2 things every good startup needs

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Robert Scoble has a great article today on his take on mistakes startups make.

You really should read his whole article but two things stand out for me.

  • FOCUS ON USP: You should be able to say in one tweet why anyone should buy your product
  • SMART AND GET THINGS DONE: You company is full of smart people but you know when to say “no” to them.

The first is strategic and the second is tactical.

Strategically, you need a razor-sharp focus on why you are different and you should be spending enough time thinking about why anybody will buy your product. Then, you should be able to express that differentiation in one sentence. (Robert gives the example of Prius: “It gets better mileage than your car”)

Tactically, we all know the importance of hiring smart team (Joel Spolsky even wrote a book about it). Its getting-things-done part that gets sidelined. One needs to be careful about over-engineering any part of the organization.

Over-engineering not just happens in engineering but can happen anywhere where very smart people exist. In my last company, we had a manager incentive plan so complex, that, famously, only two people in the entire organization understood it when it came out !! (those were the two people who designed it)

The reason plan was so complex was not because creators of the plan were evil or stupid but exactly the reverse. They wanted to be fair to everyone in every situation and they were some of the smartest people I have known in my life. However, the end goal was lost. An incentive plan is no good if you cannot even understand how you are being incentivized !!

At my current company – hCentive – we constantly worry about if there is anything at all on our web application that is extraneous. Something that will get in the way of a visitor’s experience of buying a health insurance plan – the tool time – needs to be removed.

Avinash – our UX designer – constantly comes up with yet another feature that we can add and I have to say no to many of his beautiful mockups. Not because they are bad ideas but because we want to leave it simple and truly make hCentive the easiest way to buy health insurance.

Scoble gives the example of Evan Williams (founder of Blogger and Twitter) here who prides himself on NOT doing things.

To summarize, if you know your goal (why customer will buy your product) and you have hired a smart team – the job of an entrepreneur is limited to just two things: saying no and moving the furniture out of the way.

A case for consumer-centric health care

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In the cover story for the September issue of The Atlantic,  the author, David Goldhill, makes a very compelling case for a new kind of healthcare in this country that he calls “consumer centric”.

David makes the point that we are using insurance for the wrong things in this country by mostly using it for “regular” and “predictable” health expenses rather than those that are truly catastrophic or unseen. While the viewpoint is not new, David does take it to its logical conclusion with a plan based on it. The last page of his article summarizes his proposal:

  • A  low-cost, true catastrophic (> $50k deductible) insurance that everybody needs to buy. This comes with no medical underwriting and a national shared risk pool. This policy should cost about $200/month for a family of 4 as per today’s premiums.
  • A new type of HSA account which everyone is required to contribute to fund for under-50k expenses. People can take loans from this account (if bigger expenses happen earlier in life) and they can also withdraw from this account for non-medical purposes (after a certain minimum indexed to age is met).
  • Govt contributes to this new HSA for lower-income Americans. Medicare is replaced by this new type of govt-assisted HSA

David believes that this will force people to save for health insurance while at the same time letting them use that money for other things if they use it efficiently. Such an approach will lead to:

  • Removal of obfuscated prices for health care as people will demand to know prices when they are paying for it themselves
  • Providers will spend dramatically less time on paperwork as very little of expenses will pass thru insurance
  • Patients will see “integrated” pricing for the whole service (like they see today for elective surgery like LASIK) rather than multiple bills from each provider that was part of the service leading to better efficiencies at the backend.
  • Technological innovation— which often takes the form of slightly improved treatments for much higher prices—would begin to concern itself with value, not just quality. Many innovations might drive prices down, not up.

I think this is an excellent proposal however I will add two more things to it:

  • We  also need to deregulate insurance sector allowing carriers to operate beyond state boundaries and letting hospitals and providers form tighter, efficient groups
  • We need to limit legal liability and at the same time protect consumers against unscrupulous providers perhaps by giving FDA or similar authority some kind of jurisdiction over providers for safety of procedures.

There is only one problem: the implementation of such a process requires tremendous political leadership as all of the health-care interest groups—hospitals, insurance companies, professional groups, pharmaceuticals, device manufacturers, even advocates for the poor—have a major stake in the current system.

Unless, we as American public, wake up and realize who much are we paying for our health care (an average of $1.8M per person over our lifetime) and how little say we have in how it is spent, such a proposal does not even stand a chance.

They say, a nation gets the government it deserves. I think its true for health systems as well.

It is time we rise above our narrow interests and do what is Right.

weekend “reading”: amazon design philosophy

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http://www.uie.com/brainsparks/2009/06/01/presentation-revealing-design-treasures-from-the-amazon/

This is an excellent presentation about how amazon designs their website. You need about 60 minutes to go thru the whole thing but I suggest you give it a try nonetheless.

This is not about “design” in the sense of which font to use or “design” in the sense of how many tiers in my web stack but “design” in the sense of what are the most important principles you need to follow.

Good reading for anybody building a website (consumer or otherwise) or almost any software or community.

Why web designers are over-rated

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Wired did a competition inviting designers to improve craigslist.

As you can see, most designs actually decrease the functionality of Craigslist under the pretense of “making it beautiful” or “making it a webapp”.

It is possible to do three clicks in the current craigslist design in the time it will take for the home page of these so-called new designs will load. (so much for saving clicks)

Just another data point on why most Web 2.0 products end up making it no money (too much focus on cool design. too little on value for users).

Omnifocus Syncing Design Goofup- what happens when geeks design interfaces

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At the outset, I must say that I am a regular user of OmniFocus on my iphone and mac.
Its a very well designed product and I use it many times a day every day and cannot imagine how I will manage my tasks without it. I have tried Things and a few others and, I think, for my current needs, Omnifocus is the best fit.

However, I think the sync choices in the application are unnecessarily complex and the concept of keeping things simple for users was lost somewhere.

Omnifocus currently offers 4 different ways to sync data from iphone to mac:

  • MobileMe (easy to set up. available everywhere. but not everybody has it.)
  • Bonjour over your wireless network (harder to set up. does not work everywhere. most people have it)
  • Disk (most esoteric. does not work for mac to iphone sync but is listed right there)
  • WebDAV (hardest to setup. can be made to work everywhere. most people dont even know what it is)

As you can see – there are no good choices. There is nothing here that is easy to setup, works everywhere and everybody has it.

I submit that when designing a product a product manager should focus on easy to setup above everything else. If its not easy to setup, it should be made easy to setup or its not a viable option. Period.

In this particular case, Omnifocus should have had really one choice and one backup choice:

  • company run webdav server for syncing
  • a command line based  option to change the URL of the webdav server

A server run by omnifocus can be made exceedingly simple to set up, will be available everywhere, can be free (given the price of the product), available to all licensed users and should be the default, automatic choice.

Its actual technical implementation could be as a webdav interface (which the product currently supports). The only challenge with it would have been that a minority of people will not be comfortable putting their data in a 3rd company hands.

For that minority privacy-focused group, there should be a way to change the “URL” of the webdav server to a private server (if they want).

This would have been the best compromise to provide ease of use of the users along with giving the control to modify if they want.

And control is second only to ease of use in terms of what you as  a successful product manager need to give to your users.

The 1 book you should read about money

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GRS has a great post about the best financial matters books:

25 Essential Books About Money: Financial Wisdom from Your Public Library

I cannot do justice to his entire post here so I will urge you to go read his entire post. (And, then, go ahead and read the 25 books he recommends. It is a great list.)

However, if you can only read 1 book on money, I will recommend one of the following based on your current situation

  • If you are struggling with cash flow and money and want to break free from debt: The Total Money Makeover by Dave Ramsey
  • If you are past the cash flow stage and now interested in building good money habits that will allow you to save your first million and beyond: The Millionaire Next Door by Stanley and Danko
  • You have made your first million and feel comfortable about your earning and saving habits but now need a good plan for Investing: The Random Walk Guide to Investing by Burton Malkiel
  • You think you are doing okay on debt, making money and investing it but now its time to inculcate some good habits in your young kids then its: What Color is Your Piggy Bank? by Adelia Cellini Linecker

Full list of websites that you can take offline with google gears

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List of web applications that provide at least partial offline functionality to end-user using Google Gears.
Listed in the order of perceived decreasing complexity of offline implementation:
  1. Zoho Writer and Zoho Mail
  2. Gmail :
  3. WordPress
  4. Google Docs
  5. Remember The Milk
  6. Some Things
  7. Autodesk Labs Project Draw
  8. MindMeinster
  9. Passpack
  10. Paymo
  11. Google Reader
  12. Google Calendar:
List of sites that use Google Gears but do not provide significant end-user level offline functionality on desktop:

Creating a multi-layered backup strategy for mac

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Apple Blog has a good article on how to create a multi-layered backup strategy:

http://theappleblog.com/2009/06/05/my-multi-layered-backup-strategy/

Some software worth considering are:

  • Time Machine or Superduper! for daily painless backup. this is your first line of defense
  • JungleDisk or Mozy for the off-site backup (just in case time machine is corrupted or your house is on fire. This is your reserve backup
  • Dropbox or Syncplicity to sync files to other machines on your network (good to have a backup of “critical” files). This is for the worst case

There is also CrashPlan that is a little expensive but can take care of all these three facets.

Building better health insurance plans

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We are going thru our yearly open enrollment where we get a chance to change our health insurance plans (among other things). In that context, I am reading a little bit about health care sector.

While the sector has clear deficiencies and is probably ripe for a complete change – there has been some innovations worth mentioning. For example, consumer driven health plans offer a way for providing higher quality care at cheaper prices.

DefinityHealth (a startup that got acquired by UHC for $300M when it had 300K members) offered such products as early as 1998. Essentially, they offered cheaper plans with higher deducitibles.

A typical plan is funded as follows:

  • Employers funded most of the cheaper plan (just like other plans) but their costs were less .
  • Employees got an attached account (HSA) that they can fund with pre-tax dollars (upto $5950/year/family).
  • Many employers choose to pass on some of their savings (say, $500/year/family) to employees to kickstart their HSA fund. This added as an extra incentive for employees to opt for this fund.
  • Employees owned their HSA free and clear and are free to invest them as they wish or take it with them when they leave the job but can only use it for medical purposes.

A typical plan paid as follows:

  • Preventive checkups were covered at 100%
  • Any other expenses (upto about $5000/family) were covered by the HSA – funded by employer (first $500) and then by pre-tax money from employees
  • Catastrophes (beyond $5000) were covered 80% by insurance and 20% by employees.
  • Any unused HSA will rollover to next year.

The plan has following benefits:

  • Extra incentives for preventive checkups (no copay).
  • Since consumer pays from “her” money – she has more incentive to search for the right cost.
  • Cheaper premiums for employers and employees.
  • Incentives for staying healthy as consumer pays some portion of the cost.

The plans has following disadvantages:

  • People with chronic diseases (diabetes etc) where annual expense is roughly between $600-$5000 will have to pay most of it from their pocket

One can argue that benefits outweight disadvantages by a huge degree for such plans and people with chronic diseases should carry higher costs than other people in a capitalist society.

Now, if we can combine such plans with pricing transparency (another article) – we will be half way to medical nirvana in USA.