Apple: Great Products, Awful Support

At the risk of provoking the wrath of the “iTelligentsia” I must rant about my experiences getting cheated by Apple.

The iPhone’s dandy accelerometer reports the device’s orientation to iPhone apps. Except that my iPhone is calibrated 6 to 7 degrees off kilter, as shown in this photo on a flat horizontal surface (taken by my reliable Blackberry). Within a month of purchase I demonstrated this problem to an Apple store Genius who replied that sorry, my phone is operating within spec, nothing he can do.

In my second encounter I rented a movie from iTunes that would never finish downloading. I tried to report the problem but the Apple site does not offer up an email address for support. I tried to follow Apple’s protocol for reporting the problem, but the Report-A-Problem button failed to launch the helpful reporting wizard that iTunes Help promised. I finally found a form I could fill out on the web site seeking help with my bill, but a week later I’ve still had no response.

You know, I get better service from the Romanian Viagra suppliers who spam my inbox. Is this a fluke? If not, has Apple always been so incompetent and uncaring about customer problems, or do you think this is a temporary casualty of the iPhone’s hyper growth?

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BHS Keeps the Whole Word Singing

Last week my son and I read a great book from Andrew Clement's Jake Drake series titled Know-It-All about a school science fair. A know-it-all scares his classmates away from the competition by touting his great work -- an expensive project really put together by his father. But the hero Jake Drake persists on his science project, working diligently and quietly. Of course I expected Jake to win the science fair (hey, this is a kids' book), but Clements throws us for a loop. Jake places second, the know-it-all places third, and first prize goes to a kid who had tested the impact of sunlight on grasshopper eggs over 3 months, which means he had started his experiment months before the science fair was even announced. Jake ended up feeling okay about losing, because the winner really deserved it.

That's how I felt this weekend at the annual Barbershop Harmony Contest which was in Anaheim this year. The BHS has 34,000 members worldwide who compete annually in their districts for a chance to represent their regions in the international contest. My chorus Voices In Harmony once again won the Far Western U.S. District and placed third last year internationally so we had aspirations to win.

But this year the competition was just too good. Actually, great. The winners, Missouri's Ambassadors of Harmony, racked up the best score in the history of the contest dating back to the 50's. The music was damned near pefect, and their showmanship stunning. About halfway through their uptune 76 Trombones, the front line of singers suddenly and magically transformed in a flash from black tuxedo to a glistening white and gold marching band, pulling 8,000 spectators out of their seats. It will be a classic number (that unfortunately isn't available yet on YouTube).

But the highlight of the contest took place in the hallways of the Anaheim hotels where a thousand singers mingled and grouped into ad hoc quartets, singing into the wee hours of each morning. (Above are my chorus-mates Will, Jeff, Greg, and Kevin who still came to BHS in his wheelchair after literally breaking his back 3 weeks ago.) There were various parties, but the best is always the Rainbow Party hosted by the association's gay contingency. Here some of the best groups -- like Zero8 from Sweden in the photo below (music sample) -- perform raunchy versions of their barbershop numbers. It's a particularly funny spectacle since barbershop singers love to cloak themselves in Jesus Christ and America. In fact the Jesus worship and borderline jingoism at BHS can border on creepy, so it was somehow gratifying to hear XXX songs (with lots of on-stage writhing and humping) from a clean-cut baritone who had -- just 6 hours earlier on stage at Honda Center -- righteously credited Our Savior the Lord for his quartet's gold medal.

BHS is an international association and so the contest begins with national anthems from all the countries represented. But unlike other Honda Center events in which a performer sings the Star Spangled Banner, instead a musical director led 8,000 barbershop singers in song. Instinctively, this massive crowd of semi-professional singers performed our anthem in perfect pitch and four part harmony as I've never heard it before. (I tried to bootleg a recording using my Blackberry's measly microphone, which you can download and listen to if you don't mind the repeating "voice logo" of the free converter I used.)

If you're a singer and this event sounds like fun to you, come join Voices in Harmony for our next tuesday night rehearsal -- we audition new members all year round, and we're your best shot outside of Missouri for making it to the international stage!

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Israel Venture Keynote: When Failure Is An Option

This year the Israel Venture Association invited me to deliver the keynote talk at their annual conference. I agreed, since our 15 investments in Israel have outperformed our overall portfolio, and I wish to support Bessemer's office in Herzliya. After the talk a lot of people asked me for the slides, so I'm publishing them here. 

View more OpenOffice presentations from dcowan.

But SlideShare doesn't include notes, so here's the gist of what I said:

The world lost $100 trillion in the last 6 months. That effects LPs, who have generally told their VCs to slow down, and now have to re-think how to allocate what's left. The venture industry has underperformed as an asset class for over 10 years, and so only the very top performing funds will raise more capital in this climate. [I have to say that at this point in the talk, the folks didn't seem to be enjoying it much.]

But then I talked about the opportunities for innovation, and showed the 2 slides below. I had stolen the first one from someone else's presentation in 2001, and I updated it for today. These illustrate that innovation is decoupled from economic cycles.




Jumping forward, I believe that Slide 17 demonstrates my theory as to why Israeli VC has underperformed the venture industry this decade. In Israeli culture, failure is not an option. So look at all the money going into the 276 active companies among the 325 Israeli startups funded since 2002 (acc. to VentureSource). Wow, imagine how much more valuable that portolio would be without that big blue bar. The little grey bar of failed companies is inconsequential to the portfolio's result, but the blue bar is killing it. They need more grey.

Slide 18 is a prettied up version of my Internet Law that shows why internet investing is the most capital efficient opportunity in venture capital. 

As an example, I shared screenshots of Votizen, a fully functional site that my friend Dave Binetti designed (and he's not a programmer) that operates a social network of registered voters who can share ideas, circulate petitions, and generally assemble online for political purposes. By utilizing contractors around the world, Dave got this site up and running -- fully operational with some nice polish -- for $1203. (That includes the costs of hosting and legally incorporating.)

The rest of the talk was about investing in a capital efficient manner across sectors. My general advice was to plan for failure -- write small checks to test ideas, and assume that many will fail, so you and the entrepeneurs will approach the question of continued funding scientifically, without defensiveness or shame.  The truth is that today, sometimes the cheapest -- and certainly the most accurate -- form of due diligence is to just build the damned thing and see what it happens.

In case that didn't pick up their spirits, I demonstrated capital efficiency at work in my portfolio by describing how Smule partially validated its business on an initial round of $500k from Bessemer, Maples, and Jeff Smith. Showing off my Leaf Trombone, I played an Israeli favorite by Naomi Shemer  titled "Al Kol Eleh" (from which I borrowed the title for my talk "..on the bitter and the sweet"). Here's DocJazz playing it on both Trombone and Ocarina. I think this was the part that drew the standing ovation. At least it made an impression on The Globes, Israel's business daily, which ran a full centerfold on my talk and translated it to Hebrew.

My conclusion: Israel invests more of its GDP in venture capital than any other country, and her economy depends upon technology innovation more than any other nation's.  While failure is hard for them to admit, Israelis understand the need for resource efficiency. If they can make the desert bloom, they can save a shekel in their startups. 

Voices in Harmony

Since I last blogged about the international 3rd place medalist a capella chorus Voices in Harmony, I’ve so enjoyed their performances that I went ahead and joined the chorus as a performing lead singer. To hear why, come out for our annual spring show, 7:30pm May 30 at the Center for Performing Arts in San Jose. Two awesome quartets -- Boyz Nite Out and Metropolis -- will perform with us. General admission tickets are available for only $12 at www.VIHchorus.org or by calling at 1.877.684.3844. I promise you a great time!

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PR Firms: Adapt to the Social Web, or Die

I lunched today with PR agent extraordinaire Abigail Johnson, who gave me great tips for my upcoming trip to Russia. I reciprocated with a lesson I learned from a recent exercise in amateur PR.

I had wanted to tell the world about an exciting development at MashLogic -- a startup we're incubating at Bessemer -- so I blogged about it. Having posted the article, I congratulated myself on a job well done. But weeks later I noticed a blog post titled Why I Uninstalled MashLogic from a user (Zoli Erdos) spooked by privacy concerns. Our mission at MashLogic centers on user empowerment and privacy, so this negative post might have easily erupted into a contagious meme on the web -- a potentially fatal backlash against our young product.

Fortunately, though, MashLogic's architect and co-founder Ranjit Padmanabhan (photo right) had been combing the blogosphere, so minutes after Zoli posted, Ranjit responded with a very open acknowledgment of the issue, a full explanation of our privacy policy, why we think our approach is right for users, and what we're doing to improve it. Ranjit showed genuine appreciation for the feedback. Zoli's response: "Kudos to you guys for recognizing the issue :-)" and then he updated his blog post with a commendation of MashLogic for the immediate response.

The conclusion here is probably obvious and intuitive to some readers, but it may bear elaboration for those among us saddled with more outdated expectations of the PR process...

As everyone knows, PR agencies cultivate relationships with journalists and editors who are in a position to generate product awareness among their readers and viewers. In a world where most people were reading a concentrated set of newspapers and magazines, these agency relationships -- combined with diligent follow-through to address the journalists' questions -- promised significant value to companies who wish to get their message out. Plant the story in a few key chokepoints, and everyone would read it more or less as pitched to the media outlets.

But in today's world, it's not enough to hit the major news sources. For every story printed in the New York Times, hundreds or thousands of reader comments, blogs, emails, and tweets react to the story. Indeed, user-generated content now dominates professional content in both volume and mindshare, and so the tenor of user-generated commentary is far more important to the agency's client than the tenor of the original article.

For almost all agencies, though, favorable press hits represent the end of the PR process, not the beginning. But favorable press hits themselves should not be the metric of success. Rather, PR firms today should document an intense followup in the two or three days following press hits to actively engage the market through comment pages, blogs and Twitter.

Specifically, a great PR firm should help its client companies address the inevitable questions and reactions that skeptical readers should and do express, and to do so quickly while the public reaction is still forming through social echoes of the story. Responding to a "backlash" a week later is much more difficult than pre-empting the backlash in the first place.

Really I'm just talking about listening to customers, giving them straight answers, and doing it quickly. In today's transparent world, spin doesn't work. Questions must be addressed with humility and honesty (just as Amazon did yesterday); today more than ever, a great PR firm must help its clients respond fast, without defensive thinking.

I hope Abigail appreciated the advice as much as I appreciated her pointers to the Czar's palaces near St. Petersburg. I do hope to see her agency and others adapting to the dynamic, transparent PR requirements of social media.

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Best Product Teaser Video Ever?

Congrats to the Smule team on launching Leaf Trombone World Stage!

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Carless for a Year

I didn't mean to become carless -- it just kind of happened.

The 2004 Mercedes E500 has a poor track record for quality, so a week before the warranty expired on mine, I sold it. I couldn't figure out what to buy, and there are so many cars to test drive. (Who Has Time For This?)  That was 14 months ago.

It hasn't been so bad, really. I hitch rides with my wife and my colleagues, and sometimes I bike to work. I borrow my friend's car when he's away on travel, and I joined ZipCar. And when I'm not traveling for a whole month, I pay Hertz $600 to rent an Audi, BMW, or Infiniti .For regular customers like me, Farshid at Hertz Palo Alto drops off and picks up the car and -- here's the best part -- It turns out that renting is actually cheaper than either buying or leasing.


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Here's why it works for me (and maybe for you): my wife drives an old Odyseey minivan (winner of the WhoHas award), for which the liability insurance has got to be cheaper than for any other car. But still the policy covers my liability for rentals up to one month, and AmEx covers any damage to the rental car (as I now know first hand). I don't have to pay for insurance, registration, sales tax, maintenance, depreciation, cost of capital or even car washing. (I still pay for gas, but less than before, thanks to BillShrink.) Even if I rent the car 7 or 8 months a year, it's still way cheaper than owning the same luxury car, and I get to feel just a tiny bit greener.

So when the hell are you going to buy your own car? they ask me at work as I bum rides home.  Well, I did put down a deposit on a Fisker Karma, so that pretty much guarantees I won't own a car any time soon!

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