Hank Williams Archive

A platform is traditionally considered to be something on top of which you can build other applications. Last week Fred Wilson lamented that people really aren’t making new applications on top of Twitter. There’s been a bit of uproar over Fred’s post, and then Twitter’s aquisition of Tweetie including an article in today’s New York Times.

But being upset over Twitter’s desire to control more of the Twitter ecosystem misses the point a bit. The reason that, after several years and tens of millions of registered users that people are not building new app categories on top of twitter is that Twitter is not really a platform.

Let me explain.

Fred correctly pointed out most of the apps that people are making are not new apps. What you do with the current generation of twitter apps is essentially what you could always do with Twitter which is to share bite size bits of content with others that are interested.

Continue reading “Twitter isn’t a platform. Yet.” »

Yesterday I wrote about the issue of vendor lock-in regarding cloud-based services and how I think developers should think about it. In that discussion, I touched on the open source strategy of cloud computing company 10Gen. After thinking about it I begin to believe that such a strategy may be a serious liability for cloud-based services.

Then, this morning I read an article By Nick Carr where he discussed the significance of open source to buyers. His thesis is that what is most important are the meat and potatoes issues around reliability security, etc. Specifically, Carr says:

We can (and will) have debates about the relative openness of Azure and AWS and Force.com and all the other "cloud platforms" that are available or will be available. And those will be important debates. But in this early stage of the cloud’s development, openness means little to the buyer (or user). The buyers, particularly those in big companies, are nervous about the cloud even as they are becoming increasingly eager to reap the benefits the cloud can provide. What they care about right now is security, reliability, features, compatibility with their existing systems and applications, ease of adoption, stability of the vendor, and other practical concerns. In the long run, they may come to regret their lack of stress on openness, but in the here-and-now it’s just not a major consideration. They want stuff that works and won’t blow up in their faces.

This is very much in line with my thinking from yesterday. Azure is a big deal. No one is going to care about the fact that it is not open source. Basic hosting is going to become a commodity business very quickly, with Microsoft, Amazon, and Google (MAG) competing in the game of creating highly scalable services that use traditional development methodologies. Microsoft is now ahead in that game from a technology perspective. Amazon is ahead in customers, and Google, for now, is left in the dust but can obviously catch up. But I don’t see any of these guys making any of their cloud technology open source, and I don’t think it matters.

I liken open source in this space to DRM in the music business. Its one of those things that a small number of people complain about but will later be proven totally irrelevant to the rank and file buyer. We now have statistics to prove that DRM was irrelevant in terms of sales, and we are beginning to see the outlines of the irrelevancy of openness in the cloud.

The real issue here is that small companies are not going to be able to compete selling basic “get your applications into the cloud” type services. MAG is going to own that business. I think that 10Gen and other companies providing baseline services are going to have a rough time playing that game.

Startups who wish to compete in the cloud business will have to provide great value added services that facilitate unique new application categories sitting on top of one or more of the MAG clouds. The services will have to be hard to copy and/or narrow enough to not attract the attention of MAG.

Given the need to innovate in some unique way, and the need to be interoperable with MAG clouds, I am not at all clear how you can create innovate cloud platform services using an open source business model in a money making way. Being open source in this space is akin to what it might be like if Apple made OSX open source and optimized it to run on standard Intel PCs. Good karma perhaps. Good profits, not so much.

Of course many open source businesses hang their hat on services, consulting and support. I personally hate time and materials type businesses masquerading as scalable software businesses, but my opinions aside, these are by and large tough businesses to succeed at.

In short, while being open source may be politically correct, I fear it may be a grave hindrance towards providing a defensible, unique, money-making offering in the cloud.

This article was authored by Hank Williams who is a New York-based entrepreneur who explores the tech marketplace from 10,000 feet at Why Does Everything Suck?.

I am a member of the NextNY mailing list which is a group of New York folks that talk about tech business and entrepreneurship. A recent conversation and actually a persistent theme in that group is that in a startup, an idea is worth %1 and execution is worth 99% or some other highly disproportionate ratio.

I take issue with the concept.

Here’s the problem with the formulation. It belies a misunderstanding of what an actionable “idea” really is. A good idea is almost never some light bulb moment that occurs where you realize some insight that no one else has seen. In truth there are few of those. Very, very few people are that smart or that lucky. Great actionable ideas are really a collection of much smaller ideas, weaved together in such a way as to create something useful unique and compelling. There are few actionable “aha” moments.

In other words, to me, coming up with great actionable ideas requires lots of perspiration, iteration, and ideation. However, once you have an actionable idea that has been achieved through this process it is worth *way* more than 1%. I would say getting to this point is worth easily 50% and perhaps well more than 50% of the value of your enterprise. Actionable and truly compelling business ideas are incredibly valuable. And most people that say otherwise probably don’t have them. For example if you open up a shoe store on Amazon, there is likely no “idea” there. But if you have developed a set of insights which allows you to develop a cost effective and safe hovercraft, that is certainly a valuable idea.

The problem is that people confuse the idea creation process with the execution process. They are different. I think one can, at times, blend the idea creation process with the *development* process, but there are important distinctions. When development is just execution of some defined idea, that is not idea creation. That is part of execution.

On the other hand, when the development process is part of the ideation process, you have set the stage for an environment where real creativity is possible. But in order for this to work, the development process must be more interactive and less goal-oriented. Great ideas come from having a bit of a “lab-like” environment in the early stages of your process. This is because exploration is almost always required to achieve a great compelling concept. Few of us has the ability to see with clarity a really useful idea from the beginning of the process, which is why iteration and stepwise refinement is so important.

This leads to what I think is a very important issue in the idea development process. There are lots of people who strongly suggest that you should do your development in public. It is part of the “release early and often” concept. But I also believe that this concept is not effective in developing great ideas because it is limiting. The minute that you get real customers involved, their needs become much more pedestrian. They will yell loudly about things that may be important to their use of the product, but they will rarely yell about some new game-changing concept. In fact they will resist radical change and rethinking because it messes with their now committed workflow. And now you are comitted to supporting them.

To be clear, I am not saying that a mediocre idea can’t be a good business. But good businesses are not all great ideas.

So as I see it, if you want to do something great, you should strongly consider whether you have enough meat on your conceptual bone before you decide to release publicly. Because when you get users involved, it is the equivalent of putting the saw and the screwdriver down and grabbing the sand paper. There will likely be few additional big ideas after that point.

And so the point of all of this is that I feel few people really respect the process of creating big ideas. Compelling idea creation is hard and it is incredibly valuable. And as I see it, the “release early and often” meme is a reflection of a broad-based acceptance of incrementalism, in lieu of real creativity. In truth some of these incredibly popular concepts may be behind the incredible slow down we have seen in real innovation in the tech economy in the last decade.

This article was authored by Hank Williams who is a New York-based entrepreneur who explores the tech marketplace from 10,000 feet at Why Does Everything Suck?.

On Wednesday I attended the Sandbox Summit here in New York, which is a conference about the intersection between technology, toys, play, and learning. For someone deeply embedded in the software development world, but also deeply troubled by the state of education in America, the event seemed fascinating and also pregnant with possibility. And it did not disappoint.

And while many of the speakers had lots of really interesting stuff to say, one statement by Nancy Schulman, Director, 92nd Street Y Nursery School really got my attention. She said “kindergarten is becoming more like regular school, but I think regular school and life should become more like kindergarten.”

For those that may miss the nuance, what she was suggesting is that joyful playful exploration is critical to learning. Rote learning and memorization is less effective. As I sat, I realized how much the ideas I was hearing relate to how we make products. Much of this way of thinking I believe is already embedded in my thought processes, but there is something different and crucially important about codifying it, and expressing it concisely. What Schulman was saying got me immediately thinking about Apple.

I believe that a big part of the reason that Apple has been successful is that they figured out long ago that their products had to have the elements of joyful exploration that are the hallmarks of great toys. The concept of play is generally something associated with children, but I believe that that desire and that need never die. It is just muted by the expectations of adulthood.

The best example of this is my mother’s excitement about her new iPhone. My mother loves her iPhone because it is the best toy she has had since childhood. No, she has not said this to me, but I can see it clear as day. When she played her first YouTube video, she could not wait to tell me. For her, the iPhone is hard enough to still present challenges, and yet easy enough that she can overcome them. And the payoffs are joyous. The sound, the animation, the smooth virtual physics are incredibly compelling and toy-like. But of course it is not a “toy” it is a phone. It has a real function so she could never be accused of “playing.”

And so, the real question here is what does Apple, and what does the Sandbox Summit teach us about our way forward. First, I think that Apple sets a great example of what is possible, and it should inspire us to make our products more playful, accessible and exploratory.

But the second and more important lesson is that adulthood, and teen-hood are not demarcation points for a reduced interest in play – in fact the converse may be the case, meaning play may in fact become *more* important as we get older. And with our high school graduation rates at 50% in our 20 largest cities, something is obviously and seriously wrong with our current process. With that said I suggest that perhaps our educational system could use a serious injection of not so serious exploration and play. It seems to work for Apple.

This article was authored by Hank Williams who is a New York-based entrepreneur who explores the tech marketplace from 10,000 feet at Why Does Everything Suck?.

Apple has claimed that the iPhone does not do background processing because supporting it would hurt the performance of the phone. Jobs has said Apple’s concern is that because the processor is limited, loading up the phone with background apps is likely to crash the machine or bring it to its knees.

I have discussed this issue in the past. I have also discussed Apple’s response to the issue, which is an improved way of handling notification of inbound events like instant messages, which would normally be implemented through a background task.

I understand Apple’s concern about background processing, but I personally think its pretty lame. As I have written, there are ways to handle Apple’s concern. But the interesting thing is that the first Android phone, The T-Mobile G1 has been announced and will be out in the wild available on October 22nd. Android has no restrictions at all on background processing, and the first Android handset, the G1 is pretty similar to the iPhone hardware.

The question is, will Android demonstrate that Steve was somehow disingenuous about this whole background processing thing, or will the Android team be shown to be foolhardy about this critical performance issue? Nokia’s Symbian-based phones seem to handle background tasks just fine, but admittedly I don’t think many people are motivated to load up a Nokia smartphone with software in the same way that people are doing with the iPhone. But Android is really a true test. There will be lots of software, an easy to use app exchange, and a sense of openness that will encourage experimentation.

I am personally very curious to see what happens in the Petri dish.

This article was authored by Hank Williams who is a New York-based entrepreneur who explores the tech marketplace from 10,000 feet at Why Does Everything Suck?.

A big part of what I do professionally is focused on thinking about how to improve the usefulness of the web. Tied into that is the additional question of how to empower developers to create more useful applications.

Much of this exploration has lead me to believe that the most powerful “pregnant” web concept is the simple idea that the web should be a web of objects, and should become less a web of text or pages. Indeed the web has been moving in that direction, but the road map has not been entirely clear.

Web inventor Sir Tim Berners-Lee and the W3C have pioneered the broad outlines of the concept of objectifying the web with the ideas embodied in the W3C semantic web specifications for RDF, OWL, and SPARQL technologies. But in truth, most developers have no idea what the term the “semantic web” means and are totally unfamiliar with RDF, OWL and SPARQL.

Despite the fact that the officially proposed terminology and methodologies have not quite taken hold, the idea of “objects not pages” most definitely has. Application developers are creating APIs to allow people to access their data objects, and other application developers are using those APIs to consume data objects. And because the need is so great, when developers do not make their data objects easily accessible, other applications are going as far as scraping web pages, in effect manually objectifying source sites.

And so, while the most common term for the idea of “objects not pages” has been the “semantic web”, I would really like to get everyone around the lesser known but more encompassing term, Web 3.0.

I know the idea of glomming onto the Web 2.0 bandwagon rubs some people the wrong way, but we need a “big tent” term to describe stuff that is so important, and the truth is the word “semantic web” just doesn’t cut it. In fact, in my informal surveys, it almost universally turns people off.

But terminology aside, the concepts here are really important and are building momentum. We must, as a developer/entrepreneur community begin to focus on best practices for this object-oriented web, and to discuss its broader implications. The emerging mashups and semantic applications are compelling, but they are just the beginning. Facebook and its social graph is really the first major Web 3.0 application, so make no mistake, these ideas are powerful.

Because I believe this is such an important mission, and because I strongly believe it needs more shepherding, I have committed to doing my part to move these ideas forward. I am co-chairing the Jupiter Web 3.0 Conference Series, which launches in Santa Clara next month. My co-chair is Dan Grigorovici who writes lots of interesting stuff on this space at web3beat.

The Web 3.0 Conference is the first in what will be a regular series that we hope will become *the* gathering ground for talking about how we can, should, and will approach these next generation issues. And indeed since I have been thinking a lot about these issues I will be writing a lot about them in the next few weeks.

Particularly if you are in the Bay Area, but really no matter where you are, if you want to get a view into where the next generation of the web is going and how you can leverage it, this will be the place to be. But whether you come to the conference or not, I am hoping to spark a discussion about moving the ball forward. Needless to say I have my own ideas, which I will be sharing, both in person at the conference and on these pages in the next few weeks, but this should be a multi-way discussion. If you blog about this issue and let me know I will link to you in upcoming posts, and I will try to respond as well.

Let the Web 3.0 Era begin!

Web 3.0 Conference, October 16th & 17th, Santa Clara, CA

Today Lehman is filing for Chapter 11 bankruptcy protection, and Merrill Lynch is being bought for chicken feed by Bank of America.

The Wall Street sky is falling. but what does that mean to tech companies, and particularly to startups?

The last five or six years have been all about community, "social media" and other related types of communications. That era has ended and the next phase of the Web will be about *real* productivity. That means products that make you more efficient, and more effective. It means software that saves you money or makes you money. And yes, we are really going to have to start paying for the good stuff.

One theme that has been emerging is being referred to as "web meets world". It’s an idea that has been discussed by Brad Burnham from Union Square Ventures, and also the folks at the Web 2.0 Summit. The concept is that the web needs to actually help you do things in the real world, and not just meet other folks on the web. I think this is all true but it is really just a fancy abstraction for helping people do things that matter, and things that they will pay for. As an example, Union Square just invested in Meetup — a terrific investment. Meetup makes real money charging people for helping connect them to other people. They are providing real value and so people pay real money.

I find this "web meets world" concept particularly interesting because of a controversial piece I wrote back in April called "Free Is Killing Us, Blame The VCs." The core of my thesis in that piece is not that free is inherently bad, but that too much free was distorting the value of the market because the free is only supported by VC money and not real value being delivered to users.

As a result, I opined, it was way too hard to start a small business and to grow it because you need to "get to scale" since everything is expected to be free and monetized by advertising, which requires lots of users. Perhaps the idea people found most objectionable was when I said the following:

In today’s “free” world, in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it. This is because in the digital world, advertising, the only real revenue stream, cannot support a small digital business. If businesses were based on the idea that people paid for services then small companies could succeed at a small scale and grow. But it is very hard to charge when your competition is free.

People really objected to the idea that "in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it." And of course there is room for debate here. But what is not debatable is that by and large, tech startups engaged in offering totally free services ( I am not talking about freemium here) are not making money, and they are not getting acquired. Its fine not to get acquired, but you can’t do that very long if you’re not making money. And now that "free" VC capital is drying up, sustaining such businesses will be really tough.

Interestingly, at the time, Brad, among many others, took me to task for having a dated view of the online world, and for not understanding how it really works.

But in my view, Brad’s stated new thesis is exactly in line with my writing at the time. "web meets world" really might be better phrased "web meets money." There will be fewer and fewer companies getting funded by offering services that help online folks interact with other online folks, because cool as it is, people won’t pay for it, and the bottom is going to fall out. Brad and Union Square’s new investment thesis is the canary in the coalmine for that strategy.

Brad’s rebuttal to my April piece talks a lot about new business models that are going to emerge that I am just missing. But five months later, I see no evidence of it, and "web meets world" to me, suggests that in their heart of hearts, they don’t either.

In fact, I think companies like 37 Signals have had it right all along. They preach charging people for services, and staying small, and adding real productive value. Scale is irrelevant in this model because the software ads value to the individual without the network effect. In this model, scale is a benefit, not a requirement. I am not saying there will not be successful advertising based companies, but I am saying they will have to solve really serious issues like improving the value equation of online banner ads, in order to be successful.

As I see it, this is a fantastic shift in the marketplace, because it means if you have a company that adds real value, you are less likely to get thrown off course by a flood of capital creating unsustainable competition. I am very happy the venture markets are making this shift.

This article was authored by Hank Williams who is a New York-based entrepreneur who explores the tech marketplace from 10,000 feet at Why Does Everything Suck?.