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Are You Building Something That Will Move the Ball Forward?

Saturday, November 27th, 2010

My co-founders (David and Matt) and me are embarking on building a new company called Gigwalk.  The experience got me thinking about why we start companies.  I was going to write a long post about this but came across a Tim O’Reilly interview where he captures it perfectly while commenting on some of the TechCrunch50 companies “I don’t really care if they succeed or not, they are not really moving the ball forward in any meaningful way”

Ultimately life is too short to work on something where I could make a bit of money but really didn’t care for.   If my only goal was to make money I would be working on Wall Street (as a few of college professors encouraged me to do so). Wall Street is a great place to make tons of money working on stuff that doesn’t matter much.

If you take a much longer perspective – say 100 years – companies that move the ball forward succeed in changing what people do and how they think.  They change the course of history. Each of these companies dramatically changed billions of people’s lives over the past fifteen years.

  • Microsoft and Google changed how people work.
  • Facebook and Yahoo changed how people communicate.
  • eBay and Amazon changed how people buy and sell things.
  • LinkedIn is changing how people manage their career.
  • PayPal changed how we pay for stuff.

As Tim says these companies clearly created more economic and social value than they captured – the founders and investors did pretty well along the way.  I have no idea whether we will create a company on the same level as some of these — only lots of hard work and a bit of luck will determine that; yet this interview got me thinking on why we should start companies.

Posted in Startup | 4 Responses »
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Behind Google’s Data Buying Binge

Friday, August 6th, 2010

Google used to be based on a simple premise.  The web is a big place, we help you find the relevant piece of information for your question and direct you there — as quickly as possible.  You don’t consume information on Google, you simply find it.  Users only spend 3.4% of their time on search engines.  This is changing.  Having the best algorithm is no longer enough.  Google is investing heavily to own the data across key vertical categories and slowly becoming a destination experience for consuming this data.  Unless you own and curate rich data-sets there are natural limits to both the search relevancy and experience you can provide.  Google is quickly adapting by buying access to vast and rich data sets. Let’s look at their recent buying binge:

  • Travel: Acquired ITA Software which aggregates flight routes and pricing information and enables advanced search capabilities on travel data.
  • Local: Attempted to purchase Yelp.com, and after that fell through they ramped investment to build their own local data set.  Additionally,  Google has been investing for years in map with StreetView and satellite imagery.
  • Metaweb (Freebase): Structured data of  people, places, and things.

When Google focuses on a category like local this is what happens to the search experience.  For a query like Delfina Pizzeria (an excellent pizza place in San Franciso) rather than linking to the best sources of information like Yelp, Zagat, SF Chronicle, etc. Google first pushes you towards Google Places. It currently includes a mix of their own content and other sources of licensed content.  What happens when they have their own pictures, reviews, and check-in data — do they really need to license all this other content from the likes of  Zagat and SF Chronicle.

I expect Google to complete the buying binge by acquiring companies with rich data sets across other highly monetizable categories:

  • Shopping: Amazon and eBay to a lesser extent are capturing significant percent of query share in a very lucrative area.  If users bypass Google and go directly to Amazon for their product queries this represents a serious threat to their business.  They need to acquire a company with a huge selection of product data — rich and structured product attribute (size, color), inventory availability, pricing and promotions, and user reviews.  I can’t think of one company (beyond Amazon) that has done this well at the scale Google would need.  This may require acquiring multiple companies to create this.
  • Real-Estate: Is somebody like Trulia next?

Posted in Data, Product, Search | No Responses »
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But..But..I Built What The Customer Said They Wanted

Tuesday, June 1st, 2010

At most enterprise software companies sales and its largest customers dictate product requirements.   Product managers and engineers usually just execute against these “requirements.”  These enterprise systems are rarely successful because the people setting the requirements – sales and its largest customers – are mostly confused (or don’t care) about what the users of these systems actually need to get their job done effectively.

eBay is one of the very best Internet stories.  They built a global marketplace that created economic opportunity and work-life balance for millions of people.  Very few Internet services come close to that kind of economic impact.  Ultimately though eBay got “enterprised.”  While I never worked at eBay I know many who have and they basically tell the same story Ben Foster a former product management leader at eBay explains well here:

The fear of ruining Ebay’s “secret sauce”.  Products could be vetoed by the heads of various functional units if it threatened “the community”.  But no one really knew what made the business so successful, and so there was major resistance to non-organic change.  Our most vocal and successful community members were the very same people who benefited from the inefficiency of the Ebay platform.  So we had major disincentives to innovate.
Seller focus.  Sellers paid Ebay the money, so the company focused innovation on them.  We listened to sellers that said that they wanted feature X, Y, or Z.  But we missed what sellers really wanted.  What sellers really want is for buyers to think of Ebay FIRST when they want to buy something.

This reminds me of one of the best quotes on product innovation: “Your customers won’t tell you everything, so you need to invent on their behalf” – Jeff Bezos CEO and Founder of Amazon.com.  If you are a product manager and sales comes rushing to you with a list of requirements don’t cut and paste those into a product requirements document.   Big mistake.  Listen to customers and listen to sales, but then go and do the hard work of innovating on their behalf.

Posted in Product | No Responses »
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