How to Start Up

With the endless proclamations of the startup funding apocalypse inundating all our channels, it might be useful to consider how to start up a software thing and do it well on the cheap. I’m not talking about using the “cloud” or how you ought to look at open source… there’s plenty written about those and they pretty much fall into the “duh” category.

This is as good as any characterization of what we are facing. It’s not good. But there really is a lot of potential opportunity, heightened by the dearth of folks who can comfortably funnel some personal money into a project. Innovation marches on, and the gaps to fill with smart products, quickly developed, are accumulating at just about the normal rate. A project spun up with truly minimal cash and a real market, not a speculative one, will succeed if anything can in the next 12 to 24 months.

In the past couple of months, I have had the opportunity to advise and look at a number of Web/software technology ventures that meet these criteria, but are crippled, or doomed, because they just don’t know how to get started efficiently and set the stage for great things.  Here is some the advice I have given and thoughts that have come to mind of late.

  1. The Prototype Trap
    Beware of building a throwaway prototype, something that appears to work but really is nothing more than carefully propped-up demoware. In the good old days, such a diorama might have raised funds, but building it cost entrepreneurs money and served as nothing more than a starting point for spec’ing the real product. Don’t build a prototype; build an alpha, and define “alpha” in terms that accomplish your goals.  It’s infinitely better to choose platform(s), language(s), deployment environment, and base features than to build garbage demoware. The inital results won’t be as pretty as the polished garbage, but when you see something working, it’s really working. You’re team has identified real risks and pitfalls rather than emptily theorizing about real costs and unknowns.
  2. Hire/Partner with a Leader
    If you aren’t technical, or aren’t technical enough, hire someone who is. If you are human like me and need an invested collaborator, find that person as one of your primary efforts. Don’t accept that you tech lead has to be part of your outsourcer’s organization or that you, the most accomplished well-connected business professional that you are, can manage the risk yourself. Find a technical collaborator who grooves with your vision and working style. Offer equity for participation, hire a consultant who has a real interest in what you are doing and who will come aboard, or best of all spend on this full time hire, offer equity, and build a real partnership for execution. Spend more than 50% of you start-up time and energy identifying and exchanging ideas with this person. It is an obvious and critical investment that will yield staggeringly good returns.
  3. Start Microscopic
    Don’t bite off more than you can code! Sounds obvious, but it’s such a common mistake. If you start by identifying the bare minimum functional requirements to demonstrate your mission with real, working code you are comfortable handing over to alpha users and potential investors, and potential partners and staff and build nothing more… well, that’s really the start up app holy grail. Few achieve it, believe me. I think the tendency is to fail to find the perfect mix of focus and flexibility. If a project takes in the neighborhood of a month to implement, chances are very high that during that time the team will learn substantially more about the problem, the market, potential users, and competition that changes will happen. I’ve got some rules of thumb for this, and I will share them in a follow-up post. I know; you’d think this is common sense but I can assure you that very smart, savvy people with excellent ideas fall into all of the traps I’m writing about.
  4. Interest Alignment
    Regardless of who is building the alpha, make sure your respective interests are well-aligned. Your technical leader will push on topics such as framework choices, development environment, source control, and implementation time. Equally important is User Experience and performance, which will float or sink the idea in an instant on the monitor of your first alpha user! I like to set milestones that are small and very well-understood, and use them as checkpoints for Interest Alignment. Are the tools and framework choices holding up? What hackery has taken place to build this iteration, and is it something I want to inherit and support in beta and beyond? What code or approach was “borrowed” from another project? Are the resources still the best possible and invested, or are we slipping to the back burner? What User Ex compromises have taken place or are about to take place? These questions and more are relevant when implementation is done by outsourcees, contractors, and even new employees. And, one immutable fact is that if you are outsourcing, your outsourced team has fundamentally different interests than your own. The closest those interests align is in the goal of having your business survive. But, you need to do much more to lead the market and innovate, and they need you to survive and continue providing a steady flow of income.
  5. Alpha Wise and Beta Foolish
    Go into it assuming you are going to succeed, where success here is defined as moving from Alpha to Beta and eventual launch with real users and enough funding to do it all justice while not starving. Getting apps to market, and a large component of the art of development, is compromise. Finding the optimal trade-offs as goals change and timelines compress is not scientific, despite what a lot of books, brochures, and coursework purport! You often have much more wiggle room with the alpha time line than with subsequent ones. I always try to use this to advantage, insisting on building enough of a foundation to support what we imagine will subsequently sit atop it all. It’s very important not to shortchange your initial implementation and have the confidence to build solidly. There will be compromise, but don’t rush these decisions; a quicker-to-build, shaky alpha will always cost more to revisit as you are sprinting toward beta and launch than the cost of building solid and letting the foundation have some settle time in alpha.
  6. Outsourcing: The Glass is Half Full and Evaporation
    Assume the worst when you are outsourcing. There are many, many strategies for managing outsourced engagements, but the best is to assume, at the outset, a pessimistic disposition. If things fail in some way, you will be prepared to minimize and deal with the consequences. Competent outsourcing managers and teams expect this, and it has little to do with your confidence in them, or their ability to earn your trust. Since Interest Alignment is implicitly handicapped when outsourcing, both parties must make the most of it. Excuse this analogy, but you are a client, and they are the server. Code defensively! Extending the glass analogy, I like the term ‘Evaporation’ to describe what happens when that half-full glass sits around exposed to natural factors. Essentially, if you don’t put effort into ensuring a quality product via testing, frequent contact and brainstorming, and code inspection done in-house, you face Evaporation. Over time, that half-full glass get emptier, and emptier.
  7. Outsourcing: It’s Your Source Code
    Always have access to your source code and documentation. Ensure that code builds and works on your hardware and subject it to your high standards. Know the dependencies yourself, and ensure that dependency bloat doesn’t occur on your watch.  The unthinkable extreme case of source code kidnapping happens more often than most people realize.  But death by a thousand cuts can occur when your team is not vigilant about quality.  Your app will bleed to death from a zillion cut corners. Keep an eye on updates every day.  After all, this is why you hired or partnered up with a rockstar technical leader.
  8. Live with It!
    Well before real users assail your system, make sure you and your team understand all of the implications of running it. How many machines or could slices do you really need? Does the code recover from failure? Does it care? What registers as a catastrophic crap-out and waking someone up at 3 am, and who exactly gets that call? Rock sold stability is not expected in alpha, after all that’s why it’s alpha. But if you aim for better and achieve it, you will stand out. Live with the system you are deploying for a week before unleashing it. It will probably result in some work and living with an improved system for another week, but the time burned is another kind of important investment you will not possibly regret.

Starting things up isn’t easy or straightforward. But it ought to be fun, predictable, and inexpensive.

DRR and “What Happened?”

I am the former CTO of Digital Railroad, Inc. With the very difficult shutdown of DRR behind us, I’d like to set the record straight where I feel it is ethically OK to do so. Photo industry commentators, outside the fray and at times without a good understanding of what happens when a business is in distress, have attempted to lay out a time line and answer the elusive question, “what happened?” I’m writing this to correct some of the misinformation, and put forth clearly that the creators of Digital Railroad did everything possible to prevent the difficulty that our loyal customers are now enduring.

Among the things I cannot do are single out any individuals or companies, neither to praise nor criticize them, and please know that both praise and criticism are well warranted. I also cannot correct or clarify all of the misstated and erroneous information on various blogs, but I will make a few important points.

I hope that among the readers of this post are some of you with whom I had direct interaction through this difficult period. Each of you knows how the small DRR team that remained to the end (and beyond) fought hard to bring about a better resolution than was ultimately possible.

The most well-intentioned, objective explanation was posted by Allen Murabayashi of Photoshelter this week, and you can read it here. Allen was an insider to a degree because of his good work helping push for salvaging DRR photographer archives, which would have benefited our members and Photoshelter, both. As he reported in other posts, he also was in touch directly with investors and the DRR management team during this time. Nonetheless, his account gets some of it wrong. He writes:

“Portions of this document might be factually incorrect – I don’t vouch for the complete veracity, I’m just trying to shed some light on the situation, so that photographers can gain some understanding of the situation.”

True and honest. Thanks also, Allen, for not speculating on how DRR came to face financing challenges prior to the publishing of John Harrington’s post. DRR was a company with significant revenue and also significant investment. The economic downturn presented us with a time line for additional financing against which we could not deliver a solution. This despite strategic opportunities that never came to light publicly but were very much in play. Any of those opportunities would have resulted in a remarkable future for DRR and our members. But, they were not to be realized.

When Diablo Management was retained, it’s mission was not to liquidate the company, but rather to identify and accelerate any of a number of potential deals which would have preserved the business and the platform. Shutting down the company was called for only after the funds allocated to pursue potential deals ran out. Note that employees were not all let go simultaneously, and even some who were let go volunteered time to continue efforts to salvage the business, or minimally to export photographer and agency assets.

“Potential acquirers were asking questions, but there was no one at the company who had intimate knowledge of the business. Diablo tried to assemble answers, but they didn’t really know the entire situation.”

That’s not correct. I personally dealt directly with most of the folks asking questions, and with others indirectly. I am aware of every potential deal and did not turn my attention away from them until all were exhausted. During this time the team also made contact with a number of DRR members who had very difficult business situations to resolve, and these members were able to do so with the help of the staff who remained. I cannot sufficiently emphasize the fact that the dedicated team our membership came to know over the years went well above and beyond the call during DRR’s final days. Of course, I know this means little for those who have been dealing with major headaches as a result of what transpired.

Finally, Photoshelter’s assessment of the technical issue encountered exporting images via FTP syndication is close to what transpired. The syndication subsystem simply could not keep up with demand during peak times of the day. DRR staff (or former staff) were monitoring to a degree and taking action, but keeping systems healthy became impossible when access to office equipment, VPN’s, and DRR engineering tools was no longer possible. At no time was access to images deliberately blocked, as has been claimed elsewhere (not by Allen or Photoshelter).

“It is easy to see how DRR’s demise can damage people’s belief in the entire space for online archiving, portfolio, and digital storefront providers.”

Agreed. It’s my hope that faith in the space and innovation around it are not damaged for the long term by our story. DRR’s fate is not a result of the business we were in, or the platform we built, but a consequence of strategies and gambles often taken by early-stage business in order to grow. In our case, accumulated risk and recent severe economic developments combined to close off one opportunity after another, until none remained.

Poncakery is Live!!!

Well, besides the obligatory useless “welcome to my blog” post, I can’t think of anything more important than linking (often) to, Monica’s new business website. Monica is an amazing pastry chef/cake scupltress/creative artist extraordinaire here in our hometown of Brooklyn, NY. If you ever need a remarkable cake in the NYC area for a special occasion, get in touch!

Hello from over here.

I’ll start off with the obligatory, “now what?” I’ve finally made the time to start up a blog, or rather, the time was made for me. Since I am a person of relative leisure at the moment, I am focusing on the very, very long to-do list that’s been accumulating for the last several… years. And now I will need to cultivate a habit of discovering useful things to say. Or just blather on, adding bits to the Web, raising the temperature at so many faceless data centers, and accelerating global warming.

Stay tuned to see which it’ll be.