The end of the killer feature

Archive for the ‘Business’ Category

By Scott Berkun on May 3rd, 2012
11 Comments »
Business

Everything is a bubble

When I hear debates about whether there is a tech-bubble, or a real-estate bubble, I think “everything is a bubble” in some way. I don’t mean this as an investment strategy. I’m expressing doubt about the utility of calling out the existence of bubbles.

Markets and free-will ensure bubbles are common and unavoidable. Depending on what level you look at, you can find bubbles anywhere.

Markets by definition have a multitude of bubbles in them. People place bets on the value of stocks going up. Others bet on the value going down. Stock prices are not a perfect indicator of the value of anything: people invest based on their prediction for the future, not the present.

But predictions for the future include our assessments of other people’s predictions of the future, which makes any market a network of speculations built on top of other speculations. This is fragile and prone to feedback loops. Feedback loops generate dramatic rises and falls. Widespread optimism about something can fuel years of investing in something that never pans out, and markets are dominated by optimists about markets.

Many investors love bubbles provided they get in on them early, and get out before they burst. They care nothing about “real” value. They are investing to profit, and don’t need “real” value to profit, but only the stock price to go up.

Here are some examples:

The sun is going to explode in a few billion years. This makes the earth, and our civilization, a bubble. We will not be here forever. Our certainty about the human world is unfounded. We know we take for granted many things that are not certain or are guaranteed to change for the worse for us. The human species is likely a bubble in the history of the universe.
Some believe our consumption economy is not sustainable. That at some point we won’t have the resources to produce or buy the kinds of goods that make up much of the world economy. If this is true, the entire economy is a bubble. Which means a bubble in any domain is is really a bubble (domain) on a bubble (entire economy) on a bubble (human race).
We are all going to die. We behave mostly as if we will live forever. Our lives are bubbles. We live in denial of the great uncertainties of when and how we will die. On the day people die, their families are surprised to learn how much unfounded security they placed in something that disappeared instantly, and possibly without warning.
Relationships are bubbles. Most of them end. Two people are good friends for a time, then lose interest in each other. If you created a stock price for each friendship, you’d seem them rise and fall. If you moved or took up a new and annoying religion that alienated your friends, you’d see a ‘friendship bubble’ burst, and your stocks drop.

The challenge isn’t identification, its timing:

If bubbles are easy to find, the challenge isn’t identifying them: it’s predicting when other factors will force those bubbles to burst. Bubbles can last for years, decades, or in the case of dinosaurs, millennia. So what if you see a bubble: that doesn’t necessarily mean anything.
Awareness of a growing bubble means little, unless you know when the bubble will end.
Macro-economics do not define micro-economics: A bubble can burst in an industry, but the strongest players may still do well. A bubble can rise in another, and the weakest players may still struggle.

This is why articles making an argument for the existence of a bubble are empty to me. What do you think?

By Scott Berkun on November 1st, 2011
12 Comments »
Business

How Microsoft kills cool projects

There’s a good article detailing the death of Microsoft Courier, a tablet device project from 2009/10 led by J. Allard, of XBOX fame. The core story rests on this observation:

Within a few weeks, Courier was cancelled because the product didn’t clearly align with the company’s Windows and Office franchises, according to sources. A few months after that, both Allard and Bach announced plans to leave Microsoft, though both executives have said their decisions to move on were unrelated to the Courier cancellation.

Most interesting products for today’s world can not easily align with business models created in 1995. I know many smart people who had great prototypes for new products while at Microsoft, who were saddened to learn the escape velocity of a project is, at minimum, greater than the gravity of its two largest businesses (Office & Windows). They’d watch with sad eyes as their well conceived plans were smashed to pieces against the massively successful, but ultimately boring, twin leviathans of Microsoft. The details of the Courier story, a well designed product, fully staffed with 100+ creative employees, is sad indeed. A very different future for Microsoft was ready to born, but never saw the light of day (photos and demos).

During the browser wars, a similar, but rarely told, story explains why IE4 was the pinnacle of browser innovation in 1997, and then took a right turn into stagnation.

Brad Silverberg, VP of internet things circa 1997, intended for the web to replace Windows. He wanted Microsoft to make the web a platform, and launched versions of IE on Mac and IE on Unix (to the dismay of the industry. It’s the only UNIX application Microsoft has released). The idea was to leave OS’es behind, and focus on the web as the core way people will interact with computers. A prophetically Googlean strategy.

But when it came time for Gates to make the call, Jim Alchin, the VP of Windows, won. Windows was more important. As a result, after IE4 (and the implosion of Netscape), plans for making the web the future platform for the company were shut down, in favor of protecting the Windows franchise.

Many lament these choices. It seems boring to continually protect the status quo. But when your status quo generates $60 billion annually, a rate of income only a handful of companies in history have achieved, few complainers would have the courage to act differently if they were in charge.

By Scott Berkun on July 28th, 2010
11 Comments »
Business

How to fix a team

Many people never learn how to work on a team.

It’s sad, but the reason many projects fail has little to do with expertise or intelligence. Instead it’s the fact that as soon as you have two or more people working together, they have figure out how to share, collaborate and trust each other to be successful. And ‘playing well with others’ is something few adults are ever taught how to do. If we learn it, it’s by the good fortune of being on at least one good team early in our careers.

If you show me a project in trouble, I’ll show you a team that’s dysfunctional. I always look at the people and the quality of their relationships before I look at anything else. The plan can be masterful, they can have a 7 figure budget and wonderful gear, but if the people don’t trust each other, none of it matters. Agile, waterfall, six-sigma… it’s mostly noise in sorting out why a project is falling apart.

If you discover you are the leader of a team in trouble, here’s the simplest playbook I know. It’s roughly the same whether you’re new to the team or not.

Build a theory of what’s wrong. The superficial reasons a project is struggling are rarely the important ones. We notice symptoms first, not the causes. Racing to fix symptoms often just creates other symptoms (And cultures that always operate in panic mode have a culture prone to dysfunctional teams). Instead, go into detective mode for an afternoon or a day, which means listening to other people on the team’s theories about what’s wrong. Talk to people in private, offer confidentiality, and shut up and listen. What are the common frustrations you hear? (If none of them involve you, you haven’t heard the whole truth yet). There are four major reasons: lack of trust, old wounds, conflicting priorities, or poorly defined goals. I’ve yet to encounter a struggling team that didn’t suffer from two or more of these issues. As you talk to people one on one, let them help you translate their complaints into those reasons. If they don’t fit ask them to offer another bucket. Be patient. Pay attention to their language. Ask questions. Listen and look.

Identify people interested in change, enlist their help (Assets). In talking to your team, you’ll learn who is most interested in helping change happen. They might be the angriest, most critical people at first – but once they’ve vented, are they most passionate and willing to invest energy in working differently? Among them, who has the most respect of their peers? These are the people you need to involve in reviewing your assessment of the situation. Make a list of the issues you’ve heard, and work with them to rank the issues in terms of severity.

Identify people least likely to follow, and treat them with respect (Liabilities). Some people will resist change, even if they are miserable. This includes powerful people. Despite their negative vibe, they can be just as useful as the positive folks are. Explain what you see as the problems, offer your strawman for fixing them, and ask for their feedback. See if there’s a way, even if the plan has to change, to get them on board. If you can’t get their support, make sure to get their acknowledgment. “Ok Fred. I realize you don’t like this plan. And I understand your reservations. But I’m going forward, starting with those interested in change. But I want to make sure we continue talking about this as I go.” Don’t fall into the trap of ignoring people who don’t agree with you: a great person, sufficiently upset, over enough miserable months, will be indistinguishable from a bad seed.

And either way, your critics can be the source of a key piece of feedback, however negative, that leads to a big insight.

Pick a small, easy thing to fix. Morale and trust operate on momentum. If the team has been struggling for some time, it’s very hard to turn it around all at once. You need to identify one single point of pain that is small, but real and fixable. The first tiny shinny star, undeniable in it’s contrast to the dark night sky, can change people’s minds about what’s possible. Let everyone know what you are going to solve first. Then ask them for their help in doing it. Once it has been fixed, report back. Ask for feedback? Is this better? If yes, you’ve now earned a small piece of trust that you can mortgage to solve the next problem. Go back and re-evaluate your assets and liabilities. Who is on board now? What feedback do they have?

In some cases the right move is to take big action: reorganizing the team, stopping the project, or dramatically change the goals. It’s true some problems can only be solved with big moves, but most aren’t this way. If you believe in the long term health of a team, you have to be willing to grow and build it over time, and resist the temptation for the mythical complete and easy fix. Some organizations make big changes regularly (e.g. your standard bi-annual big company re-org), but they’re so confused as to what the problem was, or how it could be fixed, they never fix anything. They just keep making big changes, masking their ignorance of what’s wrong and why.

There are dozens of factors that might lead me to work outside this playbook. But all things equal, this is where I’d start.

(If you want more, you should check out Making Things Happen on What to do when things go wrong).

By Scott Berkun on May 4th, 2010
14 Comments »
Business

Fishing with Strawberries: on Tim O’Reilly

Tim O’Reilly is the CEO and founder of O’Reilly Media, the publisher that has printed all three of my books. He’s a high profile guy and gets written about often, but this week there’s finally a piece in Inc. that does the special thing of capturing someone I’ve had the pleasure of hanging out with a couple of times over the years. I don’t know him that well, but it’s so rare someone you’ve met gets written about in a way that reflects the person you know.

One favorite part of the article is an old story Tim told. Years ago, O’Reilly Media was looking to find partners for an early Internet venture. Bob Broadwater, an investment banker, gave them the following advice.

“You don’t fish with strawberries. Even if that’s what you like, fish like worms, so that’s what you use.”

And Tim, in a short essay, explained:

That’s really good advice for any sales situation: understand the customer and his or her needs, and make sure that you’re answering those needs. No one could argue with such sound, commonsense advice.

At the same time, a small voice within me said with a mixture of dismay, wonder and dawning delight: “But that’s just what we’ve always done: gone fishing with strawberries. We’ve made a business by offering our customers what we ourselves want. And it’s worked!”

And in my own career I’ve thought much about these things, and I’m convinced they’re not mutually exclusive. Often in writing I’m aiming for Strawberries. This is the driving motivation in many of my essays: I simply wish someone else had written these things so I could read them. I feel there is a question or answer that should be out there, but isn’t, so I go and make it, and feel satisfaction when I do. Even if no one else cares, I feel like I solved a problem and filled a microscopic void in the universe.

But the ones I tend to publish are those that I sense, based on experience, there are many people who would want to read them. And to run the above metaphor into gross oblivion, this would be fishing with strawberry flavored worms, or worm flavored strawberries, which sounds awful and disgusting, but demonstrates there can be creative ways to satisfy yourself and others at the same time. There can be 80% worm and 20% strawberry, or 50% or 50%, or a hundred different breakdowns of how much you are thinking about you and how much you’re thinking about your customer, or reader.

If I know you, or have a sense of you, I can find the sweet spot between what you like and what I like and spend time there.

To only make strawberries makes you an artist. And to only make worms makes you a capitalist. To make both at the same time, or some of one now and then some of the other later, perhaps makes a successful artist. Or an artistic capitalist. Or in Tim’s case, it means you’re having a successful life that has helped people like me make successful lives, and perhaps that’s the best kind of fishing of all: fishing that helps other people learn to fish.

By Scott Berkun on April 8th, 2010
17 Comments »
Business

The end of the killer feature

At The Economist Ideas Economy event Matt Mullenweg, founder of WordPress, in an excellent talk about open source software, proclaimed the end of the killer feature. He asked the packed audience of high profile influentials how many people use Firefox, and how many of them have a plugin installed – and a good percentage of them raised their hands.

He’s got a point. For many kinds of products, it’s the end of the killer feature. Not everywhere, not for all kinds of products. But the trend is definitely the other way. And the trend has been happening for some time.

There was a day and time when software product launches hinged on features (or killer applications) and how the new features compared to the old features competitors had. The browser wars were perhaps a peak of this kind of guns blazing feature rich marketing warfare between two competitors. Back then it was expensive to launch products and press millions of CDs, and ship them in boxes. It took time and money and you needed expensive waves of promotion to propel each release forward.

But today, with websites, iPhone apps, and web browser plugins. new feature additions are cheap(er) and can roll in at any time: the feature set matters, but it matters less. What matters more are the overall user experience and the quality and depth of the plugins/apps available for people to use.

Curiously enough, Apple’s app store is leading the way in 2010, which is an inversion of what happened in the 90s with Microsoft and Apple. The success of Windows 95, in part, was based on the huge platform of applications it had compared to the Macintosh. It didn’t matter than the Macintosh had a better experience, the availability of apps drove the decisions for many people. With the iPhone, perhaps for the first time I can remember, a product has both superior design and a superior 3rd party platform.

But the new plague we have is the annoyance of syncing upgrades and compatibility. To stay secure, we’re compelled to keep everything up to date. But my Firefox install has a half-dozen plugins, and every time Firefox itself updates, it causes a wave of incompatibility across those plugins. I’ve had the same problem with WordPress too. I never know now when I upgrade one thing, how it will impact the others, and the more plugins and apps I have, the more of a problem this becomes. It has happened before that a plugin, or app, is abandoned: , it can’t make the upgrade with me, and suddenly I’m surprised to be without something I’d grown to depend on. I’m dependent on a wider and wider set of people to get the features and things I want, which has its advantages, but its disadvantages too.