Derek Sivers

On how he felt the day he sold his company and other stories.

Video and Transcript of Talk

Stop wasting your time sending apologetic emails about being late to submit your Lightning Talk and Workshop ideas for Business of Software. We are a pretty easy going bunch so we have given you a little more time to get your ideas in. Please submit to info@businessofsoftware.org by midnight PST on 14th August.

• If you are coming to Business of Software and want to lead a workshop about a subject you are passionate or expert about, here is how you get your idea in: http://blog.businessofsoftware.org/2011/07/run-a-workshop-or-unconference-session-at-business-of-software-2011.html

• If you are insane enough to want to subject yourself to the pain that is giving a Lightning Talk (not really selling it there huh?), here is what you need to do: http://blog.businessofsoftware.org/2011/06/lightning-talks-early-birds-and-the-business-of-software.html

To get your creative juices flowing, watch, and for the first time ever, read along to, last year's winning talk from Patrick McKenzie, @patio11

Here is the full transcript of Patrick's talk if you want to indulge in a bit of Lighting Talkeoke:

[Music] Good afternoon everybody, my name is Patrick McKenzie and I’m a software engineer from central Japan. Yes, I’m exactly as geeky as you probably think I am. [Laughter]

I’m going to be talking to you today about software for underserved markets. There’s many underserved markets in the world, there’s people with disabilities, non-technical customers, people outside the United States of America. [Laughter] There’s . . . [Laughter] It’s true. There’s one market in particular, it’s gigantic and I think most of us are missing it so I want to address that market and I want to address them directly.

One of the reasons Business of Software has become such a great event over the years is that extraordinary people have taken a risk in paying with time and money to come. We know it is not a cheap conference to attend – or produce (I would not recommend running this type of event if you are want to make a quick buck).

We want to say thank you to all those people who have supported us over the years by offering a discounted rate to attend the 2011 event.

If you have attended Business of Software before, we would like to offer you a full delegate pass at the discounted rate of $1,895. This rate will be available until the conference sells out. To register, use this link to the registration page: https://www.regonline.com?eventID=946196&rTypeID=527886 

P.S. If you are a previous attendee and booked recently you will have already paid more than this. Don't get mad, check your credit card statement in a week or so. We will refund you the difference.

We appreciate your support. You are Business of Software. Thank you.

Time Magazine just released their list of the 25 most important management books of all time. Congratulations to Business of Software 2011 speaker Professor Clayton Christensen who makes the list with, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

I noticed The 7 Habits of Highly Effective People is on the list too. I bought this once, put it on my desk then promptly spilt a cup of coffee on it. I don't know if this rendered the book completely unreadable as I took it home from the office to read, left it on top of the car and drove off. Sadly, these are the kinds of things that I am in the habit of doing. I don't know to this day whether this is the sort of behaviour that Stephen Covey would espouse. I doubt it though.

Remember that post from, oh, two days ago about entrepreneurs and incumbents?

Congratulations to Business of Software 2011 speaker Jeff Lawson and Twilio on now being recommended by Ribbit as BT, who bought Ribbit three years ago for $105 million is shuttering Ribbit. I am sure this is more of a gesture than a revenue generator though. http://gigaom.com/2011/08/10/ribbit-croaks-just-three-years-after-105m-bt-deal/

The little guy beats the BIG guy at disruptive innovation yet again.

A guest blog from Josh Linkner, founder & Chairman of ePrize, the largest interactive promotions agency in the world and Adjunct Professor of Applied Creativity at the University of Michigan who will be speaking at this year's Business of Software conference in October.

Most software, business (and life) decisions come down to a multiple choice question. Should we launch Product A or Product B? Should we develop in house or outsource? Should we choose design schema 1, 2, or 3? This is where 99% of the software world stops, selects an option, and goes on to spend countless hours justifying their decision.

And then there’s the top 1%. The best-of-the-best who play at a higher level. The ones who refuse to accept that there are only a few, obvious choices. These are the software development leaders who look at a multiple choice question and write in a new option to the list. They discover the Unconventional Alternative, and it ends up making all the difference in the world.

In 1912, Teddy Roosevelt was campaigning for his third term. Three million campaign posters were printed with his photo and about to be distributed, until it was discovered that the campaign didn’t have the rights from the photographer to use the photo. The copyright laws of the day allowed for the photographer to claim as much as $1 per poster, which adds up to over $60 million in today’s dollars. The campaign couldn’t afford to pay the photographer, but also couldn’t afford the time and money to reprint the posters. The multiple choice options seemed bleak.

Until a brilliant campaign manager sent a telegram to the photographer that said, “We are considering using your photo in the campaign. How much do you offer to pay for the publicity?” The photographer ended up paying $300 for the exposure instead of bankrupting the Roosevelt campaign and perhaps costing him the presidency.

This visionary leader discovered an Unconventional Alternative.

At my software company, ePrize, we were running the software behind a $1 million sweepstakes for a major airline in which entries could come from one of eight countries including Brazil and Australia. After we accepted the job, we learned that the drawing had to be done on Brazilian soil by law. That was fine, until we learned that according to Australian law the drawing had to be conducted within the geographic borders of Australia. We were overwhelmed with despair and fear, realizing that this blunder may cost our company an extra $1 million (a sum that we absolutely could not afford at the time).

At the last minute, a member of our technology legal team discovered an unconventional alternative. Do the drawing at the Brazilian embassy (technically Brazilian soil) in Australia! This creative solution saved our client and our company, and it surfaced by challenging conventional wisdom and exploring options that weren’t obvious or even in the consideration set.

The next time you are faced with a decision that looks like a choice between A, B, or C…. pause for a moment and let your imagination wonder. Is there an option D, E, or F? Before locking in an obvious choice and perhaps accepting a mediocre result, challenge yourself and your team to explore the unlisted options. In today’s ultra-competitive world, the time you spend exploring the possibilities can represent the difference between winning and losing.  So, unleash your creative mind, explore the unorthodox choices, push yourself to discover the unconventional alternative, and I’ll see you at Business of Software 2011!

This is a guest blog for the Business of Software from Josh Linkner, founder & Chairman of ePrize, the largest interactive promotions agency in the world and Adjunct Professor of Applied Creativity at the University of Michigan. Josh is on a mission to make the world of business more creative and will be talking at the Business of Software about harnessing creativity to build a better software business.

When other people fail, we tend to think there’s something wrong with them. We say they’re lazy, stupid or feckless (of course, we don’t think that when *we* fail).

In reality, people’s behaviour is a product of their ability and the circumstances. Take the superb developer who manages her first project and crashes it burning into the ground. Or the mild mannered tester who morphs into the micro-managing boss from hell as soon as he starts running a team. Or the super-star designer who starts delivering ill-thought out, impractical and impossible to implement product designs. Or the support engineer who aced his interview but who can’t actually do the work of helping customers solve their problems*.

When that happens, it’s tempting to write the person off: to say that Alice will never run a project that again, that she simply doesn’t have it in her; that Bob is inherently incapable of running a team; that Charles is too flakey to rely on; that David isn’t good enough.

But people fail often not because of some soul-deep, inalterable essence, but because they lack the skills they need to succeed, or because they’re in a situation that sucks. Alice didn’t have a mentor; Bob is too scared to delegate; the project Charles is on has been set up to fail; nobody is giving David direction.

One possibility is that the person is genetically incapable, or has some deep character flaw that renders them useless. If that is true then their behaviour will be consistent across a broad set of different circumstances. But if they are succeeding one minute, and then failing the next, open your mind to other explanations.

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* I made these up.

About a year or two after starting Red Gate (this must be about 10 years ago now), Simon and I were chatting to a couple of venture capitalists. We explained what we were doing – building software that we hoped people would buy; software that addressed the pains of SQL Server developers; software that people would just download, try and buy.

A few minutes into this conversation, one of the venture capitalists turned to us and said (and I remember this vividly):

VC (confidently and suavely): "You know what you need?"

Me (eager to learn): "No"

VC (authoritatively): "A strategy. That's what you need. A strategy."

That conversation has stuck with me for over a decade. It epitomises the problem of giving advice and illustrates why I find giving advice so hard.

Everybody's situation is complex, full of subtleties and unique. The idea that I – or any 'expert' – can give you advice after a ten minute chat over coffee is laughable. The advice will either be generic ('you need a strategy', 'just ship the product', 'talk to your customers'), wrong ('what you need to do is hire a PR company' / 'under no circumstances hire a PR company'), or both (in our case – a case with its own special set of circumstances – not having a strategy and simply trying to build software that people wanted worked out fine).

The best advice I get is when people don't tell me what to do. It's when people use their deep experience to ask interesting questions that make me think, or when they describe similar situations they've been in – with all the details and context – and explain the choices that they faced and the decisions they made with all their pros and con, and why they think they worked, or didn't.

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That’s something I once heard Bill Gates say. It struck a chord, and I thought it was kind of clever at the time. Learning C++ takes raw intelligence, a lot of commitment, and a brain that’s wired a certain way*. Marketing, well, doesn’t.

I see things a little differently now. Sure, C++ is hard. But learning it, and coding with it are tractable problems. The vast majority of programming challenges can be stated and can be solved. And you know when you’ve solved them.

Marketing problems, on the other hand, are harder. Sometimes they’re wicked. They’re hard to state; they have no right answers, and you don’t know if your solution is any good until it’s too late.

Take an issue that Microsoft face right now. Building a distributed operating system that people can build, host and sell applications on is hard. Of course it is – I wouldn’t argue otherwise. But they’ve done it. Getting people to adopt it? Persuading them that it’s the future? That your success is inevitable? That’s not just harder: it’s a different class of problem altogether.

If you think that getting a machine to do what you want is hard, try persuading a bunch of humans.

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* It was way past me. I got as far as all the different types of string and gave up, confused.

I have listened to three great talks on business models recently that have really made me think about how important they are in building a sustainable and successful business. In fact, some of the most successful, disruptive and admired businesses – Xerox, ARM, Google for example, have all been so successful because of the highly innovative business models they adopted.

I wanted to share three talks, two from our own events, the BLN Growth Forum and Money in Mobile and one from Alex Osterwalder who will be talking at Business of Software this year alongside Professor Clayton Christensen and significant others. I think they will be of interest to a lot of BoS-ties as they illustrate really neatly how important it is to think beyond a product. All three offer powerful insights into why business models matter and all have something to say that is likely to think about the business model you have in your organisation.

The speakers are Hermann Hauser, Ilja Laurs and Alex Osterwalder.

Hermann Hauser is an entrepreneur (behind Acorn Computers amongst others) and venture capitalist who has personally invested in well over 100 technology companies. Only one of those companies has failed because of technology. Hermann discusses some of the key building blocks of successful companies and illustrates the incredible importance of the right business model to the success of ARM Holdings who have now got over 21billion chips on the market that incorporate their designs.

Ilja Laurs, CEO of GetJar is the founder of the world's largest independent app store. He talks about business models in mobile content and shows how you should go about deciding what business model is going to work best for your mobile app business.

Alex Osterwalder loves business models. He lives and breathes business models. He has even written a best selling book on the subject: Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers This was such an interesting book we have got a copy for everyone that attends Busienss of Software 2011. Here Alex explains why innovation in the business model was critical to the success of companies including Xerox and Google.

• Alex will be speaking at Business of Software, the preliminary schedule has just been released. I am also pleased to say he will be running a guest blog for us on business model innovation in the software industry.

• Tickets for BoS 2011 are now 2/3 sold.
• Starting from 18th July tickets will increase in price by $100 every month until the event or we are sold out.
• Quick reminder – if you are considering applying to do a Lightning Talk or Workshop/unconference session, the deadline for submissions is 10th August.

The Economist has just published its list of the top 6 business books of all time.

Huge and deserved congratulations to Business of Software 2011 speaker Professor Clayton Christensen who makes the list for his seminal, 'Innovator's Dilemma'.

"Clayton Christensen’s The Innovator’s Dilemma (1997) introduced one of the most influential modern business ideas—disruptive innovation—and proved that high academic theory need not be a disadvantage in a book aimed at the general reader. Mr Christensen showed that great companies can fail despite doing everything right: even as they listen to their customers and invest heavily in their most productive technologies, their markets can be destroyed by radical new technologies." Aiming High, The Economist

It is a great read and it still astonishes me that I meet entrepreneurs that haven't read it – a great source of insight and inspiration. Buy it from Amazon - The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

The six books picked by The Economist are:

• My Years with General Motors, Alfred Sloan, 1964
• The Organisation Man, William Whyte, 1956
• Management: Tasks, Responsibilities, Practices (Drucker series), Peter Drucker, 1973
• In Search of Excellence: Lessons from America's Best-run Companies, Tom Peters & Robert Waterman, 1982
• The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, C.K. Prahalad, 2004
• The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, Professor Clayton Christensen, 1997

What is the book that has made the single biggest impact on your business life? 

One feature of Business of Software that we will be changing a little this year are the workshop and round table sessions. Traditionally, these have been held as open sign up sessions in an afternoon slot and up to ten people on a table debate a single subject of common interest. They give delegates a chance to meet with people who discuss issues openly, brainstorm a problem and share their ideas. 

We want delegates to get more from them this year and we don't want a conversation to necessarily be restricted by the size of a meeting table or a talk title. We also want to draw on the incredible knowledge and expertise of our community and help you to help each other. We are delighted that some of our speakers have already indicated that they would like to get involved in a workshop session. We would love you to consider leading one or helping to put an unconference session together.

If you are passionate about something and want to share your knowledge and experience with others, we want to hear from you. You might not want to talk in front of 400 people but you might feel comfortable leading a discussion with a smaller group or want to . If you have expertise and passion about something that will be interesting to others, please let us know what it is. We want to organize a few different kinds of breakout this year and the space we have at the World Trade Center allows us to do that and play a little with the number of people in any particular group.

We are opening submissions to lead workshops today with a deadline of August 10th.

Here's how to get involved if you would like to lead a workshop or set up your own 'unconference' session with some others:

• Drop us a line with your name, contact details, topic title, a 100 word overview and an indication of the preferred size of the group. (A number between 15 and 380, or a range would be great).
• If you have done something similar before, or feel you would need special props, oxyacetylene equipment etc, feel free to mention it.
• We will send all registered BoS attendees a list of the session titles and ask them to indicate which ones they would like to attend in August. The event is now almost two thirds full so we will have a very good indication of demand at this time.
• We will finalise the sessions based on delegate demand and available space in early September.

Please send any nominations to be workshop/unconference leaders to us at info@businessofsoftware.org to arrive by August 10th.

As you probably already know, Lightning Talks are an important part of the Business of Software experience. They follow a simple format – every speaker gets 15 slides and 30 seconds per slide to talk about a subject of their choice. The slides advance automatically. 

If you would like to do a Lightning Talk at Business of Software in 2011, you are probably clinically insane. However, sane or otherwise, if you want to do a Lightning Talk, here is what to do before August 10th:

• Upload a video of yourself talking about what you would like to talk about in a Lightning Talk to YouTube or some swanky video hosting service like Blip.tv, Vimeo or whatever.
• The video should be between 2 and 4 minutes in length and you should be prepared for the possibility that the video will be posted on the blog at some point.
• Send us a note containing your contact details (info@businessofsoftware.org), with a link to the video.
• We will review all of the submissions, and pick what we feel will be the most appropriate ones, to talk live at BoS 2011. 
• Remember to submit by August 10th.

DO NOT submit a Lightning Talk on behalf of anyone else especially if you are a Speaker Agent or PR agency working for a really important CEO. We only want submissions from people that care enough to do their own sutff. This is NOT a chance to shill your company, or a company/person you work for, this is a chance to stand up in front of a bunch of people and share an idea you love.

To get your creative juices flowing, here are the previous winners.

Business of Software 2010. Patrick McKenzie, 'Hello Ladies'

Business of Software 2009. Mark Stephens, 'Are you a large lizard or small and furry?'

Business of Software 2008. Alex Ohanian, 'Keeping it Real'

Don't forget, the end of the month is nigh which also means that the ticket price for Business of Software will rise by $100.

We now have about 250 places of the 380 total available sold and paid for so if you want to come, book now to save money and potential disappointment. Note that the Seaport Hotel allocation of rooms is being reserved faster than last year as well.

PLEASE DON'T DO WHAT I DO AND LEAVE IT ALL TO THE LAST MINUTE AND THEN GET ANNOYED WHEN I REALISE THE ONLY PERSON TO BLAME IS MYSELF…

Looking forward to seeing some awesome Lightning Talk ideas.

Mark Littlewood.

I was idly thinking about seeing if some Business of Software delegates might be interested in getting together before the conference so had a look at where the 180 registered attendees are coming from (exactly halfway now).

Seems you are a pretty ecelctic and well dispersed bunch!

So, 180 people, 17 countries and Chicago is the best represented city with 7 delegates beating Cambridge MA into first place. (Though Boston MA plus Cambridge MA is 11 in total).

• Italy: 1
• Romania: 1
• South Africa: 1
• Spain: 1
• Switzerland: 1
• Turkey: 1
• Uruguay: 1
• Malaysia: 2
• Sweden: 2
• The Netherlands: 2
• Australia: 3
• Germany: 3
• New Zealand: 3
• Russian Federation: 4
• United Kingdom: 18
• Canada: 26
• United States: 126

Seem Business of Software really is a gathering of the software clans.

One of the people we really wanted to get to speak at Business of Software is Professor Clayton Christensen, author of, 'The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail'. The Innovator's Dilemma considers how successful companies with established products can stay ahead of those with newer, better, cheaper products. Needless to say this is a tough proposition. It is a seminal work that starts out by comparing the hard disk industry to fruit flies…

"When I began my search for an answer to the puzzle of why the best firms can fail, a friend offered some sage advice. “Those who study genetics avoid studying humans,” he noted. “Because new generations come along only every thirty years or so, it takes a long time to understand the cause and effect of any changes. Instead, they study fruit flies, because they are conceived, born, mature, and die all within a single day. If you want to understand why something happens in business, study the disk drive industry. Those companies are the closest things to fruit flies that the business world will ever see.” The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

Here, Professor Christensen talks about disruption in the steel industry.

We are delighted that Professor Christensen will open this year's Business of Software Conference, (24th-26th October, Boston).

When I started talking to Professor Christensen's office about speaking, I came across an article he wrote last year that had as much resonance for me as the Innovator's Dilemma. It turns out that a lot of other people felt the same about How will you measure your life? (10 minute read, lifetime impact). The article, a summary of Professor Christensen's graduation address to 2010 HBS students, has become one of the most downloaded articles in the history of the Harvard Business Review. This month it won the Harvard Business Review McKinsey Prize making the author an unprecedented four times winner of the award.

How will you measure your life is less about business, more about, well, life… 

"When people who have a high need for achievement—and that includes all Harvard Business School graduates—have an extra half hour of time or an extra ounce of energy, they’ll unconsciously allocate it to activities that yield the most tangible accomplishments. And our careers provide the most concrete evidence that we’re moving forward. You ship a product, finish a design, complete a presentation, close a sale, teach a class, publish a paper, get paid, get promoted. In contrast, investing time and energy in your relationship with your spouse and children typically doesn’t offer that same immediate sense of achievement. Kids misbehave every day. It’s really not until 20 years down the road that you can put your hands on your hips and say, “I raised a good son or a good daughter.” You can neglect your relationship with your spouse, and on a day-to-day basis, it doesn’t seem as if things are deteriorating. People who are driven to excel have this unconscious propensity to underinvest in their families and overinvest in their careers—even though intimate and loving relationships with their families are the most powerful and enduring source of happiness."

We are very proud that Professor Christensen will be speaking at Business of Software in 2011. Not only has he written some of the most important business writing ever, he understands that life is not a business, it is about people. We think those sentiments resonate with the attendees at Business of Software.

"I think that’s the way it will work for us all. Don’t worry about the level of individual prominence you have achieved; worry about the individuals you have helped become better people. This is my final recommendation: Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success."

We hope to see you there – and don't forget the delegate rate will rise by $100 from midnight 3rd May so act now – you will almost save yourself the price of a Kindle. Register here.

I am a little bemused as to what happened to April…

Living in the UK, we are used to having a few bank holidays around Easter but this year, we also had an extra public holiday to celebrate the wedding of William and Kate. We at the BLN have been organising two UK events, (Money in Mobile, June 14th, and the BLN Growth Forum, July 5th), that have taken up a lot of our time and I also went camping for a week with my family. A week with no electricity or internet access is not that productive.

As a result of my inefficiency, I have not flagged the end of our $800 discount on Business of Software that is due to finish at midnight tonight, on the blog. I am sorry.

As a result, we will extend the discount period to midnight on 4th May. This should give you enough chance to get into the office, work out who will go, grab the company credit card and book for this year's event that takes place between 24th-26th October. We are now over 50% booked. Please don't miss out – book now!

Back in October, when I was listening to Young Me Moon at Business of Software, she talked about her book Different: Escaping the Competitive Herd which is about how to be, DIFFERENT. This really resonated when I read this funny post by Sami Paihonen, ex Director of User Design at Samsung.

From my notes at the time: How can you differentiate between 50 brands of bottled water in one supermarket? In almost every instance, the managers of each and every one of those executives can tell you EXACTLY why and how their brand is different to the others. Sadly, for real people, no one cares very much. It doesn't start out like this:

Choice – sparkling or still?"

But soon escalates:

Water water everywhere, now which drop to drink?"

And then the supermarket looks intimidating.

Real difference has become rare in business. I was reminded of how true her whole thesis was when I came across this excellent blog post by Sami Paihonen, ex Director of User Design at Samsung and now Head of User Experience Design Services at Ixonos.

Probably without knowing Young Me's book, he wrote this quick recipe for a smart phone.

It probably took him about 10 minutes to spec out a complete Smart Phone (and the rationale behind each choice) including chip, Memory, Flash Memory, Screen, Battery, Camera, Supported Media, Social Networking, Location, OS.

Then, when it comes to the product category;

"Our device is ultimate time and people management tool, amazing music phone, tremendous media center, unrivaled social network hub, excellent navigation device, best-in-class internet surfing board, pack along with intuitive UI. Who could be the customers for this…? hmm… Who would not be customer for this super smartphone! No need to categorize this beast, it is simply too awesome to be put in some category!"

Read the full spec, and the rationale behind it here – I can hear the sound of a million product teams reading this and saying, "Let's go!" This is all too depressingly familiar and Sami parodies the process perfectly.

From Young Me Moon at the Business of Software again. If you are actually looking for an Outlier solution, you should not rely on the views of others. What would you expect a manager to improve?

But all that happens then is a more mulchy solution – particularly when you multiply that across a ton of companies in the industry. Why not try the lopsided solution? The more crowded and competitive market you are in, the more you need to be lopsided.

Sami though, does give me some hope that somewhere, people aren't just aiming to make the highest specified product across all known possible dimensions.

"Why I wanted to show you this “product planning” in action was to show the current status of mainstream smartphone competition; mobile device market is driven by too much the same. And if something is driven by too much the same, then it becomes easily specification war; who has the longest and most impressive product specifications.

"So my humble wish is for every product planning people in the companies in this market; please think before introducing another boring, dull, uninspiring specification monster. What the world needs is inspiring products, which simply work and don’t fail to meet expectations. Everything between those must be designed, not just thrown in product specifications.

"And that design, my friends, is user experience design."

Nice thought Sami, but from what I see on the market today, no one is listening. When someone does, they will discover the power of different. If you want to be different…

• You have to be willing to ignore your critics
• You have to be able to ignore your customers as well
  • Just ask Google, Facebook, Apple (though most of them won't respond)

Different and crazy can look the same at first.

Go on! Bet you are too chicken to try!

Simply one of the best Lightning Talks ever from Patrick McKenzie (@patio11) at last year’s Business of Software.