Thursday, June 02, 2016

How to Get Hired as a Technical Co-Founder

I recently left my tech job with a plan of finding a new challenge. In the brief time I was a free agent, I got a handful of emails from friends, acquaintances, and intros about joining them on a new venture. A couple of those turned into coffees and dinners.

All of them were people looking for their "tech co-founder". Some of them had some promising ideas and I deeply appreciated the offers, but in the end it wasn't what I was looking for.

Finding a technical co-founder is quite hard. Part of the reason that's true is that non-technical co-founders (looking to start a tech startup) will need some technical expertise at some point probably sooner rather than later. They can outsource it, or hire employee number one, but getting someone fully vested in the new company (and the idea) is a great path.

When someone technical has an idea, their first inclination is simply to go build it. I'm super critical of my own startup ideas these days but development tools are so incredibly good now that I still can usually build a quick (and crappy) version faster than I can veto the entire idea as something to pursue (which almost always happens).

Non-technical founders will follow a different path with more research and discussions with relevant people up front. Finding a tech founder is likely part of that process. It would seem that by design, there's typically more business co-founders looking for technical co-founders than visa versa.

Needless to say, if a business co-founder is recruiting you, it's also pretty much implied that they're planning on being the CEO. As one ex-business-co-founder told me, "Either of us could be CEO, but only you can be CTO because I can't code". Despite me being penalized for having a unique skill in the relationship, he had a point.

The part you should understand right off the bat is that all co-founders besides the CEO will be in the backseat for the rest of the company. On a case-by-case basis, that may be understated or it may be end up being supremely obvious but it will be the situation. By definition, you report to your co-founder. Your investors will get to know the CEO far better than you, that's who's calling the shots. During the courting period, your prospective new co-founder will tell you its a partnership (or even "family"). There's no question its a unique type of relationship, but its just as easy for those sentiments to disappear when money or opinions get on the line.

(Check out Reid Hoffman's thoughts on using "family" to describe an employment relationship)

A partnership is the right word - but is that really what they're offering? It will be before you join, but I've seen it go both ways thereafter. The fact that your co-founder is CEO and you're not is already an inherent inequity. That's already an unequal partnership.

When a prospective business co-founder now calls me, my first question is to ask what they are looking for and what they are offering. I mean the exact statements and exact numbers. I'm not saying I'm the right guy for the job, but I am saying they should know all that already and for the right technical co-founder, they should be willing to put it right on the table. The only reason to be coy about it is to hide the unequal parts of the deal.

For the moment, let's assume the situation is that they have an idea, investigated it to some degree, but have not yet raised money or built anything. Once in my life a prospective business co-founder gave me the following pitch:

I'm looking for a technical co-founder to be my partner in this new company. I expect that person to be able to fully deliver on the technical needs of the company including building the initial tech and the team. They also need to prove that to potential investors. Someone who believes in this idea completely and thinks they can make it work. Someone who will go all in on this once adequately informed. Someone I can trust.

I am confident of my ability to raise money and build the company. I believe in the idea and my ability to execute on it. I can sell it.

As I said, I'm looking for a partner not just a coder. I would be the CEO, that person would be CTO/President. My partner and I would split equity 50/50 and have equal salaries - for the life of the company.

Now that's a partnership.

I've always advised new startups to have all co-founders take equal salary and equal equity. If the company lives awhile, its a sure thing that at some point discussions will get heated. There'll be a time your co-founder needs to leave work early and you need to work through the night. Add onto that fact that he or she makes ten thousand dollars more than you per year, and the resentment will just keep growing.

Having perfectly equal equity and salary won't solve every problem, but it also won't become the focus of yet another one.

There are of course factors that can influence the equity split (salaries really should be locked, even when they're both zero) but keep in mind, the moment the equity is not equal - even for damn good reasons - you are no longer equal partners. That's forever. That will come up again. I promise.

If the business co-founder put money in already, the company should pay them back. If they came in with money already raised from investors, that's like the most valid point worth considering an equity inequity at the very early stage. Of course, if the company has been up and running for some time, the arrangement is completely out of scope for this article. A fair deal in that case looks quite different.

If I were to be pitched as a tech co-founder again I would want to hear what I heard above. What they want, what they expect, what they'll deliver, and what they are offering - in concrete numbers. If the business co-founder won't tell you the numbers right off the bat - it's surely not equal. They are selling you to join for less. Just like a used car salesman, after the sales pitch and the box of chocolates, at the very last minute, they'll slide the offer letter across the table with the value on there telling you what they think you're worth.

If you can't trust your co-founder, things won't end well. Part of that initial negotiation is telling you how they value tech and how they will value you. If they're talking you down before the company even starts, it's not likely that will stop when the money, fame, or credit (or blame) is handed out.

Technology is, like it or not, often just a means to an end. So its not all that uncommon for people to treat technologists the same way. It's up to you to defend yourself, and if nothing else, just make sure you get a fair deal.

Friday, April 26, 2013

Why We'll Never Meet Aliens

If you combine all our current knowledge of statistics and astronomy, it's nearly comical to believe we're the only intelligent life in the universe. It's easy to get lost in the numbers thrown around - there are billions of stars and planets in our galaxy and billions of galaxies. Humans are rather bad at fully understanding such large numbers.

Despite where this article might lead, it isn't really about science - its about thinking big. Big enough to consider that if there are any aliens with the ability to come visit us, they would almost assuredly not care to.

Photo Copyright UncoolBob  -
We come in Pea.. actually, we're not coming

Stephen Hawking, the famous physicist, said in an interview that aliens visiting us would be similar to Christopher Columbus first landing on North America (not a good event for native Americans). His idea being that they would come for our resources, not with any particular purpose of friendship.

There are a few problems with that thought however. To introduce the idea, consider most any space movie in existence. Movies are of course, just movies, but they have shaped our thinking about meeting aliens. And small thinking it is indeed.

From what movies tell us, it would seem that scientists from alien races pretty much focused on 3 primary technologies: faster-than-light travel, energy weapons, and artificial gravity. Movies don't highlight artificial gravity much  because given our limited view, we pretty much expect gravity to just work and shooting a movie without it would be an unnecessary pain. So, screw it, all movie alien races invented artificial gravity.

There's a lot of implied technology thereafter (i.e. movie aliens don't often get sick and seem to not worry about eating) but that's not the fun stuff to think about. Lasers, phasers, and pew-pew-energy-blasters however, are fun to think about.

Did you ever wonder though - why these same scientists who made these neato energy weapons never bothered to develop targeting systems? They still rely on crappy biological reflexes to aim them. It's even sillier when alien robot/cyborgs that can outperform humans in every other way somehow still aren't so great at aiming their phaser zapper. They miss just as much as the humans do, and by that I mean - a lot. Of course, Star Wars would have been a short film if every shot stormtroopers made hit Han Solo but it would have made more sense.

Its actually rather ridiculous when you think about it - we (as in current state of human tech) already have automated targeting systems that work well with our doofy bullet-guns. We literally have targeting systems in existence today better than anything you saw in Star Wars.

Truth is, given how far along we already are - by the time humans develop usable energy weapons - we'll have awesome targeting systems to match. We won't miss. It is with fantastically geeky sorrow that I proclaim that there'll never be an energy pistol or rifle I'll get to shoot. Sure, there'll be energy weapons. Sure, they'll shoot. But it won't be me "aiming" them. They'll darn well be perfectly happy aiming themselves. Chances are I'll probably just be running away.

Movies get to ignore whatever they wish. However, reality dictates that science tends to advance in all directions at the same time. Not only because there's some level of constant pressure in all directions, but because advances in one field often accelerate many others (much like the invention of the computer accelerated all other fields of human science).

If Stephen Hawking is right, then he is saying a race of aliens have, at a minimum, perfected faster-than-light travel (or be willing to travel for several thousands of years at sub-light), conquered longterm biological effects of space radiation, and mastered extreme long distance space navigation just to come to earth and steal our water.

Another consideration that I rather enjoy is that if aliens would come here for resources, then that inherently implies an economic model into their decision. By definition, they need and value resources. Consequently, coming here to get them must have been their most economical choice. Getting them somewhere closer to home or manufacturing them must be more "expensive" (in some sense of the word) than the cost of them traveling all the way here, gathering our resources (probably atomizing us in the process), and flying them home.

While not impossible, that seems like an unlikely set of events - both technologically and economically. Again, even we have (expensively) already mastered alchemy. We even have the tech to create matter from energy. Imagine that tech in a hundred years, or two hundred, or whenever it is you think we'll be able to travel several light years for a mining expedition. What would be cheaper and better, forge the plutonium at home or send a galactic warship with thousands or warriors (and miners) to some far off planet?

From where we are now, we're not even close to being able to get to Proxima Centauri (the closest star to us besides the sun) much less a place where we think there's an actual planet. Even the technology required even to get us to Proxima Centauri in less than, say, 1000 years would require tech orders of magnitude from what we have. Propulsion, sustainability, radiation protection, nanotech - you name it.

Comparatively (and no disrespect to NASA) our existing space program involves us putting bombs underneath rocket-ships, blowing them into space with enough air supply for a few weeks, and bringing them back before the astronauts lose too much bone mass and/or the Tang runs out. If getting humans to another star system is a 100 on some "technology ability scale", we're a 2 which is not comparatively far ahead of say, poodles - who are probably at a 1.

The idea that they might come to Earth to colonize hits a similar argument. You could argue that terraforming (or xenoforming for them I suppose) could be a technology more advanced than FTL travel. With that assumption, you could imagine an alien race within the technological sweet spot of knowing how to travel across the universe but not alter planets to suit their biological needs. Coming to colonize Earth (again while likely blasting us into being "no longer chemically active organic matter") could make sense. But this ignores the fact that several other requisite technologies would probably make their need to colonize obsolete.

Before they had FTL travel, they likely spent many decades traveling at less that light speed. Even if not, chances are their ships are quite hospitable to themselves. In fact probably more like sailing biodomes than ships - someplace they could live indefinitely. But a biodome is probably the wrong inference - assuming their bio-scientists were at work while their space-propulsion engineers were perfecting FTL, they would likely have quite minimal external environmental needs. Stuff like air and food has long been technologied away.

The only thing something like Earth could give them is a place to stand on. Xenoforming a planet might be out of their reach, but creating ships to live in is by definition, well within their reach. The home-iness of living on a planet probably is questionable. It won't be as hospitable as their own ships.

So why else might they want to come here? Maybe they want to trade with us. Well, yeah, right. If you've gotten this far it's obvious we have no tech that would interest them. Maybe we'd be able to trade them some local arts and crafts or pottery or something - but other than that, they won't be interested in our childish technology.

Well, maybe they want to study us? Well, maybe. It seems probable that if they were on a mission to study life forms, we would not be the first planet they would have visited. Chances are, they've seen other life forms already. Probably some at least similar to us. Statistically speaking, we might be interesting but not all that interesting.

Oh yeah - and statistically speaking - what about statistics? Remember, my thesis is that all fields of science tend to advance simultaneously. That includes math and statistics. In order to make FTL ships, pew-pew-lasers and artificial gravity you're going to need math (and computers) that are light years ahead of ours.

Let's say they could use their super-advanced Hubble telescope, and see our solar system (at some point in the past). They'd see earth in the goldilocks zone for life. They'd know its land and atmospheric composition. They'd see it's oceans and know the planet's temperature variations. They'd see Jupiter acting as a bodyguard soaking up dangerous asteroids.

Even today, if we saw such a solar system, we'd have a pretty good idea that life could be there. If our math, statistics and knowledge of other life forms was 1000 times more advanced, how accurately could we predict that the life forms there would have 2 nostrils? How close could we come to guessing exactly what those life forms would be like?

And if we couldn't get exact - how close would we care to? Does it really matter? In other words, with enough data and statistics (the foundation of what humans like to call "machine learning" or "artificial intelligence") they already know we're here. Just like we know there was water on Mars or high temperatures on Venus.

Even with that however, we're still thinking too small. It's not just their science and tech that's advanced - you need to expect that they have too.

Twenty years ago if I asked you how many feet were in a mile (and you didn't know) you could go to a library and look it up. Ten years ago, you could go to a computer and google it. Today, you can literally ask your phone.

It's not a stretch at all with the advent of wearable computing that coming soon - I can ask you that question and you'll instantly answer. The interesting part of that is that I won't know if you knew the answer or not - and more importantly, it won't matter. If information is reliably fed directly to you from an external source, there'll be no advantage to remembering anything.

How many years before we have a brain interface to Google? You'd know everything. And its not crazy to think that soon after we'd find ourselves limited by how slow our brains process information. The obvious next step being to augment our brains, our thinking, and in the process - augment who we are. That's what our scientists will be working on then (and of course, are actually already working on).

How would you change if you had instant brain-level access to all information. How would you change if you were twice as smart as you are now. How about ten times as smart? (Don't answer, truth is, you're not smart enough to know).

Now, let's leap ahead and think about what that looks like in 100 years. Or 1000. Or whenever it is you'll think we'd have the technology to travel to another solar system. We'd be a scant remnant of what a human looks like today. Movies like to show aliens with over-sized heads and that may well be the case, but not because of biological evolution. Technological evolution will have long surpassed the snail-pass of biological evolution by then (read most any Ray Kurzweil book to hear this a lot).

The question of why aliens might "want to come here" is probably fundamentally flawed because we are forming that question from our current (tiny) viewpoint. The word "want" might not apply at all to someone 1000 times smarter than us.

If we discovered a fish-like creature on Europa today it would be fascinating for us to study it. If however, we were 1000 times smarter and had spent the last 1000 years finding fish-like creatures across the galaxy, and could with 99.99% accuracy predict the exact existence of such creatures from light-years away, it probably wouldn't be all that interesting to go study another one.

The bottom line is that if an alien race is capable of getting here, all the other technology they've requisitely developed in the meantime would make the trip unnecessary at best - and more than likely, simply meaningless.

We're just not as advanced or as important as we like to think. In the end, there's no compelling reason to think they'd be interested in meeting us - we simply think too small.

Wednesday, May 02, 2012

How to get your resume "Silicon Valley Ready" - Part I

Per my last post, I've been given the opportunity to review a nice pile of resumes. As I am prone to, this got me to obsess a tad over how the resumes were put together and more importantly, what each told me.

What I perceived as issues are, in retrospect, my fault, not the resume owner's. That's because, per the entire point of my last post, the start-up environment is radically different than the corporate IT department. And the latter is where many of these resumes came from (which is exactly what I wanted and asked for).

In many cases, I received a resume from someone that included the regular set of data - experience, education, skills, etc. But the ones that got me excited were the ones where the person included in the email links to the websites or mobile-apps they had built. As I've said - the number one selling point for you as an engineer to get a job in Silicon Valley is that you love this stuff. There's an age-old conundrum of new grads who say "Employers want me to have experience before they'll hire me - but how do I get experience if I can't get a job?"

In our business I'm happy to say - that problem does not exist. Simply because you don't need anyone to give you a job to build something. A website. A mobile app. Heck, a program that finds smaller sets of strings in larger ones.

I realized that's probably the number one thing I'm looking for. You can show me, with no doubts, that as a software engineer - you can build something. Start to finish.

Interestingly, I like to think that I also don't put that much weight into whether a project was a commercial success. If it was, that's nice but and maybe it's because you are not only a great engineer but you have an awesome product sense - who knows (it just might mean you were lucky too). And unless it wasn't a commercial success because it was poorly engineered, that's not really the point. The point is that you built it. Or at least some non-trivial part of it.

With that in mind - this article sprang forth on what I like to see in resumes. I'll point out that this isn't very different from what I looked for when I was on a hiring committee at Google (so there are at least some current Google engineers that are partially there because of these thoughts).

First - I propose a new section to resumes - at least for software engineers. In addition to Experience, Education, Skills, Interest, and References (not suggesting we remove any of those) - I propose we add Cool Stuff I Have Built.

If your resume is going to go over one page (which, personally, I don't mind) - I'm hoping it's because of this section.

Any project you did solo or had a major hand in - whether paid or not paid, million users or just your mom, I'd love to know about. Websites, iphone apps, android apps, desktop apps, open-source projects, github accounts - you name it. Solo or as part of a team (indicate that). But it has to be, in one way or another "finished". Even if your iphone app was rejected by the app store - you can point me to a link to see it. It doesn't have to be a product either - maybe its an open-source project. The bottom line is it is something that you "finished". You executed. Your idea became a living breathing application or piece of code that in some way some how you could show to people.

The section might be broken up into individual projects with bullet points about each. For example:

Project Name: Mailinator
Technologies used: Java, tomcat, (no database)
Team Size:5'11", 175lbs (haha)
Implementation details/challenges:Custom server architecture built as an experimental test-bed for highly-multithreaded server design. Custom SMTP server. No database as emails are stored in RAM with a custom compression scheme.
Notable Metrics: up to 25MM emails per day, ~20k users per day, runs on a single server (on purpose as part of a personal experiment to optimize the system).
relevant links:,

Surely you could add other bullet points too (and suggestions welcome, leave a comment to this post). But you get the idea.

My previous post resonated strongly with some people - that is, they were in "IT departments" feeling like they weren't growing technically. And as you can imagine, a resume telling me you did a payroll system is great - but it's not what (most) start-ups are building. But what if you haven't built anything? And your "Cool Stuff I've Built" section is empty?

Well .. fix that.

No one is stopping you from building something. No one said you're ready for a transition out of your current job today and as with much of life it's up to you to take yourself to the next level. But nearly any person that already writes software with a penchant for learning and some ambition can spend the next few months of nights and weekends learning and building. (And it's absolutely possible that your day job accomplishments belong in that cool stuff section too).

So if by day you're a payroll guy, but by night you're in iphone ninja - you've got my attention. Not only because you have the skills that I'm looking for - but that in your spare time, you're out doing great things. And instead of going out every night drinking with your friends - at least some of those nights, you chose to stay home and learn and build cool stuff. And why would you do something like that? Simple - you love this stuff.

(My start-up is located in Palo Alto and I am right now interviewing for the initial engineering team. We're well-funded, building cool stuff, and plan to change, ya know, the world. No matter where you are - if you're a software engineer, willing to relocate to San Francisco/Silicon Valley (and of course, love to build great things) send me your resume. or check out

Tuesday, April 24, 2012

Why you should join a start-up - and maybe why you shouldn't

I've recently been interviewing engineers for my new start-up (fyi, this is wholly separate from Mailinator). We're well-funded, have a world-changing idea, and as you can imagine, I plan to build an awesome engineering team. (Regardless of where you are, if you're a passionate developer, I'd love to hear from you. Check out the Job Description here and email me your resume at ).

I've been talking to engineers from all over hearing their stories. There's really amazing talent everywhere and honestly, a non-trivial amount of it seems to be idling or even decaying in environments that aren't using its full potential. A bunch of moons ago I used to work for Dow Chemical in the dreaded "IT department". It was pretty clear to me then that I was not growing technically in that job. I left to start my Ph.D. but I always vowed from then on that if I was going to be a software guy, I was going to work for companies who's business was creating software. In other words, at Dow I was an expense, I'd much rather be an asset.

Eventually and with that goal in mind, I ended up at Google. Without reservation I can say it was a fantastic experience.  I have said before, "if you're the smartest person at where you work - quit". And trust me, nothing makes you realize how smart people can actually be by working at a place like Google. (To avoid any implications - I did eventually quit Google, but rest heavily assured, it was not because I anywhere even close to being the smartest person - read on!).

I did over 200 interviews while at Google and it was actually a bit fun to interview someone who was coming from someplace where they were the smartest person (at least about tech). I could always tell. It's no surprise that if you're the smartest person somewhere for a long time, you get used to it. You get used to waiting for people to catch up to where you are.

By no fault of their own they walked into the interview with some attitude. An attitude of impatience if nothing else. After someone like that started at Google however, it didn't take long for them to realize the situation they were now in. It was humbling in many respects and I don't mean that negatively, simply they'd not recently (or ever) experienced a place where many of the people they met were at their level or better. Obviously, there are smart people everywhere but almost universally, smart people enjoy the company of others like them, the synergy makes them all better. This is why Silicon Valley is a magnet for them.

As I said, Google (and similarly Facebook, etc) are great places to work. At some point after working there however I thought to myself what a wonderfully steady and safe place to work it was. My responsibilities, expectations, and compensation package were well outlined. I was working with awesome people and learned a ton but I still felt it was far too big for me to have any real impact.

For a time, I worked on the Google Web Server which I could best describe to non-techies as "well, sort of the thing you interact with when you do a search" (this is a bad definition at best). A woman I was dating thought about that answer a moment and condescendingly replied - "what do you mean you work on that - isn't that done?"
In one sense she was right, I worked on that darn thing every day but to her it all worked the same. To her, I was having no impact.

It occurred to me that Google would be a fantastic place to work if what I wanted was a meaningful 9-5 job that after each day of work I could drive my minivan back to my home in the suburbs. But I didn't have a minivan. And I didn't own a home. And I didn't live anywhere near the suburbs. What the heck was I doing there? The smart-person environment was at start-ups too - I could get that there and even have some ownership of what I was building.

It's a relatively normal course of life in our sea of first-world problems that you'll have many chances to take risks early in life and those chances diminish as time goes on. Simply put, Google will always be there. And if Google isn't - the next big, awesome company will be. Every decade or so has a "company" (or two) where the greatest things and the greatest people are happening. At times it was Microsoft, Cisco, Apple, Google, Facebook, etc.

I left Google not because Google was in any way bad, but because I wasn't done swinging for the fence. And I still had the luxury of trying. If I ever got to the point where I wanted to realign my life's risk profile, Google (or Google-next) would be there. And this is a pretty common theme - places like Google and Facebook incubate some set of people into entrepreneurs who then go start their own start-ups. But with big ideas, agility, and impact. And they don't tend to fall far from the tree. You might think Google doesn't like this - but I doubt that's true. This is a constant stream of risk-takers that go try stuff for them that they can buy back if needed.

What gets me today is how vibrant Silicon Valley is right now. And even for Silicon Valley this place is on-fire. It seems cities around the world try to copy it but that's really hard to do. The start-ups are here because the investors are here, and the investors are here because the start-ups are here. Guy Kawasaki wrote a great article several years ago partially about why Silicon Valley is Silicon Valley.

I am fully aware that Silicon Valley has a nasty habit of simply not being able to darn well shut-up about Silicon Valley. Other cities are hotbeds for tech too (Austin, NYC, etc), but truth be told, you could find a cadre of smart engineers doing a great start-up in a Des Moines, but it's not easy. There's LOTS of great companies in Silicon Valley that can take you to the next level.

We're in the midst of a huge wave. Depending on your risk profile, joining a start-up or joining "a Google" is the best way to put your chips in the game. Regardless of where you are - if you're a crack-shot engineer looking to change the world, you could do worse than coming here. Again it's all about your risk profile and what's keeping you where you are (which may be great reasons). Start-ups will not only pay to relocate you, we'll put you up for a few months (in the corporate crash-pad) while you find your own place. Joining a start-up now will get you experience both technically and start-up-wise that you can't get anywhere else.

I'm not thinking the start-up life is for everyone. I can definitely see a point in my life or where I have life-constraints where I'll want my job to be a less important part of my life (probably because my life will be more about, well, you know - just "life"). But for me right now, and maybe for you - I'm swinging for the fence. And love or hate IT departments, I couldn't do that there.

Again, if you're a software engineer that loves what you do and lives in commuting distance to Palo Alto, CA or is willing to relocate, I'd really love to hear from you. We're well-funded and I'm literally building the first engineering team right now. It's a fantastic opportunity to get in on the ground-floor of a great start-up. jobs

Monday, November 21, 2011

Overheard at my last Bullpen Cap VC Meeting

I'm lucky enough to be on the advisory team at Bullpen Capital. The main part of that job is that once a month we have a meeting where the advisors get to hear multiple start-up pitches and give our thoughts about each.

It's always great fun but it's also not unusual that I find myself in a situation like this one:

Managing Director: "Everyone meet our new member Bob. Let's go around the room and introduce ourselves to him.  Josh - you start"

Josh: "Ok. Yeah, so I was a Senior Product guy at Linked back in its early days. Then I went to Zazzle and Headed up product development for them. From there I went to Facebook for a few years before landing at Twitter - wow, those were wild and fun times. Currently, I'm a Principal for an awesome VC firm here in the valley."

Managing Director: "Great! Paul, you're up. Tell us who you are."

Me: "Huh? Who am I? Oh. um. I grew up in Ohio, I like pizza, and I'm never sitting next to Josh again. Next."

Of course, the little secret is that I make sure to sit next to people like Josh every time. I figure, surrounding yourself with overachievers can't help but rub off a bit.

Saturday, October 29, 2011

Startup Ideas - Part 3

A few years ago I wrote 2 posts about evaluating start-up ideas. They were pretty well received and recently I bumped into them again. It's always fun (unless it's frightening, which it often is) to read your old stuff but it made me think how much has changed and how that's affected how I evaluate start-ups and start-up ideas.

Apart from working on my own start-up, these days I'm an adviser to several companies and am part of a VC-firm's advisory team. The frosting is that I get to hear internet start-up pitches on a regular basis. Then I get to throw in my input as to whether the team, approach, tech, idea, and probably 100 other factors come together to make a company investment worthy.

Of course, like anything else, if you start doing something enough - you start to see patterns. What I'm writing here are some of most noteworthy things that have caught my attention.

Basically, a few questions to ask yourself about your new idea for a startup.

1) Do you see the "Snowball" ?

I pitched an idea a few months ago to the CEO of a rather-mature and happily successful start-up. He was rather intimidating in how fast he understood the big picture. I'm not sure what sort of casual conversation I could keep him interested with at a party but I'm sure that if I had had a whimsical need to immediately know, for example, the half-life of cesium-137 (and google happened to be down), I could have just asked him.

He sat and listened largely emotionless to my idea. At the end of my presentation, he looked at me and said "I don't see the Snowball". He ended the sentence with such a period I not only felt the meeting was instantaneously over, I was waiting for him to push a button and have the floor open up sending me sliding star-wars style outside into the dumpster. The "snowball" as he put it. That is, the very obvious reason this product is going to take off, keep going, and getting bigger. The reason why customers will come - and why they'll come back. Why they'll get their friends to come who will then get them to come again. The "viral loop" is a specific facet of this for social sites - but it applies in every case one way or another.

Interestingly, he didn't ask me "Where is the Snowball?". He fully assumed that if it was there, he should have seen it already. If it hadn't shown it by now, having to ask wasn't going to save me.

This idea is documented across the web in many different names. Viral loop. Customer acquisition/retention. Or even the "Techcrunch effect" - get mentioned on Techcrunch, watch your servers scream and then... nothing. In any start-up idea, you need to be able to see the snowball. And how it overcomes impedances such as cost (if any) and competition.

Spotify - free music, posts to FB to involve friends
Facebook - free gossip, detailed voyeuring of people in your life
Google - free information

Gamification is an artificial method of creating a snowball. The seratonin shot you get from competing with friends and winning at a game that is very easy and has fair, tractable rules for success. Then give them the ability to "cheat" using money while still taking credit for the success.

2) What's the customer effort required to gain what value? Your answer better be "a little" and "a lot".

Every keystroke you require from your users to use your product is a speed-bump to adoption. Every single keystroke. And, for keystrokes that are digits, where those digits together make up a credit-card number are like 20 speed-bumps piled together.

They don't call it the "pay wall" for nothing.

I love to see products that give me value the instant I'm introduced to them. If it requires a lot of work first - I better fully understand the value I'm going to get or it's not likely I'll care to find out.

3) Are you technically defensible?

I bet you're not. And although it's very nice to be, surprisingly you can get pretty far without it.

They say that the more little things in life surprise you - the younger you stay. Well thank God for that. It seems every day I say to myself - "now it's THAT easy?". I am perpetually amazed how radical advances in computing power, storage capacity, and programming abstractions have not so much advanced us as species - but instead made everyone a coder.

Now mind you - all that computing power also made it really really easy to be a bad coder. At least in the computer science sense. But the real bottom line is that it almost never matters until you get a lot of traction. And if you're ridiculously bad performing app starts to die because of too many users - that's what we call a "rich man's problem". In other words, at that point you'll like be making money or be ripe for investment to hire programmers or sysadmins or whatever to fix the problem.

I've seen I think one pitch in the last year where I thought the technical hurdles would cause a strong deterrence to competition. That was Flashsoft. Phil Karlton famously said "There are only two hard things in Computer Science: cache invalidation and naming things" and Flashsoft is doing cache invalidation.

Now mind you, technical hurdles don't mean "no competition" they just mean it takes a sophisticated (and crazy smart) team to be up to the task. But we all know - those are more common than you'd expect.

In full contrast, I saw a pitch this year where the team had a nice (web) GUI and then showed their technology. As they demo'd it became immediately clear to me how to recreate what they were doing. They were (pardon the technical jardon) making one call to Amazon's API, making one call to Facebook's API, and showing the results.

So, unless you count "call Facebook, get result and give to Amazon" as technology - they had none. There was no analysis, no intelligence - no nothing. Without the GUI (which was very very nice) - this was without exaggeration 20 lines of Ruby code.

It might be a shame to call this company a technology company, but as I said earlier, their technology might not have mattered. Execution and team still win the day. Sadly, their team would not have filled the gaps which was enough to rule out investment, but the "lack of tech" wasn't the only factor.

As a final counterpoint - GroupOn, AirBnB and Taskrabbit are 3 companies that have in my estimation completely uninteresting "technology". If you're a developer is there really anything there you couldn't see how to create with just a moment of thought?

4) What's your plan for moving off of Facebook?

Ever heard of a Remora? It's that fish that literally attaches itself to sharks as they swim around. Sharks don't mind apparently as they provide a mutually-beneficial relationship. They clean off parasites and sharks provide implicit protection and for the most part the shark doesn't even notice them.

If you watch some videos of them latching on to Sharks however, you'll notice something, it's not often you see one swimming in FRONT of the shark. It's probably some sort of well-known unwritten code among remoras - latch onto any darn thing you want - except near anything resembling teeth.

Sure, there were probably a few rebel mouth-latching remoras that flaunted convention throughout history - but they're gone now. And whatever gene they had that said "Hey.. try latching on the mouth - no competition and plenty of yummy parasites!" disappeared along with them.

I'm not saying Facebook is a shark. They're just a bigger company trying to grow their own business. In that way, they're no different than Apple (tons of iphone app developer "get squashed" stories) or Microsoft or anyone else.

Creating a mutually-beneficial relationship is what it's about. Regardless of what stage you're at - bringing and/or keeping users on Facebook makes Facebook happy. However at some point, you'll hopefully grow big enough where Facebook notices you. That's sort of like the "rich man's problem" from above except that people are trying to kill you and money doesn't change their mind.

Starting out partnering with a big company is usually good. Facebook or Apple or whoever. If your dream comes true however - you likely get two courses of action.

Get bought by them - or have a plan for surviving without them. For Facebook it's usually that you keep it as a customer acquisition mechanism, but not your only one. For Apple, you usually migrate to Android and/or Web.

No need to name names but most every big company has purposely or accidentally stepped on a few start-ups along the way.

5) Your business model is advertising? no. really. What is it.

Despite the incredibly obvious and utterly overwhelming evidence to the contrary, Facebook as an advertising platform never felt right to me.

For example, when you go to google to do a search. You are, literally - going to in order to, as quickly as possible - LEAVE

Marissa Mayer's super clean homepage is great, but you're going there to find out something specific and move one. Like, what was that train movie where the guy keeps waking up in someone else's body?

If almost everyone comes to to find something and then leave, then some percentage of those people will find what they're looking for via an ad. You have to leave somehow - once in awhile you'll leave via ad. At times, the ads are exactly what I was looking for.

Facebook however is different. You go to Facebook to stay. I'm not sure I've ever clicked a Facebook ad. Sure I've clicked photos of Aunt Edna's 75th birthday and videos that cousin Willy linked to. But I go to Facebook to find out family/friend gossip. Not do product research.

The days of monetizing through solely ads are sort of over. I don't mean that by saying ads are dead (phew - heck no). I mean that as there are far more options now than simply showing adsense.

a) Companies like Viglinks and Skimlinks will affiliatize every last link (that can be affiliatized) on your site. Wordpress and Ning do this to great effect. b) Install the browser plugin Ghostery and watch how many sites get to know where you are browsing. Tracking user movements is big money and imgur likely monetizes not through ads, but by selling advertising data companies the data that you were there at all.

Simply - more than ever, if you have a few million eyeballs a month - the baseline ways to monetize are better than ever.

5) How does this get to $100MM? (helpful hint: It's nice if the market size has a good size number followed 'B')

I alluded to this earlier, but it's important to point out that even if you think a company has a wonderful chance at being successful, that doesn't necessarily make it a good investment. Many factors surrounding that success help determine that.

One pitch I saw fell for this exact reason. I liked the product a lot. It felt like one of those products that you can throw off a cliff and all by itself - it will crawl itself back to the top still generating revenue. It worked. It was going to work.

But examining the market - I couldn't see how it could get past a certain level of revenue. This included factors of market size, competition, and strategy. This is one reason market-size is always part of pitches - if its big enough - then we can skip a few details in worrying that the company can get to a needed size.

So what's a needed size? That depends on your investors and how much money you're going for. It's another good reason to start with angels. If the company grows to Zynga size - great, we've proved the model and we can add investors as we go along. But if it doesn't, we've taken a good amount of cash for what we need to do.

Walking into Sequoia asking for you iniital funding round of 10MM might be cool. And you just might be the right person to be able to do that. But your projections better better warrant the round. Yes, everyone knows those projection numbers are shot from the hip. But they still better be there - and with a story that could theoretically make sense.

Simply - different investors need to make particular sized investments with expectations of particular sized returns.

Incidentally, this works for job offers too. Some of the hottest startups in the valley make great offers but you also always need to do the math. Being part of a hugely successful start-up is great, but sharing in that success is rather nice too.

6) Revenue is King. And so is Traction.

Ok, that's not a question. But seriously, everytime someone makes a list of questions - one of them has to not be a question with a sentence following saying "Ok, that's not a question".

If the rubber is meeting the road it gets harder to argue. In fact, if you have traction (and maybe even revenue) then investors only need to consider how you might get squashed somewhere along the way (see "getting off of Facebook" above).

Waiting until you have these two things is a great way to improve the interest and terms you'll see from investors. If you don't have them - investors will be looking a lot harder at you and trying to guess if your idea could someday get these things.

7) What's your customer acquisition and business development strategy?

As a disclaimer, I'm a complete techie. I started my first start-up with 2 other complete techies and you're not going to believe what we did - We sold our products just like a few complete techies would sell products like. (no.. I re-read it, that sentence is ok)

Maybe our worst sin was thinking we were kicking ass. When we finally hired a bizdev guy and with extreme skepticism - he changed everything.

Our pricing model was wrong. Our marketing was wrong. And most notably to me - he changed our company from selling products to selling solutions.

If you don't know what that means, you too may benefit from gaining the help of someone who's acquired customers and positioned products before. Put simply - we went from selling things for little bits of money to selling bigger things for bigger bits of money. All the while bringing more value to our customers.

It's really amazing what a small pivot can do for a product to bring it to new customers and to expose a much higher value to those customers. This should probably be filed under - "do what you're good at and more importantly, admit what you're not good at". And hire people in those roles.

Pitching is an art - and so are start-up ideas. I still get a few ideas a week I quickly kill for lots of reasons. The ones that make me the saddest are those I think people would love and use - but that I can't see how to turn it into a scalable business. I'd love to do those things for fun assuming time was an infinite resource.

Making web sites has absolutely never been easier. All you really need is to know how to code in some very high-level language and leave all the computer science and engineering problems for when you have scale. Getting the right idea, the right positioning, and the right go-to-market strategy that "can" get to scale however is still the tricky part.

Thursday, November 18, 2010

A Google Interviewing Story

A few years ago I was entering the Silicon Valley job market and at that time looking for senior engineering positions. A good rule of thumb about interviewing if you haven't done it in awhile is to at least somewhat accept that you'll probably make a few mistakes on your first few tries. Simply, don't go for your dream job first. There are a million nuances to interviewing that you've forgotten, and a few up-front, not-so-important interviews first will educate (or re-educate) about them.

One of the first places I interviewed was a company called As far as I know - gofish is an utterly different company now than when I interviewed there. I'm almost sure that everyone I met there no longer works there, so the actual company isn't terribly relevant to the story. But the interviewer is. My technical interview there was with a guy named Guy.

Guy wore leather pants. Its a well-known fact that interviewers in leather pants are "extra" scary. And Guy was by no means a let down. He was also a technical crack-shot. And he was a technical crack-shot in leather pants - seriously, I didn't have a chance.

One question he asked me I'll never forget. In truth, its a pretty innocuous question - but it's also pretty standard fare for silicon valley interviewing questions at that time.

Here it is:

Say you have one string of alphabetic characters, and say you have another, guaranteed smaller string of alphabetic characters. Algorithmically speaking, what's the fastest way to find out if all the characters in the smaller string are in the larger string?

For example, if the two strings were:


You'd get true as every character in string2 is in string1. If the two strings were:


you'd get false as Z isn't in the first string.

When he asked the question I literally jumped to my feet. Finally, a question I could answer with some confidence. (Note my answer to him was solely considering the worst cases as there are plenty enough nuances there for an interview question).

The naive way to do this operation would be to iterate over the 2nd string once for each character in the 1st string. That'd be O(n*m) in algorithm parlance where n is the length of string1 and m is the length of string2. Given the strings in our above example, thats 16*8 = 128 operations in the worst case.

A slightly better way would be to sort each string and then do a stepwise iteration of both sorted strings simultaneously. Sorting both strings would be (in the general case) O(m log m) + O(n log n) and the linear scan after that is O(m+n). Again for our strings above, that would be 16*4 + 8*3 = 88 plus a linear scan of both strings at a cost of 16 + 8 = 24. Thats 88 + 24 = 112 total operations. Slightly better. (As the size of the strings grow, this method would start to look better and better)

Finally, I told him the best method would simply be O(n+m). That is, iterate through the first string and put each character in a hashtable (cost of O(n) or 16). Then iterate the 2nd string and query the hashtable for each character you find. If its not found, you don't have a match. That would cost 8 operations - so both operations together is a total of 24 operations. Not bad and way better than the other solutions.

Guy wasn't impressed. He showed it by rustling his leather pants a bit. "Can you do better?" he asked.

What the heck? What did this guy want? I looked at the whiteboard and turned back to him. "No, O(n+m) is the best you have - I mean, you can't do this without looking at each character at least once - and this solution is looking at each character precisely once". The more I thought about it, the more I knew I was right.

He stepped up to the whiteboard, "What if - given that we have a limited range of possible characters - I assigned each character of the alphabet to a prime number starting with 2 and going up from there. So A would be 2, and B would be 3, and C would be 5, etc. And then I went through the first string and 'multiplied' each character's prime number together. You'd end up with some big number right? And then - what if I iterated through the 2nd string and 'divided' by every character in there. If any division gave a remainder - you knew you didn't have a match. If there was no remainders through the whole process, you knew you had a subset. Would that work?"

Every once in awhile - someone thinks so fantastically far out of your box you really need a minute to catch up. And now that he was standing, his leather pants weren't helping with this.

Now mind you - Guy's solution (and of course, needless to say I doubt Guy was the first to ever think of this) was algorithmically speaking no better than mine. Even practically, you'd still probably use mine as it was more general and didn't make you deal with messy big integers. But on the "clever scale", Guy's was way, way, (way) more fun.

I didn't get the job. Or I think they offered me some trial position or something that I refused, but it didn't matter. I was on to bigger and better things.

Next, I interviewed at After a phone interview with the CTO he sent me a "programming assignment". It was a bit over the top - but in retrospect, worth the 3 days it took me to complete. I got an interview and a job offer - but the biggest value was what the programming assignment forced me to go out and learn. I had to build a web-crawler, a spellchecker/fixer, and a few other things. Good stuff. In the end however, I turned down the offer.

Finally, I had an interview at Google. I've written before that the Google interviewing process does tend to live up to the hype. Its long - its rigorous and in all honesty, pretty darn fair. They do as best they can to learn about you and your abilities in an interview setting. By no means is that an exact science, but I'm convinced they give it a good try.

My 4th technical interview at Google was with a woman engineer that honestly seemed a bit bored of interviewing. I had done well in all my previous interviews there and was feeling pretty good about my chances. I was confident that if I did nothing ridiculously silly - I'd get the job.

She asked me a few softball questions about sorting or design, I'm not sure. But towards the end of our 45 minutes she told me "I have one more question. Let's say you have a string of alphabetic characters of some length. And you have another, shorter string of characters. How would you go about finding if all the characters in the smaller string are in the larger string?"

Woah. Deja-Guy.

Now, I could have probably stopped the interview right there. I could have said "Ahee! I just got this question a few weeks ago!" which was true. But when I was asked it a few weeks previous - I did get it right. It truly was a question I knew the answer to. Almost as if Guy had been one of my study partners for this very interview. And heck, people study interview questions on the internet all the time - by me non-chalantly answering the question I wouldn't be "lying" in any way. I did know the answer on my own!

Now you might think, that in the instant after her asking, and before the moment of time that I began speaking that the entire last paragraph sequenced through my thought process rationalizing that I was, indeed, morally in the right to calmly answer the question and take credit for the answer. But sadly, that wasn't the case. Metaphorically, it was more like she asked the question and my brain immediately raised its hand and started shouting "Me! ooh! ooh! ooh me! I know! ask me!" My brain kept trying to wrestle mouth-control away from me (which happens plenty) but only by stalwart resolve was I able to retain composure.

So I answered. Calmly. With almost unearthly grace and poise. And with a purposeful demeanor - with, I think, a confidence that only someone with complete and encyclopedic knowledge of this timeless and subtle problem would hold.

I breezed over the naive solution as if it were unworthy. I mentioned the sorting solution as if it were wearing a red-shirt on an early episode of Star Trek. And finally, nonchalantly, almost as if I had invented all things good and algorithmically efficient, mentioned the O(n+m) linear solution.

Now mind you - despite my apparent poise - the entire time I was fighting my brain who, internally, was screaming at me -- "TELL HER THE PRIME NUMBER SOLUTION YOU DIMWIT !"

I ignored his pitiful pleas.

As I finished the linear solution explanation, her head dutifully sank with complete non-surprise and she started writing in her notes. She had probably asked that question a hundred times before and I'd guess most people got it right. She probably wrote "yep. boring interview. got boring string question right. no surprise. boring guy but probable hire"

I waited a moment. I let the suspense build as long as possible. I am truly convinced that even a moment longer would have resulted in my brain throwing itself fully into an embolism resulting in me blurting out unintelligible mis-facts about prime numbers.

I broke the calm. "You know, there is another, somewhat cleverer solution"

She lethargically looked up with only a glimmer of hope.

"Given that our range of characters is limited. We could assign each character to a prime number starting at 2. After that we could 'multiply' each character of the large string and then 'divide' by each character of the small string. If the division operation left no remainder, we'd know we have a subset."

I'm guessing that at this point, she looked pretty much as I did when Guy had said the same thing to me. General loss of composure, one pupil was dilated, slight spitting while talking.

After a moment, she blurted "But.. wait that wouldn'... yes it would! But how.. what if.. wow. wow. that works! Neat!"

I sniffed triumphantly. I wrote down "She gave me a 'Neat!'" in my interviewing notes. I'm pretty sure I was getting the job before that question, but it was pretty clear that I was in for sure now. What's more, I'm pretty confident that I (or more precisely, Guy) had just made her day.

I spent 3 years working at Google and had a great time. I quit in 2008 to CTO a new startup and have subsequently started another of my own after that. About a year ago I randomly met Guy at a start-up party who had no idea who I was but when I recounted this story he nearly peed his leather pants laughing.

Again, if there is a moral here - it's to never chase your dream job before you chase a few you're willing to fail at. Apart from the interviewing experience you'll gain, you never know who might just get you ready for that big interview. In fact, that rule just might work for a lot of things in life.

And seriously, if you get the chance and you're looking to hire a crackshot engineer - you could do far worse than hiring Guy. That dude knows things.

(a bit of nitpicky technical detail for the fusty: characters may repeat so strings can be very long and thus counts must be kept. The naive solution can remove a character when it finds it from the large string to do that but its remains O(n*m). The hashtable solution can keep a count as the value of the key->value. Guy's solution still works just fine)

Edit: 11/30/10 - Guy from the story has found this post and gave some clarification in the comments. Worth the read.

Thursday, June 17, 2010

The Young Man's Business Model

I've had an idea bouncing around in my head for awhile that randomly came together recently. And given I have a blog, I thought I'd write it down. This idea came from 3 experiences I've had - and here they are:

Mini-story #1:

In my early 20's I pretty much did 2 things. Ride motorcycles and code. Oh, and given my motorcycles were always sort of junky and I beat the snot out of them, I spent plenty of time fixing motorcycles too - I guess that's 3 things then. (If you think I forgot dating or went to bars or some such - nope. We're good. 3 things).

Every now and then we needed an "old man" (like in his 40's or something) to help us fix something when it was beyond our self-taught abilities. Now when I say "old man" here and throughout this article, I don't necessarily mean "old" (and I don't necessarily mean "man") - I mean "experienced". Experienced at whatever I'm interested in at the time - or more specifically, experienced at what I wasn't experienced in at the time.

And as far as fixing motorcycles, what struck me was the way he'd go about it.

A rather common case would be something like there being one final screw holding on some engine part that we needed to replace, but it was buried deep inside the engine - i.e. you could barely see it. My first reaction was to wedge a screwdriver in there as far as I could - and see if, with luck, brute force, and karma, I could turn it enough to get it out.

The old guy on the other hand never went this route. He merely looked at it a moment, then immediately started taking off the neighboring easy-to-remove piece of the engine. Once that was off, he then effortlessly put his screwdriver in to remove the now exposed screw. Now mind you, the old-guy's way was my back-up plan - but I was betting that my brash exuberance would payoff in a slightly quicker result. Sometimes it did - sometimes it didn't - and sometimes I broke screwdrivers.

This trade-off of investment up-front versus brute-force hope became so obvious that my friends and I used it as vernacular. "Do you want to try this the 'young man' way or the 'old man' way?". It was surprising how without any further explanation we would know all the precise steps involved in both for whatever situation.

Ok. That was mini-story #1, here's mini-story #2. This is a business story but its actually surprisingly similar to the previous one whether you know it or not.

In 1997, I was writing a Java optimizer (this made a lot of sense when Java was interpreted) called DashO. Somewhere along the line I was introduced to a guy at Adobe, who (I was told) wanted exactly what I was building.

When I finally spoke to him, it turned out that the Adobe guy didn't really want Java optimization at all. What he wanted, was Java application size reduction. It had literally become a show-stopper for what he was developing. He was clear that money wasn't a problem - if I could solve his issue, he was a customer.

Wanting to please my newfound (big-time) customer I said "Sure! I can add that in!". Then I shrewdly secured the Adobe guy as a beta tester. This changed the direction that my product took and added about 2-3 months of development, but given the payoff, it seemed worth it.

About mid-way through those 2-3 months my partners and I had lunch with a veteran ("old man") business guy that for some reason seemed to like us and liked to keep tabs on our progress. As I excitedly told him the story of Adobe waiting anxiously for our product, his reaction wasn't as I expected. I thought he'd be excited for us, but instead he had a look of disappointment on his face.

Me: What? What's wrong - this is awesome - Adobe is our first customer!
Old-guy: So you spoke to Adobe. Directly to an internal guy that's a customer
Me: yeah!
Old-guy: And he has plenty of money to solve his problem.
Me: yeah, tons!
Old-guy: And how much of that money are you going to get in the best case?
Me: erm. um. We'll sell a copy.
Old-guy: Right. A copy. Maybe a few if you're lucky.

Old-guy went on to discuss how that deal should have gone. Adobe had effectively contracted me to build them a product that didn't exist (this was true). It was possible that no other customers would ever want that functionality (possible). Simply put, they had a specific business need, lots of money to solve it, and had hand-picked me to be the solver.

I should have structured the deal as a contracting agreement. Charging on a per-hour basis to develop their product using what we already had as a base. Then, give them a discount rate on the hourly rate in exchange for full-rights to further develop and sell the product as our own. This would have been a 6-figure deal which would have meant a lot at that time. What's worse is you might be thinking that I missed an opportunity to fleece a customer - but I argue you're wrong. In fact, that arrangement would have actually brought more value to the Adobe.

In the old-guy's arrangement, Adobe would have then had a hand in guiding the project and making sure all the features they wanted were in the soup. Not to mention, if I didn't build this for them, they simply would have had to hire someone else to do it - probably spending lots more.

Once in awhile, you have a fucking-duh moment - and for me, this was one. If you're thinking "well obviously" then clearly you've done this before, at that time - I hadn't.

Story 3 - a recent breakfast.

I recently had breakfast with a guy I met at an entrepreneur event. He was CTO of a pretty popular website. When he first described his site, I liked the business model a lot. His site fed him data that allowed him to refine his real product: pre-built server boxes which he sold to companies that allowed them to use his software internally.

Visions of sugar-plums and multi-million dollar deals immediately started dancing in my head. As he talked, the rolodex in my mind quickly flipped from person to person. I thought of potential customers, potential partners and even maybe people appropriate to join his team. His product was good, and not that he asked me to, but I couldn't help forming a deal network in my head.

I asked about his sales infrastructure. His answer left me wanting but I figured he was probably still fleshing it out (a very hard task). I almost rhetorically asked about the sales cycle. There wasn't one. Now I was getting confused.

As we talked more it became clear that he and his company were following what I'd call the young-man's business model.

He was basically building a (good) product, then laying it out on the web for all to see and hoping to get a million eyeballs. The viewpoint of the business is to get eyeballs, often from things like Digg or Techcrunch, and then figure out how to keep them. And then amazingly often, this really is the step where entrepreneurs have no clue what happens except they are sure the next step is "and then Profit!".

This is an extremely innocent look at business - and in some sense, its the most logical one if you simply have no other avenues.

This model isn't wrong but now to me (who has of course only recently come to rather shocking self-realization that I am... an "old-man" at how I view business) it seems like a business model without considering connections. Deciding to make connections for your business of course isn't conscious. When something happens, the first thing that pops in your head is "Boy, Fred needs to hear about this". And depending on how many Freds you know dictates how often that idea pops in your head. (and of course, the more Freds you know, the more Freds you will know).

My old-man/young-man nomenclature may not be perfect but it might be statistically correct. Its probably safe to say that on average a 30 year old has a generally more business connections than a 20 year old. From there people simply follow business plans as they occur to them.

To me, my friend at breakfast had a sure winner if he had put together a solid sales and marketing infrastructure. His product should have been selling inside 6 figure deals with several month sales cycles. Now clearly, this model doesn't apply to everything. And plenty of new Web 2.5 startups don't fit this mold - but I also think many people underestimate the idea. So far it seems the evolution of all businesses, even something so webby as Facebook eventually becomes about making deals with big partners at least as much as its about eyeballs.

It wasn't so long ago that saying your new startup was monetized by ads wasn't scary. Some companies go right from eyeballs to ads and to sell-out. Thats great work if you can get it. But the number of eyeballs is limited. Its scary to think that, but on the web, we tend to give value away and "make it up on volume". The only problem is you need a hell of a lot of volume to make up for free. And 6 billion people isn't all that many when it comes down to it.

Personally I think web businesses are growing up. The eyeball business model is getting to be like Market street in San Francisco. Everyone is pierced, shaved, screaming, or on fire. They're crying for attention and they have to keep shouting louder than everyone else to get it.

I have plenty of opinions about business models, but to me, the best business model is one that makes your customer money. I didn't say "saves" them money - big difference. Also, its better yet if that customer is a business. You need less businesses as customers to be successful than if you had individuals as customers. A common sweet-spot is BtoBtoC. Supply to businesses that supply to consumers (and of course, make them money).

If you don't have a ton of business experience, try this - think about your next great web app, then imagine the slickest (or sleaziest, your call) old-man salesperson you ever met sitting in front of you. Picture the idea that this guy is really good at persuasion and networking. He can't code, you may not like him, and he wears shoes you wouldn't wear on halloween, but he's good at what he does. Then imagine handing the old-man 5% of the company (I know its hard, try - remember, its just pretend). You need him truly on your side.

If you had access to the old-man and his imaginary immense rolodex of connections. How else could you sell this? What value could you bring to some customers that currently you can't reach?

Your real business model might be hiding like that last screw holding on part of the engine. Despite you stubbornly breaking screwdrivers, you might not get to what you need. It might just be worth asking yourself, "WWTOMD" - What would the old man do?

Tuesday, November 11, 2008

A thought experiment on the end of Humanity

Pretty slick title huh? Thought of it myself.

My girlfriend used to be a high school teacher. She told me an interesting fact - she said one of her bigger issues was that sometimes when a student handed-in an assignment, it wasn't uncommon for it to be something the student simply found on the Internet, cut-and-pasted into their word processor and handed it in. If you're like most people I tell this too, you're a bit unhappy about the laziness of these students. Instead of learning something for them self, they simply used Google to find it, and (effectively) recite what they found. Pretty weak, eh?

Einstein was once asked how many feet are in a mile. He replied something like "I don't keep information in my head, when I can just open a book up" (I googled that). Einstein apparently didn't have google.

Funny thing is that when Einstein was alive he'd look up simple facts (i.e. 5280 feet) in a book. Ten years ago we had the ability to look it up on our computers. Now I can look it up on my phone that's with me at all times. What do you think is next?

Let's say that what's next is mind interface to the net. Surely, this isn't a new idea and people are working on this right now.

But think a second - what happens when we have instantaneous access to the Internet without moving a muscle. If you ask me how many feet are in a mile and I answer - you won't know if I knew it, or if I "looked it up". And at that point, it pretty much won't matter. If it takes more effort to memorize it (to my real memory) than it will be better and faster to just leave it on the Internet and grab it there whenever I need it.

Like all technology this promises to have its glitches at first - but eventually, it will be pretty reliable. And what then? Well, if our minds work like our flabby bellies, then our human memory will atrophy. We'll slowly but surely lose the ability to remember things.

We tend to describe the idea of "knowing things" as wisdom. And we tend to describe the idea of "figuring out things" (like math or connecting disparate concepts) as intelligence. A way to distinguish this is that you can be born intelligent, but you can't be born wise.

Tomorrow's Internet has the potential to fully replace wisdom. We won't be any less wise - in fact, we'll all be instantaneously super-wise. And equally-wise (which may be weirder than being super-wise). Even children.

If you think this is crazy - I argue its already happening. Those kids in my girlfriend's old class already find memorizing things to be more effort than simply googling it. As soon as they get a faster interface to that information, they'll take it.

Most people that disagree with me on this don't actually disagree, they simply fear it. It does spell a fundamental change in humanity - and that's rather frightening. Surely things will change fast. At a minimum, all business that relies on hiding information will be, ya know, gone.

But it doesn't end there.

If we all gain super wisdom, then the only mental differentiation between us is intelligence. How fast can you multiply two numbers? How many times must some explain particle physics to you before you get the relationships between the elements involved?

The first computer beat the first human chess grandmaster in 1998. We pretty much always associated chess with intelligence, but chess is actually a pretty unfair example. Humans approach chess abstractly. In some sense considering the board as a whole, processing it in parallel, and extrapolating opportunities from it. Computers work far differently. They simply examine every possible combination (with some smart algorithms to not examine useless moves) of the game from this point forward. Chess has so many possibilities that it took awhile for computers to get fast enough and computer programmers to get clever enough to search enough possibilities to beat a human.

Computer "intelligence" is likely farther off than computer "wisdom". But you're fooling yourself if you think it isn't coming. The human brain is in essence, just a machine - damage it and it stops working. Give it alcohol and it gets off kilter. Computers will reach it - maybe not computers as we know them, but computational machines will. Ray Kurzweil predicts this sometime in the 2020's or so (per the book I read anyway, he might have changed his estimate - incidentally, he predicted computers would beat a chess grandmaster in 1997 - he was off by a year).

So what happens then? To us I mean.

By that time we will have farmed out our personal memory long ago. And then, we'll start farming out our thinking. We already happily do this with calculators or spreadsheets. We all know computers kick our ass when it comes to math. Who wants to do long division anymore? Let the computer do it. We've already farmed that part of our intellect out. If you told me I could get a chip put in my head that let me do all math instantly, I'd sign up for sure.

What happens when computers can do more? I mean, literally think for us. It won't happen overnight. But just like long division and multiplication today - we'll do it little by little. As computers get smarter and smarter, and as our interface to them gets faster and simpler, we'll slowly but surely, give them our thinking tasks.

And just like the dumbification of our kids today - and just like our fat bellies and long atrophied human memory, our unused thinking capacity then gets lazy too.

What happens then? Seems like, in some sense, we sort of cease to be as we know us. We become conduits to some consciousness we created elsewhere. You can call this extinction, paradigm shift, or apotheosis - it probably doesn't much matter.

I'm not smart enough to know what happens in this borgian future - but I have a feeling, that in 20 or 30 years, I sure will be. And so will you.

Kurzweil is a great read on ideas of the future:
Age of Spiritual Machines

Monday, October 27, 2008

Never send your Application out alone again

Anyone that reads my blog knows I was one of the founders of a company called Preemptive Solutions, Inc. Preemptive was my first startup and has a very been very successful in evolving its DashO and Dotfuscator product lines. Those products are near and dear to my heart as the initial incarnation of DashO was spawned from my Ph.D. dissertation work. People often now associate it as a Java Obfuscator, but to me that was largely an afterthought. Its a static analyzer of an interesting sort for Java. I had originally set out to write a Java bytecode optimizer, but I quickly realized that given Java's nature, you fall pretty flat on how and when you can do static analysis.

Java (and .NET) have very many dynamic components (the more you look, the more you tend to find). My dissertation ( was most interested in a scheme to identify closed systems inside of Java applications. Basically cordoning off open hooks into Java applications and not trying to optimize across them. In essence, it identifies sub-applications within Java and .Net applications and optimizes those one at a time.

This is all well and good, but its basically old news.

Whats new news is Preemptive's new product line. As Preemptive evolved those static analyzers, they got really really good at instrumenting code. In fact it became second nature. Preemptive's new product line takes advantage of this know-how.

They call it "Runtime Intelligence" - I call it fricking cool.

I explain it like this... In past decade application servers popped up to provide an application services cradle for which you to drop your business logic code into. Basically, you write a nice little piece of business logic, put it into an application server, and that server took care of all boilerplate details like database access, fault-tolerance, load-balancing, etc. Its a silly idea to think every website had to write code to handle these generic ideas.

The heyday of application servers isn't what it used to be as many discovered that they added a ton of overhead for applications that weren't using all those shiny services. In fact, new web or server frameworks pop up all the time to literally "part out" application server functionality. You used to ask someone their server infrastructure and they'd say "Weblogic" - now its not uncommon to hear "Spring, Hibernate, Struts2 and GWT".

Runtime Intelligence is sort of the inverse of the idea of an application server. Simply put, Runtime Intelligence allows you to "inject" prebuilt functionality modules into your application. So, does your super application need licensing? Does it need to update itself through patching? How about statistics on how people are using the product?

You got it.

Write your code like you planned to without worrying about "generic" functionality pieces and "inject" them later.

Whats more is that Microsoft has bought into this idea in a big way for .NET. Microsoft today announced a joint press release (See it here) with Preemptive at PDC about this product. If you're familiar with how Microsoft works, you know that joint press releases are pretty rare. Its clear to me that they "get it". This is big.

Preemptive's first round of injectable functionality is pretty slick too. Basically a statistical package for your application. Like web analytics, only for applications. Ever implement a feature and wonder how many people really use it? How about finding out that 33% of your customers never get past the 2nd page on your wizard (maybe its design is too confusing?) How about finding out that 68% of users tend to do 5 features in the same order everytime - and you could easily add a new feature that does that for them. Simply put - releasing an application into the wild unknown and "guessing" how users use it is a thing of the past.

Surely, this kind of application monitoring makes a lot of sense for certain types of applications (of course, its not right for every application just the same way other boilerplate functionality like licensing or patching would or wouldn't be). Either way, this opens up all new possibilities in development planning for applications. I expect plenty of meetings between sales teams and project managers discussing this data.

Some people have compared this to aspect oriented programming, but that's quite inaccurate once you look deeper. I've used both and aspects feel like a sledge hammer (and at least for the packages I've used, an annoying-to-configure one at that). Runtime intelligence is surgical (as far as I know, no one is doing feature stats with aspects). You write the code and inject real business boilerplate functionality anywhere and anyway you want.

As you can tell, I'm really excited about this - and I'm doubly excited that Microsoft is on board with it too. If you're going to PDC this week, definitely check these guys out.

Disclaimer: I have an unhealthy crush on this company. It has gone farther than I had ever imagined and I'm continually impressed of their accomplishments and future.

Thursday, August 28, 2008

Probably the hardest sales job ever

The VP of Marketing of my old company is an absolute master at analogies. One of my favorites was when he described to me the idea of selling a new product that creates a brand-new niche - often a very difficult task.

He likened it to the first person that had to break ground selling thermometers. Not the "How's the weather" thermometers, I mean the "Do you have a fever thermometers". Surely nowadays these are digital little gizmos, but when they came out they were the old-fashioned mercury based ones.

I can imagine the sales-pitch:

Customer: So, whats it good for?
Salesman: It will tell you your temperature.

Customer: Why do I care about that?
Salesman: Well, then you will know when you have a fever.

Customer: Um. I already know when I have a fever.
Salesman: Yeah, but now you'll be sure.

Customer: Erm.. k.. What's it made of?
Salesman: Glass

Customer: Whats that stuff inside it?
Salesman: Mercury - careful, its toxic.

Customer: How do I use it?
Salesman: You just put it in your butt for 2 minutes.

Um. So basically, you want me to take this toxic-substance filled thermo-thing made of breakable glass, stick it and leave it in my butt for 2 minutes so that I'll know something I pretty much already knew.
Salesman: Yepper.

Customer: Awesome - I'll take 2 !

That had to be a hard job. Solve a problem that was perceived as not needing solving and then do it in a new, dangerous, and highly uncomfortable way. And you thought software was hard.

Monday, March 17, 2008

A few ideas about Negotiation

A good friend of mine asked me for some negotiating tips. This is what I told her. Use, agree, or disagree with them at your own risk.

1) Never put numbers in email. Email lives forever. Numbers are only discussed on phone or in person. Only written down when you're signing the contract.

2) There's an old saying "Whoever puts the number on the table first - loses". In general, this is good fallback advice.

I modify this according to several factors:
a) The less you can predict the outcome, the more likely I let the adversary say the first number. (i.e. revenue-less company valuations are often voodoo - its quite possible your buyer will give a higher number than you ever imagined).
b) The more I need a deal, the quicker I am to say this first number. This sets a tone.
c) Conversely, the less I need a deal - I'm willing to let them show me just how bad they want it. The danger is if they give an extreme lowball, I need to be able to walk.

3) No matter what they offer, ask for more. How forcefully depends on how good the deal already is. If they offer you 10% when you were expecting 3, meekly ask for 12% and back down fast if needed. If they offer 1%, strongly go for 4% and settle for 2.5.

4) Don't answer the phone if they call to discuss the negotiation. You are probably thinking about the chicken mcnuggets you just ate and they have been thinking the last 20mins how the phone negotiation will go. In short - they are prepared, you aren't. Let them goto voicemail. Wait an hour.. spend 10 minutes focusing on the possibilities of the negotiation and call them back. Their mind will be elsewhere now. You'll be ready.

5) Seriously - don't ignore #4. Fifteen seconds is just not enough time to swap your mind into the right context. Besides, information they leave in the voicemail could be advantageous.

6) (Unless you're reading this and you end up negotiating with me - then we might as well set a time in the future to chat otherwise we'll never answer each other's calls.)

7) *Everytime* you sign a contract, you are giving up something. Take a step back and make sure you fully understand all that you are giving up - and all that you are receiving in return. Never sign a contract (or sleep with someone for that matter) because you feel bullied into it.

8) A common negotiating tactic is to put your adversary in an uncomfortable situation. The hope is that the adversary will compromise some just to relieve the discomfort (the more experienced the negotiator, the less likely this is). If you can, reverse the discomfort instead. (This is a class used-car-salesman tactic - think "But you told me yesterday you were going to buy this car!")

Surely negotiation is an art and there's plenty more to it. These ideas are at best a few tricks and tips. Negotiation is a dance - you can't exactly know what you'll have to do until you are forced to react to what your partner does. Thus just like dancing, practice does wonders for your skill.