This Time Its Different . . .
This time, its different . . . but the outcome will be the same for entrepreneurs . . .
After 6 months of seeing my friends go off and start their own companies I wondered like everyone else if this time, its really different or is it just a bubble . . . knowing that its almost impossible to predict the future especially with regards to market adoption, I wont sit on my ass and pretend to know better than people who are more qualified than I am . . . (Fred Wilson, Brad Feld, Tom, Alarm Clock, BubbleGeneration, Genuine VC, David Gibbons, Blodget?!)
I know that the weakness of “web 2.0” companies are the very “superiority” of their business models. In exchange for long-term scalabilities, these companies sacrificed short-term applicability. Put it another way, while “virtualness” is great once critical mass is achieved, the lack of value proposition until scale will cause many of these companies to fail . . . the value proposition of buying a book online is quite transparent . . . but the value proposition of writing a book, publishing a book, and reading a book .. all online is much harder to articulate and market to joe schmo.
On the other hand, to balance the increase in market risk, the execution risk for these ventures are significantly lower. As small as my sample size is, the people that are leaving to pursue their entrepreneurial are experienced builder of Internet applications. . . Back in 1998 no one really knew how to build web apps. . . we cobbled together software development paradigms and adjusted it as we went hoping to come up with the right recipe. 7 years later, companies like eBay, Yahoo, MSFT, who have went through countless iterations of the web product development cycle have produced a generation of developers and product managers that have no problem articulating a vision and execute to produce a user friendly product.
What this means is a potential gold mine for VC’s. Instead of funding execution and market risk, many VC’s have either invested minimal amount at the concept stage or waited until beta is produced to invest.
In the end, the ratio of successful companies to failed companies will be the same as another other boom . . .be it railroads, minicomputers, pc’s, the internet, web 1.0, 2.0 . . . (Hsu’s Law . . .not! :) ) But this time, VC’s would have put in less money and taken less risk to get the same amount of return. Unfortunately, entrepreneurs would have taken the same risk (quit their job, lived off savings) . . . to get the same success probability. Unless they bootstrapped the company (and thus acted as the financier themselves), someone else would have captured the shift in the value creation in web 2.0 world.
Without Product Managers, Life Would be Just Fine
. . . for a while . . .
Ken Norton, VP of Product of JotSpot, left up an presentation he gave at Hass on his blog. The content is great (but I really loved the presentation template and the font :) ). I also loved the fact that its all text, no consultant mumbo jumbo diagrams, yet it says everything it needs to say in a clear and insightful converstional tone. The hardest thing to do in a powerpoint presentation is to straddle the line between “argument” and “conversation” . . . how to get your point across yet allow room for exploration, conversation, and eventually knowledge creation between the you and the audience. Its kinda easy to see why Ken is good at what he does just by looking at the presentation.
Anyways, back the actual presentation. . . at big companies, many function of the product manager is split across many people in the company. This presentation made me miss being close to the actual development of a product. Knowing that everyday, real progress (in creating something tangible) is being made is one of the most satisfying feelings in the world. But really, in big companies the stakeholders for anything you do, product or otherwise, is so wide that cross functional teams/projects are the norm. As a result, everything in the presentation would apply generally as “how to get thing done without direct authority.” Its great to argue over trends, memes, strategies, and visions. . . but once in a while, I need something to remind me to what actually pays the bills. . . and that is . . . getting things done, product pushed out the door, end users/customer using the product (paying for them hopefully), and finally coming back for more.