Mergers: The Good

(intro blog post here)

How to help your acquired employees succeed

Out of the 6 acquisitions I've been involved with, two really stand out as positive experiences, both for the acquired and the parent company. Here's what was different about those two mergers, as opposed to the ones that didn't go so well.

Integrate the new team quickly (Apple/NeXT)

In Apple's case, they acquired NeXT both in order to get new technology to base their next-generation OS on, and to get a fully-functional engineering organization. You can't really understand just how screwed up Apple was in 1996 unless you were there, but in the last quarter of the year, Apple lost over a billion dollars. They had, at that point, had 2 or 3 (depending on how you count) different "next generation" OS projects crash and burn, and the latest one, Copland, was on the verge of disaster – I've seen credible evidence that it wouldn't have shipped for another 5 years, if ever. Into all this swirling chaos, we bring the NeXT team, understandably freaked out to be called on to "save" this huge, dysfunctional company from itself.

But one thing that was hugely encouraging, and helped us to all settle in, was how quickly we were integrated into the Apple organization as a whole. Within a month after the acquisition, we were meeting with our counterparts in Cupertino, we had apple.com email addresses, our systems were on the Apple network, and we'd had an army of Apple HR folks over to the NeXT offices to get us transferred over to Apple's payroll and benefits.

It was still a very hard slog, and there was a LOT of anger from folks at Apple that had their friends laid off right after the acquisition, but feeling like we were legitimately part of the team, and not just a bunch of outsiders, helped us to fight the battles we had to fight.

Put the full support of the larger organization behind the newcomers (LG/WebOS)

After the debacle that was the HP's acquisition of Palm (see the "Ugly" segment, coming soon), the folks remaining on the WebOS team were pretty nervous when we were told that we were being sold off to LG. "Oh, great, another absentee owner who will tell us we're important, but then never do anything".

And then we had our first meetings with LG's upper management. And we were told that we would be building the user interface for all of LG's high-end smart TV's, that we were going to ship in less than a year, and that we were expected to deliver something BETTER than the existing NetCast software, which they had been shipping for a few years. "Oh, crap, I thought - none of us know anything about Smart TVs, or TVs in general". But then they told us: "The CEO has expressed his full support of this project, and you'll have as much support as you need".

I really didn't believe that we were going to get "as much support as you need", but sure enough, within a short time period after the acquisition, truckloads of current-generation TVs and prototype logic boards for the next generation started flooding into the office. And in the months after that, truckloads of engineers from Korea, who knew the hardware and the existing NetCast software intimately. Anything we asked for, we got – score one for top-down, authoritarian management style, I guess.

And we did it - a small group of developers, working their asses off, managed to build something in less than a year which was immensely better than the existing product, which had been shipping for several years. The next-generation smart TVs, with a new version of WebOS, were even better. This was definitely a high point for the "acquire a smaller company to bring innovation to the larger company" strategy. And it succeeded because the project had a powerful advocate within the larger company, and a VERY clear vision of what they wanted to accomplish.

Next week

What not to do to make your new employees feel welcome, and how to tell (as an employee) when things are likely to go sour quickly.

Easter Pictems - a marketing experiment

I'm trying an experiment. There's a free version of Pictems up on the App Store now, loaded with just the subset of items appropriate for Easter.

This version is called "Easter Pictems", appropriately enough, and you can get it here, if you're curious about Pictems, but didn't feel like ponying up the $2.99 to find out whether you liked it.

I'm hoping that folks will download the free version and like it enough to upgrade to the full version. This seems to be a common tactic among developers on the App Store. Of course, people have to find out about your free app if it's to be of any value as a marketing tool. I'll update this post if anything dramatic happens with sales.

In related news, product #2 is coming along nicely. It's a puzzle game, along the lines of the sliding-squares puzzles you might be familiar with, but with a twist (literally, in this case). For this game, the idea of Free and Pay versions makes a lot of sense, so I'm going to release both at the same time. Here's a preview of the (as yet unnamed) puzzle game:

Pictems, three weeks in

"So, where's my update?"

That seems to be the most common question from our Pictems customers lately. I've been running a bit behind my (unannounced) schedule, but I'm still hopeful that I'll have the first update finished and posted sometime this week. Mark K. has done some awesome updated item artwork (see above), and I think I have a handle on the user-interaction problems we had with 1.0, such that the new version will be easier to use.

"How many downloads have you gotten?"

The most common question from my friends and family seems to be "how many downloads have you gotten?", or alternatively, "are you ready to quit your day job, yet?". We don't actually know how many downloads we've gotten overall, since we haven't gotten our first monthly financial statement from Apple, yet.

I did try some hand-waving estimates, based on traffic on the starchytuber.com site. Based on those figures, I figured we had somewhere between 30 and 300 users.

and boy, was I ever wrong...

Apple has just recently given us the last 6 days worth of daily download statistics, and I'm . . . stunned at the number of downloads we're getting. In the last 6 days, we've averaged more than 50 downloads a day. That means we've had as many downloads this week as I was expecting to see from the whole three week period.

Also, despite the fact that Pictems isn't localized for any other language than English, we have downloads from more than 18 different countries. That's pretty astonishing to me, and probably indicates that we'd do a lot better with an application that was localized in multiple languages. I'll have to look into translation costs for application #2.

Where my estimates went wrong

Here's where I think I misled myself and came up with a far too low estimate of our customer base.

"Unique" computers aren't

The "unique hosts" count that our web hosting provider gives us doesn't exactly correspond to the actual number of people that visit the site - someone who looks at the site from home & from work will be counted twice, multiple people hitting our site from behind a web proxy or NAT router would only count as one person, etc. I figured that these would balance out, but I think that the latter factor turns out to have a much greater influence.

Most people will never look at the web site

I figured that some of the people hitting the site would be friends and relatives, and some percentage would be actual customers. I also assumed that some small percentage of people would see the application on iTunes, check out the website, then decide the software wasn't for them.

So I estimated that somewhere between 10-100% of the "website visitors" represented sales. Building on top of the (probably worthless) "unique hosts" number, I compounded the error by assuming every paying customer would look at the site at least once.

As it turns out, I personally have bought something like 10 applications for my iPhone (other photo-related apps for competitive analysis, and a few games), and I've visited the websites for only two of them, once each.

No one signs up for the mailing list

I also had an email address set up so people could ask to be put on a list to be notified of updates when they were available. We've had 6 people (I think) sign up for the mailing list so far. This means that the sign-up percentage is probably substantially below 1%, which was what I figured would be the minimum number that would sign up.

Given that the iTunes App Store will automatically notify customers when an update is available, there's really no reason for them to sign up. I didn't really consider that, but I may just quietly kill off the "updates" mailing list if it never gets above 12 users or so.

So what's your best guess now?

Well, I really don't want to go out on a limb here, but it seems likely that the last 6 days probably don't represent our "best" days, in terms of downloads. They probably aren't the "worst" days, either. If we assume that they were about average, then we've had about 1,100 downloads over the last 22 days. That's not bad at all, by my standards. It's possible that the actual number of downloads is much higher - the first couple of weeks of the App Store being open was probably a bit of a feeding frenzy...

So my current guess is that we'll probaby have sold somewhere between 1,200 and 5,000 copies of Pictems in the first month. If you think you have a better guess, e-mail it to me, along with your t-shirt size, at salescontest@starchytuber.com, and if you have the closest guess, I'll send you a one-of-a-kind Starchy Tuber t-shirt to celebrate your estimation prowess.

So, are you going to quit your day job?

When i was asked "are you going to quit your day job?" for the first time, I decided to sit down and work it out. I figured that if we sold 100 copies in the first month, we'd have lost money on the whole thing, if we had 1,000 downloads we'd actually be making money, and if we had 10,000 downloads in the first month, then I'd seriously have to consider whether it made sense to stay in my "day job", or actually try to make a living as an independent software developer.

I guess we'll know in a week or two if the number of downloads is close to that 10,000 download mark in the sand. Of course, it'd be sheer madness to assume that downloads will continue at the same rate forever, so it'll be several months at least before I'm ready to make that "stay or go" decision.

Hopefully by then I'll have several applications on the store, at different stages in their lifecycles, and at different price points. That should give me a more realistic idea of what the earning potential is. I'll keep you posted.