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An important driver for success

Who wants you to win?

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An important driver for success is if you can answer the question who wants you to win? This is especially important when you’re disrupting existing industries and markets. Sometimes it’s the customer like and sometimes it’s your suppliers.

Here are a few examples.

Google Android won because the industry wanted to offer a smartphone which could compete with the iPhone. Most phone manufacturers did not have the in-house talent or organization nor market share to go at it alone. This was the time that Microsoft could step in and offer an alternative. But they had none. For Microsoft, it is too late now and they’ll never be able to get a foothold in the mobile operating system arena. They’ve tried but it is impossible to build an ecosystem like IOS and Android from scratch. The only option they have is to go down from desktops to tablets and keep pushing Windows into smaller form factors. They certainly have a great position on the desktop which they can leverage to get into tablets. It certainly looks like this is the current strategy at Microsoft, but it’s going to take them a decade or more to get back even if they can succeed.

Google is doing the same with Google Chrome where they are moving upwards to the desktop. Chromebooks are a success because of their price point and simplicity. Removing the burden of the Windows tax – both in licensing cost, hardware requirements and software complexity – enables manufacturers to offer better and lower priced laptops compared to those running Windows. OEM laptop manufacturers can reach markets which they barely could reach before.

Of course, it all started with netbooks. Initially many of these netbooks came with some version of Linux. It was a brief rise of for Linux on the desktop but was ultimately replaced with XP because Linux proved to be complex and user unfriendly and Microsoft acted quickly to defend their position by offering the even then aging OS Windows XP for super low licensing fees to netbook OEMs. Netbooks didn’t survive because of the introduction of the tablet and problematic form factor. Chromebooks basically took over that market.

Linux did win on the server market and now runs the majority of servers connected to the internet. Linux won because it came without licensing fees and was in many ways technically superior – less mature but more than secure than Windows back in the day. Servers are typically ordered without operating systems and relied on admins for that. Nowadays we just spin up a server in the cloud and choose our operating system from a drop-down. Admins and technology companies wanted Linux to win because it reduced cost, more secure and better performance. Now the ecosystem around Linux is so mature that Microsoft has a feature called Windows Subsystem for Linux which is a compatibility layer for running Linux binaries on Windows. Microsoft used to warn their customers not deploy Linux because the GPL license under which Linux was distributed could pose significant risks to protecting the intellectual property of the organization. Linux has come a long way, even in Microsofts mindset.

The success of iTunes can be attributed to the fact that the music industry saw their revenue plummet because of the free MP3 sharing services like Napster, Kazaa and Limewire. They had no idea how to offer an alternative online for their offline products. Steve Jobs offered them a great option with iTunes. The industry quickly rallied around the iTunes store not only by offering (part) of their music catalogs on iTunes but also helping in promoting it as a legal alternative for online MP3 sharing. Ultimately we ended up with music subscriptions and a decade before revenues of the music industry increased again in 2016. But the reason Apple could successfully launch the iPod with iTunes was that the music industry wanted Apple to win.

It’s often better to work together than to fight, but to cooperate they need to want you to win.

It ain’t done when it’s done

Little things

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A few years ago, I bought a car. I had a great conversation with the sales guy and the whole experience was very pleasant. I got to test drive it and we discussed a couple of things which were wrong with it and they would fix them. At closing, I asked if they could put on license plate holders without any markings on it. It’s a personal thing, but I don’t want to drive around with free advertising for the dealer. After a couple of days, I picked up the car and the sales guy was happy to see me. We had a short pleasant chat and then he asked me to pick up the plate holders from the parts desk. I was a bit confused by that but did as asked. He had them set “aside” for me. I went over and they gave me my plate holders. They were exactly as I wanted them. And then they charged me $39 for them.

I picked up my car and never went back to them. My car is maintained somewhere else.

The moral of the story is that little things matter. Overall the $39 was peanuts compared to the sales price of the car. It wasn’t even worth debating over, but it did set a tone which made me choose another dealer to maintain my car. I’m typically a very loyal person to a business. If you treat me well, you’ve a customer for life. If you don’t, I couldn’t care less. I think this applies consciously or subconsciously to many transactions you do. The transaction doesn’t end when the signature is on the paper and the money has exchanged hands. It’s a continuous effort to get someone’s business and do the best you can.

The first transaction with a new company like in this story is the most critical. You’ve no creds as a business with this customer. If this would’ve happened to a dealer I’ve been doing business with for years, I would’ve said something. Now I let it go, I’ve nothing to lose. I’ve no relationship with you and I rather spent my effort on building one with someone else.

Making it easier to follow a lot of blogs

Djoomba: a simple RSS feed aggregator

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A while ago, I built Djoomba. It’s a hobby project to solve my own problem. I was looking for a simple RSS feed aggregator to follow a bunch of blogs. I wanted something which just presented the articles on a roll like Techmeme and I couldn’t find anything I liked. I’ve been using it for 6 months now and I’m happy with it. It does what it needs to do. I no longer have to go down my bookmark list and see if something got posted. I used  Blogtrottr for a while which delivers the posts in your inbox. It’s great, but it cluttered my inbox after adding ten or so blogs. I wanted something I could ignore when I was busy and visit when I had a moment.

You can easily add or remove feeds to Djoomba. It tries to be reasonably smart in detecting feeds on its own. You just enter the URL and presents you with a list of feeds you can subscribe to. After subscribing it checks once per hour every feed for new articles. If you want, it’ll notify you via email if there is anything new and you haven’t visited in a while.

I currently have 21 blogs in my feed and I’m super happy with it. It’s interesting that I got more interested in following blogs than I did in the past. I frequently end up on blog posts via shared links but never got around to revisiting them regularly. Now I just add them to Djoomba and Djoomba does the following for me.

Feel free to play with it.

Sorry, I’m not eating at home tonight

Subscriptions for consumables are impossibly hard

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I’ve been following the IPO and the performance of Blue Apron closely. Innately I don’t believe in subscription models for consumables. In my mind, there’s too much hassle in “managing” the subscription. Life is not predictable and small changes (“Sorry, I won’t be able to make dinner tonight”) ruin the rhythm of incoming products.

Amazon is pushing this for a long time as well. Many household items you’re offered to subscribe and you get a discount if you do. That always annoys me because I’m a loyal customer and I do buy certain items religiously on Amazon, but I digress.

I do wonder how successful these subscriptions are. With Blue Apron it’s pretty clear, it doesn’t. The churn and CAC are super high. Not a great recipe for success. But for others, it’s less clear since they’re private like HelloFresh or don’t get reported on like Amazon’s subscription service.

As a side note, I do believe the product of Blue Apron is great. The idea of packaged fresh food which you can easily prepare yourself is gold. It’s actually been in the supermarkets in The Netherlands for a long time. And that’s also where they belong in my opinion.

The only place I’ve seen this work is in the office. Offices are pretty predictable in how much coffee, paper, trash bags or other stock items they use. The individual dynamic behavior is absorbed by the group and hobbles around a mean. But for individuals or households, I see too many variances in behavior which break the norm.

When I buy my trash bags on Amazon and see the offer, I also just wonder how many bags I actually need in a month. I’ve honestly no idea. It’s probably one of the most stable staple items I use. It’s easier to just click the button I guess.

A potential future for retailing

Showrooms vs retail

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Yesterday, we were driving past a big Toys’R’Us sign. My partner remarked it’s interesting that these signs are still up and she was wondering what is going to happen to these retail locations. They’re gigantic locations and not easy to fill. As far as I know, the only stores who are increasing their retail locations are dollar stores. Everybody else is shrinking.

My parents live in a small village and half of their retail locations are empty with “for rent” signs on them. Some of them have been sitting there for years and there’s no real end sight.

I do believe there’s a need for retail, but as Ben Evans remarked in his presentation I posted the other day, it’s going to be part of the CAC and coming out of the marketing budget. It’s in this light you’ve to see the Amazon 4-star store. This store does not exist to make money.

I expect retail ultimately is going to morph into two directions:

  1. Grab-and-go stores for your immediate needs on the go
  2. Showrooms

The first one is pretty obvious and already exists today. It even includes the vending machines of Best Buy you see at the airport. It’s nice you can grab a pair of headphones before you’re heading into an 8-hour flight in case you forgot to bring them.

The second one is less obvious. When I think about retail in the future, it’s more about experience and discovery without the goal of making the sale. Retailers – and especially niche retailers – have been complaining about “showrooming” since the advent of online retail. You go to a store and check out the product, but you ultimately buy online – most of the time because it’s cheaper.

From a product brand perspective, it doesn’t really matter where a customer makes the sale, but it certainly matters to the retailer today. The need to play, try out or discover isn’t going away. For this, I expect that retailers will morph into showrooms where they get paid for putting a product on display and they don’t rely on sales anymore. This can also solve the problem of empty stores without knowledgeable staff to tell you about a product.

Apple does this in their own stores even though they do significant revenue in each store as well. But it is mostly an extension of their company and their brand. There is ample staff available to help you and advise you on making a purchase decision. Apple can pull this off because of their sheer size and this isn’t an option for most companies.

I would not be surprised if several showroom retail companies will pop up over the coming years to just that – showcase products and give purchase advice. Shopping will become “showrooming” by default and you buy online at your favorite place. This may even give the Toys-R-Us locations a new life.

Personal pet peeve

Ghosting is rude

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When did it become ok to just drop out of a (email|text) conversation and stop participating? Even mid-conversation?

It’s one of those things which really bother me. I get, you don’t respond to unsolicited sales communications, but the other day I got introduced to someone by an investor. The person responded 6 minutes after the intro and asked me how my Tuesday looked like. I responded and then… silence. I followed up, but no response.

Now I wonder? Did the person die? Are they in a hospital? I know they’re probably just fine, maybe busy, maybe they’ve a cold – it happens.

I just don’t support the idea that it’s ok to drop off mid-conversation. I understand people are overwhelmed by the amount of communication which is initiated with them, but apparently, you’re failing at it if you can’t handle it.

Somehow it feels like “Oh look, there’s a new shiny thing!” and a short attention span problem. If you’re not on their mind, you’re not going to get a response. It’s weird. I don’t like it, I find it rude.

The internet is not nearly done

Let’s do everything else

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This morning, I watched a presentation by A16Z’s top analyst Benedict Evans titled “The end of the beginning”. I always enjoy his analysis and this one is no exception.

Using market sizes Ben extrapolates that we’re just scratching the surface on disrupting global industries – we’re maybe at 5-10% of leveraging software and the internet to change how we spent our money. He also gives my favorite example that a decade ago nobody could envision we would buy our clothes online, now it’s normal and accepted. You could argue the same for cars.

He also remarks that (retail) rent is just CAC and no longer logistics. I agree with that and I’ve been thinking about that for a while. It’s a topic for a post but ultimately I think that retail will morph into showrooms. It’s more entertainment and marketing than anything else. Physical showing of a product to touch and play with is a powerful concept and can be useful for new introducing new products and reach new customers unaware of your product.

Here’s the video – if you’ve 24 minutes to spare, I recommend watching it.

Less choice is often better

FOBO & Amazon

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Every now and then, I’m searching for something on Amazon and end up not buying. The problem is that I get overwhelmed with choices and end up with option paralysis. In other words, a serious bout of fear of better options (FOBO). Yesterday, I was looking for a long outdoor extension cord. Amazon has 14 pages of cords which are longer than 50ft. I couldn’t make a choice. My local Home Depot only had one option. It’s easier.

With the explosion of Amazon, I find myself more often in the situation that I don’t want to buy there. There’s just too many options. I just want the best option. The best option is either determined by product attributes, price, quality or a combination of both. But often I can live with any caveats as long as I know it’s good. That’s where Amazon often is not very helpful. None of the options scream good to me.

“Amazon Recommended” is one of those solutions, but often I read the reviews and then it isn’t anymore. I wonder then if that’s a paid promotion. How does Amazon otherwise “recommend” this product to me? I don’t feel it’s a human-curated list. It feels random.

Reviews are often mixed. People have problems with the product or get “open box” version shipped by a seller.

I wish that Amazon – or someone else – could curate Amazon’s inventory and just show me 5 options. Definitely not more, maybe even less. Those options should reflect things I care about like good quality for a good price. I don’t care if it’s cheap or the best.

I think this is where retail can make a difference. Retail used to be that. You went to a specific place because of their product selection. Based on the brand, you knew you were paying the lowest price or got the best option etcetera. Nowadays, it feels like that retail is either big box and cheap or high-end expensive. There’s nothing in between.

When I want to buy a TV, I have a specific price point and size in mind. If you go to Amazon or Best Buy you could 50 different options for similar TVs. Which one is the best for me? I don’t know. I wish someone could make that decision for me or at least help me with that decision.

I know brands can do a lot here too. With Apple you know it’s expensive, but it’s also high quality. It’s like a BMW or Mercedes. It’s easy to be loyal to a brand like that. But many other brands are not consistent with their product portfolio. You can definitely buy an underpowered but cheap laptop from Dell while at the same time they offer high-end performance laptops. It’s that inconsistency that makes many brands unreliable indicators for selecting their products. You’re back relying on retailers and reviews. Often that leads to my fear of better options (FOBO).

Nothing to do with nostalgia

Why we love vinyl

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One of the fascinating effects of today’s technology world, is the way we mix sound. Most people are not aware of this, but music today sounds widely different than it did 20 years ago. Everyone is aware that we changed from LPs and CDs to streaming. Some people might have heard about the vinyl revival, but most people do not understand where this came from.

If you follow the media and read stories about the vinyl revival, they typically like to write about people wanting to “own” their music and vinyl is a great format to do that. It has a beautiful large sleeve and ample space for lyrics. The other angle they write about is the act of playing. It’s more gratifying to select a record, put it down on the turntable and drop the needle on the vinyl.

Now all of these reasons are valid, but it’s not where the revival came from. It stems from the way we mix music today and vinyl typically is mixed differently. Let alone old records which you can pick up from thrift stores for a few dollars. For the avid collectors there’s Discogs. Their market place has 35 million records for sale.

The way we experience music has changed significantly since early 90s. We used to live in a world with decent sized speakers with wooden cabinets to a world where we experience music through closed headphones and bluetooth speakers. The sound reproduction of these devices is widely different than what we had before. Musicians figured out that the mixing of their music had to be different to be fully enjoyed on these devices. Inherently the devices we use today lack dynamics. Lower level sounds were drowned out or not even reproduced at all. Apple’s standard earbuds and airpods are a great example of this. They can reproduce voices really well , but are terrible at reproducing sound dynamics. Most soundbars and bluetooth speakers have poor stereo separation as well. Many of them are just mono speakers.

Poor dynamics and stereo separation created the need for compression. Compressed music sounds much more enjoyable on these types of devices an has become the default for sound mixing. It arguable created more “loud” music and makes older music sound bland in comparison. Not everyone is happy with that development and they call it the loudness war because artists try to outdo each other in how loud their album is.

For audiophiles like me, it’s a sad situation though. Modern albums are not as fun to listen to. Every track blends into the next one. There is less “emotion” in music with loud and quiet passages – there’s just a wall of sound. This is the reason we tend to flock to vinyl which is often mixed less loud due to technical limitations of the format and  because the publishers know that vinyl buyers have different expectations. It’s not about cover or act of playing. We all love streaming and pushing a button to select and listen to our favorite music. It’s solely because of loudness and compression of the sound mix.

Like your home, it’s better not shared

Own your blog

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Yesterday, I was reading a post on Medium that Medium is not a great place to blog.

And kind of like Blogger, Medium is a terrible thing for publishing. If you think about publishing an article, starting a blog or even just sharing a short rant on Medium, please consider what you’ll be putting your readers through.

It’s true that the experience on Medium lately is quite awful. They’re employing all the social media tactics to get people to signup.

I’ve given up on Medium for another reason though.

I tried Medium for a while and even migrated my whole blog to their platform when they introduced domain support. But after a while, I decided to go back to my own hosted WordPress site.

Regardless of the UX, my problem with platforms in general is that they foster champions. Similar to Youtube, Twitter, Facebook and Instagram. You’re just there to experience content from someone else. 100% of their views are generated by 1% of their users. The rest of us is just there to consume (and watch ads). Your own content is irrelevant. It’s a sane strategy from a business perspective, but it isn’t so great if you’re just there to share your own content and are not part of the upper echelon of creators.

I want to own my own content.