Matt Hodges

Today is May 1, 2013. Last May, big things were happening in my life. I graduated from college. I moved to Cincinnati. I was gearing up to start my career as a software developer. I can’t believe that was a year ago.

In that time, a lot of great things have happened. I hit the ground running with my job. I was part of a mobile dev team, from which I learned A LOT. I’ve worked on multiple side projects that have garnered modest publicity. I was on the front page of some of the world’s most read online publications (that literally caught the eye of more than 2.5 million people). I’ve got some amazing people in my life now that I didn’t even know one year ago and I can’t imagine living without. I could go on and on.

It’s been a good year. No, it’s been a great year. But I’d be lying if I said I was content. There are many reasons for that, but I won’t bore you with them. Rather I’ll leave you with this: Where do you see yourself in five years? Why are you waiting five years to get there?

This past Sunday I purchased a really cool iOS app called CodeBucket. It’s a handy app that lets me completely manage my Git repositories that live on Bitbucket. I use it primarily for issue tracking on the go. But this post is not about that.

I’m cheap

I admit it, I’m not one to often purchase apps. It’s not that the price is too high, it’s just that I don’t find myself to be very productive on my iPhone. It’s usually not worth the money when I can often complete a task more quickly on my laptop–and for free. Despite all this, CodeBucket had good reviews so I decided to buy it for the negligible price of $1.99. Or so I was told.

Buffering…

It wasn’t until two days later, Tuesday, that I received an email receipt from Apple for my purchase. Here’s a snippet from that receipt:

First of all, why the hell did it take two entire days for me to receive an emailed receipt? The purchase happened on Sunday, the receipt is dated Monday, and I get the email on Tuesday? Perhaps the internet tubes were filled in Cupertino this weekend. But, whatever, I can live with it. It’s not like I was eagerly awaiting my receipt so that I could keep my books in tip-top shape.

What’s up with that?

The second issue here is a bit more bothersome. As I mentioned, I thought I was purchasing an app for $1.99. Apparently a 6.5% sales tax was applied to this purchase, bringing the grand total to $2.12. Now, my issue here isn’t with the fact that I had to pay tax; that doesn’t bother me. The problem is that I was never told that I would be paying tax on the transaction. The price read $1.99 so I assumed I would pay $1.99. There was no final confirmation to make sure I agreed to a grand total–it just went ahead and applied the tax and charged me.

I consulted the iTunes Store Terms and Conditions, and sure enough it’s in there:

Your total price will include the price of the product plus any applicable sales tax; such sales tax is based on the bill-to address and the sales tax rate in effect at the time you download the product. We will charge tax only in states where digital goods are taxable.

Apparently Ohio enforces tax on the sale of digital goods. I was unaware of that. I did a quick ctrl+f on the Wikipedia page, and Ohio didn’t come up. I guess Apple knows more than me about taxes. Regardless, it’s a common courtesy to let a customer know just how much they’re paying for something before they actually pay. Oh, and an emailed receipt really shouldn’t take two days to deliver. But I guess when FT 500 says you’re the most valuable company in the world, you can do what you want.

Many people who study economics say that you often don’t know you’re in a bubble until it has popped. But once the bubble bursts, it seems almost obvious that one had existed. I’m going to postulate something that no one in Silicon Valley wants to hear right now: we’re in another bubble.

This isn’t the same as the dotcom bubble

In the late 1990′s and the early 2000′s, we had the dotcom bubble. Every other day, a new IPO was launching for some web company. Excitement was bountiful, and it seemed like a fool-proof move to invest in anything that ended in “.com.” Some things were great. After all, the economy was surging at the time and companies like Amazon made the scene. But, as we soon found out, there wasn’t much to back up this excitement. Eventually, companies like Pets.com realized that having a website wasn’t equivalent to having a business, and the bubble collapsed. Investors pulled out, stock values went to zero, credit was frozen, and companies died. The dotcom bubble was an exercise in investing in nothing. But the current app bubble more closely resembles the recent housing bubble.

If you want a good, in-depth, analysis of what happened in the housing crisis of 2008, you should read Andrew Ross Sorkin’s Too Big To Fail. But for the moment, we can focus on some very simple concepts. The housing bubble came about because (big investment) banks made risky bets. They loaned money to consumers to buy homes that, historically, should not have been eligible for such financing. The banks assumed that housing prices would continue to go up, and even if they took some losses on risky loans, they would profit in the long run. Also, these big banks took out insurance on their loans so that if a consumer defaulted, the bank would still be covered. Unfortunately, the defaults hit hard. The assets (housing) that the banks had financed became toxic–as there was no one to pay off the debt–and the banks started losing money, fast. The insurance that they had taken out was also crumbling because it was never anticipated that so many banks would need so much coverage in such a short span of time. All in all, the banks, who had loaned and insured trillions of dollars to each other, started to bring one another down.

So what does that have to do with apps? Well, take this same idea and scale it down a couple orders of magnitude. Instead of large investment banks and houses, we have venture capital investors (like Y Combinator or Google Ventures) and app startups. New app companies are popping up at a very impressive rate, and it seems like they all have the same business model: build up a user base and then sell out to a big company. Very few of them appear to have an actual method of bringing in revenue. But what’s more amazing is that the big tech companies are continuing to invest in these “toxic” assets. Facebook bought Instagram for $1 billion. Instagram had never turned a profit. Companies like Zynga, which is in the “virtual farm animal” industry, are buying up competitors like OMGPOP for hundreds of millions of dollars.

Yes, there is a case to be made for these acquisitions. You could argue that Facebook bought out Instagram so that it could secure the large user base. But here’s the problem: that cannot go on forever. Asset bubbles occur when companies focus on securing assets rather than profits, in the hopes that the profits will come later. The big banks secured housing, California investors are securing apps and users. This is when “bubble math” starts appearing. Companies make a large investment, and break it down into individuals, saying things like “we spent $20/user on that acquisition,” and hope to eventually turn that user into a profit.

Software development is a good business model

I know that this sounds like an attack on the software development industry. Trust me: it’s not. I work in the software development industry and I see enormous value in it every day. There are also decades of evidence to show that the industry is quite lucrative.

I also have no problem with software startups. You never know which next big tech company is going to come about out of someone’s garage. The problem is that too many people think that having a website or an app is the same thing as having a business. If you don’t sell anything (such as your software or a service related to your software) it’s hard to picture any success in the long run. Eventually, Google and Facebook will stop spending $1 billion on asset takeovers and realize that they can do it cheaper in-house. Then what will happen? Google will stop paying inflated prices for the assets. Venture capitalists, who have been anticipating these high payouts, will stop (or significantly decrease) funding to startups, and then we’ll see a massive exodus (failure) in the tech startup industry.

Six months ago, I predicted that we would see the bubble collapse soon after the Facebook IPO landed. So far, we haven’t seen that. And for the sake of all those startups, I hope I’m wrong. But for the sake of a healthy industry, we need to start producing better products and services. I would much rather see Google, or any other large tech company, acquire profitable tech startups. Or better yet, if startups can be profitable on their own, then maybe they will be the next Google or Facebook. Enough with this Instagram and Zynga crap. Let’s see some real innovation that is actually sustainable.

Let’s talk about QR Codes. But before we begin, think for a second about the last time you actually scanned one. Was it worth your time? Was it easy? How often do you actually use them? I’m willing to bet a lot of money that your answers to those three questions were “no, no, and never.” Why? Because QR Codes suck. And despite how much they suck, they are stubborn little bastards that just don’t seem to go away. But it’s not useful to just declare that a technology is shitty. Let’s be pragmatic and actually try to understand why the technology is shitty.

You’re doing it wrong

It’s not the QR Code’s fault that it sucks. It really isn’t. In fact, QR Codes are very good at what they do: they are a two-dimensional representation of some data. That god-awful box polluting the top of this blog post holds some data and your mobile device is very good at delivering that data to you in a meaningful way. The problem is that the powers that be haven’t yet figured out how to use these things correctly.

For whatever reason, QR Codes started gaining huge popularity in the late 2000s and that has continued into the current decade. Restaurants, libraries, museums, and marketers all realized that QR Codes could be read by smartphones and they instantly assumed that it would be a good idea to plaster these ugly things everywhere. I can forgive some people for this, but marketers? What the hell are you thinking? Every piece of a product or advertisement design is important. Why would you waste such valuable space with a giant ugly box that literally means nothing when viewed by a human eye? Protip: if you’re making me go through hoops to get your advertising message, you probably need to reevaluate things.

I saw a big QR Code plastered to the back of a truck driving down the highway the other day. In 1994 Denso Waved invented a powerful gun that shoots both forward and backward simultaneously. Not satisfied with the number of deaths and permanent maimings from that invention they affixed QR Codes to the backs of moving vehicles.

It’s only when we wake up that we realize something was actually strange

Like the housing bubble, many people are too blind to be able to see that we’re in a QR Code bubble. Everyone keeps chugging a long like nothing’s wrong, despite endless stats that suggest that no one is actually using these things.

The main issue here is that QR Codes should have never been presented to consumers. They shouldn’t be built into advertising, they shouldn’t act as information kiosks in department stores, and they certainly shouldn’t be substituted for a simple web link. QR Codes should be treated like bar codes, because they are the same thing. The only difference is that QR Codes can hold a lot more data.

When I go to the store, I pay absolutely no attention to the bar codes on the items I am purchasing. There is no need for me to even realize that they are present. But they are of great value to merchants: they power their entire point of sale and inventory systems! You may have also noticed that when you receive a package shipped by FedEx or UPS, they often have similar two-dimensional data matrix labels on the box. Those aren’t for you, they’re for the shipping company to track the package!

If you must do it, do it right

And this is the key. Because QR Codes are ugly and because they really aren’t convenient, you should stop expecting consumers to use them. That’s not to say, however, that you can’t use them yourself.

I was part of a research and development team for ShelvAR for two years working on integrating this sort of technology into an augmented reality shelving and inventory system. While we didn’t use the exact specifications for QR Codes, we did create very similar codes, aptly named ShelvAR tags. They are the same idea: a rectangle of black and white pixels that represent data. But here’s the kicker: the consumer (in our case, a library patron) is never meant to interact with these tags. They might notice them, but a call to action is never requested.

Library employees, however, are meant to use these tags–but very minimally. In the project’s most recent demo, you can see that the tags are passed over very quickly and don’t act as a gateway to more content. They serve their very concise purpose and the person moves on.

Not unlike bar codes in a grocery store or tracking codes on packages, ShelvAR employs this technology correctly. Other projects can use codes like this correctly too, it just takes some time to stop and think. So stop this madness of trying to turn ugly pixels into marketing and realize that it’s time to move on to something different.  Just like you would never expect me to scan a bar code to view your content, you should never expect me to scan a QR Code either.

Recently, a buddy of mine asked a question on Twitter and Facebook:

What are your thoughts on changing your name on Facebook/Twitter to [First Name] [Middle Name] so potential employers won’t find you?

— Eliot Fowler (@EliotF1011) September 28, 2012

To which I fired back a resounding:

“It’s asinine. Set up proper privacy settings instead.”

and

“Your name is your brand. If you compromise it for ‘privacy’ reasons you’re doing it wrong.”

Now, there are many theories about the idea of assuming a temporary and new identity; some debate whether the act of disguise is necessary, others question if it even works. But I’m not going to discuss either of those. I’m going to tell you why hiding your name online, even temporarily, is a terrible idea.

But we have to, like, hide from creepers

For the uninitiated or indisposed, the idea is that you can “hide” your online profile by changing your listed last name to your middle name. The theory is that if anyone searches for your first and last name they won’t be able to find you and you get to keep your online presence in tact. It’s a popular tactic, often exercised by college girls looking for jobs, that likely stems from some forced procedure during sorority rushing. Unfortunately, the fiction here is the belief that your online presence persists after such a change. I assure you: it does not.

It used to aggravate me when my Facebook feed would suddenly fill up with people (mostly girls) that I could not identify. It seemed as if overnight I had friended fifteen Sarah Nicoles and eleven Katy Lynns! At first, I’d try to identify who everyone was by clicking on their profiles and shuffling through some picture, but I quickly gave up on that. I’m bad enough with names that I sure as hell wasn’t going to try to learn everyone’s middle name. Eventually I went through and unfriended everyone that I couldn’t immediately identify.

They weren’t anonymous, they were ambiguous 

If my frustrated anecdote about Facebook friends isn’t enough, then let’s talk about it in broader terms. Social media is a shouting board that anyone can jump onto and immediate have an audience of hundreds or even thousands of people. Why on earth wouldn’t you use this to your advantage? When you alter your identity, yes you can still consume but you cannot produce. You have given up the most powerful platform available to you! If you’re searching for a job, why not impress recruiters with your insightful tweets about the industry? And take it even farther than Facebook and Twitter. Do you have a website? Does it use your name? If not, why? If you are an artist it could be your portfolio. If you develop software why not showcase some of your work? Hell, if you work in finance then why aren’t you blogging about the markets?

For some of you, it’s because you’re lazy. Others of you are scared. You’re afraid that the big and scary internet may judge you and point out where you are wrong. It doesn’t matter. If you’re looking to make a name for yourself or you’re just looking to get hired, your enthusiasm to create content will win over at least half of everyone who sees it.

Your liabilities should be assets

The entire point of social media is to have an online presence that represents who you are and you should be proud of it. I’m not telling you to open up your entire Facebook profile to the world but I am telling you that if there’s anything online that would ruin your career, you’ve got bigger problems than Facebook’s challenging privacy settings. And on that note, configure your Facebook privacy settings! I know, they’ve got a confusing and shitty setup, but take an hour and just do it.

If you use Twitter and your account is private, you’re doing it wrong. Twitter is not Facebook. You’re meant to interact with people you don’t know. No one wants to ask permission to read your tweets. Now, because Twitter should be treated as an all-eyes platform, you need to use it differently from the way you use Facebook. You know what’s worse than a drunk texter? A drunk tweeter. You can ask Anthony Weiner about that one.

A rose by any other name

Your name is your brand. Unless you’ve achieved all of your dreams and aspirations in life, you need to go out and sell yourself every day. This isn’t the 1950′s, so stump speeches in front of the barber shop won’t work anymore. The entire world is interconnected and you’re competing against everyone else. Social media is a fantastic tool that you’ve been given, so use it. What’s in a name? In our world, everything.