Another post, another prediction, another take on a tech giant. It’s possible that in a few years when I revisit this I’m going to think it was the stupidest thing I’ve ever said, like when in 2000 I predicted that Pocket PC was going to fail (which it did) and Palm would be the king of mobile platforms (wow!). I’m actually mildly proud of that one as iOS mimicked a bunch of good things Palm had – monotasking, fool-proof navigation, developer ecosystem. And it’s about Apple that I want to talk about, particularly about one key feature where 2000 Palm and current Apple are dramatically different – openness.

I was thinking about this when last week I was looking for a tasklist software for my Mac. Several months ago I decided I was giving up on Mac Mail. It happened that I also migrated all my domains to Google Apps so I could either use gmail or a better email client. I finally chose the latter and started using Sparrow (awesome email client in case you’re looking for one). But Sparrow was lucky that I had the chance to play with it on a friend’s laptop before actually buying it. Otherwise I would have picked Gmail web client, which is better than most email clients and it’s free. The thing is, there is no way I’m going to pay $10 for an email client before I try it out. It’s not about the money, it’s about the idea of paying without trying. The problem is that Sparrow bought into Apple’s policy and doesn’t allow a trial download.

So when last week I decided to pick a tasklist software that could integrate with my other productivity tools, I was faced with the same problem. After reading a bunch of reviews, I made a shortlist of applications to try. The problem? Some of them were exclusively sold through the Apple Store and I couldn’t give it a try before buying. As a user I still had a lot of options as fortunately not every developer has yet stuck to Apple’s exclusivity. But it worries me that Apple is trying to build the same ecosystem for OS X as it did for the iOS – if you want to build an app, you have to comply with Apple’s rules and sell exclusively through the App Store. It’s going to be a lot harder to build that ecosystem for OS X as there’s a stronger legacy and users won’t easily give up on their freedom to download software from wherever they want, but Apple’s intentions seem very clear.

The problem with the walled garden that Apple is building is that is doomed to fail. I know it sounds like heresy but no walled garden has ever survived to openness and freedom. This is not a tech issue; it’s a social one. We (humans) don’t like walled gardens. Between perfection and freedom, we will always choose the latter. I don’t know if Apple thinks it’s better than any previous giant but no giant is big enough or good enough to fail. Everyone thought that AOL’s walled garden was rock solid. If in 1994 of 1995 you criticized AOL you’d be called insane. Is AOL even relevant these days? In 1998 we were afraid we would have to live under Microsoft’s tech dictatorship. Today that sounds laughable.

It looks like Apple is trying to stretch the borders of its kingdom to unthinkable limits and that is bad for innovation, and therefore for the end user. The limitations of Apple’s policy are already visible. If you’re a developer, don’t you want your users to download a free trial before buying your product? I do. Don’t you want to invite a select group of users to your beta? I do and 100 is not enough. Don’t you want to have the freedom to choose different price strategies? I do but it took Apple years and plenty of complaints until they allowed any sort of subscription models.

History shows that walled gardens don’t work and that’s why I say Apple’s walled garden is doomed. I don’t know how it’s going to happen (competitor? Apple changing its rules?) or when it’s going to happen but I’m positive it’s going to happen. So if I were you, I’d keep an eye on open platforms (HTML5?) and be ready to change rapidly. Just in case.

 

Image: Ambro / FreeDigitalPhotos.net

You got to give Google credit for sparking an intense debate about the state of social networks, and boy is it interesting! If you haven’t followed the discussion, please check at the end of this post a quick summary of the most interesting opinions with links to the original posts.

I’m not going to get into every single aspect of this discussion but I’ll tell you why I think Google+ can’t succeed in its current form, despite the fact that I’ll be posting this on G+ (and FB and TW) and the 10+ million users they've already pilled up.

1. G+ is not disruptive. True, the circles is a cool feature that generated a lot of buzz but it gets old quickly (for me it was after 3 days) and it’s not a real innovation. The problem is that G+ hasn’t disrupted the social network space, therefore giving me zero incentive to switch my entire network over to their platform. I already have 2 windows opened for facebook and twitter (or tweetdeck for that purpose) so why would I want a third one with nothing new to offer? I still think Google is in an enviable position to disrupt this space. They have access to all my email, contacts, photos, blog content, and a lot can be done with that (like automatic circles?). But it hasn’t and as a result I’ll keep using Twitter and Facebook and will keep G+ on the background just in case.

2. G+ feed is not efficient. The problem is that G+ is trying to be Twitter and Facebook at the same time and ends up being less efficient than either one. You can’t beat Twitter’s lean feed without becoming Twitter, and Facebook feed reads better. Plus I don’t follow people I don’t know on Facebook so that limits the size of my feed. Sure, I do have circles to limit the size of my feed but will I ever use those? I already feel I created too many circles and it’s impossible to keep track of who’s where after just 2 weeks. Plus I haven’t gone back to moving squares into circles since the first few days. I think there’s a UI problem that needs to be addressed (this is Google after all) but the problem is more fundamental than that. I use Twitter for broadcast content (to and from people that I may or may not know) and Facebook to connect with people that I know. I have that very clear and I know exactly when to use one or the other. By mixing both G+ blurs its use case and makes it harder for me to know when/how to use it. I don’t think the social network space is a zero-sum game (I use both FB and TW daily) but I don’t think that combining all in one is the solution.

3. Circles are not about privacy as they are about spam. G+ tells us that privacy matters, and that’s why we have circles. But does it really matter? And do circles really help me with that? We had this discussion when we first started Piictu – should the content be public or private? Will people care? It’s obvious that people are increasingly comfortable with exposing their life in public, especially the <25-year-old segment. To me the problem of friends groups is more about spam than it is about content privacy. I definitely don’t want to spam all my followers with something that’s directed at a group and I use email for that. I can see how G+ might want to be the replacement for email but that’s not clear and, by the way, Katango does a much better job at joining my friends in logical message groups. I’m skeptical that in the social network age we can control the privacy of the content we share and I think G+ is transmitting its users a false sense of control over who sees what, which can backfire. It’s me being skeptical but I’ve seen too many backdoors on Facebook to believe G+ will do any better. I think circles should be more attached to my email groups and less to privacy.

My point is, I think G+ has great features but its use case is unclear right now. I’m sure a lot of people will just switch from Facebook and/or Twitter (this one less likely, I believe) but in my opinion that won’t make G+ a winner. In any case, what G+ accomplished is already a win for the end user as I think this will drive innovation across all platforms.

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This is a quick summary of the recent discussion with links to some of the most interesting posts:

- Circles, Lists and Organization. Can we, should we, and will we organize our friends online? G+ circles is its most distinct feature and the most debated one. You can start with Paul Adams, who’s been arguing in favor of digitally grouping friends for a long time. Then read Kevin Cheng’s brilliant analysis of Google circles, which I subscribe entirely, and Fred Wilson’s follow up about implicit and explicit groups.

- Plain feed, curated feed, edited feed. Should the feed reflect exactly your social graph (a la G+), should it be curated (Twitter) or should it be edited based on some algorithm (Facebook top news). Few people are siding with Facebook. Mike Elgan has a great post on Facebook’s approach and why he thinks it’s ultimately wrong, and Tom Anderson (MySpace Tom) wrote another great post on algorithm-based feeds.

- Feed density and content. Twitter’s revolution came in the form of 140 characters. Sure it’s limiting but you can’t argue it’s super efficient. For me it meant the death of RSS and online news altogether. I now get it all on Twitter because it’s fast and I can quickly scan through the most recent posts. Facebook allows richer content but naturally less content for the same space. G+ offers even less content for the same amount of screen. Plus Facebook and G+ have likes, +1, comments. Twitter has none of those. Opinions vary. Robert Scoble is a big fan of Google+ and its feed, Mike Monteiro not as much, and MG Siegler thinks Scoble is wrong.

A lot has been said recently about how you should go about finding a co-founder, and more specifically a technical co-founder. I think the idea of “earning a co-founder” is good as it is the very structured process of co-founder dating that Elizabeth Knopf explains. However, 2 questions remain unanswered after I read this: Should you have a co-founder? And once you find a co-founder, how do you know he/she is the one?

These questions are way more important than the whole co-founder dating problem because they’re more fundamental and have a long-term impact in your startup. The thing with co-foundership is that it’s such a personal decision that you can find a million different opinions and all of them can be right. In most cases, people are driven by their personal experience and think that what worked with them should work with you. I’m not sure that’s always the case but I’ll tell you what I learned from my personal experience and you decide whether that’s valuable or not.

1. Should you have a co-founder?

There are 4 reasons why you might be considering finding a co-founder

1.  In the short term, it’s cheaper to have a co-founder than to hire someone to do the job. I hear way too many times people saying they’re looking for a co-founder because they don’t have the money to pay someone to do the job, the job being whatever: coding, designing, selling. If this is the only reason why you want a co-founder, it’s a wrong one. I would advise you to read the remaining 3 and think again. It can’t just be about the money.
2. The startup emotional roller-coaster is easier to get through when you have someone by your side that can reassure you about the soundness of your business and the possibilities of success. Let’s be honest, it’s great having someone telling you “this is going to work out” when you start questioning the assumptions, and family and friends don’t do the trick. But a mentor can, or someone else who you respect and know will always be honest with you.
3. You want a balanced team with people equally incentivized to see the company succeed. Most likely you don’t have all the skills needed to build a successful startup. Dave McClure says the perfect team needs a hacker, a hustler and a designer. I think people can combine some of those skills or even all three of them, in which case the problem will probably be time. Will you be able to be all three of them efficiently? And if not, do you want a co-founder or do you want to hire someone to fill in? That will depend on how crucial you think that role is. If it’s key and you want someone as incentivized as you, then you need a co-founder. If not or you think it’s easily replaceable, then maybe you don’t need one.
4. You want someone at your level that can challenge you and help you take the company to a whole new level. To me this is the most compelling argument to have a co-founder. When you hire a person, it doesn’t matter what your style is and what you tell her, she’ll always be an employee. A co-founder will challenge your premises and that will help you shape your idea and build a more solid business. Of course, you have to make sure your co-founder is able to do that. You can find advisors and mentors that can help you with this process but it’s not going to be the same. Advisors and mentors don’t have the time to think about your business in detail and won’t be there for all the important decisions you’ll have to make. You might be able to do it by yourself, there are plenty of examples of successful solo entrepreneurs, but please do think about this aspect before making a final decision.

2. How do you know the person you just found is the one?

So you went through the whole co-founder dating process and you think you found the right person. But how can you be sure? The right answer is you can never be sure but there are a few questions you can talk about to dramatically increase the probability of success.

Some people will tell you one way to solve this is to give a minority share to your co-founder. That way you can always pull the plug and go by yourself or with someone else. You can read Mark Suster’s opinion as he argues in favor of that solution. I’m not dogmatic about this but I do think that when you “hire” a co-founder you might create an unleveled partnership where it’s harder to challenge your assumptions because it’s “your” business. Again, to me this is the most important aspect of having a co-founder so I’d be very careful to make sure you have a true partnership.

Other than that, here are a set of questions you HAVE to make sure you talk about with your potential co-founder before you seal your agreement:

• Equity split. This is an obvious one but for some reason a lot of people postpone this conversation. As I said, I’m not dogmatic about the split but make sure you discuss this early in the process and everyone is comfortable with the final number.
• Vesting – things change, shit happens, and sometimes people decide to move on. It doesn’t matter why it happens as long as you make sure that you have a vesting calendar in place. The last thing you want is to have people leaving the company after 6 months with a huge chunk of equity, which will leave you looking for a co-founder with no equity in hand. Make sure everyone is on the same page.
• Expectations, goals, exit, pull the plug. If you read a lot of Mashable and Tech Crunch you’ll hear about companies being sold for dozens of millions or even hundreds of millions. It’s easy to be dragged into the perception that you should never accept any less than that but the truth is that most companies fail, and a lot of the successful ones either survive with meager revenues or get acquired for a small sum. So it’s important to manage expectations and set personal goals. When are you going to pull the plug? What is an acceptable exit, how long are you willing to stick around? These are awkward discussions to have early on but you better have them before you start than having to face those issues later.
• Salary. Are you going to have a salary? If so how much and when? What triggers a salary bump? This is usually an easier question to have but an important one.
• Pivot or not to pivot. This is another awkward conversation but you should talk about how willing you are to pivot and what could trigger that.

I’m sure you should be talking of other issues but from my experience these are the ones that can cause serious trouble if you don’t talk about it early on. With all this in mind, you’re ready for co-founder dating.

 

Image: Michal Marcol / FreeDigitalPhotos.net

An entrepreneur has to be adaptable. When you’re building a new product for a market that often doesn’t exist, it’s hard to have a clear path to the end goal. It’s part of the game – you try an idea, get feedback, tweak, release again, get more feedback and that until the end of the startup life. It never really changes but in the beginning it can be overwhelming as the gap between what an entrepreneur thinks the customer wants and what the customer actually wants is wider. This is, in a very simplistic way, what Lean Startup is, a concept coined by Eric Ries that helped entrepreneurs build faster customer-focused products with a very iterative approach to development. You can learn more about it here and here and even pre-order the book coming this fall.

The learn startup concept is quite attractive and simple to understand but people like easy slogans with 1 or 2 words, and with the lean startup movement came the Fail Fast movement, which for the most part is an ill-conceived idea. According to most people talking about fail fast, or more precisely fail fast fail cheap, you learn from failures (which is true) and in the beginning you know very little about your customers (which is kind of true) so you shouldn’t spend much time building a thoughtful business plan as most likely it will be wrong (which is a wrong approach). So build something quickly, put it in the market, learn from your customer’s feedback, and if it’s a complete failure you haven’t spent much money and can quickly move to something different. Of course, the cheap part depends on who’s looking at it – I’m sure an investor will never think you failed cheaply. With the fail fast movement came the Pivot movement. You can’t go around entrepreneurs without hearing people talking about pivoting, usually along with some examples of companies that successfully pivoted from a total failure to an extraordinary business.

You can see how the fail-fast-pivot movement takes some good concepts from the lean startup idea and twist them into something completely wrong. The result is a dangerous one as it encourages entrepreneurs to dismiss an idea after a failure and clashes with another fundamental feature of entrepreneurship – perseverance. There is a fine line between perseverance and obstinacy but I can tell you that the first few failures are not that line and unfortunately I’m seeing more and more people pivoting into a totally different business when they see no traction after a few iterations. When you pivot too much, you’ll often be back to the start position.

I like the fail fast approach when is correctly implemented (aka lean-startup-like) and this is how entrepreneurs should be thinking about it without going crazy pivoting all over the place:

1. Do your homework before you start. It’s true that when you start you don’t know exactly what your customers looks like but you can try to understand them better before you start. Interview people, do market research, talk to people in a similar space – there are tools to understand your customer before you start so you won't be completely blind. Also, good research can tell you not to start an idea before you try to fail.

2. Build a plan. You will likely break your plan after a few months (damn! even after a few weeks) but that doesn’t make it useless. If you don’t have a plan you can’t measure success. Build a plan, adjust it as you go, and learn from those adjustments, but have some guide to tell you where you should be headed.

3. Iterate (and fail) but don’t forget your long-term goal. It’s easy to get lost in the details and see every failure as the end of the world. Every time you iterate and your clients tell you they don’t like something, step back and think about your long-term goal. Why are you building the product? How does that failure affect that goal? Often times you’re going crazy on a feature that is not that relevant for your end goal.

4. Before you pivot, think if the problem is your idea or your approach. Are you targeting the right demographic? Are you not reading your customers correctly? If you have some successful customers, talk to them and see why they like your product. Learn from that and see if you can replicate that to a larger audience. Exhaust your idea before you move on to a totally different one.

5. Fail respectfully. This only applies if you raise money. If you do raise money, don’t go to your investors saying, “I failed cheap”. Be respectful to your investors, tell them what you tried to make things work, guide them through your thinking process and the reasons that made you shut down the business. Listen to their feedback. Don’t be an uncaring asshole.

I know a lot of people will think this advice is too conservative but it’s intentionally so. I don’t think you should build a 100-page business plan and insist on your idea indefinitely but when I hear the craze around fail fast and pivoting I feel people are just forgetting that a startup is first and foremost a company. A company requires management and hard work.

 

I’ve heard a few politicians in Portugal, including the President, asking entrepreneurs to be the engines of the economic recovery. These are not newcomers, these are people who have been in the political scene for a while, and for those who don’t know, the President himself was prime minister for 10 years during the 90s. So after decades doing nothing or very little to help entrepreneurs, these men now request them to be the saviors of the country. It’s a really wrong approach to the proverb “teach a man to fish and you feed him for a lifetime”. Instead, these politicians are telling a man to fish without giving him a fishing rod.

I already wrote about how to build an entrepreneurial culture and Portugal has a long way to go until entrepreneurs can be a relevant class. This change won’t happen overnight and we need more than political statements to make it happen.

For years, entrepreneurs have fought an uphill battle due to unnecessary bureaucracy, a dysfunctional judicial system, lack of VC money, and excessive government weight in the economy among others. If we exclude some measures to reduce bureaucracy, nothing has been done to solve these issues. As a result, nothing has substantially changed to promote real entrepreneurship.

My fear is that politicians think that an empty statement will make any difference. It won’t. I feel the situation is changing. Mostly because of the dire economic situation, more people are considering starting their own business, and as I said before, we should take advantage of momentum, wherever it comes from, to promote entrepreneurship. If a domestic economic recession combined with an overheated VC industry abroad can give you that momentum, take it and do something useful with it. Go fix what’s wrong, get yourself out of the way. But please, don’t just say empty words.

 

I’m going to take a break from being a bitter motherfu**er who criticizes everything to actually complement an idea I recently heard about. Disclaimer: I was not asked to promote this nor do I have any sort of participation on this idea.

Talking to a friend sometime ago, I heard of this program that was sponsoring Portuguese early stage ventures to come to Silicon Valley for 3 months and learn something new. I thought the idea was smart but I lacked more detail and finally a few days ago I managed to talk to Torben Rankine, who runs the show here in the Bay Area.

The program is called Global Strategic Innovation Accelerators (I’m out of breath!) and the URL is longer than my Firefox address bar. Otherwise the idea is fairly simple. Every quarter, 3 companies are picked to come to Silicon Valley to spend 3 months at the Plug & Play Tech Center and interact with the Bay Area’s entrepreneurial community and ecosystem. The companies can have different goals but they do have a goal they’re trying to accomplish during the 3 months. The program sponsors part of the expenses although companies have to pay a small fee and living expenses.

The application form is short and to the point and the whole process is fairly transparent. As you can guess, I would change a bunch of the program’s details but overall this is a great idea for a number of reasons:

1. Companies have to pay. Everything free is deemed worthless so the fact that companies actually have to pay, even a small amount, ensures that whoever is applying is serious about it.

2.  Immersion in the Silicon Valley community. If you want to learn entrepreneurship, you have to live it, talk to founders and investors, see it with your own eyes, and the SF Bay Area is arguably the best place to learn entrepreneurship.

3. No bullshit. This is not an academic program – it’s not about listening to a bunch of people telling you how to do stuff. There’s a small training component but this is you, your idea and your goal, and it’s up to you to take the most out of it.

In brief, what I like about this idea is that it’s simple yet powerful and can produce long-term impact. It’s not the typical government-run ultra-bureaucratic free program that treats you like you’re 5 years old and makes you fill 100-page application forms and in the end requires a 50-page report. As I said, I would still change a few things and make it leaner, less formal and find a shorter name and URL. But that’s me.

Putting it together and running it is a great achievement and I hope this gets some deserved publicity back home. And of course, it’s always good to meet interesting countrymen and discuss ideas in Portuguese. If you’re around, there are enough buttons around this website that will allow you to reach me.