Silicon Valley Is Right — Our Jobs Are Already Disappearing – Sam Altman (Y Combinator)

Silicon Valley Is Right — Our Jobs Are Already Disappearing – Sam Altman (Y Combinator)

Sam Altman, the head of Y Combinator, is so convinced that we’re going to need to figure out new ways of providing people with a means to live that he’s giving ~$20k each to 1,000 people in Oakland for a year just to see what they do with their new jobless income.

Stephen Hawking says that “we are at the most dangerous moment in the development of humanity” and that the “rise of artificial intelligence is likely to extend job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.”

Sam Hinkie, the smartest man in sports and a Stanford grad, asks, “How are you preparing your kids for a life with 60% unemployment?”

Sam Altman, the head of Y Combinator, is so convinced that we’re going to need to figure out new ways of providing people with a means to live that he’s giving ~$20k each to 1,000 people in Oakland for a year just to see what they do with their new jobless income.

Literally the smartest people in the world think an unprecedented wave of job destruction is coming with the development of artificial intelligence, robotics, software and automation. My friends in Silicon Valley have read the Second Machine Age and Rise of the Robots and they see a wave coming.

The White House published a report last month that reinforced this view. Some of the headline stats:

  • 83% of the jobs where people make less than $20 per hour will be subject to automation or replacement.
  • Between 9% and 47% of jobs are in danger of being made irrelevant due to technological change, with the worst threats falling among the less educated.
  • Between 2.2 and 3.1 million car, bus and truck driving jobs in the U.S. will be eliminated by the advent of self-driving vehicles.
Source: Executive Office of the President of the United States; Artificial Intelligence, Automation, and the Economy; December 2016

Read that last sentence again: we’re confident that between 2 and 3 million Americans who drive vehicles for a living will lose their jobs in the next fifteen years. Self-driving cars are the most obvious job-destroying technology, but there are similar innovations ahead that will dislocate cashiers, fast food workers, customer service representatives, groundskeepers and many many others in a few short years. How many of these people will be readily employable elsewhere?

Okay, you’re thinking. But isn’t this all still in the somewhat distant future, since unemployment is only 4.6% according to the headlines? Actually, automation has already eliminated about 4 million manufacturing jobs in the U.S. since 2000. And instead of finding new jobs, a lot of those people left the workforce and didn’t come back. The U.S. labor force plummeted by about 10 million during the same period, down to levels not seen in decades. The labor participation rate is now at only 62.7%, a rate right below El Salvador and right above the Ukraine:

Each 1 percent decline in the labor participation rate equates to approximately 2.5 million Americans dropping out. The number of working-age Americans who aren’t in the workforce has surged to a record 95 million, up almost 500,000 in the last month alone, with many of these being factory workers.

Yes, there are 95 million working-age Americans no longer in the workforce. The Great Displacement is already here and is set to accelerate.

High rates of unemployment are linked to higher rates of substance abuse, domestic violence, child abuse, depression and just about every other social ill. Despair, basically. Note the recent spike in drug and opioid overdoses in the U.S. If you care about communities and our way of life, you care about people having jobs. This is the most pressing economic and social issue of our time.

Our economy is evolving in ways that will make it more and more difficult for people with lower levels of education to find jobs and support themselves.

It’s a boiling pot getting hotter one degree at a time. And we’re the frog.

Read the full version from the author’s website.

Silicon Valley Is Right — Our Jobs Are Already Disappearing – Sam Altman (Y Combinator)

Why Trello Failed to Build a $1 Billion+ Business – Hiten Shah

In 2011, Joel Spolsky launched his company Fog Creek’s new product at TechCrunch Disrupt called Trello. It looked a lot like a whiteboard with sticky notes translated into a web browser and an iPhone App.

In 2011, Joel Spolsky launched his company Fog Creek’s new product at TechCrunch Disrupt called Trello. It looked a lot like a whiteboard with sticky notes translated into a web browser and an iPhone App. Instead of physically moving a sticky note on a whiteboard, you could drag and drop cards on a board from your web browser.

Within days, Trello succeeded in getting 131,000 eyeballs. 22% of them signed up. The vision for Trello was to create a wide product that was so simple and useful, just about anyone could use it. It caught on like wildfire.

It’s also why Trello ultimately had to sell to Atlassian for $425 million when it could have become the next $1 billion SaaS application.

In a blog post Spolsky wrote a couple months after launch, Joel presciently touched on the biggest challenge ahead:

“Making a major horizontal product that’s useful in any walk of life is almost impossible to pull off. You can’t charge very much, because you’re competing with other horizontal products that can amortize their development costs across a huge number of users. It’s high risk, high reward.”

Trello was successful building this horizontal product, achieving rapid growth to tens of millions of users and an acquisition of hundreds of millions of dollars. However, the one thing Trello didn’t do a good job of was keeping track of it’s paying customers.

Trello was so focused on building its free customer base first and monetizing later; by the time it looked to its paid subscribers, it was too late—they’d already moved on. While that makes Trello a perfect complement to Atlassian’s suite of enterprise productivity tools, it hampered the company from growing further on its own.

Let’s talk about the opportunity that Trello missed, and what it could have done instead.

Why Trello Had to Sell

Trello is organized around a “kanban board” concept. Kanban was a system for lean manufacturing that Toyota popularized in the 1940s. The basic idea was that each “card” represented a product, part, or inventory. When a card moved around a board, it meant that something had been physically moved from a supplier to a factory.

In practice, it looks like this:

When Trello first started out, it was really technically challenging to create a board in a web browser where you could collaboratively drag and drop cards into lists. A lot of other SaaS tools at the time were big databases with a visual interface built on top (think: Salesforce). This basically created an architecture where you structured data in terms of leads, customers, or tasks.

Trello came at this from the opposite direction. The product vision was to strip everything down and build around the visual idea of cards on boards. To get this to work, Trello implemented a bleeding-edge stack. The single page web app basically worked as a shell that pulled all of the data from the servers in less than half a second, at under 250 kilobytes. After a user visited for the first time, they then cached the page so Trello would load even faster.

They built their servers on top of Node and used MongoDB to store data so that the web app would load really fast. Everytime a user dragged a card to a new list, or changed the entry on a board, Trello pushed this data to every other browser with the board open almost instantly.

Trello Architecture

The result was breathtakingly simple. You made a change to a board by dragging and dropping a card, and that change was reflected everywhere else in the world.

All of this stuff was new at the time, and gave Trello a lot of runway. But by 2016, it wasn’t as hard to a build beautiful and responsive web app like Trello, and you started seeing Kanban boards everywhere:

  • GitHub builds Kanban boards in September 2016:

  • Asana announces Kanban Boards in November 2016:

  • Airtable Launches Kanban Boards in November 2016:

Justin Rosenstein, co-founder of Asana—one of Trello’s biggest competitors—said, “We definitely give Trello full credit. That is clearly the product that has done a good job pioneering this view.” But Justin was equally unapologetic about copy-catting Trello’s board feature: “We see Trello as a feature, not a product.”

Trello might have become a $1B+ business if it looked like a “system of record” application—the single-source of truth for a company. Imagine if you could use Trello not just to track your marketing funnel, but to move information from your marketing board to your sales pipeline and product roadmap. Instead of having a separate Trello board for each team, you’d have a big board for the entire company.

Trello never became this “system of record.” It was an strong visual metaphor that the competition ultimately copied. Ultimately, the Kanban board was a really cool UX feature, but not a difficult one to replicate.

In SaaS, you don’t win by getting there first or having the best idea. You win by continually solving the problem better. When you build a feature that’s extremely popular or successful, the competition will steal it.

Trello could have doubled down on upselling individual consumers to paid plans. They could have focused on building features for SMB customers. Or they could have expanded into the enterprise faster. Any one of these things would have led to a $1B+ valuation. Let’s talk about what Trello could have done with each path, starting with its consumer plan.

#1) Trello Didn’t Monetize Free Fast Enough

Chart of Trello’s user growth based on publicly available data.

It’s possible to build a $1B+ company with a freemium business model targeted toward consumers. In 2013, Dropbox was valued at $8B on $200M in revenue with 200M users six years after launch. This was before Dropbox had even launched a business plan—the company’s revenue primarily came from upselling free users to a $10/month plan.

Three years after launch, Trello’s growth in users looked on track to explode past Dropbox’s levels, at 10 million in 2015 (Dropbox had four million three years after launch). But Trello had a much harder time upselling free customers to its paid “Trello Gold” plan.

The 2013 blog post that announced the launch of Trello Gold highlighted three main reasons users should pay $5/month for Trello:

  • Customizable board backgrounds
  • 250-megabyte attachments for each card in Trello (vs. 10 megabytes on the free plan)
  • Stickers and custom emoji

While everyone likes emojis, it’s not a good enough reason to spend money on software. Dropbox’s free plan gives away 2 GB of space. Its paid plan delivers 1TB of space—50x what users get for free.

Trello’s value proposition is harder to locate than Dropbox, which is exactly why Trello should have figured out early what features individual consumers were willing to pay for.

Solution: Dig Into the Freemium Use-Cases

Instead, Trello focused on building a freemium, horizontal product that everyone could use, and chose to figure out monetization later.

Instead of focusing on building a wide product for everyone, Trello should have dug deeper into its use cases in the beginning to figure out why people were signing up, what they were using the product for, and what people found so valuable that they’d be willing to pay to use Trello.

If you have a broad product with a lot of applications, dive into all of the different use cases first:

  • Is there a competitor that’s able to do this—or is already doing it today?
  • What’s the revenue potential for people using this use case?

By doing research around your customer base and your competitor’s customers, you can segment out the use cases with the highest lifetime value.

Read the full version from the author’s website.

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