Month: August 2010

Last night I bought a few things on Amazon. The shopping experience on Amazon hasn’t changed much over the years except for Amazon Prime (which I love). In my opinion Amazons check out experience is one of the best out there. 

I always wondered why other ecommerce sites don’t just lift the Amazon check out experience. So many shopping sites have checkout experiences that feel like they were built in 1996. 

And then it hit me. We, the consumer, know the difference between the real thing and the clone. It’s sorta the same reason why I never bought a Mac clone back in the day or why I don’t buy a fake watch on Canal Street. I want the real thing. So each ecommerce site should try to make their own experience and pave their own way. That’s a good thing. 

It’s also why I never ask a founder pioneering a new consumer web service if he’s afraid that another startup or big company XYZ is going to clone his/her app. Big ideas are one thing but execution is critical. And the same startup that creates a new, useful product is has a great chance of beating another company that tries to clone the little company. A few years ago someone sent me this link to the 250 Twitter clones out there. I’m not sure if this list is longer today or shorter but I never worried about that.  

Why is that?

Because the innovator is always thinking ahead (or two or three steps ahead), creating the user experience, increasing the value of the brand and has a relationship with the user. 

The clone maker doesn’t have that relationship.

Now, don’t get me wrong. There are times where a big company uses their advantages to destroy the small company by copying features. Regretably it does happen. 

But i believe the very best entrepreneurs can survive and thrive because they are the pioneers. They are the real thing. 

At this point, I think paying for music is essentially based on the honor system. And as a lover of music, I’m happily paying my share for music. I pay for it in many ways right now – Rhapsody, Pandora premium, Spotify, Amazon and iTunes. In the world of music, DRM is dead. 

I happily pay for music although I can get it for free the wide range of free torrents or invite only torrent aggregators. 

In addition to paying for music and consuming it on the services I mentioned above, I rarely discover new music on those pay services. Instead I discover it on blogs, on twitter, on tumblr, on the hype machine and more recently on Ex.fm. Then, when I find a song or artist (or when they find me), I buy it. It’s an honor system and it works (recent example, I blog about a new album that I love and it leads to a purchase from a someone that checks out my post as you can see in the comments). 

It turns out that in our household we pay for a lot of video content too. We pay hundreds of dollars a month to Verizon for FIOS TV. We watch live sports when we can, and DVR a bunch every week. I usually get around to watching 1 or 2 shows a week time permitting. That’s about it. We are also loyal Netflix subscribers. It turns out we are also highly profitable for Netflix – I just returned 3 DVDs yesterday that was sitting in our kitchen for well over 3 months.

In August we were gone for 3 of the 4 weeks in the month. And that experience leads me to believe that video is quickly moving to an honor system business model as well. If I didn’t want to pay for video content we could basically replicate the content we purchase from Verizon and Netflix for free over the web. It’s available right now but it’s not legal.

Not only would that video be free but it’s much more convenient. The pirated stuff is available within an hour after the show airs on TV. There are cloud based torrent services that will transcode to .mp4 and stream beautifully to your Mac, iPad and iPhone. I can’t get that from my cable or telco provider today no matter how much I want to pay. 

But I’m going to continue paying for our video content. But in a world where “premium” content, like video, is moving to an honor system, the challenge is higher to deliver better user experiences to keep the economic viable for all parties.

(i wrote this post in a hurry. sunday night is my night to make dinner and I need to run and get my act together. But this post was in my head last week and I had to write it down. I’m sure I left out key points, so I’d welcome your comments and perspective and I’m sure it will allow me to clarify a few things. Thanks as always)

I spend a lot of time with technical founders and engineering managers in startups.

I like how the best ones think.

During this summer in particular, I’ve heard many talk openly about their growing technical debt. 

In many ways it’s not surprising to see early stage startups with technical debt.  The first version of their application was built either as a hack or very quickly built as a prototype that was never meant to scale. And that very code base is now supporting a growing community of users.

Then the question becomes, do you add more things to that code base to give users additional features and a better experience (and increase the technical debt) – or do you start paying down the debt by doing that re-write of core parts of the system.

It’s a tricky one for sure – especially the timing. I was trained in the VSCF way of thinking. So that’s how I think about product priorities. 

But at some point the debt has to be paid. While some folks may find this daunting or a put off to a new investor I think it’s refreshing & often inspiring to have an intellectually honest discussion about these issues.