Getting impatient

When I started Recursive Function, I put together a set of very modest goals. The goals were rooted in the practicality that my company is a very young one without a large client base, deep advertising budget, or superstar employees. The goals fit me well since I'm a practical, frugal person. I want to grow organically, building a business that will be around for a long time and not be dependent on burning through a lot of cash in order to survive.

For example, my goal when launching Formstack was to humbly acquire one paying customer shortly after launching without knowing the person or communicating with him/her before the purchase. My goal wasn't to have a launch party with musicians, celebrities, fireworks and Dom Perignon, intent on signing thousands of customers on the first day. My expectation was to start with one customer, then two, then three, and so on.

I'm pleased to say that I've met most of my goals so far, but I wouldn't be honest if I didn't say that less than 6 months into this, I have to fight hard to battle impatience.

I spend a lot of time reading business-related sites, blogs, forums and magazines. It's rare that a day goes by when I don't read about small businesses that are experiencing tremendous success, whether they're getting $1M AdSense checks from Google, or signing up thousands of customers with their new product launch.

Lest I drive myself crazy, I have to step back and really look hard at the reality behind those stories. Sure, those business owners might be luckier than I am, or more talented, or make better decisions, or be privy to business secrets that I'll never discover. But the one thing that's easy to overlook is how much time it took for them to get where they are.

For example, I wrote last week about the owner of PlentyOfFish who's making $15,000 per day from AdSense. My first impression when I read the story wasn't that it must have took him 5 years and a lot of trial and error to get to that point. As I dug more, I discovered this blog post by the owner that detailed his struggle to create a successful site. He talks about how he made $5.63 his first month and how ugly the site was. It wasn't until several years later that he started to see significant traffic growth.

I also often think about 37 Signals, the darling of the Web 2.0 world that can do no wrong. I don't know much about their back-story, but according to this Wikipedia entry, the company was founded in 1999. Reading their history raises speculation that it took them a long time to break into the successful role that they have today.

This whole thought process leads me to one of my favorite lines from Joel Spolsky. He writes in the forward of Micro-ISV: From Vision to Reality:

In the first month, you are going to make, about, $364, if you do everything right. If you charge too little, you’re going to make $40. If you charge too much, you’re going to make $0. If you expect to make any more than that, you’re going to be really disappointed and you’re going to give up and get a job working for The Man and referring to us people in startup-land as “Legacy MicroISVs.”

Joel is a lot more right than a lot of people believe. The flip side of me reading a lot of business stories is that I see a lot of posts from people dismayed at the fact that they haven't landed a single sale of their shiny new product. Some of them give up after a couple months, but it seems that those who stick with it eventually find some success.

Some of the best advice I've seen about this comes from marketing whiz Seth Godin, who wrote about the myth of the overnight success:

The challenge ... is to avoid the temptation of buying the media infatuation with the overnight success story (which rarely happens overnight). The goal, I think, is to be an overnight failure, but one that persists. Keeping costs low, building a foundation that leads to the right kind of story, the right kind of organic growth.

I hope he's right.

[Updated references to Formstack to prevent confusion about the name change]

Opposition to net neutrality

In case I came across as too one-sided in my post about net neutrality, I want to refer you to Hands off the Internet, a grassroots site opposing any sort of net neutrality amendment.

Except that it's not really a grassroots site. It's a site built and funded by the telecoms and their lobbyists, that tries hard to pretend it's built and funded by concerned citizens like you and me. In addition to building the site, telecom shills are also posting comments on blogs pretending to be concerned citizens, as some bloggers have discovered.

(This reminds me of the phony Microsoft switcher ad from a few years back, when a Microsoft PR rep pretended to be a real customer who decided to switch from a Mac to a PC.)

So these are the companies I'm supposed to trust to "play fair" when they have the freedom to control the Internet?

Making online poker illegal

Another issue working its way through our government right now is a fight to make playing online poker illegal. Opponents have pointed to the 1961 Wire Act that targeted Mafia bookies taking sports bets over the phone, and interpreted the act to cover any wagering online.

Some of the ambiguity comes from the lack of clarity about whether or not the act applies to individuals placing the bet, or only the companies taking the bet. There's also the question about whether or not poker is gambling, as it's a game of skill much closer to backgammon or scrabble than craps or roulette.

Early this month the state of Washington made it a felony to play poker online. This means that if you're caught playing penny poker on PokerStars in Washington you could face up to 5 years in prison and a $10,000 fine. You would have a felony on your record, akin to a child pornographer or drug dealer. You can read more about the Washington legislation here and here.

It's an interesting note that Washington poker players are now furious given that there was no press about the pending legislation until it passed. The legislation's main sponsor is also refusing to give interviews about the issue.

It's also interesting that in 2004 Washington enacted legislation making it legal to place bets on horse races online. And there are several dozen legal casinos and card rooms in Washington. Oh, and don't forget the state lottery.

So it's not really that Washington is an anti-gambling state, it's that it's an anti-online poker state. Why the discrepancy? Could lobbying from the legal casinos and card rooms have something to do about it?

UPDATE: I just came across this Seattle Times column, where it's discovered that Washington officials even consider running a website that talks about online gambling illegal.  No, you don't have to take bets or place bets — talking about betting is considered "aiding and abetting" the online casinos.

More numbers

After doing the math on the number of combinations for randomly generated passwords, I thought about TinyURL, a great service that's been around for a long time. You enter any really long URL, and it creates a short one like http://tinyurl.com/XYZ that redirects to the original URL. It's a pretty simple solution, but seems very cool nonetheless.

I've always wondered if they were going to run out of tiny URLs, until I did the math. Assuming 5 character URLs only made up of numbers and lowercase letters, they can create 60,466,176 URLs. Add uppercase letters and that's 916,132,832 URLs. According to the website they have over 20 million URLs right now, so they have a way to go.

A slightly different math problem, in an episode of Thief last season, the main character was trying to crack a safe with a keypad. He used UV light or a spray or something to show which numbers had been pressed most frequently (don't they do this in every safe cracking show?). There were four numbers used in the combination, and the safe had a defense mechanism where after three attempts you couldn't enter any more combinations. This was supposed to add a lot of tension to the moment, but the main character was steadfast in his belief that he could guess the right combination.

I couldn't help but do the math. There are only 24 possible combinations in this scenario, which sounds good at first, but that means you only have a 12.5% chance of getting the right combination before you're stuck. If you're playing Texas Hold'em, you have a better chance of beating a pair of aces preflop with kings, or even 3-2 offsuit. And you've got right about the same odds of cracking that safe as beating a pair of aces with 7-2 offsuit.

Maybe that just tells me I should be playing 3-2 offsuit more often.

Net neutrality

One of the effects I've experienced from thinking a lot more about the Enron case is having a greater suspicion that corruption permeates our government. It's hard to ignore the hand that the government had in providing the Enron (and other companies) the means to take advantage of Californians, and their unwillingness to act against Enron while they watched the pillaging occur. Not that I've ever been Pollyanna about government, but I've always tried to start by giving officials the benefit of the doubt.

The first thing that comes to mind in this light is the fight right now over Net Neutrality. The short of the issue is that telecoms (AT&T, Verizon, Comcast, Time Warner, etc.) are starting to abuse their control over delivery of content via the Internet. They want to start setting subjective pricing for companies that provide services over the Internet, and control which sites load faster than others.

For example, if Time Warner decided they wanted to create a service to compete against one of mine, they could ensure that my site uses the "slow lane" while their site loads quickly for users. That is, unless I wanted to pay out the ears for my site to use the "express lane". This goes far beyond me paying X dollars for each Gb of transmission where I pay more for 10Gbs than I do for 5Gbs.

You can learn more about the issue at SaveTheInternet.com. A couple juicy tidbits from their FAQ that shows you what could become commonplace if the telecoms move full steam ahead:

  • In 2004, North Carolina ISP Madison River blocked their DSL customers from using any rival Web-based phone service.
  • In April, Time Warner's AOL blocked all emails that mentioned www.dearaol.com — an advocacy campaign opposing the company's pay-to-send e-mail scheme.

Earlier this month an amendment to prevent the telecoms from doing this was voted down in Congress. Why? Was it because Congress really felt that allowing the telecoms this freedom is good for American citizens and the growth of business? Or was it because the telecoms spent millions of dollars lobbying Congress to defeat the amendment? Isn't it apparent that these telecoms will profit considerably from holding companies at ransom, at the expense of stifling Internet entrepreneurship? Why is this even remotely acceptable?

The fight goes to the Senate right now. There are some people in government who aren't puppets of big business. Let's hope there are enough.