JayWeintraub.com - Internet Advertising Analysis and Growth Insights

The Best Thing for Google Glass Are All the People Telling Me Why I Would Never Want It.

For reasons known only to Google, @businessinsider makes my inbox, and with their CTR optimized titles, I make @sailthru look good. Between the two of them of though, I'm finding myself well exceeding my capacity to hear another article about how people don't want Google Glass.

As for the future of Google Glass, I couldn't be more bullish. Don't get wrong, I personally hate them, but they are a necessary evil on the path towards a Cyberdyne Systems and/or Minority Report future. The world we live in continues to progress towards an always on, always connected, but more so always captured. Look at London. The issue in my opinion is not that we're being captured, but who is doing the capture - big brother or some douchebag. Not sure which is worse, but big brother only posts to the NSA not a kitty kat YouTube channel. 

Let's face it. Google makes great products, but can't market for crap, which is slightly ironic given how much we all rely on them for marketing our businesses. But in this case, they are doing a brilliant job. They've create a demand for people like myself who aren't early adopters but try to keep on the periphery of what's happening in tech. We know there are a meaningful number of glasses out there; I believe the number is 1000. Plenty to think we might see one in a market like SF or NY, but nearly enough to make them accessible to someone like me. 

I'm not sure how I feel about life where everyone is a potential reality star. How I feel doesn't matter, but how the collective feels, will. So far, any news is good news for Glass, not so good for my frustration level, but what surprises me more than anything is not the negative news, but just how little of this news talks about the B2B application of Glass. When I think of the life changing and disruptive nature of wearable devices, it doesn't exist in the consumer market. Life where certain professionals could use Glass could increase efficiency in ways that far outstrip the ability to take pictures more quickly. 

From the consumer standpoint though, an enterprise first approach feels like the smarter route. Glass is more Blackberry than Apple, a top-down rather than bottom-up movement. I think about the NICU and subject of much of our recent stress. Were the nurses to have Glass and be able to see the readings of their patients, response times would increase dramatically. If the doctors had the information about the room visually without flipping through charts, and if they could speak to update, care is transformed. And, that's just one of many use cases. 

An enterprise only approach to Glass, would be the at scale version of their current testing program. The result would be a body of work extolling the virtues of Glass, creating a demand for a consumer version, instead of where we seem to be at today - a body of concern and mounting questions. Make us unable to live without it. That's how it will become the changer it should be. Such an approach will help to quell critics and make sure the intended audience of users, instead of just the antitrust as well as mass tort lawyers, excited.  

You Down with OMG? Yeah, You Know Me. Tumblr And A Whole Bunch of Cray-Cray.

Quite a bit has been said about Yahoo buying Tumblr. $1.1bn is a staggering amount for a company that earned $13mm last year and has declining growth in its users and pageviews. It's been said that the business will generate around $100mm in 2013, which is impressive growth and suggests that the company could make $200mm to $300 fully optimized. And, assuming a conservative 20% EBIDTA, it will take *only* 20 years to make back the $1.1bn, which by the way happens to equal an entire year's worth of free cash for Yahoo. Seriously, imagine selling a business where the decimal in the sale price is $100 million. This isn't $10.1 million or $100.1 million. It's $1.1 billion.

I think one of my favorite write-ups comes courtesy of The Onion, with their piece, "Yahoo Back On Top After Purchasing Millions Of 13-Year-Old Girls’ Blogs." While in jest, the article brings up two serious questions, "REALLY?" And, "WHY?" Please remember that "Why not," and "We needed to do something big," do not qualify as answers. While I know of one friend that was an investor, so I feel happy for him, I struggle with the acquisition of multiple levels.

On the business front, I almost get what Yahoo is trying to do. They don't have a sexy media play that can take part in the new hashtag reality. They've given up on search, don't have a social play, aren't a mobile player, so with Tumblr, they get a piece of social, a piece of mobile (views), and not just scale to sell against, but an ad format / methodology currently in vogue. BUT, user generated content is really hard to monetize. Ask Twitter and Facebook. They have done an astounding job at creating ad products that big brands want and feel safe using while balancing the user experience. Not an easy task. Where Yahoo will struggle, and why I have a hard time understanding the price is that major brands don't promote their Tumblr presence on TV. It's not the digital calling card, and in a world of YouTube, Twitter, Facebook, Pinterest, etc., asking a company to add and master another platform is no easy task. Google+ anyone?

On the personal front, I have more issues. I'm a bootstrapped entrepreneur, so the company's money has always felt like my money. This reminds me of the issues I have with the government. It's other people's money. Success or failure of this deal hurts CEO Mayer very little. She did not have to put personal money into the deal, and if it fails, it becomes a write down. If it really fails, the way Bebo did for AOL, someone looses their job, potentially her, but by that point, her own wealth has already increased by $20mm at the low end. And, no matter what, she will be remembered as a risk-taker, willing to make bold decisions. That's all very good, and were I in her shoes, I cannot say I would do things differently with the system we have in place today. That's the problem. The system is broken.

One part of the system that is broken is on the early side of entrepreneurship - the acquihire. It's something Marissa Meyer has publicly decided she supports, and sadly only perpetuates the entrepreneurship bubble. Make no mistake, this is not an internet or tech bubble we are in. This is an entrepreneurship bubble, and when companies with no right to hop on the bandwagon do, it creates a potentially toxic scenario. The entrepreneurship bubble is the quick flip of businesses and people, fueled by hype, speculation, and a false sense competition. Unlike Facebook, Yahoo is not a tech company and does not have a tech culture.

Yahoo will fail at keeping the talent, which is fine if they are buying assets and not people. And, as Mark Suster points out so well, as an operations business, Yahoo needs good, talented operators. Make a young person rich and you do nothing to help your business except give the person you need a strong desire to leave or stay but give less and the person who won't stay anyone time and a runway to start their next thing.

Getting back to Tumblr. They did something special. They created a platform that attracted an enormous user base (110 million blogs created) without spending any real money on paid user acquisition. The team and the investors had an astoundingly successful outcome, and they played the game perfectly. What's wrong then? The game is arguably flawed.

Incentivizing the wrong behavior. That's life's version of greenhouse gasses, and it's arguably getting worse and worse. A result of which and the hardest problem to solve let alone address, as even mentioning it brings about a Pandora's Box of conversation, is the wealth divide gap. As of May, according to Wikipedia, Tumblr had 175 employees. The money isn't going to them, 20% is going to the founder, 10% max to other employees, so 70% to investors. All of which is how the game is played, but we do nothing to help sustainable job creation and the resuscitation of a healthy, true middle class. The vast majority of the proceeds go to a limited number of players, with little being put back into play.

I will guess of the $1.1 billion that $100 million gets reinvested in the next generation. One winner from the Tumblr sale should be the NYC and broader tech communities. The new $100mm available for startups and investments will create a modest amount of jobs, and a meaningful percentage (is it 20%, 30%, more?) will go to people young in their careers, for whom this is also not their money, and failure often means a lead up to another job. What we haven't had is another Google, a game changer that has created a large number of jobs not to mention a well respected culture and benefits to try and get hired for. Large, long-term growth. That's not Yahoo, and it wasn't Tumblr.

The ability to be an entrepreneur is one thing that makes this country great. But, there's a case to be made that it's gotten a little out of hand and that the game is no longer an even playing field, or at least one with the proper alignment of incentives. We are also losing the battle to create a healthy and sustainable middle class. Are the two directly connected? I don't possess the scope to really say, but something is happening that we will need to fix. Or maybe, I'm just one of the haters. No matter what, it's cray-cray.  

Lessons from the NICU - The Trouble with Not Being Able to Measure

My wife and I have been spending quite a bit of time in the NICU. She gave birth to our first children, fraternal twins Ryan and Madeline. (Like backstories and context? Keep reading. Otherwise, go to Part 2.)

Part 1: The Personal Story and Current Journey

All things considered, we are very lucky. While born 8 weeks and 3 days early, we have according to medical professionals, healthy kids. Their small size, fragile appearance, the CPAP obscuring their face, the IV in their arm, and multiple connectors to constantly measure heart rate, oxygen saturation, and respiratory rate make it very difficult for us to feel they are healthy and progressing as they should.

Knock on wood, they have not needed any surgeries, transfusions or significant intervention. They are starting to put on weight, are able to eat, sleep, and poop, all things that we cannot take for granted, especially when all we have to do is look at some fellow NICU-mates whose struggles are much greater than our own.

After the first week, we started seeing noticeable differences between our boy and our girl. The medical staff set our expectations for her to develop much faster than him, and that has been the case. She has grown faster, consumes more, and most importantly, can spend time off CPAP. He on the other hand has not shown many signs of progress. Had we only one kid and had we just celebrated his two week birthday, we might feel differently.

Instead of two steps forward and one back, it feels like one step forward and two back with him. The nature of the NICU is partially to blame. In many ways, it is the definition of stressful, and it also epitomizes the squeaky wheel gets the grease. Each of the three continuously monitored metrics has an acceptable range, and if any of them outside the range, an alarm goes off. Sit in the NICU for more than a few minutes, and that's what you hear. With our boy, it's what we hear seemingly non-stop. It's a form of torture. You have few to no tools at your disposal to assist, and your mind can only focus on the alarms.

With three babies in a nurse's care generally, someone needs something almost always, so it's anything but calm or easy. The issue is not just the feeling of helplessness, it's the balance between what is measurable, trackable, and known versus the unknown and thus subjective.

The balance, or imbalance in this case, also leads to something else, a high sensitivity (on my part at least) to our babies' nurse. "Hospital" may be close to "Hospitality" in spelling, but that's where the difference ends...on so many levels. Let's look at one. Unlike your typical higher-end hospitality environment, the nurses are very much people with individual styles and personalities. There is not a higher brand and code under which they operate. That is not a criticism, but when assigned a personality and style that does not match your own, it adds additional friction to an already charged situation.

Part 2: Connected-Future and the Unknown

Having had a wide range of nurses has led to many observations, especially about our medical system, but a way to frame our experience not just this experience but others as well. It stems from balancing good enough with doing all that can be done. In so much of our life, this is what good versus great looks like, or hard work versus less hard work, etc.

In sports especially, we see the difference between hard work versus not as hard work. In school, we see it too, and it often looks like this. You know what you have to put in to get to good enough, and some choose to do more. It can be personally motivated (just a high achiever) or reward driven (achieving highly to get to a good school).

If you want to raise performance, you have to either install a minimum threshold or raise it.

When situations aren't as measurable, at least in the connected-future*, that's where it gets hairy. The NICU that our babies are in is rated very highly, but that's because they do many procedures on difficult cases. The actions taken have measurable results and in the connected-future. This is where you want to be when certain neo-natal procedures might be needed. But, what if there isn't a procedure? Then, there is a prescribed course of action that revolves around monitoring and "good enough."

Our nurses tend to fall into two camps. Those that optimize to good enough and those that optimize to all that could be done, even if the results of those actions can't be felt in the connected-future. Some are high achievers, others not as much. Some are just driven because they can't live life not giving it what they can; others are satisfied at giving just enough. In other words, nurses are people personified.

Why we care about is that this isn't a restaurant; it's our kids lives. The potential delta between good and great is immeasurable and exponential. How much more could you do and have if you were 1% better? 5%? 20%? 50%? In the NICU, we're talking about kids in the very beginning of what any parent hopes will be a long, fulfilled life. How can we not obsess at what good enough and better than good enough means for them - mentally and physically. That more than the constant alarms eats at me. CPAP not bubbling consistently but "good enough?" Oxygen saturation low but "good enough?" A greater number of bradies, where they recover but with a lower low? No one knows what it means. The high achievers try to make sure more time is spent well above good enough. The other group doesn't try to optimize for achievement. There is no connected-future incentive that would force a good enough achiever to reach higher. The result. This.

Without better metrics, we struggle to optimize to anything but the minimum, as it relies on people doing more just because. And, when the potential difference between good enough and better than good enough can be immense, not having tracking commiserate to the gravitas of the situation creates an imbalance in the parties and potentially toxic scenario. 90% of a great meal is very different than 90% of a great life. This situation isn't unique to being in the NICU, but it highlights the gap in a unique way.

As my father would have said, "Way to over think it." Give me some proof that it doesn't matter, and maybe I'd agree. Until then, for me it's all about alignment and optimizing.

 

*The connected-future means a timeframe where a person responsible for an action feels the real result of the action. By and large humans optimize for the connected-future not the eventual-future, because our system of incentives places the maximum benefit on the connected-future instead of the eventual-future. Alignment of incentives and the disconnect between for what we are generally incentivized and what we should be incentivized is a topic of extreme interest to me.

Why developers are leaving the Facebook platform and that is OK

Many in the customer acquisition, especially the newer genre of "growth hacking" know of Andrew Chen, whose career has spanned the earliest days of behavioral targeting to today's platform era. I was reading a recent essay of his, titled "Why Developers Are Leaving the Facebook Platform," in which he writes, "In recent conversations with fellow entrepreneurs in Silicon Valley, it’s become a common belief that Facebook has become an undesirable platform for a startup to build their company."

As even those in the lead gen world know, that attitude could not be further from the Facebook App ecosystem of 2008 - 2011. I remember a conversation I had with one of my favorite people, Saar Gur, a partner at Charles River Ventures, not long after he invested in a firm that was early leveraging the MySpace ecosystem for app installs. This was before Facebook had officially opened up its platform to developers. He had a such a great way of explaining what at the time was a very simple ecosystem, comprised mainly of people sending hugs and the like. He called them light touch activities, and it made perfect sense. It's why we "Like" more than "Comment," follow more than friend, text more than call, etc. It's easier, safer, and a way to engage without having to use conscious thought and face rejection.

The light touch app phase became less prominent as Facebook's algorithms for what was shared and what wasn't. The opened the door to more intricate casual games, who for several years also enjoyed phenomenal gains, not the least of which came from shrewd news feed optimization, ok gaming the rules. And, if there is one thing that always happens, it's holes are plugged and rules tightened, so that experience ultimately harmful to long-term user happiness does not become the dominent experience.

For app developers who relied on these hacks, a more crowded playground with stricter rules is absolutely an uphill battle, and I can see why it would make for less investible, if not uninvestible business. On first glance, shifting developer interest sounds like a bad thing for Facebook. Is it bad for Facebook or just bad for developers?

I think the changing developer landscape and interest in Facebook is a non-signal for the health and wellness of Facebook. Facebook is a platform, but it is a very different business today than several years back. Facebook today is a media business. It is a no longer a platform for entrepreneurial developers to build their own audiences via Facebook. It has shifted to become a platform for businesses to interact and grow their audiences. It makes money off ads, and is catering to those who will drive its business going forward.

The prototypical entrepreneur product-developer doesn't build for Google's search engine any more. That hasn't hurt Google, and it won't hurt the Facebook of the future. Games, for example, will never be able to spend enough money to help Facebook earn the revenues they need, and games / third-party apps aren't core to the experience Facebook wants. Agencies and the long-tail of SMB's will determine Facebook's fate. Making sure they have "apps" for businesses is Facebook's priority, and it's a smart one. I still think the company must continue to have a vibrant third-party publisher platform, and it must continue to have a healthy developer base. But it's ok that the developer base is changing. And, it's ok that we're entering a period where their developers aren't necessarily product-entrepreneurs looking to build their own media property versus helping others use Facebook to maximize theirs.