It’s Time Your Smart Phone Earned Its Name

Photo borrowed from The Verge

2014 will be the year your phone actually earns its title of being smart. Up until now smart phones have that label simply because they allow us to do more than the older flip/feature phones we had in the 90s-early 2000s (Blackberries, or really Blueberries notwithstanding). The iPhone exploded on the scene in 2007 and shortly thereafter our love affair with apps gave life to our phone and we considered it smart. Problem is, phones don’t do anything without being told. Phones are dumb. 2014 is the year that changes on a large-scale.

Today at CES, Yahoo announced the acquisition of Aviate, a start-up that focuses on making your phone smarter through context – understanding time, usage, behavior, and need, and then serving up the most relevant information at the time. Aviate is one of a crop of companies that are focused on actually making your smartphone smart including Chameleon, Cover, and others I’ve written about in the past (Disclosure: I work for Synacor, who acquired Teknision the company behind Chameleon). What is interesting is that Marissa Mayer used her keynote address at arguably the year’s largest technology events to announce Yahoo’s move into context-aware technology and making your phone smart. Google Now, Apple’s Notification Center, and Windows Phone dynamic widgets are all already playing in this space but these efforts have been part of the OS, almost spoken about as a feature. Mayer’s announcement is the first time that a major tech company has shone the light squarely on this arena.

Google Now is clearly the king of context at this point. It’s all about data and Google Now is freaky good due to the insane amount of data and reach Google has to draw from both on your phone and your habits across the web. Search drives data and with their reach on the web, Yahoo and Microsoft are in great position here as well, possibly even better than Apple, but not as deep as Google. Mayer said on stage that the future of search is contextual search and as TechCrunch mentioned in their post on the subject;

Yahoo SVP of Mobile and Emerging Products Adam Cahan says that the company isn’t interested in turning Aviate into some sort of ‘all Yahoo apps’ portal. For now, it will expand the beta program and get more users checking it out. “Think of this as an extension of [Yahoo] Search,” Cahan says. 

The extension of search metaphor is an apt one, as contextually aware home screens will be all about using anticipatory ‘searching’ through our apps, habits and use cases to provide us with better experiences. Aviate will now be able to tap deeply into Yahoo data like search, weather, maps and more to inform contextual experiences.

Aviate and other launcher apps have always suffered from the chicken and egg problem – to the average person the default OS is good enough and going out of your way to change it means you need to first be convinced of the value of doing so – why is the new thing better? In order to demonstrate that a more personal, context-aware phone experience is better, launcher apps need to gather data from a person’s usage, which only happens if people first install the launcher…which they don’t because they don’t see the value. Search data provides the baseline for context and the Aviate team will now have an immense amount of data to leverage as they make Yahoo mobile properties react and respond without being told. They’ll also have a massive marketing channel to push an alternative Android experience if Yahoo chooses to go that route.

Launchers, which I’ve called Apperating Systems, are popular in Asia but less so in other parts of the world most due to the somewhat unregulated and wild west Android ecosystem in China. Apple’s re-design with iOS7 was more about making the experience smarter and more reactive but don’t look for Apple to open up the iPhone to third-party experiences, it will stay locked down. This is all about Android which keeps getting better and better with each version and the baked in context-engine Google Now keeps getting smarter. It will be difficult at best to out-do Google, Apple, and Microsoft on the OS itself but Yahoo, Facebook, Synacor, and other companies battling in the context-aware world will bring us apps and experiences that react without being told just based on what we’ve done and what we’re doing. Gone are the days of the dumb icon, privacy issues aside, in 2014 our smart phones will start to earn their name.

How to Pick the Right Co-Founder

Microsoft-Founders-Bill-G-007Gates + Allen. Jobs + Wozniak. Page + Brin. Clark + Andreessen. Filo + Yang. Co-founders of legendary tech companies that have shaped our world. So, what makes a good co-founding team? When does it come together? Should you even have a co-founder?

I’ve been a founder, co-founder, founding partner, and held other positions while succeeding and failing at a few ideas, watching friends do the same, and having the good fortune of meeting and mentoring a lot of aspiring entrepreneurs. So, is some humble advice with the battle scars attached.

Go it Alone or Team Up?

The “two guys in a garage” mentality prevails in the start-up world; the idea that there’s usually two co-founders that give life to a company. I happen to agree that at some point early in a company’s life this happens but not necessarily always at the beginning. In some cases, although I would argue rarely, being the only founder might work. The glaring example is Jeff Bezos being the sole founder of Amazon. There are a few factors that determine what makes sense:

  • Where did the idea come from? If you truly came up with the business idea on your own (and be honest) then you could run with it. If, as in many cases, it was something you thought of together with someone else and both decide to take the entrepreneurial plunge together then  you’ve got a partner in crime.
  • Are you both jumping in? Just because you batted around an idea doesn’t mean you’re stuck with the other person. You both have to decide to start the company. If only one person decides to run with it then the other person isn’t a co-founder, they helped with the idea but its going for it and executing that matters. There is no maybe, either you’re in or out from the start. No fence-sitting then claiming to have a stake later.
  • What are your weaknesses? What are you good at and where do you need help? Is your weakness so glaring that you need someone who can compliment you asap or the idea isn’t going anywhere? If you’re 100% business and think JavaScript is what they call it when you write with ink and a feather tipped pen then you need a co-founder.

Co-Founders Are Not Always Equal

It’s not the case that the term “co-founder” needs to apply to people who conceived the idea or started the company together. Sometimes, someone can earn the co-founder tag. I’ve done this at my previous company where someone worked so hard and was so integral to success that they de-facto were included in almost all decisions and contributed as much as I did. They deserved to be a co-founder and so I made it happen. Earlier in life I started a company where I had a co-founder and were equal partners right from the start. It taught me what can happen when the hype fades and the struggle continues but not everyone is in for the fight. So, I see two options:

  • Be the Founder: start your company and add people who add value where you can’t. As you move forward be fair and award equity and maybe even the “co-founder” or “partner” tag to the person that is just as integral as you are.
  • Co-Founder from the start: find your compliment and start the company together but make sure to spell out how equity is earned over time.

The Power is Not in the Crowd

Personally I feel that three co-founders is a maximum and two is ideal. More than three and you usually get group-think, less leadership, and have to deal with multiple egos and personalities at the top. Not good.

Being a co-founder is different from being an early, valuable, decision maker. Sean Parker was Facebook’s founding president but he’s not a co-founder of Facebook. Add people to your company as needed and give them the value and respect needed…and ALWAYS make sure their equity is on a vesting schedule!

Make Sure Everyone is Vesting

I’m often meeting first time entrepreneurs that haven’t been given the advice or read about the importance of vesting. Engineer founders are more interested in coding something great and later end up getting advice on structuring the actual company and running the business. In the simplest terms vesting can be explained as follows:

  • Vesting of shares means that a person earns shares or the option to buy shares by providing services to the company.
  • You get shares, or the right to exercise the options and purchase shares, based on a set “vesting schedule” provided that you are working for the company.
  • Your shares and/or options) “vest” over time as you stay with the company. This means you are either allocated shares outright or you exercise your options and can buy the vested shares.
  • When you stop working for the company you lose the shares that haven’t vested and the company can buy back unvested options (usually at the price they were offered which means no money or very little money to you).

Example of a standard vesting schedule:

  • Co-Founder gets 100 shares that vest over a 4 year period with a 1 year cliff
  • At the one year date if the co-founder is still with the company than 25% of the shares vest, so the co-founder gets 25 shares
  • The remaining 75 shares vest equally every month for the next 3 years provided the Co-Founder is still with the company. This means the Co-Founder gets 2.08 shares per month
  • At 4 years the Co-Founder has fully vested their shares.

This is WAY better and makes A LOT more sense than saying “let’s start a company we each get 100 shares right now,” only to have your co-founder leave when you’re six months in taking half the value of your company on paper. It’s thankfully something aspiring entrepreneurs increasingly understand but still happens more often than I’d like to know of. Vesting means that if you’re with the team then you get rewarded and if you’re not you don’t.

Above everything else, even if you skipped everything else in this post remember it is 100% true that starting a company with someone is like getting married. Make sure they are a perfect fit for the success of the business, bring complimentary skills to the table and that you get along. If not, it’ll end in a messy, ugly divorce. Whether you go it alone or get in bed with someone else. Choose wisely my friends!

Why Context Matters

It’s true that many early stage companies fail because they exist before their time. The founders might believe in their innovation and it might in fact, truly be something great, but the market or ecosystem is not ready. An arguably classic example is interactive television. Launch an interactive TV effort in the 90s and you’re dead, try it now and you’re fighting for market share as everyone big and small is innovating for TV. The challenge for entrepreneurs is to know if they’re on to something special and if the world is ready. This is called context, and the success of a start-up can sometimes boil down to having the right context to make key decisions early.

I attended an event earlier this year where Howard Gwin (@howardgwin) spoke about context and what he said stuck with me. These aren’t his exact words (I’m probably butchering it) but the message is what’s important not my limited brain power; it went something like this…

“I may not be building the next great company right now but I’ve been around a lot. Over the years I’ve worked with start-ups and major corporations, on multiple boards, and in venture. So, I have been fortunate to see a lot of things work and not work. What I have is context and context is a key thing entrepreneurs need when starting and growing companies.”

Context comes from asking people who have valuable insight because they’ve been there and done that, work in the industry, or are from your target consumer audience.  For example; if you’re building something targeted to automotive designers, you should go talk to someone who designs cars for a living. If you’re building a product that you want moms to buy, no one will give you better context than your neighbor with three kids.

Not exact science but below is graphic to share the point. Even visionaries that throw caution to the wind and change the world start from a place of context. They see a problem, dream of a solution, and let nothing stop them. But they do so knowing that their idea may have never been tried or that they had that all illusive lightbulb moment, tested their theory, and it all made sense. And sometimes they’re still wrong and live to fight and change the world another day.