Many thanks to all of our customers, new and old, for making 2013 a great year to work at Populi. Here’s to an even better 2014!
* Future employee #spoilers
Many thanks to all of our customers, new and old, for making 2013 a great year to work at Populi. Here’s to an even better 2014!
* Future employee #spoilers
Website usability researchers The Nielsen-Norman Group have something to say to business-to-business websites: publish your pricing.
Business customers report pricing as the top most needed piece of information online, yet many business-to-business (B2B) sites don’t show it… In our studies, we watch participants go to competitors’ sites when websites do not show prices. If pricing information can be found elsewhere, that’s where users will be.
We’re aware of one other company in the higher-ed software industry that has up-front pricing information—Pathwright—and they’re after a different slice of pie than we are. Otherwise, we’re not aware of any services comparable to Populi that publish what they cost.
Companies rationalize reasons for not revealing prices online: we don’t want our competitors to know, price varies for different customers, price constantly fluctuates, customized services have unique prices, and so on. These excuses are legitimate reasons in almost all cases, but they’re still excuses. Not showing pricing works against customer needs and thus creates a hostile shopping experience. Remember the Halo Effect: people’s impression of one aspect of your brand (“they’re hiding the information I want”) transfers to their feelings about everything else (“they’re difficult to deal with; I don’t like them.”)
We don’t call it the “Halo Effect”, but the description of it resonates with us. We want you to know everything you deserve to know about us: What do we provide you? How will we do business with you? What are our priorities as a company? What does it cost?
This may be a murky, obscurantist industry, but hiding basic stuff like that never made any sense to us.
We were unable to secure sufficient funding in order to properly scale the business, and our endeavors to find a new home for Everpix did not come to pass. At this point, we have no other options but to discontinue the service.
By all accounts, the site and service provided an elegant solution to a common problem: how to store, organize, and access years’ worth of digital photos from myriad sources. Everpix stored them all on the cloud and gave users a simple interface to manage them. But as good a product as it was, it simply failed to gain traction. Casey Newton’s post-morten at The Verge reports that “the company had attracted fewer than 19,000 signups”. Some 6,800 of those were paying customers, plunking down $4.99 a month or $49 a year for the paid version.
In the company’s final months, company founder Pierre-Oliver Latour made the rounds among the venture capitalists. He sought another $5 million to follow up on the initial $2.3 million he’d raised during Everpix’ nonage—which sum the company had burned right through. In a telling paragraph, Newton reports:
In meetings on Sand Hill Road, Latour says, nearly everyone expressed enthusiasm for Everpix’s product. But one by one, they turned him down. After two meetings with one well-known firm, a partner sent Latour an email. “You guys seem to be a spectacularly talented team and some informal reference checking confirmed that, but everyone here is hung up on the concern over being able to build a >$100M revenue subscription business in photos in this age of free photo tools.” Said a partner at another firm: “The reaction was positive for you as a team but weak in terms of whether a $B business could be built.”
Everpix, not holding the possibility of doing billion-dollar—or even a paltry hundred-million—business, was thus refused five million semolians by the VC’s. Which well they should have. Only suckers go for an investment that gets you less than a 2,000-percent return.
In time, Latour hopes, the lessons of Everpix will become more clear to him. Where had it all gone wrong, exactly? Maybe there was something obvious that everyone had missed.
Maybe the Everpix guys could have taken a look at their expenses. Their Profit & Loss statement:
Funds raised: $2.3 million
Subscription revenue: $254,060.57
Total consulting and legal fees: $565,975.65
Total Office Expenses: $128,750.87
Total Operating Costs: $360,924.30
Total Salaries: $1,168,710.45
Total Payroll: $1,298,819.67
Total Personnel Costs: $1,411,513.53
Net Income: -$2,294,818.17
Source: Everpix profit and loss statement summary (via The Verge).
Everpix was spending money like there was no tomorrow. Which, as it turned out, there wasn’t.
To be clear, we’re sympathetic to the Everpix guys. No one wants to see their work up and vanish like that. What we’re looking askance at is the culture that killed it. The company raced through its cash with such abandon that it must’ve been planning on either more funding or an acquisition. And when it came to that time, turns out the VC’s wouldn’t lift a finger for anything less than a nine-digit payday. Not a thought given to long-term sustainability or the preservation and improvement of what they had built.
The ones who put up the money are the ones who own your work. If you want it to last past tomorrow, make sure they’re as invested in it as you are.
Higher education in the United States is overpriced and plagued by ever-increasing costs—and the government funding that makes it so widely available is perpetually endangered. What’s more, the very best professors at colleges and universities around the country are limited to teaching a few hundred students at a time, at the most. There’s a real danger, therefore, of a good college education becoming the province of an elite, wealthy few.
The Massive Open Online Course, or MOOC, puts courses from top universities and professors online and makes them available to any number of students—sometimes hundreds of thousands at a time—for free. MOOCs address the money problems by being more scalable and less expensive to deliver than campus-based courses. They give professors access to a wider variety of students by an order of magnitude. And students get to take them for free.
So anyone with a reasonable internet connection—whether rich or poor, fat or skinny, elite or hoi polloi, American or from somewhere else— can sign up and take one and change his future.
Companies offering free online courses for anyone must be driven by some lofty ideals. Here’s the “Vision” blurb for Coursera, the MOOC company that gets the most press:
We believe in connecting people to a great education so that anyone around the world can learn without limits.
Coursera is an education company that partners with the top universities and organizations in the world to offer courses online for anyone to take, for free. Our technology enables our partners to teach millions of students rather than hundreds.
We envision a future where everyone has access to a world-class education that has so far been available to a select few. We aim to empower people with education that will improve their lives, the lives of their families, and the communities they live in.
Let’s hear from Udacity, another prominent MOOC pioneer:
Our mission is to bring accessible, affordable, engaging, and highly effective higher education to the world. We believe that higher education is a basic human right, and we seek to empower our students to advance their education and careers…
…We are reinventing education for the 21st century by bridging the gap between real-world skills, relevant education, and employment. Our students will be fluent in new technology, modern mathematics, science, and critical thinking. They will marry skills with creativity and humanity to learn, think, and do. Udacians are curious and engaged world citizens.
Curious and engaged world citizens finally enabled to learn without limits. Basic human rights. Millions of students. Improving lives. Reinventing education. Partners. Fluent.
Nothing has more potential to lift more people out of poverty — by providing them an affordable education to get a job or improve in the job they have. Nothing has more potential to unlock a billion more brains to solve the world’s biggest problems. And nothing has more potential to enable us to reimagine higher education than the massive open online course, or MOOC, platforms that are being developed by the likes of Stanford and the Massachusetts Institute of Technology and companies like Coursera and Udacity.
If you have high-minded ideals about giving away free coffee, you still need three bucks to buy that latté you want to give away. Same goes for high-minded software companies.
Coursera recently raised $43 million from a crew of venture capitalists and investors, bringing their total funding, as of this writing, to $65 million. Venture dollars fuel most of the rest of the MOOC “space”, too: Instructure includes a MOOC-hosting platform as one of its services, which it developed with the help of $39.1 million; Udacity does what Coursera does, and is in hock for a comparatively modest $20 million. EdX, FutureLearn, and any of a half-dozen other entities looking to get into MOOCs are similarly propped-up by massive investments from universities, private individuals, and other investors.
All that money for companies that give away their core product.
However much they might have signed on to the lofty ideals, the VC’s aren’t looking to write off those millions as charitable donations on their taxes. Business plans of some sort are in order. Here’s how these companies have contemplated making money from free online courses for anyone:
The jury is still way out as to whether MOOCs are a worthwhile way to teach anybody anything. In January of this year, San Jose State University announced a big collaboration with Udacity to offer low-cost MOOCs for remedial courses; by June, it suspended the collaboration owing to “disappointing student outcomes”. The preliminary data on completion rates indicates single-digits for a lot of MOOCs. On the money side of things, Georgia Tech’s excursion into a MOOC-based MS in Computer Science encountered little in the way of cost savings. Coursera started offering certificates of completion, realizing that there’s little incentive for a student to finish a course without some kind of carrot on the end of the stick.
Most telling, perhaps, is Udacity’s about-face, prompted by founder Sebastian Thrun’s stark realization that:
“We were on the front pages of newspapers and magazines, and at the same time, I was realizing, we don’t educate people as others wished, or as I wished. We have a lousy product.”
Udacity, shepherd of curious, engaged world citizens who are taking hold of the basic human right of higher education, is getting into vocational training in a big way.
Over the past year, Udacity has recruited a dozen or so companies, including Autodesk, Intuit, Cloudera, Nvidia, 23andMe, and Salesforce.com, which had sent a couple of reps to discuss a forthcoming course on how to best use its application programming interface, or API. The companies pay to produce the classes and pledge to accept the certificates awarded by Udacity for purposes of employment.
Udacity won’t disclose how much it is making, but Levine of Andreessen Horowitz says he’s pleased. “The attitude from the beginning, about how we’d make money, was, ‘We’ll figure it out,'” he says. “Well, we figured it out.”
Thrun, ever a master of academic branding, terms this sponsored-course model the Open Education Alliance and says it is both the future of Udacity and, more generally, college education. “At the end of the day, the true value proposition of education is employment,” Thrun says, sounding more CEO than professor. “If you focus on the single question of who knows best what students need in the workforce, it’s the people already in the workforce. Why not give industry a voice?”
If anything needs a voice, it’s industry. It’s high time someone took a stand for industry. And what about those high ideals from the vision statements, that free education for people who can’t otherwise get at it?
The San Jose State pilot offered the answer. “These were students from difficult neighborhoods, without good access to computers, and with all kinds of challenges in their lives,” he says. “It’s a group for which this medium is not a good fit.”
So, then, who are these MOOCs for after all?
Although Thrun initially positioned his company as “free to the world and accessible everywhere,” and aimed at “people in Africa, India, and China,” the reality is that the vast majority of people who sign up for this type of class already have bachelor’s degrees…
…and are already being considered for employment by Google, Salesforce, Autodesk, and others.
The only truly galling thing about MOOCs is the puffed-up idealism and rhetoric that accompanies them wherever they go. The technology is admittedly complex and impressive, and there’s no doubt ways for colleges and universities to meaningfully incorporate some of it into their online offerings. But the techno-utopians, venture capitalists, and attention-hungry professors framed higher education’s problems in a particular way so as to pose MOOCs as the one-stop solution.
Would their basic assumptions hold up under any kind of scrutiny?
What if higher education’s problems don’t come down to issues of costliness? What if it’s not all about professors who want access to ten-thousands of students? What if a university degree isn’t simply a token to a higher-paying job? What if college isn’t a basic human right? What if education is more than just putting free content in front of a student?
What if there are human problems technology can never hope to solve? What if there are human problems education can never hope to solve?
Information is Beautiful, a data visualization site run by one David McCandless, has charted the relative sizes of the codebases of some notable games, machines, and computer programs. Visualized in terms of number of lines of code, it’s an interesting look at just how much programming’s required to make things run.
Populi, at around a half-million lines of code, beats out the Space Shuttle by a cool 100,000 lines. TAKE THAT, NASA.
Granted, that’s a bit of an apples-to-oranges comparison—the Shuttle software was designed in the late-70’s and early-80’s for the high-end computers of the time. A more apples-to-apples comparison would measure Populi alongside another modern, complex, person-centric app driven by a relational database. The only other thing like that on here is… Facebook, weighing in at around 61 million lines of code (and one-point-something billion users).
Raising venture capital isn’t the be all and end all of entrepreneurial success. But it is an important metric… for an important subset of the business world — firms in pursuit of explosive growth — raising capital from angel investors or venture capitalists is an early step on a long and uncertain road to success.
So, firms in pursuit of explosive growth that raise capital to fund a long and uncertain roadtrip to success are an important subset of the business world.
If you judge entrepreneurial success as surviving or selling (including raising follow-on funding, being bought, or successfully IPO’ing) as no doubt your investors do, then your odds of success are lower outside of the superhubs.
What if you judge it by something meaningful, like building something that makes your customers’ lives better?
Every business is unique, so I would never claim to have the perfect answer for any founder trying to select his or her location. It’s not that founders outside of superhubs work any less hard, are any less talented, or have worse ideas. The reason the numbers look the way they do is because the environments are fundamentally different in start-up superhubs. And until community members acknowledge the shortcomings of secondary markets, and come up with some way of addressing them, then we should be open and honest with our entrepreneurs about the heavy toll they will pay to build their businesses where they live today.
The heavy toll we pay here: we’re home for supper every night; our wives, children, and friends know and love us; every customer is important to us; no one’s forcing us into ill-advised moonshots; we spend a good 25% of any given workday laughing together; we don’t spend our days making money for someone else.
Ah, the high cost of not moving to Silicon Valley to change Populi into something that won’t be here in five years.
Expanding on Brendan’s post about designing for the “job to be done” rather than starting with a visual design, Alan Klement introduces us to the idea of using “Job Stories” instead of “User Stories”:
Summed up, the problem with user stories is that it’s too many assumptions and doesn’t acknowledge causality. When a task is put in the format of a user story ( As a [type of user], I want [some action], so that [outcome] ) there’s no room to ask ‘why’ – you’re essentially locked into a particular sequence with no context.
The distinction may seem subtle at first, but it’s easy to make the mistake of designing a particular interface or workflow to meet the needs of one specific “user”, when it will actually be used by different people in different roles seeking different ends. Writing a story about the job someone wants to do—rather than assuming what kind of user they are—should lead to designs that work better in the real world.
Job Stories are great because it makes you think about motivation and context and de-emphasizes adding any particular implementation. Often, because people are so focused on the who and how, they totally miss the why. When you start to understand the why, your mind is then open to think of creative and original ways to solve the problem.
We’ve seen something like this at work in our Feature Request Forum. Users suggest features based on their own particular user stories (nothing wrong with that). But it’s not until other users pile on with their own suggestions (and user stories) that the job story emerges. We’ve found that it often takes multiple perspectives on the problem for us to identify the job to be done.
Inside Intercom’s The Dribbblisation of Design lambastes software designers who start with the visual design of their program without first considering the underlying layers of a well-built app.
Much of the product design work from job applicants I’ve seen recently has been superficial, created with one eye towards Dribbble [an online design community]. Things that look great but don’t work well. Perfect pixel executions of flat design, but work that doesn’t address real business goals, solve real problems people have every day, or take a full business ecosystem into consideration.
The best software design starts with the unglamorous stuff: what is the user trying to accomplish? How can the software help them do that? How can the software explain how it works to the user?
This way of thinking owes much to Clayton Christensen, a Harvard Business School professor whose ideas on management and business are summarized in his “Job To Be Done” framework. JTBD leads with this question: what job is the user hiring this product/service to do? It has a surprising range of applications—software, household products… and even milkshakes. And there’s no doubt that it has plenty of uses in designing college management software.
Prospective customers sometimes ask us to sign papers that would—whether instead of or alongside our own legal documents—govern our business relationship with them. Schools with the cash to have lawyers draft stuff for them are lucrative prospects, and we should be happy sign whatever if it’ll bring them aboard.
But we decline to sign every single time.*
Why? What could Isaac’s signature on another piece of paper do to our business?
The answer is, We don’t know. Some of these documents outsize our own by an order of magnitude. They’re written by lawyers working in other states. They contradict or negate our own Terms. They oblige us to requirements totally foreign to college software. For all we know, they could cripple the way we do business, and so make things sticky for all the rest of our customers.
They’re just full of potentially expensive unknowns.
We do know this: our relationship with that customer would be very different from what we enjoy with everyone else. And that’s just not worth it for anyone.
The Terms of Service define our relationship with our customers, and we want that to be a relationship of trust, adaptability, and common sense. The Terms protect both Populi—our property, employees, and business—and our customers: your data, your rights, and your enjoyment of the service. They permit our ongoing release of new updates that improve the value of the service. They let us update the Terms so no one is bound to what worked in 2008 but doesn’t in 2013. And they give us the leeway to not enforce the Terms in a given situation—because we wanted the right to not be hardnoses about everything.
But it’s not just the relationship that’s valuable. It’s also the fact that the relationship is the same for everyone: every school and every user is on the same footing as every other school and user. We cherish that. It’s simpler in terms of administration—managing different agreements with different customers just doesn’t scale. It’s simpler in terms of knowing what to do when situations arise—support issues, pricing questions, data challenges. And it’s simpler in terms of development—we’re not bound to develop Populi to satisfy the requirements of someone’s unique contract.
In a nutshell, we like the Terms of Service because we like the relationship they foster between us and our customers.
And that’s why you won’t catch Isaac’s signature on some other piece of paper. Trust, adaptability, and common sense are just too valuable to this relationship.
* Do pardon the rhyme.
Steven Pearlstein writing for the Washington Post in “How the cult of shareholder value wrecked American business“:
In the recent history of management ideas, few have had a more profound — or pernicious — effect than the one that says corporations should be run in a manner that “maximizes shareholder value.”
Indeed, you could argue that much of what Americans perceive to be wrong with the economy these days — the slow growth and rising inequality; the recurring scandals; the wild swings from boom to bust; the inadequate investment in R&D, worker training and public goods — has its roots in this ideology.
The funny thing is that this supposed imperative to “maximize” a company’s share price has no foundation in history or in law.
The focus on “shareholder value” effectively replaced long-term thinking with an obsession over short-term gains—and reconfigured the the structure of American business around that:
This infrastructure includes business schools that indoctrinate students with the shareholder-first ideology and equip them with tools to manipulate quarterly earnings and short-term share prices.
It includes corporate lawyers who reflexively advise against any action that might lower the share price and invite shareholder lawsuits, however frivolous.
It includes a Wall Street establishment that is thoroughly fixated on quarterly earnings, quarterly investment returns and short-term trading.
And most of all, it is reinforced by gluttonous pay packages for top executives that are tied to the short-term performance of the company stock.
A related article provides a case study: IBM, which through layoffs and outsourcing (among other things), has maximized shareholder value at the expense of the people and communities that once depended on it:
The main street, once swarming with International Business Machines employees in their signature white shirts and dark suits, is dotted with empty storefronts. During the 1980s, there were 10,000 IBM workers in Endicott. Now, after years of layoffs and jobs shipped overseas, about 700 employees are left.
Investors in IBM’s shares, by contrast, have fared much better. IBM makes up the biggest portion of the benchmark Dow Jones industrial average and has helped drive that index to record highs. Someone who spent about $16,000 buying 1,000 shares of IBM in 1980 would now be sitting on more than $400,000 worth of stock, a 25-fold return.
The software startup industry is deeply afflicted by this mindset: the shareholders whose value most startups are designed to maximize are known as venture capitalists.
As we’ve said before, we have no interest in maximizing shareholder value. We’re in it to make life better for our customers, families, and employees.