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Entrepreneurship

Hiring via API

It is easy for a team of developers to start a startup right now. Indeed, many are. There are now over a hundred developers in each new Y Combinator class! These are people that could otherwise be working at your company.

Why would someone start their own company rather than joining yours?  It isn’t because they are likely to make more money.   A developer has a much higher expected return going to work for Google, Dropbox or Square than doing their own thing. I believe it is culture, not money that is driving their behavior.

“Do my own thing.”  
I speak with lots of developers every week. If they are good I try to hire them. If I fail it is rarely because they choose another startup. Usually they say “I want to do my own thing.”  This translates to “I want to decide with who, how much, and on what I work.” This is a culture decision. This may be working only 20 hours a week. This may be working from 8pm-8am wearing PJs.  This may be working while traveling in Asia.

If there is all this talent out there “doing their own thing,” how does a company capture their value?
The simple answer is to become their customer. And no, i’m not talking about contract work.

I’ve never met a talented person who said “I’d rather do contract work.”  Developers don’t like equating their time to dollars.  They don’t like working on someone else’s stuff.  Good developers want to be as close to their customer as possible.

Partnerships written in code
Luckily APIs are an innovation that allow developers to create meterable value for a company without being employed by said company.  A developer gets paid for the value they create not the hours they put in.

Instead of building a notification system for your iPhone app (requiring an additional engineer and $150k in total costs), it is easier to pay Urban Airship a fraction of a penny every time you send a notification.

I encourage developer teams to make a meterable service that many companies need but don’t want to build themselves.

As a company scales they may end these API partnerships and vertically integrate – building every piece of their service and value chain. At 2M notifications per day, it might make sense to build your own Urban Airship. But maybe you don’t ever want to get into the business of sending notifications, and you don’t have to.

It is often said the best path to success is focusing on what you are good at. Everything else you should outsource to a partner.

APIs are partnerships written in code

Case Study: Sincerely Inc.
At Sincerely, many aspects of our service and business have been written by people who don’t work for us:
Postmark – instead of running our own SMTP server.
Appirater – instead of writing our own app review notification system
Hoptoad – instead of building our own crash reporting system
Urban Airship – instead of buildling our own notification system
Geckoboard – instead of making our own dashboard
Linode – instead of owning and running our own servers
Flurry – instead of writing our own analytics
Instagram – instead of creating our own community of photo content
Github – instead of hosting our own repositories

How you can hire us
Sincerely’s focus is making it easy to send real photos in the mail from a mobile phone.  We’ve gotten good at collecting physical addresses from users. We’ve learned how to bill users for small transactions.  We’ve set up relationships with print centers around the world.  We’ve built powerful customer support systems that address the challenges of sending real things in the real world.

There seems to be a new photo app launching every week. It would be a huge undertaking for each of them to recreate what Sincerely has built.  Our Ship Library for iOS makes it easy for any app to add photo print & delivery functionality in less than 30 minutes.
 
I believe we’ll see a pattern of more companies launching APIs and launching them earlier in their life.  It is the first step of a biz dev strategy – and it is a step that developers are comfortable with.  We get to talk to each other with snippets of code.  We don’t have go through a big legal process to work together. We can even create value together without having money change hands.  Heck, you can scale to hundreds of partners without having a biz dev guy – sounds like something a lot of developers I know would really like to hear.

What services do you wish developers “doing their own thing” would build?

*There is a good discussion going on over at Hacker News – join in

Xobni’s 5 stages of growth & 5 pivots (preso from web 2.0 expo)

I recently had the pleasure of presenting twice with the leaders of the lean startup movement Steve Blank and Eric Ries. They’ve started a startup movement I’m a very big fan of. If you aren’t familiar with their work, I’d recommend reading their blogs. To concisely describe this movement we’re calling “lean startup” I’d liken it to a method of company building we’ve subscribed to at Xobni for a long time and that has only recently had a name. A Lean Startup is a startup with quickly iterating cycles of customer development and product development. Lean Startups stress product market fit before scaling and are characterized by a metrics driven culture and low cost experiments. I love this stuff. I can’t imagine building a company another way.

Today I spoke about Xobni’s lean startup tactics as part of the O’Reilly’s web 2.0 expo. The slides are below.


Follow the Sales Guys

Want to build the next big personal productivity application, communication platform or X?  Follow those that have the most to gain from it.

With any new technology, the users on the forward edge of a trend are the people who stand to benefit most.

Follow the sales guys

Those that benefit most from improvements in personal productivity are sales people. Sales jobs have the clearest correlation between personal output and compensation among any role inside a company.  This direct correlation leads to millions of sales people across the web searching for any edge they can find to increase their sales (and therefore their compensation).  Make twice as many calls in one day – make twice as many sales.

Jawbone, Blackberry, Xobni, Virgin America’s WiFi enabled flights – all of these products helped sales people be more productive.

I like building stuff for sales people because of how clear their incentives are.  To understand a man, understand his incentives.

Follow the marketers

The people that benefit most from improvements in communication technology are marketers.  In no other role is success more closely tied to getting your message heard by more people.  Get your message heard by twice as many people – drive twice as many visitors to your product/website/store.

Twitter, email, Facebook – whether it be marketing a product or marketing themselves, the people that have the most to gain from new communication technologies are marketers.

Want to build a new startup in the personal productivity space? Listen to the sales guys.  Want to build the next big communication platform?  Get to know some marketers.

I guess this is all just a corollary of knowing your customer.  But I thought it was important to break it down just the same.

What do you want build?  Who are you following?

Starting Is The Hardest Part

A few weeks ago I completely ruptured my right Achillies tendon.  I will be spending the next 3 months doing very little other than sitting behind a computer, book, or tv (likely in that order).  So, it happens to be a perfect time to start a new project: this blog.

I’ve been meaning to start a blog for a long time – but I’ve been so busy working on Xobni that it has been tough to get the free time to write outside of work.  Fortunately, I recently hired a great new head of communication that will be taking over responsibility for the Xobni blog – a responsibility I’ve had for over 3 and a half years. Hopefully this will open up time for me to write more on my personal blog.

Like any new project the hardest and most important part is actually getting started.  So, I’m starting today. I don’t know where this will end up.   I’ve got a good idea for where it will start, but I know it will change.

The Idea

I like to surround myself with makers – people that do stuff.  I wrote a blog post about a few of these friends 3 years ago. My friend Trip from Scribd encouraged me to post my article on his website.  It has now been viewed over 19 thousand times.

I also really like meeting new people and listening to their dreams.  A lot of entrepreneurs come to me these days asking for advice on product, marketing, building a company, and inevitably raising money.

So I’m starting out with the theme of Matt Brezina & Friends for this blog.  I’m going to write about the people I meet and the things they are making as well as about projects I’m working on.

I’ve never been one to spend time with a narrow group of friends. I usually find myself spending time with a broad range of friends with a myriad of backgrounds.  So you’ll just as easily find me writing here about new bands following their dream,  software companies solving new problems,  non-profit entrepreneurs solving the world’s problems, or even my oldest buddy spending a whole year as a “full-time friend.”  I think I’ll write about that last guy first – he has an incredible story.