Innovation in Software

If you’re a start-up, here’s the names of two people you should consider ignoring: Mike Arrington and Chris Shipley. Avoid their blogs unless you appreciate what they are there to do. Do not attend their events unless you understand how nobody cares about what happens at their events (not least, your customers). Focus on your own business execution and what your customers want, and you might get somewhere.

The web industry is very young and very immature. Bad ideas are still coming and going as the barrier of entry remains low and the bargaining power of customers is very strong. The churn in this industry is astonishing.

A result of this churn is a whole sub-industry in analysing start-ups, their culture, tracking launches and giving entrepreneurs a shot at getting some publicity. The problem with this sub-industry is it places companies into the wrong frame of mind, and as recent events have shown things can get a little bit ugly as players compete not by asking what is best for the sector, but by complaining about each other.

In recent weeks the public dialogue has been the rivalry between Arrington’s “Techcrunch 50” event and Shipley’s “DEMO” conference. The difference between them fundamentally comes down to this: DEMO charges companies $18,500 to attend, and if you have the money you might get the invitation to show up (they’re over-subscribed). TC50 shows off 50 companies who have been picked by industry “leaders” and don’t pay – the event makes money by charging the audience to turn up and see new products and services before anybody else.

Arrington charges that DEMO is “unethical”. Cue cat-fight. I don’t really care who said what to who, why, when and whatever. All I know is that the posts I have read concerning all this coming from Arrington and Shipley themselves have been the most navel-gazing, but for good measure I have to agree with Shipley’s point that on this occasion Scoble is a dick for determining a company’s entire worth in less than a minute based on their website.

All of this is distracting and silly, because guess what start-ups do not need in any way shape or form? Events that focus entirely on their launch or providing a PR opportunity to those already in the tech industry.

Running a business is a marathon, not a sprint. The launch means absolutely nothing other than the fact you’ve taken the first step. You don’t spend weeks, months or even years preparing for a marathon run by concentrating on what you’re going to do at the start line: you focus on how you’re going to pace yourself and deliver a result over the full distance. As you run, you listen to your body and you adapt – you take on fluids when you need them, you keep track of your time as each mile disappears underneath you and if it’s not working you give up before you kill yourself.

You don’t prepare for a marathon by training for 100 metre sprints either. You’ll tone your muscles all wrong, and exhaust yourself too quickly.

Arrington and Shipley are inadvertently creating a structure that breaks companies. It makes them prepare for completely the wrong thing, and the blog echo chamber is building and supporting this culture of “Oh, shiny-shiny! Next?”. They don’t mean to, they’re not being vindictive here, it’s just their audience is geared to launch analysis and they’re catching companies in the dragnet behind them who don’t understand this isn’t the way to execute.

Techcrunch does, to be fair, continue to do industry analysis as companies evolve, but to build an event around a launch rather than an event that helps companies grow and develop over the long term is to my mind a mistake. I hope one day they fix it.

What’s my answer? What do I know that is better? I’ve thought about this a lot. Condensing down my 15 years of experience in the software industry down into as little space as possible, I realise it’s no different to any other industry. I think I have at least one very basic insight that can replace this launch-hype-focus. I’ve said it before elsewhere, and I’ll repeat it again. Sit down and ask this question several times over with different emphasis: What does your customer want?

What does your customer want? Don’t hawk over your competitors picking them apart piece-by-piece. Sure, do some industry analysis, understand how the sector works and good ways to develop the business, but think about what you are going to do that is unique. This is something you are going to have to be passionate about for a long time, so think and choose carefully.

What does your customer want? Have you actually asked some customers whether what you’re offering is what they want? Do you know for certain there is a market for what you’re doing? Is your delivery strategy suitable? Is it profitable? Do you know how to work out whether what you’re about to do even has a chance of profitability? Also remember for most businesses, it’s very unlikely your customers will ever read Techcrunch or watch DEMO pitches.

What does your customer want? Can you exceed expectations, time after time, reliably? Can you deliver beyond a mere need and do something spectacular? If so, you’re differentiating yourself from your competition and raising the bar for entrants and competitors, but make sure it’s what your customer wants, not what you think they want.

What does your customer want? Now you have some answers to the above, make a list. Turn them into actions, projects, whatever you need to do. Put the ones involving people giving you money as close to the top as you can. Now, deliver them. Tick each one off as you go. Well done, you’ve started the marathon – remember, pace yourself, listen to what is happening to you, take on board what you need as you go, try and avoid a heart attack.

Arrington’s opinion of you is nothing compared to your customers’ opinions. Your DEMO pitch is nothing to your customers compared to their experience of your product. It’s you and your customers and that’s it, concentrate on that and you’ll be fine.

It’s not rocket science, but it is far more useful to a startup than the obsession over launch or PR within the tech industry echo chamber.

The above cartoon is by Hugh MacLeod of gapingvoid.com – warning, these days he talks about a particular brand of wine a lot, but his cartoons are often cool. I’d quite like this one on my business card. Thanks to his nice licensing terms, I might be able to do that.

When he published this, he pointed to a story by Scoble about the bubble people are now seeing. There are some important things to note about this bubble:

1. It’s only being seen by those of us inside the industry. If I talk to most people outside of the industry about social sites, Web 2.0, Ajax, whatever, they haven’t got a clue what I’m talking about.
2. There is a long, long way to go before this one bursts, but I don’t think the web in 12 months time will look close to what we have right now – it won’t burst, it’ll just look more sensible.

Let me give some background to where I’m thinking here, and start by making a controversial point: Technorati sucks from a social software perspective. So does Google.

I think they suck because to be part of the network, to add to the community, you have to be a publisher. Most people don’t have the time, energy or inclination to become a one-person publishing band, or the money to become a 10-person publishing house. Nor do they want to make videos to put on YouTube or podcast their thoughts. Some people think publishing is something attention-seekers do, and they don’t want to be called attention-seekers. They’re not going to participate.

Of course blogging is attention-seeking, but it’s not a given that this is a bad thing. I want to draw attention to all sorts of things, and I’d rather get your attention by talking and educating you about Ruby on Rails or new technology, or innovation, rather than just put up a big billboard and take out radio ads saying “We Rock the Kazbar – Vagueware Ltd”, because I respect your attention way more than that.

So am I an attention seeker? Sure, of course I am. But I’m seeking attention for something I’m passionate about: my business, technology, innovation. I want to share it. You might not give two hoots about my business, technology or innovation, but you’ll be passionate about something else. People who realise that become bloggers.

However, as a result of a relatively small set of attention-seekers having all the kung fu right now, looking at the A-list of blogs – the ultimate list of passionate attention-seekers – is a pointless exercise. The only thing that is being used as a metric is how many attention-seekers like this group a bit more than a different group by way of the number of linked articles. This is a terrible metric to use.

Ultimately, it could be Google’s downfall as well. PageRank – whilst better than previous systems for ranking content on the Web – uses the worst metric possible: what publishers think is relevant, as opposed to what searchers and readers think is relevant (although they have taken measures to improve this).

What could be more useful is to find out what people of all persuasions – non-publishers included – like across the board. That’s why social bookmarking sites have got traction – it doesn’t take much to digg, reddit or del.icio.us something, you’re not some being publisher, you’re just some dude who clicked on ‘digg this’. That metric – people who were prepared to go ‘Yo! This guy has funk!’ – is a lot more useful. It means that people who are only a bit passionate get to play with less effort.

Except it’s still not great.

For starters, game theory gets all over this model, and sites like Alexa’s Top 500 can so easily be manipulated, all you end up doing is creating a whole new form of spam. As the social bookmark sites get attention from other niches outside tech – particularly porn – they’re going to have to deal with this problem.

The other problem is that it’s still not frictionless. Alexa tracks people who bother to install their toolbar, which most people really can’t be bothered to do. Digg and Reddit are contributed to only by people who can be bothered to click on a little button they remembered to save to their bookmarks bar, write up a few words and some tags and hit submit. It’s not as bad as publishing a blog, but it’s still effort.

All the Web 2.0/community sites are going to face this problem: social communities take work to build and you can’t build them, they have to build themselves. And once people realise they’re there, they are going to start spamming the heck out of them and game theory becomes game-on.

The potential though is huge. Reddit is doing something very interesting with niche sites – joel.reddit.com and so on – which has the potential not to just change the way we think about publishing, but how we think about search.

I’m not interested in what the Internet at large as a group of publishers thinks is the best result for ‘Ruby on Rails’, I’m interested in what a community I respect thinks is the best hit. It’s a better metric for me. If they get the sweetspot just right, the social bookmark sites can take market share away from mainstream search. Right now Joel has his own bookmarking site, but what if every community, every blog, what if they all had social bookmarking communities? Every blog becomes a search engine built by people you share a passion with – a niche community with value.

Even better, because this is so niche, you don’t care about scaling, you don’t care about game theory, you just care about trying to reduce the traction of participation. It needs no money, just passion. Passion is the steam engine of the next industrial revolution.

That’s where the Web 2.0 crowd need to head. This bubble is wrong because we think it’s about Ajax and Rails and reflecing logos. Technology and shiny buttons aren’t what is making the net different in the next 10 years. It’s the people, stupid!

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