Innovating too early is the same as being wrong

The EV2 Electric car

I’ve had a few startups where I was a bit early. I’d put my former startup rentoid in this category – not to mention the amazing potential pivots I missed. When someone is early to an emerging market we often say these simple words.

“He had the right idea, he was just a bit early.”

Here’s the truth. Early is the same as wrong. I know it sounds mean, but we have to be honest with ourselves. If the idea is not at the right time, then put simply it is the wrong idea. But I will admit there are complexities with being early, and it leads me to these thoughts.

  1. I’d rather be wrong by being early, than wrong with a dumb idea.
  2. There’s always a good chance of being early with something new.

Number 2 points to the importance of keeping costs low. A low cost operation has more time to learn and iterate. They have a better chance of getting closer to todays needs, and or the market catching up to their initial vision.

You should totally read my book – The Great Fragmentation.

Your app is not an app

8 bit smartphone

Never, ever tell anyone your startup is an app. It’s a startup that does X, Y or Z.

Saying your startup is an app, is a bit like telling people your startup uses electricity. The app side of what you do is making the infrastructure the hero, not the problem you solve.

My latest startup is all about Surfing. #SneakySurf – you might have seen me tweet about it. It’s still in private beta, and it is, lets say – ‘Smartphone compatible’ but it is much more than an app. I never sell it as such. It is a surfing company.

The world doesn’t need another app, but it certainly needs many more businesses. Make sure you don’t confuse what you really do, with the infrastructure you happen to employ.

You should totally read my book – The Great Fragmentation.

Why Twitter will die if we keep saying it

No engagement on Twitter

I’ve been thinking a lot about twitter lately based on the many articles written forecasting its demise. I really hope they’re wrong, but I think they might be right. The main reason I think it will die, is because so many people are saying it. The same people who espoused it’s virtues when it arrived in 2007, are now nostalgic about a time when twitter really, really mattered. The problem with this sentiment, is that it will probably come true even if it isn’t. It’s a bit like a run on the banks. Here’s a short Sammartino definition:

A bank run happens hen a large number of a bank’s customers withdraw their deposits simultaneously due to concerns about the bank’s solvency. As more people withdraw their funds, the probability of default increases, thereby prompting more people to withdraw their deposits. The end result is the bank’s reserves may not be sufficient to cover the withdrawals.  A bank run is typically the result of panic, rather than a true insolvency on the part of the bank; however, what began as panic or opinion can turn into a true situation.

If enough people think there is no engagement on twitter, then more and more people will stop making ‘engagement deposits’ on twitter. Those who are there will get less engagement as a result. Then they’ll leave, which makes it less useful for others and before we know it we have another MySpace on our hands. It’s classic behavioural economics.

For me twitter has been valuable the past 8 years or so – I joined in Jan 2008. While it sounds kinda weird, I met a lot of my current friends through twitter, I built my personal brand there, and it became a tool for discovery and learning. It really helped me find people who cared about what I care about. It was an incredible tool, and my favourite brand for many years.

But if I were to think of one reason why I believe twitter started to stumble it would be this:

Delayed Tweets. Yes buffer, I blame you and cohort.

It’s a bit like this. All of us were at this really great party. Some of your friends were there. You met some new and interesting people. Everyone was really interested in what you were doing, and you interested in what they were doing. We helped each other, built a great eco system and it was all very give and take. But the party was so valuable and fun that no one really wanted to leave. People didn’t want to miss out on sharing a cool idea. So people started to talk more and listen less. After a while it became hard to hear and be heard. People even started sending messages when they were’t really in the room. It was like everyone put up a cardboard cut out of themselves, with interchangeable speech bubbles attached to them. The conversation turned into a noisy nightclub where no one could hear anyone speak. You’d try and have conversations with people who weren’t really there. It lost its authenticity. Slowly but surely, the value declined, and less people turned up.

Honestly, I don’t know if this is the cause, but it’s how it feels for me. If someone shared a blog post of mine it used to mean they really liked what I wrote. Now it probably means they have an IFTTT recipe set up. I’ll probably still hangout at twitter for a while yet, I might be one of the last to leave. But if there is any lessons for business people it’s this:  Twitter is classic reminder that we can never be sure of a channels long term survival. We should all be trying to build things we own and control so we have independence. We need to be our own media channel and have a place to talk to people who want to hear from us. It’s probably a portable email list. If people don’t have a reason to follow us on our own channel, then maybe our we need to create something more compelling.

You should totally read my book – The Great Fragmentation.

The 2 simple questions all successful startups have answered

Here’s two great questions to ask when starting a business endeavour:

  1. Is there a gap in the market?
  2. Is there a market in the gap?

Question 1 is about needs being unmet or not fully satisfied. In the realm of disruptive technology, you may be able to solve customers problems a better way. The gap in the market could even live at the emotional level – $200k Hermes handbag anyone?

Question 2 is about whether we can make money filling it. Until we have real revenue and real costs, outside of a VC funding cycle the question remains unanswered. Users alone, do not a market make – just ask Fab.com. The cool thing about being small is that previously unprofitable segments for big players can now become a super efficient money spinners. Legacy infrastructure is the enemy of today.

These questions are not new, but we’ve got new tools to ask them with. We can know about the market gaps quicker, and maybe even change what they answers are.

You should totally read my book – The Great Fragmentation.

The simple truth about Virtual & Augmented Reality

Tony Stark Augmented Reality

There’s no doubt these two technologies will start to intersect our lives and therefore business. Startups and big tech co’s are manoeuvring to find ways to plug the technology into how we work, live and entertain ourselves. But Virtual and Augmented Reality sound more complex for a consumer perspective than they really are. Here’s how I like to think about these two technologies to simplify how they can be used.

Virtual Reality: Takes me to places where I am not.

Augmented Reality: Helps me understand and interact in ways I cannot.

They help us do more than we can on our own. Virtual helps us escape and hide. Augmented helps us interact and create more efficiently. Neither is about replacing us.

Virtual Reality isn’t that much different to TV –  taking us to another place, it’s just far more immersive. We could even compare it to a novel or a movie – it’s just that more senses are involved.

Augmented Reality could be compared to signs and instruction manuals. Our smart phone is also used this way, like when we use google maps. Augmented reality is about telling us more about our immediate environment than we could guess on our own. But it can be far more personal, immediate and immersive.

Sometimes the best way to understand new technologies is to compare it to technology we already understand and use. It is very rare indeed for new technology to be more than an evolution of what we already have.

I really think you’ll like my book – The Great Fragmentation.

Yes, we are all in the technology business

A few weeks ago the surfing world was astounded when Kelly Slater released a video of his new wave pool.

The launch of his 10 year long project to KS Wave Co, and OMG did surfers loose their minds. The reason it matters for this here blog has little to do with surfing. It has to do with technology. I would never have believed a wave this good could come from a pool. That waves I spend thousands of dollars each year chasing, could happen all day, every day. And so you now, this picture below is typically how terrible wave pools are for Surfing – A wave pool from 1985 where they once held a Pro Surfing event.

Tom Carroll in wave pool

And the reason it is now possible is not to do with machinery, it’s because of what software can do. It’s because of what we can model it before we turn soil. We are entering a phase in life where possibilities confound expectations. Where dreams from our childhood and coming to life in all manner of entertainment and industry. The future has finally arrived.

If the worlds most nature driven zen sport, surfing, can enter an artificial arena, then it’s fair to say we are all in the technology business now. It might even be time to ask yourself if that ‘thing’ you dreamed about is possible now.

And Kelly, if you’re reading – I’d be happy too buy the rights for Melbourne.

You should totally read my book – The Great Fragmentation.

 

Yes, we know Uber has no cars, but what do they really sell?

So by now everyone knows that Uber has exactly zero cars and Airbnb has zero hotel rooms. But this shouldn’t really be that surprising given it has been the playbook of the internet since like Altavista was a thing. So we can stop putting it in presentations as though it is a surprise. The web is a connection device, those who make the most useful connections win. It’s all about access, not ownership. While these two tech companies don’t own the assets they rely on, we ought remember some older examples from the ‘Connection Playbook’.

  • Apple have 800,000+ app developers they don’t pay.
  • Alibaba has 4.2 million factories they don’t own.
  • Facebook has 1.2 billion content creators.
  • Amazon sells almost every author in the world.
  • WordPress has 75 million journalists writing for them.
  • eBay doesn’t own any good it sells.

The web has always been about leveraging cognitive surplus and idle assets. Owning stuff and paying creators is so Industrial era.

Now let’s consider what people are really buying when they get an Uber: Certainty & Transparency.

Uber time to arrival

For me the thing that makes Uber valuable isn’t the nice black vomit-less cars, or the random risky strangers who drive them. It’s knowing the car will be at my house in 6 minutes. It’s far superior to whenever I order a taxi – they still to this very day have the gall to tell me they’ll send the ‘Next Available’ – which does not help me get to the airport in time. I’m also a fan of just leaving the car without having to waste like 7 seconds swiping a credit card to pay. Yes, human laziness knows no bounds. Interestingly, the key features that make it work could all have been done by the taxi industry. But heck, why would they do that in monopoly conditions?

As for Airbnb, I’d much rather stay in a hotel when travelling on business. Hotels are far more convenient and have a number of services that matter when travelling for work – like late night burgers and concierge. But whenever I hear someone talk about their Airbnb experience, it’s never about convenience and amenities. And it’s not always about price. Most often it is about the story of where they stayed and how authentic it was. Airbnb sell the story of accommodation. They localise the experience for strangers.

Yes, it’s quirky that many big businesses connect things rather than own them, but it’s more important we understand what their customer advantages really are.

You should totally read my book – The Great Fragmentation.