It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

Can’t really argue with Steve. Customers are really good at asking for incremental improvements. At MProfit we field 100′s of request a month and many are useful but most are not. Most are requests for a single feature to help that person but of course that’s not how a customer spins it. They usually tell us “if you add XYZ feature you will get 1000′s of new customers.” However, companies don’t grow exponentially by adding one feature here or another there, it’s about completely flipping the mindset and getting many more new customers in the door.

One of my favorite quotes in regards to product development supposedly came from Henry Ford:

If I’d asked my customers what they wanted, they’d have said a faster horse

The car industry for the past 50 years has been stuck in this add one feature here or increase gas mileage by 5% sort of mentality. Innovation has been slow and hence General Motors, Toyota and Volkswagen each have taken turns for the top spot for most number of cars sold every year for the past 3-4 years. As a consumer, I would ask for a 500hp car that gets 50 miles a gallon, which is what Henry Ford was getting at.

Companies big or small need to think about innovation on a much larger scale and not get trapped in a feature war.  It’s tactical thinking vs strategic thinking, but many people forgo the strategic thinking because it sounds too dreamy/fluffy and doesn’t bring in revenue right now. However, Apple has shown it really pays to think different and essentially tell it’s customer to buzz off because they don’t know any better. And yet I still come back to Apple…genius.

Something might look beautiful but if it has no real purpose…who cares how great it looks. You’ve heard this same story before in the context of dating, “he is really good looking but talking to a door knob is more fun” or “she is a California dime but absolutely dumb as a rock.” Instead of focusing on the needs of a customer, many startups are spending way too much time on packaging (user interface, funding sources, PR, etc…).  A great example of this is Color.com, it received a ton of press because it was funded by Sequioa for $41 million and when the application was released people were clueless about its usage. Since then they have gone back to the drawing board for version 2.

Some of the comments from the web that really got me to think about this user interface debate:

@erickschonfeld For social apps design matters very little. It's all about being where your homies are at. Most were on FSQ.

December 5, 2011 11:52 pm via Twitter for MacReplyRetweetFavorite

@Percival

Sean Percival

Design and user experience is the new intellectual property. --Ron Conway #sus11

October 30, 2011 5:50 am via Twitter for iPhoneReplyRetweetFavorite

@garrytan

Garry Tan

Ron Conway is a legend in the VC space and you can’t really argue with his track record but I disagree with his comments. Not only that, but I’m pretty sure you can’t have IP rights to the way something looks.

Design is becoming a competitive advantage for startups http://t.co/j5Or9Wd8

December 5, 2011 4:00 am via BufferReplyRetweetFavorite

@sahilparikh

Sahil Parikh

Design might be a competitive advantage if there are many players in the same space, but it really depends on the category. Facebook had a pathetic website when it launched in 2004 when compared to Friendster. But people gravitated towards Facebook because it served a social utility, gradually over time the Facebook interface got more polished.

An example of an interface that is absolutely horrible to look at is Tally – an accounting software for the Indian markets. Most people still use the MS-DOS version and it’s reported it has 90% of the market in India. Why does it dominate the market? Because it does one thing really well – calculate numbers.

Steve’s demise was bound to happen, but knowing what he had done in the past I figured he could dodge another bullet. Starting a company, getting kicked out and then coming back and kicking ass. In between all that drama he started a couple more companies and in the process became the largest shareholder in Disney.

While most of us fail to leave a mark on anything this guy left his mark on many markets – personal computing (Macintosh), animation (Pixar), music (iPod & iTunes), phones (iPhone) and mobile computing (iPad). I mean what the f!@#$…brilliant.

I remember when I saw my first Apple Computer and first NeXT computer, I was blown away by the interface. At that time, I was hacking away on an IBM PC with a 1200 baud Hayes modem while screwing around with MS-DOS commands.  The Macintosh user interface just seemed so natural to use…simplicity.

P.S. The title of this post was going to be just a placeholder till I finished the post. However, the draft title says it all.

Some people just declare email bankruptcy once they come back from vacation and figure if something was that important the person will email again. There are many startups and even Google is trying to prioritize your email for you and present what is believes are the most important emails to respond to. Luckily, I’ve been able to tame email using a ton of filters so I don’t have to go down the path of declaring email bankruptcy.

However, what smacks me in the face when I get back from vacation is my RSS feeds. RSS feeds allow you to track the content of various websites into a single location so you don’t have to visit 10-15 websites on a daily basis. I use Google Reader to aggregate the information that easily tops over 400 new pieces of content on a daily basis. If I take a 3-4 day vacation my RSS feeds would easily top 1600 articles, there is no way I’m going to scan 1600 titles in Google Reader…hence RSS bankruptcy.

When I got back from my most recent vacation I decided I needed to really tame my RSS feeds. For me, I like reading articles but I’ve come to realize many of the articles that I read are just worthless and a waste of time. I believe I read these type of articles for two reasons: it diverts me from work that I should be doing and second I gain knowledge about a particular subject. The problem is if you waste 15 minutes reading garbage you won’t get time to read another article that might actually be useful. Coincidentally, my friend Sahil sent me a link saying that “keeping up with RSS is poisonous.” I would completely agree with the article.

So what did I do? I nuked about 75% of the RSS feeds I had and started following those particular websites on Twitter. Secondly, I started following several new people that seem to send out useful articles via Twitter. The idea is I might miss a particular tweet from
Engadget when it first comes out, but if the article is really useful it will get re-tweeted many times and then I can read it. You kinda have to have faith in the people you follow and truly believe in the wisdom of crowds. Twitter has now become my curated personal news aggregator.

So what were the big news stories when I was on vacation for 3 weeks? Two seem to stick out 1. Google buying Motorola Mobility and 2. The VC funding misadventures of Rand Fishkin at SEOmoz. The second story was heavily re-tweeted and even Sahil sent me a link to the story. Using my old method I would have seen story #1 pop-up in my RSS feed but story #2 would have been buried…and story #2 is actually a GREAT read if you are looking for VC funding.

I’m sure while on vacation, I missed out on thousands of stories. Let me guess there were several Top 10 articles on how to grow traffic, effectively use Facebook for your company, maximize your Google ad spend, etc…all noise to be honest. It’s the fear of missing out that drives people to track everything and read everything. The article I’m really looking for is how to score a 2012 Lamborghini Aventador since it has a 3 year waiting list.

Lexus LFA dashboard

During the late 90′s all the rage on the internet was with portals. The concept was simple, you select the type of information you wanted  - news sources you like, stock quotes for your holdings or local weather information. Then the portal would magically aggregate all the information in a single location.

If portal 1.0 was about external information (news, weather, etc..) then portal 2.0 is about your information. Portal 2.0 or what I’m calling The Personal Dashboard is the next step, where you can quickly glance at various parts of your life in a single location. Parts of your life would include friends (Facebook), work colleagues (LinkedIn), personal finance (Mint.com), health, cars, fashion, etc…

Social Dashboard
Since many websites are opening up their data stream via an easy to use API (application programming interface) the ability to create a centralized dashboard is not that far fetched. For the social piece of your dashboard you would have a mix of Facebook, LinkedIn and/or Twitter in your social news feed similar to how the individual streams look now, but it would be an aggregated summary. For the full blown feed you would have to go to the respective sites to get your daily dose of empty calories better known as social networking.

Personal Finance Dashboard
Yes, Mint.com does a lot of the financial data aggregation but two things: first it’s on their site, I want to see that data stream appear on my dashboard. More importantly I would like to weave Mint.com with all my other financial data streams. Suppose I have Google Wallet, I would want that to appear as well.  For me personal finance is broken down into 2 categories: short term (expense tracking) and long term (portfolio management). Since all my financial feeds are in one location, I would want to get real advice and/or offers based on how I spend on my short term or daily expenses.  If I constantly spend on cafe lattes at The Coffee Bean (which I do everyday in Nariman Point), it would be nice if they kick out an offer for 50% off on a new product they are introducing. Or if I suddenly stop visiting for 2 weeks, they kick out an offer for 20% off on my next visit. This would be completely automated without having to signup for some dumb-ass daily deal site (Hi Groupon!).

On the portfolio management side, it would only present offers in two cases: the product saves me money or makes me money. If there is a better performing CD/FD it would alert me to it. If I can save on brokerage, then it would notify me…but only if I really trade a lot and it would specifically show me a cost comparison based on my accounts details. Consumers would love this, but of course established companies would hate this level of transparency. However, there are new players such as BankSimple.com who might be able to make a difference.

Health Dashboard
Personally, the area of health is what got me started to think about the Personal Dashboard concept. There is a growing trend around the idea of the quantified self –  capturing details such as heart rate, blood pressure and many more data points to learn about your health in real time.  Gary Wolf gave a TED talk about the topic. When you talk about big markets, the health care industry is one of the biggest at 16% of the US GDP and a large chunk going to hospital care. There has to be a better way for people to track their own health and make adjustments in real-time to improve their health. There are several devices available today that offer a glimpse into the future.

Fitbit is the size of a money clip and tracks physical activities, calories burned, steps taken, distance traveled and sleep patterns. At a $100 a pop, this should be mandatory for anyone with a BMI over 30. Another gadget is Basis which is like the Fitbit but also tracks your heart rate. Of course, Apple is also planning to gate crash this party with their products based recent patent filings.

Gadgets are one piece, the other is data aggregation and several companies such as Microsoft HealthVault and RunKeeper have started to support the above gadgets on their platform. Once again these are islands of data and should be part of an overall personal dashboard. These services should interact with each other and kick out real-time advice based on my physical condition or let me know if my sleep cycle for the one week period is normal for my age group, etc… Or I should be able to export my data to a PDF to show my doctor that I have indeed been sleeping 7 hours a day and working out every other day. By tracking certain metrics it lends itself for people to correct their behavior if they are serious about it.

Summary
I’ve touched on 3 areas but there can be many more depending on the lifestyle of the individual. Such as a car dashboard that tracks the vitals of the cars you own – mileage, fuel tank, tire pressure, etc…then it could send a reminder for when the next servicing is due. (Yes the irony, a dashboard of a dashboard!)

The Personal Dashboard might seem like an idealistic view of how our lives should be simplified, but I firmly believe it’s where things are moving to. Currently, all this data is housed in disconnected data stacks but eventually there will be a meta aggregator of all these bits of data we are creating on a minute by minute basis.

The above article was syndicated on VCCircle.com.

One of them is Sucheta Dalal, who is a highly acclaimed journalist who broke the story on India’s largest insider trading scandal in 1992 involving Harshad Mehta (he was the first person in India to buy a Lexus LS400). I’ve actually had a chance to meet Sucheta and she is a straight shooter. I’ve commented in the past that I feel Aadhaar will help to ease corruption. On Twitter, Sucheta had a more direct question for me:

@mrjain  please enlighten me how a number allotted to you will curb corruption? I am all ears

One of the misconceptions about Aadhaar is that it will solve every problem that affects India, it won’t. The other misconception is that it will be 100% fool proof and rock solid from day one, it won’t.  Aadhaar is a technology startup that happens to be ventured backed by the Government of India. As with any startup or government program there will be teething and integration issues that will have to be dealt with in real-time.

My answer to Sucheta’s tweet is “yes, but probably not for Sucheta and me.” It would benefit people that suffer from the “poverty tax”, which is a large percentage of the Indian population. If you receive a pension, you might have to pay a “fee” to the clerk to speed up the transaction. Same issue with food, subsided kerosene, government jobs, etc…if you want something you have to pay a fee.  That fee hurts more if you earn less and hence it’s called the poverty tax or you can call it what it really is…corruption. With an Aadhaar number the government would directly deposit the money into your bank account. No middle man to slow down the transaction or take money from you to speed up the process of getting YOUR money.

Fear, uncertainty and doubt are the 3 things that critics raise when talking about Aadhaar. Fear of what the Indian government will do with the data. Uncertainty about how much money is being spent on the project. And lastly, doubt of whether the program can achieve anything impactful.

The other complaint I’ve heard from several people is they feel it’s just a large technology project to benefit system integrators like Infosys, Wipro and TCS. In particular, a friend of mine questioned why Aadhaar was so keen on using iris and fingerprint scanners to authenticate people. Was it because that would force new hardware sales for iris and fingerprint scanner vendors. Why not use voice verification via cell phones that are so readily available? Granted, there might be issues with voice pattern recognition but why not open it up to a college competition for the top technology schools (read IIT’s) to try and solve the problem.

Personally, I think that’s where the Aadhaar team has done a rather poor job of openly communicating and should really improve in that department. I still firmly believe Aadhaar is a step in the right direction and will eventually benefit a large percentage of the Indian population.

Ever have one of those “oh sh^%!” moments when your data gets deleted or your hard disk spins out of control and takes all your data with it? We have all been there and it’s a painful moment. Sadly, it doesn’t have to be since it’s completely avoidable if we were just more proactive. I had my first oh shit! moment back in 2003 when my iMac went all wonky and I thought I had lost all my data. Luckily I was able to hook it up to another Mac and transfer the data safely to an external hard disk (thank God for target disk mode on Mac’s). That’s when I realized the benefits of running regular backups.

For me there are 3 “oh shit!” moments you are trying to protect against:

1. Oh shit! I deleted a file (file diversity)
2. Oh shit! my computer hard disk crashed (hardware diversity)
3. Oh shit! everything got stolen (location diversity)

The first event is very simple to implement on a Mac, you just have to fire up Time Machine and attach an external hard disk. Then it will periodically backup all your files and keep track of the files you change and allow you to recover to a previous file for whatever reason.  Apple makes it even easier with a Time Capsule (a wireless router + hard disk) which continuously backs up your computer over a wi-fi connection to the Time Capsule…pure genius.

Many people forget about event number two because they feel it’s covered by event number one, which is not totally true. If your hard disk crashes you might have all your data on an external hard disk, but you still have to waste hours re-install your operating system, reload your applications and copy your data. That’s a major pain if it happens on a Monday morning and you have a big presentation later in the day. To cover event number two I use Carbon Copy Cloner (CCC), it allows me to make a bootable backup of my computer to an external hard disk. Which means if anything happens to my main hard disk, I can just plug in the external hard disk and boot-up as if nothing happened. It’s become a Sunday ritual to use CCC and make a bootable image to an external hard disk. Oh, and the best part is that CCC is completely free.

Event number three is where I still struggle to have a completely fool proof system. Before the dawn of cloud computing people used to have a multi off-site strategy, they would store copies of their data at their house, office and bank locker. If an earthquake were to hit then most likely all your local data storage locations would have been affected and thus making the strategy useless. But now you can easily backup your data to a cloud service like Dropbox, CrashPlan or Jungle Disk. I use Dropbox for my critical data and it’s great. But, I haven’t gone down the path of backing up all my data which is around 400GB and growing by 1GB a week. To transfer that over a 1MB line would be impractical and not to mention very expensive. In the meantime, I’m still searching for a complete full proof way to insure against event number three.

Well there you have it, a quick summary of how to avoid those three “oh shit!” moments. Since external hard disks are so cheap these days, I would say get two external units and starting backing up right now to avoid events one and two from happening to you. Granted all the information was Apple specific but I’m pretty sure the same can be implemented on the Windoze platform.

Over the past couple of years an initiative by the Government of India has been gaining momentum which could have far reaching implications for its residents. In early 2009, the Unique Identification Authority of India (UIDAI) was setup to issue universal ID’s (UID), they have called the program “Aadhaar” which means foundation or support. However, most people still refer to the program as UID. This is the one rare initiative from the Government of India that excites me because it could help the people that need it the most – the poor.

Currently, most government aid programs are pilfered so heavily that at one point Rajiv Gandhi famously said only 15% of the benefits reach the poor. The Public Distribution System (PDS) distributes subsidized food and non-food items to India’s poor via a ration card that is issued. However, the ration cards get duplicated and “ghost” accounts are created, then the food is taken and sold on the open market. Even before the food gets to the recipients there is “leakage” all along the supply chain – transportation, warehouses and government officials.

The aim of Aadhaar is to create a central database and provide proof of identity when using government services. Aadhaar will be technologically advanced in that it will be a combination of a person’s iris scan, fingerprints, photo and optionally include demographical information such as age, sex, address, father, mother, etc. With an iris scan you can be sure that only the receipt of the food or cash-subsidy is receiving the benefit and not a middle man, which is often the case today. Aadhaar has an ambitious goal of issuing 600 million numbers in the next 4 years. The Aadhaar number will be 12 digits long and oddly enough there is no card, it’s a piece of paper with a number. Users would authenticate their identify via fingerprints and an iris scan hence no need for a smart ID card. Aadhaar will be useful in 5 areas – 1. food distribution via PDS; 2. National Rural Employment Guarantee Act (NREGA) ; 3. health services; 4. education; and 5. financial services. Number 5 excites me the most since it might put an end to the poverty tax that so many citizens of India face on a daily basis.

The poverty tax is everywhere if you are poor in India.  If someone wants a loan they can’t goto their local bank because they don’t have the required documentation, which leaves them to the loan sharks where the interest rates charged would bring a tear of joy to any investment banker. When you receive money from someone you can’t put that into a bank account so you lose out on the interest that you might have received from a bank. If you receive a pension, you might have to pay a “fee” to the clerk to speed up the transaction. Same issue with food, subsided kerosene, government jobs, etc…if you want something you have to pay a fee.  That fee hurts more if you earn less and hence it’s called the poverty tax.

Financial institutions are thrilled at the prospect of Aadhaar because they can start to market their products to potentially 600 million new customers. With the large number of mobile phone users it also means that banks don’t have to setup branches in every corner of the country, they could use the mobile phone to keep track of balances instead of the old school passbooks. Near-field communications (NFC) is probably a couple years away from being adopted by the mass market but that is potentially another game changer in the way people transact in India.

Aadhaar would also streamline the plethora of numbers that many middle class people need to keep track of. If you are a taxpayer and an investor you might have several numbers such as PAN for taxes, TAN, TIN, MIN, DIN and folio numbers for investing in mutual funds. The reason for multiple numbers is because each group has a vested interest in keeping their numbering system because it creates jobs for them and more importantly they have access to the money flow. Knowing where the money is coming and going is a source of information that can be used against an individual.

For Aadhaar to work it needs to be made mandatory, currently it’s optional and that might be more of a political move. If Aadhaar was mandatory on day one then people would jump to the next logical step – using Aadhaar for voting. And changing anything to do with the voting process would absolutely disrupt the status quo and would be shot down by politicians in a heart beat. However, once end-users start craving for the “optional” Aadhaar then nothing would stop its mass adoption which would make it mandatory in the end. The second thing that needs to happen is that Aadhaar should be an acceptable form of Know Your Customer (KYC), this would help financial institutions, mobile phone providers or really any one that needs to authenticate an individual for a companies product or service. Since the government would have validated someones identity then why go through the process again, this would also lower the acquisition costs for companies and allow them to provide “no frills” type services.

Facebook Connect in the virtual world has turned into the de-facto standard for identify, whereas Aadhaar has the same potential in the real world for India. Aadhaar could be the catalyst to open up many more markets for companies and also bring products to a set of customers that have previously been excluded from financial services.

The above article was syndicated on VCCircle.com.

Update:
June 4 – View a quick 10 slide summary about Aadhaar (via SlideShare)
May 18 - India’s Poor Yet to Reap Full Benefits of Its Anti-Poverty Programs (World Bank report)
April 30 – India’s $9 Billion Jobs Program Fails its Poor (WSJ link)

As a past employee of Cisco I think John is a stand-up guy and a VERY charismatic speaker. I would joke with people that if John told us to sell cocaine, I would because he was so persuasive. However, as a shareholder of Cisco I think John really needs to clean house and take a hard look at the direction of the company and more importantly look in the mirror.

Since John’s admission, many columns have been written about what ails Cisco. Most articles are going for the low hanging fruit such as get rid of the consumer focused product line and get back to basics with enterprise and service provider customers. But there is a much bigger issue that goes to the heart of Cisco – people.

Executive Departures
John has been around since 1991 and has had the top spot since 1995, he runs a tight ship and probably to tight of a ship. So much so, that I believe many top executives are leaving because he won’t give up the throne.  The list of departing executives include Tony Bates (left for Skype), Sue Bostrom, Judith Estrin, Charles Giancarlo, Kevin Kennedy, Don Listwin, Carl Russo, Jayshree Ullal and Mike Volpi to name a few.

Failed M&A Strategy
Cisco was once hailed for it’s inorganic growth via their M&A (mergers and acquisitions) strategy. That strategy worked early on for Cisco when it acquired companies such as Crescendo (the heart of their LAN switching platform), Kalpana, Grand Junction, StrataCom (WAN switching IGX platform) and Calista (IP phones). Most of these deals took place on Mike Volpi’s watch when he used to run the M&A group. In a Fortune Magazine article back in May 15, 2000 they called Volpi the Cisco M&A wunderkid.  Volpi had a great reputation within Cisco of being super bright and potentially could have led Cisco.

But, over the past 7-8 years that strategy has been a complete disaster with acquisitions such as Scientific Atlanta, Linksys and Pure Digital Technologies (Flip camcorder line). It appears many of the consumer focused acquisitions happened under Ned Hooper, the recent M&A head. It’s easy to say the strategy was completely flawed in hindsight, but Ned took a chance and unfortunately it didn’t work out. However, a lot of money was flushed down the toilet in running this experiment. Little known acquisitions such as Monteray Networks were shut down within a year of signing a $500 million term sheet. Internally, Cisco talked about how quickly they could integrate these new companies into the Cisco machine. Unfortunately, many founders of these companies left just as quickly and started new companies. Such as Dev Gupta who sold two companies to Cisco, Dagaz and MaxComm in 1997 and 1999 respectively.

Cisco Globalization Center East
I get annoyed every time I read an Indian business magazine and Wim Elfrink is talking about how he re-located to India to setup Cisco’s second biggest campus.  It’s a catch-22, is Cisco East something truly revolutionary? If so, then please communicate that better to the world so we can learn. If it’s not revolutionary then get over it, many large technology companies do it all the time – it’s called cost arbitrage.

In summary, John Chambers has one goal and that is to keep his shareholders happy which has not been happening. Cisco was the internet darling in the 90′s and all the way to March 25, 2000. On that day, Cisco became the largest company by market capitalization in the world at USD 579.2 billion, few companies can say that. Since then it’s a different story, if you bought Cisco in April 2001 you should have paid around USD 18.00 a share which is exactly where it is today in April 2011…over those 10 years it hit a low of USD 9.50 and a high of USD 33.00. Compare that to Apple, in April 2001 you would have paid USD 12.00 a share and now it is hovering around USD 330.00…the lure of the consumer market.

That got me to think about Apple. Many people would say Apple is about simplicity when you look at their products and design. I would argue it goes one step further – the number of products.  You want a phone from Apple? Great, that is the iPhone end of story. Granted they have various models based on storage but that’s it. Look at Nokia, Samsung or Motorola, I honestly get a f***ing brain hemorrhage when someone mentions their model number of their phone.

Apple follows what German car makers have been doing for decades. Have a basic design and sell it in 3 levels, what I call SML (small, medium and large). You want a Benz sedan? The low end is the C, mid-range is the E and high end is the S class. Within those 3 classes are various models based on engine specs but at least when someone says “I bought an E class” you know the general specs of the car. BMW has 3, 5 and 7. Audi has A4, A6 and A8.  American car makers face the same issue as Nokia and Motorola, confuse the buyer with all sorts of models and then spend massive marketing dollars to “educate them.”

Simplicity is easy to achieve on day one but to maintain that same level of simplicity 10 to 20 years later is almost next to impossible. Companies that can figure it out get compensated and you have to look no further then Apple’s market capitization, not bad for a company that just sells consumer electronics. Simplicity at its best.