Jason Fried has a great interview on Fast Company:

Look at what the top stories are [on TechCrunch], and they’re all about raising money, how many employees they have, and these are metrics that don’t matter. What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well? In the coverage of our industry as a whole, you’ll rarely see stories about treating customers well, about people building a sustainable business.

The story about his business icon is great as well.

One of the questions that really interests me is why certain digital products succeed and others fail — even if they look great and are easy to use. What can we learn from the failures to ensure that there are less of them? Is there a process that can help increase the likelihood of success?

The answer to these questions is the focus of my first article for A List Apart, entitled Usable yet Useless: Why Every Business Needs Product Discovery. From the intro:

All around us we see beautiful, empty monuments erected not for their users, but for the people who built them—and the VCs who are scouting them. Even sites and apps that go beyond beauty to usability often fail because they can’t find a big enough market.

Why can’t some interactive products find enough users to be sustainable? Why are there so many failed startups, despite a renewed focus on design? Most importantly, what can we do about it?

It was an absolute pleasure to work with the ALA team. I especially want to thank Sara Boettcher for being such a tough, gracious, and encouraging editor. I learned so much through this process — lessons I’ll take with me in my all my writing going forward.

So if these are questions you struggle with as well, have a look at the article. My hope is that we’ll see more businesses trying out the Product Discovery process as a way to build products that people love.

Cap Watkins says goodbye to getting stuff for free — and celebrates a better way — in Death of the Free Web:

As a result, the web is becoming more localized, more niche. And what startups are beginning to realize is that they don’t need to be the next Facebook or Twitter or Google to achieve success and to grow a large, sustainable business. What they need to do is create products that connect with these small, but passionate groups of like-minded people. Instead of passionate users making up the minority of a product’s customers, the new goal is to make them the majority from the start. Because those passionate customers, it turns out, create even more passionate customers.

Cap gives some good examples as well. His post argues for a similar approach to what I discussed in Imagining a future without traditional marketing.

(link via @bokardo)

I turned off satellite TV at our home about 5 months ago. This wasn’t some moral stand against the horrors of technology. It was simply a matter of return on investment. Satellite TV is ludicrously expensive in South Africa, and my wife and I are so happy with our Apple TV setup that I couldn’t justify the cost any more. I wondered if we would have some withdrawal symptoms, but I can honestly say I’ll never go back to satellite. I do miss the odd live sporting event, but that’s not compelling enough to fork out a gazillion dollars every month just to see some guy yelling about cake.

The side benefit of this decision is that we haven’t seen a TV commercial in 5 months. Combine that with my practice of doing most of my online reading in Instapaper, and things start to get interesting. The sheer volume of advertising I used to be bombarded with forced me to tune it all out. But now that it’s a bit scarcer I notice every ad I come across. And I don’t like what I see. It’s especially jarring on Facebook, where “Promoted pages” are starting to annoy the crap out of me. I used to scroll through them without a second thought, but now I grit my teeth as they fly by.

This got me thinking about the current state of traditional marketing, and what a future without it might look like.

RIP traditional marketing

I believe that marketing as we currently know and practice it is well on its way to extinction. That’s certainly not what ad agencies want you to believe, but the evidence is all around us. Marketing is losing its ability to convince people to buy things they don’t need. Jason Calacanis sums it up perfectly in The Age of Excellence: “If your product sucks, it’s over. Transparency is a bitch.”

We discuss products and services everywhere we go, and our friends and followers are listening. “Word of mouth” marketing isn’t new, but the tools to spread our views about a company or experience are now within everyone’s reach. And boy, are we reaching. Even a cursory look at Facebook’s usage metrics shows the staggering amount of time people spend there.

What frustrates companies, of course, is that they can’t control the conversation any more. They’re powerless against an angry mob of consumers who spew vitriol about their products all over the Internet. This is ultimately a good thing, because it will slowly scare companies into taking some of their marketing budgets and spending it on making better products instead. Because that’s where profit and sustainability will come from.

This doesn’t mean I don’t want to know about new things. I still want to find out about cool products or services that I might be interested in. But I don’t want to see it on TV or in a sponsored link on my Facebook page. I want to hear about it from people I trust. That can be through a tweet or blog post about a good experience, or even a paid ad related to a topic I care about (like the advertisements on the 5by5 network).

I’m not averse to marketing messages. I’m averse to being manipulated into buying something that won’t live up to its promises. When’s the last time you read the back of your shampoo bottle? Do you believe that the right shampoo will give you “gorgeous, luxuriously soft” hair, or maybe “the hair nature didn’t”? No? Then why are we ok with these ridiculous marketing messages? Why don’t we call companies on it when they do things like promise “everything you could ever want”?

The future of marketing is product

There is no traditional marketing in the future I’d like to see. There’s no professional advertising TV spots, no billboards, no videos created to be “viral content”. Instead, companies take the money they save from paying ad agencies, and spend it on building great products.

In this future, the people who work on products aren’t faceless entities. They are individuals who hang out online, who write on their blogs about their journeys, and who are active in the industries they operate in. Since they’re focused on providing value to others, they have a large enough following so that when their product launches, they can promote it to their networks without being overbearing. And if the product is good enough, that message gets amplified through the various networks to acquire customers. If it’s not good enough, they get the negative feedback and try again.

The outcome of this vision is that the products we use are made by people we know, and promoted by those who want to spread the word about something they like. I don’t think we’re even that far from being able to create this future. I’m happily unaware of TV advertising these days, and most of the things I buy are based on recommendations on Twitter or in offline conversations.

Granted, we need more success stories to convince companies to buy fewer ads and hire more product-focused people. And we need all those product people to start contributing to their communities and talk about what they’re working on. But the puzzle pieces are all there. We just haven’t finished putting them together.

Anil Dash discusses App.net in You Can’t Start the Revolution from the Country Club:

In today’s world, where the social web is mainstream, innovating on the core values of tools and technology while ignoring the value of inclusiveness is tantamount to building a gated community. Even with the promise that the less privileged might get a chance to show up later, you’re making a fundamentally unfair system.

I am genuinely confused. If you take this argument to its logical conclusion, is he saying that everything we make should be free so that it doesn’t exclude anyone? Isn’t that how we arrived at the current situation where advertisers call the shots on major social networks?

I didn’t back App.net because I hate Twitter and want to move somewhere else. I love Twitter, and I have no problem with anyone who uses it because I get to choose whose tweets I see. I backed App.net because I want to see what innovation comes out of it. To illustrate my point, in 1970 a NASA director attempted to make the case for space travel to a Nun who asked how he could suggest spending billions of dollars on space projects at a time when so many children are starving on Earth. From Why Explore Space?:

I believe, like many of my friends, that travelling to the Moon and eventually to Mars and to other planets is a venture which we should undertake now, and I even believe that this project, in the long run, will contribute more to the solution of these grave problems we are facing here on Earth than many other potential projects of help which are debated and discussed year after year, and which are so extremely slow in yielding tangible results.

I understand that comparing an app to space travel is silly, but if you read the whole letter you’ll understand the sentiment that prompted me to back App.net. I believe that a community of passionate developers can use the platform to develop ideas that not only solve existing problems with web publishing, but also meet some as-of-yet unknown web user needs.

For me, it’s not about excluding people, or sticking it to The Man. It’s about funding a playground for innovation1.

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1. Wow, did I really just use that tired phrase? Sorry. I actually do mean it, though. ↩

If you secretly enjoy snarky writing as much as I do, you should read Paul Constant’s post called Yesterday, I Went to the American Idol for Startups. It Made Me Want to Die. It’s a scathing and funny rant about lazy, unimaginative use of language in business, and yet he ends with quite a poignant remark:

You can do anything you want with an idea. It can be as big as you want. It doesn’t have to solve a minor problem that nobody ever really realized was a problem. It doesn’t have to fit into something the size of a button crammed into a “folder” the size of a button on a screen the size of a playing card. But everywhere I look, I see tiny little ideas, ideas that are almost petty in their inconsequentiality. And I come back to those cliches, and I think the real problem is in how little thought goes into the language these people use. When the language you employ to communicate your ideas is small and boring, your ideas are going to be small and boring. And when all your ideas are small and boring, your future gets dimmer and dimmer and more claustrophobic until it’s finally just a pinpoint of light on a dark screen, in danger of going out at any time.

Jason Calacanis believes The Age of Excellence is here, and I agree:

You see, in the old days, it was about distribution, location, marketing spend, celebrity endorsement, traffic buying or the black art of search engine optimization.

Today it’s about getting a positive net-promoter score and making your five-star histogram look like a gun: a lot of five-star reviews coupled with some four-star reviews make the barrel. A dramatic drop-off to three stars, followed by slightly fewer two- and one-star reviews, makes the handle of your gun.

No amount of marketing or gamesmanship is going to flip the upside-down gun over. If your product sucks, it’s over. Transparency is a bitch.

(link via @jonaspersson)

Angela Baldonero in Just Say No:

We’ve all seen the all-important and all-knowing executive team. The team that has all the answers and yet isn’t able to execute. I’ve seen too many executive teams where personal relationships and politics are the real business drivers behind-the-scenes. Business is done over cocktails, after hours and not in broad daylight. Personal agendas trump team goals. People smile and nod politely in meetings, then leave the meeting and corner the CEO to say what they “really think.”

Michael Mulvey points out an interesting distinction between Microsoft and Apple in Very Soft, his response to the news of Microsoft’s first ever quarterly loss:

The thing is, Microsoft has never been a consumer-focused company to begin with. Windows was designed for businesses, not people. Microsoft got in good early in the enterprise market in the 80’s and 90’s and that trickled down to peoples’ home computers. “I have Windows at the office, I might as well get it for home.” That left Apple out in the cold until Steve Jobs came back in 1998.

Contrast that with:

Windows PC spread from the office to the home. In the past 10 years we’ve seen the opposite: Apple products are going from the home to the office.

This is true. As BYOD (Bring Your Own Device) policies become more prevalent, corporate IT departments are finding that many of those devices are iPhones and iPads, and they just have to find a way to deal with that. It goes even further, because these devices are “gateway drugs” that end in employees dumping Windows PCs in favor of Macs (see How the Editor of Windows Magazine Became an Apple Fanboy for a good example). And before you know it you have a groundswell revolt against Microsoft Office for Mac, and a loud push to switch everything to iWork and Google Docs.

It’s a difficult situation for Microsoft, because the shift is mostly driven by masses of individual contributors — not executives. And it’s a situation that Windows 8 is not guaranteed to fix.

When the news hit that Sparrow has been acquired by Google, you could almost hear the collective sigh from those who use and love this wonderful iOS and Mac OS X email client. Many people (myself included) took to Twitter to voice our disappointment with this move, especially about the fact there there will be no additional development on the app:

We will continue to make available our existing products, and we will provide support and critical updates to our users. However, as w’ll be busy with new projects at Google, we do not plan to release new features for the Sparrow apps.

The response from many others was that we should just get over ourselves:

Sparrow doesn’t owe you anything. You paid, you got software. They can sell and/or kill it if they want. No right to complain. Sad, true.

— Matt Gemmell (@mattgemmell) July 20, 2012

Matt is right, of course — Sparrow doesn’t owe us anything. The Sparrow team did everything right: they had a great idea, they worked hard on it, and they executed well. That’s why Sparrow is a great app that serves a real need, and why it’s so successful. This is how software development should work: make a great product, and sell it to people for money. The Sparrow team deserves enormous credit for doing that.

But the issue is not that we think Sparrow “sold out.” I don’t think any of us would have turned down Google’s offer if we were in their shoes. The Sparrow team deserve their success, and it’s their software — they can do with it whatever they want. It’s also a great strategic move by Google. If the Sparrow team end up making Gmail better, Google wins. If they don’t — well, at least they’ve eliminated a competitor, and they still win.

We need to reframe this argument. The real issue is much deeper than this specific acquisition. The real issue is the sudden vulnerability we feel now that one of our theories about independent app development has failed.

You see, for a long time we’ve chanted this refrain wherever we could: If you’re not paying for it, you’re not the customer; you’re the product being sold. We point to Facebook and Delicious and ad-supported sites and lament the fact that we’re all just a set of eyeballs being sold to advertisers. So we came up with a solution. We decided that we don’t want to be free users any more. We decided that we want to pay independent developers directly so that they can have sustainable businesses and happy lives.

The philosophy is perfectly summed up in Don’t Be A Free User, a great post on the Pinboard blog:

What if a little site you love doesn’t have a business model? Yell at the developers! Explain that you are tired of good projects folding and are willing to pay cash American dollar to prevent that from happening. It doesn’t take prohibitive per-user revenue to put a project in the black. It just requires a number greater than zero. [”¦]

So stop getting caught off guard when your favorite project sells out! “They were getting so popular, why did they have to shut it down?” Because it’s hard to resist a big payday when you are rapidly heading into debt. And because it’s culturally acceptable to leave your user base high and dry if you get a good offer, citing self-inflicted financial hardship.

This is why I am a paid subscriber to services like Pinboard and Instapaper. It’s also why I paid for the both the Mac OS X and iOS versions of Sparrow. I believe in this philosophy. I believe we should pay people for the things they make, so that they can make it even more awesome.

But with Sparrow’s acquisition the cracks in the philosophy starts to appear. Marco Arment (creator of Instapaper) posted his response to the deal in Talent acquisitions:

If you want to keep the software and services around that you enjoy, do what you can to make their businesses successful enough that it’s more attractive to keep running them than to be hired by a big tech company.

But… that’s what I did. I paid full price for every version of the Sparrow app I could find. I told everyone who would listen to buy it. I couldn’t have given them more money even if I wanted to. So, as a customer, what more could I have done to keep them running independently?

This is the core of the disappointment that many of us feel with the Sparrow acquisition. It’s not about the $15 or less we spent on the apps. It’s not about the team’s well-deserved payout. It’s about the loss of faith in a philosophy that we thought was a sustainable way to ensure a healthy future for independent software development, where most innovation happens.