Ronald's Blog

Spotted a family of four deer as I got home, bit slow on the...

Thu, 21 Jul 2011 19:20:36 +0100

Spotted a family of four deer as I got home, bit slow on the draw so only got one in frame. Poor thing.

Tumblin Berries

Thu, 05 May 2011 20:43:04 +0100

Finally got the tumblr app working on the blackberry. Perhaps ill be able to post more now, somewhat doubt it, but should get my finger out.

On the subject, blackberries are just vile for apps. First the appworld works, but the apps don’t then the security eedjits go through a policy revision and switch half of them off. Put this all together with the worst user interface in the modern world.

Honestly, if the other phones had a decent email solution, and no iphone and android email is horrid, rim are on their way out.

How are the windows phones not targetting that market directly.

How to be yourself

Fri, 04 Jun 2010 17:00:00 +0100

I get a lot of advice to just be myself, for various situations, meeting new friends, formal business meetings, presentations, interviews, and the list goes on.

Problem is, how do you know what you are? you can do a lot of navel gazing, and try and figure out what you are and be that, but in the real world this doesn’t work. There’s research that says people make up their minds about someone new in 3 seconds. The thing is they make up their mind based on their classification not yours.

So someone might decide you’re a developer. And then they judge you based on how “developer” you are, they’ll be dissapointed if you’re not as good a developer as _they_ were expecting.

Someone might decide you’re a bit of a flirt, everything you say will be loaded with innuendo even if you didn’t intend it to be.

Sometimes, even your initial impression isn’t enough. I’ve recently had the experience of being retconned. I had an hour long conversation with someone about business models and content structure. Then they asked for my title. After I told him I was a dev, he went quiet for about 10 seconds. I could see him recasting everything that has been said in the conversation into a technical light. I would love to meet him at a poker table one day.

Seems like the more people get told to be themselves, the more they try and be what people think they should be.

So do you be yourself, and then alienate others because they don’t understand who you are, or do you present façades to fit into their heads. The end goal has to be what makes the difference. If you’re going out to make friends, being a confusing enigma is not going to get you there.

I’m lucky in that I have someone that I can be myself with, warts and all, I don’t think I’ll ever get that level of acceptance from anyone else.

Probability, Fractals and Swans

Wed, 02 Jun 2010 22:44:06 +0100

I’ve been promising since I started this blog to write about Nassim Nicholas Taleb’s book, The Black Swan. Today is the day I finally make good on that promise…

Imagine for a second, that you know how the world works, it should be quite easy. Imagine further that you have a grasp on the causality of this world, certain actions lead to certain consequences. Imagine even further that you can have a rough idea of how things are going to turn out based on what you can see and experience.

All of this should be pretty straighforward to most of us, after all that’s what we do every day. We believe we know how things work, and how they will work tomorrow. Even the distant future of next year we have a pretty good grasp of how things are going to be, because we’re not stupid, and we can see what’s going on around us.

Now imagine you’re the CEO of an airline just before the icelandic volcano. Or a financial banker before the banking crash (the latest one). Or an Executive of Altavista before Google launched.

Seems a little different, doesn’t it? That’s the key idea in NNT’s book, the outliers have such a great effect that simply dismissing them as outliers is not good enough anymore.

The Black Swan, at it’s heart, is a study on probability, dressed up in good research and narrative, both of which are pointed out by the author to cause particular weakness in most of us. The question it raises is centered around how we think about probability, how our prediction models and our expectations are structured.

Fundamentally NNT advocates that we need to move away from the conceptual model of probability we have in our heads, that outliers are rare and don’t affect the main body of results, and move towards emiprically gained evidence, without assumption. And that this evidence, resembles most Madelbrotian, of fractal fame, probability, that is, that the more you zoom in, the more it looks the same.

I’ve been thinking a lot about this book and how I can apply it to my professional life. Agile software development is fundamentally a technique that allows development teams to reduce risk of the unknown.

In the various flavours you get agile in this is pretty apparent; Scrum: sprints are effective little projects with limited scope. with the same risks and pitfalls as bigger projects, but at least you’re dealing with them immediately and can mitigate the risk next time. XP exposes code to review as soon as it’s written. Other agile methodologies, repeat this pattern in various forms, always mirroring larger projects but at a much smaller scale.

The same goes for actually building teams, Fred Wilson put up a post recently about the balance between product and engineering as a startup scales. Essentially to maintain the true essence of what made the startup great, you’ve got to keep the same balance that you had in the beginning, which normally means you’ve got to let go of one or both areas.

The key thing is that as soon as we treat something as being a smaller representation we also get better at predicting the larger representation even as we get worse at predicting the smaller ones. Perhaps that was a little bit of a stretch, the idea is that because we can fit a project on a gant chart, we lie to ourselves that we know how it’s going to go. Anyone that’s ever run a project knows that this is rubbish. Breaking the project up into smaller chunks doesn’t mean we get better at predicting the success of those smaller chunks.

Using Scrum as an example, i’ve seen teams implementing it very well that fail 75% of the time on delivering on their sprints. That is, they’re late with one or two items, or one or two aren’t done two spec. The key thing about scrum is that you take this aggregating cumulative error into account when the project as a whole is being discussed. Because we screwed up 75% of the time, our overall estimate is only 75% accurate. and the closer you get to the end, the less screwups you have ahead of you, therefore the more accurate you get.

Detractors of Agile methodologies have long used this as an example of how bad agile is, after all they’re 75% wrong off the bat. What the detractors don’t tell you is the failure rate of projects without using agile. it’s about 75%. The smaller units at least allow you to be wrong earlier, and therefore either take corrective action or give up altogether.

We fundamentally assume that we understand how the world works, and that it works the way it does because of some underlying reason that we think we’re just on the edge of grasping. Which just about sums up how some project managers feel about development projects… “It should have worked, we did everything right right up until it all fell to pieces.”

Cannibalistic Platforms

Mon, 12 Apr 2010 01:41:00 +0100

I’ve been watching the developments at Twitter over the past 2 months with some real interest. Other than the excellent engineering feats they accomplish, like Gizzard, elephant-bird and their work with Unicorn, they’ve made some interesting business decisions.

I’m specifically talking about their stance announced in February that they will start competing in the application space. On Friday, they attacked the app space by acquiring Tweetie and launching their own blackberry app. So in a day, they’ve launched a salvo at two of the most popular app markets in business. My only surprise was that they didn’t launch a desktop or AIR app the same day. I’d guess their only reason not to is because they prefer to use their site as the main “app” instead.

Loic Le Meur, the founder of Seesmic, has an interesting take on it. Admittedly he takes it very well, for hole read niche:

As long as we keep moving and innovating and both partners treat each other in a fair way, I think we will all be safe, the hole is big enough and there are many other holes.

Where Seesmic has gone right is that it’s not only working on Twitter, they work with Facebook, and other socnets too. But lets face it, as long as you’re no the owner of the platform you’re always going to be at the mercy of the owners, now you’re just at the mercy of more of them.

I remember an argument years ago about how the Internet was turning into the sharecropping system of the time. That was then in reference to GeoCities, but it seems just as applicable these days.

And as I’ve experience in the past, the most fickle of mistresses is Google. In one case they put a penalty in place that killed 80% of traffic overnight. Loic, in the same post above, points out that this happened to a friend “because they did not like what he was doing”.

Google have moved into real-estate, shopping, Airline times and stock quotes. The real scary thing is of course that they’re not making any significant amount of money from any of these efforts, they’re all just AdSense fodder. Twitter isn’t making money on its apps either, at least not as far as I know. As a business operating in a space, how can you compete with someone willing to occupy that space without having to face your business realities?

Simple answer is you can’t. It’s not enough anymore to be the best client to a platform, maybe it never was, you have to solve a problem. If you’re just a better UI on top of Twitter, you haven’t solved a problem, you’ve made their solution prettier or more usable, which is great if you’re an UX guy for them, weak if you’re building a business on it.

If you’ve built up a directory site that only serves to aggregate information already on the web, you’re not solving a problem. Even if you add value through adding additional editorial content or control you’re not really solving a problem you’re putting a layer on top of an existing solution if they’re using Google to find you, and those layers can be taken away by the owners of the existing solution at their discretion, regardless of what you’ve done.

Of course, the platforms and solutions only became popular because they’re useful. And they became useful through being open to an extent. Twitter would not have become as popular as it is now if it only had its web and SMS client. It certainly would’ve had major competition on platforms like the iPhone if it didn’t open itself to developers. Google wouldn’t have become popular if it didn’t educate and empower webmasters and content aggregators. The entire SEO industry is based on trying to pretend you know what Google wants, and for an SEO’s mojo to work they’ll encourage even tighter adherence to whatever the current Google magic bullet is.

Both are competing with their original enthusiasts, biting the hand that fed them growing up.

In 2006 all of the company results on Google maps were from yell.com, a couple of years later, they’ve built the local business centre, and completely replaced the yell content with in-house results. A local business site in that period received a 90% drop in yell.com referrals but had an overall increase of traffic from Google. They will defend themselves, correctly, that they are serving both the search user and the business customer better by doing what they’ve done. That doesn’t change that yell is now defunct, that it sucks as a site and a business may also play a role of course.

When a retail wholesaler sells direct to the public, bypassing the retail channels, it has to tread carefully, it incentivises retailers to still stock the product through giving them a fair margin, promotional offers, training, etc. The online platforms have to be careful that they don’t alienate the businesses out there that make them tick.

I hope that the fall out from all this is that developers wake up, and don’t just chase the dream on the new platform, but ensure that they protect themselves by working with, or demanding, platforms that respects them as developers and continues to give them that respect and support to let them build stable businesses.

I also hope that business realise you have to have something worth using, something worth paying for, otherwise you are just a means to an end. Which can be more easily replaced that how you did it in the first place.

I fear though that the excitement of the next big thing causes people to leap in before making sure they’re not going to get screwed over. I must say though, the only people that stand to lose from a move like this are the people that have gained through the platform already. To the rest of us it just means more choice.

Best Business Model in the world

Wed, 24 Mar 2010 20:00:00 +0000

I came across a post by Anthony Tjan (a VC) on the Harvard Business Review which talks about how at their VC firm, they’re constantly on the lookout for business with the following monetisation model:

recurring revenue + fixed cost leverage = superior cash flow

I think he convolutes the message a little bit, and using a words like recurring and leverage just confuse the matter.

What it comes down to is very simply, build a business where your costs stay fixed or close to fixed, and your revenue keeps climbing and you’ve built a successful business.

The opposite of this model, if you’re interested, is to receive linear revenue per cost, something which is typical of the service and retail industries.
There are only a few industries where this model really is viable, Technology, Biotech, Finance and Securities trading. What Taleb refers to as Extremistan. (Almost done with his book, so will post on it soon)

Tjang further goes on to expand and clarify the idea,

…a business model where you get the vast majority of your customers coming back every year, where the cost to deliver an additional customer approaches zero at scale, and where you get a lot of the cash upfront…

This is a great business model, but the three basic premises are very important to get right:

High retention rate,
0 cost of customer acquisition, and
cash up front

If you look at those individually, there are very very few business that do match this, and more importantly match it in the long run.

Running out of retention:

If you’ve got product that no-one reuses, you’re not going to last long unless you fix it, lack of retention when its your fault is fixable. The big problem comes in when you are highly reliant on others for your customer retention.

As an example: The humble roadside attraction.It used ot be a great familly business, you have an initial outlay to build some weird and wonderful thing, and customers just walk in off the road. your cost is fixed, you get a high number of people coming back, normally with their kids in tow, and they have to pay before they can go in and see your world of wonders (and then you sell them a t-shirt on the way out).

Then someone builds an interstate, and your customers are simply not there anymore. Nothing the roadside attractions did in the 50s saved them from the interstate.

The biggest fear of most internet “content” sites, is someone switching of the tap of traffic. If that happens, their revenue tanks, their costs stay the same, and they’re screwed.

If I look at some online businesses, they relied on Google for either traffic, revenue or both. Without exception, all of them started doing really well, well enough to get the Execs on the board to sit up and start adjusting budgets, and then tanked.

The key is retention. These sites were reporting traffic numbers in the millions per month, and the numbers were going up, so they thought retention was in the bag.

They didn’t pay attention to the stats that tell them how many users are coming from external sources, or how many of them are new vs. returning. When those external sites found somewhere else to send the traffic, or launched a competing product, the fountain of plenty dried up. For the interested, these numbers were usually around <1% direct traffic, and 10% returning.

Simply retaining numbers isn’t good enough, you have to retain individuals, or more clearly, people have to choose to use your product over others.

Customer Acquisition doesn’t stay 0

Another business is subscription based, with very high numbers of retention, they built a complicated technology offering but once it was up and running they didn’t have to spend much to keep it running, so their acquisition tended to 0. They are and have been successful for a very long time.

Their big issue that they target a very specific role in an industry. As it pans out, they’ve run out of customers to sell to.

By itself, running out of customers isn’t really a problem, what it means is that your cost of acquisition all of a sudden tends towards infinite, if there aren’t any new customers, it doesn’t matter how much I spend, I’ll not get any new customers.

So you can stop spending on acquiring customers, but you still have to spend something to keep your retention high, otherwise someone will steal your lunch, but you can bake that increase of cost back into your charge to customers. This kind of business needs to batten down, start figuring out how to save money by being efficient and shore up their market.

What it doesn’t need to do, is to try and build a whole new product, which they hope will work for their existing customers and attract an entire new market.

Know your limits in a market, and be comfortable with them, if you’ve cornered the market, that’s a good place to be, make sure you stay there rather than find a new market.

Cash up front

Gift vouchers are the bane of the Service industry. Cashflow is normally quite tight, so by the time the customer comes round, the initial money has already been spent and then you’ve got to tie up one of your employees in an activity that makes no money, but costs you lots.

You’d expect your customer acquisition costs to balloon right? Except for the cashflow issue however, there is no additional cost to getting that customer, after all you did get the money already. Even better, you’ve now got an opportunity to sell additional services or products and to market your business directly.

A beauty salon till recently was putting an expiry date on their gift vouchers, primarily to try and avoid the cashflow issue. Needless to say, customers that had received a gift voucher and ended up not being able to use them got rather upset about the whole affair.

They ended up not only losing out on the opportunity to sell more to a customer, they also created bad marketing for themselves by letting people down.

When you take cash up front, don’t forget what people have paid for, they must feel that they are better off by having paid in advance, there’s nothing in it for them otherwise.

High time for some science

Wed, 24 Mar 2010 17:36:32 +0000

Figured I’d finally put some CompSci stuff on here since I’ve just been warbling on about business and random crap.

There’s a research project in Berkeley that tries to tie up the various cluster computing platforms, and give a common layer below systems such as Hadoop and Dryad and allow them share resources, interact with running processes etc.

The paper looks interesting, with a posted result of around 20% increase over running separate instances, though I’ve got to spend some time to dive into the details.

I am a little hesitant, since they haven’t yet released the implementation behind the research. But there’s always hope.

Also, it appears I’ve actually had two visitors! Welcome, please turn the lights out when you’re done.

A Penny Saved is not a Penny Earned

Tue, 16 Mar 2010 00:10:05 +0000

I had lunch with an old boss and another exec recently. Among various topics we discussed, the following question came up:

What is more valuable, a dollar of revenue or a dollar of cost saving?

Around the table, both the execs and I knew which one we preferred and also knew that our preference is against the corporate line, for those of you playing along at home, the corporate line is cost saving. Not really a surprise.

Looking around on the web, you find that most personal financial advice toe this line pretty well. sticking with Benjamin Franklin’s well known phrase, “A Penny saved is a penny earned.” With some going to the hyperbole of a dollar saved is two dollars earned.

The corporate line follows the common approach, but ads an additional veneer to make it even more palatable for shareholders I guess. Cutting costs is seen as a predictable contribution to your bottom line. Every dollar you cut, you know is going to stay cut, whereas revenue is a fickle friend, here one year, gone the next.

Hopefully the cynics out of there are as appalled by this utter bullshit as I am.

The first problem is with applying the folk knowledge to business, there is a fundamental difference between saving money and cutting cost. When you save, you hold something back with the aim of using it on the proverbial rainy day, you save to spend. When you cut costs, you reduce your existing expenditure. I’m going to ignore the corrolary, you spend to save, since most companies ignore the direct costs of cost savings anyway.

The second problem is the corporate veneer, the seemingly solid fact that once it’s cut it stays cut completely misses the point that you still can’t predict your income. In fact I’ll even go further than that, when you focus your efforts on growing revenue and you’re successful you know you’re doing something right, and you can repeat that process to keep growing your revenue. When you focus on cuts, you’re not focusing on growing your top line, so instead of moving your business forward, you stay still… but the rest of the world doesn’t.

For every dollar you save, you’ve already lost the opportunity to make a dollar, and furthermore you’ve prevented yourself from establishing practices to let you earn even more dollars.

You won't see the future coming

Fri, 05 Mar 2010 00:43:00 +0000

Interesting confluence of ideas today. Firstly, there’s the buzz post by RRW that talks about whether we can ever get away from the good ol’ keyboard and mouse combo.

Secondly, there’s this post by John Scalzi, one of my favourite authors, carrying on a rather fractious and long running debate about e-books vs. print books. Which Scalzi points out, among other things, that assuming e-books are inherently cheaper is a fallacy. Actually his point isn’t so much directly that, rather than in the novel publishing world an authors work causes employment a fair amount of people and that is a Good Thing. The e vs print boiled up in the comment, where Scalzi goes to town on a certain “business background person”.

Note to self: never engage in a word war with someone that does it for a living.

Anyway, getting to my point, which I’m borrowing liberally from Nassim Taleb, I’ll put together another post about his ideas at some point, is that no matter what you think is gonna happen, you’re not going to see the big changes coming.

Paradigm shifts like the replacement of scribes by the printing press are not the shifts that happen over time. One day, you and I will be happily clacking away at pieces of plastic, the next, it will be different.

The main reason that e-books for example haven’t taken off is simply that there isn’t much difference in it. Consider for a moment, that all of the actual improvements when it comes to e-books have been logistical in nature. Improvements such as printing cost, access to material, immediacy of availability, nevery running out of copies or shelf space are all about the logistics of how books get shipped around not about reading them. And don’t get me wrong, I think e-books are great when you’re looking at spreading literacy and education, for the cost of 1 years print textbooks you can deliver free electronic textbooks for an entire academic career.

When you get down to the act of reading though, there is zero positive benefit to e-books over print books. In fact most people still prefer to read off paper. Until we get a shift in the fundamental action there won’t be a shift in the medium. the astute reader will probably point out that there has been at least two such shifts in the last century. Radio and Television have both altered how we can consume content, so they count.

The same argument applies to the keyboard debate, unless there’s a way to create input faster than typing, typing won’t change. But mouse interaction has changed how we interact with computers in a very meaningful way, without replacing keyboards.

There will be major shifts on these mediums, and it will increase our ability to consume and produce content vastly, I’m guessing an order of magnitude like the difference between printing with movable type and a typewriter. But until that happens the current methods will remain largely unchanged, and crucially we won’t know when it’s going to happen, because it’s so far out of our current experience that we are unable to predict accurately. This last bit is the key gem I got from Taleb, so I will expand on it at some point.

Funnily enough more people are reading now, whether on-line or off, than ever. So assuming that the old medium gets removed from the market is also false. Though you don’t get many caligraphed manuscripts these days.

As good a time to start as any

Wed, 03 Mar 2010 18:15:00 +0000

Joel Spolsky, of Joel on software fame, is giving up blogging.

So it seems as good a time as any for me to start. Thought truth be told I’ve been looking for a reason or excuse a long long time.

Funnily enough, Joel’s reason for giving up is the thing that spurred me to give it a whirl, and also the same thing that’s been making me hold off doing it for so long.

He makes the point that, when blogging, you should cater your material to interest your audience, not use it as a soap box to jump up and down about yourself. He makes this point talking about how his blog allowed his software company to become what it is.

I find this a little disingenuous, but I also see the point. As a reader, I don’t want to read about someone grandstanding, boasting and generally releasing enough hot air to raise the sea level. I want to read someone that’s interesting, thought-provoking and entertaining. Having the author cater his posts to fit into some perceived market space, just strikes me as a bit too much like copy writing as opposed to a true reflection of the person I am reading about.

However, you do see this in many blogs, for instance, Gary Vaynerchuck, is a very entertaining guy, his book, Crush It, is very inspiring in getting you focused on how to leverage your “personal brand”. Gary’s key bit of advice is to “be Authentic, be Passionate”, which runs counter to Joel’s points, yet, Gary himself made his fortune in wine blogging, not his true passion which is business development. He was of course authentic in his enthusiasm and character, but he still catered his posts to his audience of wine drinkers (or those interested in becoming wine drinkers).

Another person that is authentic about their personal life and has used their blog to promote and talk about their business is Penelope Trunk, whose posts range from career advice, to describing how she cries in bathrooms. Fascinating reading, but I’ve always found her to be more concerned with simply talking about whatever is bothering her than angling for business. Of course within the last month or so this has changed, since her CEO has asked her to start separating the business brand from her personal blog. So far this has meant she does more business webcasts that she plugs on her blog, so it has become less interesting.

I think that as long as you have something to gain from your audience the temptation is to make that gain. So if you initially start out with a blog, and you get a ton of traffic and you turn it into a business, is it wrong? No it’s not wrong, but churning out content to satisfy your market is not being genuine. If you make a ton of traffic turn it into a business and then get bored with it, you should simply turn your blog onto new things, things that are current for you. Not worry, as Joel has done, that your blog has effectively trapped you because it is too closely associated with your brand, business or product. The separate brand or business simply needs it’s own space.

For my part, this is intended to be a personal blog, perhaps this is because at this point in my life I am not angling for business. I don’t have a company (yet), so perhaps this is a luxury I will not be able to afford when I need something, whether that be new business or a new job, so this may come back to haunt me.