Hitting the Product Sweet Spot

Getting a product out the door requires a tremendous amount of time, money and effort. There’s nothing worse than going through all that and then have little to no market adoption.

Unfortunately, there is no crystal ball when it comes to getting your product right. But there are a number of strategies at your disposal.

Imagine you are standing in a room where the other end of the room is pitch dark. Now also imagine there is a dartboard somewhere in the dark part of the room. This is a simple analogy to building products and hitting the illusive market bullseye. Each dart is costly. What are your options?

You could build one dart and hope to get lucky. Or, rather than building one expensive dart (I suppose darts have different aerodynamic properties based on shape and materials used), you could build a whole bunch of low cost darts and hope one of them hits the sweet spot.

You could do market research, but that’s like asking people who’ve wandered about in the darkness where they think the dartboard is.

Alternatively, you could do what the Lean Startup movement is all about: You build several low cost darts that have a light on each. And each time it lands in the dark side of the room, it illuminates a part of the wall so within a few darts, you can see the dartboard. If you’re having trouble with this analogy, the light on the dart is what user data analytics is all about and Google and many other companies take this approach.

Lastly, you could do what Apple does. You turn off the lights in your side of the room, drop some acid, put on some Dylan and wait till your eyes adjust to the darkness and are able to see the outline of the dartboard :). Few companies have mastered being able to see into the dark like Apple has.

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My Core Coding Principles

Over the years, I have worked on and lead several development teams. The following core principles have helped guide me.

  1. Prime directive:  Let no one have cause to alter your code
  2. When meeting your manager/team lead/peer, be as prepared to tell them what you should be working on as they are
  3. If you spot bad or faulty code, find the person responsible and have them fix it or fix it yourself. Never scroll past bad code and think it’s someone else’s problem
  4. It doesn’t matter if some other part of the program is broken – if it’s broken, your product is broken and you are at cause. Take it personally
  5. Do not let your code cause other people’s code to break. Test, document and communicate
  6. Do not write code that, when you come back to months later, requires you to have to re-learn your thought process. Make your code self-evident. Otherwise, document/comment in detail
  7. Pay attention to what my change above or below your code in the architecture stack and code defensively – wherever possible, have code break at compile time instead of runtime
  8. Quality of code beats quantity of code any day. Bugs are a bigger measure of your skill level than late delivery
  9. If you have a gut feel that what you are coding is not good code/design. Stop and ask for a second opinion from a peer. Talk it out – never rush to completion
  10. Take effort to make your team aware of what areas of the product you are working on and what outcomes they can expect from your work instead of simply reporting timesheets
  11. Always be learning – share cool new concepts that you come across
  12. Take ownership of the product’s success even if someone else’s way of doing things prevails. It is after all, the sum of all our efforts

I hope they serve you as well. You may also wish to write down your own and share them with your team. Nothing is static in our ever changing field. I intend to review and update these from time to time.

Whom to trust?

Many months back, I wrote about the central issue around the financial crisis was one of trust. Until trust is restored, the gears of the financial system remain jammed. Most of the current activities around restoring market confidence have been about ensuring that there is adequate money supply however; this has not really been the central issue in this meltdown. If anything, the current solution will likely lead to inflation down the road. The central issue is not the supply of money but the velocity of money. It’s not moving and it’s not moving because it is difficult to ascertain who is credit worthy.

The here’s an article about the notion of quarantined assets in order to isolate toxic assets. Not sure about the mechanics of this but it’s an interesting idea. The moral hazard issue remains unresolved.

Copyright laws for the Digital Age

I was asked to write a debate style short essay on whether Canada should change its existing copyright laws to achieve good public policy in an era of digital products and services. This was for a course on the Management of Intellectual Property. As a founder of Vitrium, this is obviously an issue that I’ve kicked around a fair bit. Those of you who know me well know that I love to debate and would often engage in both the pro and con side to any debate given the right environment and time. I particularly enjoyed writing this short essay – even though I was restricted to one side of the argument and the length of the essay had to be less than 800 words.

I argue that Canada should not imitate restrictive Copyright legislation governing the use and distribution of digital media but instead, require that business adapt to changes brought about by technology innovation. Copyright law bestows the exclusive right to control the distribution of an original work onto the author for a certain time period. Prior to the development of digital media, publishers of original works maintained control of copyrighted material by tying it to a physical medium (e.g. book, cassette tape). Furthermore, the act of copying analog data resulted in a degradation of quality of the original work. The physical medium and degradation of quality helped check copyright violations.

With the advent of digital media, original works are now freed from their physical medium and the copied material is indistinguishable from the original. This has greatly enhanced how licensees purchase and use copyrighted materials. Unfortunately, it has also contributed to rampant copyright violations as legitimate information exchange over the Internet is virtually indistinguishable from illegitimate without serious intrusion into the end-user’s privacy. Various industry associations have taken civil action intended to set examples of copyright violators and to strong arm infrastructure providers into monitoring the activities of Internet users. The industry has also responded with digital rights management technology that in some cases severely restricts what customers may do with a digital material. In addition to this, these industries are lobbying for changes to the Copyright act to deal with consumption of digital material and Internet distribution.

The strongest proponent of Copyright reform is the music industry. The book publishing industry provides a great deal of value add to an author through the editorial process. By contrast, the music industry is largely built upon the distribution controls of physical goods. It is therefore not surprising that the changes proposed to Copyright legislation are largely geared to preserving this business model.

Most users of digital media are not legal experts and may not distinguish fair use from copyright violations. Users have established behaviour patterns based on physical (analog) media. People often lend materials to friends and move materials from one playback device to another. The same behaviour patterns, when transposed to digital media often result in violations. This is because digitally copied materials represent an exact duplicate where both parties get to simultaneously enjoy the benefit of the material which is not possible with physical goods.

If left to fend for themselves, the industry seems to want to turn back the clock on innovation and strip consumers of the vast benefits of digital media. This is akin to trying to put the genie back into the bottle. The problem is not one of legal or technology innovation but one of business innovation. As technology evolves, new business opportunities are created while old business models fall by the wayside. Businesses have to learn to adapt to changes brought upon through innovation.

The software industry was arguably the first industry to experience copyright violations through software piracy. Today, the software industry has learnt to take a stick and carrot approach to achieving harmony between fair use, unintentional violations and outright violations. For instance, in addition to legal deterrents, the software industry requires that customers have legitimate versions of software prior to gaining accessing value added services such as product support and security updates. This evolution in business practices is a result of accepting the detrimental together with the beneficial aspects of digital media.

We are already starting to see changes as new businesses take a fresh approach on how to monetize copyrighted materials. For instance, there are now flat rate monthly subscription services that allow customers to listen to as much music as they would like. There are also new bands whose business model is to distribute music online for free and derive revenues through paraphernalia and live events. Perhaps the most interesting model was when the band Radiohead made their latest album available online and let fans name their price prior to downloading it. Interestingly, the average price paid for the album was the same as what consumers would have paid in stores – in this case however, all the revenues went directly to the artists.

Proponents of copyright law reform are taking a one sided approach and wish to go back in time. They wish to restrict the flow of digital goods and impose unto them the same constrains as physical goods in order to return to a bygone era. Instead there are new businesses that are embracing consumer behaviours and adapting to new ways of doing things. This new approach not only opens up the landscape for new artists and gives consumers an access to a larger variety of intellectual goods. It is best that governments do not hamper this natural evolution of technology and business through legislation.

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Market Volatility and Interbank Lending

The markets have been taking a wild ride these past few weeks. Those of you who crave volatility must be having a field day however; one can’t help but be puzzled as to what’s causing the recent market swings.

We know that the roots of the current financial crisis lie in the securitization of sub-prime mortgages and a general failure in containing risk within these portfolios. We know that there are significant funds being made available to the financial institutions to make loans as well as to purchase toxic assets off the balance sheets of these institutions. So why all the uncertainty and when will recent measures actually bring stability to the markets?

Banks form the base of the economic pyramid given that businesses depend on them for loans for various projects that otherwise would not be carried out. At the end of the day, banks make money from these transactions and have typically relied on the ability to borrow from each other should they experience a shortfall of cash reserves at the end of each business day. The recent revelation regarding financial institutions with unprecedented levels of toxic assets on their books has resulted in a disintegration of trust among banks. This has caused banks to start hoarding cash instead of freely lending to each other.

Interbank lending rates such as LIBOR can be used as a rough proxy for the measure of trust between banks. Despite cuts of the benchmark lending rates by the Federal Reserve and the Bank of Canada, LIBOR has jumped to the highest levels since December of last year. In other words; banks do not trust each. After all, without clarity on how these assets will be divested, they could end up lending money to insolvent institutions. Furthermore, banks have no reason to believe that borrowing banks will no longer engage in the activities that got everyone in this mess to begin with. To the best of my knowledge, there has been no notable change in regulations, executives or boards of directors at any of the offending institutions. Perhaps there is a concern that any such move would be interpreted as an admission of wrongdoing. In any case, it is unclear when banks will free up capital and when business will have access to prior levels of debt financing. While this is the case, I am not sure that we can expect stable markets anytime soon.