April 9, 2015
Lean Product Design
In this presentation, Jeff talks about how to use a lean framework for product experimentation & better interaction design. He reviews some ...
In episode 59 of To Be Continuous, Paul and Edith discuss the changes in production and monetization that have propelled the modern gaming industry, cloning products, and the merits of paying for distribution.
Edith: Hey Paul.
Edith: It's been a while.
Paul: How long has it been since we did a thing? Like, an entire pandemic has happened since we did our last episode.
Edith: We released a couple after the pandemic.
Paul: OK. Did anyone listen to them?
Because certainly for the first few months of the pandemic, there was just all the protests and the fascism and the Covid.
Was anyone listening to tech podcasts?
Edith: You're sounding a little Pink Floyd now.
You know, "Hello? Is there anybody out there? Is there anybody listening?"
I don't know if Pink Floyd made it over to where you grew up.
Paul: Yeah, we're not complete savages.
Edith: I don't know how much popular music you listen to.
Paul: Wasn't Pink Floyd English?
Paul: OK. No, I've seen the Epic trolling Apple. They put out a video that was a parody of one of the original Apple launch videos.
Edith: What do you what do you think about that one?
Paul: 30% has always been a fucking rip off.
Edith: I disagree.
Paul: Wow. You're pro rent-seeking. That's an unusual view.
Edith: OK. So I was at TripIt, and we were the number one travel app, and you pay that cut for distribution.
Paul: So, distribution is a thing that doesn't have a-- It doesn't have a cost, right? It could be any number.
Edith: What you pay for is, I would say, distribution and also ease of purchase.
Paul: Sure. You think that's worth 30% of the thing that you pay for?
Edith: I don't know if 30% is the right number, but there is some number.
Let me give you another example.
I used to work at a hardware company and we sold a device, it doesn't matter what the device is.
I was the product manager so I also tested the flows about purchase at our own website.
Paul: It's funny, I swear you've told some story about this plant hardware thing a million times.
It's funny that you're saying, "It doesn't matter what the hardware was."
Edith: It was a plant hardware.
What I found in my own testing is that-- It was as an 8 person company, so I was a product manager and also product marketing.
And though Amazon took a bigger than if we sold it on our website, we sold a lot more because people saw Amazon as a trusted vendor and they already had their payment information on Amazon, so it was much easier for just somebody to say "I want to buy it on Amazon."
Other than them going to our website and typing in all their credit card.
So we actually, when I ran our ads I would actually push to that Amazon instead of our own website.
Paul: Was Amazon shipping?
Edith: Yes. Also, Amazon shipping was much cheaper than ours because Amazon had bulk deals.
Paul: Right, so Amazon was doing physical work to sell your products and to ship your products to people.
Edith: Also, payment and trusted vendor was a huge thing.
I would do a follow up with our customers about "Why do they buy from Amazon?"
And they're like "Because they're trusted. I know if something goes wrong I can ship it back to Amazon, as opposed to your risky looking start up site."
Paul: The thing is that you had an alternative with Amazon.
Edith: You mean selling on our own website?
Paul: Yeah. In fact, dozens of places you could have sold it. In retail stores you could have sold it.
Edith: We tried them all. I actually I flew to Florida.
Paul: Right. But you had all those options, there is no option on the iPhone. There's the App Store or fuck you.
Edith: There goes our clean reading, Paul.
Paul: Have we ever had a clean episode? I don't think so.
Edith: Anyway, you were saying that if people are on Apple they don't have as many outlets to sell?
Paul: There are no options apart from Apple.
Edith: Well, there's Android.
Paul: That is not an alternative. You need both.
Edith: In defense of Apple, they do put a lot of work into making sure that they have a good ecosystem, and that apps and there are vetted and not going to do something terrible.
Paul: OK, apps aren't going to do anything terrible.
Well done on hitting the absolute minimum that is required, but portraying Apple as some sort of benevolent overlord here.
At the same time, they have absolutely destroyed gaming.
Edith: Gaming is a multibillion dollar industry. I don't think they've destroyed it.
Paul: They've destroyed the actual experience of gaming.
Like, the converting everything to in-app purchases across the board is a huge net evil for the world.
Edith: OK. So Paul, you say we always agree. But I strongly disagree.
Paul: Finally, an actual disagreement. All right, let's hear it.
Edith: Why is it bad that everything is an app?
Why is it--? Isn't this a consequence of just people being on their phones more, and more casual gaming?
And the democratization of gaming? So it's not just people sitting around their basement with a console.
Paul: I accept that.
Edith: I say that as a proud owner of a very early Atari.
Paul: The way they did in the old days, shareware--
Not opposed to the concept of shareware or the idea of it being free, what I'm opposed to is turning games into click mining for dollars.
Where you have situations like, there's multiple situations I've read about where some kid spends $6,000 dollars of his parent's money on whatever it is.
Skins or hats, or whatever the fuck is going on.
Edith: I'm of course against that. But just to say "Games are bad because they're on phones."
Paul: I'm not saying games are bad because they're on phones, I'm saying games are bad because every game is now oriented around trying to get you to buy more gems or coins or credits, or whatever it is, so that you can actually have the in-game experience.
Edith: But why is that so bad? It is directly linking--
Paul: It ruins the games.
Edith: But games have to monetize somehow.
Edith: What would the alternative way be?
Paul: How games were always done. It's free for the first episode and then you buy the full game for $20 or $50 or whatever dollars.
Edith: Yeah, but games are so much richer because they have a continual stream.
All I'm saying, and don't judge because I'm not ashamed, but I play a lot of Pokemon.
I've been playing it for years now because the game is always changing, because they have a stream of money.
Paul: If you were to pay a monthly fee for your Pokemon, that seems totally legit.
Edith: Or, the Spotify model.
Paul: Yeah. I like a lot of-- Are you familiar with the tower defense genre?
Edith: I might be, but I'm not sure.
Paul: It's like, Plants vs Zombies was I think the original one of these.
It's like, there are hordes coming and you get to put things in their way and you have to level them up and that sort of thing.
They're really fun games, but almost every single one of them is-- They're impossible to get all that far in because in order to get beyond a certain threshold you just need to pump money into the game.
It just takes all the fun out of the game.
Edith: But people need to monetize. Their game developers need--
Paul: I understand the people need to monetize.
What I'm saying is that Apple's specific incentives have caused game's monetizations to ruin games.
One of the reasons console games are still pretty good is that you buy the full game and then you play the full game.
Edith: I begin to dissect this argument a little bit. Even in console games you can buy upgrades now.
I don't think that's an Apple thing so much as a shift to the cloud, and being able to unlock the stuff over time.
Paul: There's also a difference between buying-- If you have a complete game and then you can buy an extra episode of the game in DLC, that's substantially different than what I'm saying.
Which is games where you have to just keep spending money to unlock the main content, and where the content is designed to cause you to keep going through this cycle.
Edith: I don't think that's anything to do with Apple.
I think that's just the nature of continuous game development.
Paul: For triple-A titles and console titles, that's not the case at all. You pay your $20 dollars and then it's fine.
Edith: I think Android, they have the same issues. I think this is more a shift to the cloud and Apple is a convenient--
Paul: Android also has the same issues, for sure.
I think it was originally caused by Apple's pricing of apps so low and encouraging apps to be priced so low.
Edith: That's how you get distribution.
Paul: The purpose of what I was saying there is that Apple is not in any way a benevolent overlord of the space, and 30% for what they get is absolutely fucking ludicrous.
Edith: I think you're conflating two things, with the shift to the cloud and more casual games and Apple.
Paul: I'm saying there's lots of things going on, and I don't think that Apple is some sort of-- I'll say it again, "Benevolent overlord."
Edith: I think that it's good to have some link between player behavior and what they value, and money. Which leads me to ask you about Mozilla.
Paul: Oh, my. Some shit going down there.
Edith: Summarize it.
Paul: 250 people laid off.
Paul: How many people work there?
Edith: I don't know. You worked there, but it was a long time ago. Right?
Paul: I worked there about ten years ago, and it was 600 people at the time.
But I think they had a lay off before, but I think not as big as this.
In this layoff they've laid off a bunch of teams that are-- They laid off the MDN team, they laid off the people working on Servo, which was the next generation browser engine.
I haven't even kept track of the whole thing. But people are describing it as pretty brutal on the internet.
Edith: One of the things I read, which made me wince, was them saying "We have to focus on stuff that makes money."
Paul: I mean, they do. Right? You need money to survive.
Edith: I don't know if there was some negativity or lack of belief in gravity, that "We can employ a lot of people without money coming in."
Paul: It's interesting because a couple of years ago they shifted back towards focusing on Firefox as the core thing.
Edith: Do you think that was a belief in trying to make more money?
Paul: Mozilla has always had this utopian ideal of the internet, and they are the force that is probably the only people out there.
They are a non-profit and they probably are one of the only people out there who are trying to make the internet open and free.
Where everyone else is basically trying to keep people in their walled gardens.
We talked about the App Store, Google is trying to keep everyone on Chrome.
Apple won't let anyone even install another browser on the iPhone.
Microsoft ships their browser and has a terrible history of trying to make proprietary things and trying to keep it within windows, so the role that Mozilla had was great but also it was not--
I think what you were saying earlier, it was not particularly aligned to their revenue streams.
Edith: Then always some reckoning happens.
Paul: I don't even understand how Mozilla could make products, if you know what I mean.
Edith: Tell me more.
Paul: Like, companies tend not to invent products from the middle of nowhere.
New companies create products for things they see in the world, but companies that don't have the DNA of creating new successful products, how do they even do it?
Edith: I was really active in the Lean Startup Group in-- This sounds weird now, but in the 2013-2014 era.
I remember there was a big debate after some speaker said, "Big companies have all the advantages of startups and more money. So, they're going to win." It's like, "No. They have all of the advantages of big companies and the money, and that's why they can't act like a startup. The incentives are totally misaligned ."At a big company, if you put out a new product and it totally flops you're going to get fired.
If you had a startup and you put out a product that flops, you hopefully have enough runway or time that you're like, "OK. That didn't work, let me try something else."
But you're scratching that itch, not "I only get one shot. It better be the right one."
Paul: You can look at Google putting out products to see this.
They just keep churning out these complete products that presumably are ready to scale to tens of millions of users but that no one actually wants to use.
Edith: Their last big hit was really Google Maps.
Paul: Yeah, which they acquired.
Edith: Or Gmail?
Paul: Gmail was before that, and that's the thing that they actually built themselves.
Edith: Google Cloud is picking up.
Paul: Google Cloud is a very good product.
Edith: Did you use Google Cloud at Dark?
Paul: Yeah. Except our databases suck, and it's hilarious.
You know Amazon has Aurora, which is their cloud version of MySQL and Postgres, and then Amazon also has like DynamoDB and S3 is functionally a database, and they have all these cloud products.
Google has CloudSQL in order to check a box because they have Spanner, which is their cloud product.
It's like this massively scalable everything database, but if you want to use Postgres it's really like, "Fuck you. We'll manage a box with Postgres on it, but good luck."
Their Postgres product is so bad, and we pay them for high availability but I don't think it has ever been--
Even when they do maintenance it doesn't even switch over to the high availability, it's ridiculous.
That is just one example of the many things that are wrong.
Edith: So, Paul. OK. Are you multi cloud? Or are you all on Google?
Paul: Jesus, no. We're all in on Google Cloud. It's all Kubernetes and Google.
Edith: What informed your decision?
Paul: A couple of things. One is that we were going in on Kubernetes at the start, and AWS didn't have a good Kubernetes solution. That was one.
Edith: OK, I'll give Google a lot of credit for that, for Kubernetes.
Paul: The other thing is that Amazon is so opaque in all the things going on.
At the time, and I think it's still true, Google automatically reduces your costs and that sort of thing over time, whereas Amazon made you really work it to figure out how to do it cheaply.
That was one big thing, and then the other big thing is "Fuck Amazon."
Like, if ever-- Is this the episode where we're talking about monopolists and their shitty practices? Because Amazon is fucking king of it.
Edith: We already talked about that near the middle, and you said then that Amazon was not a monopoly because there are other places to buy products.
Paul: I'm talking about AWS.
Edith: But there's Azure in the mix.
Paul: Do you know any startup using Azure?
Paul: The only ones I knew, Azure was buying them by giving them hundreds of thousands of dollars in credits.
Edith: I do know some startups that use Azure. So, that was your decision tree?
Did you look at any of the others, like Oracle Cloud?
Paul: I don't think Oracle Cloud existed, but I obviously never looked at Oracle Cloud. Not even once.
Edith: Not even once?
Paul: But Amazon, I remember being partner-- "Partner" is an extremely generous term for a person that you're built on who is trying to undercut you and clone your product to undercut you.
Edith: That's what happened with Iron.
Paul: With who?
Paul: What happened?
Edith: They were basically Lambda, and then Amazon came up with Lambda.
Paul: Literally, if anyone has a claim to be Lambda before there was Lambda, it was Iron.io
Edith: Yeah, they were workers as a service.
Paul: Oh really? Did Amazon clone them? Is that where Lambda came from?
Edith: I don't know if it was a direct clone, but I know that was their entire business then.
Paul: It was, yeah.
Edith: Then Lambda came out, and I was like, "Well."
Paul: What an ignoble end. They wouldn't be the first and they won't be the last company that just gets killed by an Amazon PM wanting to clone something to get that promotion.
Edith: But on the other hand, they don't always work.
That's always what people ask us. It's like, "Can't somebody just close this?"Like "Yeah, sure. But it won't be as good."
Paul: Has Amazon cloned your product yet?
Edith: "The Eye of Sauron draws near."
Paul: The thing that I find always interesting is I think Amazon, and I think I've probably said this before on multiple podcasts, Amazon is good at--
It'll occasionally invent a thing and it will be a game changer, like S3 or Lambda.
When they don't invent things, when they copy it, they just end up with these like shitty box checks and of the 160-170, I don't know, you can't even keep count of them services inside of AWS.
How many of them are amazing high quality products that people love to use, versus piece of shit clones? It's almost as bad as the App Store.
Edith: That ties it all back together.
Paul: Yeah, see what I did there? I felt really good about that.
So the thing that I was thinking about with the Mozilla situation, is-- I'm remembering when I was at Mozilla and just how much of an advantage Google had.
They were putting "You should download Chrome" in Google search.
Edith: Which is why people hated Microsoft.
Paul: Right, exactly.
Edith: That was when Microsoft had their huge antitrust suit, was that they were putting it into the OS.
Paul: Right. So now there is this tech antitrust stuff that's going on about how Apple is like monopolistic and Google is monopolistic and Amazon is monopolistic, and they're right.
They're all monopolistic. They all have their unique little monopolies that they use to stifle everyone, and I think really that's what Mozilla is the victim of.
It's the victim of massively unfair competition by Google, who is also Mozilla's partner and a source of revenue.
Edith: No. I disagree with you once again, Paul. I love saying that.
Paul: Love it.
Edith: Mozilla's competition was they never figured out how to monetize.
Paul: That is absolutely correct.
Their making money from search revenue was, I don't necessarily want to say a mistake, but I remember they had this golden goose.
I think, honestly, they shouldn't have scaled it up.
They should have kept it and just keep spending much less, because when I was there I remember those like these fucking lavish all hands where they flew us all to Whistler to spend something like $5 million dollars or something like that on just that one all hands.
Paul: They flew all the employees, but then they flew hundreds of contributors as well.
Edith: I'll say, I guess that's great if you're making enough money that you can afford that.
Paul: They were making-- They were bringing in about $300 million a year, and they're non-profit so I'm not even sure they're allowed to keep it.
But if they had spent $50 million a year on building Firefox, they could have lived forever.
Or good enough to forever, but I don't know if you can build a browser with 50 people.
My own personal thing is when I was at Mozilla I was looking at "OK. What is Mozilla's competitive advantage? Mozilla's competitive advantage is contributors. If they manage to leverage contributors, they can--" But they just never did.
I worked on contributor engagement and tried to make it easy for people to contribute to the thing, which actually is pretty helpful around Dark to have that experience.
And nobody cared, they hired every contributor to be a Mozilla employee except a handful of them.
It just killed external contributions.
Edith: I mean, we've done a bunch of podcasts around open source and community. It's just hard to maintain that.
Edith: That's worthy of a whole podcast. Let's pick that up another time.
Paul: It truly is. Absolutely.
Edith: All right. Thanks, Paul.
Paul: All right, next time.