‘Sell Him On The Idea That’ ..

Here is an amazing technique to add an element of excitement to everything you do (with the exception of coding – because the greatest thing about coding is that you can do it alone) – before you take up any task, just rephrase your task, in the following format: “I need to sell him on the idea that …” . Let us take a few examples:

1. Talk to a potential hire: “I need to sell him on the idea that this would be a great move for his career”

2. Ask your boss for an unplanned vacation: ” I need to sell him on the idea that this is something I cannot avoid, but I will more than make up for my absence once I am back”

3. Write to a blogger to cover your app: “I need to sell him on the idea that this content would fit into his site, and would get blog stand out of the crowd”

4. Talk to your boss about a raise: “I need to sell him on the idea that this is the right thing to do”

What changes when you do this? You get into a sales mode – and your arguments will be structured in such a way that “No” as a response is just not acceptable.

And Yes, what you are thinking is right – this blog post is a result of “Sell the reader on the idea that trying this approach will work wonders for him”. Try it to believe it.

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How Important Is It To Be Disruptive?

We hear this all the time: we are disrupting the [fill in a vertical of your choice] industry. So we have seen startups trying to disrupt the healthcare industry, the publishing industry and so on. We even have a conference with that name.

But how important is it to be disruptive? Is it a necessary condition for success? Being disruptive – is that overrated?

Examples abound. The scenario where a non-disruptive (facilitative?) idea becomes a commercial success is more common than a disruptive idea becoming a commercial success, across verticals. So why does everyone want to be disruptive?

It boils down to this simple idea: if you try disrupting an industry and you succeed, the results are well worth the risk. Disruptive ideas are not capped by existing industry equations. In a lot of ways, for a truly successful disruptor, the sky is indeed the limit. And that is precisely why the term ‘disruptive’ is popular in the startup world – folks are out to change the world, and not run a lifestyle business.

There is an important lesson there – if you are the kind of person that likes swinging for the fences, go ahead and try to disrupt whole industries. If not, you might be better off trying to identify inefficiencies in a vertical that you know, and fix those inefficiencies profitably. Most of commerce has actually evolved that way.

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Which Chinese Restaurant Do The Chinese Go To?

In 2004, over lunch, a friend told me he has finally understood the trick to figure out the best chinese restaurant in town. “Just ask your Chinese friends. Which Chinese restaurant do they go to? Obviously, that would be the place serving the best Chinese food in town”. I thought he was making a very obvious point – i told him that – and we just laughed it off. Before we changed topics, my friend told me this: “But you possibly cannot use this trick to find out the best Peruvian place for example – there are not many Peruvians around”. Of course. How is it even possible to figure out who went where, and what they thought about the food?

That was in 2004. The smartest phone you could find was an email device called Blackberry. ‘Location’ was still a term used mostly by real-estate agents and not technology folks.

I was reminded of that lunch table discussion last week – I was watching an interview of Dennis Crowley (Foursquare) – and he mentioned a new Foursquare feature: “How do you know which place serves the greatest Argentinian food in New York? You can look up what your friends say, and more importantly, you can see what your friends who have been to Argentina recently and have tasted Argentinian food there, say about places that serve Argentinian food in New York after they returned to the US. That is pretty awesome”.

The next time your friends tell you something obvious, like “Which Chinese Restaurant Do The Chinese Go To?” – pay attention. Even better, pull out your smartphone and see how that device can be used to make that comment ‘possible’. You could potentially be staring at a billion dollar idea.

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Bitcoin’s Rise: What If It Is Not A Bubble?

Some very smart folks have written about the recent rise of Bitcoin – the general consensus seems to be that this is definitely a bubble and will soon end in ‘tears’. Yes, someone out there is paying real money to buy these Bitcoins, but the financial world quotes one simple reason – ‘hey you can’t short it’ and attributes the recent rise of Bitcoin to that one factor, calls it a bubble, and tries to move on.

But what if it is not a bubble?

We have had our doubts on the Bitcoin economy – specifically, around the way the economy is shaping up – we had said this before – ‘If you think about it, the current model, where you have these ‘middlemen’ saying ‘Just pay me in Bitcoins. I will pay for what you need in USDs ‘ – is not natural. It would just get the hoarding levels up. It is one big issue with the Bitcoin Economy – and would impact its health in a bad way.’

So what is the basis for our question – “what if it is not a bubble?”

1. Many Bitcoin startups have received VC funding. The total amount invested in these startups could me more than $5 Million (Source). It’s not the scale, it’s the fact that they thought that the Bitcoin ecosystem could thrive – that is huge. Each one of those investments is a calculated bet on the future of Bitcoin.

2. How can you call something a bubble, when nobody has any idea how to value the thing? The whole dotcom bubble was a “bubble” because valuations for companies were not justifiable based on traditional valuation methods (profits and cash flows) – but those traditional methods existed. In this case, no such valuation methods exist.

3. A better term to explain what is happening with Bitcoins could be ‘Gold Rush’. But even in the Gold Rush, it is a fact that some people actually managed to make tons of money.

4. When we do not know the source of funds, such a rise in prices is actually more convincing, because we could argue that a diverse set of folks are analyzing the future of Bitcoin and are arriving at similar conclusions. (In the housing bubble, money came from the banks in the form of sub-prime loans, so it is easy to call it a bubble for example). It is possible that most folks are not buying Bitcoins right now to sell it for a profit before the music stops (in which case it would be a bubble). In this case, there are definitely other reasons why the money is coming in.

5. You cannot short Bitcoins, but you can sell them for sure. Where is the selling pressure?

(Historically, the ability to short-sell a commodity has never been a requirement for efficient price discovery)

We don’t know if this is a bubble or not – but we need to ask ourselves ‘what if it is not a bubble?’ – let us not make the mistake of missing out on the early stages of a truly revolutionary concept by dismissing the whole thing as a bubble driven only by speculation.

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Twitter Killed RSS. Period.

There, we said it. Marco Arment wrote an article today, explaining how the majority of folks ended up using RSS the wrong way – he says the way it must have been used, was to get updates from infrequently updated sites. Turns out, this is just another way of saying ‘If the news is important, it will reach me. For things that I find interesting but not many others might, I will subscribe to their RSS feed’.

While we agree that this is the current state of affairs, it is important to remember that this reduced role for RSS is new. This was not the case in the pre-twitter (should we say non real-time?) days. RSS was simple but magical: you saw something that you wanted to ‘follow’ or ‘keep track of’ – you looked for that orange button and clicked on it. You could be sure that you wouldn’t ‘miss’ any updates, and you did not have to bookmark a ton of things. Really Simple Subscription.

Then one fine day in 2006, Jack Dorsey sent out this: “”just setting up my twttr” to a group of ‘followers’. It took some time for Twitter to get positioned as the pillar of the real-time revolution, but when it did, it did it right. So right, that the term ‘breaking news’ is now synonymous with ‘Twitter’. But it had an interesting side-effect – the kind of asynchronous ‘Follower’ model was a neat replacement for things like Email updates and RSS, because in essence, that is exactly what they were: an asynchronous way to follow interesting things.

In the new world, Marco’s argument: “Without RSS readers, the long tail would be cut off. The rich would get richer: only the big-name sites get regular readership without RSS, so the smaller sites would only get scraps of occasional Twitter links from the few people who remember to check them regularly, and that number would dwindle.” – sounds like an effort to save a dying technology by citing a solid use case for its existence. However, we think that the use case is weak, because the twitter crowd is going to say “oh the whole long tail thing? it’s just a hashtag” and then the Twitter API will take care of the rest.

Twitter Killed RSS. Period.

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The One Understated Benefit Of Twitter’s 140-Characters Limit

A lot has been written about how the 140 character limit of a Tweet (originally, a technical limit since text messages were used as one of the mechanisms to send a tweet) has encouraged people to share ‘quick updates’ – basically there is not much to write but the actual message, and this limit has been widely credited with the spread of the medium, since it eliminates the friction of writing something long.

This characteristic of a Tweet has also been credited with ‘forcing’ people to be brief and ‘to the point’ – in fact, many people thank this characteristic of a Tweet, since they need to read less to understand the message. This characteristic has also been praised for being the driving force behind Twitter emerging as a platform for ‘breaking news’: it is just 140 characters – and you can just tweet from a cellphone. This limit has also been quoted as the reason for a lot of ‘in-tweet’ innovations, like the hashtag for example.

Here is one benefit of a Tweet being 140 characters that we think has been understated but nevertheless has been as much as a driving force for Twitter’s success as the other reasons mentioned above: from a programming standpoint, consuming, storing and analyzing a tweet is much simpler than, for example, a blog post. It is just 140 characters. And this fact has been responsible for a lot many apps based on Twitter API moving from ‘traction’ to ‘scale’ very quickly. Yes, there are millions of tweets. But it’s all just 140 characters! (Right, we are not considering expanded tweets, but you get the idea).

This supply of brief messages has made possible, a huge spectrum of products and servies based on analyzing thought streams – isn’t that a dream scenario – self-summarized thought streams expressed in just 140 characters, presented to a programmer used to analyzing paragraphs of text trying to separate the signal from the noise ! (The signal to noise ratio in tweets is a different argument though)

And yes, we could have said all of this in 140 characters

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You don’t want jacks-of-all-trades. You want experts.

(This post is a response to Bryan Goldberg’s article in PandoDaily)

Bryan’s argument revolves around two points – quoting from the article,

1. “But I’ll wager that there aren’t many people on the planet who understand the confluence of technology, editorial, and advertising better than me.”
2. “But what really catalyzed our success was that the founding team could bring it all together. Short of that, you would have had a boardroom where the editors, engineers, and salespeople were talking past each other and growing frustrated.”

Confluence and bringing it all together. That is basically the argument. Bryan’s idea seems to be that you can ‘hire’ experts – but to get it all together, you need a jack-of-all-trades running the show. It sounds like a great idea, except that it isn’t. Particularly in today’s world. Bryan’s argument can be nullified with this one statement – Expertise in any area and the skill required to bring it all together are not always mutually exclusive.

And Bryan’s examples are wrong. We will not consider the AOL example though – we never really understood why Bryan picked up that example as well. AOL is basically just a wrapper brand around many web properties, at least in our view.

What is wrong with Bryan’s examples? Steve Jobs, Jack Dorsey, Elon Musk. Steve Jobs – Jack Dorsey – Elon Musk. (Read it the way Steve Jobs introduced the iPhone in 2007). SteveJobs-JackDorsey-ElonMusk. That is right – he has picked examples that are, by definition, exceptions. What is wrong with that? If there ever could be a ‘most non-representative sample’ to base an entrepreneurship argument on, this would be it. SteveJobs-JackDorsey-ElonMusk.

Bryan, Steve stood atop a mountain of experts, and they listened to him because he was Steve Jobs. Jack Dorsey can get away with not knowing about credit processing (we don’t agree with you on the technology part though, he is an expert on technology) because he is ‘Twitter creator’ Jack Dorsey. And Elon Musk – don’t even get us started ..

The issue with the ‘jack-of-all-trades’ argument is this: it works at both ends of the entrepreneurship spectrum (small business owners and visionaries) but it doesn’t work in the huge space in-between. Because in that space, you absolutely have to be an expert to run your business. You definitely cannot be a jack-of-all-trades when you are expected to be an expert-of-all-trades. At the very least, you need to be an expert in one area, and preferably in the area that is the focal point of your business.

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The Death of Portability

Before the world was conquered by Steve’s (and other similar) devices, there was one term that every single programming person in the world worried about, always: Portability. ‘Write once, run anywhere’ was so magical, everyone knew that phrase, and understood it intuitively. They practiced it for a full decade. But for some reason, just as people had started placing that term towards the top of the requirements list for their software projects, the term just vanished from the tech vocabulary. All of a sudden, nobody talks about portability anymore. At least on the consumer internet side of things, the term doesn’t have the impact it once had. What happened?

If you are building apps, just build one for Steve’s devices, and one for Android, and be done with it. If it is a web app. you already know it would work everywhere, so you are good. If you still have stuff on flash, train your team on HTML5 or hire some HTML5 folks and start porting your stuff. Just don’t talk about portability any more. It really doesn’t matter. It really doesn’t matter if you can just build for Steve’s devices for example, and be bought for a billion dollars.

Funny how the tech world works. When you just have two platforms (platforms that matter, anyways) and one platform says it cannot encourage technology ‘middlemen’ (Adobe) on its platform, the world of developers has no choice but to forget portability and other such good things. Funny thing, Apple owns the chokepoint and hence could be called the biggest middleman of them all. But then, Evil is what Sergey says is Evil. And Good is what Steve thought was Good. Unfortunately, portability did not cut it.

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Nostalgia As A Business Model

I was reading through Fred’s post ‘Back in the day’ when it struck me – Nostalgia is something every human being is willing to spend some time, effort and attention on – it is the rare thing that one does not consider as ‘intrusion’ – on the contrary, everyone seems to enjoy participating in it. Of course, with the right ‘group’. Has this interest been tapped by any business models that you know of?

We are not suggesting variants – like an Instagram with a nostalgia flavor for instance – we are suggesting more dedicated business models that directly tap into this interest in nostalgia that everyone seems to share. So for example, if I were to land on a website today that highlights stuff that reminds me of my high school days (TV shows, music, devices – anything), my 5 minute attention span is guaranteed for the service. And I will share it with everyone I know who I think would enjoy such stuff.

How do I know Nostalgia works? Because I have seen these groups emerge once in a while on social networks, and some email chains – that send some stuff from 10-15 years back that basically just goes viral and everyone shares it with everyone they know.

Has Nostalgia been completely explored as a business model? Do you know of any specific examples?

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One Big Issue With The Bitcoin Economy

Bitcoin is trading at an all-time high, and interest in the Bitcoin economy is picking up again. The Bitcoin economy, loosely defined to include all Bitcoin transactions, has started taking some shape now – but we wonder if there is a big issue with the way it is shaping up.

A currency has two key characteristics: Trust and Wide Acceptability. Obviously, one drives the other. Now, let us carefully analyze the way Bitcoin is making progress. We are seeing a lot of marketplaces emerge, which play the role of ‘middlemen’ – basically they will take Bitcoins from you, and they would pay USDs to the merchant. Bitspend is a good example. “Stop waiting for your favorite online retailer to accept Bitcoins. Place your order through Bitspend – we’ll handle paying the retailer for you.” – While this seems like a normal progression for a new money exchange medium (i.e., currency), if you look closely, you will realize that something is just not right.

So we ask the obvious question: Who are these middlemen? In many cases, these are a group of early believers, backed by folks who do not want to miss out on the next 10X thing. Why is that an issue? Is that not how everything is supposed to work – you have a set of early believers, and then the concept goes mainstream?

Well that is how it works for concepts – not currencies. Remember, we are talking about a commodity (whose primary purpose is to get circulated and used for transactions) that has been hoarded heavily – some estimates say that 75 percent of Bitcoins are hoarded.

The way this economy should have shaped up is this: Where it is difficult to put a dollar value, transactions should happen in Bitcoins. Like in the early barter days. So for example, some ‘domains’ would be Bitcoin enabled. Like some services on the Internet. Domain names for instance. Nobody knows what their dollar value is. Thats a good candidate. And then, as these services or products get closer to a dollar value, Bitcoin would move accordingly.

If you think about it, the current model, where you have these ‘middlemen’ saying ‘Just pay me in Bitcoins. I will pay for what you need in USDs ‘ – is not natural. It would just get the hoarding levels up. It is one big issue with the Bitcoin Economy – and would impact its health in a bad way.

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