Business – Page 3 – Kyle Cordes

In the Arena

Almost every day at some point I wander over to Hacker News, which has some great discussion, along with some less great discussion, among people pursuing or aspiring to pursue a software startup or similar business. Likewise with local events (like ITEN STL offers), and even more so the Business of Software conference earlier this month. (experiences)

I used to have a software product business myself, a vertical market SaaS firm. Now that I’ve been out of that for over a year, the thing I miss most is the feeling of being “in the arena”, of having a speculative product out there for people to buy. To be out there is both terrifying and exhilarating. I have heard it said that there are “product people” and “consulting people”, and looking back it is clear to me that I am mostly in the Product category.

Unlike some product people (like Amy Hoy, whom I admire greatly!) I don’t think it’s necessary to swear off one thing to do the other. Consulting (building software for clients) is very satisfying, especially when working with a team of great people (and a group of very competent customers) like we have at Oasis Digital.

So while I’m going to keep building software for other people, I’m also going to go back to the marketplace with speculative products. This time it will be products in the plural, some subset of:

Web/SaaS software
iPad software
iPhone / iPod Touch software
Android software (by year-end the stores will be piled high with Android tablets)
Or possibly HTML5/etc software to address all of the above
Backend / data / system management software
Or even, possibly, locally installed desktop software

I apologize for the vagueness of this list; but I agree with Derek Sivers about keeping one’s specific goals to oneself so my voluminous and tedious notes on exactly what products to offer, will remain offline.

Apple is Building a Bigger Footprint

I’ve seen a lot of people writing (whining?) about being unimpressed by some of the new Apple products/features announced at their event this week. These folks are missing Apple’s strategy. Several of Apple’s new gizmos are laying a foundation and pointing down an obvious path for their products:

iTunes-Ping Social Network

It doesn’t integrate with other social networks, and the initial content on there (from what I’ve heard, I didn’t even bother to look) is weak, consisting mostly of some well-known musicians who (shockingly!) think you should buy their music. None of this matters. If Ping v1 gets Apple some incremental sales in the iTunes store, it’s a win. Apple has an enormous audience, so inevitably Ping will get some level of community, and with that in place Apple can bring out a v2 in which they add integration, support in all of their devices, etc.

Apple TV

The 720 resolution is a disappointment, and I find the lack of a digital audio output rather surprising. No apps. It doesn’t compare well on technical features, with some similar products already out there.

But it’s a whizbang, very friendly Apple device $99! It will probably sell in big numbers, to many millions of consumers who haven’t (and won’t ever) hear of the similar products from lesser-known firms. Once there is a big user base out there, Apple can announce Apps and other features for Apple TV, with enormous fanfare and day-1 sales volume.

iPod Nano with multi-touch

This doesn’t have apps yet either; and similarly, the foundation is clearly there. Apple can add some form of Nano Apps in the future, again with an installed base already in place ready to start buying apps (in volume) on day 1.

iPad Multitasking

As a power user and developer, I find it a bit annoying that the iPad, a powerful computer launched in 2010, didn’t ship with multitasking. Yet I’m very happy with the device anyway, and it didn’t stop Apple from selling a billion dollars’ worth of them in a few months. Adding multitasking for free in November is a nice (small) step forward, plenty good enough for a mid-cycle update.

Winning Big

Apple isn’t merely trying to win today. They are trying to win big.

Sorry, Not a Fanboy

But am I a fan of all this?

As a user, yes. I enjoy Apple’s products. I am typing this on a MacBook Pro, with an iPad sitting nearby.
As a developer, I am not a fan of the increasingly closed ecosystem they are building. It reminds me ominously of the first generation of home computers, and current gaming systems, where the manufacturer interposes themselves in every financial transaction forever. That approach lost to an open market back in the 1980, I hope it does not take over the PC world ever again.
In addition, the closed ecosystem excludes many possible applications that would be very useful to our customers.
As a business aficionado, I nod approvingly at their strategy and execution prowess.

Update: I’m not the only one who thinks Ping will make Apple a lot of money, regardless of its merit.

I Admire the Ruby Community

(I have cross-posted this to the Oasis Digital blog.)

Over the last year or so, I’ve spent perhaps 50 hours rethinking what kind of business Oasis Digital should be. I’ve studied business models. I’ve made spreadsheets. I’ve looked around that numerous other consulting firms. The results of all that… are slowly emerging. Stay tuned.

In the meantime, though, I noticed something very interesting: the firms that appeal to me most, in terms of web site content, community involvement, portfolios, marketing approach, etc., are disproportionately Ruby or Ruby-Rails shops. I admire the “vibe” of the Ruby community:

Strong focus on design, to the extent that some Ruby-centric development firms have web sites which could pass for visual-design firms instead.
Ruby developers seem unusually aware of the extent to which syntax and conciseness matter.
There is much discussion of craftsmanship, though I’d need to survey a broader swath of production code to determine whether this discussion has a basis in reality.
Seemingly contrary to the above factors, Rubyists also appear to be unusually pragmatic.
This pragmatism translates to real-world financial impact: many developers make a good living with Ruby, and many firms are very happy with their Ruby projects.
Ruby events are numerous, nationwide.

There are numerous Ruby- or Ruby-Rails-centric development firms, and Oasis Digital is not one of them (we are perhaps a 5%-or-so Ruby shop, with Ruby expertise to effectively attack automated sysadmin, integration projects, and so on). We aren’t going to become a Ruby-centric-firm, either; and there are some technical aspects of Ruby that don’t impress me.

Rather, we want to bring some of the cultural qualities seen in the Ruby community, to other languages and tools. We care about design much more than most firms, and it shows in our GUIs. We care about user experience, and we are obsessed with quality, working results.

Sometimes, Establishing Expertise Doesn’t Pay Off

Recently I analyzed the relative payoff from different types of work I’ve done in my career to date. Some of the work has paid off reasonably well. But one particular bit of it stands out as a counter-example to common wisdom:

Between 1997 and 2000, I spent countless hours on the BDE Alternatives Guide, a section of this web site devoted to listing and analyzing the dozens of third-party database access libraries available for Delphi in that era. Delphi shipped with the BDE a not-great mechanism for database access. BDE was Borland’s answer to Microsoft’s ODBC, but unlike the latter, BDE didn’t get industry-wide support.

Working on the BDE Alternatives Guide had many positive payoffs:

It created a much-needed resource, greatly appreciated by thousands of developers.
I learned enormously in the process.
It put me in touch with dozens of library vendors, and many hundreds of developers.
It generated many incoming links and much traffic, around a million page views over a 5-year period.
Banner advertisements brought in a few hundred dollars, before I scrapped them to avoid the appearance of bias.
It made me reasonably well-known in the Delphi world, which was growing rapidly at that time. (Our team at Oasis Digital still does some Delphi work, by the way.)

You might think, though, that establishing expertise as a Delphi database integration expert, would result in lots of consulting leads, new business, and job offers. Let’s look at the stats:

Total number of leads generated: 0
Total consulting work generated: $0
Total job inquiries and offers: 0

Yes, that’s right. Not a single firm ever contacted me to inquire about consulting, development, etc., as a result of the BAG. I’m still glad I did the work, for all the reasons above. But it is a counter-example to the notion of showing expertise and building a technical following, as a way to generate business interest. Sometimes the work pays off in new business, and sometimes it doesn’t.

The situation is not as dire as it sounds though; concurrently with that technical reputation, I was building a development-results reputation, and the latter was vital to launching Oasis Digital in 2001.

Helping Our Customers Hire

For today, a “day job” topic:

Oasis Digital (my firm) is a custom software development shop. It is not a staffing or recruiting firm; there are many good firms in those businesses, and I have no desire to join them in that market. Oasis Digital doesn’t offer contract-to-hire, it doesn’t charge a percentage of a hire’s pay, and does not recruit in for customer placement.

Nonetheless, we do occasionally help our customers hire.

Really?

I’ve heard customers and our own team members express surprise at this. Isn’t it against our own interest to help a customer with a direct hire, who might end up doing some work instead of Oasis Digital doing it?

In a short-term, trivial sense it is perhaps against our interest. If we wanted every project to go on forever, using 100% only Oasis Digital staff, then we would make sure to never help any customer with any hire at all. But that is completely unrealistic. There are millions of software developers (and sometimes it seems almost as many software development firms). We are in a competitive market. Our customers have a choice, they can do business with us or have someone else write their software instead, regardless of whether we help them with hiring.

Therefore, the real question is whether to be greedy for the short term, or visionary for the long term. We choose the latter. Our policy is that we are happy to help our customers hire direct staff. We believe that this will, in the long term, lead to success for our customers and for Oasis Digital.

We assist with hiring in 3 ways.

Direct Assistance with Hiring and Onboarding

At Oasis Digital we have a somewhat unusual hiring process: in addition to the usual interviews by phone, in person, and otherwise, we ask (and pay) prospective developers to write some code for us based on a short specification. The resulting code, and conversation about it, provides a great opportunity to get to know someone (and to assess the results they will create) very quickly before hiring them. We assess technical skills as well as teamwork / cultural fit. We have a high bar to hiring and a defined process to reach that bar. At the same time, our process respects potential employees, by not asking for sample work to be done for free.

A good hire, though, is not the finish line. It is the starting line! During the first months of a new developer’s work we have an onboarding process in which the new developer sets up a work environment (mostly by referring to project documentation), then implements tiny changes, then small changes, then medium changes, then finally can begin work on large, important tasks. Throughout these initial months, the new developer works with more frequent collaboration and code/change review than will be needed in the long run. We have found that with our hiring and onboarding processes (described above at a very high level), we have a high success rate.

The first and most direct way we can assist our customers, therefore, is to simply execute these processes for them: assist with interviews, sample projects, and lead the onboarding effort.

Same Standards

When working with a mixed team consisting of Oasis Digital staff as well as customer staff, we hold everyone to the same high standards.

I’ve seen teams that work the other way: accepting a lower standard of work from a customer’s internal staff. It ends badly. We would rather lose a customer, than ship bad software. Our reputation matters more than the next dollar.

Pass It On

Lastly, our processes aren’t a deep secret; the key is not the ideas, it is the execution. We are happy to teach our way of working to customers (and everyone else, in blog posts and talks). Even at the price (free to read, normal billing for customer work) it is a hard sell, though: hiring is often deeply embedded in how companies work.

Stay Tuned

I’ve summarized here at a high level; expect future posts and talks with many more details.

SaaS: The Business Model – Video

On Feb. 27 at St. Louis Innovation Camp 2010, I gave a talk on the SaaS business model. I posted the slides, handout, audio, and transcript soon thereafter. Here is the 44-minute video the talk, conveniently on YouTube:

But until I revisited this page in 2020, the video situation was much more complex. It took three months (back in 2010) to post.

Warning: Sausage-making Discussion Below

The following has nothing to do with the content of the video.

This is an x.264 video, shown here initially with a Flash-only player (FV WordPress Flowplayer). Later I’ll replace this Flash-only widget with one that offers HTML5 video (for iPad use, in particular), when I find one that works sufficiently well.

That’s the easy part, though. Getting this video to you here was an adventure, and not in a good way. Three recordings were made of the talk:

We hired a professional videographer to record the talk. When I say professional, I mean it only in the most literal way, i.e. the videographer charged money. They showed up with a nice camera and a wireless lapel mic… but somehow produced a broken video recording (the first 10-15 minutes were intermittent video noise). In addition, the mic gain was turned up way too high and thus the audio is awful.
Dave Blankenship recorded the talk on his consumer camcorder; he was not paid for this, yet he did a much better job. This video is usable all the way through, but arrived in an oddball format produced mostly by some models of JVC camcorders. The audio was not so hot, because he used the mic built in to the camcorder from the back of the room.
I recorded the audio using a $5 microphone plugged in to an iPod Nano, sitting on a table at the front of the room. It’s a bit noisy, but with a few minutes of work with Audacity (Noise Removal and Normalization), the results are much better than either video attempt.

Armed with this, I set about to somehow combine the video from #2 with the audio from #3. I send emails describing this mess to several videographers I found on Craigslist. Most of them didn’t reply at all. I finally got a cost estimate from one, of many hundreds of dollars or more, and not much assurance of results.

Now I’m willing to spend some money to get good results, but spending it without confidence of results is less appealing; so I set about trying myself instead.

First, I cleaned the audio in Audacity as mentioned above.

Second, I watched the video and listened to the audio a few times, to get the approximate starting timestamp in each one of the moment the talk actually started; each recording had a different amount of lead-in time

Third, I grabbed ffmpeg, the swiss army knife of command line video and audio processing. After reading a dozen web pages of ffmpeg advice, and a number of experiments (with short -t settings, to quickly see how well it works without waiting to transcode the whole thing), I ended up with this command to produce the encoded video:

ffmpeg -y -ss 40.0 -i Recording-3-audio-only-clean.wav -ss 95 -i Recording-2-video-ok-audio-bad.mod -shortest -t 18000 -vcodec libx264 -vpre normal -b 700k -threads 2 Cordes-2010-SaaS.m4v

I then noticed that the MacPorts installation of ffmpeg omits the important qt-faststart tool, and found this helpful version of qt-faststart and used it instead, on my Mac; later I switched to a Linux machine with an ffmpeg install including qt-faststart. Without the faststart step, the metadata in the m4v file is arranged in a way that prevent progressive/streaming play-while-downloading.

The results are good but not great:

The video has some motion/interlace artifacts; these were present in the original recording, and I’m not aware offhand of what to do about them
The video camera used rectangular pixels; the pixel aspect ratio is 3:2 while it is intended for display at 16:9. I wasn’t able (at least in 20 minutes of learning and experimentation) to get the 16:9 output working correctly, so if you grab the underlying m4v file you can see the aspect ratio a bit off in the shape of the clock on the wall, for example.
The audio-video sync is adequate (and plenty good enough to follow along) but not perfect. Clearly using the audio track on a video recording is much better than putting them together in post-processing.
The audio is not as good as if I used a lav or headset mic, though I think it’s quite remarkably good for a $5 mic plugged in to iPod.
I’ve no idea if ffmpeg complies with any of the relevant copyrights/patents/whatever in video production, though it seems hopefully safe to use for a one-off non-commercial video like this. (Normally I use Apple’s iMovie for my videos, and I assume Apple has taken care of such things.)

A few morals of this story:

Get some powerful tools, and learn how to use them.
Be willing to pay for professional work, but be skeptical. Just because you pay, doesn’t mean it will be quality work.
Have a plan B. If I had assumed that at least one of the two videos would get decent audio, and skipped my own audio recording, I’d not have been able to deliver the acceptable audio here. If Dave had assumed that my professional videographer would produce results, and turned off his camera, we’d have no video here at all.