Good timing makes great products

Well, we are joined once again by Paul Orlando, who was my guest on one of my favorite episodes all about second-order effects and unintended consequences. A couple years ago now, but it was just me and you, Paul; we’ve added Adam to the cast of characters, so…

I’m here. It’s me.

…we can officially do this. Welcome back, man.

Thank you. Yeah, thanks for having me back. Yeah, I loved that earlier talk, and it was kind of excuse for me to geek out Goodhart’s law, and related topics…

That’s what we’re here for man…

Yeah, good to be back.

50,000 listens, Jerod, that episode.

That was good conversation. I mean, people dug it, I dug it… I think I put it in my State of the ‘log top five. I had to apologize to Adam because he wasn’t there for it… I kind of rubbed it in, like “Dude, you missed one of the best.” I mean, unintended consequences - how could that not be entertaining and thoughtful? I mean, you hate it when things happen that you didn’t plan to happen, and they always do in software, don’t they? Complex systems.

Absolutely.

It kind of like is that thing I mentioned before, big change brings big change, Jerod. Isn’t that kind of like the same thing in a way, the unintended consequences? Like, when you do things, thing happen that you have no power over.

Sure. Second-order effects. You expect this outcome, but you don’t expect the result of that outcome changing something else…

That’s right.

…and so on and so forth. And so we’d do well to be weary of decisions, and just – what’s the antidote, Paul? Do nothing?

Do nothing, yeah. Never change anything. [laughs]

Paralysis is actually the worst, right? Like, perfection and paralysis go hand in hand, because you feel like you’ve gotta be perfect in your decision, yet that will never happen because of being in a dynamic world… And then you become stuck and do nothing. Indecision is the worst. Being in that middle ground of just, you can’t decide - it’s the worst place to be as an individual, let alone a corporation trying to move innovation forward.

That’s one of the nice things about software, is we get to ship early and often, and see the results. Sometimes you don’t see the second-order effects until it’s too late, but a lot of times you do… And you say “Oh, I can just quickly change that.” Now, if you’re shipping for instance a book, to production - like, Paul has a new book out - that is something where it’s more like, you know, it’s off to the printer. You’d better not have a typo on page three, or something, because there’s no going back. Software is too easy compared to the real world.

You know, I think the on that, the way that you can write now actually has changed… So I kind of stepped into this topic, and I guess I’m changing topics to like the Why Now topic…

Please do. Yeah.

[00:08:04.27] … but I stepped into it pretty naturally. So I started with a bunch of blog posts a couple years ago on this topic, started basically discussing this timing topic with a bunch of startup accelerators, a bunch of companies, even like your Fortune 500 very late stage companies… So yeah, hopefully – I might still have some typos, but hopefully at least the thought process is solid.

[laughs] Refined thinking, as I’ve heard it called, as you write something like that. Well, this topic to me is darn near as good as our previous one. The age-old question “Why now?” Why is this idea, or this business, or this solution well placed in history? …which is a fascinating question, one that I find very difficult to answer. I think in retrospect we do a better job of saying “Well, the timing was great”, or “Well, the timing was off.” And you don’t get any points for being off in your timing. Well, maybe you get some points, but you don’t get any money. [laughs]

Exactly. Yeah, so people I think do console themselves… And it’s usually always the same things, like “Ah, I was just too early. I was ahead of my time.” And I guess I console myself when I’m crying myself to sleep that it wasn’t a complete waste of time. I was just too early, I was just ahead of the game. But yeah, I got interested in this Why Now question, this timing topic because like you said, I heard a lot of people talk about it. I’d heard a lot of people say how important it was, and then I never really saw anybody dive into “Okay, can we get some clues? Can we at least try to figure this out? It’s never going to be perfect, we’re not predicting the future, but can we at least get some clues as to “Okay if I have an option of working on this or that, I’m going to choose the one that maybe has the timing advantage”? So this is my attempt at doing all of that. I’m not saying predict the future, but I’m saying you can get some clues and you can follow a generalizable process that at least clues you into “Yeah, there might be an advantage in this area”, that you happen to be focused on. Or if not, then here are some other things that you could do as you reconsider that.

But yeah, so that was literally how I ended up getting interested in this, because I heard it so often. And when I even think back to one of the old startups that I was involved in years ago, it was in effect – when Clubhouse was becoming popular, maybe around the last time we spoke, like a few years ago…

Oh, I recall.

And then it kind of dropped off…

It fizzled.

…my old startup was kind of like a version 0.01 of Clubhouse, but in a 2G world, or maybe a 3G world. So a lot of what they were able to do later on, having thousands of people simultaneously listen in or speak at an event was what we were trying to do, but with lots of limitations. People didn’t have Wi-Fi. A lot of people didn’t have smartphones yet. So yeah, I was always think back to that example that I had, very directly, of being like too early.

And along the way, I’ve seen people return to this topic, even to the point where there is a regular kind of “Why Now?” slide in a typical pitch deck… But again, I was trying to help people kind of think through this process, and then figure out “Okay, what do I actually go with?”

[00:11:53.06] This reminds me of the book Eric Ries wrote called The Lean Startup, in a way, because he systematized thinking about this manufacturing process applied to software development. And not just software, but company and product development. Popularized MVP, shipping early, being embarrassed by it even… If the Why Now slide is in so many decks, what book out there represents getting to that answer? …which, it seems like your book is. It’s somewhat of a Bible or a system that says “If you think Why Now, this is a book that will help you get through that process”, whether you’re a product manager, VC, product lead, whatever it might be.

Right. Investor…

Exactly. And that’s what I hope I’ve done. So yeah.

The point there too is he became famous because of that book. It became the way for –

This might be Paul’s big break here. This could be the Why Now –

Yeah, this could be your thing, man.

[laughs]

Did you apply Why Now to the Why Now book? You said “This is the good time for it”, you know?

Yeah, funnily enough, it was really like – this came out of just the passion I had for the topic… So I figured the Why Now might have existed at any time… So I hope it’s the right time for me, but… Yeah, it would be ironic if I was just a little early on that.

Just a little early… [laughs] People still don’t care about the Why Now, might they might a decade from now, and then your book will be well positioned. All your SEO will be there for you… Good time to get into it. So when you set out to answer this question - of course, we can look back and we can see products in the past, or services that were too early… It’s harder, I think, to find the ones that were too late. Maybe they just disappear into the ether, you know… You don’t really get even kudos for speaking too late. But too early…. Lisa comes to mind. Apple had a lot of things that were too early… Microsoft has been too early on tons of stuff, and then like a decade later, here comes everybody else, and Microsoft’s like “Hey, we were there first… And we’re back again.” So I think of big tech, of course, taking swings… What are some other famous “too earlies” that were just kind of pushing the ball uphill too much, and failed for that reason?

I’ll give you a famous one that – well, it was famous at the time, and I think it has been forgotten by history… It’s the first videophone. Funnily enough, this was made by AT&T, and funnily enough, my first real job was at AT&T. I was doing voice over IP stuff back. A little before Skype came around… And I had never heard of this videophone that AT&T had made in the 1960s. You think “I had no idea this was even possible.” And they were doing it over the old – like, the legacy copper wire into the phone…

[unintelligible 00:14:40.23] maybe…

Yeah. Plain old telephone service. Yeah. And they –

It had to be terrible.

You know, I’ve seen videos of people using these devices, and it’s definitely – it’s got that kind of mid 1900’s TV kind of feel to it. It’s black and white… But you could talk real time to another person, you could share a document with them by moving the camera to your piece of paper… But yeah, so they had this, what they called the picture phone. They spent $4 billion in today’s dollars developing it.

It’s a lot.

It’s a lot. Yeah, it’s a lot. And - I mean, AT&T back then, or the Bell Labs back then, that was the gold standard for corporate labs, which we don’t really have to the degree that we had, say, in the 1900s… But they pushed out this product, first at the 1964 World’s Fair, with a commercial launch in 1970. And it was just crickets. They sold, I want to say, tens of units… [laughter]

Maybe even dozens, who knows…?

[00:15:55.02] Maybe dozens, yes. And so they pretty quickly realized “Okay, yeah, that was a $4 billion waste. Shut it down.” They tried basically variations of that product again in 1980s, in the 1990s, and it wasn’t until we had solved the installed base problem. So I don’t need – I want to call you by video, and you want to talk to me; we both need the same make of videophone. Like, once we have solved that, either through laptops with a camera installed, or a webcam that would sit on top of your monitor… It wasn’t until we had solved that that people really had commercial videophone or picture phone type service.

My dad had a car phone back then, early ’90s.

Very popular, yeah.

So his business was same-day small package delivery, so he had to be on the phone all the time… And I felt like even as a young kid riding with a dad who had a car phone, I felt like the car phone was too early. Like, it did not have product-market fit. It was way too big… You couldn’t unplug it, because it would just turn off… It barely ever had reception wherever he was… The only reason he had it was because his business needed him to have it. But even that, which I think eventually obviously got gobbled up by mobile phones, which got gobbled up by smartphones, is like - the car phone was not cool. I mean, it never had mass adoption, for sure. Because even then, putting a phone in your car was just too early… I think probably because just the mobile networks were just bad.

A lot of dead zones…

It looked cool, though.

They looked cool. I mean, my friends were like “Your dad has a car phone?” I’m like “Yeah, he does…” You know… But it was lame.

Yeah. I mean, mobile phone telephony – sticking with communications… Mobile phone telephony goes back much farther than people realize. There were demos… So I believe there were very much demo versions of this in the 1910s, 1920s… But more like the kind of thing where you’d have to throw a cable onto a telephone wire as you stop your car, and you’d be able to get a signal that way…

Styrofoam cups on two ends of a wire?

Styrofoam cups, yeah, with a string. Yeah, the famous story - and I’ve heard this story from people who were there in the room when this happened… But like the famous story, also at AT&T, in the 1980s was - so they had developed a lot of the… At least the network side of mobile telephony. And Motorola had done a lot of the handset stuff. So in the 1980s, early - I think this is like 1983, 1984 - they hired McKinsey Consulting to do the study for them. How big is the mobile phone market going to be in the US? And it was going to set the direction that the company was going to take. Everything is fixed line, and we’re gonna go heavily into mobile telephony. And so McKinsey does this study, and they survey thousands of individual consumers, business people… They come back with this big presentation, saying “This market is too small. You’re not even going to hit a million subscribers by the year 2000.”

Really…?

“Sell off your network assets. Just get out of the market. It’s too small. People don’t even want this, if it’s cheap. So maybe you’ll sell this to truck drivers, maybe traveling salespeople… But this is not a big enough market, so get out of it.” And AT&T got out of that market, only to buy back their old networks and get back into it in the 1990s. And yeah, the numbers were something like – I think McKinsey had said “You’re gonna cap out at 900,000 subscribers in the year 2000”, and it was actually 109 million subscribers in the US in the year 2000.

Wow.

So yeah, so it was a little off.

[00:19:52.16] What’s funny about that though is it seems in hindsight – like, hindsight obviously is 20/20 in almost literally every case… But - I mean, don’t you think that like… Didn’t it seem obvious that eventually we would be having phones with us? That seems like the obvious, but it’s not the if, it’s the when. So I mean, back to your Why Now entire premise is the when, not the if. And I think you quoted Marc Andreessen on that within your book, early on… I don’t know the exact quote, but I’m paraphrasing; something around not the if, but the when, when most startups eventually have success. But to me, I think mobile phones or something like that - yeah, it’s gonna happen. How would you not just make it 900 million, versus 9 million, or whatever; 900,000. Or 9 million versus 900,000. It seemed obvious that it was gonna blow up, to me.

You know, it’s a great point, because - how long can we wait? Do we do we want to exit now and then enter again later on? And I do claim in some cases you could get a good enough perspective on how long it’s going to take something to happen, like some of the supporting technologies, say, to be there… But yeah, early ‘80s those phones were bricks. The battery life was like 30 minutes. All you could do was talk. There’s no texting. Obviously, there’s no touch-sensitive screen…

Sure.

And a lot of dead zones… But it was amazing how quickly – and those phones were expensive. Well into the thousands of dollars. A few dollars a minute for talktime. But it was interesting how quickly those problems were solved. The phones of the mid-1990s, so basically like 10, maybe 12 years after that AT&T/McKinsey kind of example happened, those phones could fit in your pocket, they were pretty cheap, they had good battery life… And a lot of those things – I would say if you were paying attention to how fast progress is happening, or what you might expect, if you believe “Hey, I think Moore’s law is going to continue for the next decade”, this is like the 1980s, “Okay, we’re gonna see X, Y and Z happen”, or “We’re gonna see this cost decline”, like this or that… So I think that you could probably get some clues.

But the other piece of that, of course, was the demand side. So McKinsey goes out and they do this huge survey, and they say “No, it doesn’t matter if it’s cheap. People just don’t want to talk to people when they are in their truck, or when they’re riding the bus.”

So not true.

And the quote that summarized that was from the engineer at Motorola, who had developed the first handheld mobile phone handset, Marty Cooper… And he said “Yeah, what they didn’t realize was the old landline phones connected places to places.” Like, this is your house phone; I’m calling another friend at their house. Places to places. And mobile phones connect people to people. And - wow. Now I can use this device really differently. Like, I am talking to YOU. I know who’s gonna answer the phone. It’s not like somebody who is also in the house; it’s gonna be like you only. Maybe there are certain conversations, like for kids, like “Oh, I don’t want my parents to know I’m on the phone right now.” Or “Of course, I want to make this call when I am outside of my home.” So it changes user behavior, and it changes user behavior in the sense that now there’s more demand for talking to people.

Break: [00:23:37.25]

The rate of progress is amazing, because I think back to my childhood - I think all of us here are relatively same-aged - where we had landlines, you had a fight over who’s using the phone… It very much connected place to place.

30-foot cords.

Absolutely. And you’d get all toiled up in them, and stuff… And now I have my own teenagers and my own tweens, and kids, and I’m explaining to them how phones used to work. And it doesn’t feel all that long ago; we’re talking one generation. It’s not that long ago. 15-20 years. And it’s just dramatically different. Like, they don’t understand the reason why you may not need an area code if you’re calling locally, versus long distance… Like, “Did you realize people used to pay by the minute, and all this kind of stuff?” and they’re like “What?!” Because it really does –

“Isn’t it all free?”

Yeah. I mean, when you zoom out and see the entire forest, the rate of progress of technology - it’s amazing how far it’s come, especially in mobile.

Yeah, absolutely.

As you’re talking about this though, I’m thinking about like a company like Apple… When you think about When, like the Why Now, or timing - could you imagine a company like Apple, given where it’s at currently, if Why Now wasn’t then for the iPhone… They disrupted everything, and the entire – I mean, largely where they’re at today is because of the placement of the iPhone in history, in time’s history.

I would agree.

2007 was the year it came out. It was the right time for internet speeds, you had visual voicemail… That was a whole thing, right? Like, you didn’t have to call in, and listen to the voicemail, and like push one to go to the next one… You could literally see the voicemail from the person, and whatnot. It was revolutionary. Where would they be as a company if it wasn’t Why Now for them, and the right timing for the iPhone?

Yes, so true. And it’s also an example of something that - it’s not like people were clamoring for smartphones. It wasn’t like “Oh, I have this problem. I can’t touch the screen on my phone.”

And there were other smartphones out there too, right?

Right. BlackBerry was out… Yeah, there were a few other early ones where - I guess you still had to use a stylus, maybe, for the screen…

PalmOS, that kind of stuff.

Yeah.

Palm, Blackberry… And then Microsoft [unintelligible 00:28:40.23]

Nextel. I loved Nextel.

Yes. There were Nokia phones that had Java games on them…

Snake.

But none of these things were lighting the world on fire until the iPhone, which seemed to really be the right timing… Maybe even arguably slightly a little early. I think that’s kind of how you invent the future, is you provide something that brings us to it, because - I mean, the internet was really slow on it. The screen size was tiny. The camera was terrible compared to that today. But all those things – you could just see “Oh, I can see the future suddenly, and this is what it is.” Just definitely a revolutionary product. But Apple has had wrong timing as well. I mentioned the Lisa… Timing is hard to get right. So you’ve done all this deep analysis… I can only look back at the past and tell you when things were timed right. What about the present looking forward? You have a business, you have an idea, and we’re going to ask the question “Why Now?” You know, the venture capitalists who I’m trying to convince asked me “Why is now the right time for your business idea?” What does that analysis look like, and what did you find is effective, or ways that we can get a good sense of “Now”, or maybe “Put it on the shelf and come back to it later”?

[00:29:53.16] So I think of this in like a few high-level kind of parts. So the first thing I have people look at is what I call timing drivers. So I track 12 of these, in a general sense, in the book. If you’re working on your own startup, you’re probably going into a lot of detail on one or two or three of these… But basically, 12 different things that are outside of your control, most likely, that you notice are changing, or they are in the process of changing, and you’re going to benefit from them. And maybe other people have noticed this, maybe they haven’t, but you see that there is some convergence that’s going to be beneficial to you. So this could be a tech driver, this could be something on the social or behavioral side, it could be like a regulatory change…

So I go through these 12, and then how they work. And in a specific case, you’re probably going into a lot of detail on what are the specific technologies, or what the specific regulatory changes are that are relevant for you. And that’s typically where I saw people drop the topic if they were thinking about Why Now.

What do you mean?

Well –

They quit?

In the sense of like that’s as far as they’re thinking.

Okay, they think the timing is good because…

…because this new capability is out there. Or there’s going to be –

5G. 5G is the reason, right? And they stop there. That’s what you mean by drop it.

That’s what I’ve typically seen people do. And so I think you need to do this next part, which is you have to understand how that timing driver impacts your business model. So it either has to improve an existing business model, or it needs to make a new one possible. So what I mean is – like, even the examples that we’ve just mentioned, like the old mobile phone examples, say, or the video phone examples… You could do the thing decades ago. But it was just prohibitively expensive.

So yeah, if you wanted to have a video phone in 1964 - yeah, you could. It would just cost you $4 billion to get to that point. Or even when it was commercially rolled out, it would cost you well into the thousands of dollars, and then I think like $20 a minute talk time. So you could do it, but there was something about the business model. People were not going to get enough value to pay that much for it, for example.

So I kind of take the readers through “Okay, how do you understand what your business model is?” and then “How do you understand what those timing drivers do to either improve it or make a new impossible?” And if you don’t have that, you don’t have an advantage related to timing.

Right. So one example you give, which ties back to our iPhone, is not what made the iPhone possible, although there was lots of things there, but when the App Store launched, for instance. This was a technological change - perhaps you’d call it that’s the timing driver - which all of a sudden put GPS with customizable software in everyone’s pockets. And this made Uber, for instance, suddenly possible, where it just wasn’t really – I mean, you could have done it somehow, but it would have been prohibitively slow and expensive and it wouldn’t have gotten adoption. Whereas that timing driver opened up a new market opportunity for the likes of Uber, and Lyft etc. Is that a good example?

That’s a great example. So the interesting thing on that Uber example… So I believe it wasn’t until I think the third iPhone - so this might have been like 2009 or ‘10 - that the phone itself had enough processing power to do real-time directions. So yeah, you had GPS in the first 2007 iPhone, but it would have been difficult having that be like real time directions when you’re driving in a car. But that’s a great example.

[00:33:53.10] So I gave that Uber example as one where, even if you think back earlier, when did civilian GPS become legal? It was like May of 2000, I believe. So after that, you see a lot of these-in car devices, like Garmin, Tomtom… They’re not networked; they’re relying on a CD or like a bunch of CD ROMs that you’ve got in the trunk of your car. It’s not going to enable you to pick up passengers. They’re not networked. But it took both the installed base of iPhones, and then also just like better processing power, legalization of civilian GPS, to enable something like Uber.

I remember back in the day I used to run a whole different podcast that was called the Web 2.0 Show. And we talked to – I’m not sure what you’d call it; maybe an upstart, or a skunkworks project from the Brickhouse division of Yahoo called Fire Eagle. And they were a geolocation service. And a recall - this was published June 2008. Even then. This is like post iPhone, it sounds like a year into the iPhone, basically… It was still kind of weird to talk about geolocation. That you would somehow use this geo stuff. It was a big rage at that time, like 2008-2009.

Foursquare, baby.

I think it was before that even. It predated Foursquare.

It probably was, because Foursquare had to – when did the App Store launch? It had to be 2009, I think.

2008… I thought it was ’08…

So either way, Foursquare definitely doesn’t predate that. Neither does Uber. But you’re saying this Yahoo – wasn’t it called Firestarter?

It was called Fire Eagle, and maybe like a labs project called Brickhouse inside of Yahoo was doing these things. And one of them was called Fire Eagle. There’s an Ars Technica article on it, and all that good stuff… But it’s like a geolocation service, and it shut down later that year. I don’t know why, but… I mean, there they are, right timing, but – kind of right timing. Like–

A little bit early, maybe.

Just a little premature. If they had hung around for a little longer, they could have done something good with it.

Right. Well, another one that just comes to mind - and Paul, you may not be as familiar with this story as we are, but the Heroku story, if you go back into our catalog and listen to Adam Wiggins, who tells the story of Heroku… The timing of Heroku is like textbook perfection in terms of the convergence of all the things that came together. I mean, the timing indicators - what do you call them? You call them timing drivers?

Timing drivers. Yup.

Yeah. There had to be like six timing drivers that all converged… And then Adam Wiggins and his friends were like standing right in there, and it was just the right people at the right time. And I don’t know if they did the analysis or not. I know in retrospect they did, and he’s like “Wow, all these things really came together for what was a rocket ship of a company.”

And what year was that?

This is the same timeframe, honestly. This was post Ruby on Rails. AWS had [unintelligible 00:36:56.04] and so they’re building on top of open source, on top of Ruby on Rails… Y Combinator was taking off, and so a lot of young startups who were using Ruby programming language, and needed ways to deploy it, and then AWS as this infrastructure layer that Heroku could build upon, plus a few other things that I’m forgetting now, just made it a rocket ship. And you can’t really plan that, but you can look around and ask yourself –

That’s it.

…is the timing now good or not? And maybe save yourself some effort if it’s not, right?

Yeah, that’s it. And that’s really what I’m trying to do. I’m not trying to say “Okay, you can predict the future.” But I am saying “Okay, you can look around and observe what is happening that’s probably completely outside of your control”, and then you connect those dots. And then you consider “Okay, I think we have these timing drivers that are advantageous. It’s going to result in a business model that is better, or a new one is now capable.” Doesn’t actually have to be right today, but at least in a realistic timeframe for you. So like “Okay, a year or two years later, by the time that we are actually ready to hit the market, the business model is going to support that.”

[00:38:15.03] So I actually – yesterday I had ChatGPT go and look through your old transcripts with the other podcasts, just like looking… I should have done this months ago, but like - just looking for times when people mentioned timing, or like “Why now?” And it comes up quite a bit.

Oh, I’m sure it does.

Yeah, so – I don’t think the Heroku example was among those, but… Yeah, it certainly comes up a bit. But always, people like reflecting on the past, like “This happened”, or “We realized this afterwards that we were there at the right time.”

Yeah, exactly.

And like the other thing I’m not trying to do is I’m also not trying to say “Hey this completely removes founder agency. You’re just being carried by the wind, and you can’t actually control what happens in the world.” Founders absolutely do change what happens. Or you can pull the future forward, or as a result of your work and your creativity you can make something happen that was not otherwise going to happen… But instead, I like to think of it as you can do a lot of things with your time. Maybe it’s better to choose where you focus based on “Hey, there’s a potential timing advantage there.” And that’s only going to help you; that’s going to help you move faster. It’s going to help you grow your business bigger. Yeah, so I like thinking about it in that way.

Yeah. I think there’s some analogues there with content creators… Just because we happen to be podcasters, I kind of think in that lens. There’s never been a worse time to start a YouTube channel as today. I mean, the headwinds are there, the competition is there. It’s entrenched. The algorithm is fickle. All the things. And yet somebody out there is starting a YouTube channel today, and they are going to have massive success…

Oh my gosh, yes.

…despite all of that. And so the same thing with startups and things, it’s like “Well, here’s just another piece of analysis that you can do when you’re thinking about going ahead and pouring yourself into something, is are there timing headwinds or not?” And that doesn’t mean that you therefore do it or don’t; it’s just another kind of tool in your toolbox, where maybe it’s enough where you’re like “Okay, this feels like a pretty good idea, but now I did this timing analysis, and I went ahead and did the Why Now session”, as you call it, “and now I’m really excited about it… Because I did all this deep analysis, and it’s actually looking like six months from now is the perfect time to launch a product into this space.” Some of these timing indicators though are unpredictable. One of them you mentioned is a crisis. And the folks at Zoom couldn’t have been better placed for COVID and the pandemic lockdowns than they were… But they had no idea that they were going to be well-positioned for that kind of a thing.

Yeah. The crisis driver - I included that there because there’s a crisis that’s happening somewhere in the world every single day. So you should think of crises in a broad sense. But yeah, there are some businesses that benefit, say, from a crisis, like the Zoom example, just because they were already around for years before that, and they were just well positioned to take advantage of that. And they made that their new, secondary go to market, like “Okay, everything is remote. I need to reach out to all these businesses, universities, all the places that previously were bringing people together in-person, to work together, and now I’m gonna sell to them… Because they have no choice but to be remote.” Yeah, so a company like Zoom can really benefit from that.

[00:41:55.28] But one of the other ways that you could think of a crisis is - so if you are the type of organization that can move really quickly, you might see this crisis emerging, and you even might say “I don’t know how long this is going to last. Maybe this blows over in six months.” Like, people didn’t really know with COVID, in 2020. Maybe this blows over in 6 months or so… But I can move really fast, so I can enter this new market that was created because of this crisis, I can make some money, or I can benefit from that. I can be on to the next thing, and it’s worth it for me to go for that.

But then - I mean, there are a lot of other organizations, or maybe more of the more mature, older, bigger organizations that might say “We’re not going to be able to push out anything in a few months. Better for us to just wait. Or if this is an enduring change in the world, let’s learn from the mistakes that the early entrants made, and maybe we come in later on… But we’ll have to take a different approach, because we’re just a different organization type.”

But you’re right, the crisis ones - definitely not predictable. Even some things related to the social or behavioral side. These new social trends kind of come up, and you might get some hints by looking at niches, where different communities, with different types of behavior kind of are emerging… So yeah, so they all function a little differently, and that’s where I kind of say this is influencing your perspective. You’re kind of like learning from these areas, where those 12 timing drivers give you places to look… And then if you’re making that decision, and you’re coupling that with the business model question, you’re coupling that with what kind of organization are you… Like, can you move really fast? Is it better for you to hang back? You put that together, and then it gives you some direction… And it might be a different direction than you would have expected if you hadn’t kind of gone through the process.

One of the things mentioned in here is the first-mover advantage… And that’s an interesting one, because it seems like there are moments and there are markets where it’s huge. And then it also seems like there’s times where it’s not all that beneficial. We brought up the iPhone again, and going back to like early smartphone makers - it’s like, Apple was not the first mover in that market. Apple’s rarely the first mover, often the second mover. VisionOS - again, not the first mover, but maybe, in a weird way… I don’t know what was gonna shake out with that particular product, but… Are there ways to know this is a place where first mover advantage is like very advantageous, or isn’t going to matter as much, because the incumbents can catch up quickly, or how do you analyze that?

Yeah, so that first-mover advantage topic… So I actually went and I read the paper that that term comes from, which is called “First mover advantages.” Funnily enough, they use that title…

Yeah, very functional title…

So it was written in 1988, and it was used in the dotcom era as the support for funding a lot of those startups from back then. Like “Hey, we are the first mover in selling –”

Pets.com.

…Pets.com, yeah, and doing this or that. “We’re the first ones to do this online.” And it was really a misrepresentation of what that paper was about. I read through it, and high level, the times when it is beneficial to be the first mover are when you can control resources. So a later entrant is not going to get access to some essential resources, because you’ve already controlled them… Or when you can lock in customers. So there’s some switching costs are not going to want to go to like the next product, that might be better than you. And so yeah, I would probably look at first movers through that lens… Like, are you in a situation where you can do those things?

[00:46:09.08] And that’s, I guess, also why there’s so many AI-related products now, today, and people are saying “Yeah, I think long-term the incumbents are still going to own this market.” Even though you can’t keep up; there’s thousands of new products being launched. And so do those new startups have the ability to either lock in those customers, or control resources? It might not be the case, especially since in many cases they’re dependent upon other incumbents just for some of the infrastructure. Yeah, so it’s something that I would consider when you’re thinking about, you know…

When you look at the switching costs as very – we talked about straight up like API calls to language models, the switching costs are almost zero. Especially as everybody formalizes around open AI’s API spec. It’s like “Well, they had to publish an API, it was a pretty good one, and they were first movers in this new era of language models…” And so if you actually conform to that API, just like the S3-compatible things, switching costs are darn near zero, and then maybe you could say “Well, resource constraints”, if you’re talking about GPU purchases, and that kind of stuff… But that seems to be short-lived. Like, that’s gonna be for now. The real winner here is Nvidia… But yeah, I can’t see much lock-in.

Now, network effects seem like a place where you really do have lock-in, like social networks, because switching costs are very high. Apple’s famous blue bubbles on iMessage are just astronomically strong lock-in because of the social ramifications, which is a very strange thing. I often wonder, was that a decision of whimsy, by some engineer, some user experience person who was like “Hey, let’s make SMS green, and iMessage blue.” And then they’re like “Good idea, because that way you’ll know.” Or “That’ll be fun.” Was that just an inconsequential decision that had massive second-order effects?

Who set the color on that?

What’s that?

Who set the color on green versus blue?

Well, whoever was inside of Apple’s engineering team or design team that designed the messaging app, right?

You know, that is so funny, because – so I’m an Android user, and the only reason I’m an Android user is that 10 years ago I used to put Cyanogen, a custom mod on Android phones. [laughs] It was fun back then.

Sure. Because you wanted to. Yeah.

And I’ve just remained an Android user. And I’m also – so I don’t use an iPhone, I don’t use MacBook… But my wife is an iPhone user. And it’s not only the blue versus green bubbles, it’s also - I want to say that a couple percent of the time, the messages from iPhones to Androids, it’s a delay, or even sometimes it doesn’t show up. And I don’t have a problem when I’m messaging other Android people, but I’ve heard this enough… There’s something – I’m not saying it is intentional, but I think there’s something there; some of the messages just aren’t delivered, or they’re delivered really slowly when you go between Android and iOS devices.

Well, you have a strong marriage if you can conquer that divide. It’s amazing.

Yeah. That’s the excuse anyway that I’m using when I didn’t see something. Yeah. [laughter]

“Didn’t see it, babe Sorry.”

Yeah. You can edit that out of the conversation, I hope. [laughter]

It’s staying in, sorry. That’s how it works around here if you ask for it to be edited out… Unless it’s literally a secret. I’m just kidding, we can get rid of that.

I was kidding, too.

What’s her name?

Susan.

Susan. Oh, that’s right. She’s in the book. That’s right.

Yeah. That’s right.

The second page, I think. Yeah, the dedication.

Of course. Gotta include that, yeah.

Great job.

You’ve gotta do that, because she gave up so much of her life for you to write this book, I’m sure. Isn’t that true? I mean –

It is true. It is true.

In any partnership there’s give and take, and to write a book, I know - not because I’ve done it, but because everybody tells me - it’s a huge undertaking. And surely she suffered, if not as much as you maybe more, as you wrote this sucker.

She’s gonna love listening to this. [laughter]

Break: [00:50:17.09]

Have we quantified all 12 of the timing drivers well enough that you clearly state all of them so we can have just a good list?

I mean, I hope I did in the book, if that’s what you’re asking… [laughs]

Do it here in the audio, if you can. Give us just a bullet list of all the drivers.

Okay, so the 12 that I list are technological related ones… So you might be thinking here of like even Moore’s Law kind of examples, or I gave like [unintelligible 00:53:09.19], other types of network-related, bandwidth-related examples… Social and behavioral changes… There’s some social and behavioral things that stay the same across centuries. People love music - I don’t think that’s going away in the future, no matter how long you wait. And there’s other just maybe more cultural effects that do change generation to generation.

There’s regulatory and legal drivers, and some of these function like an on/off switch; it is completely prohibited to do a certain thing, or it’s mandated you must do it. Others are more like a dimmer switch; like, there’s some gray area. And I give, different examples there, like patent protection, where it’s strongly enforced, versus - you know, it could be state by state; say like legalization of different products.

Installed base is another one. So when you rely upon the existence of another product that’s out there, so like the smartphone, or smartphones with the App Store installed… Like, Uber did not need to also develop the smartphone, and then hand that out to all of its customers, so you can rely on an installed base another company invested in.

The crisis one we mentioned… The economic driver is, I think, pretty straightforward. So there are growth times in the economy, times of decline; that might drive different behaviors. Networks we kind of mentioned, but as opposed to the installed base examples. It’s about the connections in a network.

So again, going back to the Uber example - you had people navigating with these old Tomtom devices in their cars, but those were not networked. So if I want to create a rideshare business, I need whatever that device is, whether it’s a smartphone or some other standalone device, I need them to be networked for the communication between the driver and picking up the passenger.

Distribution is another one. So different ways that you can reach customers, resources… Capital access is a big one, especially I’ll say for the last few years, because we went from an era where the money was kind of flowing… Both low interest rates, so you had to look for high-yield, places to invest, but then also COVID era, the first part, when a lot of money was pumped into the economy, and [unintelligible 00:55:38.00] valuations were going through the roof… And then a year, year and a half later that dried up. Huge valuation cuts, startups that were expecting that they were going to be investing heavily in growth, but maybe it was not profitable growth, and then they can’t raise the next round, and they have to shut down.

[00:56:00.13] Organizational drivers… So this is where the organizations themselves can learn internally, and then be more efficient.

Available talent. So what is your access to people that can actually build the thing? Is it that there’s just not enough people with – I guess the joke is I want 20 years of generative AI experience on my team. People don’t exist. Versus “Oh, we are producing these new experts at a good rate.”

And then lastly, demographic drivers. So you might just look at how populations age, or health needs, things like that. It’s a long list, and I’ve figured that any startup is probably really dipping into one, two, maybe three of those… And then to make that process maybe a little easier, to give people some ideas, at the end of the book I include what I call timing patterns. So we see combinations of these in different ways, and what ends up happening in some of those combinations… So that might give you an idea, if you have a tech driver with a capital access driver and a demographic driver - what are some examples of companies benefiting from that or not?

But yeah, I’d say the approach that I would take - because you mentioned Lean Startup, that book changed the way people ended up building companies after that came out… Yeah, what I hope people end up doing as a result of reading this “Why Now” book is they’ve probably already been thinking about the impact timing has, either on themselves, or they’ve seen other startups, other products kind of benefit or suffer because of timing… So they’ve started thinking about this, but this book will give them a bit of a process to follow, that I think is helpful. And then a lot of examples of other companies that either did this really well, or poorly. So I tried to write it in a way that was pretty straightforward… Basically, I want people to be different, and to act in a different way because they’ve read this. And yeah, I think a combination of the methodology, and then all the examples does that.

I love the naming of these timing patterns. So again, the patterns are a combination of drivers which you may see are available, and you’ve you slapped names on these, like the Hermit Crab…

Yeah.

I love that one.

…the Unlocked Asset, the Clone, the Toy… I’m imagining these are like constellations in the sky…

Oh, I like that.

Like “We’ve got a Hermit Crab over here, guys! Let’s go, it’s time to attack!” [laughter] That’s all good stuff. I love it when you slap a name on something and all of a sudden we can identify a phenomenon.

What would the one you’ve been talking about be called, Jerod? You mentioned before in a couple of podcasts - I’m trying to recall which one it was, where somebody had been out there doing it, and they weren’t doing it very well anymore, or not so well, and there was an opportunity for somebody to come in. How does that one align to these names?

That’s a good question for Paul. So Paul, here’s an opportunity where you have a beloved service or product, which was then acquired, and has dissipated or disappeared, and is a shadow of what it once was. And yet the idea, the thing it represents - still beloved. So perhaps Foursquare would be an example. I used meetup.com as an example. The one that we were specifically talking about was Goodreads, because Nadia Odunayo had noticed that Goodreads was beloved, bought by Amazon, became part of the borg that is Amazon… And just like people now use it kind of in despise. But they still use it, because their stuff is there, and their history of reviews… So she started building Storygraph, which is very much like “What if Goodreads was awesome again?”, in a nutshell. And I’m like “That seems like a pattern where maybe the time I mean is this thing is now in ruins… And we can enter…” Have you identified anything like that as an opportunity?

[01:00:07.15] I didn’t list it, only because you’ll have thousands of patterns if you [unintelligible 01:00:10.07] example.

Sure.

But I like that one. So you just need to name it.

Okay. I’ll get back to you. I’m gonna name that sucker and we’ll put it into some sort of writing somewhere, so that people start to identify that. Maybe it’s called like the Relic, or something.

The Renewed Relic.

It’s not bad. We can workshop it. Yeah, Renewing the Relic… Sounds like a blog post in the waiting. Paul, you can write that one. I don’t like to write. You apparently like to write more than I do. Just say “quoted Jerod Santo.”

Alright, you got it.

You don’t even have to do that part. Just write it up. All good.

I do like naming these though, because like you said, Jerod, it does give you this lexicon to use towards like “Well–” If you see something, it’s like “Oh, that’s the Clone” or “That’s the Hermit Crab.”

You can identify a pattern, exactly. You can be like “Ooh, good timing.”

Naming things to tame things is a popular thing. Once you give it a name, it’s easy. It’s like rugby in Silicon Valley. Sorry about that…

So for instance, here’s the timing pattern called the Clone. And the Clone has drivers such as economic, regulatory, social/behavioral, capital access and demographics. So this is a pretty good pattern. It’s got a lot of things going for it. The Clone, it says “With some localization, what is already popular in one geographic market can gain popularity in a new place.” So this is basically like “Here’s a formula that works, and when it’s tied to a geography, or it’s tied to an ecosystem, here’s a great iPhone app. I’m gonna go make a similar app for Android.” Right? I think that’s basically the idea.

That, or - there’s a geographic kind of barrier that you’re crossing over…

Yeah. It worked well in India, maybe it’ll work well in Pakistan, or something like that.

Yeah, exactly. Those are often ones that at least American startup people complain about…

Because it’s not innovative.

That, or it just seems to be like “Oh, this is bad form.” But obviously, some of these businesses become huge. Or the question is “Well, why didn’t you do it then? You should have deployed to Pakistan instead.”

Right. China seems very good at these. There’s always the Chinese version of the American tech company. And some

of those, like in the China example - in some of those cases, the American companies are just prohibited from entering the China market.

Yes, yes.

So you just created a new market if you prohibit an external company from coming in. Basically, all the social media companies, were either kicked out or blocked. Yeah, so then you have the domestic Chinese versions that pop up.

And based on their population size, they end up eclipsing the original in market.

Yeah, exactly.

It’s amazing.

That works in a country that’s got a huge population. It wouldn’t really work well in Bermuda, I guess.

Right.

Yeah, you’ve got to pick and choose when you do that.

Also not as easy to pull off in free markets, right, where anybody can just enter.

Yeah, exactly.

What about bad patterns? That’s next on the – I mean, if we’re chronologicaling, or in order of operations, to say timing patterns is one section, and the very next section is bad patterns. So what’s the deal here?

Hey, yeah. It’s pretty easy. Bad patterns are just the patterns, but they’re bad. [laughter] No, so on this one…

Just for instance…

So early in the book I gave this walkthrough in quite a bit of detail on YouTube, how everything basically worked out really well in terms of timing for YouTube. And I go through the whole Why Now session with them as a case study. And I use them as a case study not only because everybody knows that company, but also because the investment memo from Sequoia was - which typically is kept private, but that was made public because of a lawsuit. And so we have all the private numbers, from users, their cost structure, all of that, we have, as a result.

[01:04:08.07] And I quoted some parts of that, and like the Sequoia investor, Roelof Botha, who had recognized there’s this time and advantage in YouTube’s case in 2005, whatever… So he assists that really well. And then 10 years later, he actually wrote a piece in TechCrunch about why 2016 is VR’s breakout year. I think he called back to the YouTube example from 10 years earlier… But he wasn’t right that time. It was not a breakout year for VR in 2016.

So I kind of tried to assess why that was the case. And unlike the YouTube example, where YouTube was being carried along by broadband into the home, people now have laptops with computers built in, becoming pretty normal to take video of yourself, or friends, and then share that… You know, unlike a lot of that, on the VR example, we had this installed base problem.

So it kind of goes back to the picturephone example that we were talking about earlier on. Like, “Well, not everybody has the headset yet.” “Oh, these headsets are still pretty expensive.” This is not yet anyway the type of thing that people will sit on for hours and hours as they ended up doing with YouTube. So there’s some differences there, and I think some differences in the drivers. Definitely there’s differences in the business model that was supporting, or what eventually supported YouTube, and then what is still kind of questionable on the VR side… But yeah the bad patterns are – I list a few of them. So that one is an example.

Or the wrong curve… So you think something’s going to be exponential, and it just flattens out, it plateaus… Or vice versa. Which again, kind of calls back to the AT&T McKinsey mobile phone example… You know, one that I think some startup people get wrapped up in. Or it even close back to that Marc Andreessen quote that you mentioned. I call this one the illusion of immediacy. “Oh, this new thing is possible. It’s going to take over the world immediately.” And no, it actually is going to take over the world, but it’s going to take 10 years.

10 years.

Yeah. And we’re out of time by the time that happens. Yeah, we’re out of money by the time that happens. Yeah.

Paul, can you take all of these patterns, all of this knowledge, whether they be anti and pro, and could you answer this one simple question… When is the year of the Linux desktop?

Gosh… [laughter]

I knew it was going to be something like that. I don’t know.

We’re waiting.

3411.

Oh, my goodness.

Wow… So basically never.

Well, he’s gone on record here. So for those of you listening to this in the future, because your AGI tapped into it and told us there was a prediction of 3411… And so all hail Paul Orlando for getting that one right.

Thank you. I like questions like that. I won’t be around to be held accountable.

Unfalsifiable… [laughter] They’re completely unfalsifiable. I like those two.

When you write a book like this though, you have some hope. Right? You don’t just write it, you don’t dig deep like you did, and research, and truly think… You have some version of hope, once it’s out there into the hands of those who should read it. What is your hope?

[01:07:38.27] Oh, that’s a great question, too. My hope is that smart, creative, talented people will be able to better devote their time. So they’ll still do things that they’re passionate about, but if it’s a question of “Hey, I’ve got a lot of options. I’m going to think about timing as a way to make a decision, and then I’m going to do something that I think will benefit from timing, that’s just going to help me along the way.” So related to that, I hope that our cousins in these large corporate environments, where maybe they have in-house labs, or they’ve got like 50 different potential products that they are trying to figure out how to put resources behind, or what to keep, what to kill, I hope that timing will become another way they filter opportunities and decide where to put resources.

Similar things for startups that are pitching for capital, or investors that are evaluating startups. We recognize timing is important. How could I actually step through that with some type of a process that’s helpful, and then get to a place where if I’m the startup, I either represent what we’re doing appropriately? This is why the time is right, in a Why Now slide. Or on the investor side, lots of things we can invest in, but we should be in this area. I don’t know exactly who’s going to win. I’m not predicting which team, if there are 100 different startups doing something similar… But we should have some type of place in this new market.

So I hope it’s things like that, that come out of this. I would really want people to apply this in what they choose to work on, and what they choose to invest in, and what they choose to do. But absolutely, founders do influence what happens in the world… So you can take this book and say “I’m still really passionate about this topic. I’m going to pull the future forward. I’m just going to do it anyway.” Or “I’m willing to wait the 10 years that I think it’s going to take for it to have a supportable business model. I’m gonna get through that in some other way.” But yeah, to your question, I really hope that it’s going to change the way people actually build or invest in companies.

This reminds me of the SWOT analysis, SWOT, strengths, weaknesses, opportunities and threats, as a way, a framework for thinking and a framework for evaluating and obviously deciding. It also reminds me of the conjoined triangles of success, which is made famous by Jack Parker in the TV show called Silicon Valley…

[01:10:21.01]

“Jack, shouldn’t we hire engineers to build the platform before we get people to sell it?”

“No! God, no. The system, Richard. Sales and engineering are the two pillars of the conjoined triangles of success.”

“Yeah…”

“Engineering and sales must work together to decide what to build.”

I think you need something like that. Could you distill this down into a visual? I think that might also be an igniter for this book, this idea. Some sort of smaller framework that’s visual, like the SWOT analysis, like you do with the drivers. And that’s kind of what you do with the YouTube examples; you kind of go through that. Can you take what you did there with that case study, and condense it into something that’s a little bit more compressed, that gives it like “Here, I’ve battled-tested this against the Why Now pattern/framework”, or whatever it might be.

Yeah…

Did you draw something, are you showing us something?

I drew it, I drew it.

Okay…

I don’t know if you can see that. So that’s not exactly what you’re talking about, but that graphic that I returned to –

So it’s a little too chaotic. It needs to be –

Well, I just have too many dots on it. Just removed some of the dots.

Yeah, too many dots.

But yeah, so I represent timing, if like time is on the X axis… And then successes and failures are on the Y axis. So I return to this diagram again and again in the book, but it’s basically – there’s a dangerously early phase, there’s a market window opens phase, and then there’s a “not too late” phase. And you can choose any of those spots to enter, even dangerously early, if you say “Hey, yeah, we’re willing to just stick it out. We’re going to wait.” You can choose to enter not too late, as a niche player, and then maybe something happens, like in your Goodreads example. The incumbent starts to decline, and then we can displace them… But I do like the idea of having just like a simple graphic of this. And maybe I can actually just think on that a bit more, but… I also wanted people to go through and have their own assessment, of their own specific process.

So one of the big ideas is it’s more dangerous to be too early than it is to be too late. And if we just look at this historically, back to the YouTube example, there was a dotcom era startup that was doing user-generated video content over dial-up… Which I had no idea existed. I found an interview with the guy, who years afterwards was reflecting “Yeah, we shut down in 2001, four years before YouTube. But we were too early.” What too early is might not be all that many years, in some cases… I don’t know, that’s I guess my comment on diagrams.

[01:13:08.14] Yeah. Is this something you’d want to teach? Like, if somebody said “Hey, come help us decide why now, and give us a course on this. Help our leaders and executives understand this framework, and come help us navigate it.” Would you be that kind of person? Is that what you could do?

Yeah, so I kind of went through figuring this stuff out by doing this as a workshop. So I visited a number of startup accelerators, and I ran this as a workshop. I teach at USC, so I’ve done this also at a few other universities, where I would go and talk to one of their classes… I’m now starting to do this with not really like the super-early stage, but either later-stage companies, or companies where they have like in-house labs… And so it is kind of that example of “We have lots of things that we could be working on, or putting resources behind. We need another filter on where to put our attention.” Yeah, I kind of got to this point by doing this a number of times in different environments… But yeah, I like that. So yeah, if anybody wants a talk, I’m happy to kind of like do this as a workshop or a talk with your company.

I like the idea of that, because if somebody can just buy a case of your books, for example… Like, prerequisites is buy a case of my books, pay me 10 grand, fly me out there, roll out the carpet, all the good stuff. And you just get to travel the world with your wife and do some fun things, and teach people Why Now, the whole principles of it. And maybe through the that experience, you can eventually distill down this graphic we talked about, or some sort of condensed version of it…

[laughs]

Because in a lot of cases, what that requires is more thought, but sometimes iteration on, like you said before, as a teacher - you know this as a teacher; you learn as you teach, and so you sort of refine how you teach, and the tooling and the tactics you use to teach. And so maybe what that might be is through iteration getting there.

Yeah. Good. Well, I welcome the invitations.

How can they get a hold of you? What’s the best way? Let’s get you hired.

Yeah. I love it. A couple of ways. You could find me - I guess for this, the easiest way is to find me on LinkedIn. Just “porlando”, or just search Paul Orlando. You could find me through my site, which is called startupsunplugged.com. Twitter, @porlando… So one of those ways will get to me.

Gotcha. Well, we’ll make sure that we have your LinkedIn updated on your profile on the episode page, so that anybody going to the episode page can link out to at least your LinkedIn. And we’ll obviously link up in the show notes all the other things you just mentioned too, but… Yeah, I mean, if you can turn this book into like the next big thing, and you can ride that wave, why not? Is now a good time?

Now’s a good time. Let’s do it.

Actually, a cool follow-up to Why Now can we Why Not.

Oh, yeah…

You could write a book called Why Not.

It’s got the sequel built in. Yeah.

Then you’d have a series. So the book in paperback, 10 bucks cheap, right?

It’s cheap.

10 bucks in paperback. “Why Now: How good timing makes great products.” It’s on Amazon. You can get it on Kindle. Paul, what’s the best way to buy the book, that puts the most money in your pocket, versus perhaps Jeff Bezos’ pocket? Is it Amazon. Is there a better place?

Yeah, Amazon would be the place. That’s the spot.

That’s the spot. Alright, fair enough.

Very cool.

Thanks for stopping by and sharing with us, man. Good stuff.

Thanks. Yeah, thanks for having me back.

It’s nice meeting you.

Thanks Jerod, thanks, Adam.