Terry Jones

Fred Wilson stirred up the entrepreneurial blogosphere 6 months ago with a series of posts wondering about the influence of founder age on startup success. I wrote one of my typically long comments.

Today I was making myself a coffee, and thinking about how fast/slow I can move, and how that’s changed over the years. When I was 24 I perhaps had more energy, but I often acted in a quite unfocused way. Now I’m 44, and I still have tons of energy. E.g., I was up coding last night until 6:30am, and then got up at 10am this morning and continued, so I’m not exactly loafing around with slippers and a pipe reflecting on my glory days. But I also have 3 kids, and other things going on. I have to act in a much more focused way or I couldn’t do the things I want to do.

But….., I then thought, the life of your average VC probably has some strong similarities. A couple of kids, insanely busy when working, regularly carving out quality time for family, needing to stay very organized and on top of things, needing to keep multiple balls rolling, etc. Those thoughts led me to reconsider Fred’s posting, but in the context of VCs.

Might it be that the best VC general partners would actually be a bunch of 24 years olds? Of course they could have some older guys as analysts. What do 40-50 year old VCs have that 20-30 year olds don’t that makes them more qualified and better as VCs? If you want to argue that experience makes the older better, you probably need to argue that for entrepreneurs too. If you want to argue that the energy of youth makes for a better entrepreneur, you might need to argue that for VCs too. If you want to argue that young founders have unique insight into what products will be successful, you might think the same would be true of young VCs — if there were any.

It takes a massive amount of work to create and build a startup. Unless you’re a superstar, it’s also a huge amount of work to get funded. You have to go begging and scraping, on bended knee, hat in hand, to make mature and otherwise sober people with a lot of money believe in you. And that’s all done against a background of very steep odds. Similarly, it’s a massive amount of work to raise a venture fund. You have to make even more mature and more sober people with even more money believe in you. And you have to do it in a much less forgiving environment, also against steep odds.

Thirty or even twenty years ago, most CEOs would probably have scoffed at the idea that a 20-year-old could start and run a company, and sell it for tens or hundreds of millions, or even a billion, or take it public. We now know that that actually happens, and the idea that the very young can do it, including getting financial backing, is no longer foreign. Might not the same one day be true for fund managers? When will we see the first VC fund run by a couple of twenty-somethings? Will they exhibit a marked preference for funding older founders?

Back when Fred was posting, I pointed Howard Gutowitz to one of the postings. A couple of days later, Howard told me that he’d talked about it to his brother:

Robert made what is actually an interesting suggestion: get a figurehead 26 year old to be the CEO. Turn the old game around.

I think that’s pretty amusing.

Maybe Andrew Parker is actually running Union Square Ventures. Turn the old game around.

[These are some comments I wrote in reply to a Fred Wilson posting, The Age Question (final post). I've pulled them out here because I feel like it, and I want to link to them.]

I really don’t see what all the fuss is about. Fred posts some observations about the numbers he’s seeing, and people take it personally. It could hardly be clearer that he’s not ageist. This is shooting the messenger.

The world is a changing place, as usual. Technology and knowledge is better understood and packaged and available, especially to youth, as usual. Kids of 15 can do things today (including starting companies, which takes 10 minutes on the web) that older people wouldn’t have dreamed of at 15, as usual.

There’s a tendency to let two questions overlap here. One is whether young people do better at starting and running companies, etc. The other is whether young people are inherently different simply because they’re young.

I don’t think there’s enough evidence on the first question to know the answer. Personally, I doubt that young inexperienced people are better than older more experienced people on this question.

But, young people ARE different. They think differently. It’s very clear. The easiest way to see it is to ask yourself whether (at least with regards to technology) you’re more advanced (or similar word) than your own parents? Of course you are. Of course. How could you not be? Ask all your friends the same question, and they’ll probably all say the same thing. Now just extrapolate.

The “but we invented it” argument doesn’t hold water. Bicycles were invented many generations ago, and in many respects haven’t changed that much. But look at the innovations in cycling of the last 20 years! Kids are doing things on bicycles that people of my generation (I’m 43) never contemplated. Or take skateboards. The basic form hasn’t changed much in the last 20 years. Arguably, my generation invented the skateboard. But when we were kids the Ollie and grinding etc. hadn’t been thought of and the kinds of tricks that regular kids in the street are doing today would have blown our minds in the 70s. We had almost exactly the same gear. Back then, the ultimate in coolness was to do a few 360′s and maybe a handstand. If a mundane object like a skateboard or a bicycle can be put to such novel use, who can doubt what the internet/web can be made to do/look like in the hands of people who push the envelope? It’s very clear that successive generations of users (aka “kids”) push the envelope.

The internet, and of course the web, are not mature technologies. Our kids are still discovering amazing new way to use bikes 120 years after the invention of the “safety” bicycle. So we probably have a fair way to go on the internet/web. The sheer numbers alone argue that most of the innovation will come from people much younger than the current generation of users, some of whom are undoubtedly yet to be born, and none of whom will have had anything to do with the invention.

In summary: are youth better at starting and running companies? Don’t know. Are they different from us? Hell yes.

It’s probably useful to keep the two questions apart.

Another thought worth considering: in some cases (see above) it may take adults to invent something and bring it to market, but kids to figure out how to really use it.

I do everything I can from inside emacs. Lately I’ve been thinking a bit about the Twitter API and social graphs.

Tonight I went and grabbed python-twitter, a Python API for Twitter. Then I wrote a quick python script to post to Twitter:

and an equally small emacs lisp function to call it:

so now I can M-x tweet from inside emacs, or simply run tweet from the shell.

Along the way I wrote some simple emacs hook functions to tweet whenever I visited a new file or switched into Python mode. I’m sure that’s not so interesting to my faithful Twitter followers, but it does raise interesting questions. I also thought about adding a mail-send-hook function to Twitter every time I send a mail (and to whom). Probably not a good idea.

You can follow me in Twitter. Go on, you know you want to.

Anyway, Twitter is not the right place to publish information like this. Something more general would be nicer…

I like thinking about the power of representation, particularly inside computers. I wrote about it earlier in the year and gave a couple of examples. Here’s another.

Think about how you might have done multiplication with Roman numerals. Why is it so difficult?

It’s not because multiplication is inherently so hard. Roman numerals were just a terribly awkward way to represent numbers. However, if you introduce the concept of a zero and use a positional representation, things become much easier.

Note that the problem hasn’t changed, only the representation did. A new representation can make things that look like problems go away.

I claim that we are still using Roman numerals to manage information online (and on the desktop for that matter). Until we do something about it, we’ll probably continue butting our heads against the same problems and they’ll probably continue to appear intractable.

At Fluidinfo, everything we do is based on a new way to represent information.

I’m sitting in a hotel in Berlin, the Hotel Ibis Berlin Mitte. They’ve done a deal with Vodafone to provide wifi access for their guests.

Here’s the price list:

• 30 minutes – 5.95 euros, or $8.66
• 2 hours – 12.95 euros, or $18.85
• 24 hours – 29.95 euros, or $43.59

There’s no option to connect/disconnect and use your time bit by bit. You have to take it all at once, making the 24 hour option particularly attractive.

Way to go Vodafone! You idiots. With bargain basement rates like these I will certainly keep coming back. Same goes for you Ibis Hotel. Typical phone company strategy – maximally fuck your customers in the short term.

I don’t mean to appear cold-hearted. I have a heart. Really. But news of a shakeup at Powerset given release delays doesn’t come as a surprise at all.

What is surprising is to read that Powerset has “been hampered by limited resources.” Oh puhleease. Since when has $12.5M (minimum) in funding qualified as having limited resources?

Delays in getting hold of the Xerox NLP API caused fundamental problems? I used that API (ten years ago, admittedly) and, sorry to say, it’s not the key to unlocking the natural language understanding puzzle. But it was widely trumpeted as the key to Powerset knocking off Google. The mysterious all-powerful NLP API from the mysterious all-fumbling Xerox PARC finally lands in the hands of a commercial company poised to Make Good! Powerset had snatched the NLP crown jewels out from under Google’s nose!

It wouldn’t surprise me if PARC were glad to get rid of the rusty old thing. “Psssst, buddy. You over there… wanna buy an antique NLP API owned by former royalty? S’good fer what ails ya.”

OK, I’m being a bit sarcastic and silly. I guess I just have limited patience for these projects and especially for the breathless hype that surrounds them.

I’ve often wondered about Powerset (and Metaweb) hitting the wall. Lots of hype, pressure, and funding. Lots of people. High burn rate. And revenue coming from…… where exactly? And that’s not to mention the blow to our confidence that Powerset were really onto something deep when they let a genius programmer drink and get away from his handlers at a dotcom-style bash.

I’d say the real reason Powerset are “hampered” is the fact that they’re trying to solve something that’s practically impossible.

If you look at it that way, then I suppose having only $12.5M to achieve the impossible really is a case of having limited resources.

Stay tuned. There’s a long, nasty and heartless blog posting locked up inside me about people and companies that chase words like “understanding”, “meaning” and “intelligence”.

First of all, let me just say that Jason Calacanis is a genius.

Having said that, I most humbly submit that his posting today on Facebook’s WORST two features is a little off in one regard.

I also hate the way Facebook tries to pull me into its world when they could so easily just deliver my message in email. But I don’t think they’re doing it for the page views.

I think they’re doing it because they want to take over the world.

Once there were PCs. Then came the mass migration towards online apps that run in one’s browser. Microsoft got that one right, though they were a little early in calling it (culling it?), and then ironically were present at the conception and birth of what really kicked it into high gear, XMLHttpRequest. But that’s another story.

So what’s next? Or, what would Facebook like to be next? Well, the obvious next step in the progression: mass migration to a particular platform running inside your browser. It just makes sense.

Except it doesn’t.

But that’s what I think Facebook will be going after. They want us all in there. That’s where we should be sending and receiving messages, IMs, poking each other, and, of course, throwing expensive virtual food. Why not twitter in Facebook? Why not Tabblo in Facebook? Why not watch videos inside of Facebook? Why not everything in Facebook?

There’s no way it can work, but I bet that’s what they’re going after – to as great an extent as possible. A bundle of cash will make for some nice acquisitions, as would an IPO. And everything they buy is going to wind up inside Facebook.

I’ll save my reasons for why it can’t work for another posting.

Fastest news in the West? Twitter wins hands down.

I’m very curious about the correlation of perceived early stage (seed, series A) startup risk and the eventual reward. That is, if you plotted a set of well-informed potential investors’ perception of a collection of startup companies’ risk against the eventual performance of those companies, what would the plot look like?

Would it be low-risk low-reward and high-risk high-reward? Would it be all over the place?

In an earlier post, the blind leading the blind?, I wrote about it being extremely hard (or impossible) to assess value. I’m sure that’s true in one-off cases, and that it’s true for entrepreneurs who by definition have relatively little practical experience with startups (sure, they may have read a lot, we’ve all read a lot – I mean in actually doing them).

But is the same true for investors? It’s certain that the bulk of investors get their results all over the map – some things that look safe end up worthless, some things that look like big risks end up paying off big time, and everything in between. If it were otherwise, the investment game wouldn’t be what it is – it would be much safer and more predictable.

One question I have relates to the relationship between extreme risk and extreme reward that I wrote about earlier. I.e., if risk and reward always go together, then you can’t reap a huge reward without taking huge risks.

But perception of risk is subjective. A run-of-the-mill VC might see something as hugely risky, not make the bet and so miss a huge payoff. But an exceptional VC, presented with the same investment opportunity, might see accurately that it in fact was destined to be big (i.e., consider it relatively low risk) and make the home-run investment. Do such VCs exist? If so, and we knew who they were, we’d be clamoring to pitch to them, to invest alongside them, to study there methods. Does Sequoia fall into this category? Or are they just lucky, or maybe they simply have access to better quality deals because of their track record, etc.

That’s why I’d love to see a plot of perceived risk against reward. I think in general my feelings about entrepreneurs would also hold with investors – that the really rewarding things are strongly correlated with the really risky. An investor with that sort of profile doesn’t really know any more than the rest of us. But might there exist a class of investor who can look at things that are going to be hugely rewarding and not think that they’re also high risk?

Here’s another way to put it: Maybe risk and reward always go hand in hand, are always proportional, that to get high rewards you must take high risk. If so, a VC firm cannot possibly be sitting on the next Google (or whatever) unless they have one or more companies in their portfolio that scare the shit out of them. Or, might it be the case that while risk and reward appear to go hand in hand to many, there are a few superb investors who perceive risk differently and looking at their plots we’d see that they made tons of money by taking what looked to them like low-risk bets? Or maybe the entire premise is wrong and risk and reward actually aren’t well correlated, let alone perceived risk and reward.

This is a bit of a rambling post, I know. But it’s what I’m thinking of these days. I would at least know how to make the scatter plot I’m imagining, and it’s fun to speculate on its shape – both across multiple VCs and for them individually.

[This taken from my comment on Fred Wilson's posting Andreessen on Platforms, in which he discussed Marc Andreessen's posting The three kinds of platforms you meet on the Internet.]

I think Marc’s posting has two flaws. The first, which is serious, is that he didn’t put enough thought into it. The second, less of a problem, is that in several places it comes across as biased and a bit of a Level 3 sales pitch. I may be guilty of the former in what follows. Certainly my reply is a bit piecemeal – but there are only so many hours in the day.

In what follows, when I talk about “you”, I mean you the humble individual programmer.

Firstly, things become clearer if we categorize Marc’s Levels 1, 2 and 3 differently. Level 1 and 2 are two sides of the same coin:

• Level 1: You write an app, and you call out to an API (a library of functions) that someone else has written.
• Level 2: You write functions, and an app that someone else has written calls you (treats your code as a library function it can call).

To me these things are opposites. Within Level 2, there are two classes:

• Level 2a: You write functions. An app that someone else has written calls your code, which runs on your server.
• Level 2b: You write functions. An app that someone else has written calls your code, which runs on their server.

My Level 2b is what Marc calls Level 3. I’ll continue to use his terms.

Note that only in Level 1 are you really writing a full app. In level 2 and 3 you’re writing functions that are called from an existing application (like facebook or photoshop) that you almost certainly didn’t write. To make you feel better, they give your functions pleasing names like “plug in” (photoshop), “extension” (firefox), and even “app” (facebook).

To me that’s a more logical division of the 3 classes. I see no reason at all to call Level 1 a “platform”. You are writing an app. You’re calling someone else’s libraries – some of them will be local, some will be on the network. You’re not writing a platform. The only platform here is in the local OS of the machine your app is running on.

If we stop calling Level 1 a platform, it makes that word much less cloudy. That means that things like Photoshop, Firefox, and Facebook (Level 2), and Ning, Salesforce.com, and 2nd life (Level 3) all provide platforms for you. But Flickr, delicious, the Google maps API, etc., are not platforms and calling them that is just confusing. They’re just APIs or libraries that other apps can call (across the network, in these cases).

—

Next, virtually ALL applications in operation today are running in Level 3 platforms. Most of them run in the environment provided by operating systems.

Once you look at things that way, you see that the thing which is important is the runtime environment provided by the Level 3 platform you are already running on. Is it fast, secure, scalable, flexible, etc.? Can you write the kinds of things you want to write with it? Should you try something else?

I think Marc didn’t look at his Level 3 this way, or at least not clearly.

Now, traditionally in the field of computing, there has been a single main way of providing a platform. You provided a computer system — a mainframe, a PC operating system, a database, or even an ERP system or a game — that contained a programming environment that let people create and run code, plus an API that let them hook into the core system in various ways and do things.

The Internet — as a massive distributed system of many millions of internetworked computers running many different kinds of software — complicates things, and gives rise to three new models of platform that you see playing out in the Internet industry today.

I don’t think they’re all platforms, and I don’t think any of them are new :-)

But let me say up front — they’re all good. In no way to I intend to cast aspersions on what anyone I discuss is doing. Having a platform is always better than not having a platform, period. Platforms are good, period.

Hey, all platforms are great. But some are greater than others…

Level 1 is what I call an “Access API”.

…

This is undoubtedly a very useful thing and has now been proven effective on a widespread basis. However, the fact that this is also what most people think of when they think of “Internet platform” has been seriously confusing, as this is a sharply limited approach to the idea of providing a platform.

Do most people think of things like the Flickr API as being internet platforms? If it’s sharply limited (I agree), then please let’s not call it a platform.

What’s the problem? The entire burden of building and running the application itself is left entirely to the developer. The developer needs to provide her own runtime system, programming language, database, servers, storage, networking, bandwidth, and security, and needs to take responsibility for running all of the above — and then exposing the application to users. This is a very high bar in terms of both technical expertise and financial resources.

This is painting an overly bleak picture. Almost every application programmer on earth uses an off-the-shelf runtime system (e.g., an OS or a Java sandbox), off-the-shelf databases, servers, networking, etc. Yes they choose a programming language (as they do if they choose to use a Level 3 system). It’s work to pick these things out and combine them but that’s a very far cry from shouldering the _entire_ burden.

This is an example of what feels like salesmanship in Marc’s article. He’s right in general, but the way he puts it feels slanted.

As a consequence, you don’t see that many applications get built relative to what you’d think would be possible with these APIs — in fact, uptake of web services APIs has been nothing close to what you saw with previous widespread platforms such as Windows or the Mac.

And this isn’t a good comparison. It’s comparing use of a Level 1 API to use of what Marc later tells us is a Level 3 system (a traditional OS).

Because of this and because Level 1 platforms are still highly useful, notwithstanding their limitations, I believe we will see a lot more of them in the future — which is great. And in fact, as we will see, Level 2 and Level 3 platforms will typically all incorporate an Level 1-style access API as well.

Right. In fact Level 1 platforms (aka APIs) underpin all of Marc’s levels. Which is to say that even if he’s right, the Level 1 “platform” isn’t going away or lessening in importance – that’s because it’s not a platform at all. It’s a API, and libraries of functions exposed as APIs are useful things to have around. Likewise, APIs on the local OS aren’t about to go away either – in fact they’re crucial to the operation of the OS, just as they are to the operation of a level 3 platform (which is also running in a Level 3 OS).

So Level 1 isn’t going anywhere, or getting less important.

When you develop a Facebook app, you are not developing an app that simply draws on data or services from Facebook, as you would with a Level 1 platform. Instead, you are building an app that acts like a “plug-in” into Facebook — your app literally shows up within the Facebook user experience, often as a box in the middle of a page that Facebook otherwise defines, such as a user profile page.

Here (as with Photoshop or Firefox), your code is like a library function you write that is called by another app. In this case, your code runs on your server, and the calling app (usually on another server, if it’s a web app) takes your results and displays them (often to a web browser).

Level 3 is what I call a “Runtime Environment”.

In a Level 3 platform, the huge difference is that the third-party application code actually runs inside the platform — developer code is uploaded and runs online, inside the core system. For this reason, in casual conversation I refer to Level 3 platforms as “online platforms”.

And here, your code is like a library function you write that is called by another app. In this case, your code runs on the platform’s server, and the calling app (on their server) takes your results and displays them (often to a web browser).

Obviously this is a huge difference from Level 2. And this difference — and what makes it possible — is why I think Level 3 platforms are the future.

And the past.

There follow a number of breathless paragraphs that describe exactly why it’s hard to build an OS, and what the advantages are once you manage it.

Then it’s acknowledged that yes, this is all… just like having an OS!

So those long paragraphs feel like Marc is either completely blind to an _extremely_ obvious and almost perfect analogy, or, like he’s a salesman trying out a snow job on just how incredibly amazing these totally new Level 3 platforms will be. It’s impossible to think #1, so I’m left feeling #2.

The Level 3 Internet platform approach is ironically much more like the computer industry’s typical platform model than Levels 2 or 1.

Back to basics: with a traditional platform, you take a computer, say a PC, with an operating system like Windows. You create an application. The application code runs right there, on the computer. It doesn’t run elsewhere — off the platform somewhere — it just runs right there — technically, within a runtime environment provided by the platform. For example, an application written in C# runs within Microsoft’s Common Language Runtime, which is part of Windows, which is running on your computer.

At which point you note that basically all programs already run in a Level 3 platform:

I say this is ironic because I’m not entirely sure where the idea came from that an application built to run on an Internet platform would logically run off the platform, as with Level 1 (Flickr-style) or Level 2 (Facebook-style) Internet platforms. That is, I’m not sure why people haven’t been building Level 3 Internet platforms all along — apart from the technological complexity involved.

But nothing is running “off platform”. It’s all already Level 3. Yes, there are differences in environment… coming up.

So who’s building Level 3 Internet platforms now?

First, I am — Ning has been built from the start to be a Level 3 platform.

…

Second, in a completely different domain, Salesforce.com is also taking a Level 3 platform approach

…

Third, and again in a completely different domain, Second Life is a Level 3 platform.

Fourth, Amazon is — I would say — “sort of” building a Level 3 Internet platform with EC2 and S3. I say “sort of” because EC2 is more focused on providing a generic runtime environment for any kind of code than it is for building any specific kind of application — and because of that, there are no real APIs in EC2 that you wouldn’t just have on your own PC or server.

Ah, there’s a very interesting bias…

The generic traditional PC OS is a Level 3 platform, despite the fact that it’s not specifically geared towards any particular use. But EC2/S3 are somehow only sort of Level 3 precisely because they have the exact same property???

By this, I mean: Ning within our platform provides a whole suite of APIs for easily building social networking applications; Salesforce within its platform provides a whole suite of APIs for easily building enterprise applications; Second Life within its platform provides a whole suite of APIs for easy building objects that live and interact within Second Life. EC2, at least for now, has no such ambitions, and is content to be more of a generic hosting environment.

However, add S3 and some of Amazon’s other web services efforts to the mix, and you clearly have at least the foundation of a Level 3 Internet platform.

I might argue this the other way round. Things like Ning and 2nd life and Facebook are trying to be real Level 3 platforms to allow people to build a wide range of apps (i.e., 3rd party functions that they call), but they’re only “sort of” true Level 3 because they’re built for a specific purpose and so are only useful for that purpose – even if the purpose is broad, like “the” social network.

Things that are more generic, like EC2 and S3, are more like the generic computational environment provided by a traditional OS. And for that reason, one can expect them to be used for a wider range of applications (including standalone applications, not just code that lives within the Facebook or Ning world). For that reason you might expect that applications written against them will be longer-lived, as they will not die as fashion and coolness moves its fickle hand from MySpace to Facebook to Ning to…?

Would you buy a used Level 3 platform from this man?

Fifth and last, Akamai, coming from a completely different angle, is tackling a lot of the technical requirements of a Level 3 Internet platform in their “EdgeComputing” service — which lets their customers upload Java code into Akamai’s systems. The Java code then runs on the “edge” of the network on Akamai’s servers, and is distributed, managed, and secured so that it runs at scale and without stepping on other customers’ applications.

This is not a full Level 3 Internet platform, nor do I think Akamai would argue that it is, but there are significant similarities in the technical challenges, and it’s certainly worth watching what they do with their approach over time.

Why is it not a full Level 3 platform? Because it doesn’t have a particular focus?

I believe that in the long run, all credible large-scale Internet companies will provide Level 3 platforms. Those that don’t won’t be competitive with those that do, because those that do will give their users the ability to so easily customize and program as to unleash supernovas of creativity.

Oh my!

But having already said that Level 3 platforms will need underlying Level 2 and Level 1, it doesn’t seem like the Level 3 providers are driving the lesser levels out of the marketplace.

One might instead argue that it’s the Level 3 providers who are most likely to disappear. We’ve seen exactly that happen in the traditional Level 3 world (operating systems), while some applications and many great libraries hop happily from one Level 3 environment to the next.

I think there will also be a generational shift here. Level 3 platforms are “develop in the browser” — or, more properly, “develop in the cloud”. Just like Internet applications are “run in the browser” — or, more properly, “run in the cloud”. The cloud being large-scale Internet services run on behalf of users by large Internet companies and other entities. I think that kids coming out of college over the next several years are going to wonder why anyone ever built apps for anything other than “the cloud” — the Internet — and, ultimately, why they did so with anything other than the kinds of Level 3 platforms that we as an industry are going to build over the next several years — just like they already wonder why anyone runs any software that you can’t get to through a browser. Granted, I’m overstating the point but I’m doing so for clarity, and I’m quite confident the point will hold.

But everything _already_ runs “in the cloud” on a Level 3 platform. Your local OS has far more functionality, more speed, more libraries, more space, more flexibility, etc., for you to run your applications in. OK, I’m being a bit difficult, and understating the point. Maybe.

Now to the main point, which I think is valid, but which Marc doesn’t answer.

Before we had operating systems with all their benefits (see the long list of benefits Marc tells us will accrue from his Level 3 – ease of use! open source! buying and selling code that just runs!) a forward-looking person could have looked ahead and predicted the rise of the operating system. What sorts of programs, what supernovas of creativity might they have predicted?

Marc looks ahead…

A new platform typically enables a new set of applications that were not previously possible. Why else would there be a need for a new platform?

But: keep this in mind; look for the new applications that a new platform makes possible, as opposed to evaluating the new platform on the basis of whether or not you see older classes of applications show up on it right away.

But give us no examples at all.

I’m extremely interested in this. What will these applications be?

Is it true that what we can build with these future systems is not “possible” without them? Or just not feasible? Where does their extra power come from? I think it’s NOT principally from the great diversity of apps that can be written to run on these platforms, but from what you gain by having a large number of apps running in the _same environment_ – be it in an OS with a file system, a process subsystem and communicating processes, or a Level 3 internet platform with whatever it provides.

In the fullness of time, whenever that is, we may see the rise of truly open internet Level 3 platforms that will challenge the well-funded closed commercial ones. Meanwhile, I’m happy to _only_ be working away at Level 1.

[This pulled from my comments and questions on Fred Wilson's posting Every Product Is A Platform on September 10, 2007]

My question to VCs and others is where you see value in having others build on an API. I can see some arguments – visibilty and branding, pushing maturity of the API, giving you an under-the-radar tap with which you can experiment with increasing traffic, maybe giving you ideas for products (if you’re the kind to take that route), finding (and then hiring) good hackers who love your product. These are all indirect benefits. I’m curious about why, from an investor’s POV, there’s value in having others build on the API. There are 250+ things built on the del.icio.us API. Were they of value? Did they increase revenue in any direct way? If you argue that there’s great direct value, can I therefore walk into your office, claim that thousands of people will write apps using my API and argue for a massive valuation? :-)

Do any of the companies offering an API have a strategy for monetizing it, or simply recouping costs for bandwidth, servers, etc.? Sure, the exposure is great. But, as I was once taught, you can die from over-exposure.

Here’s another way of looking at my question: if API traffic is 10x bigger than interactive web traffic, then just 1/11th of Twitter’s computing resources are being used to support their (arguably) most important customers. Maybe the site could have been many times faster if they had opened up API usage slower. I found the Twitter web interface unusably slow in the first 6 months after I heard about it – a feeling that many shared. Is that because they were actually using 90% of their resources supporting apps they didn’t write and didn’t benefit (directly, financially) from? That’s a very delicate line to choose to walk. At that level of diverting resources from normal users, there’s a huge risk blowing it. Hence my question about value. Sure, the 3rd party apps are cool and exciting – but are they so important that it makes sense to give you front-line customers a miserable time, making your service extremely slow.

To go to another extreme, imagine releasing an API that was so powerful that thousands of people wrote to it, but which had no user-facing component. How is that going to make you money unless you charge for it? E.g., Amazon’s S3. If you charge, like Amazon, I understand the model. If you don’t charge and the API is eating 90% of your resources, you may be shooting yourself in the foot rather severely.

It’s an interesting problem. As I said earlier, I agree with you that if you can do it, product should drive platform. Twitter could have followed that route, but apparently went the other way round. Or maybe things were just totally out of control and they unexpectedly found themselves in this 10:1 situation.

One thing’s for sure, if you’re using 10/11ths of your resources on your (non-paying) API customers, you should definitely make sure the rest of the world knows about it :-)

Russell and I met with Esther Dyson (a Fluidinfo investor) recently. After she’d listened to our presentation and seen the latest demo, she said that we’d “given the towel another half twist” and that we should carry on twisting.

She was referring to the process of tightening up and focusing company vision, strategy, business plan, etc.

I liked the analogy a lot. Twisting a wet towel is fun. It’s hard work, and it gets harder. But it’s surprising and satisfying to see just how much water you can get out of the thing before you let nature take its course and finish the job.

It also applies to writing documents. I spent most of 2005 writing a proposal to start a research institute for the computational study of infectious diseases (still in the works, though I’m no longer directly involved). Thanks to the repeated insistence of Derek Smith in Zoology at Cambridge, the document went through about 5 iterations, each more painful and difficult than the previous. It drove me nuts. But it was amazing how much better the thing became at each round, and the end result was hugely satisfying.

I’m going through the same process now with Fluidinfo as we prepare to raise our first round of outside financing. Putting together a slide show, executive summary, and demo is a ton of work. I’ve been round the loop a few times already. Earlier tonight I gave a presentation to Vicente López, general manager of the Barcelona Media Centre for Innovation. He poked holes in the presentation from start to finish. I took notes.

So I just spent the last 6 hours slowly twisting the towel. As a result the presentation is much improved. I figure we still have a couple of half twists left to do.

Meanwhile, I’ve paused to reward myself by knocking off today’s blog entry.

Entertainment retailers are not happy that Prince is giving away his upcoming album, via a deal with the Mail on Sunday newspaper. Their reaction is one of abject fear with a sprinkling of nonsense:

It would be an insult to all those record stores who have supported Prince throughout his career

All those stores making all that money, colluding to fix prices, over all those years, and they were just doing it to support the artists! My heart bleeds for them.

You can almost smell the fear.

I like O’Reilly technical books. Back in 1987 I put together some notes to write a book on the vi editor, and later considered submitting the idea to O’Reilly. I used to think I knew just about everything there was to know about vi, at least as a user, and I spent a small amount of time fiddling with its code to fix some limitations. Of course now being a hardened emacs user, it’s a good thing I didn’t blot my career early by writing a book on a crappy editor like vi.

I just did a quick count of the O’Reilly titles on my shelves: I have fifty five.

And you?

The two books I just bought on Amazon.com cost me $37.74, plus shipping to Spain of $13.47, for a total of $51.21.

The same books are available on Amazon.co.uk for a total of £28.35, plus shipping to Spain of £5.97 and VAT of £1.37 for a grand total of £35.69 or USD $71.15.

So you can pay $51 to have the books shipped (in theory) from the US, or pay roughly 40% more and have them shipped (in theory) from the UK. The difference in shipping time isn’t much either, in practice. Even if the price of mailing in the UK were free and there were no VAT, it would still be cheaper to have books sent from the US.

The dollar hit a 26-year low against the pound in April of this year (2007). If it keeps falling and Amazon don’t adjust their pricing, I might start a side business in literary arbitrage.

Amazon, intentionally or not, have done a great job with their special offer feature that suggests a second book to you and offers you both at the same time for a discount.

One could argue that it’s not in their interests to offer you a second book that you would buy later anyway at its normal price. (Yes, you can argue that it’s implicitly in their interest because it creates goodwill.)

At least in this customer’s experience, they do a great job of offering me things that I might want but never offering me anything I already know that I want. You might think that that’s because I always immediately buy everything I want, but that’s not true.

Today they slipped up and offered me something I knew in advance that I also wanted. I went to look at Glut: Mastering Information Through the Ages, and after I clicked to see the book, I wondered if they might just maybe offer me Everything Is Miscellaneous: The Power of the New Digital Disorder. And… they did.

That’s a first for me. I buy lots of books on Amazon, and I’ve never been offered something I knew I wanted.

Of course it’s also in their interests to occasionally slip up like this. Then people write blog posts praising them and saying how good their algorithms are.

At least for me, Amazon’s “better together” is almost pitch perfect. They consistently land tempting titles just outside the small ring of books I’ve already decided I’m going to buy at some later point. (Note that making special offers like this is very different from the far simpler “customers who bought X also bought Y” – which is just a lookup.) It’s easy to imagine Amazon’s algorithms trying to figure out what I’m almost certainly going to buy anyway, and what I might well buy but probably wont, and picking something tantalizing and just over the edge, just out of reach. What a great way to push readers’ boundaries while making more sales and not leaving money on the table.

Whatever’s going on, and whatever you think might be going on, it’s clearly not simple to keep customers happy and enthusiastic via special offers that do not sacrifice money the customer would in fact spend anyway.

I’ve spent many hours reading about Amazon’s S3 and EC2 services since they were announced. They’re certainly very attractive, and they are being put to heavy use by many companies. There’s a list of examples over on O’Reilly Radar. Don MacAskill of SmugMug gave a great talk at ETech about SmugMug’s use of S3. SmugMug have something like 200TB in storage at S3.

I think S3 and EC2 are fantastic and innovative offerings from Amazon. I’d love to use them for my own project.

But if you read the Web Services Licensing Agreement, it’s quite worrying. Or at least it should be worrying for anyone whose potentially S3/EC2-reliant service may one day rub Amazon the wrong way.

Here are a few extracts:

5. You agree to provide such additional information and/or other materials related to your Application as reasonably requested by us or our affiliates to verify your compliance with this Agreement.

What does “other materials” include? Source code?

If your Application is available as an online solution, you acknowledge and agree that we (and/or our affiliates) may crawl or otherwise monitor your Application for the purpose of verifying your compliance with this Agreement, and that you will not seek to block or otherwise interfere with such crawling or monitoring (and that we and/or our affiliates may use technical means to overcome any methods used on your Application to block or interfere with such crawling or monitoring).

“Otherwise monitor” is pretty creepy and all-encompassing. I’m supposed to give Amazon blanket permission to monitor my service in any way they choose? I think it’s fair enough for them to reserve the right and means to verify that I’m in accordance with the agreed T&C, but the above language is…. well, see below.

If your Application is a desktop solution, you agree to furnish a copy of your Application upon request for the purpose of verifying your compliance with this Agreement.

What does this mean? Source code?

And then we get to the real kicker:

8) If your Application is determined (for any reason or no reason at all, in our sole discretion) to be unsuitable for Amazon Web Services, we may suspend your access to Amazon Web Services or terminate this Agreement at any time, without notice.

Wow.

But big net-and-web-friendly Amazon, they wouldn’t just pull the plug on something they didn’t like. Would they? The experience of Zlio might make you wonder, as might the experience of Alexaholic Statsaholic.

From what little I know of those two cases, I don’t see a reason to condemn Amazon. But they do give pause, and section 8 of the T&C is frightening. There’s more in the agreement that I find vague (just what is an Amazon Property?), but that’s enough examples for now.

IANAL, but I’ve worked on and negotiated dozens of contracts. What we have here is a contract for services drawn up by the lawyers of just one party. This is the kind of shot across the bows you can take when your side gets to draft the contract, and it inevitably comes back with Unacceptable or Rejected all over the place, especially when you’ve egregriously over-reached. You know you’re over-reaching, of course. You get to frame the terms of the contract, which is why it’s so nice to do the first draft.

And yes, OK, Amazon is offering a service, they can define the price and the T&C as they see fit, and you can like it or lump it. But there’s another way, which is to push back a little.

S3 and EC2, and most likely future Amazon offerings, are important. They change a lot and they deserve to be widely used. It’s worth fighting about because they’re so great, because the T&C could be fixed, and because drafters of contractual terms like these expect you to push back.

Potential customers shouldn’t have to worry that Amazon might cut them off without warning and without reason. We should instead speak up and push for a better deal. Because right now the terms of the deal are totally one-sided. Amazon are big enough and mature enough and smart enough to know that it’s in their interests to make S3, EC2 and the rest of their web services as big as possible, and of course they know that their T&C are over-reaching.

If you’re building something that Amazon may one day decide they don’t like, or that they want to compete with, I’d be careful about using S3 or EC2. What if Amazon come along one day and offer to buy you for a deliberately lowball price—or else? What if [insert evil villain] calls up Jeff Bezos one day and makes a deal to have your service cut off? That’s going to be totally opaque to you, and you have no recourse. What if Amazon is bought by XXX, who then decide to cut you off? This may all sound farfetched, but these sorts of things do happen.

Comment #2 on the Zlio RW/W page I referenced above makes an important point. Amazon’s platform is akin to an operating system on which services can be built. Amazon promotes it like a platform. But they reserve the right to dump you unceremoniously, without notice, and without reason. Come on Amazon! We may be fragile startups dying to use your services, but we’re not idiots. If you want to build a platform and have people use it, do it properly. Otherwise, you’re just reserving the right to act like Microsoft after they finally woke up and realized that they could write applications for their OS too, and proceeded to use ugly means to wipe out competitors – to their ongoing and deserved detriment. But even Microsoft didn’t have an EULA that said they could take the OS away from you any time they felt like it.

Given a choice between Amazon cutting the price on S3 again and having them revise their T&C, I’d much rather the latter. But if we all silently accept their T&C, there’s no reason for them to revisit.

A few small changes could make Amazon’s web services irresistible.

Antonio over at the Onda has a post up about Productivity and being Always-On. He’s got comments turned off, so I’m going to make a few here.

First of all, I really enjoy Antonio’s writings. That’s why I read his blog. But today I just need to push back a little :-) I think all four of Antonio’s points about what you can expect to go wrong are rather weak and/or misleading.

Let’s go through them.

Power (this one was on me for being unprepared). Between Spain and England, I discovered 3 different plug types. What is more, if you travel with a laptop and a phone (more than one device to plug in) and check in late, good luck getting the hotels to have anything to lend you to plug your American appliances in.

You could substitute the U.S. for Spain or the UK in this sentence and it would remain true. There’s actually a good deal of standardized plug size across Europe. Yes, the UK and the US (and some other countries) do things differently. But Spain is part of a large swathe of countries that follow a standard. I could mention the use of 110 volt devices, but I wont. But I do suggest, just for fun, going to the reception of some US hotels and asking them if they have a European plug converter they could lend you. Or try asking for two. I’ve lived 10 years in the US and 10 years in Europe and I have a fairly strong opinion about where you’re more likely to find accommodating help for stuff that requires regular employees of a company to even be aware of the existence of other countries.

Consistent SMS/data on your cellphone. Having just switched to a GSM network, I was really excited by the prospect of 3G networks and zippy-fast mobile data. While voice worked everywhere, SMS and data did not. In fact, SMS was the flakiest of all of the services that I’ve come to rely on— I could receive messages almost everywhere, but I had at best 50% odds of being able to send them.

I’d put this down to (probably) having a mixture of Europe and US carriers involved. I also spent nearly 5 years working in the cell phone industry and know first hand from various carriers that passing SMS between their networks is (or was a few years back) hugely flaky. Someone from a US carrier (I don’t remember which), told me that, officially, US-Euro SMS was not supported by their network but that messages did sometimes “leak” through, but they weren’t sure how! In Spain I find SMS extremely reliable, and I send probably 200/month. When in the US I also have not-infrequent problems, in both directions.

And as far as the wi-fi is concerned, it does seem to be fairly ubiquitous, but in 100% of the cases it was expensive and encumbered by either its billing mechanism or by some lame proxy server setup that blocked most of the useful Internet services you’d want to get access to.

The same could easily be said of the US, and probably every other country. This is too general a complaint – I’ve encountered expensive brain-dead wifi all over the place. One pleasant exception is the airport at Las Vegas, with free wifi. Plus see below.

Overall Internet speed. Finally, the speed of “broadband” connections (especially in Spain) is painful. In this new world of rich Internet applications, it’s easy to forget that we’ve only just been able to get to the point where we can use them in the US and that this is far from a given for other parts of the world. For instance, in Spain Tabblo.com was completely unusable, and even Gmail was severely hobbled by the dearth of bandwidth.

This is also very weak. Who was the ISP? In what city? What sort of bandwidth was the contract? How many different places, ISPs, did you try out? It’s like saying “I went to the US and my broadband connection sucked, so therefore broadband connections suck in the US”. FWIW, I’ve had an ADSL connection with a fixed IP address in Barcelona for about 7 years. I had the connection for several years, at a cost of about US$30/month during which the CEO of the company I worked for in Manhattan couldn’t even get any DSL connection to his Manhattan apartment. I mean nothing. He was using a modem for years while I had a much zippier always-on connection. These days I have a theoretical max of 1Mb up and 20Mb down, and the last time I tested it it was running at about 6Mb. A connection at that speed can be had from Ya for just US$26/month. I ssh into servers and the connections stay up until I close them (often many days). I can even work with Tabblo. I know dozens of people here who use GMail as their only mail source, and I’ve seen it working just fine, without noticeable delay.

That’s it for now I guess. While I’m sure Antonio’s experiences happened, they read like someone comparing their comfortable home setup with what they experienced as a foreign tourist. Of course those experiences will be very different, even if the underlying services are identical. You see the same thing when tourists complain about how expensive a country is. Yes, you can pay 12 euros (US$16!) for a large (and I mean beer stein large) Fanta on the Ramblas. But that says more about you than it does about Spain :-)

I like George Orwell. A tired fool got me started on the four-volume collection of Orwell’s essays, journalism, and letters. It’s great. Among many things I could say, one is that you know you’re reading someone damned good if you’re fascinated by their thoughts on something you formerly had no interest or experience in. There’s the essay on Dickens that I mentioned earlier, essays on cheap vulgar postcards, boys magazines, and much else besides. Gore Vidal is similarly compelling, and I think I would take his collected essays even over those of Orwell. Christopher Hitchens is similarly provocative but not in the same class as a writer. Very few are.

Today I was reading an Orwell review of three T. S. Eliot poems. I’m not into Eliot and I’m not into poetry. Like Gore Vidal’s, Orwell’s reviews are wonderful – balanced and surgical skewerings. Anyway, I came across the following, which I enjoyed enormously and decided to post:

But the trouble is that conscious futility is something only for the young. One cannot go on ‘despairing of life’ into a ripe old age. One cannot go on and on being ‘decadent’, since decadence means falling and one can only be said to be falling if one is going to reach the bottom reasonably soon. Sooner or later one is obliged to adopt a positive attitude towards life and society. It would be putting it too crudely to say that every poet in our time must either die young, enter the Catholic Church, or join the Communist party, but in fact the escape from the consciousness of futility is along those general lines. There are other deaths besides physical death, and there are other sects and creeds besides the Catholic Church and the Communist Party, but it remains true that after a certain age one must either stop writing or dedicate oneself to some purpose not wholly aesthetic. Such a dedication necessarily means a break with the past:

every attempt
Is a wholly new start, and a different kind of failure

Because one has only learnt to get the better of words
For the thing one no longer has to say, or the way in which
One is no longer disposed to say it. And so each venture
Is a new beginning, a raid on the inarticulate
With shabby equipment always deteriorating
In the general mess of imprecision of feeling,
Undisciplined squads of emotion.

Apart from the fact that I am much too impatient to read poetry, one of my problems is that I never have any idea what it’s about. But at least the above is clear. It wonderfully captures the inevitable progression from the troubled search for meaning of existential youth to the amorphous struggles of the serial entrepreneur.

I’m trying to work. But right now I’m not working, I’m writing this.

Q: Why am I writing this instead of working?

A: Because my MacBook Pro has decided to spend 2 minutes showing the spinning color wheel in the application I was trying to use.

I used to have a 17″ G4 Powerbook with 2GB of RAM. When people asked me what I thought of it I was always very positive and enthusiastic in my reply. Then I got a 17″ MacBook Pro, and I hate it and wouldn’t recommend it to anyone.

Every single day, probably half a dozen times, I’ll be using some application (in this case Aquamacs, a version of Emacs for the Mac) when, for no apparent reason, the mouse cursor will change to the spinning pizza wheel of death, and remain that way for up to a couple of minutes. This happens to me in Firefox too, so it’s definitely not an Emacs thing. It probably happens in other apps too, I haven’t paid as much attention as I probably should have.

I’m too busy swearing at the machine.

Anyway….. what the hell!? I wish I could just throw this piece of junk away and get something that just works. I’m planning to head back to Linux next time around. I can’t believe that this machine could have made it out the door. But I need it too much to be able to just send it back, so I’m stuck, and I resort to cursing and blogging.

I have other complaints too. I run a make clean that removes a bunch of files (around 20M of stuff, not that many files). Sometimes the rm command will just sit there for 15 or 20 seconds before completing. What’s it thinking about? I run unit tests on Python code all the time. Sometimes the python command to run the tests will just sit there, the other day it was taking almost a minute to launch python. Yes, I know, I can go look at what’s going on on my machine, and I do, and sometimes, yes, it’s busy. But this is just ridiculous. I’ve been using UNIX for 25 years and I haven’t had to wait for things like this since the early 80’s (and then on a machine I was sharing with up to 128 others). It’s infuriating to have the expensive latest and greatest laptop and then have it perform like a dog.

FWIW, the machine is probably a year old. Probably these seem like small problems, but I think Apple really screwed up, and there’s plenty of complaints online about problems with these laptops. Blast them to hell.

Now back to work – if I can manage to get a cursor in Emacs, that is.