Russell Dicker

Killing SMS

Josh Kopelman from First Round Capital likes to talk about shrinking markets.  Michael Dell likes to attack competitors margins.  Well, Hello SMS!  There doesn't seem to be a whale more bloated than SMS in play right now.

Of course historically the wireless companies have kept a very tight leash on software development making disruptive software very hard to build.  But then someone let Steve Jobs guard the hen house and it is now off to the races.

How it would work

When the iPhone first launched it was clear it would be disruptive because it moved so much control out of the hands of the carrier.  The second piece came when Apple released the SDK and democratized the disruption.  The third, and final piece arrives in September with the release of the Apple Push Notification Service (APNS).  With this developers can push notifications and badges down to the iPhone instantly.  A little messaging service in the backend and you have replicated the functionality, if not ubiquity of SMS.

Growing your network

Alas, this only works for people who have installed your application and day 0 that is only you.  In the business, we call this the "cold start" problem and it kills 99% of social applications before they launch.  How do you make your app useful to the first person to install it?  How do you grow your network?

The carriers have really helped us out here because they have given the world APIs to send text messages.  So just make your Web 2.0 Name Compliant iPhone app (Textr?) communicate only with your Textr service.  It does a quick little look-up to see if phone number 206-555-1234 is a Textr user.  If it is, deliver the message via APNS, if not send an SMS.  Every installed user no longer sends text messages and you've started to shrink the market.  The poor fool who is getting the text message probably isn't using your service and is therefore paying exorbitant fees for that text.  Help that guy out by appending a nice little message on how to save money to the text:

Hey Steve, let's meet at McLeod later for a drink.

Text for free with Textr!

And your network starts to grow with no cold start costs for the first few users.  Your evangelize the network to the people that they'd use it with the most.

Embrace and Extend

Now that you've made it cheaper than SMS for your users, make it better.  Keep a record of all messages on the server that can be, archived, indexed, and searched.  Send digests of entire conversations via e-mail or RSS.  Open up APIs to make it really easy to send yourself or others Textr messages, link it with Jabber, AIM, whatever.  Find out what people wish could be done with instant communication and do it.

Go after the big boys

Once you have a little bit of traction, go after big companies to try to reduce their costs.  Companies like Twitter, Facebook, Dodgeball, etc. must pay a fortune in SMS fees.  I'd bet they'd love to decrease those.  Sign them up and charge them wholesale for SMS gateway work and next to nothing for people who use your application.  The largest cost to them is your little ad on a small percentage of their texts.  This really benefits them because everyone who installs the app saves them money.  The market continues to get smaller.

Move beyond the iPhone

So far so good on the iPhone users, but as my friend Darren asked "does this mean I can't be friends with people without iPhones?" Of course not, whether or not your friend has the application installed is almost transparent to a user.  But we can built Textr for other platforms too!  RIM, Windows Mobile, and Android all allow applications to run in the background, so we can build our software for them.  Dollars to doughnuts says that at least RIM and Android are working on some APNS analog which will make this even easier.  People without phones based on one of these platforms can't play, but in the long run I believe that will become a very small percentage of the population as these phones become cheaper.

Increase shareholder value

All this is well and good, but how do we make money from this?  Charge the biggest users.  For the casual user of your service <5,000 messages per month, charge them nothing.  For the larger (read: institutional) users charge them a fee that is half the price of SMS.  We know that SMS is highway robbery, so making it much cheaper and still profiting should be easy enough to do.  Or once you get market penetration start charging some nominal fee, like $1, for the application.  Assume you net $0.70 (this is the margin on the iPhone App Store) and with a little work you're collecting $0.70 / phone sold worldwide.  That's not shabby.  Did I mention you get a free social network from your app as part of the deal?

Well this has been fun, I hope you enjoyed it as well.  If you decide to launch a company based on this idea please just drop me a line to say thanks.  Or 2% of the company.  That's cool too.

I wonder if anyone else has thought about this already?

Re: Important News Regarding Netflix Profiles

From: Russell Dicker

To: Reed Hastings, CEO Netflix

Dear Mr. Hastings:

I have been a proud Netflix customer since January 2000, so I am well aware of your track record of being a customer centric company.  This is exactly why I was both surprised and dismayed to receive the e-mail informing me of your plans to deprecate the multiple profiles feature.

At its launch, Profiles was immediately one of may favorite features and I clearly recall the "Oh my God, this is awesome" moment when I learned about it.  My discovery of the feature coincided with my girlfriend moving in with me.  The process of becoming acclimated to living together was eased by her ability to watch a seemingly endless stream of "Desperate Housewives" episodes in quick succession while I took my time with "A History of Violence" and "Ong-Bak: The Thai Warrior".  We still live together and it would be only a small exaggeration to say that this feature played a small role in the fact that we will be getting married one month from today.

Perhaps you read this and think it is time that I be prepared to share everything, including my movie queue, with the future Mrs. Dicker.  You may have a point; she is the love of my life and sharing is what marriage is about.  But isn't it enough that I've offered to teach her stick shift so she can drive my BMW?  I'm taking dance lessons for the wedding.  Can't you let me hang on to this one little bit of my bachelorhood?  I love her more than words, but despite being from Texas, she just isn't a "No Country for Old Men" kind of gal.

I am not ignorant of your protestations that you must balance the needs of customers with the rigors of development.  I am a senior manager at a small e-commerce concern named after a large river.  In this position I am confronted with these kinds of challenges almost daily.  I only bring this to your attention so that you understand the weight of experience behind my advice:

You can do better.  Whatever the customer experience or technical challenges may be I am confident that you and your team can overcome them. I'd volunteer my own services, but I'm afraid it would conflict with my NCA.

Best of luck.

Yours,

(Signed)

Russell Dicker

CC:http://www.rdicker.com/home/2008/06/re-important-news-regarding-netflix-profiles.html

Arguing on the Internet...

What is it about human nature that requires us to shed blood, sweat, and tears and treat opinions like holy wars?

Despite arguments from all sides the fact is this:

Great software has been shipped both with and without Agile.

I have personally shipped great software both with and without Agile. If what you are using today is working for you, don't change it. If what you are using today is not working for you, do some research, find something that you think will work in your case and will make you happy, and try it. Repeat.

If you don't have any established practices and you're debating which to use the answer is simple. Stop. Focus on people. I'm sure even Steve Yegge and Ken Schwaber would agree that people matter more.

Put another way, it doesn't matter what your bony ass i wearing, Michael Jordan could school you in flip-flops and a pair of tight stonewashed jeans.

Sheesh.

Get a Cloogle

I may not fawn over them like so many media hacks, but one must admit that Google did revolutionize search with a very simple concept: relevance matters.

So what is going on now? I regularly run a search to see how their rankings are changing over time and qualitatively evaluate how they're doing. My control term is naturally, my name, "Russell Dicker", leaving out the quotes.

Over time I've seen my Amazon.com profile and my 43 Things Places People profile trade places along with a number of other things that made some level of sense. The current results however cannot be described as anything but rank stupidity.

Let's dissect their search results:

First up is a blog post about using the word 'whore' and its derivations in Amazon.com reviews.¹ In the comments, an angry customer posts an off-topic and woefully inaccurate depiction of a time I tried to personally help him. The combination means the first thing popping up on Google when searching for my name is "The Whore of Amazon.com". Charming.

Amusing but unflattering allusions to a secondary source of income aside, does this site really deserve to be number on for that search term? My first name appears five times, my surname eight, and five times they appear in succession. Not bad, but it never appears in any sort of markup and the page hasn't been updated in over a year. What about links? According to Google there are 0 links to that page.

Anyone can make a mistake, so what is second? Up next is an article from 1999 that embarrassingly tried to claim my father and I as the first .com dynasty.

While I blissfully remember the halcyon days of my fleeting membership in the .com paper millionaire club, this doesn't seem to be the most relevant item about me either. It has my first name five times, my last name seven, but only together once. Again there is no markup around the usage. This time the page manages to pull in a single measly link, but there haven't been any updates in nearly seven years.

The next few listings are the to-be-expected profiles on Amazon.com and 43 things. We also have the unexpected link to my single experimental entry on Erik Benson's Morale-O-Meter.

So where is this fine piece of writing with 10 instances of my first name, twice with my surname in markup, countless links to other pages with my name, two inbound links, and regular updates?

It is three quarters of the way down the third page, behind a gaggle of links where my names never appear together and, my personal favorite, a hit on an incorrect spelling of my name halfway down page two:

Far be it from me to predict Google's demise based on this one search result. After all, search is legitimately a hard problem. But I do wonder what my friends over in Redmond have as a top search result for me?

[1] The same site also contains another hit for my name which requests that I stop Googling myself. I honestly never went to that site before the page was up. The gentleman only assumed it was me doing the Googling for the name Russell Dicker. Hey Angelina Jolie, stop Googling for pictures of yourself naked!

Amazon Gets Scobleized

Amazon has ongoing series of internal events known as the Amazon Fishbowl where people stop by and promote their new album, book, or whatever by talking to or performing for a set of interested Amazonians. For example, Monday had Ben Harper stopping by to promote his his new album. Unfortunately I missed Ben Harper while recovering from jet lag, but I was able to attend today's talk from Robert Scoble and Shel Israel about blogging and promoting their new book on the subject, Naked Conversations.

Overall I thought it was an interesting talk, and it was definitely fun to read Robert's take on the talk afterwards, including the ribbing he got from our CTO. He even posted a pair of pictures on Flickr from the event. The observant might find part of my head in the second to last row one from the left in the second picture.

The talk was, as might be expected, a "rah-rah, go team" about blogging and why everyone should do it. Fair point and obviously apropos. Despite the fact that I generally liked what they had to say, I think they missed the mark on two things.

First, Robert and Shel got a great question about Apple and how they are an example of a company that is extremely closed lipped but still gaining momentum and generally well loved by bloggers. Their response was a pretty quick dismissal of Apple as a flash in the pan. Robert even made the statement that he thought Microsoft had a better chance of being around 100 years from not than Apple does. The stock market agrees, but what made it a non-answer is that they ignore the fact that Apple is well loved and does have a teflon reputation despite doing some not very nice things.

Apple has sued bloggers, runs a monopolistic music business, and has produced products that break easily or even light on fire. Still the next time that Apple calls everyone together for a "fun" announcement, Gizmodo will once again be there, blogging it live. The question of how they can do this is an interesting one and flies in the face of what Robert and Shel are trying to promote. I don't expect them to necessarily know the secret behind Apple's mystique, but that they seemed uninterested in even addressing it left me disappointed.

The second issue I had was their example of a small online bookstore in Japan (I'm sorry I don't recall the name) that saw their sales increase when they started blogging about their thoughts on books. Shel encouraged us to do the same. With all due respect to my co-workers, most are not literary geniuses. In fact I would say that, on average, most Amazon employees (myself included) are poorly suited to commenting on most books, so this felt very much like square peg pounding to me.

Are Amazon employees really the best people to be informing you about books on, say, Russian literature? If they are, is a blog the best format to do it? I would answer 'no' to both of these questions.

One beauty of blogging is that because the barrier to entry is so low, it allows anyone to participate. This, of course creates an attenuation problem that the reverse chronological ordering of blogs are poorly suited for. Customer reviews that are ranked on usefulness (see my still open reputations jobs) seem like a much better format.

This isn't to say there is no place for the blog-style communication on Amazon. In fact with AmazonConnect I think we found a great place for it.

When Amazon employees write informative reviews of books they will naturally float to the top, just like any other customer of ours. This makes sense to me, a blog on the subject doesn't.

This sounds like a lot of criticism. In reality, as I mentioned above, I thought it was overall a good talk and it was nice to meet Robert and Shel. But in the spirit of open communication, I know that Robert and Shel will be happy to read my thoughts.

So what is the ETech?

The one question I expect everyone to ask me when I return for this conference is, what is the Emerging Technology?

Well the theme of the conference has been summed up in one word, 'Attention'. Everyone is talking about how to get, give, secure, and demand attention. Root Networks even proposed a new security instrument, the attention bond.

That's nice, but people have been trying to get attention since the first sibling was born, and there isn't one central "emerging technology" around this.

The technology that is emerging at this conference hasn't had a single presentation on the subject. It is the Mac. Over half of the notebooks attendees have are Macs (but very few MacBooks). Even more impressive is that over 80% of presenters are run off Macs (but only half of those using Keynote).

If this is a conference about emerging technology, attended by people creating emerging technology and a particular technology is over represented from the general population by an order of magnitude, something is going on.

Idiom of ETech

The underlying idiom of ETech is clearly the versioning of terms and ideas. Web 2.0, Identity 2.0, Attention 1.0, Web 3.0.

We need Naming 3.0

ETech 2006 Books

A continually updated list of books discussed at ETech 2006.

ETech Computer Census

Current (unscientific) census count:

Macs: 23
PCs: 18

The opening presenter, Rael Dornfest, is running Keynote.

Additionally, there are ~30 people on Rendezvous Bonjour iChat.

This is not a representative sample of computer sales.

Going to Etech

Next week I'll be flying to "overcast with possible showers"¹ San Diego for the O'Reilly Emerging Technologies conference. I'll be one of a number of Amazonians attending and, in some cases, presenting.

My track record on getting value out of conferences is pretty poor; the last conference I attended laid an 8 hour (plus two days of travel) egg on my schedule. Etech's anecdotal track record is pretty strong though, so I have faith it will beat the curve.

My belated planning has also left me with a dearth of information about extracurricular activities during the week. Chris Butler, my good friend and Microsoft hack, was planning on attending but informed me tonight that he won't make it. That's bad news since things to do generally find him. My hope is that my rank and position will get me into all the hottest Geeks Gone Wild after hours parties, but it is also possible I'll be eating cold pizza alone.

Regardless, I plan blogging about anything that captures my interest while down there. I also plan on doing most of my writing with my Mac. Since I won't need to be connected to the company network during the day I'll enjoy unshackling myself from my Dell, whose design is so defective that it is larger than my PowerBook but still requires an external DVD drive. Besides the overwhelming design superiority, having my Mac will allow me to make sweet and smug eye-contact love with the other hip Mac users. One would imagine that Etech will have disproportionately high number in attendance.

[1] I'd link to accuweather.com for this but apparently linking to an exact date is a $79.95/year premium service. Hey, big spender!