Important Startup and Technology Trends for 2009

January 19, 2009

As we close out the 2008, we look forward to 2009 and another year of new ideas and great technology. Here are the trends we’ll be watching this year:

Business models – We think because of the current economic client and funding environment companies will be forced to focus on the business side of running a business in 2009. Closing the doors because you run out of cash is not fun for anyone. Investors will expect a real business model from startups and one that doesn’t start with, “Once we have 50,000 users…” We saw this start to happen last year at a facebook meet-up. Several people in the audience wanted to know how the top application developers were going to monetize their success. Short of acquisition, these companies didn’t have an answer. This year, they will need one. How about charging customers who use your software? Surely, if the product is valuable, people can spare $10 a month. Look at the iTunes App Store for an example of how to do this right.

Substantive content – The Internet has truly democratized content. You can post a video, publish a book, write a blog, become an expert, and really put any content you want online as soon as it’s done. But now, we consumers of content spend a lot of time searching for something worth reading let alone finding something we might remember or share. Many people who published perhaps shouldn’t have. Case in point, who better to know what’s funny or not than Will Ferrell versus some guy listing his video under comedy on YouTube? We predict in 2009 consumers of content will focus more on content they can validate or that includes some level of credibility. Sites that have credible subject matter experts or support validation of content should garner more attention in 2009.

facebook is valuable, but social networking is a feature – My non-tech family members are on facebook. The Today Show just did a segment recently about parents invading their kids playground. I even saw some not so flattering pictures of my nephew at his first year in college. facebook may not be worth 15 billion anymore, but we definitely see a new surge of friend requests and many are coming from the least likely of usual suspects. The increased user base will renew the interest in facebook and reverse the declining valuation trend. On the other hand, many other social networking sites are struggling as most companies now include common features like invites, friends, posting, sharing and profiles. We suspect it will be hard for social networking destinations to prove their value in 2009 except for those already well established like LinkedIn for business and facebook for consumers. Look to facebook, and LinkedIn, to grow their dominant position but also for them to introduce new ways to generate revenue for themselves and those around them.

Bootstrapping – As the funding pendulum swings back toward tighter controls and stringent valuations, more and more innovators will resort to the garage startup and working a day job to fund the night job. Founders won’t want to give away ownership, nor invite board members into their decision space, unless the money is good and the cost not so bad. Those caught in this downturn or in the last one in 2001 remember what it means to lose control of your company to investors. Founders will choose to retain ownership as long as possible even if their launch is delayed. We discuss the impacts of various funding models in a previous post.

The New New New Thing – It’s time for new ideas. Calling your company Web 3.0 is not a new idea (notice the version 3 in the name). Tweets. Blogs. Wikis. Community. SaaS. Good stuff that came out of Web 2.0 and before. But people are no longer interested in a new twist on an old idea. The companies that establish a new product category in 2009 will be pleasantly surprised by increased interest from people tired of hearing about yet another way to send a message or post content.

Fast launch – Is the 6 month launch obsolete? Is the 2 month launch simply a bad idea let alone doable? We provide our opinion in this post. The latest trends in development languages and technologies, especially Ruby on Rails and cloud computing, enable faster launch times through quicker process and less over-head. Development teams will be forced to make hard trade-offs this year as they struggle to meet the demands of an evolving market and shrinking development cycle.

Please let us know what you think of our predictions and what you think will be important in 2009.

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Good Bye Bill Gates

June 24, 2008

Posts are flying around the blog-o-sphere about a once in a lifetime event. The most successful man in the computer industry is finally stepping down from an active role running Microsoft. That’s right, this week is Bill Gates’ last as an active member of the Microsoft team.

I met Bill a very long time ago. I was extremely lucky to have been a college intern at Microsoft working on Excel 2.0. When I graduated from college, I had two job offers; one from Microsoft in their tools group and the other from Software Publishing Corporation working on Harvard Graphics. If you looked at my LinkedIn Profile, you’ll see that I opted to stay in the bay area.

I went to an intern party at Bill’s house, before his complex had been built. I met many of the founders of MS. I heard Charles Simoni talk that summer about how programmers lose their touch over time. He said when he was younger he could remember every item in every room in a house of 30 rooms.

I even have a button some where that has “Save the blibbet!” on it. The blibbet was the first MS logo (sort of like the AT&T globe) and the button was part of a protest against changing it. At one point, I worked in a fish bowl office of interns with a bird’s eye view of Bill’s office over looking the courtyard.

I have no regrets on my decision to go to SPC. I like more variety in my life and would never have fully bought into the Microsoft way of life.

Sometime later, I ran into Bill Gates a second time at the Intuit merger company meeting. Bill Gates, Scott Cook and Bill Campbell were on the podium. Bill G and Scott were really into the merger. Bill C seemed very hesitant. I, of course, had the (nerve or stupidity, you pick) to ask about how Intuit customers would feel about getting help from MS as a company given that Intuit had built a reputation of being the Mr. Rogers of technical support.

Scott answered with something about how you can’t become a 100 million customer company by being a scum bag. To which I stupidly replied, “I didn’t say he was a scum bag.” The audience roared at this as they thought I had “implied” the scum bag part. I apologized personally to Bill Gates afterwards and he said it was no big deal. Bill Campbell told me it was a great question. And I spent the rest of the party joking that I had become a legend and unemployed at the same time.

I actually have a video of this somewhere in the house, probably next to my save the blibbet button.

What I can tell you is that Bill Gates programmed BASIC on an airplane for the first home made computer, before there were personal computers, Windows and the Internet, and at a time when most of us were impressed with the convenience of calculators. He had vision, acumen and drive that to me, is unparalleled in the computer industry. I respect those qualities and all that he has achieved so far. The man deserves a statue in the front of the computer hall of fame right next to Woz and Jobs and the rest of the early wizards.

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