the onda

When I was growing up in Venezuela, there were two companies that represented everything that marked the US as the place to be: Apple Computer and Hewlett Packard. Each company was the epitome of the creative energy of engineers building the future with little care for the status quo. As I would learn years later from Alan Kay, they were employing the practice of "predicting the future by inventing it."

Imagine then how thrilled I was a couple of decades later when HP decided to buy my company. Sure, the company no longer had the luster of its Bill & Dave days but it was still the place that had invented the garage culture, put Silicon Valley on the map, and taught generations of engineers that hard work and creative work eventually paid off. I remember showing up to the closing day of the transaction with a decades-old HP 35 calculator that my father had given me after a trip to the company's Corvallis plant during my college tour. "If you can help do something like this," he had said to me, "then we'll know that bringing you here was the right thing to do." I repeated the story to the guy who bought us and told him I was ready to try.

The results of my efforts on that front are the subject for another post; here I'm just going to talk about the two types of executives I met during my two years there.

The first represented the Bill & Dave world: they believed that everyone in the company had to constantly evaluate their own "contribution" to HP, put their head down, and make a difference. Most had Bill & Dave stories of their own, whether it was driving either of the founders to the airport when they were busy visiting one of the company's outposts in Colorado or Idaho, or sitting through a review where Hewlett would encourage a feat of engineering prowess or Packard would explode about "not being able to make a dime" on some engineering breakthrough.

The second had been teleported in from the central casting departments of other big tech companies that Hurd respected. They used terms like "value add," and "thinking ahead a few chess moves," relished the abstract concept "competitive advantage" and attached totemic reverie to the "P&L reviews" even when it was clear that this was an exercise in cargo cult management. They were also often quite a bit more concerned about managing their "brands" in the face of their SVP, EVP, and eventually Hurd reviews.

I spent most of my time with my fellow HP executives telling the first kind of folks that the transplants weren't playing the same game as them— that no matter how much it sounded like they were trying to achieve the same goals, there were other motives at work.

One good thing about the post-Hurd HP is that the company has a chance now to get back to being the place that was run by the first kind of executives. I am not sure that it is possible, but one can hope.

There is no denying that Mark was a Wall Street dream of a CEO. He delivered predictable results and pushed his people really hard to get them. In some ways everyone was made a better business person because of that discipline. However there was a cost to his method and I'm not sure that anyone ever really accounted for it correctly— despite his obsession with numbers.

For instance, in a company full of engineers, the IT organization did everything possible to stymie innovation and put people in endless meetings instead of in the lab. The organization was quick to measure the cost in the reduction of data centers, or the license savings from creating a procurement process that was more complicated than the entire canon of Roman law, but no one bothered to measure the drag coefficient of these various corporate initiatives.

Now they have a chance to get a leader who will.

In talking to a few HP alums over the last week, I've heard people claim that it is too late— that after too many big acquisitions of loser companies with nothing to offer beyond awesome cost-cutting opportunities, the company has begun to resemble the supermarket it inherited as its first corporate office— except in this case, it sells generic computing gear to the Fortune 500 along with coupons for budget PCs and printers.

I don't buy it though. I'm hopeful that the board knew we are entering a new phase of predicting the future by inventing it with the combination of the shift to mobile compute form factors that are going to change radically over the next 5 years and the weaving of the web into all facets of personal and corporate computing, and as such knew they had the wrong captain piloting the ship.

Let's hope I'm right.

My partner Josh had a great blog post this weekend that went straight to one of my recent peeves with the world of Internet startups: the almost religious adherence to a particular methodology for developing your product. In this case, he takes on A/B testing, wondering whether relying heavily on this type of iterative optimization can ever come close to achieving what product vision can.

These days a lot of folks seem to like the idea of "12 simple recipes for a successful Internet startup." The reality is that there is no such certainty— and certainly not in any one easily repeatable process. For every Zynga that has supposedly risen via A/B tests and constant tweaking, there is a Facebook that almost got burned at the stake by introducing a controversial feature which would have never resulted from iterative development but which later went on to redefine the entire core experience (anyone remember the outcries around the newsfeed's introduction?)

One of the commenters on Josh's post points to the classic "local minima" problem with iterative optimization: getting stuck at a less than ideal outcome because your testing approach doesn't accommodate large discontinuous jumps on how UI/messaging/calls-to-action are presented. And while true that good testing hygiene can help overcome some of this, the reality is that with any relatively complex app, the interdependencies between the various different parts of a flow can quickly cause a combinatorial explosion of things to test absent some sort of very coherent product vision.

For instance, at my last company, Tabblo, we had broken the entire lifecycle of a user of our application into an acronym we affectionately referred to as M.E.E.M. (Marketing, Engagement, Experience, Merchandising). Each of the elements contained a set of key actions we were hoping to guide our users through and had a set of associated metrics which were owned at times by the same folks, and at times by different people.

Had we put all of our eggs in the iterative testing school of thought, I think the overall experience would have greatly suffered, eventually becoming a set of disjointed gates held together by little more than suspension of disbelief and blind hope that it all still made sense. Even with judicious use of it, when considered in the context of cohorts who sometimes took months to move from one phase to the next, our A/B test results often caused some fantastically heated arguments among the product owners.

To me A/B tests and other iterative product development practices are like a good writing fundamentals: just because you know to use active verbs, avoid adjectives, and keep sentences short doesn't mean you are going to start turning out Hemingway novels. For that you need great inspiration and tons of hard work— and even then, there is no sure thing.

I recently came across one of my favorite books from the last century: "Fire in the Valley," a tome about the history of personal computing. In the book, there are chapters that go back to the Altair, a machine which was heralded as democratizing computing even though it was programmed by flipping switches. The 40 column"toy computers" followed and set the stage for Apple's HGR graphics (a whopping resolution of 280x193) which shocked the industry with its cutting edge visual appeal and caused thousands of aspiring programmers the world over to learn to PEEK and POKE.

These machines were toys by today's standards, and yet we find ourselves these days whining these days about how much all of the new tablet computers seem to trap us into "content consumption" instead of "content creation." I wonder though whether this is not more about our state of mind— something along the lines of only bad carpenters blaming their tools.

Just tonight I came home to my kids— who spend their lives swimming in the types of hand-me-down gadgets that are supposed to turn them into content consuming zombies, using two 1G iPhones and a Nintendo DS to play different music on each of the iPhones to then record it and tweak it on the DS. In total, three content consumption devices redeployed for the sake of creating something. And to them it was all about discovery and magic.

I think we are hard-wired for it no matter what the form factor.

Back in the 90s, I was a huge fan of Mercata (during its fleeting existence), the predecessor to all of today's group buying sites. And it doesn't take long these days in any conversation about the consumer internet for Groupon to come up, at which point anyone who has been around a while will usually point to Mercata and say something like "clearly it was too early for the concept."

Outside of how much information people are willing to publish about themselves, I find this to be a poor excuse for why something didn't work before. And as it happens in the case of Mercata/Groupon, I've finally discovered why. Listening to Andrew Mason (the Groupon founder) on Mixergy over the weekend, it becomes clear quickly that he was applying a key lesson from his failed attempt at a "collective action platform" (The Point): getting the audience super-focused by providing limited choice. More importantly, he did this in the local space— where unlike Mercata's attempts in electronics— it was fairly easy to overwhelm a local merchant with a relatively small user base. This online/offline lever quickly proved the concept both to themselves and to the merchants upon which they relied to drive the "deals" that grew the site.

In these heydays of lean startup mania, everyone talks about focus as the key way to find your initial product/market fit, but this kind of "limited features that please a small number of people across the Internet" is a bit different from Groupon's leveraged approach for early traction. For sure the early merchants were underserved when it came to performance marketing channels which is most likely what has helped the category explode both in the US and abroad. But the better early lesson for small startups might be that finding the right source of overwhelming leverage to prove out a an early business model (i.e., send your 400 Facebook friends to your local coffee shop on a given Saturday morning) might provide some interesting avenues for getting started.

Especially as mobile and location seem to be the race du jour, it would seem that thinking through applying this online/offline leverage might yield better early outcomes that obsessing about the first million users and being stuck with fundamental user density challenges.

This iPhone antenna thing is insane, both because of how much airtime it has gotten (this is my last iPhone/Apple post for a long while) and because of how ridiculously careless Apple has been about wasting all of the accumulated trust it has collected with its customers over the years. The whole thing makes me remember Phil Schiller who claimed that Apple's comeback strategy was predicated on their becoming the "Sony of personal computers" while he was trying to recruit a bunch of us out of grad school in 1999.

Back in the 1980s, I (and just about everyone I knew) bought Sony stuff just because it was Sony. VCRs, walkmen, headphones, and even totally commodity products like media. Then Sony bought content companies and got its head completely turned around on how its devices would relate to digital content. But in a much worse move, to justify their own stupid strategies, they started lying to their customers. They lied about the superiority of the DRMed formats, the performance of their proprietary flash storage, even about the relatively high costs of repairing one of their VAIO laptops (which were built with mostly standard components).

The result? They destroyed all of the accumulated trust that allowed them to charge a premium to their customers, even on products like blank CDs. A child of the 1970s when the Sony brand stood for the pinnacle of consumer electronics, there is almost nothing that they could sell me these days that didn't have a rock bottom price attached to it.

Apple is getting dangerously close to the edge of the same mistake. The press conference last week was a joke, and having their PR department grinding out videos to knock the better radios Motorola is shipping in the Droid phones just looks desperate. We may all keep buying their products, but increasingly it will be only in categories where the competitors are so weak (i.e., HP/Dell craptops running Windows). And once that trust is gone, they will be forever sailing against the wind with every new product introduction.

If I were them, I'd think hard about that before letting this get papered over via free rubber cases and attack videos aimed at the competition.