Category: business and economics

Things about management and business on a smaller scale, and economics on a larger one.

The Innovator’s Dilemma and the impossibility of remaking an organization

One year ago today (2014-03-03):

During Tech budget and resourcing meeting for the 2014-2015 Annual Plan, one of the ideas proposed was possibly sourcing an incubator group to (re)“build Wikipedia or other major project in line with the Vision from the ground up, without prior constraints from existing technology, processes”, or communities. The idea was, even if it didn’t succeeded it would cause the organization “to think differently, to create energy around being BOLD,” and catalyze the movement.

This had some currency from many of the participants1, even the C-level2 involved, that was until a director argued that this was infeasible due to the Innovator’s Dilemma. Ignoring the obvious misreading of the book, he argued that because this might destroy the existing order inside the organization, it couldn’t be done by the organization itself, and thus the proposal died despite never going up for consensus consideration.3

Deciding that it is politically stupid to point out their Readers’ Digest understanding of a deeply-flawed business text, I instead argued that an organization built around vision, rather than profits, does not have the same constraints that allow disruptive technologies to spell their undoing.

That argument didn’t carry weight because people with more experience than me were sure that this initiative would be defunded in the next annual plan and that no one would ever get behind a project that is a direct threat to them. Incubation outside the WMF is only possibility.

…

It’s sad that people don’t bother to know the most basic lived history of their own industries (or have a terribly short memory).

I give you the history of Firefox:

The Mozilla Firefox project was created by Dave Hyatt and Blake Ross as an experimental branch of the Mozilla browser.

The Phoenix name was kept until April 14, 2003, when it was changed because of a trademark dispute with the BIOS manufacturer, Phoenix Technologies (which produces a BIOS-based browser called Phoenix FirstWare Connect). The new name, Firebird, met with mixed reactions, particularly as theFirebird database server already carried the name.

The project which became Firefox started as an experimental branch of the Mozilla Suite called m/b (or mozilla/browser). After it had been sufficiently developed, binaries for public testing appeared in September 2002 under the name Phoenix

Hyatt, Ross, Hewitt and Chanial developed their browser to combat the software bloat of the Mozilla Suite (codenamed, internally referred to, and continued by the community as SeaMonkey), which integrated features such as IRC, mail and news, and WYSIWYG HTML editing into one software suite.

Dave Hyatt would leave Netscape4 for Apple in 2002 and go on to architect the number one competitor to Firefox, Safari and WebKit (the core of Safari and Google Chrome). Blake Ross would work at Netscape/Mozilla until 2004 and be nominated the next year for Wired magazine’s top Rave Award, Renegade of the Year as all of Mozilla’s resources had were redirected to Firefox, a project started internally by two employees to combat the poor direction of original Mozilla project.

…

So yeah, Fuck you.

…

One Year later

It really is astounding when you think about the level of incompetence that was on display.

There are only two large-scale consumer-facing Internet non-profits: The Wikimedia Foundation and Mozilla Foundation (which owns Mozilla Corporation). Someone makes a statement that everyone accepts and affects the entire annual budget. Meanwhile, the only other company that shares organizational affinity with yours is a living counterfactual to the statement.

I didn’t say anything as I was sitting on my resignation letter and didn’t want to humiliate my colleagues, but the disappointment I had back then was immense. Now that I’m gone, that disappointment has turned into relief.

  1. In the months since this time whenever I mentioned this to a WMF staff member, often you’d pretty much have to hold him or her back from wanting to switch into this team if it were to exist. ↩
  2. Chief level, as in CEO, CTO, Vice President, etc. ↩
  3. Not that it would have won that given that this would have required a resource sacrifice among all the Directors… Still, it would have been worth it just to see who cared more about the mission and who more about their fiefdom (or their job). :-) ↩
  4. Mozilla Foundation before it was separated in from Netscape in July 2003. ↩
Posted on by tychay 11

TechCrunch dreams

In 2008, I had a friend who was the co-founder and CTO of a startup. He was getting a lot of pressure from the other co-founder to get into TechCrunch. I said, “Why the fuck does anyone want to be in Techcrunch?1 The only people who read it are your competitors.”2

…

This morning just before I woke up, I dreamt that I found out that TechCrunch had made it into the top ten most popular websites.

In my dream, Michael Arrington still owned them and through a systematic analytically-driven approach of A-B testing subject lines, content, and marketing, they had applied it to an entire network of blogs to make it very popular. Michael had picked up ballroom dancing as a hobby and even his ballroom dance blog, through this approach, had become far more popular than it deserved to be.

I started thinking, “Wow, that’s crazy. I remember back in 2005 when TechCrunch was so unknown Michael had to comment on Scoble’s blog to get traffic.3 Who would have thought it could become so popular?”

…

Then I woke up and remembered that nobody reads TechCrunch.4

  1. Usually it’s because they have a tiny ego and need to be a big fish in a very tiny, tiny pond. BTW, I remember at the time Tagged was really obsessed with TechCrunch. ↩
  2. I suppose given the big Valley circle jerk, another valid reason is if you are seeking funding from investors. ↩
  3. This part is true. ↩
  4. Not even your competitors. Because even if TechCrunch does write about you, they won’t catch it before it scrolls off the front page an hour later. ↩
Posted on by tychay 0

The Uber-truth about the slavery economy

When I first heard someone use the term “the sharing economy” last year:

Me: What the fuck is “the sharing economy”?

Someone: It’s a catchall for businesses like AirBnB, Uber, Lyft, TaskRabbit and the like.

Me: Sounds more like they should call it “the slavery economy.”1 Give it a few years for that bubble to go the way of GroupOn.

…

What did I mean?

Well to take one example, this was sent to me recently by a friend because it appeared on her feed and she was curious how they got the numbers:

UberX truth in advertsing

Should say “Apply now and start making serious cash… for Uber’s investors.”

Let’s do the math, shall we?2

Continue reading some Uber math after the jump

Posted on by tychay 10

LinkedIn and the dangers of A-B Testing

LinkedIn brags about their use of A-B testing.1

Here is a fucking clue, guys. When you vary where a mail header (from:2, to:, subject: line, etc.), you bypass peoples’ mail filters and of course e-mail open rates will test higher.

Fuck you, LinkedIn

So many companies don’t know the limits of analytics. To those idiot business analysts that are data-driven instead of data-informed: please DIAF. ktnxbai!

  1. Never mind the fact that LinkedIn took years to go viral and only after Reid Hoffman became on Tagged’s Board of Directors. ↩
  2. invitations@linkedin.com, member@linkedin.com, invitations-noreply@linkedin.com, communication@linkedin.com, messages-noreply@linkedin.com, updates@linkedin.com, communication@linkedin.com, connections@linkedin.com, … ↩
Posted on by tychay 0

Thoughts on Brendan Eich’s departure

(Disclaimer: None of the views here are those of the Wikimedia Foundation.)

Brendan Eich, creator of Javascript, resigned as CEO of Mozilla mostly over his unrepenting anti-gay views.

I must admit a brief bit of schadenfreude because I predicted that this change would happen on Prop 8 specifically. The only thing that surprises me from those six-year-old articles is the quickness of the sea change around this issue.Continue reading about Eich and other thoughts after the jump

Posted on by tychay 6

The peering story

At my first startup, I had a CTO, who was a year younger than me, used to tell me stories of his time at UUNET and what whiney little cheap turds most of the first generation dotCom billionaires were before their tiny little ISP’s sold for hundreds of millions.

This story isn’t about that.

As a Korean, he was asked to set up the asian version of UUnet. Back then Korea’s networking should have been trivial as its a peninsula and most of the population lives in or around a single city, Seoul. Instead it was terrible because none of the Korean networking companies would set up peering points with each other. “See,” he told me, “When you need to connect two networks to each other, you have to set these up, and while they’re free to run, they’re costly to build. How do you decide who pays for the point?”

You might think 50-50 is fair and propose that. If you’re a new player in this space, since you’re the one asking to set up these points, you probably benefit more than network you are trying to pair up with so they expect you to pay all or most of it. You get nowhere with this offer. This is what happened to him.

Korea wasn’t the powerhouse Internet trendsetter they are today. I remember, back then it was often faster to connect to a US site then to another Korean one because your packets to the latter would have to go through peering in the US since there wasn’t any in Korea. In other words, to talk to your neighbor, your message would be sent from Korea, across the Pacific to the US, and then back across the Pacific to Korea. This was the Korean Internet in the early-mid 90’s, all because of a lack of peering there.

On a lark, a friend of his wanted to set up a BBS or something and he dropped a server on his network for his friend to use for free.

Then one day, months later, companies that had previously refused to peer up were contacting him to peer up. As I’ve outlined just now, being the asker is a huge concession in the negotiation. He wondered what changed and looked at his traffic. It turned out that his friend’s BBS or something had become hugely popular in Korea and a lot of that network’s customers were demanding better service to it.

…

The lesson here is if you have what the other party wants, you hold the cards and the other side has to make the concession.

I bring this story up when I have to explain a basic business principle to others to understand what is going on.

Want to understand why Office is finally out on iOS? Look no further than the peering story.

Posted on by tychay 0

Mailing list talk has consequences

One of my engineers was leaving the building for a late lunch and held the door open for me and another director. Before we parted, we had a short chat in the doorway about approvals on a purchase order.

“Hey, I need to see your ID!” Building security yelled at us.

“Huh? What?” H— replied?

“That’s the new policy. I need to ask to see everyone’s keycard.”

“It must be related to that mailing list thread.” I told H—, matter-of-factly. (For over a week now, an internal mailing list thread has been going on about building security. I stopped reading when someone suggested that the only way to solve this was to install lasers to detect when two people enter with one card, and another one argued that we should just make an HR policy to fire anyone who lets anyone in without proper ID. The reason I stopped was because neither post was trolling us in jest.)

The building security guy continued indignantly, “Even if I know you, even if you’re a manager—and I know you two are managers. L—, the head of the company, said I must to ask for your ID or call her down to greet you in the lobby.” (Sidenote: L— is not the head of the company. On the other hand, poor L— suggested on the mailing list that any solution hopeless because building security is seriously underpaid by the owners, perhaps to the point of illegality.)

I joked, “Even if I thought the discussion that touched off this policy was a waste of everyone’s time?”

Building security apparently has about as much humor as our company mailing list. So I reluctantly dug through my wallet and and pulled out a blank white piece of plastic, that may or may not have been my car parking card—they’re identical and I do not have an RFID reader on my person.

He let me through anyway.

That’s good, because to this day I do not know the average airspeed of an unladen swallow.

Posted on by tychay 0