October 29, 2013

Video: GDL Root Access: The Intersection of Skill and Luck

In the seven-plus years I've run this blog, one of the more frequent discussions is around how the factors of skill, effort, opportunity and luck intertwine to result in a positive outcome (or not) for companies and individuals. Earlier this month, we talked about how you need to do more than just show up in Silicon Valley to gain traction, and back in 2009, I took on the required intersection of skill and luck, wondering aloud how good employees at unsuccessful ventures differentiate themselves from bad employees at successful places. Unfortunately, no magic.

So fellow Googler +Don Dodge and I talked about this very thing on a +GDL Root Access event last week, making it clear that for every great story of startup success you read about on the Web, there are handfuls more that you might not ever hear about, or close down with a whimper. I've long said that celebrating failure never helped anyone, but we should be aware of it, and learn from it. Tune in to our embedded YouTube discussion below. The debate runs just over seven minutes.


Video: GDL Root Access: Timing and Market Conditions

Earlier this month, I wrote about how, even in the fast-paced, big opportunity world of Silicon Valley, you don't get any participation medals just for showing up. Sometimes fantastic ideas are ahead of their time, or by virtue of personnel and personality decisions, customer issues, scaling or any manner of factors.

As part of +GDL, the program I own for +Google Developers+Don Dodge and I sat down to talk about some technologies that took a while to catch on, including Sun's Javastation and the Network Computer. Our discussion on Root Access is captured on YouTube and embedded below, taking about 10 minutes.

October 22, 2013

Real Valley Stories: "The Missiles are in the Air... Please Stay"

Editor's Note: Part 10 in an irregular series of stories from my 15 years in Silicon Valley. Part 9 talked about the time I emailed the entire company about impending layoffs days before they took place. This time, a story about how, during a stressful time at the office, I got a job offer at a competitor, and over not much more than a weekend's time, rescinded and stayed instead - all while gaining new promises for career growth.

Ten years ago was a time of change, or so it seemed. I'd just gotten married, and Silicon Valley was in the throes of a deep recession. The once-packed highways became easy to drive again. Parking lots were empty and constructed buildings didn't have any tenants. Two-plus years into my job, we'd already seen our unfair share of peaks and valleys. The CEO had been replaced, as had our VP of Sales, and the Marketing team had almost completely turned over, making me one of the more senior folks, surprisingly. But while I believed in our technology, our future was not certain, so when a former colleague gave me a call, asking me to interview at his new startup, I figured I'd give it a try.

At the time, amid a national recession, and extreme risk aversion by our target customer base to test and deploy equipment from startups, meeting our numbers each quarter was challenging, to say the least. On the marketing side, we found our budgets compressed down to nearly zero, and our options were increasingly limited. Our trade show and travel budget was eliminated. Our online advertising budget was deleted. We even took our PR work completely in house, paying only for the typical wire service fees, followed by strategic emails or phone calls from me to press to push the success stories we did have, or try to take the reporters off the scent of how dire things seemed.

The Friend Throws Me a Job Opportunity

Then came the phone call. A former director of product marketing who'd found a new home asked me to come in and interview for the role of digital marketing manager. I polished up the resume and started the process - talking to the hiring manager by phone, and eventually coming in for an interview.

Stepping into the competitor's office was a dramatically different feeling than the quiet library-like ghost town of the startup where I worked. This one sported bright colors and the fresh smell of new venture funding, being bankrolled by one of the Valley's biggest names. The interviews went well, and I remember specifically driving them to be a pioneer in the space, using Google's AdWords, which at the time were untapped waters for the industry, and could be a fast way to get inexpensive leads.

A few days later, on a Friday, I got a phone call, and they wanted to move forward. I got the job. They wanted me to start as soon as possible, which put the ball in my court, to call HR and let my employer know I was leaving. So the next day, on Saturday, I called the VP of Human Resources, catching him at a kid's softball game. I told him I didn't want a lot of drama around my leaving, that I just wanted to be done by that Friday of that week. The sooner out, the better. I was excited about moving on.

The Best Phone Call from HR Ever - and a Note from the CEO

The next morning, Sunday, I checked my work email and saw a rare message from the CEO, with a simple subject line: "please stay". The body of the message too was short, but said he was traveling to Europe, didn't want to lose me, and to reach out any time. That was interesting.

Later that day, the VP of HR emailed to say he wanted to talk that night. So I awaited his call. Overnight, I'd gone from having two feet out the door and feeling like a low-level peon to someone who'd gotten the attention of senior management. My wife, appropriately, rolled her eyes, and told me to be wary.

Which Direction to Take?

That night, he called. It was after 10 in the evening, and I paced back and forth in my apartment kitchen, telling him how with our company's situation, and recent changes in the marketing team, I just didn't see a route for us to be successful. Citing Bush's comments at the time as we started battles in Iraq, I said, "Marketing needs a regime change." Seconds later, he answered with the coolest line I've ever heard from HR. "Louis, the missiles are in the air."

From that moment, the tone changed - not from one where I was on the way out, but to one where I said what I would need to stick around, including the obvious meeting or exceeding in compensation, but additional responsibilities, and transfering to a new boss, whom I'd already had a ton of respect for.

Never Take the Counter-Offer?

That made Monday awkward. In addition to putting through my usual tasks, I met quietly with the HR VP again and practically every roadblock I saw as preventing me from staying was knocked down. I was promised the salary match, a title change, and a changed reporting structure. The people who had limited my ability to succeed were going to be out of the way. And all it took was my sending a note back to the competitor that I had rescinded the offer. I obviously couldn't tell them why, but I had to let them know.

You read in career guidance books to never take the counter-offer. Despite any financial gains, the reason you were interested in leaving is usually still the same. The people are usually the same. But I drafted a "Sorry but..." letter and sent it off. This no doubt surprised them, and it really burned my friend, who'd brought me in, as he left me a livid voice mail which landed me on his bad list for years to come.

And yes, I was immediately worried I'd flubbed the decision - especially as I saw this company eventually launch, put out their share of positive releases, and have glitzy booths at our mutual events. But their star faded, even as I got more opportunities to own our strategic direction and help the company grow out of its darkest points through new product introductions, several cycles of upgrades, dramatic customer expansion and eventually, an IPO filing - although we never did quite make it.

The biggest surprise in all this, even during the darkest times for us as a company and as an industry wasn't that I could find a new role, or that things ended up right after all, but that I had allies higher in the food chain than I had ever anticipated - people who agreed with my views, and respected me to the point that they would give me an opportunity to succeed on a path I saw made sense.

And those missiles that were in the air? They landed, and eventually the people that were slowing us down and making roadblocks for me and the company found new roles somewhere else. As for the company that almost pulled me away? They never went public, instead selling back to their primary investor. They burned bright for a short minute and eventually faded away. It turned out I had made the right choice.

October 15, 2013

You Don't Get Any Participation Medals for Just Showing Up

"I need some record of you being in this class," hissed my 8th grade math teacher, looking at me and pointing to my lowly 5% grade to date in his course after ten assignments, by far the lowest mark in the class. My not so glowing 50 points out of a possible 1,000 was the product of many days' not turning in homework, as my continued refrain of "I'll get to it tomorrow" started to become an impossibility to tackle.

Each day I told myself I'd eventually get to the previous day's assignments, taking a penalty for my lateness, but part of me knew I'd just float through the day to day and try to make it up on the tests. For me, it was proving I knew the answers - conveying mastery of the subject. Yet for my grade, it was proving that not only did I know the answers, but I was willing to do the work. Just showing up wasn't enough.

For the past 15 years, I've been working in Silicon Valley, and I've encountered an incredible mix of people who perform as if they are on different gears. Some work incredibly hard, and are driven to succeed at practically any cost, refusing to let traditional limits get in their way. Others seem almost crestfallen if they can't keep up with those gracing magazine covers simply by being in the right place at the right time. And the truth is that life's not perfect. There is an intersection of skill and luck that very often sees great employees at bad businesses punished for their career choices, while less impactful employees at incredible companies gain the benefit of their colleagues' work.

From the outside looking in, Silicon Valley might look like a technology-centric Disneyland, where the future can be experienced today, where dreams can get funded, and you can't walk down the sidewalk without knocking shoulders with millionaires. But every success story you read, and those people who become household names, be they Steve Jobs, Meg Whitman, Larry Ellison or Marissa Mayer, came not as a product of pure luck, but the application of effort against risk.

Risk Is Often Required If Something Is Worth Doing

I remember sitting around our corporate boardroom one afternoon ten or so years ago, as an account manager on our team explained why we had been unable to close a once-promising deal. He said, paraphrasing with some angst, "In his business, the IT manager's job is to reduce risk. At our stage, we're all about risk." And it was true. While our more established competitors didn't have all the whiz-bang capabilities our devices did, what they did offer was a track record of success, integration with top partners, security, and all those things that moved risk out of the data center. We had to look elsewhere to find customers more willing to take a bit and absorb some risk, in exchange for our differentiation.

Which brings us back to "just showing up".

I spent my first three years in the Valley working at two very small startups. The first didn't have any revenue, and some odd ideas. When the founder was let go, the sister company asked me to stay on, and we worked hard at bringing traditional office tasks to the Web. The work was good, and our customers liked our products, but we weren't growing fast enough. When we went out to raise a $10 million B round, we came up light, and that was the end of my tenure. But as we were plodding along with our incremental growth, it seemed like everyone around us was going public, making money and buying homes - which to us was pure fantasy. Some of our best engineers took other jobs, and spoke openly about the frustrations they felt when all their friends were getting rich, while we were still bringing our food in a bag lunch and eating at our desks.

Even in a bubble, showing up wasn't enough. At my next company, where I spent 8+ years, we had enough spikes and troughs to fill a novel. Maybe some day I'll write it. We scored several rounds of venture funding, several rounds of layoffs, and filed to go public, not once, but twice. The company eventually sold for a good amount after I had left, but not before a number of upstarts had soared past us, having much more profitable exits, at valuations anywhere from 4 to 5 what our exit had been. And while we could feel bad about not having hit a home run, I was all too aware of the many other players in our industry who had already gone bankrupt, or returned money to the original VCs, lacking a business model, and other former colleagues who had bounced from company to company in search of something that stuck.

I've always been raised with the mantra that nine out of ten startups fail. I've seen other ratios with different numbers, but the truth is that the overwhelming majority of small business concepts, even those with venture funding, don't have a positive exit, and it's a much rarer one that sees the founders and employees strike it big. For every market sensation like Facebook, Twitter, Instagram, Tesla or Spotify, you have scads of others with software products few wanted, or website plays that have seen their URLs turn into dead links.

In the big race of keeping up with the Joneses, especially in an area ripe with exceptional people who have impacted history, seeing others' success can make it seem easy. Easy to start a company. Easy to start a venture fund. Easy to find customers. Easy to do practically anything. But it's not. I remember the wave of aspiring dotcom millionaires who came from around the country sporting MBAs, only to return when things got tough. And I remember the stories of former Business Development managers loading luggage at the airport when jobs were scarce. Success is not doled out equally and fairly, and the best products and best people don't always get rewarded. But the equation improves with incredible market study, exceptional effort, and the self-awareness to make change where it's required at the right time.

Do read up on the world's successful people, as I remember doing in college, checking out "The Difference Between God and Larry Ellison" from the Berkeley city library. Do make yourself aware of their smart strategies and innovative products. But don't forget the hard work and effort required that set them up with a greater likelihood to succeed. Or you'll be like I was in 8th grade -- getting dressed down publicly by my teacher who questioned why I was even there at all if I wasn't going to do the bare minimum.

Disclosures for fun: I worked at BlueArc from 2001-09 and owned options, as well as stock acquired in the company's 2005 AA round. These converted to shares when HDS purchased the company in 2011. I currently work at Google, and any references to their competitors or partners are just part of the story and presented without intended bias.

October 09, 2013

Balancing Act: Building for Both Future and Current Users

As companies mature and gain an installed user base, it can become easy to continue forward with incremental and iterative updates that bring features that improve customer satisfaction, but much more challenging to step outside the comfort zone and try something new. Usually, with rare exceptions, to create a new idea and marketplace, it takes new people and a new company with a new goal.

In Silicon Valley, it's more accepted that you will challenge the status quo and take a higher level of risk. Companies' ability to innovate is often measured by how much they spend on research and development, but new products that haven't yet debuted often take attention away from users on the products that are bringing in revenue today. How you manage this balancing act of preparing for a future, while managing the present, can have dramatic impact on your quarterly earnings sheet, and how you're perceived by your customer base.

One of the most well-known quotes bandied about in front offices comes from sports legend Wayne Gretzky, who said, "I skate to where the puck is going to be, not where it has been," which can be boiled down to preparing your company and product line for future years, not for what's already happened. Companies like Google (where I work), Apple, Tesla and others are well known for creating new product lines for future customers and helping convince new audiences that their inventions will have an impact on their lives.

But to create new services best categorized as potential can come as risk if you take your eye off the ball and discard existing customers and their interests. I remember having a discussion with Apple's Ellen Hancock way back in 1997, when she was speaking at Berkeley's Macintosh Users' Group (BMUG). To hear her story, Apple, deep in a mess of trouble at that time, had big plans to revamp their operating system to a next-generation OS called Copland, but hadn't planned any updates to their existing product for more than a year.

Her quote, from my story in the Daily Cal that day: "I said, 'What do we have planned between July 1996 and December 1997?' and they said, 'Nothing...' I said, 'I think that's strange -- we have 25 million users; don't you think they want anything?'"

Somehow, in the excitement over Copland, Apple had asked their 25 million user installed base to wait around and be patient for them to get their act together. Hancock, who no doubt painted her role as a glowing benefactor, pushed the company to make improvements to the aging Mac OS in parallel, bringing value to that installed base, while the company continued efforts on the future product that never did quite make it out the door. (Postscript: Hancock was later demoted by Apple CEO Gil Amelio and had run-ins with Steve Jobs, according to the Wall Street Journal

In my own career, I've seen this push/pull relationship between future product lines and enhancements to existing lines rear up regularly.

In my eight years working in Marketing at BlueArc, a network storage provider, from 2001-09, I often found we would put practically all our engineering resources on one product line instead of another, instead of assigning some product leads to one task and a second group to the other. We would go "all in" on the high end product, launch it, and then turn around and go full bore on the low end product, and then repeat. There was no balance at all - the result of having a scarcity of people available and trying to compete with market heavyweights with significant resources.

In the meantime, while working on the successor to the current generation of hardware, our existing users practically served to annoy us with their problems which we hoped to eliminate once the new new thing came out. There always came a point in the support chain when we would find them an upgrade path to the next generation - if simply to alleviate the problems with the existing one.

Even earlier, when I was at 3Cube from 1999-2001, we had two product lines. One was a Web faxing service that wasn't sexy, but brought in practically all our revenue, especially from broadcast faxing customers. The second was a conference call and early stage Web meeting service. As I highlighted way back in 2006, our meeting platform was the first volley into building an online office suite called OfficeCube. Our small engineering resources were all focused on this future product - to promote the next stage in our growth, even while our existing customers saw innovation in our core service stall. I remember aggressive and frustrating discussions from our business development and sales lead who begged for us to do something to promote the product we were getting our money from, going so far to call our future suite vaporware - which eventually turned out correct.

For smaller companies, especially startups, where revenue has not materialized, a change in course to a future product is well-known as a pivot. It's easier to pivot when you're not walking away from an installed base and needing to have revenue each quarter than it is to tell an established company to change course. Apple's pivot from PC maker to lifestyle device maker took years and incredible effort - and their success is so well-known in part because it's so challenging. Other companies previously well-known for their hardware and software leadership turn, like product managers going the VC route, in companies that live off service and consulting revenue instead.

The topic of branding and marketing is a long one, with libraries full of books on what defines a company's personality and culture. When I see brand extensions from companies I know, I'm always curious what they're trying -- if this new product is a move to evolve their story, a grab at a growing market, a desire for an increased balance sheet, or if they can solve an issue for customers that nobody else can. When you start to tell your own customers that you represent something new now, and that what they've known you as and expected from you is changing, you had better know you're making the right move, and not abandoning what's concrete for something grounded mostly in potential.

Usual Disclosures: I work at Google, which is in a variety of businesses. This isn't intended as a commentary on any of those projects. I don't currently own any stock in Apple or Tesla, but have before and might again if the price is right.

October 01, 2013

Developing for the Web or for Classic Mode

Apple's transition away from Mac OS 9 to Mac OS X is more than a decade old at this point, which means an entire generation of computer users may never have been exposed to the "Classic" Mac OS, which launched in 1984 and evolved for the next few decades before being put out to pasture.

I remember, as if it were yesterday, my own delight at hearing the deliveryman knock on the door and leaving behind a package which contained a retail box with Mac OS X 1.0 on compact disc, which promised to completely change the way I interacted with my computer, bringing with it a new and modern look, a new kernel and more.

It Looks Great, But What About Printing?

Living on the bleeding edge by installing this first version of Mac OS X meant it had some obvious holes. For one, I couldn't print. For another, I couldn't play any DVDs. So while some of the features were exciting, it was clearly limited. These limitations, and general skittishness over new technology, led many people not to dive into Mac OS X right away - and some software developers, most notably Quark and Adobe, dragged their feet on committing to the new OS, waiting for the market to demand it. In the meantime, we users had to live in a "one foot in, one foot out" experience, with "Classic" applications launching inside of Mac OS X, displaying the traditional Apple menu bar, the traditional Finder and all other bits one would expect from an older Mac.

This awkward time had developers forced to make a choice. Would they create applications solely for OS X, continue on a path of developing for OS 9, or ship both and risk a gap in features? It's, pardon the pun, a classic dilemma of developing for a known and existing market, or preparing something for a future market. In time, Classic faded away, with Steve Jobs famously holding a burial for it at the WorldWide Developers Conference in 2002. All the big vendors, from Adobe to Microsoft, shipped for Mac OS X. Printer drivers eventually came along, as did the ability to run DVDs and do everything Mac OS 9 could.

The Desktop is the New Classic. The Web is the New OS X.

I feel we're at a similar crossroads now in development, at least on the desktop. As a fulltime ChromeOS user, I don't ever install proprietary software outside of my browser - but I also don't feel limited in what it is I can do. I can print, using Google Cloud Print to my Canon printer at home. I can play all my videos on Netflix or Google Play and my music through Spotify or Google Music. I can run all my productivity apps on Google Drive, edit photos in Pixlr and so on. Even at a time when traditional operating systems are the significant market share leader, I think we've reached a point where developers looking to reach the widest numbers of potential users are better off making a product for the Web than they are by picking a desktop platform - and in those very rare cases where I find out an application needs to be downloaded to even run, I'm surprised.

When you fight against the momentum of the Web, you lose. And while this doesn't mean every part of the Earth has ubiquitous high speed broadband - far from it - I do believe we are at an inflection point, like all those Mac developers were 10+ years ago, where one would need to choose between building for the platform that's known or to the platform that's unknown. And just like in the Mac OS X scenario, the Web as a platform may have a few holes, but the Web's modern browsers are becoming stronger and more robust at a pace I'd argue is outstripping improvements in our traditional desktops.
The Pixel is My Machine of Choice and It's All Web.

My Data Follows Me On Every Device.

In 2011, just after I joined Google, I talked about how I used Chrome all day long, and used multiple browsers to separate my business profile and my consumer ID. Since then, I've moved completely to ChromeOS and Chrome has debuted on both Android and iOS, so you can sync your data to practically any smartphone and never miss a step. Working closely with the Chrome Developer Relations team here at Google, I get to see the browser get faster, and become an even more robust platform for creating rich applications, with exceptional video and sound.

By living completely on the Web, as I mentioned last year in my post on the future of storage being none at all, any computer that has Web access is my computer. Hardware is simply a conduit for my access to my data and my preferences. Once I log in to my accounts through the browser, I should be able to pick up right where I left off, and I shouldn't be limited based on whatever client software or plugins may or may not be installed on this machine.

Pick the Platform for the Future.

Hindsight is 20/20, of course, and we have the benefit of history to fall back on, which clearly shows developers were right to present a fast track for migration away from the creaky OS 9 and start coding for OS X. While Apple's incredible success over the last six-plus years especially has been due to the company's work on iPhones and iPads, had Mac OS X never delivered on its promise, the company would certainly be a shadow of itself. The direction to a more modern OS proved to be the right one.

Now, again, we have a choice - to a more modern platform with more opportunity for a rapidly-evolving set of users for whom the Web and anytime access are a given, and for whom nearly all their time is spent in the browser. Making the leap as a developer to a lesser-known path may involve some risk, but unlike that time at the beginning of the last decade, you don't need the overwhelming majority of a small market base to upgrade and get to your product. Most of those online are already there - and they want your app.

Usual Disclosures: Yes, I work for Google. I work in Developer Relations and think about this stuff a lot. It doesn't mean I have any bias for or against any of our real or assumed competitors.