Scalability issues for dummies

Every once in a while I get people asking me what’s taking me so long to open my startup Inkzee to the public. They also ask me what exactly have I been doing as the web seems exactly the same. I normally answer that things aren’t easy, that it takes time, specially if you are alone, like I am. After a while I end up explaining my problems with scalability and that’s the point where people just can’t follow you. I’m going to explain here what are scalability problems and how deep the repercussions are for a small company.

Most web applications, like Inkzee, Facebook, Twitter, … are made of 2 parts. What we, the tech nerds, call frontend and backend. The frontend is the part of the application that’s exposed to the users, that is, the user interface (UI), the emails, the information that is shown. All that UI is a mix of different programming codes, let it be PHP, javascript, html, etc. The frontend is in charge of drawing the UI on the user’s screen and to display all the information the user is expecting from the application. But this information has to come from somewhere, well, that’s the backend.

The backend are all the programs and software applications that run behind the scenes and that are in charge of generating, maintaining and delivering the information the frontend displays to the user. The backend can be very homogeneous or very heterogeneous, but it’s normally comprised of 2 parts, the database (where the information and data is stored) and the software that deals with that database, does the data crunching and connects this to the frontend.

Now, some web applications have a barebone backend, very simple and light weighted. Normally some software that gets what the user inputs on the interface and stores it in the database and viceversa, retrieves it from database and shows it to the user. Other web applications have an extremely complex backend (i.e Twitter, Facebook, …). These not only manage the data retrieval, but have to do really complex operations with the data. Not only complex, but very expensive operations in terms of computational power. For example, each time a user uploads a picture to Facebook follows this path:

• The picture is stored in a specific hard drive. The backend has to determine which hard drive corresponds to that user (yes, there are multiple hard drives and each one is assigned to a bunch of users so the load is distributed).
• Once stored, the picture is sent to a processing queue where it will be turned into a thumbnail by an image processing software. This process is expensive as it has to analyze the picture and reduce it to a smaller representation if the image but still maintaining part of its quality.
• After processing it, the backend stores the newly created thumbnail in the database and stores, both the picture and the thumbnail in an intermediate “database” in memory for faster access (cache). This is because it’s faster to retrieve data from memory than from a hard drive.

This is an approximation of what a picture does when you upload it to a social network. I’m pretty sure it goes through a lot more processes though. So, supposing 1% of a social network’s users are uploading pics at any single moment, imagine uploading ~20 photos per user, 2.5 million users at the same time (Facebook has around 250 million users currently). Trust me when I tell you, that’s a lot of data crunching.

The problem

The best user interfaces (frontend) are designed so that all that complexity that goes behind the scenes is never showed to the end user. The problem is that the frontend depends gravely on the backend. If the backend is slow, the frontend won’t be able to have the info the user is requesting or expecting and it will seem SLOW to the end user. Not only slow, but in many cases inefficient or just not available to use at all (meet the Twitter Fail whale :P).

So, now, what will cause the backend to be slow? Ohhhhhh don’t get me started!! There are so many reasons why the backend might be slow or broken! But, most of them are triggered by growth. That is, as the web application is being used by more and more users, the backend will start to fall apart. That’s what, in the tech world is known as scalability problems. That is, the backend can’t scale at the same speed the users pour into the application. The problem is that it’s not only a problem of more users, but having users that interact more heavily with the site. For example you might have 100,000 active users but never had experience big scalability problems. Suddenly you release a feature that allows your users to share pictures more easily… BAM!! Your backend goes down in 10 minutes. Why!! Why?!! you might scream while you watch your servers go down in flames. After all you have the same amount of users, so what happened? Well, most probably your backend system that handles picture sharing was designed and tested only with few users. Now it chokes with the big deal.

The REAL problem

Once you have scalability problems, the next logical step is to find where the bottleneck is and why is it happening. This, which might seem very easy, isn’t at all. It’s like looking for a needle in a haystack. Big backends are normally VERY complex with many parts coded in different programming languages by different persons. Not only that, but sometimes problems arise in different parts of the backend. So after a couple of really stressful hours you find the bottlenecks and think of a solution to fix them. Ahh my friend, then you realize it’s not as easy to fix as you thought. First of all, you have no clue if the fixes your team has come up with are good enough. Why? Because you’re stepping into unexplored territory. Few persons have had to tackle a similar problem and even less people have dealt with your data and systems. So even if you find someone else with the same problem, the solution might be slightly different depending on what systems you use for your backend or which architecture you have. This is the point where you realize that developers aren’t engineers, but craftsmen and that fixing these problems isn’t exactly a science but black voodoo magic.

So, here you are, with a bunch of possible fixes to a problem but with no clue if they will really work or it will just be a patch that will need extra fixes in 2 weeks. Normally you try to benchmark the solutions, but that’s not an easy task, specially because you have no real load to test it against except in your production servers and no, you don’t want to fuck the productions servers more than they are.

Finally, after some black magic and some simple testes you cross your fingers and try the fix on the production servers. After several hours of monitoring the backend for new “leaks”, you scream of happiness as the patch seems to work. Then you start to realize that the patch won’t hold on forever and that you need some extreme solution to the problem.

You sit down with your tech team (our on your own as it’s my case 😦 ) and you start drafting a new solution. Suddenly you realize that the best fix implies changing the way your backend works. And by change I mean, you need to redevelop a big chunk of your backend to fix the problem. This implies a couple of things, you’ll need to invest a lot of time and resources, you’ll loose the stability your backend had (prior to the incident), you’ll walk into a new unexplored territory for your team and worst of all, you can’t just unplug your production servers and change the backend, you need to do it so both backends coexist for a while until you switch all of your servers from using the old one to the new one.

Now, the REAL problem is that this change, this new redesign grinds the whole company to a halt. All resources, let it be people or money are invested in redesigning efforts so nothing new can be done. Most outsiders just don’t understand the depth of this change and will bash the company for not doing new things, for not releasing new features, for not fixing old bugs, etc. Not only that, investors will start to get anxious and will demand things to start moving. So, the outside world only sees that you’ve stalled, while the inside teams are suffering the pressure. Not only that, developers inside the company will get extremely frustrated by the pace of things. They won’t be able to add new features and even when fixing bugs they’ll need to fix them twice, one in the old backend, one in the new backend.

So, in the end, you realize the shit hit the fan and you got all of it. It’s hard, very hard to be there. If you haven’t experienced it you have no idea how hard it is. Not only as a developer but as a founder, CEO, or executive position you’ll feel the pain. You won’t be able to publicize your site cause more stress might accelerate the old backend problems, you can’t give users new features because you have no resources, you will try to explain the problem to investors but they won’t understand a clue of what you’re talking about… “backend what?”. Current customers will be pissed at you because the site is running slow and you are doing nothing to fix it. So, in the end, everything freezes until the new backend is in place.

How long does this takes? Depends. Depends on the size of the redesign, the size of the tech team, the skills of the team and specially, the skills of the management. During this phase, management must execute impeccably. Sadly, this is not the case in most places and so priorities are changed, mistakes are made and the redesign gets delayed over and over again.

It takes a very good leadership to make it through this period. Someone that knows where their priorities lie and that is able to foresee the future and the importance of the task ahead. Needless to say that such figure is lacking in most companies. That’s the reason it took so long for Twitter to pull their act together, to speed up Facebook, etc.

I am there, I am suffering the redesign phase (twice now). It’s hard, it’s lonely, it’s discouraging and frustrating, but it needs to be done. I just wrote this post so that outsiders can get a glimpse of what is it to be there and how it affects the whole company, not just the tech department. Scalability problems aren’t something you can discard as being ONLY technical, it’s roots might be technical but its effects will shake the whole company.

Let there be light 🙂

Anchoring an idea or product

I’m currently reading Crossing the Chasm (Geoffrey A. Moore). A friend recommended it to me when I told him I was struggling with the idea of selling services from my startup, Inkzee, to the enterprise. It’s an old book, (1991, revisited in 1999, old in terms of the tech scene), but the ideas and tips are surprisingly valid nowadays.

One of the key ideas for a successful “chasm crossing“, or selling an idea to the mainstream markets is to create a reference market to which your product/service can be compared on the heads of your clients. This principle is fairly easy to follow, but quite complex in nature. It taps into the way our brain works and it’s not the first time I’ve stepped onto it. Some months ago I finished reading another book, Predictably Irrational by Dan Ariely. It’s not an awesome book, but holds some very interesting insights into how humans react to different situations. One of the examples was about getting the correct pricing, or what the author calls the anchor price.

Both ideas are rooted on the same principle. On the first case, the author suggests that when selling something innovative, that has no competition, the way to go is to create that competition. How do you create that competition? Easy, you introduce 2 new concepts, the alternative market and the alternative product. You need to position your product close to a well know market by the customer. For example, if you’re selling an online word editor, you could make yourself close to the market of desktop word processors, aka Microsoft Word, that will be your alternative market. It’s a market known by the customer, where they buy from and most importantly, they have an allocated budget to buy from it. By positioning next to that market, the client can make comparisons between your product and what they’re already using. In other words, you create an anchor they can use to compare you against. You set yourself into a preexisting category in the customers head. The problem is that you need to differentiate your product from that preexisting market. The way to do this is by referencing your alternative product, that is, a product or service that is similar to yours, and is market leader but in a different market niche. In this example, you could name something like Salesforce.com. So you end up with a punch line like, “our online word processor is like the salesforce word processor”. So, in conclusion, the idea is to create an anchor point and a differentiating value proposition.

Now, in Predictably Irrational they idea was very similar. Instead of focusing on a product sales proposition, the domain was the pricing of a product. The example the author gave was the pricing of a subscription. An offer goes as follows, an annual subscription to The Economist (online access) costs $59. An annual subscription to The Economist (print) costs $125. Finally, an annual subscription (print and online access) costs $125. Which one would you choose? Chances are that the last one. Why is it like that? Truth is, that humans can’t value things without any reference. We always draw conclusions from comparisons. Our mind works under a cause/effect paradigm, that is, if the paper edition (lets symbolize the concept paper edition with the A symbol) costs $125 (B is the price), and online + paper (C) costs $125 (B as it’s the same price symbol as before) and online + paper (C) is better than only paper (A) then (here comes the effect) option C (paper + internet edition for $125) is the best one.

1. A -> B
2. C -> B
3. C > A

As we see from the simple logic equations from above, without [3] we can’t choose between the first 2 options. We need something to compare against. In the prices example, we are creating an anchor price, $125, something we know the value of, the printed edition of a magazine (our alternative market). We then offer a new product, innovative, something we aren’t familiar with, the online access to a publication. By virtue of putting it next to the magazine realm (in this case by virtue of the same price) we create a connection between both propositions. The problem is that we need a 3rd cornerstone to allow humans to see the difference, to be able to choose. In this example we are using a quantitative approach to choose, 2 things are better than 1, specially if that 1 thing is part of the other offer.

In the product example we use the product alternative to create a point of reference to which we compare the product to. In the former case the equation [3] isn’t as clear and powerful as in the subscription example, but plays the same role, a way to quantify and compare your product. For example, Microsoft Word (A) is part of the desktop publishing tools market (B), our product (C) is on a similar market (B). Salesforce.com (C’) is doing great and it’s similar than our product but in a different market niche (D). There fore, our product must be as good as Salesforce but in the market of desktop publishing.

1. A -> B
2. C -> B
3. C’ ~= C (similar products)
4. C’ best in D
5. C > A

As you see, the train of thought is slightly more complex, but ends up with a similar conclusion. Granted that it’s not as straightforward as the pricing example and you need to probe both [3] and [4] to get the client to buy into your proposition, but it’s much easier to do that, than to try and sell it blindly.

Ahh, the beauties of neuromarketing 😉

Why well funded startups waste money?

Sometime ago I had a conversation with a friend who asked me how much money I though was needed to get my startup going. I told him I though it would take 100.000€ to bootstrap it in the US, but that  it might be less. I still remember his skeptical face. I though he was going to tell me it was way too much, but to my surprise he told me it was way too low. I realized then that there is a great gap between bootstrappers and corporate drones. Enterprise people need like 5x to 10x more cash than what a bootstrapper needs but the truth is that this is just an illusion. It’s not true you need 10x more cash, it’s just that you aren’t used to save money.

As always, nothing is black or white and there are exceptions to this, but most of the time it’s just people flushing money down the drain without any real results. I really feel it’s because the money isn’t theirs and so, they don’t feel the pain it is to earn that money. Nothing like having your own savings at stake to think twice about spending it in stupid things.

The problem isn’t that corporate guys think this way, the problem is that I’ve seen many startups behave the same and I must say, it really shocks me. Wasting money is a bad habit, specially if you
are starting up and I think most companies don’t make saving money and resources a critical part of their company’s culture. For me it’s something fundamental in an organizations culture. Everyone should think about this, even when there is plenty of money, wasting it should be avoided.

What really strikes me is that the same behavior can be observed on peoples lives. Plenty of people ask us how are we (me and my girlfriend) able to live the way we do. The answer is that we don’t pay for stupid things. When someone tells you that they’ve spent 600€ in a pair of shoes I just roll my eyes. And don’t get me wrong, if you can spare 600€ a buy some awesome handmade shoes, please be my guest. The problem is that 99% of the times, people just can’t afore to do that and they buy them either way, which I must say, it’s just stupid if you ask me.

Sadly the only times I see companies trying to save money is when they need to bump their profits for the next quarter. The problem with this is that it’s too late. Creating a culture takes time and you can’t just reverse crazy spending overnight. Employees should feel that if they waste resources it’s their own payroll money they are wasting. The more you save, the more you get back at the end of the month.

And yes, I know, some readers are thinking, hey but I do save and my payroll is the same, instead those greedy bosses of me are earning much more to my expenses. This is both, true and sad, that’s why new entrepreneurs should start thinking about this issues from day one. Transparency is key for this to work and the problem is that not everybody is willing to be transparent. I would love to think
that money doesn’t changes people, but it’s not true, but if you have some solid guidelines and stick
to the basics I’m sure we could do much better.

Have you seen crazy spending in your company, in your startup? Tell us about it!

Image credits: http://www.savingadvice.com

Sick of brands

Some days ago I was looking for a place to have lunch and I ended up eating at a wok restaurant. While I was eating I realized I’m getting sick of branded restaurants, shops, etc. Small restaurants are disappearing, giving place to branded chains that popup all over the place, alas Starbucks. It’s not that I have something against a particular brand, it’s more I’m sick of having my choices reduced to a minimum.

The same applies to many other industries. In the fashion industry I’m seeing the same. Big branded chains with shops all over the place. The good thing is that some of them do understand the problem. The biggest fashion retailer of the world is Inditex, a Spanish company, who’s flag ship brand is Zara

. You have them all over the world. The bad thing about Zara is that they’ve crushed most of their competitors. The good thing, to an extend, is that not two single shops have the same type of clothes. They geo-analyze their shops and pump different types of clothes according to the local neighborhood market. Of course, this is just to a certain extent and not all clothes are different.

The solution? As Zara is doing, keep the brand, create different shops. And I’m not talking about creating different brands under the same company (Inditex has Zara, Massimo Dutti, Oysho, etc.), but about different shops within the same brand. Of course, this is VERY expensive, but it would at least give us more choices. You wouldn’t talk about Zara anymore, but about the Zara in main street, Zara in Union Square, etc.

What do you think? Is the global brand also getting on your nerves? What would you suggest?

Image credits: semaforoverde.com

Twitter as a marketing tool

It’s been twice in a week that I’ve talked with Marketing and Communication people about using Twitter for their companies and the answer has always been NO. It really strikes me, specially because both companies are part of the Tech Industry, one of them is even a well known startup.

The response I always get about Twitter is: “We don’t use it because it’s only for early adopters and geeks“. While this has been the case until very recently, Twitter is gaining critical mass at an amazing pace. Just to throw some numbers, Twitter has a daily reach of approximately 0.1% according to Alexa. That means that 0.1% of the Internet users access Twitter each day. But, that’s not the only thing, according to Biz Stone the Twitter API gets 10x that traffic, bumping Twitter’s daily reach to a very nice 1.1%. Right now it has broken the early adopter barrier and you can start seeing a more general use of it by online users. That’s the reason I think it’s the best moment to start using Twitter as a Marketing tool.

Why is Twitter a Marketing tool? Because it allows persons and/or companies the following:

a) Give a human face to the company
b) Keep your customers up to date with the latest news of the company
c) Listen to your customers feedback
d) Interact one to one with your customers
e) Keep key influencers (tech gurus, bloggers, journalists, etc.) updated about your company
f) Brand tracking

Who should use Twitter as a Marketing tool? Not everybody of course. Twitter users have a tech profile, although this profile is being widened by other online non-tech users day by day. This is something that many old school marketers don’t grasp. Everyday the digital breach between the online and offline worlds is diminishing. Currently you can see baby boomers buying food, books or flights through the Internet. You can see them chating, emailing, commenting on forums or writing blogs. Some of them are real social network junkies. Marketers have to understand that the profile of an Internet user is becoming much more general than it used to be.

So, again, who should use Twitter as a Marketing tool? I would say that it should be used by anyone with a company that is related to the tech industry. That would be websites, blogs, newspapers, software vendors, hardware vendors, musicians, … hell, everyone that can make business through the Internet. Right now that is mostly everyone!

Why are people going to adopt Twitter? It’s very easy, Twitter is Free and Simple. The sophistication level needed to use Twitter is close to 0 for any single Internet user. It’s ease of use is one of its strongest points. Also, the need to be connected and to know what is happening in other people’s lives is something inherent to humans. Humans are curious by nature, Twitter lets you be curious about other people at a never seen scale. The best proof of this are social networks like Facebook. What’s the real value of a social network? Simple, stay connected with your friends, or in plain English, know what your friends are doing. In that sense Twitter is much simpler and faster than any social network out there. In my humble opinion, it’s just a matter of time before all the social network late adopters take over Twitter.

Finally, why do I say it’s now the best moment to start using Twitter? Well, Twitter, as what happens with blogs lets you build a big audience. And the key concept here is “build”. You can’t start using Twitter and expect a relevant audience of 10.000 users following your account. Why do I say relevant? There are many Twitter users which think that if they follow many people they’ll get followed in exchange and while it’s true that this happens (byproduct of our society, people feel bad if they are being followed but they don’t follow you back), these type of users aren’t really listening. That’s why, even though you can do that, you won’t build a relevant user base. Your messages won’t be read by the users you want. The funny part of this is that the people that follow thousands of users just to get more followers, are usually so called “Marketing experts“. That’s pretty ironic if you ask me, as they should know better. So trust me when I say that building a reliable audience on Twitter takes time and good, thoughtful messages. That’s why it’s important to start now, so that when Twitter goes mainstream your company has already a good number of followers. As they say, the more number of follower you have, the faster you’ll get new ones.

Any experience with Twitter and your company? Please share it with us! Are you a Twitter user already? Follow my Twitter user http://twitter.com/abarrera

UPDATE: I found a very good hands on example of using Twitter as a Marketing tool.

Free as in Virus

I am writing this post as I’m flying over Tulsa on my way to San Francisco. This is my 10th hour of flight and I just realized something that many might think is stupid. During my transoceanic flight from Madrid to Atlanta I had free movies on board. The same goes for free earphones, free peanuts, free drinks or free cookies during the flight. While waiting for my connection at Atlanta I tried to use the airport’s wifi but, as I expected, you had to pay $7.50 for a 24h connection. On my current flight you have to pay to watch any movie ($6), you have to pay $2 to get some earphones and you have to pay if you want to eat some miserable cookies (you guessed, I didn’t pay for anything). Suddenly something has stricken me pretty hard and I know I’ve discussed this issue with some people (Say hi to Mark Evans!).
I’m so used to free services that I expect everything to be free. And mind me, that’s just wrong, very wrong. I just realized how wrong I am. $7.50 for a 24h Internet connection is very cheap for International Standards (specially if you have Euros as I do).

The problem here isn’t that some products are free of charge, the problem arises when you expect “everything” to be free. There are always exceptions to this, like the case of wifi at hotels. I still don’t get why after spending $150 per night in a hotel I don’t have free wifi. I truly believe wifi is accounted in the high price I pay for the room, but surprise, every single time I ask for wifi I have to pay some really expensive pluses.

Anyhow, many other things really deserve to be paid for. I do have a problem, I’ve never paid for a software product (ok, ok, Microsoft licenses maybe). As a programmer, anytime I needed something I tried to find a free alternative and/or code the extra functionality I needed. Although this is a cool way to save money, it does takes you much more time an effort. Not only that, most probably you won’t code a better software in just a couple of hours.

And so back to my point, I realized that I have to start learning to pay for services I use and like. My question is this: Is this the general evolution of market perception? Am I the only one realizing that an exclusive freemium world mentality is unsustainable? Will more people start realizing this and start shifting to pay per use models?

Now, more interestingly, what are the conditions a pay-per-use model needs to have to be used by a fairly large segment of a market? In my opinion, it needs to deliver two things:

1. Create more value than their competitor’s free services (no surprise here)
2. Get the users to understand why they should pay you for your service.

We need to really start stressing the importance of paid services as we do a horrible job at it. First of all, the value – price relation MUST be fair. Too expensive and users wont pay it, even if they like your product. Too few value and users won’t understand why they should pay you either. These concepts seem rather trivial but I have the feeling we should go back to basics with this issue.

Now that I think about it, I truly wonder if this business model is even valid anymore. Either we go back to basics with a new breed of paid models or we find a way to indirectly cash in thousands of users. Either way, I predict that true free services will die (except those that are under the umbrella of a company that can accept the looses). If that ever happens, I wonder if people will go back to paid services. You know, history is cyclic, maybe it’s time to get back to the “old” revenue model but with a nice 3.0 twist.

Now some questions for all the readers, under what circumstances would you pay for an online service? Would you consider a monthly fee, anual fee or a per usage fee? Any ideas and comments are greatly appreciated!

Why forcing an entrepreneur into a big company is a mistake

Lately I’ve been hearing many negative comments about creating startups and being an entrepreneur. Most of them can be reduced to: “You should work for a big, well know company and after several years you can go and start you own“. In my experience this idea is pretty widespread. I’ve heard it from my father, from my friends, from friends of friends, etc. The problem with it is that, ALL the persons that express this idea have a common characteristic: they are conservative.

The idea that working in a big company you have better odds of creating a successful startup is bullshit. There are no statistics for that. Even more, people like Paul Graham from Y Combinator recently wrote an essay precisely about this same issue:

We’ve now funded so many different types of founders that we have enough data to see patterns, and there seems to be no benefit from working for a big company. The people who’ve worked for a few years do seem better than the ones straight out of college, but only because they’re that much older.

The three most common benefits I keep hearing about working in a big company are the following:

• At a big company you’ll have the chance to get high profile contacts that might aid you when you go and create your own startup.

Contacts are of great help, everyone knows that by now, nevertheless, the idea that you’ll have better and more contacts working in a big company has no ground. First of all, to contact truly influential persons is, in general, way beyond a normal worker. You’ll need several years to reach a status within a company to get access to the management team or high profile executives. I’m pretty sure Apple employees can’t phone Steve Jobs or mail him at any time with total freedom. Even if this isn’t true (there are always exceptions), the psychological perception for many top executives is that they are better and you are worse, that they belong to the executive class and you don’t. This means that even if you can reach them, you won’t be seen as an equal and the true advantage of recommendations et al. will be diminished. Of course, there are always special cases, but we probably wouldn’t be talking about a BIG company then.

Secondly, contacts within a same company are pretty much endogamic. This means that, if you work as a beta tester, most of your friends and coworkers will be related to the beta testing environment. Reaching interesting and influential persons in other fields is much more difficult.

Finally, the rate at which you contact new people is determined by external factors like the number of people in your department or how frequently you engage with other departments or clients. If we throw some numbers we get a glimpse of the big difference. I usually go to a couple of entrepreneur meetings per month. In average I meet 2 persons of interest for my startup at each meeting. That makes 4 good contacts each month. In the software industry (my field), projects usually take between 2 to 6 months on average (even more if it’s a huge project in a big company). During that period and if you are lucky you’ll meet an average of 3 persons (which might not even be good contacts) at the client. That means that for a 6 month project you’ll only meet 3 new persons and probably only 1 or even none will be of interest to you. Check that against 15-20 interesting persons in a 6 month period by yourself (and no, you can’t go to many entrepreneur meetings if you work at a big company). Although this estimates will also go down if you keep meeting with the same persons, it’s clear which rate is better. Please, as usual, takes these numbers with caution, they are very gross estimates and there are always exceptions.

• Working in a big company you’ll get the change to work or see really big projects that employ huge resources. This vision will help you when working on your startup.

Nobody disagrees that you acquire very interesting experiences while working for a big company. Specially if you work with large teams. The problem is that when building a startup you won’t be managing huge teams or resources, you won’t (normally) need real-time critical systems either. You won’t even deal with a lot of clients at first. So, even though it’s a plus if you have the experience, it’s not critical, as a startup is NOT a big company.

• Working in a big company will give you a good resume and it will be easier for you to find investors.

Good resumes are always good things. Specially if you approach investors, your team’s resumes must be great. The problem is that many persons don’t differentiate between the team and the founders. An investor isn’t looking for a top notch programmer founder, they are looking for people with experience setting up companies, growing companies, selling companies. They are looking for people with a track record of not wasting money in useless things. They are looking for a true leader that is able to get the best out of his team. If you are also a top notch programmer then be it so. Working at a big company won’t get you more money from investors. VCs that invest on people only because they are ex-googlers or ex-yahoos are wrong and they’ll pay for it. That it’s harder to find investment if it’s your first time and you haven’t been working at a known company, true. Impossible to do it, false. Actually, most of the investments I see are to founders with not experience in big companies, just take a look at Apple, Microsoft, Google, etc.

So, in conclusion, from my point of view, there isn’t any competitive advantage in working on a big company. Actually for me it’s the opposite. Two years of inferno, with a tight leash around your creativity and without the freedom you’ve got in a startup. Worst of all is that the environment affects you in a negative way and it takes a while to get used to breath again. Finally, the years after graduation are the best to play the high risk game of creating a startup as people haven’t got so many financial debts (a house, a family, etc.). Wasting those precious years in a restrictive environment instead of changing the world is wrong.

Choose what YOU want and follow your gut. If you don’t feel comfortable at a company, take the time to think about what you really want. And most of all, don’t listen to those that try to project their own insecurity on to you, as that will only block your true feelings.

As usual, everyone is invited to drop a comment. I would love to read what other entrepreneurs or big company guys think about this. It would be interesting to have a VC or an angel to comment on this issue as well.

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6 rules to get customer support right

Every single person that works in a business has been taught that customers come first. Nevertheless this simple piece of advice is, in my opinion, the most neglected one in a wide range of enterprises. Why this happens escapes my understanding. I remember when I was studying Marketing (yes, I’m a marketing computer scientist) we got banged really hard with: users, users, users (alas “developers, developers, developers” from the Steve Ballmer’s speech) but it seems not many people were listening that day.

I talk about this because I continually see entrepreneurs neglect the “users come first” motto. Customer or users are the most important part of any business, including web applications. I’ve highlighted several key point I think are worth noting:

• Never, ever, under NO circumstances be disrespectful with your customers. This first point seems fairly easy, but in my experience, it’s the most recurrent failure in many businesses. The lack of respect and education is really broad. Even if the customer is wrong, being disrespectful is a no-no. First of all, being wrong is a subjective notion, and we have to always try to understand the user’s perspective. But even if a customer is truly wrong, we have to treat them in an educated way and swallow the bad moment. You can reduce this notion to: “The customer is ALWAYS right“. This brings me to the next point.

• Do not confront a customer. That’s bad PR, bad Marketing, bad everything. In the end you won’t get nothing out of a confrontation as the customer is already angry and if he isn’t, a confrontation is probably going to piss him off. Under this point I want to share two stories. The first one happened to my blogger friend Tom Raftery. Blueface’s CEO confronted him in a really nasty way. This case is even worse, not only are you attacking a former customer, but a prominent blogger with media exposure and it’s the CEO the one that is attacking him. Please bear in mind that the CEO and founders of a company are an extension of the company’s brand. Their personal brand is as important or more than the company’s, so do not engage in a confrontation, but even if you do, don’t expose the CEO or founders. The second story happened very recently at one of the South by Southwest‘s panels. It was during the Mark Zuckerberg’s interview by Sarah Lacy. I won’t get into the gory details, you can read those around, but there was something that really made me jump. At one point of the interview she confronted the audience in a very cocky way and said: “Try and do what I do for a living, it isn’t as easy as it looks“. From all points of view, even if she had a reason to say that, confronting a bored audience of geeks and developers is a really stupid move. Not only she didn’t accomplish anything, she probably made things worse with that attitude. So remember, if you ever feel the urge to yell and attack a customer (we all have been in that situation), refrain yourself, tell yourself you wont get nothing positive out of it.

• Be transparent with your users. This point is probably more of a strategy to build a great brand, but I wished more companies did it. Yesterday I went to an event where they talked about the importance of personal branding. For the speaker, a brand is all about relevance, reliability and notoriety. When you are transparent with your users you increase the reliability perception of your brand. People tend to mystify companies and as such they tend to think that they are evil and that they only do things to gain big money. Being transparent brakes that notion and sets a human face to the company. For example, if Sarah Lacy had disclose that the reason she did the interview with Mark Zuckerberg the way she did was because of restrictions imposed by the organizers, maybe the audience wouldn’t have had their expectations so high. Evidently, a company can’t disclose strategic plans, but most of the time the can and in my opinion, they should. I know a lot of people that would be really happy if Twitter explained what is going on every time they are down.

• Know your users. When someone starts a business, one of the first things they do is to make some market study and see which market niches they are after. You normally get a profile of the kind of user you are targeting. Strikingly, when dealing with customers and users, a company forgets all about this and treats them in a way that doesn’t makes sense with their profile. Come one, lets try to be coherent. If your target niche are geeks and developers, please, bare that in mind when you talk with your users. Communications flow in a much nicer way when you are in synchrony with your users.

• Treat your users as adults. One thing really gets on my nerves is when you call customer support and they treat you like if you were completely retarded. Why do I have to tolerate that? I can understand that most of the calls a company gets might be from people with no clue of what they are asking, but extending that notion to all your user base is very dangerous. Please, treat your customers as adults, give them the benefit of being well educated and respectful persons. If you treat them as dumb, they will react as such. If you treat them as adults, some of them will hopefully react as adults.
  

• Ask your users in a regular manner. I just added this last point just to remind everyone that user feedback is the best tool start-ups and even fully grown companies have to understand and measure their brand awareness and quality of their products. Always introduce feedback capabilities into all stages of your products. This is even true at an internal level. Introduce feedback systems into you internal procedures to review and understand what is happening inside your company. And of course, act consequently. There is no use in processing feedback if you don’t do anything with it. Listen, process, act and most importantly COMMUNICATE the changes the company made based on the feedback. Feedback is a two way tool. This last point relates to the one about being transparent.

Concluding, I think that most of the tips I wrote about are pretty straightforward. Nevertheless I can’t decide if companies choose to ignore them because they don’t think they are paramount or because they couldn’t care less. Anyway, if you are an entrepreneur and you are bootstrapping your start-up (as I am) include these best practices as soon as possible as it will pay off on the long run. As I love to eat my own dog food, I encourage everyone to leave a comment with their thoughts on the matter.

The important people myth debunked

There is something that I never quite understood. Why do people are so afraid of famous people? There is like an innate fear of important people that most of the times scratches in paranoia. I would like to analyze this myth and try to debunk it because I feel it’s one of the most wide spread problems with many people. First of all, there are many definitions for “important“, and worst of all it’s that this definition varies depending on who you talk with. For me, someone important is someone that has an incredible track record and that has demonstrated many times that he’s truly incredible. I would like to stress the importance of “many times” because I think it’s a key concept in my definition. Someone that got lucky once and got fame and money isn’t as important to me as someone that has proven many times his/her skills or knowledge. The problem to me is that not many people share this definition. For most of them, someone important is someone that has been exposed to the media in some way or another. That means, someone that has been written about in a nationwide newspaper, magazine or A-list blog, someone that has been a TV guest in some television program or someone that has been interviewed in a radio program, turns out to be, for a great chunk of the population, someone famous.

Sometimes, and only sometimes, there is a relation between media exposure and important people, but most of the time it’s just the result of the marketing and PR guys. And don’t get me wrong, exposing someone to the media is quite tough, specially now that everyone is competing for attention. The problem is that there isn’t a correlation between both, and most people don’t know this or won’t acknowledge this.

Now what I hear most of the time is “hey are you crazy? Are you going to email X? He won’t even answer you, he’s famous!” and I must say that when I listen to this, there is something that kicks inside me. I always answer the same thing: “and? why isn’t he going to answer back?”. After all, famous people are human beings with the same defects and virtues as the rest of us, sometimes even more. They are also, most of the time, educated persons that will answer you back, even if it’s to decline the offer. I understand, because I’ve experienced it, that when you are a very social active person you don’t have time for everything you would like, and when you have to decline and invitation, collaboration or similar you feel really bad about it because you wished you could have more time. Sadly enough, until someone discovers a folding time device, there is a limited time window these people have and so they have to limit, often based on priorities, with whom they spend it, which I understand and share 100%.

Nevertheless, not sending emails, or calling famous or important people out of fear is just plain stupid. As Wayne Gretzky once said: “You miss 100% of the shots you don’t take.”. You’ll always find rude people, but those are a minority. In my experience, every single time I’ve emailed someone that is considered by society as famous or important I’ve got an answer (ok, granted that it wasn’t always the answer I was looking for, but I still got an answer).

Another problem is that we tend to empower famous people with somehow ridiculous powers. If you’ve ever been in a place where everyone thinks you are a god, you might have experience this. It’s pretty hilarious what people talk about you, it’s like if you were a mystical creature with superpowers that can bend the laws of physics just with your sight. This is a natural byproduct of worshiping, but people should be realistic, famous people are normal people that have achieved incredible things. But that doesn’t means that they are superheroes that don’t speak your language or that don’t have enough education to answer an email.

The above sometimes reminds me of when you are looking for a relationship and you see/meet an incredible woman/man. Most people freak out and say things like: “oh look he’s/she’s so cute he/she won’t even speak with me”. Truth is that handsome people are quite lonely because of this and most of the times they have no partner and they stay like that for a long time because nobody has the guts to go an speak with them.

Anyhow, what I want to say is that we shouldn’t be afraid of talking with important or famous people, because after all they are human and respond like humans. You might admire someone, as I do with many persons, but that shouldn’t stop you from talking with them because, after all, you can’t possible know what they are going to say. Limiting yourself because of your own thoughts is something we should avoid, let others put the limits, not ourselves.

As an experiment I’m going to forward this post to some A list bloggers and see how many of them leave a comment to prove my point (please don’t let me down with this hehe).

And as always, what are your experiences with this myth? Have you ever been there? Are you famous and have experienced this “fame isolation“? I would love to read everybody’s insight on this matter.

The one thing every entrepreneur needs to have: HOPE

I was listening to last night’s Sen. Obama’s speech from Virginia and I was very impressed by the defense he gave for the use of hope in his campaign. It got me thinking that the most crucial thing an entrepreneur must have is hope. It’s not the only characteristic you need, that’s obvious, hope without hard work is pretty useless. But it’s true that hope really makes the difference between two persons.

Hope is the fuel of practically all the successful startups we currently see but most of the times people just underestimate it. I remember when I told my friends I was about to quit everything and start my own company that all that I kept hearing was: “man, return to reality“, “Alex be real, it’s very tough and you won’t make it“. Obama said something tonight that really tickled inside me. It’s because people have hope that they can achieve great things. Realistic people don’t achieve anything because they are bounded to their own personal restrictions. They don’t try to break current conceptions or ideas because they feel it’s impossible. And that’s the problem, they don’t even try!

That’s why even though most entrepreneurs fail at some point, the ones that have hope on their success will eventually succeed. Take the example of Larry Page. When he was working at Stanford, his only hope was to crawl all the Internet into his computer. That seemed rather ridiculous at the time and I’m very sure that many people told him that he was an idealistic, that he was crazy and that he should be more realistic. Nevertheless that dream, that hope took him to start Google and to change the face of the Internet as we knew it.

Google is just the most notorious example, but you can find many other small scale projects that have succeeded thanks to hope. Again, hope is not magical all by it self. It usually comes hand in hand with hard work, probably because hard work is driven by it. But don’t fool yourselves, it doesn’t works the other way round, hard work by it self doesn’t gets you success. Specially because even if you work hard for many hours, days, weeks or years, it’s hope what keeps you going, it’s hope what makes you go to work every day, it’s hope what makes you stand up again when something went really wrong. What really strikes me is that many people perceive hope as the characteristic of fools, disregarding its real value and power. I truly think that fools are the ones that can’t make change happen, that are unable to pursue their dreams, that can’t wake up and say to themselves, I can make this work, I can push the limits of innovation, I have the power to change the lives of thousands of persons. Of course it’s easier to give up against reality. That’s the easy path, just blame society, the market, the global industry leaders. Thinking about doing something new is tough and requires a great deal of courage. So people, next time someone tells you that you are a fool or an idealistic, don’t be ashamed, hope is the fuel of our dreams, and dreams are the vehicle of innovation, change and success.

As Mahatma Gandhi once said:

“We must be the change we wish to see in the world“

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