Anyone who is reading the interwebs lately in the startup world is aware of the Series A crunch many startups are experiencing.

This week, the everpix crowd announced they are shutting down their service. In these posts, there have been a bunch of metrics, and the whole schmozzle keeps going through my mind, so I thought I’d post some of my thoughts.

I’m not going into their product, but reflect on their numbers and business model; freemium.

The Verge had this article http://www.theverge.com/2013/11/5/5039216/everpix-life-and-death-inside-the-worlds-best-photo-startup, worth a read in context, i.e. having to pay Amazon for $35K in hosting.

The Everpix team posted this in their blog – we gave it our all
http://blog.everpix.com/post/66102960115/we-gave-it-our-all

I also came across this too, which is the most startling.
http://andrewchen.co/2013/11/05/when-a-great-product-hits-the-funding-crunch/

It would seem to me, that the everpix had a working business, however their costs were way out of proportion, and perhaps the attitude to save their software was misguided.

1. They had 6 FTE’s to service 6,800 paying customers and 48,200 non paying users This is ratio of 13%, or 1133 paying customers per FTE. Since people costs are the highest of any, this is totally out of place. Who cares if they are ex Apple or ex Starship Enterprise, it’s irrelevant.

2. They were paying Amazon $35K per month to host their photos. From what I have personally seen Amazon is a place where old servers go to die dressed up in all this cloud hype.

3. They did a last ditch effor to sell, aqu-hire, raise funds to try and save themselves, it failed.

My thoughts on what they should have done.

1. Become businessmen, and chased their user base for revenue instead of running around pitching all the time. It seems they forgot the correct order of priority, Customers, Team, Investors. Putting investors first reverses this order, first hitting the team then the customers.  Get over this whole billion dollar  bullshit.

1. With an averag $4 per month, the 6800 paying users would net $27,000 per month, this should be enough to support the service plus 2 FTE’s

2. They should have abandoned freemium, and purged the freeloaders or converted them to paying. This would enable them to tremendously cut the server storage costs, as well as the overhead associated with the 48,200 freeloaders.

3. Cut overheads, this includes salaries and office space. 2 people can code from home.

4. Reduce expectations, living from a full salary with a six FTE startup is crazy nuts. They should have lived like bootstrappers with no salary

5. Co-locate their hardware, even in their office/home. With US based internet being awesome, they could get decent internet upload speed and could with the user cull storage and build their own SATA based storage and saved a king fortune.

The above would not have been palatable for the “team” but it could have meant surviving sustainably, and likely resulted in an increase of monthly income from removal of the freeloader factor. If their product was that good, the free people would have paid – hey they all had an investment in the service by uploading their photos.

Posting photos of smiling over beers at your startup close, laughing at yourself does not really sit to well with my personal ethos, especially when in my view their service could have been saved.

What are your thoughts?

Sam, @samotage

Advertisements

It’s known amongst people that write code, and make computers work and stuff that business or “non-technical” types can’t seem to understand software.  I’ve just thought of this little way that could help, trying to put the problem into their perspective.

Now a “business” person may write a lot of email.  They may also write a lot of documents.  They may also make many promises to people (which they sometimes forget or neglect).

Take all those emails, documents and words, and promises.  Everything.

No imagine they are all inter-linked with one another.  Such as:

One sentence in an email is mis worded grammatically.  This causes a document to be incorrect as an assumption based on that wording has been made incorrectly.  This document is the cause of some procedure that was not followed causing the promise to be made to some person to be broken.

This failure, upset someone.  And they are mad, with all the resulting emotions etc.

To fix this.  The business person must:

1. Find the email that was incorrectly worded based on the upset persons response.

2. Correct the email wording and re-circulate this to all involved parties.

3. Conduct meetings and make sure the gramatical error is understood by all parties.

4. Get the documentation updated and new copies published and circulated.

5. Update procedures and other stuff so that the appropriate promise can be either promised or not.

6. Deliver what ever it was to the customer they were promised wether or not step #5 is possible.

Then immagine the business person having to rinse and repeat this process all the time for obscure things from other people emails?

Stupid isn’t it?

Well, the above is just what software is.  That email is some code.  It may not have been understood.  The problem may not have existed, the edge case may not have been identified. This happens all the time.

Yet, the business people want it fixed.

I think it’s high time business people got out of their dark stripy suits and thought about how they can better understand technology, instead of having it contorted.

Sam, @samotage

I was talking with someone today, lamenting that people aren’t taking the next step to analyse then implement energy efficiency measures. And it occured to me that this is one of those…

“You can lead a horse to water, but you can’t make it drink”

horse_water

a thirsty horse

Everybody has heard that old chestnut… But what if what we really want to help the horse?

I’m no horse whisperer, even though at one time in my life I paid for the upkeep of three equine friends.  But I do know one thing – sooner or later the horse is going to get thirsty.

So, if we’d like to help the horse – then fill up the trough.

Apply this to the world of your little business or startup, and wonder – how am I filling the trough for my horses?

Sam, @samotage

This is a common sight in Melbourne that makes me feel shameful.

I grew up in the days when we had friendly station masters, that would let me pull the the points levers in the signal boxes. Tram conductors who would give the correct change, help you on your journey and let the kids ride up the front in the W-Class trams.  All these wonderful people from my childhood loved their jobs, and it showed. They also were worthy of the title of Customer Service – at least by my definition.

Fast forward to 2011 – it’s an ugly sight. The hated goon squad, full of anger and authority. It’s a familiar setup. 1 lady, who is the “good cop” and at least four large heavy-set thugs. Their role is to harass anyone that’s within an inch of their rule book – travellers with improperly validated tickets, cyclists, and even outside their immediate jurisdiction.

Riding along this morning on my pushbike, I spotted a goon patrol doing their thing. I had to stop and take a momento of the occasion, in a public place. The large gentleman in the fluorescent jacket, immediately started telling me I can’t take photos, that they haven’t received my consent to publish, and even chased me as I rode off on my bike. I can pedal fast, fast enough today it seems.

They are a breed of nastiness, universally despised in this city that really needs deprecation from our society that will need to use more and more public transport.

When will things change?

What do you think?

Sam.

@samotage

I stumbled upon a post from the SEO book website this morning http://www.seobook.com/download-ie9

It talked about the goodness that is Internet Explorer 9, and how wonderful it’s reviews have been and how large it’s user base will become.  Then it went on to say how Google, Youtube’s owners now being evil by posting a warning that IE 9 doesn’t make  it’s modern list.

I’ve got an alternate point of view.

Internet Explorer 9 only runs on Vista and Windows 7.  It’s not platform independent like the browsers on the youtube shortlist, i.e. IE9 will not run on Linux, OSX or other non microsoft operating systems.

Microsoft aren’t really going out of their way to change this.

This makes it kinda hard for people who make the nice modern websites people like to visit in 2011.  Also, I’m not really aware of many cutting edge web developers who make awesome stuff using a windows platform, nor do I know any that espose the benifit of any Microsoft browser.

In fact, not being able to install IE9 on Linux or OSX actually puts web app developers at a disadvantage in supporting it.  I’d even to go so far to say that I consider it a B grade gated browser.

In terms of my own web applications, I’ve had reports of some fail – surprisingly with it’s Javascript engine.  Because I don’t use Windows 7, and am unlikely to – I’m not really going out of my way to do anything about it.  Besides it’s enough to support IE 7 and 8 at the minimum functional level.

There isn’t a business case to build out suport for IE9, including Windows 7 infrastructure and then add a third layer of browser hacks when it delivers nil or negligible value.

Until we can bill Microsoft directly for browser compliance infrastructure, development effort and customer support time, I think the best option is to post the message like Youtube has and tell people to use a modern browser.

What do you think?

Sam.

@samotage

Pencil: I’m sorryEraser: For what? You didn’t do anything wrong.

Pencil: I’m sorry because you get hurt because of me. Whenever I made a mistake, you’re always there to erase it.

But as you make my mistakes vanish, you lose a part of yourself. You get smaller and smaller each time.


Eraser: That’s true. But I don’t really mind.  You see, I was made to do this.   I was made to help you whenever you do something wrong. Even though one day, I know I’ll be gone and you’ll replace me with a new one, I’m actually happy with my job.   So, please, stop worrying.  I hate seeing you sad.

I found this conversation between the pencil and the eraser very inspirational.

Parents are like the eraser whereas their children are the pencil. They’re always there for their children, cleaning up their mistakes.

Sometimes along the way, they get hurt, and become smaller/ older, and eventually pass on.

Though their children will eventually find someone new (spouse), but parents are still happy with what  they do for their children, and will always hate seeing their precious ones worrying, or sad.

For some time, I was the pencil, and now I’m an eraser.  The relevance of this story is now absolute, both considering my parents, and my children.

For I know that one day, all that I will be is shavings and memories of a story that was once written.

What story are you writing today?

Our family is taking a holiday, for the first time in quite a while… Part of the big adventure for all our little children has been plane ride! Up, up and AWAY!
I noticed something, and I thought I’d share.

Approaching the airport, inside – and now more than ever in the plane we are being mind spammed to consume, consume consume.

  • The terminal is filled with Plasma TV’s spamming our minds with all sorts of consumption options.
  • An inflight magazine, filled with places we will never go, products we will never buy like the $590 magical stereo headphones that feature a foam padded ear cushion.
  • An in seat display that won’t switch off, requests money for live to air TV, and even the map switches to an advert before its possible to determine the location of the aircraft. Even the earphones (without foam cushion) are free – another mind spamming opportunity.

It seems the advertisers know they have a bored and captive audience and use this to indulge their spamming desires. I think of the erosion it does to people still captive to their messages.

However one thing amused me. There wasn’t a Buy NOW button for the headphones. How log will it be before passengers will be hand complimentary in flight tablets, complete with a sheltered Internet of flash advertising?

Sam.

@samotage