Uber might be crashing back to Earth

Last Friday Uber decided to start operating in Portland. I know, it’s a little surprising that Uber or any of the other rideshare Taxi apps aren’t already in the city. Portland had told Uber they could not operate in the city, but Uber decided to thumb their nose at that similarly to what they have done in other cities. Even though Uber was recently valued at $40 Billion they have had some serious issues lately, like rape of a woman in Delhi while illegally operating in the city. Furthermore, as I mentioned in my last article, they have smeared women journalists with the data Uber collects.

Portland has decided to sue Uber over their illegal operation within the city. The city is following Nevada in suing the company rather than trying to fine their drivers. Uber has since ceased operations in the state due to an injunction against the company operating in the state. This appears to be the only route that will work effectively as Uber is still operating in Delhi despite the citywide ban of the service. Uber has also been banned in Spain, Thailand, and parts of the Netherlands. I think the biggest blow, however, is the fact that both San Francisco and LA are suing the company for false advertising related to their fees and background check.

These responses should not come as much of a surprise to anyone that has been watching the company over the past few years. The company is part of the Silicon Valley culture of going fast and trying to break things. The problem is that, incumbents are incumbents for a reason and they do have the ear of government. It’s not to say that they should be incumbents or that it makes them something worthy of respect, but you need to understand the cards are stacked against you. In cases where you want to go in and intentionally ruffle feathers, you must have strong safe guards in place to protect your customers and be public about how you protect them. Uber should welcome background check audits, privacy audits, and driver safety audits whenever they go into a new market. These should all be huge features that they brag about and let people under the hood to actually see.

I think it’s time that companies like Uber start treating our data as if it’s Personal Health Information, which is protected by Health Information Portability and Accountability Act (aka that HIPAA agreement you sign at the doctors’ office). The default is to not share personal information about a patient, that if someone is caught looking at the data without just cause, it typically results in a firing and a fine for the organization. Similar action must be taken at Uber to show they are a steward of our data. Now the government won’t be taking that money, but instead they should be donating the funds to a good cause at a similar rate to a HIPAA violation.

In some respect Uber is exhibiting the effects of a company that is growing too large too fast without designing processes to enable their business activities properly. For Uber to be a successful long term company they need to figure out how to both appease city governments through over protecting their users and breaking existing rules. If the company can be trusted then governments will be more willing to accept pushing boundaries.

Starting from the Bottom, building an app

So, aside from blogging, watching (and playing some) video games, and obviously reading what else am I working on? Well, I’ve got a few things cooking. A friend and I are working on an app for smart phones as well as the web application version.

Who isn’t working on an app these days? Well that’s a seriously good question, it’s pretty easy to get started. I found that the idea was one of the easier things to come up with. Especially since the starting point wasn’t mine, it was Jesus‘s, a really good friend of mine from the Netherlands. The basic premise started with wanting to build a social networks to help kids find other kids to play with.

However, we’ve since evolved the concept into something that parents would want to use for their kids. We’re envisioning an app that will help kids deal with being diagnosed with Diabetes. Managing diabetes through an app isn’t a novel concept, the American Diabetes Association has one already as well as a support group with forums online. Hell they even have dietitians and RNs to help support the forums. We’d have none of that at launch.

Our goal is to enter a slightly different space, helping the adults learn how to teach their kids how to manage the disease. So this puts us in a different space. Furthermore, we don’t think that apps alone will help manage the disease as we believe that there needs to be something to continually engage the kid or parent to continue using the application.

To this end we plan to eventually extend to games and other things that would tie into our application. Those are still in the works and I think our key idea, an avatar, will help when we launch.

So where are we now? At the very beginning. My development skills are way out of date and not so relevant for this project, so I’m learning how to develop in Ruby on Rails right now. I’m using the book Agile Web Development with Rails 4 to do so. I’m  a big fan of this book. By the time I finish walking through the book I’ll have developed a Store Application (to sell the book no less).

Even beyond that though, I’ll learn how to manage a full application in Ruby along with all the database structures that go with it. It’s pretty much ideal for developing the back end as we determine how we want the front end to work. Furthermore, Ruby plays really nicely with JavaScript, CSS, and a few other languages. So, we’ll be able to continually evolve our front end well beyond the initial Rails application.

This will allow us, as developers, to build a fairly consistent application feeling across platforms. I’m not building this alone, as I mentioned Jesus is helping me and he’s doing more of the administration of our server, DB, and has started on a UI for the app version.

We have a long way ahead of us, but we’re using an application called Trello to manage our agile Kanban work items. This allows us to pull the amount of work we believe we can do in a week. Have a conversation about the work we’re planning on doing, and then demo the work that we’ve done so far (see image below).

Kanban Board

 

These tools have allows us to move forward at a modest but consistent pace. Jesus is currently pursuing both a PhD and an ice cream business, while I’m working, buying a house, writing blog posts, and kind of working on a fantasy novel. So we’re both busy guys but we’re making head way. It will take time, but I think no matter what happens, it’s going to be worth the effort invested into this project.

By the way, the app’s name is going to be Monster’s Versus Diabetes. I think it’s a pretty sweet name. I’ll post updates as we go through the process. Feel free to shoot me any questions about agile, kanban, or managing a project like this.

Saving video games from publishers

There’s big money in video games. No one can deny that, especially now that the definition of casual gaming has changed from Wii type games, to games on your phone that mimic some really old school type flash games (bejeweled for example). One of the largest game publisher is EA, they have been notorious for making both amazing games (BF4), amazingly bad games, amazing games with poor execution (SimCity), and amazing cash grabs (Dungeon Keeper iPhone). However, it’s not alone in trying to destroy gaming.

Zynga made a pretty big run at the title and likely helped shape the current state of our gaming industry. They were the original most successful company in facebook for gaming coming up with Mobwars and Farmville. They’ve been replaced with King.com (Candy Crush) now though and have nearly gone out of business. At one point they had a higher valuation than Facebook.

The point of these games is similar to a casino. Keep you coming back and keep you putting money into the machine. They design games to be addicting and put frustrating blockers in your way to entice you to pay money to overcome those obstacles. They technically are “Free-to-play” but they certainly aren’t “free-to-have-fun”. For example, about a year ago Real Racing 3 came out and to unlock everything with cash, it would cost $503!

The article that got me thinking about this topic highlights a 1997 game called Dungeon Keeper which has been released on mobile platforms. In the game you build a dungeon and try to kill heroes that come through and kill your monsters. One of the things you do is dig out spaces for your dungeon, this used to just take a minute or two in game time. Well, EA did it’s little cash grab option with it and now that same space will take roughly 30 hours to mine out unless you pay them money to speed that up! Here’s a video with a nice little summary of the topic.

Now, we know that this hasn’t been limited to mobile games for some time. It’d hit the hardcore gamers in the form of Downloadable content (DLC) and in many cases would be a $15 or so charge to make the game functional on top of the $50-$60 you already paid for the game. In some cases they’ll also charge you for other visual upgrades and stuff like that.

In some cases the companies are doing it because it’s a beloved franchise and they know people will fork over the money for it even if they’ve vowed to never buy from that company again (BF4 after SimCity debacle for instance). This is because they are able to charge monopoly prices being the only game in town.

In other cases, they are able to charge this behavior because of the addictiveness of the game and the pressure of your peers playing the same game. It’s a casino mixed with keeping up with the Joneses mentality. The worst of the worst and company are pulling in as much money as they can on it. In many cases those games are straight up copies from other companies – or at least the game mechanics are the same.

This has made some people discouraged over the future of the gaming business model. I believe that we have some of the most generous people in the world in gaming. You have the Extra-Life fund raising event, HumbleBundle, and a ton of other things like that. There are also really honest folks out there trying to break into the industry, just look at Steam Green Light, Kickstarter Games (check out KBMOD’s Crowdsourced corner), and just the sheer number of new games and apps that have a single price and are honest about their pricing (this link will take you to a list of games that are pay upfront or honest free to play).

Which makes me think that we have two different type of people running gaming companies. We clearly have psychopaths at the head of the company and normal regular people trying to do right by their customers. I think the hardest thing is, we have honest people working for those psychopaths, which is unfortunate.

What can we do as gamers and employees? Well, if you think your CEO is a psychopath leave; it’s going to be an unhealthy work environment in general. Secondly, if we want to see those business models die, educate your friends on how horrible this movement is for gaming in general and point them to cheaper alternatives that aren’t cash grabs. Help inform your friends that aren’t savvy about this. Send them links to games that are better, more fun, and less vile in their pricing schemes.

If you have any recommendations for honest, safe gaming, let me know in the comments!

Content is king, but if you build it will they come?

In yesterday’s blog I wrote a lot about the different operating systems and what differentiates them. However, I didn’t answer the question around how to build a user base or even more importantly the app base. For all operating systems there is a chicken and egg problem, which comes first the apps or the users – you can’t get users with out apps and no users will go with your system with no apps!

I think a look at how two companies have worked to overcome this is crucial to provide a path forward for the other operating systems. First of all, Google entered the mobile market in exactly this position. I wrote a paper on this while I was in my Master’s (written 2011) the really details this if you want to read that. Google decided to approach the app issue from a very different direction than Apple. First, Google offered a good deal of money for developers to begin making apps for the operating system. Second, Google create a different reimbursement structure for their purchases of apps that provided incentive for developers to develop apps for them. Apple would essentially take ~30% of the total price the developer charged for their apps. This rent seeking behavior of Apple means that the developers could make more money on Android if they sold the same number of apps in both ecosystems. Both of these provided incentives for developers to develop – free money and more money for development. Furthermore, Google made it extremely easy to port an app from iOS to Android which increased the app development rate – Apple of course worked to eliminate this benefit. Finally, Google had different payment schemes than Apple for ad revenue and is a significantly better company for dealing with ads than Apple to this day. All of these provided a great deal of incentive in addition to the fact that there have always been anti-Apple developers and consumers.

The second case (which I didn’t do a research paper on) is of course Amazon. As I mentioned in yesterday’s post Amazon rarely makes a profit on any of their Kindle sales. Amazon’s current foray into tablet’s was not a serious surprise to me. The Kindle was clearly an effort to learn about their users and their consumption habits. Amazon first targeted their most loyal customers, book readers. Tablets weren’t really on the horizon at this point as anything beyond a novelty that Microsoft was pushing and eReaders had a questionable spot in the market when Amazon came out with the Kindle (the same year as Apple’s iPhone – I feel that the Kindle was a bigger step for Amazon than the iPhone for Apple). It was widely successful. I personally bought a second generation Kindle in 2009 (and have since upgraded to Paperwhite 1st gen). Amazon over time continually refined the Kindle and looked for more content to bring to the users. Amazon began to experiment with browsers, apps, and other features. Even at this point the Kindle was Android based, but their own custom version. This marked on of the first forks in the operating system. Amazon also developed applications for iOS, PC, Chrome, and Android for Kindle users. This helped to increase adoption and encourage Amazon that digital content is extremely valued by consumers. When Amazon introduced the Kindle Fire line of tablets they continued to focus on content. This is apparent from the design of the operating system. Content is first and foremost. Books, TV shows, and Movies are easily accessible and essentially the default view for the device. Through a different type of content Amazon has attracted users, furthermore, they are likely attracting a different set of users than the iPad or Nexus market. These users are very consumption focused and less engaged with applications.

Amazon has continued to push the quality of their products and can now compete spec to spec with any top of the line Android or iOS device. Their advantage is the Amazon ecosystem (which many tech writers scoff at), which is more accessible and connected with prime on their devices.

How can other operating systems learn from these cases? The owners of new operating systems need to provide an easy development platform. Many of Android’s applications are developed in HTML5 which should make it easier for porting from one OS to another. Another option is to partner with a third party company (if you know about it or not) like Microsoft did with Blue Stacks where it is possible to play any Android app on a computer. Google is doing something similar with the Chrome App store and browser, essentially turning any Win8 machine into a Chrome OS computer. Firefox OS could go this route on any computer and help to encourage developers to think multi-platform like this. Of the two problems, I believe that the app problem is the easier one to solve assuming it’s easy and there are the right incentive for developers. There are many platforms or tools that can even the playing field. Including marketing that users are able to use other platforms on your platform.

The more difficult type of content to pull is the licensed content from the RIAA and MPAA type organizations. I think that there could be a way for this content to gain the same feel as the Amazon experience. A mobile OS could partner with either Hulu or Netflix to provide an exclusive or personalized experience for the app that allows tighter engagement, then partner with B&N and build a strong app presence for the Nook. The next step would be to develop a seamless transition between the Nook application and Netflix/Hulu so that on one hand you knew when you switched, but it felt painless and enhanced the experience. Such as recommending books or movies based on your consumption of the other.

Finally, I think the crucial step is to find the right market. There are tons of under served markets especially in the smart phone/tablet sector. Firefox OS is going after the extremely low budget market, while it’s likely that both Ubuntu and Cyanogenmod are going to be going after the extreme high end market. I think those two are going to have more competition with the Nexus line up of devices and the extra support Google is providing to non-Samsung manufacturers like ASUS and LG. Google is doing everything they can to keep the market competitive and not owned by a single manufacturer. Cyanogenmod and Ubuntu could also work those same manufacturers to help them develop other markets that aren’t served by Google.

I think that the battle is going to be on the low budget space. Amazon is working hard to capture that with powerful but affordable tablets that are subsidized by ads. While Motorola is going after a similar market with the Moto G, a high power phone that is affordable. However, if a company looks at the base of the pyramid they are likely to find a huge untapped market that will never even own a laptop. They will go from a phone only capable of texting directly to smart phone or tablet. Developing tools that these underserved users can exploit will create a huge market that will catapult the operating system past all the others in global market share. It’s just a matter of figuring out how to survive on little to no margin.