In JC’s Newsletter, I share the articles, documentaries, and books that I enjoyed the most in the last week, with some comments on how we relate to them at Alan. I do not endorse all the articles I share, they are up for debate.
I’m doing it because a) I love reading, it is the way that I get most of my ideas, b) I’m already sharing those ideas with my team, and c) I would love to get your perspective on those.
👉 Hardcore Software: When Microsoft Office Went Enterprise (Future)
➡️ I think it is a must read about the tension between consumer and enterprise and how to try to manage it from Microsoft Office in 2000. I think it applies also for insurance and Alan Mind.
The tension between enterprise and consumers:
The enterprise reviews for Office 2000 were extremely solid [...] The consumer reviews were not so positive.
The answer, regretfully in some ways, was that we did not mess up. The Office business depended on building a product for business customers.
The consumer reviews were not the key to the success we were achieving and needed to achieve going forward. We built what we could sell.
➡️ Building what you can sell is great for your business, but not necessarily in the longer-term if you want to build a product the end-user loves.
We should do both was a constant refrain during discussions — we should have a great consumer product and a great enterprise product. On paper, that is the ideal situation. In practice, it was not that the needs and desires of each type of customer were diverging; they were increasingly in conflict. It was not that consumers wanted different features; they also explicitly did not want the features of the enterprise. This worked both ways, as enterprise IT decidedly did not want more features, but rather fewer.
➡️ How do we map very well what consumers want and what the HR department for their employees want, and define what is in conflict?
What enterprise wants:
The hope I had at the start was that by deprioritizing our traditional retail-customer focus on personal productivity at the start of the release, we avoided the messy middle. We succeeded at that, but I was struggling with how unsatisfying this felt.
The largest companies in the world were buying our software for every PC and committing to keep buying it for the next three years. It was effectively a massive increase in revenue per customer; in exchange, customers received the full enterprise treatment of support, sales teams, strategic partnering, and more. Those benefits were known as Software Assurance or SA.
➡️ That will be interesting to see the requirements from the very large ones.
The complexity of enterprise agreements was often comical. There were hundreds of thousands of different deals and price permutations.
Not all companies (customers) were on the current release; in fact, most were not. Not all customer EAs started in the same year or at the same time.
➡️ It is more solved with the cloud, but let’s be careful with the customisation they will ask for in terms of pricing, etc…
Given this, Office needed to create features that delivered so much value to IT professionals in the enterprise that they outweighed the cost of deploying (and, in their view, training) employees. Simply making Office more enterprise-friendly and easy to deploy was nice, but it was still more difficult to deploy than to do nothing.
The IT people were actively customizing Office to disable features they deemed to be of low business value. It was not surprising to see companies disable access to HTML, templates, Visual Basic programming, or data connectivity features simply for concern, or fear, that they might get misused, waste time, or generate support calls. While this was acute for Office, upgrades were an industry-wide challenge.
➡️ If you let the enterprise buyer decide everything you will end up with a poor product for the end-user.
When to disclose releases:
We only had one important rule, which was that we could not (ever) disclose the future release date of a product. Doing so would potentially turn unearned revenue into earned revenue as the rights to buy an upgrade went from “if” one was available to “when” one was available. Disclosure would also cause customers to attempt to time their deals so as to maximize the number of upgrades they received.
➡️ Interesting learning on how to make sure you don’t over promise and you don’t push back the signing date because a new feature is going to come.
The importance of keeping the consumer side
Still, the Office 2000 product felt too enterprise. I was determined that Office maintain both end-user excitement and broad horizontal appeal — those were our roots, and people sat in front of Office hours every day.
This was our product design challenge — how to build a product where the buyers and users differed so dramatically.
Customers already purchased the next and latest release, which meant we could easily fool ourselves into thinking the product was a hit by looking at the revenue numbers. Customers were buying a sales and support relationship with Microsoft, as much or perhaps more than the software itself, even when running old releases. While this was not a short-term issue, over time the lack of individual buyers acquiring specific products seriously clouded Microsoft’s collective product judgment.
➡️ Why the consumer side is so important to build the right product for the end-users.
Unaware of what was possible, end-users never really demanded specific new features, but IT professionals were aware of the possibilities, and what they wanted was not necessarily representative of what individuals valued.
Bundle:
As we bundled already successful Word and Excel into Office, even though the products were not yet integrated, we were selling enterprise licenses even though our processes (and product) had not yet matured to that level. We were selling subscriptions long before subscriptions were cool, or even built — this is an important and hugely significant legacy of Steve Ballmer’s enterprise sales leadership.
➡️ Interesting to see that they sold the bundle even when it was not ready yet.
🏯 Building a company
👉 Community & Belonging In A New Distributed-First Workplace (Spotify)
“Community is about people: feeling respected, cared about, and recognized by others. It drives our sense of connection and belongingness”.
Organizations that invest in facilitating connection, either virtual or in-person, will have greater social currency in the eyes of talent being attracted to their organization, as well as maintaining high employee satisfaction.
👉 Sho Kuwamoto - Thread about talking to users (Twitter)
Numbers and anecdotes are both important.
I need to talk to users directly
There's a difference between a politician who gets their information through polling and focus groups vs. one who is really out there, pounding the pavement and shaking hands.
Voters can tell the difference. Users can too. You need it all.
Three types of sources:
Support + Sales: your main sensing mechanism for what is working and what is not.
Research + Data: helps you scale your learning, and synthesize new insights.
Direct conversations: helps you understand and empathize at the deepest level.
➡️ On the importance of still talking to customers/members even when you have a user research team.
👉 Devin Finzer - An Everything Store for Digital Assets (Join Colossus)
One of the exciting things about CryptoKitties was the fact that you could permissionlessly build other applications on top of CryptoKitties. For example, someone built something called KittyRace, which allowed you to take your CryptoKitties, which again, you owned on the blockchain, and race them inside of this other application. Or there was something called KittyHats, where you could accessorize CryptoKitties.
➡️ Good inspiration on opening your assets.
The way to think about an NFT is it's really just the record of ownership of some unique identifier.
The smart contract on the blockchain has this record that says, "Devin is the owner of this particular identifier." but the metadata, the name of that thing, the description of it, the image associated with it, could to your point, be stored in a variety of different ways. On one extreme, you have storing that data on chain. Meaning that literally in the blockchain, you have the name, you code the image in some capacity, which usually just is not possible but various ways of trying to do that. And you have everything on chain, on chain metadata. The other way, which was what CryptoKitties did for example, is you just say, "Okay, there's some service out there, some server that if you hit a URL on it, it's going to return the metadata."
Cerebral changed 200+ therapists from salaried to hourly workers, making their health insurance contingent on hitting quotas that seem rather difficult to hit.
Cerebral is at risk of becoming a case study on the drawbacks of blitzscaling in healthcare.
Found:
Found, a weight-loss startup that came out of stealth mode just 2.5 months ago, raised $100 million at a $600 million valuation. It's another win for the venture studio model, as Found was incubated at Atomic. Will be interesting to watch how they scale the business model to meet growth needs. At an average cost of $100 per month, I have to imagine there's a "B2C2B" plan in its future. Link.
Mental health start-ups:
Mental health startup Tava Health raised $10 million. to match employees with therapists. Link.
Mental health startup Uplift raised $8 million to build a marketplace that helps patients by finding therapists, and therapists by managing the practice admin. Link.
Bright Health continues its stream of negative news this week, as it announced that it is exiting a number of markets while also being fined by the state regulator in one of the markets it isn't exiting.
The Colorado Department of Insurance is fining Bright at least $500k, potentially $1 million because of the number of complaints it received from providers and consumers related to the most basic of insurance tasks. Those tasks? Bright was called out for failure to pay claims, failure to communicate with members, failure to process consumer payments, and lack of timely claims processing.
It continues to signal a complete mismanagement of basic tasks inside Bright and the magnitude of the turnaround that will be required to right the ship. Keep in mind that Colorado is the market Bright has been in the longest (Bright got its start in 2017 with Centura Health in Colorado).
Bright also announcing this week it is exiting the individual market in six states. These states represent <5% of Brights revenue in 2022, but are 6 of 17 states Bright has entered in the exchanges.
➡️ Other arguments about Bright really not being comparable to Alan.
Iris Telehealth, a virtual mental health provider, raised $40 million. Link
Real raised $37 million for a D2C virtual therapy model with a focus on LGBTQIA+, immigrants, and people of color. Link
👉 Dramatic growth in mental-health apps has created a risky industry (The Economist)
She joined BetterHelp, a popular therapy app. She paid $65 each week but spent most of her time waiting for her assigned counsellor to respond. She got two responses in a month.
Lyra, supports 2.2m employee users globally and is valued at $4.6bn.
In October 2020 hackers who had breached Vastaamo, a popular Finnish startup, began blackmailing some of its users. Vastaamo required therapists to back up patient notes online but reportedly did not anonymise or encrypt them. [...] Vastaamo has filed for bankruptcy
As for effectiveness, the apps’ methods are notoriously difficult to evaluate.
The European Commission is reviewing the field. It is getting ready to promote a new standard that will apply to all health apps.
➡️ Very important to invest in high standards.
👉 Oracle to Acquire Healthcare Technology Firm Cerner for $28.3 Billion (The Information)
Oracle is aiming to boost its cloud computing business by plunking down more than $28 billion in cash to acquire Cerner Corporation, one of the top providers of software for managing electronic medical records.
👉 Gig Worker Benefits Platform Stride Health Announces $47 Million In New Funding (Forbes)
The company helps independent workers—freelancers, part-time workers, independent contractors, and other gig economy workers who don’t get health insurance benefits through an employer—sign up for health insurance via Healthcare.gov. It guides users through health plan selection and offers members other financial benefits and guidance.
➡️ They don’t manage the risk.
To date, Stride has enrolled 2.7 million members. To reach independent workers, Stride partners with companies that rely heavily on gig workers, such as Uber, Amazon, DoorDash, Instacart, and GrubHub, among others.
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