“I’m convinced that most people think about software companies in an upside-down way. The common belief is that when you’re building a software company, the goal is to find a neat idea that solves some problem which hasn’t been solved before, implement it, and make a fortune. We’ll call this the
build-a-better-mousetrap belief. But the real goal for software companies should be converting capital into software that works. If you understand this, its easier to make the right strategic decisions.”

“Imagine that the goal of your software company is not to solve some specific problem, but to be able to convert money to code through programmers. That’s a little bit strange, but bear with me. A software company has to think of recruiting the right people as its number one problem. If you are successful, this can solve any other problem. Hire smart people, and they will produce good stuff that you can sell and make money off.”

“Microsoft has a great recruiting strategy. They hire inexperienced, smart people right out of college… people that haven’t learned from dysfunctional corporate cultures elsewhere. These kids get to Seattle, not really knowing anybody, work their asses off, and absorb the Microsoft way of doing things like a sponge. By the time they are ready to get disgruntled, their stock options start to kick in and their effective salary for staying around goes up into the stratosphere, where it is unlikely that anybody else will be able to lure them away. A five year Microsoft veteran could be making $500K a year including stock options — care to match that?”

1. Remove hat and glasses.

2. Peer into MentalPlex circle. DO NOT MOVE YOUR HEAD.

3. Project mental image of what you want to find.

4. Click or visualize clicking within the MentalPlex circle

” They are deep into xml, think of their site as having an API (and in fact already have partners using that API to build services that use their site). They aren’t quite ready to have it documented, but they are definitely thinking ahead to the kind of next generation object web that Jon Udell talks about. And of course they are exactly the kind of company I’ve been looking for to study in terms of heavy scalability issues. At peak, they are moving massive, massive amounts of data, and have multi-terabits of data on file. High reliability, high speed networking, etc. All of this is their bread and butter. This would be a great company to spend time with.

They are also totally into what it means to be a next generation web company: try stuff, measure it, move quickly. They have built a lot of perl tools for understanding what people are really doing on their site, and they do a lot of experimentation. They try to release new features every day. Their original goal was 1 new feature a day; now they say they are up to 15 or 20. ”