentality.  If you are a VC, don’t get offended, you know it’s true.  Heck, I’ve had a number of you joke with me about it.

For this reason, I read with interest Fred Wilson’s musings about contrarian investing.  Fred talks about how momentum investing can be successful, but he can’t wrap his head around it.  Funny thing is, the herd mentality that is VC is all about momentum investing.  As a group, they want to be in deals that can only reach the valuations they crave by being momentum plays.  They thrive on one company-specific bubble after the next.  Yeah sure Facebook is really worth the gross national product of a small European nation.  They’d like to get there a little before the crowd when they invest, but not too much before.  And they want to get out before whatever the bubble is bursts.  If that ain’t momentum, I don’t know what is.

Fred says he doesn’t see how to be a contrarian because he does web investing, and the contrarian view would be to sit on the sideslines.  Yet, his limiteds don’t pay him to sit on the sidelines.  They want to put their money to work.

Yet, in the herd world, there are many many ways to be a contrarian.  Here are a few:

–  Be a Value investor instead of a Momentum investor.  A VC once told me they saw Enterprise deals as being higher likelihood with smaller outcomes and web deals as lower likelihood with much larger outcome.  Instead of betting on the next Google, Facebook, or Twitter, why not go after more of a Value situation like an Enterprise deal?  Of course that means figuring out monetization right up front and not betting that if you can get enough eyeballs you will win.

–  Be a stage contrarian.  Some time in that last 5 years or so, VC’s quit investing early.  Most won’t admit it, but none of the 5 software startups in my career could’ve been funded by VC today because they all raised significant money on a slide show and a team.  Nowadays you better have a product and some traction.  Largely, this has just opened the door for Angels and then Super Angels which are predictably starting to cramp the style of VC’s by competing with them.  Guess what, those guys are your contrarians and you created them by leaving that market open.  If there’d been more VC contrarians, there’d be no room for Super Angels.

–  Be a space contrarian.  When one prominent VC starts up a green energy practice, pretty soon they all do.  It is fascinating to watch these fads go by.  I remember one season all the big funds had to have a partner who had been an Executive Recruiter.  Made some sense, after all part of what they do is invest in teams, but wow, when every firm gets one, it sure isn’t contrarian.  Which spaces are out of vogue?  Maybe they’re worth looking into?

–  Be a market contrarian.  Talk to enough VC’s and you hear a lot of common patterns.  They mostly hate the SMB market, for example.  Fascinating.  I love it.  It is much better suited to SaaS than Enterprise, I can reach it and influence it more effectively online, there are a heck of a lot more of them to sell to, the market is way less competitive, and therefore, the bar is lower.  My cost of selling can be lower because I don’t need a herd of Rolex and Bally loafer-clad scratch golfing sales maniacs to close the business.  But hey, VC’s hate that market because they’ve lost a lot of money there over the years.  Maybe its time to figure out why and whether the world has changed subtly (it has because of the web) in the interim.  After all, with SMBs creating most of the jobs, how can they not be an interesting and vibrant market to invest in?

–  Be an executive contrarian.  VC’s love to have Sales Guys for CEO’s.  It’s not exclusive, there are some others, but given a preference, they looks for a Sales Guy first.  It sounds like a good idea.  After all, isn’t selling what its all about?  Depends.  Sales Guys have a huge advantage: the talents that make them successful are a good proxy for a good leader.  But, and this is a big “but”, that proxy is often for a later stage company.  Sales Guys are often not so hot at finding a product/market fit.  Product and Marketing Guys are better at that.  Maybe look for Product/Marketing Guys who are also great leaders?  I saw a fascinating presentation by Moneyball author Michael Lewis.  He tells a story of a hedge fund that prefers to invest in companies run by CEO’s who are not good looking white males with an Ivy-league education.  Why?  Because if they are succeeding, they have to be doing something out of the norm.

–  Be a Moneyball contrarian.  Hey speaking of Moneyball, VC funds always present the picture of needing outlandish returns on outlandishly large investments.  This creates utility curves that are way out of whack with entrepreneurs.  When every fund raised needs one or more Googles, it means you push every deal in the fund to swing for the fence.  This is so Moneyball (I’ll let you read the book if you haven’t already to figure out why I say so).  You’re forcing these big deals to make up for the large number of big craters.  Instead of a few deals making 100:1 or whatever the ratio is on big dollars invested, why not find some strategies that are more reliable at 3 and 4:1 returns?  Focus on the single or the double.  It worked great for Moneyball.  Hey, imagine a firm that had a wonderful track record of creating $40-50M exits with the occasional $100M.  Founders are making $10M, it takes a lot less time than the $1B market cap IPO game, and low and behold what many bootstrappers are saying–it’s actually more likely to happen.  Imagine a firm that does that reliably and consistently with fewer risky cratered deals.  That has to be a good thing.  Oh wait, that’s what those darned Super Angels are doing!

Anyway, it ain’t hard to be a contrarian VC.  At least not in terms of finding the ideas for how to do it.  Instead of being such pattern matchers and looking for deals that are the same as what you just chatted with your VC friends at lunch about, how about finding some deals that are wildly different and then asking yourself, “Now why can’t that succeed?”  It may not succeed, but that won’t be just because it’s different.  Kind of like, “Just because I’m paranoid doesn’t mean the whole world isn’t out to get me.”  Contrarian thinking is hard!

Posted in business, venture | 7 Comments »

Escape the Economy of Followers

Posted by Bob Warfield on September 5, 2010

I came across three blog posts recently, all completely unrelated, and yet they tickled the same part of my brain:

–  Jim Louderback’s Screw Viral Videos asks whether Viral Videos really have any value whatsoever?

–  Fred Wilson’s Apocalypse and Bubbles:  Muses on Peter Thiel’s long diatribe about how the world economy has only two outcomes, total globalization or world war.

–  Michael Arrington’s Blogging and Mass Psychomanipulation:  Michael’s typically (almost banal it is so consistent) provocative piece (complete with photo of adoring Nazis) on how bloggers learn to manipulate crowds.  The subtext sure sounds like he’s tired of the tawdry behavior of those crowds, but Michael it may be that your tactics have attracted a certain kind of crowd that has self-selected for your content.

What can a post about Viral Videos, Economic Bubbles, and Mass Psychomanipulation possibly have to do with one another?  Eventually, that tickling in my brain kicked out an answer:  they are each about an Economy of Followers.  The order I read these in really facilitated my understanding of the Economy of Followers.  In fact, it woke up what had been a nascent, but snoring concept I’ve had on the tip of my tongue for a long time.

Let me walk through the articles in order to give a sense of how they fit, and perhaps of what I mean by an “Economy of Followers.”

First, the Viral Videos.  Louderback takes the money shot right up front and scores with, “viral videos are, at their core, no better than a fluffernutter white-bread sandwich, delivering little or no value to anyone.”  For a long time, listening to radio spots as I commute (I don’t watch much TV any more), I have had a dark suspicion that ad agencies write the ad first, and the product that will use that ad comes along second.  Most of the ads involve a gimmick of some kind that has nothing whatsoever to do with what’s being sold.  Old Spice, the Man Your Man Could Smell Like is a wonderful example.  Fun to watch those videos on YouTube, but let’s face it, the Old Spice Guy could be selling almost anything.  It could be the Man Your Man Could Dress Like, Listen to Songs Like, Buy a PC Like, or whatever. 

What sort of products are so bereft of any kind of differentiating intrinsic value that they need to be sold like this?  I tell you, it’s Madison Ave Mad Men all over again.  In fact, they never stopped.  Now ask yourself what sort of customers are so bereft of discriminating taste they would be swayed by an ad like this?  Whoever they are, they must be Followers, and not Leaders.  Old Spice is counting on tapping into an Economy of Followers.

Now take the Apocalypse and the Bubbles.  Fred Wilson is fascinated by Thiel’s painfully long essay on why you must bet on Globalization.  He stridently paints in black and white that Globalization yields a great outcome where all company values increase by 10x (never mind why or when), and the alternative is stark: a potentially Nuclear World War where nobody wins.  Thiel tries to paint the picture that the Yin and Yang of Financial Bubbles has been driven by Globalization since the 1700’s and that (gasp) it’s a good thing because all those other Bubbles actually underestimated how good it could be. 

“Aha!”, says I reading the article.  The real constant of bubble economics is alive and well.  Not only is it self-referential, but it has nothing to do with Globalization and World Wars.  Financial bubbles occur when people become convinced there can only be one outcome, or at most, two where one is paradise and the other hell on earth, and they follow the logical conclusion of that outcome like proverbial lemmings off the cliff.  This one is self-referential because Thiel uses Bubble Logic to argue that you’ve got to bet on the next bubble. Why? Because the alternative is all-out Global War and nobody survives.

Yet, nature is seldom as cooperative as we would like with these black and white scenarios. Hedge Funds of Nobel Prize winners can construct mathematical certainties, only to fail because they, like Thiel, forget an essential truth:

The world and it’s markets are not Open Systems that can continue on whatever trajectory that has been set. They are Closed Feedback Loops. Whatever the trajectory looks like today, it will change tomorrow, because the trajectory alters the fabric of the space it inhabits the faster it moves.

China may raise a larger group of people out of poverty faster than ever before, but in so doing, they destroy the cheap wages that enabled them to do it. Now they’re stuck competing like the rest of us. Technology may create limitless wealth forever based on Moore’s Law, or that law may slow over time or even fail to deliver a result that anyone cares about. In this case, we can add more cores that our software isn’t written to take advantage of, but we can’t make the clock speeds go up as fast as we once did.

If you choose to make these bets as Thiel does, at least be humble enough to realize you are pursuing the Greater Fool Theory, and that if you don’t change your own course before the trajectory you’ve bet on changes, you wind up just another Fool.  And so, these Bubbles are also Follower Economies.  To win in them, you have to understand Followers, be a Follower, and then quit Following at the right time.  Or you lose when the Bubble crashes. 

Last, we have Arrington’s Psychomanipulation of Crowds via blogs.  Perfect.  This post was the wake-up call that sewed up the Follower Economy for me.  Not surprisingly, Arrington launches into his essay with some pretty ballsy stuff.  He wants to, “talk about how perfect blogging is, with its constant feedback loop, as a training ground for mass psychology and manipulation.”  And mentions that, “it’s become pretty clear to me that any blogger worth her salt could start, say, an extremely successful militant religious cult.”  Hence the photo of the adoring Nazis.  Nice, Michael.  You are certainly winning friends and manipulating people. 

But this is to be expected.  Techcrunch has built a business on the Follower Economy.  The tactics involved are pretty straightforward.  I won’t go into them, but they’re almost strident in their obviousness.  Though perhaps not for the Followers.  Perhaps they don’t see the overt manipulations and stratagems that are to the blog as Old Spice Man is to the videos.  Michael goes on to write, “the first rule of anonymous human behavior – it’s dark and brutal, and reminds me how thin the veil of civilized behavior really is.”  This is written like it applies to all humans all the time.  But it doesn’t.  It specifies behavior in the Follower Economy by Followers.  You see, some Follow to adore and some Follow to hate.  That’s what Trolls are all about.  Either way, the Follower is there because of something they’re missing, not because of something you have.  Confusing?  Of course, how can you help someone find something they’re missing unless it is because you’re giving them something you have?  Well but the answer is you are giving them Louderback’s fluffernutter white-bread sandwich.  You’re giving them Old Spice Man.  You’re giving them something they can’t really touch or hold or keep.  But it makes them happy, so they keep Following.

The larger the group of people, the more it will trend towards the Follower Economy.  Small groups can keep enough individualists and starters that they escape the Follower Economy easily.  That’s why startups can be so much fun and can get so much done.  What’s interesting, is that the Follower Economy can be beaten.  It is the lowest common denominator economy.  But, in the end of the day, and in every field, while there are many Lady Gagas and few Beatles, the Follower Economy can be beaten.  If you run a business, you have to decide whether your customers are Followers, or someone else.  Real People, for example.  People who want you to give them some real and authentic, because they don’t want to just be Followers.  The easiest path is to bet on the Follower Economy.  But, if you have the moxy and can deliver the goods, building a Real Company for Real Customers will beat the Follower Economy. 

There is a growing chorus of voices out there that tell us how to do it.  Seth Godin, one of my favorite bloggers, is not about the Follower Economy.  The people he writes about who succeed, are real, authentic, and full of guts.  When they smile, they mean it.  Author Youngme Moon tells us how to market differently and escape the Follower Economy in her book, “Different: Escaping the Competitive Herd.” 

Maybe the Follower Herd would like to escape too.  After all, if your choice is investing your life’s savings in the next bubble to avoid Global Thermonuclear War or watching a Cirque du Soleil (they’ve escaped the Follower Herd), which would you rather do?  See you under the Big Tent!

Posted in business, strategy | 8 Comments »

Content Marketers: Are you a Teacher, a Curator, or a Pundit?

Posted by Bob Warfield on September 2, 2010

I’m a huge fan of Content Marketing, and as I have said, Content trumps SEO, Links, PPC, and most other ways you can market, especially for budget conscious startups.  But what is Content Marketing, and more importantly, what makes for good Content Marketing Content?

Wikipedia has a useful definition:

Content marketing is an umbrella term encompassing all marketing formats that involve the creation or sharing of content for the purpose of engaging current and potential consumer bases. Content marketing subscribes to the notion that delivering high-quality, relevant and valuable information to prospects and customers drives profitable consumer action.

Junta42, a Content Marketing blog, is a little more eloquent:

Content marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience – with the objective of driving profitable customer action.

I explain it this way.  A concentration of content given freely invites an audience to come take a look.  If the content is good to great, it builds trust with the audience.  Ultimately, that trust can lead to an opportunity to do business, if all goes well.  Notice how you have to give quite a lot of value away before you get to the doing business part?

Content Marketing Content is not the same as Marketing Content.  We’ve all  seen lots of traditional Marketing Content: data sheets, white papers, demo webinars, and all the rest.  Usually you have to give away enough contact information to faciliate identity theft before you see any Content, too.  That’s Old School.  Fuhgeddaboutit.

The New School says you product fantastic content and give it away.  After you have built the trust, then you can ask for a little contact information and not before.  Moreover, the content you’re going to give away doesn’t have all of that overt marketing stuff.  There are no calls to action, asking for the sale, competitive face offs, feature check lists, or any of that.  No reason you can’t produce that content too, but keep it clearly separate from your Content Marketing Content, or you’ll spoil the trust.

How do marketers spoil trust?  Well, when my son was very young, we were headed over to a friend’s house for a pool party.  This friend was a VP of Marketing.  I asked my son if he knew what Marketing was.  He said, “Yeah sure, that’s where they lie to you to get you to buy stuff.”  There goes the trust!  It’s been so often, that people don’t even check whether you’re lying.  You may not be, but they will assume you are at the first sign you are trying to sell them something.

That’s a radical change of mindset for most marketers.  It goes against everything they’ve been taught.  They find themselves in the middle of writing a blog post only to find that they were writing ad copy, not a blog post, and they have to start over again.  Here’s a way to try to escape that trap.  When you sit down to create your Content, try to put your company aside.  Heck, do it at home if that makes it easier to get outside you Company’s parochial view.  Or start the session by reading some blogs written by people who don’t have competitive companies but that are associated with your space.  What are they talking about?  How are they taking positions?  What are those positions and how do they sell them?  Roll that around in your brain like you’ll roll a fine cabernet around on your tongue.  Get the nuances from that juice.

Are you ready?

Okay, now take out three hats and put one of them on.  Your three hats are Teacher, Curator, and Pundit.  Whichever hat you put on, that’s your voice, that’s your background.  You are not the Director of Product Management for ACME SaaS Software anymore.  You are a Teacher, Curator, or Pundit who is connected with the same space, profession, market, demographic, fraternity, or whatever that ACME SaaS Software’s customers are.  Does that feel a little different?  You bet it does!

What do you write?  Let’s look at each hat.

A Teacher is there to teach.  This is a rich area.  What can you teach about the Best Practices of your space?  What have you learned from your Customers that you could pass on?  What does someone new to your space need to know to do their job?  Notice I didn’t say what do they need to know to choose software to help with their job.  There is a difference.  You are a Teacher.  There is a rich mileau of subjects for you to teach your students in almost any space you can name.

Okay, now let’s put on the Curator hat.  Curators oversee collections.  There is a broad universe of knowledge out on the web that is connected to your space.  Other people are producing that content all the time.  Your job as Curator is to assemble a collection for your audience of the very best of that information that is out there.  Build lists of the very best blogs and publish them.  Read all of those blogs, and when really cool articles show up, call your audience’s attention to them.  Comment on the articles and add a little editorial value.  Link out to them.  Marketers are terrified outbound links will send their audiences packing.  If you are doing a good job producing content, the audience will be back.  Curation is the easiest way to come up with good Content Marketing Content.  If simply involves knowing what you like and pointing others in that direction.  Anyone can do it.  If all else fails, and you haven’t produced content lately, crank out some Curation pieces.  Curation is also the most easily delegated if you need to multiply your resources with some hired guns.  BTW, if you really want to get jiggy with this Content Marketing, point to some praiseworthy things your competitors are doing or saying.  Be sincere.  Give props if they do something worthy.  Your audience will appreciate it because it takes guts and is the opposite of lying to get them to buy your products.  The competitor will be so shocked they won’t know what to do.  They’ll think it’s a trick.  They’ll know if they trash you after you did that it really makes them look much worse.  Heck, they may even figure out the only way to diffuse that sneaky bomb is to say something nice about you!

Time to put on the last hat:  the Pundit hat.  I saved it for last for a reason.  The Pundit hat is both the most powerful, and the most dangerous hat you wear.  Curation is easy–you basking in the glow of someone else’s creative effort in exchange for directing attention their way.  Teaching is at least factual.  You do the research, write it up, and send it out.  If you’re intellectually honest, its hard to get into much trouble with it.  Punditry is taking a strong position that is often an opinion and not provable.  It involves taking a stand that some people will object to.  It is the antithesis of being that sales or marketing person who never creates controversy because they want everyone to love them.  You can see why it is dangerous.  If you do it poorly, you’re going to come off as a real jerk and perhaps an idiot as well.  Twain says it is better to be quiet and thought of as an idiot than to open your mouth and remove all doubt.  Nothing ventured, nothing gained, I say!

The Pundit hat is the most powerful because taking a polarizing position is viral.  It’s interesting.  It’s why the news doesn’t report objective facts.  They’re all pundits.  They take sides.  Because of the dangers, the Pundit hat must be carefully controlled.  Very likely only the CEO or perhaps one or two execs can wear it.  Some of the most successful CEO’s in Silicon Valley history have been successful in large part through the Pundit’s hat.  They say outrageous things.  I’m talking about Steve Jobs, Larry Ellison, Marc Benioff, and those kinds of CEO’s.  They understand the viral power of taking a polarizing stand and sticking to it.  If you can wield the Pundit’s hat successfully, you will have immeasurably increased the power of your Content Marketing.  37Signals have strong opinions about everything.  They are not afraid to wear the Pundit’s hat. 

Here are a few guidelines I like to use for the Pundit’s hat, but really, there are no rules:

–  I prefer not to use it to disparage competition.  If you’re going to disparage, focus on ideas, not people, products, or institutions.  Keep it abstract.  Obviously some of the famous CEO’s on my list haven’t read this rule, but I think they would’ve been just fine if they had followed it, and they would have left less breakage for their staffs to clean up in their wake.

–  Be polarizing.  You can’t say “yes” to everyone and everything.  Figure out what you will say “no” to early and be very consistent to that.  Whomever has disagreed with your Punditry will be keeping score and just waiting for you to slip up on your consistency.

–  Be good natured and not mean.  Explain why you disagree with the idea, and lend a little credence and understanding for how some people may agree with it.

Use the Pundit’s hat sparingly.  It is the most powerful, but it becomes too strident when it’s all you have to talk about.  You can’t build a Content Marketing strategy with just one hat.  Wield all three.  Use the Pundit’s hat to sprinkle much needed spice in every so often and hook new visitors in with the controversy.

There  you go.  Three hats, three new ways to think about how to get that Content produced.

Bootstrappa’s Resources

Links to the Bootstrappa’s Paradise blog series as well as other useful resources for Bootstrappers.

Posted in Marketing | 2 Comments »

Smoothspan on Top 10 List of Cloud Blogs

Posted by Bob Warfield on September 2, 2010

I was honored to discover that Smoothspan has made the list of Top 10 blogs on Cloud Computing.  I know most of the others on the list and I can tell you they’re all excellent company to be among.  Thanks so much for the recognition!

Posted in saas | Leave a Comment »

%d bloggers like this: