Advice for Microsoft’s new CEO: Go All-in with Apps

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tl;dr: Microsoft’s new CEO must make mobile work, and since Android and iOS have a huge lead, the best strategy is to buy the top 100+ apps on competing platforms while making Windows Phones zero margin like the Kindle.
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Microsoft dominated desktop computing by relentless iteration.

Word, Excel and Windows were far behind WordPerfect, Lotus 1-2-3 and the Mac when they launched. But Microsoft grinded it over twenty years from the mid eighties until the 2000s.

And they won. Big time.

It’s time for Microsoft to grind it out again, and there is a clear analogy here: people don’t buy operating systems, they buy the apps that run on them.

For a time, typically early in a technology cycle, people are obsessed with hardware. But when hardware parity is reached – as it is today in smartphones – folks tend to focus again on apps.

In the ‘80s and ‘90s, people bought PCs based on their hard disk space, memory and CPUs. People actually knew the names and speed of their CPUs!

Now folks buy based on color.

On. Color.

Nokia was a great purchase for Microsoft because they got it at half price (they used offshore money that would have been taxed to all hell if repatriated), and they got a really sexy phone line in the Lumia.

Lumia phones blow the hardware profile of the iPhone out of the water, what with wireless charging and Carl Zeiss lenses.

Carl. Zeiss. Lenses.

Wireless. Charging.

They’ve had these awesome features for well over a year. They are stunning.

But they trail Samsung’s and iPhone’s by a significant margin.

Why?

It’s the apps.

Microsoft needs to drop everything and buy the top 100 apps on their competitors’ platforms. So, whatever the top apps are on Android and iOS, snap them up!

After you do, you keep building them for iOS and Android.

Things like Evernote, Sunrise and Tinder come to mind.

Why?

Four reasons:

1. Because if you buy them, you’ve instantly infected the iOS and Android ecosystems!

2. They’re proven.

3. You get talented people on your team who can build the next generations of apps.

4. You can start releasing new features first on Windows and get the halo effect for your platform.

Now, this is a five-year strategy, with the first two years buying and the last three exploiting.

If you have the brass to spend $7b on hardware that’s largely commoditized, you better have the brassier ones to double that on apps.

Apps are what matter.

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Advice for Building a Startup Inside Someone Else's Ecosystem: Don’t

"The cave is collapsing!" -- Leia Organa
 
"This is no cave." -- Han Solo

Here’s a composite of a three discussions I’ve had with whip-smart founders over the past couple of months about building companies on the backs of existing ecosystems like YouTube and Facebook.

“Jason, I’m building a startup around the @Youtube ecosystem -- which I know from your writing that you’ve got some issues with -- we want you to invest!” said the founder.

“That’s an awesome set of tools you’ve built there. Clever indeed. However, if any of them work, you know YouTube is going to copy them and make them free, right?” I replied.

“But YouTube is going to be 10x bigger than it is in the next five years... and you said if it was a stand-alone company it would be worth $50b!” he replied.

“I did say that, and that’s even more reason for you to be worried. As they get bigger and more powerful, they will have even more resources and rationale to rebuild your ideas -- and they will have an even bigger firehouse to spit it out to customers,” I said.

“But look at all the examples of huge companies built off of large ecosystems: Norton Antivirus on Windows is a Fortune 500 company, Hootsuite exploded on the back of Twitter and it has a $1b valuation, Buddy Media rocked Facebook and sold for $800M,” he said.

“You left out PayPal... built off the back of Ebay for billions and now the most valuable piece of the company,” I added.

Then I said, “Now, while all of the examples above are true, they are a small, small percentage of founders who were able to get escape velocity from the exogorth, the space slug in Star Wars that almost ate the Millennium Falcon.”  

Ironically, as I was having this discussion, I found out that YouTube had built a tool that did EXACTLY what one of the founders in the above composite had built: a tool to help you connect with your top YouTube fans!

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Why Jeff Bezos Bought the Washington Post--Six Theories

[ Jeff Bezos was TIME's Person of the Year in 1999. ]

Spectacular news broke yesterday that Jeff Bezos bought the Washington Post.

Why WaPo was sold is obvious: running a newspaper sucks.

It really, really, really sucks. Let’s count the ways:

1. Craigslist took all your classifieds
2. Niche sites took your audience and your top journalists
3. No one wants dead trees on their doorstep
4. News breaks, is processed and largely resolved in the same day on Twitter
5. Some of the country’s last unions are grinding down already ground-down newspapers  

It’s just a huge headache with little payoff.

Which leads us to wonder, ‘Why did Jeff do it?’

Also for that matter, why has Warren Buffett been buying dozens of small papers up over the past couple of years, and why did Red Sox owner John Henry just buy the Boston Globe?

Here are the six leading theories and what I think of each:


1. EGO: Newspapers are the new sports teams for the billionaire set

There is probably some truth to this. At some point, rich folks realize they’re gonna die with a bunch of money in the bank they never deployed in service of either their legacy, fun, society’s benefit or straight-up ego.  

And it’s not just old dudes like Buffett and Sam Zell.

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Stretch Goals Are Important (Or WizzyWig Won $100k in 48 Hours at a Hackathon)

[ Summary: Stretch goals are important, and the ones we set for the first LAUNCH Hackathon this past March resulted in a team of three unknown 20-somethings from Pittsburgh building a killer product in 48 hours, landing over $100k in investment on the spot and later earning a slot at a prestigious accelerator. On November 8-10 we host LAUNCH Hackathon 2 with stretch goals of 1k *actual* developers, $250k in investment prizes and five teams funded or accepted to accelerators. ]   

At some point 10 years ago I overheard the buzzword ‘stretch goals’ and it stuck in my brain.

It might have been from an ex who was at Harvard Business School, or from reading Jack Welch.

Stretch goals, as far as I understand them, are lofty goals that you set even though you have no idea how to reach them at the time.


My Three Stretch Goals

Last year I started setting stretch goals for myself and my kick-ass teams.

Three notable ones at LAUNCH:

a) the largest startup technology conference / hit 5k attendees for the 2013 LAUNCH Festival
b) the largest hackathon with 300 *real* participants
c) the largest hackathon prize ever

Well, we had 6k folks come to the LAUNCH Festival in March, resulting in folks coming to me for the past six months saying, ‘That was amazing! It was huge!’ We blew past the stretch goal by 20%. Wow.

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The Unbearable Wearable: Google Glass is Brilliant, Loathsome and Not Inevitable (or "Take Those off before I Punch You in the Face!")

@Scobleizer's infamous Google Glass photo, which his wife took at their home.

I’ve run into several friends wearing Google Glass in the past three months, and I have three words of advice for them:

Take. Them. Off.

First, you look like an idiot.

Second, you’re killing the party.

Third, are you recording me right now?!?
 

First Encounter: “Are You Recording Right Now?”

The first time I ran into these magical devices in the wild was at a conference. A fairly notable person walked up to me wearing them.

I asked, “How do I know if you’re recording me?”  

“You don’t!” he replied before correcting himself. “Well, I wouldn’t do that without telling you.”

“But how do I know? I’m not really comfortable with trusting folks to be recording me or not. I mean, how do we have a real, honest discussion if I don’t know if you’re recording it?” I offered.

“Well, you might be able to see me turn the camera on... See, you have to click to record,” he replied.  

So I’m supposed to just trust every person wearing these that they’re not recording me.

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