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Business General Technology

Chasing waterfalls

In recent weeks, we’ve seen the launch of two highly anticipated consumer technology products, The Humane AI Pin and the Rabbit R1, and the response has been underwhelmingto say the least.

But these failures could have been predicted and avoided and weren’t. I believe their failures say a lot about what’s wrong with the tech industry today and demonstrate a concerning trend that has been creeping up for some time.

In the field of product development, there is a concept of an ‘MVP’ aka a ‘Minimum Viable Product.’ The idea — derived from the Agile software development practices and popularized by Eric Ries’ book ‘The Lean Startup’ — proposes that the correct way to bring a new product to market is to focus on creating and releasing the simplest version of the product you can that adds value quickly, and getting it into the hands of stakeholders early. This concept allows a company to minimize upfront risk while taking advantage of customer feedback to inform its roadmap, ostensibly leading to products that will be more likely to secure a foothold in a market.

On paper, and in practice generally, this is a sound methodology to operate within, and the folks at Humane and Rabbit would argue they are following this. So what went wrong?

Arguably, among other things, they’ve missed the most essential word in the ‘MVP’ initialism: Viable.

You only get one chance to make a first impression. 

When the iPhone was announced, the product was filling a noticeable gap in the market. Most consumers had clunky feature phones, and the ‘smart’ phones of the day were bulky and complex. Steve Jobs’ famous keynote presentation sold a vision of something better, and incredibly, the product that ultimately shipped to consumers met or exceeded the expectations of the product set by this demo.

While Humane and Rabbit both draw a lot of inspiration from Apple with marketing and design aesthetics, they seem to be missing the key promise that every product Steve pitched lived up to:

Under promise and over deliver.

Steve sweat the details because he knew they mattered. As boastful and braggadocious as he might have come off in that presentation, he knew he had a product that could back it up. One that would blow people away.

Both Rabbit and Humane have spent a lot of time and money marketing the idea of their products and their vision of how they will change consumers’ lives.

However, as many reviews have bluntly demonstrated, in many cases, the features the products ship with today barely work. Much of the visions these companies have sold depend on integrations, features, and experiences that do not currently exist. It seems that neither product, in its current state, does enough today to warrant its existence, especially compared to what a smartphone can already do.

They inevitably knew this. They knew the products would not fulfill those promises on day one, but they launched anyway. 

There is nothing agile about launching a product on the back of a roadmap.

Neither Humane nor Rabbit have set themselves up to succeed.

Agile development aims to prove viability through continuous discovery and iteration, and lean methodology seeks to reduce waste.

The benefit of an MVP is that it allows a company to quickly discover new opportunities and shortcomings, adapt, and change course as necessary. 

By promising functionality unavailable at launch, they’ve released products that cannot, and possibly will never, meet consumer expectations.

By launching to disappointing reviews, many would-be early adopters will likely choose to pass on these products. This essentially negates the value of their marketing efforts thereby squandering most of the value the company would get from an early launch. Had expectations been set lower, this might not be the case.

These companies now face some tough choices: 

  1. They can spend their resources fulfilling their promised roadmap, potentially ‘baking in’ their core mistakes and gaining nothing from the process.
  2. Or they can delay or dispense with their promised roadmaps, go back, challenge their initial assumptions, and rework their products to fix core mistakes identified by the early launch.

Either path is a recipe for disappointment. There is a reason Apple rarely discusses future products or features.

So why is this happening? And why now?

The truth is, we were living in a tech speculation bubble for the last decade or so.

With interest rates near zero percent, entrepreneurs had easy access to capital with few strings attached. This also meant that there was little pressure for a company to deliver a profit. Instead, the metric du jour was user growth. If a company could demonstrate massive user numbers by disrupting a pre-existing industry (like taxis with ridesharing, for example), the prospect of eventual profitability was enough to keep the funding coming in and the company valuation going up. With valuations continuing to skyrocket, early investors were able to cash out with an amazing return. As such, a frequent recipe for “success” was to spend a ton of money to disrupt an industry, get massive user adoption, create public hype, take the company public, cash out, and leave retail investors holding the bag. 

However, this formula came to a screeching halt in early 2022, when companies realized that the pandemic era ‘pivot to digital’ would not produce perpetually sustainable growth numbers (something else that should have been obvious), and inflation started to skyrocket. Investors turned to more conservative investments as the US Federal Reserve Bank raised interest rates to tamp down on inflation, shifting the focus back towards profitability.

So, the pressure is on for companies like Rabbit and Humane. They have grand, long-term visions of industry disruption and transformation, but their investors expect more immediate returns than they did of companies of the recent past.

Because making your own hardware device and accompanying software platform is expensive, the inclination to ship a product as soon as the hardware is ready with a barebones version of the platform is operational is understandable.

Consumers are not investors. They do not buy products based on pitch decks; they buy products based on what they do. If a company sets expectations high, and the product fails to meet these expectations, consumers will walk away, and the odds that they’ll come back are slim. 

In their current form these products are not viable, maybe the idea they laid out one day could be, but because they jumped the gun and launched too soon, they may never get the chance to discover their ‘MVP.’

Categories
Business Technology

Tile has never lived up to its initial pitch

The brilliant and talented tech commentator Marques Brownlee (aka MKBHD) has published a video discussing Apple’s built-in advantage and how it relates to the accusations of anti-competitive behavior against Apple by Tile.

I really liked Marques’ piece, and I think he did an excellent job of laying out Apple’s historical pattern, but I feel it missed something big.

John Gruber nailed exactly what it is:

The problem for a company like Tile — to name one high-profile company that is not pleased by Apple’s entry into its market — is that location tags are inherently simple, and Apple’s Find My network is bigger and better than Tile’s device network. Everything about AirTags is better than Tile, if you’re an iOS user. So it goes. If the answer to the question “Would this add-on be better, and be useful to many users, if it were built into the system?” is yes, you should expect it to be built into the system sooner or later.

Long-term readers of this blog may remember I was an early crowdfunding backer of Tile and managed to get some interesting questions answered early on.

Here is the thing: I loved Tile’s trackers, but they have never lived up to the promise of the initial pitch video for a host of reasons:

  • The trackers themselves weren’t loud enough.
    If the missing item was in a coat or a bag, or anything muffling it, good luck finding it.
  • The radio connections were awful.
    I can’t tell you how often the app would fail to connect to a Tile tracker that was in the same room, let alone one that was on another floor.
  • Proximity indication was basically non-existent.
    In the initial video, Tile showed something akin to ‘signal bars’ to indicate proximity. Honestly, that concept was the thing that convinced me to buy it. Nothing even close to it ever materialized

I also hated having to replace trackers annually (or ‘Re-Tile,’ as the company calls it.) It was years before a model with a replaceable battery came along, and it was a more expensive option.

Just based on the core set of features and functionality, AirTags improve on Tile in every regard. And that’s before we talk about Apple’s pre-installed network or the company’s careful consideration of user privacy and safety.

The finding interface alone, with a clear indication of distance and direction, delivers on Tile’s initial promise far better than Tile ever did.

The only thing Tile really has going for it is that it was first to market. If Apple were to be restricted from entering a market like this, consumers would be worse off, not better. In this case, Apple’s innovations and advancements will push the whole market forward, and competitors will be sure to follow.

If Tile wants to make a case that Apple has acted anti-competitively, it will need to show how the company’s actions have harmed consumers, and honestly, I don’t see it.

Apple has built a better mousetrap, and while it has undoubtedly used its unique market position to do so, this is just good product strategy in action.

Categories
Business Technology

On tracking transparency

My good friend and former colleague, Adam Tuttle, shared this article today about tracking cookies.

I think it’s worth a read as I think it does show the digital advertising industry sincerely grappling with a future where tracking is more constrained.

I think this makes a good point:

“As an advertising industry, we’ve done a very poor job of communicating to the end user as to why we’re tracking them, and why this is beneficial. Few consumers understand how any of this works, and with lack of understanding it’s simple to just say no and block it.”

Bill Tucker, Group EVP, Association of National Advertisers & Executive Director, The Partnership for Responsible Addressable Media.

This is absolutely true. I think the marketing/advertising industry has looked at tracking with an intense amount of entitlement (dare I say “privilege” even). Opposition to tracking is often seen as a nuisance that the industry often rolls its collective eyes at.

But truthfully, tracking is a matter of consent. Something many marketers are ambivalent about. (See also: spammers.)

Businesses have rarely had to make the case to consumers as to how being tracked benefits the consumer. These tools and campaigns are often run by outside agencies/companies or departments mainly concerned with showing a great ROI, not customer happiness.

The question becomes, really, IS tracking actually beneficial to consumers?

Can you make a strong argument that blocking cookies/tracking is a harm to consumers?

The defense I often hear from those in the industry that targeted ads are better for consumers than regular ads. Are they? That feels like a false equivalency to me. Do we know customers want to see ads at all? 

Another twist on this I’ve heard recently has been that people would have to spend more time searching for things to buy were it not for targeted advertisement. That, to me, is also a false equivalency.

I know it’s heretical to say, but if consumers never learn about these goods and never buy them, are they really missing out? How many of these things we have advertised to us are things we actually need? How much are these goods really making people happy? Make that case to me. 

Now, I see some validity in the argument of tracking being used to support journalism. But consumers tend to think/act in the short term, so I think it’s a hard pitch to make to many. Additionally, paywalled/subscription content is becoming more accessible and successful than ever. We’re seeing strong evidence that people are willing to pay for quality content. 

As ActiveCampaign CEO Jason VandeBoom once said:

“The best marketing experience is one the person being marketed to enjoys.” 

Jason Vandeboom, CEO, ActiveCampaign

If marketing as we know it wants to survive, it needs to adapt or convince consumers that the benefits of tracking outweigh the perceived cost. But I think, if even the best marketing professionals in the world are struggling to make that sound sexy, that speaks for itself.

Categories
Business Pop culture Technology

Facebook’s GIPHY acquisition is evil genius.

I’ve seen a decent amount of bewilderment as to why Facebook would spend $400, 000 on an acquisition of GIPHY.

Honestly, I find it surprising that so many people would be confused by this because truthfully, it’s a brilliant strategic move.

To understand why, one only needs to look at all the ‘Like’ and ‘Share’ buttons that litter the web currently.

Even when you’re not using Facebook, every ‘Like’ and ‘Share’ button on the web uses browser cookies, IP addresses, and a host of other methods to track your behavior. These embedded pixels monitor almost your entire browsing experience and report it back to Facebook, who then uses it to profile you to better target ads at you.

But as Facebook CEO Mark Zuckerberg himself has pointed out:

“I believe the future is private,”

https://www.wired.com/story/f8-zuckerberg-future-is-private/

This is remarkably prescient and brilliant positioning. Because from a PR perspective, it makes it seem like Facebook is moving towards caring about privacy, when that is not really what he means at all.

In the last few years, we have seen the rise of tools like Slack and Discord to communicate and organize. These are perceived as “private” communities to users. And they represent a challenge for Facebook because our behavior in them is cut off from their data mining.

For Zuckerberg, “the future is private” is a challenge the company faces, not a business opportunity. Facebook’s continued growth requires a way to peer into our private communities.

So how do you find a way to track things that go on inside those walled gardens?

Same way you would the web: Tracking pixels.

And who has a large market share of image files embedded in closed chat conversations and “private” communities?

GIPHY.

Categories
Business Chicago General Technology

Congratulations to ActiveCampaign on 100K Customers

Today ActiveCampaign announced they had surpassed 100,000 customers and over $100 million in annual recurring revenue.

When I joined the company in 2013, we were a team of 10 in a tiny office downtown. At that point, we were still transitioning from a downloadable software to a software-as-a-service model and had not yet launched the company’s flagship automation builder that would go on to spike our insane growth path.

Something that has set ActiveCampaign apart from its competitors is its dedication to customer care. Although the company has changed dramatically, and not EVERY practice has scaled (at one point, I would designate a half-hour at the end of every day to handwrite a personal thank you card to every customer who purchased an enterprise account) the team’s commitment to being customer-centric has never wavered. I believe if they can keep that as their guiding light, they will continue to find success.

I’m incredibly proud of the product I built at AC, but I’m even more proud of the fantastic customers and colleagues I helped in the process.

The company released this video this morning, which inspired me to write something. The video not only features a photo with me in it but a few that I shot while working there. It made me smile, and I’m proud to share it. Congrats to the whole ActiveCampaign team. Here’s to 100,000 more!

Cheers!