7 ms·

What hackers don’t know about business

122 points by tagx 14y ago

james1071 14y ago
Part of wisdom is knowing that the typical hacker and the typical customer are alien species, who cannot speak each other's language.
- mindcrime 14y ago
  No they aren't. I wish people would quit perpetuating such nonsense. Promoting this belief just makes the problem that much worse and adds to the adversarial / antagonistic relationship between hackers and the rest of the firm (and the customers).
ananddass 14y ago
The easiest way to grasp the difference is to think of the Attention-Interest-Desire-Action paradigm. This link has a basic primer http://en.wikipedia.org/wiki/AIDA_(marketing) http://en.wikipedia.org/wiki/AIDA_(marketing)
- pizza 14y ago
  Theoretically (and likely), this could be applied to anything that involves convincing: politics, debate, etc., of course with different media of action e.g. voting. This is basically all you need to know about marketing, the science of interest.
fredsters_s 14y ago
Very true.
mindcrime 14y ago
Marketing is about getting the word out. Think about ads and blog posts. That just sounds like advertising & PR. There is a lot more to marketing. To crib the definition from Wikipedia (which sounds pretty close to the one I learned): Marketing is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."[1] From the same page, another way of looking at it is: Marketing is used to identify the customer, satisfy the customer, and keep the customer. "Getting the word out" is important, yes, but that's not all there is to marketing. [1]: http://en.wikipedia.org/wiki/Marketing http://en.wikipedia.org/wiki/Marketing
- ananddass 14y ago
  Agree that marketing is not just about getting the word out. But the hard thing about the definition you quoted is that it doesn't lend itself to focus. Its too all emcompassing and things like "satisfy the customer" could include awesome product development and customer support.
  - stfu 14y ago
    Well, that is probably core to marketing. It is not just an isolated instance but only if all parts are up to par it can make its optimum effect. A shitty product and a shitty customer support will (almost) always sabotage a brand to such a degree that even the most wonderful ads won't help. Even if it succeeds in the short term, somebody else who is taking a more holistic approach should be able to gain significantly on marketshare.
    - ananddass 14y ago
      Totally agree! NO amount of marketing, sales, business development can overcome a bad product or sub par customer support. A wholistic approach will always win over a piecemeal approach but in a resource constrained environment, we are better off picking the one or two things that give us the best bang for the buck. The "programmatic" way of running marketing isn't optimal for small startups
- jgamman 14y ago
  School of Henry Ford Advertising: Model T for less than a $1000 Marketing: If I can figure out how to make a car for less than $1000 I'll sell millions
- hartleybrody 14y ago
  I've found that there are generally two definitions of what "marketing" really entails: 1. Generate brand awareness, get people interested in your product and bring in leads/customers (depending whether you're B2B of B2C) 2. One that includes all that, plus the market research necessary to figure out how to do all that stuff For lots of startups, the second part is really part of the entire product/customer development cycle, where product managers figure out what the customers need and how to talk about it in their language. This leaves the "marketing" people to really just focus on the more narrow definition. But in more traditional businesses, lots of that market research falls under the label of "marketing." As a guide for hackers, the most important two marketing activites are "getting the word out" and optimizing your funnel from visitor to lead to customer.
riams 14y ago
Doesn't LTV stand for "[customer] life time value," i.e. the amount of money you'll be able to generate from a customer during his/her time with your business, and not "long term value"?
- tagx 14y ago
  Typo. Thanks.
- jmduke 14y ago
  I've always seen customer lifetime value abbreviated as CLV. That being said, I've never heard of 'long term value', and I think the author is mistaking this term for CLV. Customer lifetime value is something calculable, even if crudely -- its amortized revenue per customer as retention approaches zero. "Long term value" is more of a concept.
- caw 14y ago
  I picked up on that as well. Wikipedia seems to agree with us: http://en.wikipedia.org/wiki/Lifetime_value http://en.wikipedia.org/wiki/Lifetime_value I agree with their points, but overall the article is just a little bit "off". Maybe it's the bit about the integral. If you had a customer pay you $1 every month, and they on average stayed for one month, your LTV is $1, not the integral of 1*x (1/2).
- nihonjon 14y ago
  It really depends who you talk to. At Groupon EU, Japan, Korea and USA we called customer life time value "LTV". Also, Avinash Kaushik, author of one of the best books on Web Analytic and previous Google Evangelist, uses LTV as well. http://www.kaushik.net/avinash/analytics-tip-calculate-ltv-customer-lifetime-value/ http://www.kaushik.net/avinash/analytics-tip-calculate-ltv-c...
bazookaBen 14y ago
when marketing Filepicker to enterprise users, how successful was referrals/friends/valley connections vs coldcalling, percentage-wise?
oinksoft 14y ago
Maybe somebody can translate the last paragraph into English for me. I read the preceding paragraph several times and I'm coming up empty: Based on our experiences at Filepicker.io we learned that it is important to delineate the differences when planning initiatives that drive growth, the amount of resources needed and the profile of team members required to drive the initiatives. While we're going for pompous titles, how about "What newly minted MBAs don't know about writing"?
- brettcvz 14y ago
  Sorry, I agree probably not the best-written paragraph. Essentially: * There are distinct focus-areas on the business side, just as there are on the coding side * Identifying the differences helps us figure out what to do, when, and how
- robertpateii 14y ago
  "Understand the differences between these things, and don't mash them all together. They each have unique requirements."
  - ananddass 14y ago
    Very true. As startups with limited time and resources I tend to stick everything into the "lets figure out how to grow-lets do blogs, sell to larger customers, plan distribution hacks etc." It is important to decompose the business bucket and pick things that matter to my specific kind of business.
- statictype 14y ago
  Translation: You need to figure out which demographic your business is targeting (large business, small business, consumers) and plan your marketing/sales according to that and have the correct people on your team depending on what your marketing/sales plan is. I agree that it isn't very well worded but it does make sense.
rmserror 14y ago
a complexity theory error: "Just as you can reduce all NP hard problems to 3-SAT..." you can reduce all NP problems to 3-SAT because 3-SAT is NP complete. you cannot reduce all NP hard problems to 3-SAT. for example, all problems in NP reduce to SUCCINCT-SAT, an NEXP-complete (and therefore NP-hard) set. good luck reducing SUCCINCT-SAT to 3-SAT (despite how little progress in separation of classes we've made, the time hierarchy theorem still indicates this is impossible)
- xmpir 14y ago
  great response! NP-problem discussions make me happy. for those not understanding a word: http://en.wikipedia.org/wiki/Boolean_satisfiability_problem#3-satisfiability http://en.wikipedia.org/wiki/Boolean_satisfiability_problem#...
rkaplan 14y ago
I think the name "Filepicker.io" is severely limiting. When I hear "Filepicker.io", I think "easy-to-use library for handling user file uploads." That is rather narrower than their description of the service on their blog: "Filepicker.io helps developers connect to their users' content." Don't get me wrong, I very much enjoy the Filepicker.io blog. I have never used their product, but from their website, API docs, and blog they seem like a well-run startup with a value-adding service. Nonetheless, they are hurting themselves with such a specific name. It creates the negative perception of "Feature, Not A Company" that Mark Suster talked about on his blog: http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-not-a-company/ http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-n...
- tagx 14y ago
  We've realized that now and are in the process of changing our name. I'd love to chat with you about what you think of some of our ideas
  - kephra 14y ago
    I'm not your customer (because I prefer own root servers over cloud services, and even prefer housing over hosting) - but I think you might stick with your name, because: 1. its a known (brand) name 2. it tells where your product is strong But I suggest to change the Enterprise pricing tag: 1. Don't tell a price for enterprise. Enterprise customers have a high COCA, so price is always negotiation. 2. Offer enterprise features = Your services runs at their servers, under their control, not as a SaaS, but as a normal enterprise software that comes with installation support, consulting, ...
    - ananddass 14y ago
      Thanks for the suggestions. It's a delicate balance between appearing "complete" with the offering versus leaving headroom for customization for larger customers. Increasingly with the consumerization of the enterprise do you think that custom development, consulting etc are a must have to servicing an enterprise?
drivebyacct2 14y ago
This is why some schools are taking new approaches to integrating business and computer science curriculum. Their graduates leave understanding business basics, have worked in teams and even for clients on contracted projects.
allstruck 14y ago
I couldn't get past this sentence: "If it costs you more to get a customer then you can possible make from them, your business is going to fail." Seriously learn some English man. The worst part about this is you're arguing that programmers should learn business directly after stating that you argue about business managers not needing to learn programming... Seriously where is your logic sir? Maybe you can write an article about why you think business managers do not need to learn programming (something I would agree with as a programmer), and make sure you have it edited before posting.
deleted 14y ago
[deleted]
greghinch 14y ago
I'll tell you what, I'd much rather be working amongst a team of engineers who are learning to run a business than a team of MBA types who are learning the ins and outs of software development. I'd put my money on a team of engineers every time too. But I also steer clear of anyone who describes themself as a "hacker". Code is a craft, MacGuyvering something together is no way to build a sustainable business.
- tatsuke95 14y ago
  And I'd put my money on a team of good people that doesn't involve members who are willing to type-cast a person based on his or her degree.
  - greghinch 14y ago
    Didn't say anything about degrees. Ultimately it's about people who know how to make things vs people who know how to talk about things. More often than not, in the software world that equates to engineers vs MBAs. I'd much rather work with people who can make and need to learn how to talk than people who know how to talk and need to learn how to make
nikcub 14y ago
Most hackers I know understand all this, but minus the fancy business school acronyms.
- statictype 14y ago
  I would say there are many that don't ( I was in this pool until very recently). This is especially true of selling to big companies. Hand holding, dealing with RFPs, getting through to the right person inside to support you and getting involved in internal politics are mind-bogglingly frustrating and often not built on logic or rationality so it often doesn't make any sense at all to hackers.
guynamedloren 14y ago
> ...many in the software community don’t understand the differences between Marketing, Distribution, Sales, or Business Development. Many in the 'business community' don't understand the differences as well. Not being an ass or making assumptions - I'm speaking from first hand experience here.
vilcans 14y ago
So this is what business people mean when they say programmers need to understand business? Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense. But now we know. So, when will business people understand software development?
- mindcrime 14y ago
  So this is what business people mean when they say programmers need to understand business? No. This is the thinnest sliver of a fraction of what business people think hackers should know about business. See the link above to the "outline of marketing," for example. Just marketing is a huge discipline with a very large body of knowledge... add in distribution, support, finance, business development, sales, etc., and there's a whole world of knowledge that a lot of programmers don't generally have. Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense. Sure, at the 60,000 foot level. But the devil is in the details. Seriously, as popular as it is for hackers to mock "business people" and MBAs and business school, do you really think that business school doesn't exist for a reason? You think these guys just sit around and spew bullshit at each other all day, graduate, then go on to run successful, real-world businesses? Business, especially at scale, is fracking complicated. And a successful technology company can't be all about just technology OR just "the business." You really need a holistic approach (which means somebody, or multiple somebodies have to understand the big picture) where technology and the "business side" complement each other. So, when will business people understand software development? Ya know, it would almost be fair for the business people to ask "when will software developers understand software development?" We, as a group, still don't do a good job of giving good estimates and delivering things that work reliably without constant hand-holding and patching. But, to be fair, that's often back to ill-defined requirements and unreasonable schedule pressure, which still - IMO - argues for the need for a holistic understanding of what's going on - that is, a shared understanding that's common to the "business people" and the hackers. In fact, I almost wish we could get away from making the distinction "business people" and "technology people" (or "hackers") and drop the antagonistic, adversarial atmosphere that often seems to exist.
iblaine 14y ago
And the death of the word 'hacker' continues...

122 points by tagx 14y ago

Part of wisdom is knowing that the typical hacker and the typical customer are alien species, who cannot speak each other's language.

mindcrime 14y ago
No they aren't. I wish people would quit perpetuating such nonsense. Promoting this belief just makes the problem that much worse and adds to the adversarial / antagonistic relationship between hackers and the rest of the firm (and the customers).

ananddass 14y ago

The easiest way to grasp the difference is to think of the Attention-Interest-Desire-Action paradigm. This link has a basic primer http://en.wikipedia.org/wiki/AIDA_(marketing) http://en.wikipedia.org/wiki/AIDA_(marketing)

pizza 14y ago
Theoretically (and likely), this could be applied to anything that involves convincing: politics, debate, etc., of course with different media of action e.g. voting. This is basically all you need to know about marketing, the science of interest.

fredsters_s 14y ago

Very true.

mindcrime 14y ago

Marketing is about getting the word out. Think about ads and blog posts. That just sounds like advertising & PR. There is a lot more to marketing. To crib the definition from Wikipedia (which sounds pretty close to the one I learned): Marketing is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."[1] From the same page, another way of looking at it is: Marketing is used to identify the customer, satisfy the customer, and keep the customer. "Getting the word out" is important, yes, but that's not all there is to marketing. [1]: http://en.wikipedia.org/wiki/Marketing http://en.wikipedia.org/wiki/Marketing

ananddass 14y ago
Agree that marketing is not just about getting the word out. But the hard thing about the definition you quoted is that it doesn't lend itself to focus. Its too all emcompassing and things like "satisfy the customer" could include awesome product development and customer support.
- stfu 14y ago
  Well, that is probably core to marketing. It is not just an isolated instance but only if all parts are up to par it can make its optimum effect. A shitty product and a shitty customer support will (almost) always sabotage a brand to such a degree that even the most wonderful ads won't help. Even if it succeeds in the short term, somebody else who is taking a more holistic approach should be able to gain significantly on marketshare.
  - ananddass 14y ago
    Totally agree! NO amount of marketing, sales, business development can overcome a bad product or sub par customer support. A wholistic approach will always win over a piecemeal approach but in a resource constrained environment, we are better off picking the one or two things that give us the best bang for the buck. The "programmatic" way of running marketing isn't optimal for small startups
jgamman 14y ago
School of Henry Ford Advertising: Model T for less than a $1000 Marketing: If I can figure out how to make a car for less than $1000 I'll sell millions
hartleybrody 14y ago
I've found that there are generally two definitions of what "marketing" really entails: 1. Generate brand awareness, get people interested in your product and bring in leads/customers (depending whether you're B2B of B2C) 2. One that includes all that, plus the market research necessary to figure out how to do all that stuff For lots of startups, the second part is really part of the entire product/customer development cycle, where product managers figure out what the customers need and how to talk about it in their language. This leaves the "marketing" people to really just focus on the more narrow definition. But in more traditional businesses, lots of that market research falls under the label of "marketing." As a guide for hackers, the most important two marketing activites are "getting the word out" and optimizing your funnel from visitor to lead to customer.

riams 14y ago

Doesn't LTV stand for "[customer] life time value," i.e. the amount of money you'll be able to generate from a customer during his/her time with your business, and not "long term value"?

tagx 14y ago
Typo. Thanks.
jmduke 14y ago
I've always seen customer lifetime value abbreviated as CLV. That being said, I've never heard of 'long term value', and I think the author is mistaking this term for CLV. Customer lifetime value is something calculable, even if crudely -- its amortized revenue per customer as retention approaches zero. "Long term value" is more of a concept.
caw 14y ago
I picked up on that as well. Wikipedia seems to agree with us: http://en.wikipedia.org/wiki/Lifetime_value http://en.wikipedia.org/wiki/Lifetime_value I agree with their points, but overall the article is just a little bit "off". Maybe it's the bit about the integral. If you had a customer pay you $1 every month, and they on average stayed for one month, your LTV is $1, not the integral of 1*x (1/2).
nihonjon 14y ago
It really depends who you talk to. At Groupon EU, Japan, Korea and USA we called customer life time value "LTV". Also, Avinash Kaushik, author of one of the best books on Web Analytic and previous Google Evangelist, uses LTV as well. http://www.kaushik.net/avinash/analytics-tip-calculate-ltv-customer-lifetime-value/ http://www.kaushik.net/avinash/analytics-tip-calculate-ltv-c...

bazookaBen 14y ago

when marketing Filepicker to enterprise users, how successful was referrals/friends/valley connections vs coldcalling, percentage-wise?

oinksoft 14y ago

Maybe somebody can translate the last paragraph into English for me. I read the preceding paragraph several times and I'm coming up empty: Based on our experiences at Filepicker.io we learned that it is important to delineate the differences when planning initiatives that drive growth, the amount of resources needed and the profile of team members required to drive the initiatives. While we're going for pompous titles, how about "What newly minted MBAs don't know about writing"?

brettcvz 14y ago
Sorry, I agree probably not the best-written paragraph. Essentially: * There are distinct focus-areas on the business side, just as there are on the coding side * Identifying the differences helps us figure out what to do, when, and how
robertpateii 14y ago
"Understand the differences between these things, and don't mash them all together. They each have unique requirements."
- ananddass 14y ago
  Very true. As startups with limited time and resources I tend to stick everything into the "lets figure out how to grow-lets do blogs, sell to larger customers, plan distribution hacks etc." It is important to decompose the business bucket and pick things that matter to my specific kind of business.
statictype 14y ago
Translation: You need to figure out which demographic your business is targeting (large business, small business, consumers) and plan your marketing/sales according to that and have the correct people on your team depending on what your marketing/sales plan is. I agree that it isn't very well worded but it does make sense.

rmserror 14y ago

a complexity theory error: "Just as you can reduce all NP hard problems to 3-SAT..." you can reduce all NP problems to 3-SAT because 3-SAT is NP complete. you cannot reduce all NP hard problems to 3-SAT. for example, all problems in NP reduce to SUCCINCT-SAT, an NEXP-complete (and therefore NP-hard) set. good luck reducing SUCCINCT-SAT to 3-SAT (despite how little progress in separation of classes we've made, the time hierarchy theorem still indicates this is impossible)

xmpir 14y ago
great response! NP-problem discussions make me happy. for those not understanding a word: http://en.wikipedia.org/wiki/Boolean_satisfiability_problem#3-satisfiability http://en.wikipedia.org/wiki/Boolean_satisfiability_problem#...

rkaplan 14y ago

I think the name "Filepicker.io" is severely limiting. When I hear "Filepicker.io", I think "easy-to-use library for handling user file uploads." That is rather narrower than their description of the service on their blog: "Filepicker.io helps developers connect to their users' content." Don't get me wrong, I very much enjoy the Filepicker.io blog. I have never used their product, but from their website, API docs, and blog they seem like a well-run startup with a value-adding service. Nonetheless, they are hurting themselves with such a specific name. It creates the negative perception of "Feature, Not A Company" that Mark Suster talked about on his blog: http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-not-a-company/ http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-n...

tagx 14y ago
We've realized that now and are in the process of changing our name. I'd love to chat with you about what you think of some of our ideas
- kephra 14y ago
  I'm not your customer (because I prefer own root servers over cloud services, and even prefer housing over hosting) - but I think you might stick with your name, because: 1. its a known (brand) name 2. it tells where your product is strong But I suggest to change the Enterprise pricing tag: 1. Don't tell a price for enterprise. Enterprise customers have a high COCA, so price is always negotiation. 2. Offer enterprise features = Your services runs at their servers, under their control, not as a SaaS, but as a normal enterprise software that comes with installation support, consulting, ...
  - ananddass 14y ago
    Thanks for the suggestions. It's a delicate balance between appearing "complete" with the offering versus leaving headroom for customization for larger customers. Increasingly with the consumerization of the enterprise do you think that custom development, consulting etc are a must have to servicing an enterprise?

drivebyacct2 14y ago

This is why some schools are taking new approaches to integrating business and computer science curriculum. Their graduates leave understanding business basics, have worked in teams and even for clients on contracted projects.

allstruck 14y ago

I couldn't get past this sentence: "If it costs you more to get a customer then you can possible make from them, your business is going to fail." Seriously learn some English man. The worst part about this is you're arguing that programmers should learn business directly after stating that you argue about business managers not needing to learn programming... Seriously where is your logic sir? Maybe you can write an article about why you think business managers do not need to learn programming (something I would agree with as a programmer), and make sure you have it edited before posting.

deleted 14y ago

[deleted]

greghinch 14y ago

I'll tell you what, I'd much rather be working amongst a team of engineers who are learning to run a business than a team of MBA types who are learning the ins and outs of software development. I'd put my money on a team of engineers every time too. But I also steer clear of anyone who describes themself as a "hacker". Code is a craft, MacGuyvering something together is no way to build a sustainable business.

tatsuke95 14y ago
And I'd put my money on a team of good people that doesn't involve members who are willing to type-cast a person based on his or her degree.
- greghinch 14y ago
  Didn't say anything about degrees. Ultimately it's about people who know how to make things vs people who know how to talk about things. More often than not, in the software world that equates to engineers vs MBAs. I'd much rather work with people who can make and need to learn how to talk than people who know how to talk and need to learn how to make

nikcub 14y ago

Most hackers I know understand all this, but minus the fancy business school acronyms.

statictype 14y ago
I would say there are many that don't ( I was in this pool until very recently). This is especially true of selling to big companies. Hand holding, dealing with RFPs, getting through to the right person inside to support you and getting involved in internal politics are mind-bogglingly frustrating and often not built on logic or rationality so it often doesn't make any sense at all to hackers.

guynamedloren 14y ago

> ...many in the software community don’t understand the differences between Marketing, Distribution, Sales, or Business Development. Many in the 'business community' don't understand the differences as well. Not being an ass or making assumptions - I'm speaking from first hand experience here.

vilcans 14y ago

So this is what business people mean when they say programmers need to understand business? Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense. But now we know. So, when will business people understand software development?

mindcrime 14y ago
So this is what business people mean when they say programmers need to understand business? No. This is the thinnest sliver of a fraction of what business people think hackers should know about business. See the link above to the "outline of marketing," for example. Just marketing is a huge discipline with a very large body of knowledge... add in distribution, support, finance, business development, sales, etc., and there's a whole world of knowledge that a lot of programmers don't generally have. Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense. Sure, at the 60,000 foot level. But the devil is in the details. Seriously, as popular as it is for hackers to mock "business people" and MBAs and business school, do you really think that business school doesn't exist for a reason? You think these guys just sit around and spew bullshit at each other all day, graduate, then go on to run successful, real-world businesses? Business, especially at scale, is fracking complicated. And a successful technology company can't be all about just technology OR just "the business." You really need a holistic approach (which means somebody, or multiple somebodies have to understand the big picture) where technology and the "business side" complement each other. So, when will business people understand software development? Ya know, it would almost be fair for the business people to ask "when will software developers understand software development?" We, as a group, still don't do a good job of giving good estimates and delivering things that work reliably without constant hand-holding and patching. But, to be fair, that's often back to ill-defined requirements and unreasonable schedule pressure, which still - IMO - argues for the need for a holistic understanding of what's going on - that is, a shared understanding that's common to the "business people" and the hackers. In fact, I almost wish we could get away from making the distinction "business people" and "technology people" (or "hackers") and drop the antagonistic, adversarial atmosphere that often seems to exist.

iblaine 14y ago

And the death of the word 'hacker' continues...