These are my slides/notes from a First Opinion company all hands presentation I gave in February 2016
What do you think of when you think of constraints?
Maybe you think of this?
I think of creativity, because constraints breed creativity.
Look no further than music
LEGOS!!!!! Simple lego bricks like this…
Give us things like this...
And, of course, because we’re in San Francisco, I couldn't resist this last example.
Any other examples you can think of where constraints breed creativity?
So what happens when you don't have constraints?
Star Wars Episode 1 - The Phantom Menace. The very definition of no constraints. George Lucas had complete control, from script and casting all the way down the line to post processing.
There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect.
So why do we set deadlines? And pare down feature sets? And don't just hire more developers and designers and product people? Because we are, to some extent, erecting constraints to increase our creativity and productivity as a company.
Below is an excerpt from when we launched First Opinion
We released our first real public version to the app store right before Thanksgiving, which in retrospect might not have been the best idea since most of us left on vacation immediately after. McKay wanted to be very hands on with the matching in the first release. ... So when a new user signed up, McKay would get a notification, he would look over their details and decide which doctor would be right for them.
And since I was going to be visiting my wife's family, I wanted to make sure those matching notifications were rock solid, because if McKay wasn't getting notified, the user wasn't getting matched with a doctor. So I rigged the server to send an email, a text message, and a push notification for each new user that signed up.
Over the next couple of days, First Opinion steadily climbed the app store rankings, moving into the top five apps in the medical category, and McKay's phone blew up with notifications, three at a time, to the point where he couldn't get any sleep because his phone was buzzing every few minutes ... On the flip side, each of our doctors was getting inundated with tons of new users every hour, all with a question or two to ask.
During this time, we were operating under the gun, as we were working to reconcile our growth with the amount of doctors we didn't have (we launched with only a few doctors but gained thousands of users in those first couple of days).
But as we scrambled to handle the load we figured out some incredible features of our Doctor application that helped our doctors manage the load, these are features we still use to this day, but they were created while we were working under intense pressure (which is a constraint) to handle our user load with the few doctors we had at the time.
He told me a story of how Larry Ellison actually got efficiencies from teams. If a team wasn't productive, he'd come every couple of weeks and say, "let me help you out." What did he do? He took away another person until the team started shipping…
I'm Closing with this quote because I think it perfectly encapsulates why we need constraints.
A few months after I gave this presentation, this tweet came through my stream, which I think is relevant...
"Constraint actually fuels innovation. Good constraint keeps people focused." Beth Comstock, new Vice Chair of GE pic.twitter.com/HEuqWxvsWH— Bill Gross (@Bill_Gross) May 5, 2016
From The Last Don:
"I've never understood how I can have ten percent of the profit of a picture that grosses one hundred million dollars and costs only fifteen million to make, and then never see a penny. that's one mystery I'd like to solve before I die."
"It's absolutely legal," she said. "They are abiding by the contract, one you should not have signed in the first place. Look, take the one-hundred-million gross. The theaters, the exhibitors, take half, so now the studio only gets fifty million, which is called the rentals."
"OK. The studio takes out the fifteen million dollars the picture costs. Now there's thirty-five million left. But by the terms of your contract and most studio contracts, the studio takes thirty percent of the rentals for distribution costs on the film. That's another fifteen mil in their pockets. So you're down to twenty mil. Then they deduct the cost of making prints, the cost for advertising the picture, which could easily be another five. You're down to fifteen. Now here's the beauty. By contract, the studio gets twenty-five percent of the budget for studio overhead, telephone bills, electricity, use of sound stages etc. Now you're down to eleven million. But the Bankable Star gets at least five percent of the rentals, the director and producer another five percent. So that comes to another five million. You're down to six million. At last you'll get something. But not so fast. They then charge you all the costs of distribution, they charge fifty grand for delivering the prints to the English market, another fifty to France or Germany. And then finally they charge the interest on the fifteen million they borrowed to make the picture. And there they lose me. But that last six million disappears."
Remember people, always negotiate for a percentage of gross, not net.
When I was a kid, Nintendo was the king of video game consoles, no one, not even Sega, could touch 'em. If you would've told me that within a decade Nintendo would be the third ranked console game maker and Sega wouldn't even be in the fight I would've called you a flat out liar, right there to your face.
It was inconceivable that Nintendo could fall so far, so fast. And now, while my daughter and I sometimes enjoy a mean game of Mario Kart Wii, chances are high my children will grow up never asking for Nintendo anything for Christmas or birthdays, something that a kid from my generation couldn't even imagine1.
I bring up this example because there seems to be a pervasive thought among people I know that it's too late to start something, every idea has already been done to death, every thought written down. So let's see if that really is the case, shall we?
No Way I could build a billion dollar company
You might be interested to know that the Fortune 500 turns over about 30 companies annually. Here's the top 10 on the list over three different periods.
While there are some companies with staying power, there are also new additions. In fact, this is entirely normal:
Because no company, no matter how successful, lasts forever, and because only a fraction of companies survive more than a few decades, turnover of varying degrees is entirely natural.
Because this ebb and flow of new companies onto, and off, the list is a natural occurrence, it means there is always time to start a new company.
It's impossible to make a living as an Author
This one is near and dear to my heart, not just because it's an inside joke in my family, but because my brother-in-law actually just published his first novel. Let's take a look at the best selling authors over three different periods2.
|1||The Chamber by John Grisham||The Da Vinci Code by Dan Brown||Fifty Shades of Grey by E.L. James|
|2||Debt of Honor by Tom Clancy||The Five People You Meet in Heaven by Mitch Albom||The Hunger Games by Suzanne Collins|
|3||The Celestine Prophecy by James Redfield||The Last Juror by John Grisham||Fifty Shades Darker by E.L. James|
|4||The Gift by Danielle Steel||Glorious Appearing by Jerry B. Jenkins and Tim LaHaye||Fifty Shades Freed by E.L. James|
|5||Insomnia by Stephen King||Angels & Demons by Dan Brown||Catching Fire by Suzanne Collins|
|6||Politically Correct Bedtime Stories by James Finn Garner||State of Fear by Michael Crichton||Mockingjay by Suzanne Collins|
|7||Wings by Danielle Steel||London Bridges by James Patterson||Diary of a Wimpy Kid: The Third Wheel by Jeff Kinney|
|8||Accident by Danielle Steel||Trace by Patricia Cornwell||Fifty Shades Trilogy Box Set by E.L. James|
|9||Disclosure by Michael Crichton||The Rule of Four by Ian Caldwell and Dustin Thomason||The Mark of Athena by Rick Riordan|
|10||Remember Me by Mary Higgins Clark||The Da Vinci Code: Special Illustrated Collector's Edition by Dan Brown||Gone Girl by Gillian Flynn|
As you can see, there is a ton of turnover on those lists3, which means there's plenty of room for your great american novel. So you know, get to work!
I could never build a best selling iOS app
|Rank||2009 paid||2009 free||2012 paid||2012 free|
|1||Crash Bandicoot Nitro Kart 3D||Angry Birds||Clash of Clans|
|2||Koi Pond||Google Earth||Doodle Jump||Skype|
|3||Enigmo||Pandora Radio||Fruit Ninja||eBay|
|4||Bejeweled 2 + Blitz||Tap Tap Revenge Classic||Angry Birds Seasons||Google Earth|
|5||iBeer||Shazam||Cut the Rope||Google Search|
|6||Moto Chaser||PAC-MAN Lite||TuneIn Radio Pro|
|8||Flick Fishing||Touch Hockey||Angry Birds Rio||Bump|
|9||Tetris||Labyrinth Lite Edition||FatBooth||BBC News|
|10||Texas Hold'em||Flashlight||Flight Control||Shazam|
Angry birds pretty much dominated 2012, but if you go check the overall top app lists right now (don't worry, I'll wait) you'll see Angry Birds is no where to be found in the top 10 anymore.
So what's your point?
Take any other industry or segment and you will likely find similar churn5. This isn't to say your idea will rise to the top, or that it will be easy. On the contrary, it will take a tremendous amount of work, lot's of concentrated effort, and a little bit of luck (the actual luck and the self made kind). This was just to show you that nothing is set in stone, and things do change, in fact, they seem to be changing faster than ever. And as my wife so succinctly put it, "there's always room for the next big thing."
I asked for a Nintendo every year for years, then a Super Nintendo. ↩
And seriously, was I the only one that had no idea 50 Shades of Grey had more than one book? ↩
This was the hardest data to find, and the problem with it is I think things like Facebook drop off the list because everyone downloads them once and has them on their phone forever more. ↩
I also compiled a list of best selling albums, but I'm sick of making tables. ↩
You notice a gap in a commoditized market, the current market leader isn't satisfying its users and a growing majority are complaining about how hard their product is to use and how annoying the ads are.
You start small, a simplified interface that emphasizes function over form, no ads to annoy your users and a liberal use policy that makes it easy for your users to fit your product to their needs. People start talking about you, and more importantly, they start using your product. A small but growing group of users can't get enough and start telling their friends about how great your product is over all the other products in the market.
Every month more users keep coming, favoring the ease of use and no hassle simplicity of your product over your competition, not to mention the lack of ads your product currently has. You hire more people, you add more servers, and people just keep coming, they love your product.
After a while, you're huge, you're now the main product on the block and all your competition has faded away into obscurity and also-rans. Some Venture Capitalists take notice and approach you to see if you can turn your product into a real business.
You believe what they are selling you and raise a huge round of funding. You're different, they say, you're special. Sure, your product is free and commoditized, but you've built an audience. You're going to transform all those eyeballs into revenue.
In order to do that though you'll have to make a few changes. You remove a feature here, tweak a policy there. All necessary changes in order to lock down your product for advertisers. A small group of users start to complain, but you don't pay attention. Your changes are working, you're monetizing your audience. You knew some would leave, but everything is going according to plan.
Fast forward an unspecified time in the future. Some random person notices a gap in a commoditized market, the current market leader isn't satisfying its users and a growing majority are complaining about how hard their product is to use and how annoying the ads are...
I remember a conversation with my wife about a year after graduating, we were living in Washington, D.C. at the time and I was working as a Patent Examiner, with a plan to attend law school the following year, I'll be kind and just say that I didn't particular enjoy reading patents all day, and I wasn't particularly looking forward to law school. My wife was working at a law firm and was commenting about how unhappy all the lawyers at her firm were. She said something I've never forgotten, "I don't want you to come home everyday unhappy and talking about how much you hate your job."
We both quit our jobs a few months later and moved back west, I wanted to try my hand at starting a company because what I really wanted was the flexibility and joy that comes from building something from nothing. And what my wife really wanted was for me to come home from work happy each and every day1.
I bring this up because I've been recently working through some old hard drives that are just full of all kinds of things from the last twelve or so years of my life. One of those old documents contained an employment survey I had filled out in the distant past, the Career Consultation section was interesting.
While I'm embarrassed about a few of those answers, I think it's interesting what I focused on when asked what is most important to me, where I wanted to be in a few years, and what my ideal job was. The only thing that mattered to me was to do something I enjoyed and was exciting to me.
Even back then, I wasn't motivated by money or prestige, I was motivated by the desire to enjoy what I do, because when you spend so much time at one place, and there are going to be so many bad things about any job, you need to really enjoy it when it's good.
Hopefully, everybody will strive for something better than just not hating your job, a good test to see where your true feelings lie about your current employment comes from Senator Schumar:
"I have a little test, when you wake up monday morning, do you feel in the pit of your stomach that you want to go to work. And if you can say yes to that, you're in great shape."
I hope all of you are in great shape :)
Man I love my wife ↩
I think making something inconvenient to use unless they pay you is the absolute worse way to make money. Want to watch that movie on any device? Tough luck! Want to read that article? Well, you can't unless your a subscriber. Oh, you didn't think we would let you listen to that song anywhere you wanted, did you?
I would like to say the idea of making money through inconvenience is the exclusive domain of large dying giants like the RIAA, MPAA, and publishing conglomerates, but it's not, lots of startups fall into this same trap also.
Heck, we even tried inconvenience as a business model at First Opinion. We want First Opinion to be the first place people turn to when they have a medical question, and yet, what did we do? We limited your interaction with our doctors to once a month unless you gave us money. A move that all but assured we wouldn't be the first place you turned to when you had a medical question.
While we gathered extensive stats that told us this model just wasn't working for us, it really hit home as a problem when my wife, my own beautiful wonderful wife, said she had two more days until her free question renewed when I asked her why she wasn't asking her First Opinion doctor a medical question she had.
Our mistake was we were making people stop and think about what they should do, as Influence: The Psychology of Persuasion notes, this is a huge no no:
The renowned British philosopher Alfred North Whitehead recognized this inescapable quality of modern life when he asserted that "civilization advances by extending the number of operations we can perform without thinking about them."
Evan Williams, of Blogger, Twitter, and Medium fame, expanded on this in an XOXO talk he gave in 2013:
"The internet makes human desires more easily attainable. In other words, it offers convenience [and] Convenience on the internet is basically achieved by two things: speed, and cognitive ease [...] If you study what the really big things on the internet are, you realize they are masters at making things fast and not making people think.
"Here's the formula if you want to build a billion-dollar internet company [...] Take a human desire, preferably one that has been around for a really long time [...] Identify that desire and use modern technology to take out steps."
In other words, people would much rather pay for convenience over inconvenience. So, if you're trying to decide what business model to pursue, I would encourage you to choose making your product more convenient, even if it results in less money at the start, because chances are, doubling down on convenience will make you larger in the long run than a model of inconvenience ever would.
This is exactly what we've observed at First Opinion, we dropped our inconvenience model and made access to a First Opinion doctor free for everyone, anytime, and instead decided to focus on charging for additional conveniences like speed of our doctor's responses and the ability to send photos to our doctors.
And if you're a large dying giant that has decided to go the inconvenience path, remember this observation by Clayton Christensen and hopefully take heed:
In nearly every instance of disruption we have studied, the survival instincts of the disruptees—the prior industry leaders who are being disrupted—set in motion defensive actions intended to slow the pace of disruption. In the end, however, the advantages that disruptive competitors bring to customers in terms of quality, cost, convenience, and accessibility become so apparent that the regulations are removed and the disruption proceeds apace.
My sister has had a few home births. I've got a niece that is basically in and out of the hospital in less than a day with new baby in hand. Heck, there was even a couple that used First Opinion to deliver their baby in the backseat of their car.
Unfortunately, easy baby arrivals doesn't seem to be how my wife, Dee, rolls. Our daughter was minutes from being taken by C-Section when she finally arrived, and so I guess I shouldn't have been so surprised when a routine doctor visit a few weeks before the due date went too long1.
Wednesday, July 16, 2014, 5:04pm to 5:14pm
Me: Just curious where you're at?
Dee: Still at the doctor. I think everything is fine but it's a long story. Hopefully coming home soon.
Dee: Don't freak out. I think it's ok
Me: Too late, I'm freaked, you've been at the doctor for over 2 hours
Dee: It's really not as bad as it seems. Just too long to tell you over text. It does look like the baby is breech though. Or at least turned funny
Dee: Doesn't mean he's not healthy or that it won't be ok though.
Me: :( let me know when you're headed home
Now I want you to close your eyes and imagine the doctor just told you the baby is breech and the umbilical chord is hanging down so if you went into labor outside a hospital you would most likely lose the baby. Now, imagine the doctor wants you to go the hospital to have them attempt something called a version, which you've never heard of, where they attempt to re-orient the baby into the correct position while still in the womb. Finally, imagine you had planned to have the baby in Redwood City, you knew that, your husband knew that, and your doctor knew that. Okay, so you need to go to the hospital, what hospital do you go to?
If you're my wife and me? You pile into the car, with makeshift overnight bags, and drive to Redwood City, walk in, go up to Labor and Delivery, where there is only a door that says Stop! No Entry and then back down to admitting, where the helpful clerk tells you you need to go back up to the floor you were just on and through the door that says Stop! No Entry and then down the hall and to the left where the nondescript unmarked door that has a silver buzzer hides Labor and Delivery.
The nurses were not expecting us, which is a seriously bad sign in a situation like this. After some back and forth, we were informed that versions are only performed at the San Francisco hospital, and after a quick phone call it was confirmed that San Francisco was wondering where the heck we were. We would've had a good laugh about the misunderstanding if any of us had been in a laughing mood, maybe someday.
My sister met us at Redwood City and took our daughter, Kenzie, home with her while Dee and I began the long rush hour drive back up to San Francisco. We finally arrived at the correct hospital a little before 9pm, where we were educated about what was about to happen. The doctors would attempt to turn our baby, if that failed, they would prep Dee for a C-Section and put her under anesthesia, and then try again more forcefully to turn him.
If either of those were successful, no C-Section for us. We were also informed versions have only about a 50 percent success rate. Also, they can't use the medication they normally use for the procedure because it elevates heart rate and Dee's heart rate was already a little too high, so our success rate was even lower.
Wednesday, July 16, 2014, 10:23pm
Me: Version attempt 1 will take place soon
My Sister: Good luck and fingers crossed
At about 10:30pm the doctors began the first version attempt. My sister tells this great story about a massage she got in India once2, where she sat in the middle of a room, cross-legged and naked, while someone poured oil over her head and then basically punched her back. She called it the worst massage any person could ever get ever, a version is kind of like that. I pressed my forehead to Dee's forehead while she grunted through the pain of two doctors forcibly pushing on her stomach trying to knock our baby back into the correct position.
Wednesday, July 16, 2014, 10:55pm
Me: Wow, they were able to turn the baby in one of the most uncomfortable massages I've ever witnessed.
My Sister: I can only imagine. Will they monitor through the night?
Me: Now they are going to watch for a few hours to see if she will continue to stay in labor or will return to normal
My Parents: Wonderful! But sorry it was hard.
Me: The doc says he might be inclined to induce since she is one day short of 38 weeks
Me: He's not sure he wants to risk the baby turning again
My Sister: Makes sense.
My Parents: How is dee doing? Give her our love.
Me: She says she doesn't know how she's doing, it was just supposed to be a normal checkup
The next 13 hours are standard labor and delivery fair, if this was a movie, here is where the montage would be. Dee's water broke around 5:49am, they put an epidural in around 7am and prepped the delivery table. They moved Dee into position at about 10:30am, and Hayden was born about 11:44am, an 8 lb 10 oz exciting new addition to our family. Between events I was able to grab a little bit of sleep, and Dee was not.
Thursday, July 17, 2014, 11:44am
Me: Hayden j Marcyes, no idea weight or time but he's here
My Parents: We are so happy. Now you can both get some rest.
My Other Sister: So happy all is well!!!
Me: 8 lb 10 oz
My Other Sister: That's pretty big. Holy cow.
My Parents: Good thing he didn't wait two more weeks
My Sister: Big boy...he looks great. I am tearing up.
That makes two, count them, two narrow C-Section dodges. And two freaking awesome kids.
This post was originally published in 2012 on the Startup Grind blog, I'm republishing it here for archival purposes, also, my wife gave birth to our second child this week so there was no way I was going to have the time to write a new blog post :)
I was quite surprised to read all the negative comments about Milk shutting down Oink1. The gist of the armchair quarterbacking is Oink had lots of users and so Milk should be obligated to support it into perpetuity because, well, they never gave a good reason.
Social apps are hard! When you launch a social app like Oink you need to have a great growth story almost from day one. Sure, Oink grew quickly on the strength of Kevin Rose and Daniel Burka's much deserved reputations, but after the dust settled, I'm guessing their true growth rate settled into a pretty consistent linear rate and they realized, rightly so, that this will never be a phenomenal success, and so they decided to move on, I applaud that.
You need to watch your growth trend line carefully, Ben Silberman, a few
weeks back talked about how Pinterest grew 50% consistently month over month. This is a great growth rate2. Even though it still takes a few years when you start with a small user base (in Pinterest's case, it was about 200 users) you are adding radically more users each month than the one before it, this is what you want.
I'm guessing Oink was the exact opposite, after their initial pop, I bet growth settled into something more regular and less impressive. They managed to quickly get 150,000 or so users, and then their true growth rate settled at maybe 5-10,000 new users a month, this is the nightmare scenario.
Most people--that have never tried to build a venture backed social app--probably think growing by 5-10,000 users a month is awesome, and if you were charging money for something, it probably would be, but for a free social product where users are considered revenue, a linear growth rate is the first knock at your door by the Grim Reaper. Starting from a user base of 150,000, and growing at 10,000 user a month, it would take about 7 years to get to a million users, still think that's good growth?
Now let's look at exponential growth. Starting with 200 users, and growing 50% every month, it will take just shy of 2 years to hit a million users, and if your growth rate stays around 50%, that's when your growth would really start to take off, adding hundreds of thousands, and then millions of users each and every month. See the difference?
Remember, Milk was a free product, its users were its revenue, and its revenues weren't growing fast enough to make the company viable. I think it's great the whole Milk team recognized they had a bad growth trend line and chose to move on3, those kind of actions should be commended, not ridiculed.
I didn't have a lot of programming experience before starting college. I'd loved computers since my parents had brought home our Mac plus around 1985, and I spent hours in my youth configuring, tinkering, and playing1 with the steady string of computers my family owned2, but I never actually programmed anything using them.
That all changed during my first semester at BYU, when I took the introduction to programming course. It was hard, but fun, and I managed to power through it with few problems, and I even did pretty well overall, so I figured this programming thing was going to be easy and with a few hours of work here and there I could conquer it.
Then came the second programming class. The introductory class used an integrated Windows IDE that streamlined the editing, compiling, and running of my code into one easy to use package. That second class, however, switched to Linux and required using the command line for compiling and running my code.
It was a night and day change for me. They moved really fast through the material3 because we all had previous programming experience now. I didn't know Linux, I didn't know what text editor to use to write my code. I didn't know how to compile my code using the command line, let alone run it. Every. Freaking. Thing. Was. Different. And To top it all off, my Grandpa died early in the semester, and I missed about a week of classes.
I got behind, and I mean really behind, and it became obvious when I sat down in the Linux computer lab, the day before my first project was due, and struggled to even open a file. It was my worst nightmare. I remember feeling sick when I realized I didn't understand half the project description and that that there was no way I was going to finish the project before it was due. And then I noticed the second and third projects built onto the first, so I was just going to get further and further behind. There might have even been some tears.
The next week I spent nearly every waking hour in the computer lab making nearly zero progress. And it became apparent I wasn't going to be able to figure things out on my own like I always had before. I was too crunched for time, too far out of my comfort zone, and under too much pressure. So I did something I had never done before, I went to the TA help lab and asked for help.
I'm not going to lie, it hurt my pride quite a bit to walk into that help lab and start asking the kind of questions I was asking4, especially already being a week late on the first project and about to be late on the second project. But the TAs helped me choose a text editor, design my project, and write and compile my code.
It took me about five weeks, and lots and lots of hours in the computer lab, to completely catch up, and I spent a lot of time getting help from the TAs. But I've carried that experience with me to this day. It's the single best thing I learned while getting my Computer Science degree, and it's definitely served me better than anything else I learned, I learned how to ask for help.
Dark Castle, King's Quest, Space Quest, and Police Quest, I love you all! ↩
Things like module importing, namespaces, and Polymorphism were completely new to me, the first course basically never required more than one file or more than one class, and then I was all of a sudden required to have multiple files, with multiple classes. ↩
As a former TA myself, questions like: How can I open a file? and How do I compile my code? are not the kind of questions you want to hear from a student that is already a week late on the first project. ↩
You may think with a title like Novel Writing I'm going to talk about writing a book, alas, you would be wrong. Novel writing is a term my family has used for years to refer to something that people say they want to do, but don't actually ever attempt to do it.
My sister and I coined the term a number of years ago as an inside joke while talking about how we've always wanted to write a novel, but neither of us have done anything to, you know, actually write a novel. In this respect, really anything can be novel writing for you: those 10 pounds you've been meaning to lose, that iPhone game you've been meaning to build1, or that startup idea you've bored all your friends with.
Basically, your desire to want to do something needs to be greater than your desire not to do it, otherwise you're just novel writing. So basically, no matter how much you talk about something, and how much you say you want to do something, if you never actually do anything to accomplish it, then you're just novel writing.
This one is mine, I've had so many false starts trying to build an iPhone game that my wife can joke that I'm writing "the great american iPhone game" instead of "the great american novel." ↩