Patrick McGuinness

Joe Gascoigne, founder at Buffer, offers up 10 lessons from my startup journey so far. There’s a lot to relate to and like in his advice.

In my own startup journey, I’ve been three months in full-time bootstrap effort, so not as far along as a guy who has a team and a revenue-generating product already. One thing I’ve had to tangle with is “What idea to pursue?” Joel’s “4 steps to a startup”  starts with ‘start with an idea’. For many, the seemingly hardest step. Others fall into a deceptively simple trap – having too many ideas, not sure which ones to pursue and which ones to drop, and none of them ever the perfect idea,  so do you keep searching?  This is where Joel has some good insight:

A side point about ideas is that you will learn far more by being in the process of working on a bad idea than you will by waiting for the perfect idea.

I have to agree with that. Distilling my own “lessons learned so far” on an early-stage startup:
1. It’s okay and normal to have more than one passion, idea, and set of interests. (See Randy Komisar’s ‘portfolio of passions’).

2. What’s not okay is to be diffused or distracted by the panorama of possibilities. We have finite energy and bandwidth, and maximum focus requires minimizing the scope of what we take on. Take your portfolio of passions and ideas, and make one of them your main active project, but you can still think of those other ideas as side projects and inactive ‘on the shelf’ ideas. This way, opening one door doesn’t close other doors, it just leaves them on ice, for later. In my case, I pivoted when from my cloud-EDA idea, when I decided it was no longer Idea Numero Uno, and my other passion – education – is now the focal point of my efforts.

3. Many ideas are so-so, none are perfect, all have flaws. It’s only in working through them that you can really prove them out. So don’t worry if your idea is lousy, if you do Lean Startup right, it will change! Or as a commenter on Joel’s blog put it:

Anyways, 6 months into my first venture, I now believe that the testing and iteration phase is what a start-up is all about. The original business plans and projections are such a joke when seen retrospectively.

4. Originality in business models is overrated. If you copy a business model (as long as you aren’t copying technology), you’ve solved part of the challenge of the startup. For example, a freemium cloud-SaaS subscription-model for delivering software is no longer an innovation, but it works. It’s innovative enough if you apply that model to a unique customer, problem and application space. (Probably the best businness idea is a truly innovative solution to a well-known problem; tackling a ‘new problem’ or inventing something too novel might be harder to get traction.)

5. Customers are a stable configuration, and their problems are a bit less stable but consistent, while solutions are more changeable. Implementations are the least stable. For this reason, asking “Who is my customer?” is the first question to ask about any business idea. It’s also a good question to ask constantly as the business evolves: “Who is my customer? And what problem of theirs am I solving?” ( And i f you can’t answer that, what sort of idea do you really have?  Ideas without customers are interesting science or technology projects, but  are not startup business ideas.)

6. It’s okay to break the above rules and other startup rules as long as you learn something significant each day that moves you forward. A startup is a process of searching for a business model to turn into a real business; it’s by definition a learning process. What this means is that if you are learning (e.g. by failing) or succeeding, you are making progress. If not – then you are in trouble.

The Emerging Wisdom Revolution shares some interesting innovations in social technologies. They describe the ‘reputation economy’ and ‘fluid democracy’ as new methods for organizing and collaborating in social institutions and societies. Social collaboration is based on key fundamentals that won’t change, but the web is changing how sharing, communication and collobaration can happen, breaking down barriers in terms of goegraphy, access to capital, leverage, etc.

Facebook is the next … Google? Much-hyped IPO that went on to greater things? Netscape? Biggest IPO ever then a flameout?

Facebook is the next … AOL? Possible, even likely. If you remember, AOL was the dominant Walled Garden that introduced millions to the internet in the era of 28k baud modems. The former highflyer got passed by when technology shifts allowed users to get beyond the walled garden and experience the ‘real’ internet. AOL faded as a premier internet provider at technology shifted.

Today, Facebook is the number one internet destination, abnd its dominance seems unassailable. However, the recent IPO filing of the 8-year-old company (has it been that long?) has skeptics arguing that Facebook is likely to do a face-plant. Facebook hopes to IPO at a $100 billion valuation, on sales of $4 billion and earnings of under $1 billion. At the 100+ PE ratio, this company is proced as a hyped-up high-growth company, and will need years of more growth to justify that valuation.

But wherein does its valuation lie? The fundamental value of the company is not to its technology per se, although its technology is amazing and impressive: A relatively small number of engineers, barely a several thousand, and the capital requirements of a few massive server farms can service the social networking needs for 800 million users. That’s technology leverage unsurpassed by any other company. As Churchill would put it, never have so few served so much (web pages) for so many.

Facebook’s value is the network itself, and the very nature of a social networking ‘herd’ to engage in herd-like behavior and hangout in one spot and not, for example, Google hangout. Or Friendster, Orkut, or a dozen other social networks. Or Myspace. What makes Facebook a gravity-defying yet slippery valuation company is the tremendous ‘lock in’ of a network, yet the fickleness of users, who could move on if they so choose.

A disturbing aspect of facebook’s value is that the more facebook knows about us, the more they can help advertiser’s target us. Their value increases by getting us to divulge more about us, for example, in our timeline. It’s disturbing enough that anyone who wants to fight back against the invasion of privacy inherent in these sharing networks should simply drop out, turn off, and shun these networks. Privacy or convenient online social interaction – pick one.

The internet is continuing to evolve and continuing to get bigger. At some point, the walled-garden aspect of Facebook can and will break down. The biggest threat is not Google or any other company, but a different paradigm for social networking that broke down the walls. In some respects, Facebook has gotten ahead of the curve with an API to embed facebook ID in all sorts of discussions, fending off OpenID. But since their business model is ad-serving, at some point being an internet utility for other sites will be a negative-sum game for them. What if the browser itself had peer-to-peer connections to friends, with all the tools for communication embedded, making a central ‘facebook’ obsolete? The technology is there, it’s just a matter of who will create enough of a feature-rich ecosystem and will users follow.

Facebook is the next … facebook. It’s had a unique journey so far, and it may well uniquely navigate the challenge of the coming open federated social web. Most impressive is that its doesn’t seem complacent. My verdict: Luke warm on its stock at its IPO price, but an incredible company that will continue to surprise us.

Is President Obama Right About Engineers?, asks CIS. President Obama seems to be clueless as to the real plight of the unemployed and underemployed highly skilled, as his answer to a woman talking about her unemployed husband shows. He seems unaware of the rising trends of outsourcing and the fact that older experienced engineers end up pricing themselves out of the market against newer job entrants who cost less.

Industry is always complaining about a ‘skills shortage’ because they want (a) instantly productive people who are (b) specifically skilled in whatever arcane area they need filled and (c) do not want to bother with training the people involved. Oh, and (d) they don’t want to pay up for excellence. Fast, good and cheap – you can’t get all three.

The CIS article has a chart that shows the real story: The ‘unemployed’ engineer is a small category fo 100,000, but more than twice as many have left the labor force and 1.4 million are working, but not as an engineer.

Obama had no good answer and really doesn’t understand this issue. The solution if there is one has to come from private sector, so perhaps it’s a relief that Obama didn’t attempt his typical govt-fits-all answer. Companies need to start thinking about training as part of how they keep their employees productive, and stop trying to bean-count away experience and excellence in their workforce. Or, figure out how much value each engineer provides and go full-bore free market on it.
And those of us who are engineers have to take charge of our own careers, as nobody else is doing it for us.

This high-falutin title represents a simple thought with respect to how to classify computer programming models.

My GUT theory of computing models is this: All computing occurs on the basis of data, communications and processing. The programming models are likewise of 3 types: Functional and function-based programming; object-oriented programming; and call-back-based and/or event-driven programming. When you center a computing model around data and state, you get object-oriented programming – start with data first and build from there. When you center a computing model around functions, you get procedural programming, and when you further treat functions as manipulatable, functional programming; when you center a computing model around events and communications, you get event-driven programming.

Having the opportunity and the necessity of brushing up on the latest in computing and programming techniques and technologies, I was struck by an ‘aha’ moment in perusing the How To Node – NodeJS site. NodeJS has a built-in event callback loop, akin to how you used to program X11 GUI or other interface code, and it’s clear that putting this in the core of the programming model is giving it both a power and characteristics that make it distinctly different from other programming languages.

That’s where the GUT theory of computing comes in, treating event-driven not as an added feature, but as a different computing model. Thinking of NodeJS this way is more useful way to understand and appreciate what it is capable of.

In the end, all programming consists of a mixture and combination of data-based, functional/procedural and event-driven algorithms and code. Functional programming is really distinct from procedural programming by the power of treating functions as objects or data; object-oriented languages, like Erlang and Scala have Actors for communication; you can code event-driven callbacks and event handlers in other languages (just as Javascript VM is written in C++).

The right programming languages should enable expression of these various abstractions effectively,
and the right programming abstractions would reflect the problem at hand, in terms of whether the focus is on data, events or processing. In the case of the RIA (rich internet application) that I am developing, the right computing model is a web-based version of client-server, where the client side is event-driven with a bit of state, and where the server side is data-centric.

Reading Paul Graham’s How to Make Wealth is probably worth more than an entire two semesters of learning economics. He concisely expresses why startups ‘work’ as wealth generators, and along the way explains how money is not wealth, why letting wealth creators keep it is vital, and how a programmer can be 20 times more productive in a startup than in a large company.

If you want a simple rule for how to make it in the world, it would be: Create Wealth. Wealth, as he points out, is another name for stuff people want. The best businesses focus on delivering a great experience for their customers, enough so that they get paid and earn money for it. How to get rich? “measurement and leverage”. Small teams gives measurement, technology that can scale gives leverage.

He mentions how it may be better to sell a startup early, as it reduces risk (and probably maximizes the log-utility function of risk-adjusted wealth – what I mean by that is almost everyone is better off taking 100% chance at $10 million than 20% chance at $100 million and 80% chance of $0). But corporations are so risk-averse themselves they wait to buy ‘proven’ companies for a lot more. Since wealth is ‘what people want’ the simplest metric for startup success is how many users and customers you have.

I was struck by his parallel between institutional schooling and institutional work. Paul Graham has elsewhere expressed how a ‘job’ is overrated. As we move to a world where work is less based on large-company culture, does that change the credentialing process for people who want a job? Probably so. So just as startup culture displalaces the culture of IBM and lifelong careerism, what will displace the institutions of higher learning? There will be a new model of learning, and let me label it - Agile Learning – to express the JIT, individualized, more fluid, smaller pieces-loosely-joined model of learning that will be both possible and more beneficial.

It’s said that a good craftsman doesn’t quibble with his tools, with the implication that it’s poor form to blame tools for mistakes. It would be better to say: “A good craftsman knows his tools.”

In the craft of programming,  tools give amazing productivity leverage; the best programmers are usually the ones who work at optimizing their tools and environment. I was reminded that I need to adopt that best-practice, as I wasted 30 minutes today chasing a bug in Javascript that a good IDE would have helped me find instantly. I had jumped in with a “simple tasks, just use basic editor”, since I was just trying a few things. However, since my larger goal is to build a rich web application, leveraging client-side Javascript frameworks like jQuery and Sproutcore; so I am better off setting up the right IDE right away and using it. A good IDE pays for itself in saved time a day.

Which one to use?  I’m downloading Aptana Studio 3, standalone for window, and it plugs into Eclipse for linux. There’s other options of Good JavaScript IDEs with jQuery support. Likewise in the Javascript frameworks for rich client web apps, there are many choices,  each of which individually will definitely bring productivity benefits, but choosing between them becomes a time sink. Open source has become such a powerful model for intellectual property development that we are awash in a plethora of open source tools in almost all areas of software development.

Using, learning, and adapting all these possible tools and libraries to a programming task takes time, so there is a balance between sharpening the saw and using it. The French have a saying:

C’est en forgeant qu’on devient forgeron.

It’s in the doing (forging) that one becomes the craftsman (blacksmith). Yes, but when the craftsman is working the forge, he knows his tools and uses the right tools for the job.

Thought for the day: “TV was this kind of box that people watched before they had computers.”

Something to think about while watching …

Jim Carrey is Rocky Balboa – YouTube.

Ted Cruz, candidate for U.S. Senate in Texas, joins the effort to STOP SOPA:

We can all agree that stealing intellectual property online or elsewhere is wrong, but SOPA and Protect IP bills are the wrong solutions to stop it. These bills threaten free speech and damage liberty. Needless to say, the Internet has transformed the way people receive and exchange information, and opened new doors for the sharing of ideas. The amazing innovations online are a product of a market relatively free of government regulation. In fact, the web is an example for the wider economy — that we should not trade innovation and vibrancy for stifling regulation.

It’s gratifying to see conservative leaders getting on the right side of this issue and bill.