One theme that surfaced for me at SxSW this week was the incredible amount of energy being expended trying to find developers for projects.  It certainly is a theme that should help the guys at StackExchange, if only they figure out how to reach this audience.  I was in so many rooms where the number of companies with ideas needing devs outnumbered the developers in the room – sometimes as high as 25x in a single room.

At first I thought that this was a systemic problem with SxSW.  I’m not sure I have the data to support that conclusion, but there was a different problem afoot.  Each and every one of these entities with ideas was going about their developer search completely wrong.  Showing up with an iPad with large font text saying “I need devs” is not a good marketing strategy.

I also met quite a few companies trying to hawk their API wares and didn’t know how to go about getting developers excited.  The skill set I have been building over my working career is understanding the mind of the developer, and how to reach them.  I wanted to share this out so that others can reduce what was perceived as frustration as a lack of ability to find developers or get them excited about a project they had.

Go Where Developers Are

It’s a bit of an obvious statement, but seriously, if you are a company looking for developers, go where they go.  If you are at SxSW, they may not be at the meetups.  Why?  Because they are off demoing/showing their apps.  They are at these broader events for the same reason you are – to do business.  Developers are in hot demand right now, and that supply/demand imbalance dictates that they are not only busy, but not partial to interruptions.

Go where they go.  Is there a local iPhone developer group in your area?  What about a technology specific show (PyCon FTW)?  If the developers are at the event to learn versus to do business, you are likely better off.

Be a Coder

I got called a “marketing douchebag” on a panel at SxSW.  I tried not to take offense.  I am a product manager after all.  However, I am a hobbyist coder.  How can you be a developer marketer and not be?  I love spending time writing code to make something cool.  Is my solution the most elegant and efficient?  Probably not.  Can I wax philosophically about string interpolation of C#?  I can now (thanks Miguel).

If you cannot speak the language, or understand the issues, how can you have a constructive conversation?  More importantly, it’s just not as hard as you think.  Seriously.  We have a Windows Phone series for absolute beginners.  I know the notion of downloading tools may seem scary.  Try it.  Most of the dev communities have walk throughs to make it mostly doable by anyone who can install Office.  If you can wrangle an XLS, you can likely get through some of the really beginner stuff.  You may even like it.  Net net, being credible in conversations in the dev user groups means at least being conversant.

Have a Prototype

Even if your design is awful, getting your concept across with working code is FAR FAR FAR more effective than PowerPoint slides or your highly polished 25 words or less routine.  Here’s a secret about developers – any one worth their salt will see what you have and want to make it better.  They may want to join your project, or they may just give you some tips on how to improve on what you are showing so that the next dev who sees it may get interested.  Either way, you get some good feedback which is actionable by you.  You are more likely to not change your slides or 25 word pitch, and just move on to the next developer, but getting actionable feedback from a developer is priceless.

The other benefit of having a prototype – a completely unpolished turd even – means you have had to communicate your ideas to the screen.  That will show you the flaws in what you are trying to explain in words or PowerPoint, and makes for a much more constructive conversation with potential devs.  Your idea gets better simply by trying to work through it on the screen.

So there you go.  I hope that’s helpful for all the non-technical types looking to get to the dev community.  It’s a great time to be a developer, and so much positive energy around projects.

I love Scoble.  I really do.  He’s a great source of content, and occasionally controversy.  In a post today, he suggests that developers should build for Android tablets.  I am left a little confused as to his overall logic train, so let’s poke at a few of his points.

The Bar is Low

Really?  The last time I checked, developers were not the types who wanted to walk into a room barely filled with mediocre people and declare themselves the best.  The lure of trying to unseat Angry Birds is a strong siren song.  Using Robert’s logic, the ones who couldn’t cut it are currently developing for Android tablets, so you should go hang out with them.

Crowds = Death

This is fairly well reasoned notion.  Having to deal with immediate scale is killer.  Robert is pointing to the Twitterati as the arbiters of a developer’s success.  What he doesn’t take into account is that editorial selection from the AppStore tribunal would result in a similar challenge to scale.

Hard Earned Dollars Results in Scrapiness

This is a true statement.  However, the uber point is lost in his analysis.  Android is a more difficult platform on which to monetize.  No amount of scrapiness is going to overcome flawed platform decisions.  You can be pretty scrappy when you are making no money on a platform designed to enable marketplace transactions too, and you have the benefit of knowing that as you succeed, the dollars are a result of your actions, and not failings on the part of the platform provider.

Build Unique Stuff

That’s an interesting statement.  I am sure it’s true to some extent, but most developers are looking for interesting scenarios to that lead to sales, not gee whiz factor.

Define Google’s Marketing

One of the core principles of our team is to make sure we are 100% focused on the success of the developers.  We give them whatever they need to be successful, and engage with them wherever we can to find out what we can be doing better.  Robert is making a suggestion that Google is going to reach out to the dev community for help in this regard.  Unless he has inside knowledge, I haven’t seen this actually occurring in the market.  He does make one very good point – Google hasn’t figured out how it will sell its tablet.  The same can be said for the how they promote developers on their platform.

Access to Lacking Features

See point above about unique stuff.  I am confused.  Using widgets + getting on Oprah means your app is more polished than Flipboard?  That’s a damn polished app.  I am not sure widgets would make it more so.  Notifications certainly enable an entirely new way to interact with customers – we’ve got them on Windows Phone 7 and devs are making some cool uses of them.

“Smooth” is Harder

I get that if you figure out how to optimize on the platform, and figure out all kinds of neat tricks, you will be a better programmer.  Totally agree.  You know what else makes you a great programmer?  Getting to focus on your algorithms and overall experience, and not dealing with ridiculous, time consuming, soul sapping optimizations which shouldn’t have to be discovered in the first place.  Developers universally tell us that they love working with the Windows Phone Developer Tools because of the maturity of the tools, the smoothness of the UI, and the ability to focus on the experience, and not nonsense.  You shouldn’t need an additional toolkit for dealing with fragmentation.

Get Noticed

I don’t buy this.  I am not likely to pay more attention because someone has something I don’t.  It may work for the first 2 people to come up to me with a Xoom, but after that, it won’t.  At SxSW, this will not be the case.  Too many plugged in people.  Getting noticed is about having something of value, or being able to cut through the clutter.  Having a Xoom is not a marketing strategy.  Being awesome is.

Fandroids

The fans matter.  Absolutely.  Do they have influence?  That’s the question.  There’s quite a lot of fans of the WebOS as well.  Getting more people to yell into the Techcrunch/Scoble echo chamber is not a marketing strategy.  It’s simply not.  Robert highlights the very difficult part of being a mobile app developer: getting noticed.  The fan boys are fine for an initial early adopter push, but to really get noticed, there’s a much larger problem to be solved.  What is the “backrub algorithm” equivalent for apps?  That’s a post for another time, but the company that figures that out is going to be unbelievably wealthy.

Iterate Faster

Being able to publish faster into a broken marketplace is not a suitable replacement for a broken marketplace experience.  There’s a reason Robert pointed out that people are having a hard time monetizing on Android.

At the end of the day, developers want sockets.  Android tablets will lag iPad for some time in that regard.  As they will also lag iPhone/iPod Touch and Android handsets.  Android hasn’t clearly demonstrated you can make money on their platform when they are supposedly activating 300,000 handsets a day, what makes Robert think that targeting a smaller target market (Android tablets) is a more viable alternative when the underlying marketplace flaws around monetization remain?  That’s not to say developers aren’t making money on Android.  It’s just not as easy as other alternatives in the market.

I was listening to the most recent TWiT where there was discussion about the recent algo change at Google.  During the conversation, there was an off-hand comment about whether or not the following relationship held water:

Google:Social as Microsoft:Search

That one kind of bent my mind around a bit.  There isn’t any new thought here.  Social is presenting all kinds of problems for Google, and despite their success in South America and some other locales with Orkut, they really haven’t made much of a dent in social.  A fact made more known by the recent additions of the talents of Marissa Mayer to the task.

Some have argued that social isn’t in the DNA at Google, and that’s the source of their problems.  It’s not too hard of a stretch to make the same claim about Microsoft: that we never had search in our DNA.

The analogy, however, breaks down when you spend a bit more time thinking about the subtleties of the companies.  Microsoft, at the core, is a platform company.  This is an important distinction, and one we will revisit in a little bit.  Microsoft started with dev tools, moving to operating systems, into desktop publishing and productivity, into the enterprise with OS and database, and branching ever more from there into mobile, cloud, web, etc, and of course into search.

Microsoft has had many successful forays beyond what is viewed as it’s knitting.  I have tried, quite unsuccessfully, to drive home the following point to people: Microsoft is a tremendous business even without Office and Windows Client.  Think about these businesses:

1. Windows Server
2. SharePoint
3. SQL Server
4. Project
5. Visual Studio
6. System Center
7. Exchange
8. Xbox

Those are businesses which are very, very large.  As in, start thinking about three commas.  Think about that for a moment.  Let that wash over you.  What else does Google have?  Search is their hit.  It’s a master stroke sort of hit, but really, what else have they done?  Android is big business, to be sure, but it exists to serve search.

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I have to make sure I don’t take 4 months off from blogging again.  Having re-read this for editing, I had a lot to say, but more importantly, I enjoyed the mental exercise it put me through.

I am not sure that I am going to tread much new ground in simply covering the weekend news of Yuri Milner and Ron Conway basically blanket offering $6M to the Y!Combinator crop.  There’s been plenty of analysis and moaning about this being the beginning of the end for the tech market.

As a former founder, and venture capitalist (late stage, but investor in private companies nonetheless), I wanted to touch on a few points I hadn’t seen elsewhere.

Yuri is a genius.  Why?  Think about what you need to do when you are an angel investor.  You have a little bit of money (relative to the overall venture pie) that you want to get into deals.  There are quite a few more angels then there are venture funds.  Competition is fierce and getting into deals is really all about who you know.  As a venture investor, your primary concern is “proprietary deal flow.”  In English, that means having sources of deals that other guys don’t have.  That problem is somewhat exacerbated when there is fierce competition for deals.

Further compounding the problem of the angel investor is the high beta nature of the deals.  In short, you have WAY more company failures than wins.  You just hope to make the winners payout more than the losers.  You expect to be compensated for that risk.  So even if you have proprietary deal flow, you need to get into good deals to reduce your risk.  Investing is supposed to be about risk management after all.

Paul Graham acts as a (so far) pretty good filter function for deals.  By just writing a check to all the companies in the portfolio, Yuri solved two problems in one swipe – Paul did the work to get the a good portfolio of angel deals, and Yuri now has access to all of them.  Further, he has put money to work evenly in a portfolio of deals which are more or less not competitive.  He didn’t have to spend 2 years putting money to work in 40 deals.  He did it one shot, effectively enabling himself to have a nice angel mutual fund.  Genius.

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I was watching Colbert the other night, and caught the very tail end of an interview with author Annie Leonard.  She was promoting her new book, “The Story of Stuff.”  I didn’t catch enough of the interview to know if I wanted to buy it, but did catch enough to grab my Kindle to order up a sample chapter.

The subtitle of the book is: How Our Obsession with Stuff Is Trashing the Planet, Our Communities, and Our Health-and a Vision for Change.  Let’s stop and think about that one for a second.  The author is railing against how the obsession with consuming, ostensibly, atoms is ruining the planet.  OK, I get that.

Imagine my surprise when I could only purchase her book in atom form.  Not available on the Kindle.  Wha?  Look, I get that not everyone has a Kindle, and that reading devices aren’t quite mainstream, but doesn’t this hypocrisy sort of negate her whole message?  Dave Ramsey rails against the use of debt for anything.  He’s a man who stands by his principles.  You cannot use a credit card to purchase wares from his site.

What principles is Ms. Leonard standing by when her book is not available at ship date in any form other than atoms?  The lesson here for entrepreneurs is pretty clear.  Know what you stand for, and why, and stick to it, lest you ruin your credibility.  This is an epic fail.

I have long held that our current system of taxation is a bad one.  It’s oppressive, is changed too often, and encourages cheating.  Further, the more complicated the tax code, the more likely you are to have to spend more time, and in many cases money, sorting out what you do and don’t owe.  It’s onerous and I hate the current system.  I want to hack it.

With that out of the way, it was with some interest that I was reading this article about the multitude of tax programs which are being enacted to help students get out of debt post school.  When thinking about any program, I view it in the same lens as I would a product that I would take to market.  First is who is my customer, but second is how do they become aware of the product.  For the average person, staying on top of all of these government programs is challenging at best.  In times like these, I prefer to opt for simplicity.  With that, let me propose some assertions, and then a potential solution:

1) As a country, we should aspire to have a more educated work force

2) The cost of college, university, and graduate education is rising faster than the rate of inflation, making it more un-affordable with each passing year

3) With the current tax system, a higher paid, and more productive, work force should, ceteris paribus, generate more tax revenues

If we can all agree on those assertions, then I propose this simple tax plan:

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This week I have been spending time at a corporate offsite.  It’s been a pretty amazing experience, and I have seen/learned a ton of things about which I cannot speak.  That’s a bummer, because I was blown away by some of the stuff I have seen, but it’s internal only for now.  However, should you want to see some of this stuff, you might want to consider being at our Professional Developers Conference in Los Angeles in a couple of weeks.

That said, one thing I can share is a story from a partner.  The presenter was awesome, and shared some interesting pivots on things that his company was doing with data.  It wasn’t data, but rather how they approached their customer support that really inspired me.  To make his point, he showed us a video of a storm chaser – the implicit statement was that for anyone who has ever been on a call with a Fortune100 customer when the service offering goes down, it was very much like being a storm chaser.  Just about the scariest thing you can do.  I would argue that it’s not the scariest environment imaginable, but that’s just me.

In order to think through how they were going to tackle customer support on a go-forward basis they decided that they would talk to the experts.  They arranged meetings with firefighters and emergency & disaster site workers.  They wanted to get into the heads of the very people who have to manage the crisis, calm the locals, and solve the problem.  How ingenious!

I don’t want to give away too much of what they shared, but I will share this tid-bit.  The best plan of action for learning how to handle support of irate, and expensive-to-lose customers?  Drill often.  Think about that for a minute.  How often do you drill your customer support team?  This reminds me of the movie Apollo 13, when Jack Swigert is getting a run in the simulator and blows it, and Lovell makes a joke along the lines of “if I had a nickel for every time I was killed in the simulator.”  The point here is that if you drill for it, you can solve the crisis when it arises with calm and focused effort.

What are you doing to train and audit your customer support?

One of my favorite VC bloggers, Josh Kopelman, has an interesting piece on the VC math problem as first envisioned by Fred Wilson.  Having gone through the fund raising process, and hearing this nonsense from VCs, I always gnashed my teeth when a VC was setting valuations based on what they needed to own.  Not any intrinsic value of the business, but rather what they felt their ownership percentage needed to be.  This was much more of a problem with the earlier stage VCs, and, interestingly enough, with some of the spray and pray VCs, where you would think they might care less about overall percentage due to the fact that they were investing everywhere.

Josh references a paper by Paul Kedrosky which takes a very detailed research approach to examining this issue.  The paper has been downloaded and will be read tonight.  However, the math that blew my mind was contained in the following section of Josh’s post:

Take a $400M venture fund.  In order to get a 20% return in 6 years, they need to triple the fund — or return $1.2B.  Add in fees/carry and you now have to return $1.5B.  Assuming that the fund owns 20% of their portfolio companies on exit, they need to create $7.5B of market value.  So assume that one VC invested in Skype, Myspace and Youtube in the same fund – they would be just halfway to their goal.

My head just exploded.  Despite my own please for my co-workers to be more intellectually curious with their jobs, I had never done this math.  I am left absolutely shaking my head at the reality that is facing any VC not in the top 5 (as in top 5 VCs, not 5%).  Good luck.  The tactical play for a fund is to invest early and small.  This is at odds with the 2 and 20 model.  I mean how are VCs going to feed their Cayenne Turbos?

Worse, I worry about the companies that the other VCs are funding.  With such a challenging economic model now staring them in the face (hey, at least before they didn’t have to answer to the data which could refute ridiculous forward looking statements about future “internet” or “new economy” fund performance), are they going to just start swinging for the fences?  Will they just pile on the risk and do whatever they can to justify the fees?  Or will they find a way to raise money and do next to nothing, and simply collect their management fees?  I wonder if LPs will now start wanting to have claw-back mechanisms in place when returns fall below a certain threshold.

The really hard problem facing entrepreneurs is that while it costs less and less money to start a company, VCs have more and more money piling up in the form of capital call commitments due to a dearth of deals over the past couple of years.  They want to deploy more capital, and that leads to capital inefficiency within small companies.

What does a guy have to do to get his StackExhange site set up and running? I put my submission in a while back, but I am probably way down on the list.  So in a creative attempt to convince Joel and Jeff that I am worthy, I figured I would give them something to read.  I spent this past week at the TechCrunch50 conference listening to developers talk about why they don’t use the Microsoft stack.  It was a great set of conversations, but I also spent a good bit of time talking with some of the business guys.  Many similar topics of concern came up over and over again, and I really want to help solve those problems.  Q&A for founder types anyone?  Let’s get this thing started already.  I will be a tireless promoter, and I can bring a pretty powerful ally to the table in making sure the site is funded and gets promoted.  Jeff, Joel, I beg you…please get my site rolled.

I have been waiting to write this post for a long time.  There are a great deal many resources on the web for entrepreneurs looking to learn, such as Hacker News, Andrew Warner’s Mixergy, and Eric Ries’s Lean Startup Blog.  However, I have always felt there was a gap in the the resources that really would help an upstart.  Having a really good base Excel model, fully built, and flexible (think Basecamp but for your financial/ operational model), would be extremely helpful.

Another resource I have always wanted to see were the actual decks which were used to get companies funded.  For obvious reasons, those are pretty hard at which to get a look.  Now that I am three years on from the initial funding of IMSafer, I have decided that I would post the slides that we used when we went out to raise angel funding.  Beyond just throwing the slides over the wall, as part of my community book The Failing Point, I have an entire essay dedicated to the content of the slides, and what it means with regard to putting together a long form business plan.

These are the actual slides, with no edits, save a few names removed for privacy reasons.  Please send questions.  Don’t be afraid to ask.  They biggest take away most of you will have is that there is no magic bullet for content, but there is good form to follow, and more than anything, at this early a stage, investors are backing people first, ideas second, slide content third.