Earlier today I read two posts that were practically mirror opposites of each other. The first was Paul Graham's essay, The Pooled-Risk Company Management Company, where he makes a case against founding a company that you intend to run as a successful business over the long term and instead building a company you that you can sell to a public company so you can move on and enjoy your money. His argument is excerpted below

At this year's startup school, David Heinemeier Hansson gave a talk in which he suggested that startup founders should do things the old fashioned way. Instead of hoping to get rich by building a valuable company and then selling stock in a "liquidity event," founders should start companies that make money and live off the revenues. Sounds like a good plan. Let's think about the optimal way to do this.

One disadvantage of living off the revenues of your company is that you have to keep running it. And as anyone who runs their own business can tell you, that requires your complete attention. You can't just start a business and check out once things are going well, or they stop going well surprisingly fast.

The main economic motives of startup founders seem to be freedom and security. They want enough money that (a) they don't have to worry about running out of money and (b) they can spend their time how they want. Running your own business offers neither. You certainly don't have freedom: no boss is so demanding. Nor do you have security, because if you stop paying attention to the company, its revenues go away, and with them your income.

The best case, for most people, would be if you could hire someone to manage the company for you once you'd grown it to a certain size.
...
If such pooled-risk company management companies existed, signing up with one would seem the ideal plan for most people following the route David advocated. Good news: they do exist. What I've just described is an acquisition by a public company.

Austin Wiltshire has a counterpoint to Paul Graham's article entitled New hire cannon fodder where he decries the practice of "exploiting" junior developers so that a couple of fat cats with money can get even richer. Parts of Austin's counter argument are excerpted below

Why these large firms, and now even places like YCombinator continually think the best way to move forward in software is to hire as many gullible young naive programmers as possible and work them to death is beyond me.  It’s pretty well known that 80 hour work weeks and inexperience is a guarantee to continually make the same damn mistakes over and over again.  It’s also an open question as to why new hires let these companies take advantage of them so badly.  Paul Graham had a start up, he begged for angel investing, and his life should show you - what does he do now?  Well he learned from his experience that designing and building is for chumps, to make the big bucks and sit on your ass you become an angel investor.

Kids will work for pennies.  You can continue to fill their heads with dreams of having the next big idea, even though they are carrying all the risk for you.  Junior developers, whether entrepreneurs or otherwise, are being asked to give up their 20’s, probably the best, most energetic years of their lives, to have a chance at making a dent in someone else’s bottom line.  (Make note, the one exception here I’ve seen is 37 Signals :) )

But have we never stopped to think who truly is benefiting from all these hours?  Do we get paid more?  No.  In fact, because many of us are salaried, we’re effectively paid less.  Are we compensated with faster promotions?  Possibly - but don’t forget about that silicon ceiling.  The only person who knows how many hours you’re putting in is probably just the guy above you - but he makes sure to show just how productive his department is (via your hard work) to everyone.  He will always get the spoils.  Who will end up really getting the spoils out of any of YCombinator’s work?  Paul Graham.

Both arguments have their merits and there are also parts I disagree with on both sides. Austin is right that YCombinator takes advantage of the naivety of youth. However when you are in your 20s with no serious attachments (like a mortgage, a family or even a sick relative) it doesn't sound like a bad idea to make hay while the sun shines. If you can sacrifice some time in your youth for a chance at a better life for yourself and your future spouse/kids/girlfriend/family/etc in a few years, is it wrong to treat that as an opportunity? Especially if you'll be working in an energetic environment surrounded by likeminded souls all believing that you are building cool stuff? Additionally, if the startup doesn't work out [which it most likely won't] the experience will still turn out to be useful when you decide to get a regular job at some BigCo even if it is just realizing how good you have it to no longer have to work 80 hour weeks while eating Top Ramen for breakfast and dinner any more.

From that perspective I don't think Austin is right to completely rail against the startup lifestyle. However I totally agree with the general theme of Austin's post that working ridiculous hours is dumb. It should be common knowledge that sleep deprivation impairs brain function and may even lead to psychiatric disorders. The code you check-in during your 14th hour at your desk will not be as good as what you checked in during your 4th. If you really have to work that much, work on the weekends instead of spending over 12 hours sitting in front of your IDE. Even then, busting your butt to that extent only makes sense if you not only get to share the risks of failure but also the rewards of success as well. This means you better be a co-founder or someone with equity and not just some poor sap on salary.

My issue with Paul Graham's essay and the investment style of YCombinator is that I it sells startup founders short. Paul recently wrote an essay entitled Cities and Ambition where he had this beautiful quote about the kind of "peer pressure" the Silicon Valley area exerts on startup founders

When you ask what message a city sends, you sometimes get surprising answers. As much as they respect brains in Silicon Valley, the message the Valley sends is: you should be more powerful.

That's not quite the same message New York sends. Power matters in New York too of course, but New York is pretty impressed by a billion dollars even if you merely inherited it. In Silicon Valley no one would care except a few real estate agents. What matters in Silicon Valley is how much effect you have on the world. The reason people there care about Larry and Sergey is not their wealth but the fact that they control Google, which affects practically everyone.

Read the above quote again and let its message sink in. The great thing about software is how you can literally take nothing (i.e. a blank computer screen) and build something that changes the world. Bill and Paul did it with Microsoft. Larry and Sergey have done it with Google. Jerry and David did it with Yahoo!, and some might say Mark Zuckerberg is doing it with Facebook.

Are any of those companies YCombinator-style, built-to-flip companies? Nope.

I strongly believe in the idea behind the mantra "Change the World or Go Home". Unlike anything that has come before it, the combination of software and the World Wide Web has the potential to connect people and empower them in more ways than humanity has never seen. And it is possible to become immensely rich while moving humanity forward with the software that you create.

So if you have decided to found a startup, why decide to spend your youth building some "me too" application that conforms to all the current "Web 2.0" fads in the desperate hope that you can convince some BigCo to buy you out? That sounds like such a waste. Change the world or go home.

Now Playing: Wu-Tang Clan - Triumph


 

It's been just over a month since we released the alpha of the next release of RSS Bandit codenamed Phoenix. Below are a couple of posts about the alpha from some popular blogs

The tone of the feedback was generally the same. People were very interested in the synchronization with Google Reader but were dissatisfied due to bugs or performance issues. I hadn't expected so much interest in an alpha release otherwise we would have been more diligent about bug fixing and performance improvements. Anyway, there was a ton of great feedback and we fixed a bunch of bugs including the following issues

  • Application hangs on shutdown due to search indexing [bug 1967898]
  • Feeds in tree view not sorted in alphabetical order [bug 1999533]
  • Mouse wheel doesn't work when attempting to scroll feed list [bug 1999534]
  • Removing a synchronized feed source deletes all items across all feed sources [bug 1999800
  • Exception when loading feed list from NewsGator Online [bug 2000390]
  • Feed logos are broken image links in feeds synchronized from NewsGator Online [bug 2000764]
  • Context menu for a feed source doesn't contain the option to remove the feed source [bug 2000808]
  • Exception when loading feed list from Google Reader [bug 20001419]
  • Space not accepted in Name field of Synchronize Feeds dialog [bug 20001908]
  • Google Reader synchronizes feeds but not items within feeds [bug 2001911]
  • Favorite icon not downloaded for Google Reader feeds [bug 2001915]
  • Selecting Unread Items search folder displays error message [bug 2001916]
  • Incorrect NewsGator or Google Reader password cannot be changed [2002144]
  • Crash on attempting to download an enclosure [bug 2004646]
  • Google Reader password communicated over the wire in plain text [bug 2005154]
  • Option to take over network settings from Internet Explorer does not allow specifying proxy server password [bug 2005687]
  • Unable to play a downloaded video from the Download Manager [bug 2005854]
  • Media keeps playing after closing a browser tab [bug 2014408]
  • Custom column layouts not remembered for specific feeds [bug 2022242]
  • Category dropdown in Add Subscription Wizard doesn't match selected feed source [bug 2026658]

There were also a couple of performance and memory usage improvements that were made along the way. I still have one or two issues that I've been having problems reproducing such as one situation where we end up getting a streak of timeouts while waiting for HTTP responses from Google Reader. I suspect it has to do with making lots of requests to a single domain in rapid succession if you're behind a proxy server but I might be wrong. Despite that one issue, the application is now a lot more usable and is feature complete for the release. If you hit that issue, you can either wait a couple of minutes before retrying to refresh feeds or restart the application to clear it up.

You can download the beta version of Phoenix from RssBandit.Phoenix.Beta.Installer.zip. There are two files in the installer package, I suggest running setup.exe because that validates that you have the correct prerequisites to run the application and tells you where to get them otherwise.

If you have any problems feel free to file a bug on SourceForge or ask a question on our forum. Thanks for using our software.

PS: As RSS Bandit is a hobbyist application worked on in our free time, we rely on the generosity of our users when it comes to providing translations of our application. If you look at the supported language matrix for RSS Bandit, you'll see the languages in which the application has been translated in previous versions. We would love to get translators for those languages again and for any new languages as well.  If you'd like to provide your skills as a translator to the next release of RSS Bandit and believe you can get this done in this next month or two then please send mail to . We'd appreciate your help.

Now Playing: Lil Wayne - Best Rapper Alive


 

Categories: RSS Bandit

July 28, 2008
@ 02:27 AM

For several months Nick Carr has pointed out that Wikipedia ranks highly in the search results for a number of common topics in Google's search engine. In his post entitled Googlepedia Nick Carr speculated on why Google would see this trend as a threat in a paragraph which is excerpted below

I'm guessing that serving as the front door for a vast ad-less info-moshpit outfitted with open source search tools is not exactly the future that Google has in mind for itself. Enter Knol.

Clearly Nick Carr wasn't the only one that realized that Google was slowly turning into a Wikipedia redirector. Google wants to be the #1 source for information or at least be serving ads on the #1 sites on the Internet in specific area. Wikipedia was slowly eroding the company's effectivenes at achieving both goals. So it is unsurprising that Google has launched Knol and is trying to entice authors away from Wikipedia by offering them a chance to get paid.

What is surprising is that Google is tipping it's search results to favor Knol. Or at least that is the conclusion of several search engine optimization (SEO) experts and also jibes with my experiences.

Danny Sullivan wrote in his post The Day After: Looking At How Well Knol Pages Rank On Google that

We've been assured that just because content sits on Google's Knol site, it won't gain any ranking authority from being part of the Knol domain. OK, so a day after Knol has launched, how's that holding up? I found 1/3 of the pages listed on the Knol home page that I tested ranked in the top results.

I was surprised to see a post covering how Knol's How to Backpack was already hitting the number three spot on Google. Really? I mean, how many links could this page have gotten already? As it turns out, quite a few. And more important, it's featured on the Knol home page, which itself is probably one of the most important links. While Knol uses nofollow on individual knols to prevent link credit from flowing out, it's not used on the home page -- so home page credit can flow to individual knols featured on it.

here's a test knol I made yesterday -- Firefox Plugins For SEO & SEM -- which ranks 28 for firefox plugins for seo. I never linked to it from my article about knol. I don't think it made the Knol home page. I can see only three links pointing at it, and only one of those links uses anchor text relevant to what the page is ranking for. And it's in the top 30 results?

Look, I know that being ranked 28 is pretty much near invisible in terms of traffic you'll get from search engines. But then again, to go from nowhere to the 28th top page in Google out of 755,000 matches? I'm sorry -- don't tell me that being in Knol doesn't give your page some authority.

Aaron Wall noticed something even more insidious in his post entitled Google Knol - Google's Latest Attack on Copyright where he notices that if Google notices duplicate content then it favors the content on Knol over a site that has existed for years and has decent PageRank. His post is excerpted below

Another Knol Test

Maybe we are being a bit biased and/or are rushing to judgement? Maybe a more scientific effort would compare how Knol content ranks to other content when it is essentially duplicate content? I did not want to mention that I was testing that when I created my SEO Basics Knol, but the content was essentially a duplicate of my Work.com Guide to Learning SEO (that was also syndicated to Business.com). Even Google shows this directly on the Knol page

Google Knows its Duplicate Content

Is Google the Most Authoritative Publisher?

Given that Google knows that Business.com is a many year old high authority directory and that the Business.com page with my content on it is a PageRank 5, which does Google prefer to rank? Searching for a string of text on the page I found that the Knol page ranks in the search results.

If I override some of Google's duplicate content filters (by adding &filter=0 to the search string) then I see that 2 copies of the Knol page outrank the Business.com page that was filtered out earlier.

Interesting.

Following Danny's example, I also tried running some searches for terms that appear on the Knol homepage and seeing how they did in Google's search. Here's the screenshot of the results of searching for "buttermilk pancakes"

Not bad for a page that has existed on the Web for less than two weeks.

Google is clearly favoring Knol content over content from older, more highly linked sites on the Web. I won't bother with the question of whether Google is doing this on purpose or whether this is some innocent mistake. The important question is "What are they going to do about it now that we've found out?"

Now Playing: One Republic - Stop and Stare
 

There was an interesting presentation at OSCON 2008 by Evan Henshaw-Plath and Kellan Elliott-McCrea entitled Beyond REST? Building Data Services with XMPP PubSub. The presentation is embedded below.

The core argument behind the presentation can be summarized by this tweet from Tim O'Reilly

On monday friendfeed polled flickr nearly 3 million times for 45000 users, only 6K of whom were logged in. Architectural mismatch. #oscon08

On July 21st, FriendFeed had 45,000 users who had associated their Flickr profiles with their FriendFeed account. FriendFeed polls Flickr about once every 20 – 30 minutes to see if the user has uploaded new pictures. However only about 6,000 of those users logged into Flickr that day, let alone uploaded pictures. Thus there were literally millions of HTTP requests made by FriendFeed that were totally unnecessary.

Evan and Kellan's talk suggests that instead of Flickr getting almost 3 million requests from FriendFeed, it would be a more efficient model for FriendFeed to tell Flickr which users they are interested in and then listen for updates from Flickr when they upload photos.

They are right. The interaction between Flickr and FriendFeed should actually be a publish-subscribe relationship instead of a polling relationship. Polling is a good idea for RSS/Atom for a few reasons

  • there are a thousands to hundreds of thousands clients that might be interested in a resource so the server keeping track of subscriptions is prohibitively expensive
  • a lot of these end points aren't persistently connected (i.e. your desktop RSS reader isn't always running)
  • RSS/Atom publishing is as simple as plopping a file in the right directory and letting IIS or Apache work its magic

The situation between FriendFeed and Flickr is almost the exact opposite. Instead of thousands of clients interested in document, we have one subscriber interested in thousands of documents. Both end points are always on or are at least expected to be. The cost of developing a publish-subscribe model is one that both sides can afford.

Thus this isn't a case of REST not scaling as implied by Evan and Kellan's talk. This is a case of using the wrong tool to solve your problem because it happens to work well in a different scenario. The above talk suggests using XMPP which is an instant messaging protocol as the publish-subscribe mechanism. In response to the talk, Joshua Schachter (founder of del.icio.us) suggested a less heavyweight publish-subscribe mechanism using a custom API in his post entitled beyond REST. My suggestion for people who believe they have this problem would be to look at using some subset of XMPP and experimenting with off-the-shelf tools before rolling your own solution. Of course, this is an approach that totally depends on network effects. Today everyone has RSS/Atom feeds while very few services use XMPP. There isn't much point in investing in publishing as XMPP if your key subscribers can't consume it and vice versa. It will be interesting to see if the popular "Web 2.0" companies can lead the way in using XMPP for publish-subscribe of activity streams from social networks in the same way they kicked off our love affair with RESTful Web APIs.

It should be noted that there are already some "Web 2.0" companies using XMPP as a way to provide a stream of updates to subscribing services to prevent the overload that comes from polling. For example, Twitter has confirmed that it provides an XMPP stream to FriendFeed, Summize, Zappos, Twittervision and Gnip. However they simply dump out every update that occurs on Twitter to these services instead of having these services subscribe to updates for specific users. This approach is quite inefficient and brings it's own set of scaling issues.

The interesting question is why people are just bringing this up? Shouldn't people have already been complaining about Web-based feed readers like Google Reader and Bloglines for causing the same kinds of problems? I can only imagine how many millions of times a day Google Reader must fetch content from TypePad and Wordpress.com but I haven't seen explicit complaints about this issue from folks like Anil Dash or Matt Mullenweg.

Now Playing: The Pussycat Dolls - When I Grow Up


 

Disclaimer: This post does not reflect the opinions, thoughts, strategies or future intentions of my employer. These are solely my personal opinions. If you are seeking official position statements from Microsoft, please go here.

Earlier this week, David Recordon announced the creation of the Open Web Foundation at OSCON 2008. His presentation is embedded below

From the organization's Web site you get the following outline of it's mission

The Open Web Foundation is an attempt to create a home for community-driven specifications. Following the open source model similar to the Apache Software Foundation, the foundation is aimed at building a lightweight framework to help communities deal with the legal requirements necessary to create successful and widely adopted specification.

The foundation is trying to break the trend of creating separate foundations for each specification, coming out of the realization that we could come together and generalize our efforts. The details regarding membership, governance, sponsorship, and intellectual property rights will be posted for public review and feedback in the following weeks.

Before you point out that this seems to create yet another "standards" organization for Web technology, there are already canned answers to this question. Google evangelist Dion Almaer provides justification for why existing Web standards organizations do not meet their needs in his post entitled The Open Web Foundation; Apache for the other stuff where he writes 

Let’s take an example. Imagine that you came up with a great idea, something like OAuth. That great idea gains some traction and more people want to get involved. What do you do? People ask about IP policy, and governance, and suddenly you see yourself on the path of creating a new MyApiFoundation.

Wait a minute! There are plenty of standards groups and other organizations out there, surely you don’t have to create MyApiFoundation?

Well, there is the W3C and OASIS, which are pay to play orgs. They have their place, but MyApi may not fit in there. The WHATWG has come up with fantastic work, but the punting on IP is an issue too.

At face value, it's hard to argue with this logic. The W3C charges fees using a weird progressive taxation model where a company pays anything from a few hundred to several thousand dollars depending on how the W3C assesses their net worth. OASIS similarly charges from $1,000 to $50,000 depending on how much influence the member company wants to have in the organization. After that it seems there are a bunch of one off organizations like the Open ID foundation and the WHATWG that are dedicated to a specific technology. 

Or so the spin from the Open Web Foundation would have you believe.

In truth there is already an organization dedicated to producing "Open" Web technologies that has a well thought out policy on membership, governance, sponsorship and intellectual property rights that isn't pay to play. This is not a new organization, it actually happens to be older than David Recordon who unveiled the Open Web Foundation.

The name of this organization is the Internet Engineering Task Force (IETF). If you are reading this blog post then you are using technologies for the "Open Web" created by the IETF. You may be reading my post in a Web browser in which case the content was transferred to you over HTTP (RFC 2616) and if you're reading it in an RSS reader then I should add that you're also directly consuming my Atom feed (RFC 4287). Some of you are reading this post because someone sent you an email which is another example of an IETF protocol at work, SMTP (RFC 2821).

The IETF policy on membership doesn't get more straightforward; join a mailing list. I am listed as a member of the Atom working group in RFC 4287 because I was a participant in the atom-syntax mailing list. The organization has a well thought out and detailed policy on intellectual property rights as it relates the IETF specifications which is detailed in RFC 3979: Intellectual Property Rights in IETF Technology and slightly updated in RFC 4879: Clarification of the Third Party Disclosure Procedure in RFC 3979.

I can understand that a bunch of kids fresh out of college are ignorant of the IETF and believe they have to reinvent the wheel to Save the Open Web but I am surprised that Google which has had several of it's employees participate in the IETF processes which created RFC 4287, RFC 4959, RFC 5023 and RFC 5034 would join in this behavior. Why would Google decide to sponsor a separate standards organization that competes with the IETF that has less inclusive processes than the IETF, no clear idea of how corporate sponsorship will work and a yet to be determined IPR policy?

That's just fucking weird.

Now Playing: Boyz N Da Hood - Dem Boys (remix) (feat T.I. & The Game)


 

Categories: Technology

I've been using the redesigned Facebook profile and homepage for the past few days and thought it would be useful to write up my impressions on the changes. Facebook is now the the world's most popular social networking site and one of the ways they've gotten there is by being very focused on listening to their users and improving their user experienced based on this feedback. Below are screenshots of the old and new versions of the pages and a discussion of which elements are changed and the user scenarios the changes are meant to improve.

Homepage Redesign

OLD HOME PAGE:

NEW HOME PAGE:

The key changes and their likely justifications are as follows

  • Entry points for creating content are now at the top of the news feed. One of the key features driving user engagement on Facebook is the News Feed. This lets a user know what is going on with their social network as soon as they logon to the site. In a typical example of network effects at work, one person creates some content by uploading a photo or sharing a link and hundreds of people on their friend list benefit by having content to view in their News Feed. If any of the friends responds to the content this again benefits hundreds of people and so on.  The problem with the old home page was that a user sees their friends uploading photos and sharing links and may want to do so as well but there is no easy way for her to figure out how to do the same thing without having to go two or three clicks away from the home page. The entry points at the top of the feed will encourage more "impulse" content creation.

  • Left sidebar is gone. There were three groups of items in the left nav; a search box, the list of a user's most frequently accessed applications and an advertisement. The key problem is that the ad is in a bottom corner of the feed. This makes it easy for users to mentally segregate that part of the screen from their vision and either never look there or completely ignore it. Removing that visual ghetto and moving ads to being inline with the feed makes it more likely that users will look at the ad. Ah, but now you need more room to show the ad (all the space isn't needed for news feed stories). So the other elements of the left nave are moved, the search box to the header and the list of most accessed applications to the sidebar on the right. Now you have enough room to stretch out the News Feed's visible area and advertisers can reuse their horizontal banner ads on Facebook even though this makes the existing feed content now look awkward. This is one place where monetization trumped usability.

  • Comments now shown inline for News Feed items with comments (not visible in screen shot). This may be the feature that made Mike Arrington decide to call the new redesign the FriendFeedization of Facebook. Sites like FriendFeed have proven that showing the comments on an item in the feed inline gives users more content to view in their feeds and increases the likelihood of engagement since the user may want to join the conversation.

Profile Redesign

OLD PROFILE:

NEW PROFILE:

The key changes and their likely justifications are as follows

  • The profile now has tabbed model for navigation. This is a massive improvement for a number of reasons. The most important one is that in the old profile, there is a lot of content below the fold. My old profile page is EIGHT pages when printed as opposed to TWO pages when the new profile page is printed. Moving to a tabbed model (i) improves page load times and (ii) increases number of page views and hence ad impressions.

  • The Mini-Feed and the Wall have been merged. The intent here is to give more visibility to the Wall which in the old model was below the fold. The "guest book" or wall is an important part of the interaction model in social networking sites (see danah boyd's Friendster lost steam. Is MySpace just a fad? essay) and Facebook was de-emphasizing theirs in the old model.

  • Entry points for creating content are at the top of the profile page. Done for the same reason as on the Home page. You want to give users lots of entry points for adding content to the site so that they can kick off network effects by generating content which in turn generates tasty page views.

  • Left sidebar is gone. Again the left sidebar is gone and the advertisement is moved closer to the content, and away from the visual ghetto that is the bottom left of the screen. Search box and most accessed applications are now in the header as well. The intent here is also to improve the likelihood that users will view and react to the ads.

Now Playing: Da Back Wudz - I Don't Like The Look Of It (Oompa)


 

Yesterday Amazon's S3 service had an outage that lasted about six hours. Unsurprisingly this has led to a bunch of wailing and gnashing of teeth from the very same pundits that were hyping the service a year ago. The first person to proclaim the sky is falling is Richard MacManus in his More Amazon S3 Downtime: How Much is Too Much? who writes

Today's big news is that Amazon's S3 online storage service has experienced significant downtime. Allen Stern, who hosts his blog's images on S3, reported that the downtime lasted 3.5 over 6 hours. Startups that use S3 for their storage, such as SmugMug, have also reported problems. Back in February this same thing happened. At the time RWW feature writer Alex Iskold defended Amazon, in a must-read analysis entitled Reaching for the Sky Through The Compute Clouds. But it does make us ask questions such as: why can't we get 99% uptime? Or: isn't this what an SLA is for?

Om Malik joins in on the fun with his post S3 Outage Highlights Fragility of Web Services which contains the following

Amazon’s S3 cloud storage service went offline this morning for an extended period of time — the second big outage at the service this year. In February, Amazon suffered a major outage that knocked many of its customers offline.

It was no different this time around. I first learned about today’s outage when avatars and photos (stored on S3) used by Twinkle, a Twitter-client for iPhone, vanished.

That said, the outage shows that cloud computing still has a long road ahead when it comes to reliability. NASDAQ, Activision, Business Objects and Hasbro are some of the large companies using Amazon’s S3 Web Services. But even as cloud computing starts to gain traction with companies like these and most of our business and communication activities are shifting online, web services are still fragile, in part because we are still using technologies built for a much less strenuous web.

Even though the pundits are trying to raise a stink, the people who should be most concerned about this are Amazon S3's customers. Counter to Richard MacManus's claim, not only is there a Service Level Agreement (SLA) for Amazon S3, it promises 99.9% uptime or you get a partial refund. 6 hours of downtime sounds like a lot until you realize that 99% uptime is 8 hours of downtime a month and over three and a half days of downtime a year. Amazon S3 is definitely doing a lot better than that.

The only question that matters is whether Amazon's customers can get better service elsewhere at the prices Amazon charges. If they can't, then this is an acceptable loss which is already covered by their SLA. 99.9% uptime still means over eight hours of downtime a year. And if they can, it will put competitive pressure on Amazon to do a better job of managing their network or lower their prices.

This is one place where market forces will rectify things or we will reach a healthy equilibrium. Network computing is inherently and no amount of outraged posts by pundits will ever change that. Amazon is doing a better job than most of its customers can do on their own for cheaper than they could ever do on their own. Let's not forget that in the rush to gloat about Amazon's down time.

Now Playing: 2Pac - Life Goes On


 

Categories: Web Development

For the past few years, the technology press has been eulogizing desktop and server-based software while proclaiming that the era of Software as a Service (SaaS) is now upon us. According to the lessons of the Innovator's Dilemma the cheaper and more flexible SaaS solutions will eventually replace traditional installed software and the current crop of software vendors will turn out to be dinosaurs in a world that belongs to the warm blooded mammals who have conquered cloud based services.

So it seems the answer is obvious, software vendors should rush to provide Web-based services and extricate themselves from their "legacy" shrinkwrapped software business before it is too late. What could possibly go wrong with this plan? 

Sarah Lacy wrote an informative article for Business Week about the problems facing software vendors who have rushed into the world of SaaS. The Business Week article is entitled On-Demand Computing: A Brutal Slog and contains the following excerpt

On-demand represented a welcome break from the traditional way of doing things in the 1990s, when swaggering, elephant hunter-style salesmen would drive up in their gleaming BMWs to close massive orders in the waning days of the quarter. It was a time when representatives of Oracle (ORCL), Siebel, Sybase (SY), PeopleSoft, BEA Systems, or SAP (SAP) would extol the latest enterprise software revolution, be it for management of inventory, supply chain, customer relationships, or some other area of business. Then there were the billions of dollars spent on consultants to make it all work together—you couldn't just rip everything out and start over if it didn't. There was too much invested already, and chances are the alternatives weren't much better.

Funny thing about the Web, though. It's just as good at displacing revenue as it is in generating sources of it. Just ask the music industry or, ahem, print media. Think Robin Hood, taking riches from the elite and distributing them to everyone else, including the customers who get to keep more of their money and the upstarts that can more easily build competing alternatives.

But are these upstarts viable? On-demand software has turned out to be a brutal slog. Software sold "as a service" over the Web doesn't sell itself, even when it's cheaper and actually works. Each sale closed by these new Web-based software companies has a much smaller price tag. And vendors are continually tweaking their software, fixing bugs, and pushing out incremental improvements. Great news for the user, but the software makers miss out on the once-lucrative massive upgrade every few years and seemingly endless maintenance fees for supporting old versions of the software.

Nowhere was this more clear than on Oracle's most recent earnings call (BusinessWeek.com, 6/26/08). Why isn't Oracle a bigger player in on-demand software? It doesn't want to be, Ellison told the analysts and investors. "We've been in this business 10 years, and we've only now turned a profit," he said. "The last thing we want to do is have a very large business that's not profitable and drags our margins down." No, Ellison would rather enjoy the bounty of an acquisition spree that handed Oracle a bevy of software companies, hordes of customers, and associated maintenance fees that trickle straight to the bottom line.

SAP isn't having much more luck with Business by Design, its foray into the on-demand world, I'm told. SAP said for years it would never get into the on-demand game. Then when it sensed a potential threat from NetSuite, SAP decided to embrace on-demand. Results have been less than stellar so far. "SAP thought customers would go to a Web site, configure it themselves, and found the first hundred or so implementations required a lot of time and a lot of tremendous costs," Richardson says. "Small businesses are calling for support, calling SAP because they don't have IT departments. SAP is spending a lot of resources to configure and troubleshoot the problem."

In some ways, SaaS vendors have been misled by the consumer Web and have failed to realize that they still need to spend money on sales and support when servicing business customers. Just because Google doesn't advertise it's search features and Yahoo! Mail doesn't seem to have a huge support staff that hand holds customers as it uses their product doesn't mean that SaaS vendors can expect to cut their sales and support calls. The dynamics of running a free, advertising based service aimed at end users is completely different from running a service where you expect to charge business tens of thousands to hundreds of thousands to use your product.

In traditional business software development you have three major cycles with their own attendant costs; you have to write the software, you have to market the software and then you have to support the software. Becoming a SaaS vendor does not eliminate any of these costs. Instead it adds new costs and complexities such as managing data centers and worrying about hackers. In addition, thanks to free advertising based consumer services and the fact that companies like Google that have subsidized their SaaS offerings using their monopoly profits in other areas, business customers expect Web-based software to be cheaper than its desktop or server-based alternatives. Talk about being stuck between a rock and a hard place as a vendor.

Finally, software vendors that have existing ecosystems of partners that benefit from supporting and enhancing their shrinkwrapped products also have to worry about where these partners fit in a SaaS world. For an example of the kinds of problems these vendors now face, below is an excerpt from a rant by Vladimer Mazek, a system administrator at ExchangeDefender, entitled Houston… we have a problem which he wrote after attending one of Microsoft's partner conferences

Lack of Partner Direction: By far the biggest disappointment of the show. All of Microsoft’s executives failed to clearly communicate the partnership benefits. That is why partners pack the keynotes, to find a way to partner up with Microsoft. If you want to gloat about how fabulous you are and talk about exciting commission schedules as a brand recommender and a sales agent you might want to go work for Mary Kay. This is the biggest quagmire for Microsoft – it’s competitors are more agile because they do not have to work with partners to go to market. Infrastructure solutions are easy enough to offer and both Google and Apple and Amazon are beating Microsoft to the market, with far simpler and less convoluted solutions. How can Microsoft compete with its partners in a solution ecosystem that doesn’t require partners to begin with?

This is another example of the kind of problems established software vendors will have to solve as they try to ride the Software as a Service wave instead of being flattened by it.  Truly successful SaaS vendors will eventually have to deliver platforms that can sustain a healthy partner ecosystems to succeed in the long term. We have seen this in the consumer space with the Facebook platform and in the enterprise space with SalesForce.com's AppExchange. Here is one area where the upstarts that don't have a preexisting shrinkwrap software businesses can turn a disadvantage (lack of an established partner ecosystem) into an advantage since it is easier to start from scratch than to retool.

The bottom line is that creating a Web-based version of a popular desktop or server-based product is just part of the battle if you plan to play in the enterprise space. You will have to deal with the sales and support that go with selling to businesses as well as all the other headaches of shipping "cloud based services" which don't exist in the shrinkwrap software world. After you get that figured out, you will want to consider how you can leverage various ISVs and startups to enhance the stickiness of your service and turn it into a platform before one of your competitor's does. 

I suspect we still have a few years before any of the above happens. In the meantime we will see lots more software companies complaining about the paradox of embracing the Web when it clearly cannibalizes their other revenue streams and is less lucrative than what they've been accustomed to seeing. Interesting times indeed.

Now Playing: Flobots - Handlebars


 

Sometime last week I learned that podcasting startup PodTech was acquired for less than $500,000. This is a rather ignominious exit for a startup that initially entered the public consciousness with its high profile hire of Robert Scoble and the intent to build a technology news media empire using RSS and podcasts instead of radio waves and news print.

When I first heard about PodTech via Robert Scoble's blog, it seemed like a bad business to jump into given the lessons of The Long Tail. The Web creates an overabundance of content and products, which is good for aggregators but bad for creators. Even in 2006 when PodTech was founded you could see this in the success of "Web 2.0" companies that acted as content aggregators like Google, YouTube, Wikipedia and Flickr while content creators like music labels and news papers were beginning to scramble for relevance and revenue. 

Kevin Kelly has a great post about this called Wagging the Long Tail of Love where he writes

So as one crosses the sections -- going from the short head to the long tail -- one should be consistent and view it from the aggregator's point of view or the creator's point of view. I think it is a mistake to conflate the two view points.

I've been wrestling with this for a while and I think the only advantage to the creator that I can see in the long tail is that aggregators can invent or produce a long tail domain that was not present before.  Like Seth's Squidoo does. Before Squidoo or Amazon or Netflix came along there was no market at all for many of the creations they now distribute. The proposition that long tail aggregators can offer to creators is profound, but simple: you have a choice between a itsy bitsy niche audience (with nano profits) or no audience at all. Before the LT was expanded your masterpiece on breeding salt water aquarium fishes from the Red Sea would have no paying fans. Now you have maybe 100.

One hundred readers/watchers/listeners is not economical. There is no business equation that can sustain profits for continual creation from so few buyers. (It can of course support the business of aggregation above the level of creation.) But the long tail niche creation operates perfectly well in the realm of passion, enthusiasm, obsession, curiosity, peerage, love, and the gift economy.  In the exchange of psychic energy, encouragement, meaning of life, and reasons to live, the long now is a boon.

That is not true about profits. Economically, the more the long tail expands, the more stuff there is to compete with our limited attention as an audience, the more difficult it is for a creator to sell profitably. Or, the longer the tail, the worse for sales.

The Web has significantly reduced the costs of producing and distributing content. Anyone with a computer can publish to a potential audience of hundreds of millions of people for as little as the cost of their Internet connection. This is great for content consumers but it has significantly increased the amount of competition among content creators while also reducing their chances of generating profits from their work since the Web/Internet has provided lots of options for getting quality content for free (both legally and illegally). 

All of this is a long way of saying that in the era of "Web 2.0" it was quite unwise for a VC funded startup to jump into the pool of content creators and thus become a victim of The Long Tail instead of becoming a content aggregator and thus benefiting from the Long Tail instead. Of course, even that may not have saved them since the market for podcast aggregators pretty much dried up once Apple entered the fray.

Now Playing: Lil Wayne - I'm Me


 

Categories: Current Affairs

One of the problems you have to overcome when building a social software application is that such applications often depend on network effects to provide value to users. An instant messaging application isn't terribly useful unless your friends use the same application and using Twitter feels kind of empty if you don't follow anyone. On the flip side, once an application crosses a particular tipping point then network effects often push it to near monopoly status in certain social or regional networks. This has happened with eBay, Craigslist, MySpace, Facebook and a ton of other online services depend on network effects. Thus there is a lot of incentive for developers of social software applications to do their best to encourage and harness network effects in their user scenarios.

These observations have led to the notion of Viral Applications, applications which spread like viruses. The problem with a lot of the thinking behind "viral applications" and applications that borrow their techniques is that attempting to spread by any means necessary can be very harmful to the user experience. Here are two examples taken from this week's headlines

From Justine Ezaric, a post entitled The Loopt Debacle where she writes

Loopt is a location based social networking site that uses GPS to determine your exact location and share it with your friends.. and then spam your entire contact list via an SMS invite.

There’s a good chance that if you installed this application you’ve made the same mistake that most people made. While searching for friends who were on the service, apparently a text message was sent out to a large portion of my contact list, along with my phone number and my exact location (you know, since that’s the point of the application). Granted, you would think that if you have someone’s phone number, they’d have yours as well…

Hi, hey.. Over here!! People change their phone number for a reason!! With the ease of syncing contacts on the iPhone, it’s not always guaranteed that everyone in your contact list is a BFF (read: best friend forever). Also, there’s always people you just never want to text.. Like Steve Jobs, or an old boss, or maybe even an ex who would rather push you in front of a bus than get a text message from you?

From Marshal Kirkpatrick, a post entitled Gmail Tries To Be Less Creepy, Fails which states

Gmail, Google's powerful web based email service, announced some changes to its contact management features today. Contact management has for some time been a contentious matter among Google Account holders - the company does strange and mysterious things with your email contacts, including tying them in to some other applications without anyone's permission.

Today's new changes failed to alleviate those concerns, perhaps making the situation even less clear than it was before.

There Are Your Contacts and Then There Are Your Contacts

The post on the official Gmail blog today announced a new policy. There are now two types of contacts in your Gmail contacts list. There are your explicitly added My Contacts and there are your frequently emailed Suggested Contacts. The distinction between the two is unclear enough that I won't even try to summarize it. Read the following closely.

My Contacts contains the contacts you explicitly put in your address book (via manual entry, import or sync) as well as any address you've emailed a lot (we're using five or more times as the threshold for now).

Suggested Contacts is where Gmail puts its auto-created contacts. By default, Suggested Contacts you email frequently are automatically added to My Contacts, but for those of you who prefer tighter control of your address books, you can choose to disable usage-based addition of contacts to My Contacts (see the checkbox in the screenshot above). Once you do this, no matter how many times you email an auto-added email address it won't move to My Contacts.


When you open up Google Reader, the company's RSS reader, you'll find not just the feeds you've subscribed to but also the feeds of shared items from your "friends." Those friendships were defined somehow by Google, according to who you email in Gmail apparently. They can opt-out of having their shared items publicly visible at all, but short of doing that - you are seeing their shared items and someone, presumably, is seeing your shared items too. No one knows for sure.

Both Loopt and Gmail + Google Talk + Google Reader are examples of applications choosing approaches that encourage virality of the application or features of the application at the risk of putting users in socially awkward situations. As Justine mentions in the Loopt example, just because a person's phone number is in the contact list on your phone doesn't mean they would like to receive a text message from you at some random time of the day asking them to try out some social networking application. A phone isn't a social networking site. I have my doctor, my boss, his boss, our childcare provider, co-workers whose numbers I have in case of emergency and a bunch of other folks in my phone's contact list. These aren't the people I want to send spammy invites to try out some social networking application which probably doesn't even work on their phone. However I'm sure there has been some positive user growth from their "viral" techniques, but at what cost to their brand? Plaxo is still dealing with damage to their brand from their spammy era.

The Gmail behavior is even worse primarily because Google didn't fix the problem. Especially since people have been complaining about it for a while. No one can blame Google for wanting to jump start network effects for features like Shared Items in Google Reader or products like Google Talk, but it seems pretty ridiculous to decide to automatically add people I email to an IM application so they can see when I'm online and contact me anytime or to the list of people who are notified whenever I share something in Google Reader. It's just email, it does not imply an intimate social relationship. The worst thing about Google's practices is how it backfires, I'm less likely to use that combination of Google products so as not to cause inadvertent information leakage because some "viral algorithm" decided that because I sent a bunch of emails to my child care provider she needs to know whenever I share a link in Google Reader. 
 
If you decide to spread virally, you should be careful that you don't end up causing people to avoid your product like the diseases you are trying to emulate.

Now Playing: David Banner - Get Like Me (feat. Chris Brown, Yung Joc & Jim Jones)


 

Categories: Social Software