July 2014 Summaries

The concept of a "Shared Inbox" has emerged as a product category, with companies like Intercom releasing redesigned team inboxes to make it easier for teams to communicate with customers. Designing such tools requires careful consideration of two key principles: designing the tool to support teamwork and providing full customer context along with any conversation. The traditional approach often ignores the messy reality of teamwork, leading to crumbled designs, while a design that considers teamwork can lead to more productive conversations. Providing customer context is essential for great support, allowing teams to answer questions quickly and focus on valuable conversations, rather than wasting time asking customers for unnecessary information.

The key to creating successful ideas and products lies in quickly gathering feedback, much like baking a cake. By starting with a "cupcake" - a small, manageable iteration that delivers value and provides insight into the product's viability - developers can refine their idea, identify problems, and accelerate the feedback loop. This approach is illustrated by comparing traditional cake-baking methods to a more iterative process, where each layer (ingredient) builds upon the previous one to create something edible and valuable. The concept also ties in with Galls Law, which states that complex systems often evolve from simple ones, and that starting with a working simple system is essential for success. By adopting this mindset, developers can avoid the frustration of creating bloated projects and instead focus on delivering small, incremental pieces of value that meet customer needs, thereby accelerating their product's development and learning process.

SaaS companies have outperformed the market as a whole, with valuations still extremely strong even after a correction in recent months. The sector has seen a surge of SaaS IPOs in the last decade, driven by its steady stream of recurring revenue and strong growth prospects relative to traditional software companies. Public SaaS companies tend to have higher valuations than on-premise software providers, with median revenue multiples ranging from 5.1x for on-premise companies growing at 30-40% to 9.2x for SaaS companies at the same growth rate. Investors focus more on growth than profitability, and fast-growing companies are rewarded with rich valuation multiples. Successful SaaS companies often have triple-digit revenue growth in the years leading up to an IPO, with sales and marketing being a significant component of spending. The time it takes for a SaaS company to go public can be almost 10 years from founding, with some companies taking as long as 14 years to reach IPO readiness.

Intercom has completed a major project to rewrite core parts of its product using the Ember.js framework. Tom Dale, one of the founders of Ember, visited Intercom's offices for two weeks to consult with their engineering teams. During his visit, Tom was interviewed about various topics such as the need for frameworks, web standards, bikeshedding, and open source. He describes Ember as an "opinionated" framework, meaning that it provides a default way of doing things for certain tasks. This approach is necessary to overcome human psychology's ego-depletion concept, where people's decision-making abilities are finite. Tom cites the example of organ donation rates in countries where drivers can opt-in or out when renewing their licenses, highlighting how default settings can affect outcomes. He emphasizes the importance of "sane defaults" in software development and believes that Ember's conventions and URL support make it a better choice for certain applications. Tom also discusses the need for the web to be the platform of choice for developing apps, rather than native platforms, and is involved with efforts to promote this vision through standards bodies and browser vendors. He believes that exposing new capabilities into the platform, rather than building high-level APIs, is key to the web's long-term health. Additionally, Tom discusses Ember's community management strategies, which prioritize making contribution barriers low and frequent releases to keep the project fresh and relevant.

Software is magical when it provides instant value with minimal effort, such as a single tap or click delivering results. The new magic in software design comes from the "Uber-fication" of products, where long processes are streamlined into simple tasks, and smart context-aware defaults are used to offer restricted choices. Additionally, the end of data entry is being achieved through the shift from recall to recognition, and by removing data entry steps entirely, allowing users to access information directly. The third aspect is ambient awareness, where systems are designed to deliver valuable insights automatically, without requiring users to take action. By reducing repeated actions to a tap or two, killing data entry, and delivering value automatically, software can create magic for the user.