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Signal v. Noise: Business

Our Most Recent Posts on Business

Bootstrapped, Profitable, & Proud: SparkFun

Matt Linderman
Matt Linderman wrote this on 24 comments

When Nathan Seidle blew up some electronics in late 2002, he began to scour the internet for replacement parts. But the results disappointed him. “The state of online electronics stores was pretty horrible,” he recalls. “I remember just wanting to see a picture, any picture, of what it was I was trying to order. But with that frustration came the clarity that there was an opportunity. Maybe, just maybe, I could start a website that sold electronic bits and pieces — and they would have pictures. Non-blurry pictures! And maybe even a picture of the back of the electronic device. In 2002, this was blasphemy. Electronics were ugly — who would want to see the back side? But I knew I did, and I figured there were a few other people with similar needs.”

NSSo in 2003, he started brainstorming business names. He realized making sparks is really what started him down this path. “Any time I’m frying things, I’m always having fun and pushing the limits of my abilities. When I found the SparkFun.com domain available, I knew it was perfect.”

Not knowing what to sell, Seidle (right, in a photo from CNNMoney.com) originally purchased just a handful of products. The orders started coming in immediately, but at a slow pace — one or two per day. “Over time, I was able to write more tutorials and build more projects using the parts we sold,” says Seidle. “It was not until 2004, once I graduated from University of Colorado that I had time to design original SparkFun products. Ever since, we’ve been growing our design and production abilities.”

Now, SparkFun helps customers assemble all kinds of projects, from an earthquake data logger to a high altitude balloon to a touchscreen mouse. Products include things like resistors, LEDs, humidity sensors, and LCD screens which are sold to crafters, designers, artists, DJs, teachers, professors, and engineers. In addition to online tutorials, SparkFun now offers classes too.

Starting from scratch
The business began with about $2500 worth of credit card debt, according to Seidle. “I believe about $2000 went to inventory purchases and $500 went to infrastructure including $25 for a scale, $15 for a tape gun, etc. I forgot to buy boxes to actually ship product to customers. How I made it this far is good fodder for pundits.”

Arduino Mobile Camera
This Arduino Mobile Camera by “Dr_Speed” uses Bluetooth control from an Android phone, a Canon A530 Camera, and a Vex mobile base.

Continued…

The incredible delivery system of India's dabbawallahs

Matt Linderman
Matt Linderman wrote this on 37 comments

Every day, approximately 4,000 dabbawallahs deliver 160,000 home-cooked lunches from the kitchens of suburban wives and mothers direct to Mumbai’s workers in “the world’s most ingenious meal distribution system.” (Hey UPS, how’s that for logistics?)



Dabbawallahs pick up the home cooked lunches in the suburbs, hop on trains, and deliver them, via bike, to Mumbai office workers. Later on, they pick up and bring back the same empty tiffins (the name for the metal containers used).

Despite the lack of fuel, computers, or modern technology involved, a tiffin goes astray only once every two months. So for every six million tiffins delivered, only one fails to arrive. That’s why Forbes awarded the dabbawallahs a 6 Sigma performance rating (a term used in quality assurance if the percentage of correctness is 99.9999999 or more).

Continued…

I don’t need every customer. I’m primarily in the business of selling a product for money. How much effort do I really want to devote to satisfying people who are unable or extremely unlikely to pay for anything?...

Maybe you think there aren’t enough people willing to pay $5 for an app with no free version. I used to think that, too. But I was wrong.

I’ve made a lot of assumptions in the app market over the last three years that turned out to be wrong. Most frequently, I underestimate demand, both for my product and for others.

Matt Linderman on Apr 29 2011 11 comments

Jack Donaghy and Meeting Magazine

Matt Linderman
Matt Linderman wrote this on 6 comments

In a recent episode of 30 Rock, Jack Donaghy has dreams of making the cover of Meeting Magazine.

Jack [to Liz Lemon]: In addition, I have a huge presentation coming up — Meeting Magazine is already calling it the first great meeting of the decade.

[Later in the episode]

Jack: Lemon, I am supposed to represent NBC in a negotiation that Rex Belcher, of the American Journal of Meetings, rated ‘Four Chairs.’ Four!

Liz: I’m sorry, is there another magazine about meetings?

Guess what? There actually are multiple publications devoted to meetings. For example, Convene and Meetings & Conventions Magazine. Can’t find anything on The American Journal of Meetings though.

Real time vs. slow time – and a defense of sane work hours

Basecamp
Basecamp wrote this on 16 comments

“Why Work Doesn’t Work” is a CBC interview with Jason Fried. He discusses the workplace, sane work hours, and meetings vs. communicating with passive communication tools (i.e. ones that don’t require interruptions).

Communication doesn’t always have to be in real time. It can be in what we call “slow time.” You can post something and three hours later someone can get back to you and then four hours later someone else can get back to you. And everything will work out just fine.

Slow time is “Maybe it takes two or three days to have this conversation. And we do it over periods of 15 minutes here, two minutes there, four minutes there.” And that’s fine. It doesn’t need to happen all at once. Unless it’s really, incredibly, truly urgent. (Which most things aren’t. They’re made out to be that way, but they really aren’t that important.)

Meetings basically make things happen all at once. And that means you’re pulling a bunch of people off their work to have this “right now” conversation. It’s very disruptive for a bunch of people. So if they can communicate over a long period of time instead, it’s much better.

I think companies would benefit from giving employees a lot more autonomy and alone time to do their work. And then when they do need to come together, it can be more special and more meaningful. It’s like seeing an old friend you haven’t seen for a long time – it’s kind of a special moment for a couple hours and then you go break up and go back to your own lives and that’s fine. And that’s how we like to treat our work here.

We also try to have sane working hours. And four day workweeks during the summer. What we’ve found is that when people have fewer hours to work, they put more time into the work. It’s like anything. If you have less of it, you conserve it a bit more. You use it better. If you have fewer dollars left, you’re probably not going to go out and buy a big screen TV if you don’t need one. You’re going to put those dollars to work in a more efficient manner. It’s the same way with time. If you only have 32 hours this week to get something done, you’re not going to waste time.

Related
Don’t break Parkinson’s Law (i.e. “Work expands so as to fill the time available for its completion.”)

Note: Text above condensed and compiled from various answers. Listen to the full interview.

Exit interview: Jaiku's Jyri Engeström

Matt Linderman
Matt Linderman wrote this on 20 comments

“Jaiku was not much more than a year old when we were acquired. It was like hitching a ride on a firecracker!” says Jyri Engeström, co-founder of Jaiku.

“I poured my heart and soul into designing the service with our small team,” he says of the microblogging tool similar to Twitter. “As a sociologist I was convinced microblogging had the power to change society (see Egypt) — and I thought we would keep building the company for a long time. But we didn’t anticipate usage would explode so fast. Our back end had scaling issues, and our mobile client was for Nokia’s Symbian phones, which turned out to be an impossible platform to develop for.”

jyriSo in October 2007, Jaiku agreed to a sale to Google (rumored purchase price: $12 million).

At the time, Engeström (right) and co-founder Petteri Koponen wrote, “Our engineers are excited to be working together [with Google] and enthusiastic developers lead to great innovation. We look forward to accomplishing great things together.” Google Product Manager Tony Hsieh wrote, “We’re excited about helping drive the next round of developments in web and mobile technology.”

A time of excitement
Looking back, Engeström remembers the excitement of those days. “We joined Google with the assumption we’d build a new, more scalable service that would be tightly integrated with a small project called Android, which I thought was the best thing to happen to the mobile industry and was led by Andy Rubin, who had the cojones to take over the world,” he says.

“At the time, most people still thought microblogging was a passing trend: superfluous status messages a small population of geeks texted to each other on their Sidekicks and Treos. I was convinced microblogging was the defining social innovation of the decade, and that it would become ubiquitous with the oncoming age of smartphones; so it was exciting to think we could leapfrog to a completely different scale and have Google’s near-infinite engineering resources behind us to meet the exploding demand.”


Unique visitors at Twitter and Jaiku back in 2007. (Source: VentureBeat)

Industry insiders also felt the prospects for the collaboration were bright. RWW’s Marshall Kirkpatrick wrote, “With easy group creation, RSS import and threaded conversation, amongst other features, Jaiku is probably a superior service to Twitter.” A Softpedia piece said, “One thing is sure: the Jaiku products will be improved a lot.” Even Biz Stone, cofounder of Twitter, had kind words for the deal: “Those guys have a keen grasp of mobile, and it’s probably a good fit for whatever Google’s cooking up.”

Closed to new users
But after the purchase, Jaiku was closed to new users and quickly slipped into “the Google black hole,” according to reporter Farhad Manjoo. Three months after the acquisition, signups were still closed. Engeström wrote on the company blog: “To be honest, a lot of our time in the early going was spent on getting to know Google.”

David Lawee, the Google Vice President in charge of acquisitions, told Manjoo that moving a new company onto Google’s systems takes 3-6 months and enables scaling. But problems continued after that time frame for Jaiku. After ten months, Jaiku was still closed to new users and existing users were complaining it was too slow. Engeström responded, “We feel the short term pain, too.” All the while, Twitter was gaining traction.

Then, in January of 2009, Google’s Vic Gundotra announced changes to Jaiku: “We are in the process of porting Jaiku over to Google App Engine. After the migration is complete, we will release the new open source Jaiku Engine project on Google Code under the Apache License. While Google will no longer actively develop the Jaiku codebase, the service itself will live on thanks to a dedicated and passionate volunteer team of Googlers.”

But nothing much really happened after that. The site is still up but its blog hasn’t been updated since 2009. The About page says, “The service is maintained by volunteer Google engineers on their spare time.”

Continued…

It isn’t true at all that nobody’s buying Flip camcorders. So far, seven million people have bought them…Flips now represent an astonishing 35 percent of the camcorder market. They’re the No. 1 best-selling camcorder on Amazon. They’re still selling fast…

[Flip] reaped the rewards that come from selling to a megalithic corporation like Cisco. Yes, there was plenty of money to go around, but also the risk that always comes when you sell to a bigger company: that they’ll chop you up and sell off your parts.

Or, in Cisco’s case, much worse: chop you up and leave you for dead.


David Pogue in The Tragic Death of the Flip
Matt Linderman on Apr 22 2011 15 comments

Bootstrapped, Profitable, and Proud: The story of Z. Vex' oddball effects pedals

Matt Linderman
Matt Linderman wrote this on 14 comments

Billy Corgan, Jack White, Trent Reznor, The Edge, Daniel Lanois, Joe Perry. They’re just a few of the big name guitarists who swear by the strange sounds, textures, interfaces, and custom paint jobs of Zachary Vex’ boutique effects pedals.

“Being weird makes me stand out from other pedal manufacturers,” Vex says. “Weird sounds get people talking. There are a number of musicians who want to produce sounds that make them stand out from the crowd. Our stuff appeals to those players.” And those players are willing to shell out too: The pedals cost between $250 and $500 each.

pedals

The light bulb moment
The first pedal Vex ever built was formed out of a small plastic fishing tackle box. “My older brothers got me into electric guitar and they worked at an injection molding company so we had lots of these plastic boxes around, and they and my cousins played through a Maestro Fuzz Tone at my uncle’s house, which I found extremely exciting-sounding,” says Vex. “In high school I heard that sound again. A student was in a practice room with a guitar, amp, and some little box with sliders on it which sounded identical to a Jordan Boss Tone. I knocked on the door and introduced myself, and he explained he’d broken his Jordan enclosure so badly he had to re-house it. A light bulb went off for me. I realized I could build my own effects. I used a schematic from an article in Popular Electronics (my mom got me the subscription) and built my first fuzz in 10th grade, and sold it to that student for $10 a few weeks later. He loved it.”

Vex then went on to build and sell tube amps and amp modifications throughout the 1980s. He did electronics tech work, owned a recording studio from 1985 to 1991, and then worked as an independent recording engineer/producer until 1995. That’s when he started Z.Vex Effects.

Startup funds came from a strange source; The city paid Vex to relocate him and his roommate from their loft because a Federal Reserve Bank was being built next to the property. Vex lived off that money for a couple of months and was able to take a break from recording to work on electronics.

Vex: “My first Z.Vex pedal was an improvement on an Apollo Fuzz-Wah fuzz, which was the Octane. I showed it to Nate at Willie’s American Guitars in St. Paul and he immediately ordered three. I hadn’t planned on going into business, it just happened by accident. I started making a living within about two months after the pedal company started. A meager living, but a living. I believe my apartment was about $300 a month.”

“Being weird makes me stand out from other pedal manufacturers.”
Continued…

Shaking up the bizarre habits ingrained in primary health care

Matt Linderman
Matt Linderman wrote this on 15 comments

It’s crazy that actually being able to email your doctor is still so unusual in this day and age. It’s one of the many “bizarre habits that have been ingrained” in the world of primary care, according to Dr. Tom X. Lee. And that’s why Lee started One Medical Group, which offers personalized “concierge” care to patients for $200 a year.

We start by offering same-day appointments that you can schedule conveniently online. In the office, we respect your time by meeting with you on schedule so you know you’ll be back to work on time. We also believe in building more personalized relationships with our patients, so we offer longer visits which means you have more high-quality time with your doctor. And after your visit, our online services make it simple to contact your doctor and even renew prescriptions without coming in for a follow-up visit — saving you both time and money.

When Lee started One Medical Group (OMG?), he said, “it was very clear that health care organizations were lacking both the service hospitality mind-set of hotels and the operational efficiency you’d see in manufacturing industries.” It now has several thousand patients and a growth rate of 50 percent a year, gained mostly by word of mouth.

Letting customers schedule appointments online also helps the company be more efficient. Most primary-care offices have at least four administrative employees per physician. OMG has cut that ratio in half.

Hello Health
Hello Health is another medical provider attempting to tackle the various unpleasantries of the typical doctor’s appointment. Some of the features of Hello Health:

Online Scheduling
The Online Availability Calendar lets you schedule appointments from anywhere.

Secure Email
A safe and convenient way to communicate with your healthcare provider.

Prescription Renewal
Request prescription renewals online and for pick up at your pharmacy.

Secure Instant Messaging
Text-based, a simple way to access your healthcare provider.

Video Visits
Meet face-to-face with your provider without leaving home.

Lab Results
Save time and review test results and other important information online.

Hello Health emerged from the house calls and same-day “e-visits” of Dr. Jay Parkinson, a NYC doctor. When he launched his practice, Parkinson accepted PayPal, but not insurance. 300 patients signed up in the first three months. He said, “I run this entire thing off my iPhone and a laptop. I can access any patient records from my iPhone. Patients can make an appointment on my Web site and it’ll text me and I’ll go see them. This is, to me, what’s missing from medicine: personalized attentiveness.”

“The Doctor of the Future” talks about the evolution of Parkinson’s system. At Hello Health, patients pay a $35 monthly subscription fee and $100-200 an hour for online or office visits. Brief email queries are free.

There’s no receptionist, so doctors greet patients as they arrive. And patients can rate visits too. “You can rate a visit, comment on it, share it,” Parkinson says. “Is that innovative? Man, I don’t know. It’s paying attention to what’s awesome about Flickr and then doing it.”

Seems strange that bringing simple basics like email/live chat access and customer ratings to an industry can still be considered “groundbreaking.” So it’s nice to see companies like these challenging the status quo and picking a fight. The health care industry could use the shakeup.