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The business ideas, new utilities for society and the next big thing all boil down to code. If the code is good, the startup has a chance. If the code is bad, no matter how brilliant the business people are the startup is not going to get far.
0. Must have code

The working code proves that the system is possible, it also proves that the team can build the system. The working code is the launchpad for the business. After it is ready, the business can happen.

In the old days, tech companies were funded based on the idea written on a piece of paper. Those days are long gone. Today a startup needs to have not only working code, but an assembled system and active users. Software Engineering transitioned from the post funding exercise to the means to being funding.

Software now needs to be built faster and more correctly. It needs to constantly change to address the changing nature of the market and meet customer demands. Fundamentally, software engineering in startups is now a different game.

The working system is what gets you in.

1. Must have a technical co-founder

Any startup starts with the idea and just a few people. A lot of startup co-founders these days are techies, passionate about technology and life. It was not always like that. Just a few years back a purely technical founding team would have had a hard time fund raising because there was a school of thought that you need an MBA to run the company.

In fact, a lot of the reverse was true. A few business people would get together, come up with the idea for a product and then think: Where can we get a techie to get this done?

It is misguided notion that business and technology are somehow separate and that the first one is the king while the second is marginal. It is not, because technology is what makes the business possible to begin with.

So the first tip is to always have a strong technical co-founder. Someone who shares or invents the business along with others, but also has the technical feet on the ground. Someone who can make sure the business is mapped onto technology correctly.

2. Hire A+ engineers who love coding

The software industry survived close to 30 years of crisis. Until recently, building a large scale system that worked was black magic. Most software projects suffered for years, had large engineering teams and little consensus on what needed to be done and how to accomplish it. The resulting systems were buggy, unstable, hard to maintain and extend.

The problem was that there were just too many people who were not that good who were working on the problem.

Startups can not afford to have less than A+ engineers. In a larger company there is an opportunity to mentor and grow people. In a startup every hour is precious. Not much time can be spent teaching people, you need to get people who know what they are doing.

Qualifications for A+ engineers are:

• Focused on results
• Loves coding and fluent at it
• Writes elegant quick code
• Smart and quick
• Loves refactoring
• Values testing
• Solid in Computer Science

3. Keep the engineering team small and do not outsource

A team of 2-3 rock star engineers can build pretty much any system because they are people who are good, love building software, focus on the goal and don’t get in each other’s way. The team of 20 so-so engineers will not get far.

The mythical man-month book debunked the notion of scaling by adding more programmers to the project. The truth is that most successful software today is built by just a handful of good engineers. Less is more applies equally to code and the number of people working on it.

Once you embrace the idea of just a few rock star people building the system, then outsourcing development becomes a really bad thing to do. Tech is your bread and butter, why would you outsource it? There are not many things more important than your code. Trusting people you never met to build the very foundation of your company does not make sense.

Again, it is a myth that you can scale faster with more programmers. It is even a bigger myth that outsiders can get your work done for you. This is not the place to save money. Hire a few of the best guns you can find, pay them well, give them stock options, make them happy and jazz them up about the company.

4. Ask tough questions during the interview

There is nothing worse than being soft during the interview and getting the wrong person into the company. This is bad for you, but more importantly bad for the person. In the end you will end up parting ways, but it would be best to just not make this mistake to begin with. So be tough and ask a lot of technical questions during the interview. What to ask depends on what you are looking for, but here are the basics:

• Ask standard computer science questions: data structures and algorithms. (If the person does not know what a Hashtable is or how it works or how to write one - thats a big red flag)
• Get a feel for knowledge of the language: It does not matter what language they claim fluency in - confirm it by asking specific questions
• Senior people need to know threads, queuing, distributed systems, databases
• Senior people need to know design patterns
• Senior people need to know unit testing inside out
• Most importantly, the candidates need to demonstrate love for simple and elegant code

Always ask for code samples - a lot can be revealed. Give written timed tests, even if its over the web. And always check references before making an offer.

5. Avoid hiring managers

You do not need these type of people in a small team. If everyone is sharp, knows what they are doing and executes on a task, why do you need a manager? People who try to overlay complex processes on top your objectives are going to slow you down and make you frustrated.

If during the interview someone who has been a manager says “I miss coding and want to code again”, beware that soon they might want to go back to management. Point being - the best startup engineers are people who are young and hungry to write code. More experienced people who are looking to do more management than coding will not be as passionate. And this is bad, because startups need passion and drive to build the impossible.

What you need are experienced technical people who love coding. These are going to be natural mentors for your younger engineers. Mentors and not managers.

6. Instill an agile culture

Modern startups need to move very quickly. There is no room to plan for 6 months and then execute because someone else will get there first. The new approach is to evolve the system. Of course you are doing planning for the release, but you are iterating quickly, doing frequent builds and constantly making changes.

Coding becomes sculpting. Starting with a shapeless form you continuously refine the code to satisfy the business requirements and make sure that the system is designed and implemented correctly. This is agile culture which values:

• Clean and elegant code
• Continuous refactoring
• Focus on defect-free software
• Code ownership and pride
• Team work and little ego
• Most importantly: use common sense

7. Do not re-invent the wheel

A lot of startups go overboard with the infrastructure. This includes two types of things - rebuilding the libraries and building your own world-class scaling. On the first point - there are so many fantastic open source libraries out there that it just does not make sense to write them in house. Whether you are using JavaScript or PHP or .NET or Python or Ruby likely there are major libraries that can help you. Re-writing existing libraries is a waste of your time and you are not likely to do it better.

Building a large-scale system is a different matter entirely. First you need to get to scale and then worry about it. The guys from 37Signals have written about this on many occasions including their Get real book. Why worry about having millions of users while you do not have any at all right now? Spending time making sure that you will scale big is a waste of your time. Focus on what your product does best instead.

And to that effect, we have been using Amazon Web Services and are now supporting > 1M BlueOrganizer downloads. The Simple Storage Service (S3) allowed us to build a truly distributed and scalable system. We have not started using EC2, Amazon’s compute cloud service, but are planning to re-evaluate it soon.

The point is that there are tools, solutions and services out there that can help you get to scale. It is better to use them than to spend huge amounts of time and energy and money on building these systems in house.

Wrap up

Software is critical to any modern business. So the key to success of any startup is to have rock star technical team that can quickly turn the vision into a piece of software and then evolve it and iterate it until it turns into a real business.

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Apple is said to have signed a deal with 20th Century Fox that will see video rentals on iTunes.

According to FT.com the deal will be officially announced at MacWorld on January 14. The same report also says that Apple is in talks with Sony Pictures Entertainment, Paramount and Warner Bros along similar lines.

Speculation of Apple offering video rentals via iTunes has been around for a long time and is seen as a natural next step for iTunes. We reported in June that the iTunes rental service will charge $2.99 for a 30 day rental, but final details have not been disclosed. Code to support rentals in iTunes was discovered in November.

After a year where Apple was portrayed as the bogeyman by companies such as NBC (who have now withdrawn their content), this is a big win for Apple. Another interesting part is News Corp appearing to continue to hedge its bets; on one hand it joined with NBC to launch Hulu, billed as an iTunes alternative, and yet they continue to deal with Apple directly as well. If Murdoch isn’t prepared to dump Apple and join with NBC exclusively, what does this say about what he thinks about the future of online video? Certainly from the outside its says that Apple/ iTunes is still the biggest and best game in town, and the place to be if you want to profit from your content online. It would also suggest that NBC’s strategy of not dealing with Apple may be bound to fail.

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First came the fervent and persistent rumours of a Google mobile phone.

Then, just six short weeks ago, the search supremo (and just-about-everything-else-online supremo) announced there would not be a ‘Google phone’ per se, but rather dozens of them from a raft of mobile manufacturers, and all built on an open Linux-based mobile phone platform named Android.

Now things are picking up steam, with Gizmodo posting a snap of one of the rumoured score of prototype phones circulating around the Googleplex and in the r&d labs of the mobile makers.

The device looks very much like it’s been cobbled together from existing chassis designs by Taiwan’s HTC, which is responsible for a estimated 80% of the world’s Windows Mobile smartphones (not just under its own brand but through badge-engineering for dozens of carriers and exclusive OEM/ODM contracts with several tech companies).

(HTC is also one of the leading partners in the Open Handset Alliance, which Google created as a hothouse for Android — the consortium’s roster of 34 tech companies also includes handset makers Samsung, Motorola and LG.)

And yes, this big drab-looking device is dog ugly - but this isn’t a slick made-for-media concept phone, it’s merely a functional prototype on which the developers and engineers can tinker (and we all know that as rule, they’re not big on elegant design).

Right now, it’s what sits inside the phone that is most important. You can bet that if Google’s handset partners lift the covers on their Android phones during the Mobile World Congress expo, which kicks off on February 11th in Barcelona - or if Google itself trots out a flock of phones to impress this annual powerhouse gathering of the global mobile industry (the company has booked two stands on the expo floor) - that these will be shiny snazzy models endowed with a very high ‘cool’ factor.

None the less, they’ll still be concept models to capture and ignite the attention of the market, the media and the public at large. Android isn’t expected to hit 1.0 stage until the second half of 2008, so right now it’s still a work in progress.

What we already now about Android is that its foundation is the Linux 2.6 kernel, onto which Google has assembled sufficient components to create a phone-centric OS.

With a small icon selection strip running across the foot of the screen the UI looks somewhat similar to that of prototype mobile internet devices from Intel’s ultra-mobile platform, as both are designed with very small screens in mind.

In that regard, Android’s interface also takes some cues from the Sidekick and Hiptop family of devices. This is not surprising, considering that the one of the founders of Android (which Google acquired in July 2005) is Andy Rubin, who also founded Danger, the company behind the Sidekick/Hiptop line. Rubin now leads the Android team.

A demo of Android posted on YouTube’s Android Developer Channel shows the top level UI menu, in which the user scrolls horizontally through a carousel of icons to launch the relevant application. However, later iterations could spawn limited sub-menus, so that a generic mail icon could contains the selections for email and SMS/MMS messaging, or a ‘chat’ icon could include SMS/MMS plus the instant message client.

The inbuilt browser is based on the Apple-developed WebKit open source project which underpins the iPhone’s impressive implementation of Safari. As a result, Web pages viewed on Android appear with the same fidelity as if viewed on a full-blown desktop client.

The demo also shows an innovative ‘visual history’ that represents recently-visited sites not as a test list but a series of thumbnail images of the actual pages you viewed.

Android also appears capable of some sweet graphics, with Open GL software to provide basic 3D capabilities out of the box plus hardware acceleration if the device is fitted with a graphics processor chip.

The YouTube video showcases smooth rendering and manipulation of a ‘virtual Earth’ globe in Android’s world time applet, then hammers home the point with a quick demo of Quake running on Android. And with NVIDIA having also signed up to the Open Handset Alliance, you can bet that Android’s graphics capabilities will come in for plenty of attention.

Central to the Android architecture is the SQL Lite database engine, which is made available to all applications - it could also be worth noting that SQL Lite is used for Google Gears, the offline implementation of online-only Web apps.

While open source provides the heart of Android, its brain is a surprisingly modest ARM 9-series processor running at 200MHz. By way of comparison, the BlackBerry Pearl and Curve run a 312MHz processor, Nokia’s flagship smartphones hover around 300-350MHz, the Motorola RAZR2 beefs up with a 500MHZ chip while the iPhone packs a 620MHz engine.

The ARM processor is also the x86 of the mobile phone landscape, being used by most mobile makers, so it makes perfect sense for the OHA to set this as the processing platform for Android.

However, given that Intel is a member of the OHA and in June 2006 offloaded its own ARM-based XScale PXA silicon to Marvell (also an OHA signatory), we expect Intel will push to put its forthcoming Menlow 2008 and Moorestown 2010 mobile device platforms on the Android menu.

But that’s all in the future, and right now the job is getting to Android 1.0. Central to that is the Android software development kit, which allows programmers to start coding.

Google has added a small incentive: a cool US$10m in prize-money for the best Android apps!

The first stage of the Android Developer Challenge, running from January 2nd to March 3rd 2008, will see “the 50 most promising entries… that make use of Android’s capabilities to deliver a better mobile experience” score a US$25,000 handout “to fund further development”. As the apps come into fruition, Google will dole out 20 follow-up awards, ten of US$275,000 and ten of US$100,000.

The SDK itself runs on Windows XP and Vista, Mac OS 10.4.8 and up, and Ubuntu 6.06 ‘Dapper Drake’ or later (although the SDK site notes that ‘other modern distributions of Linux will also likely work but are not directly supported’). It includes an Android emulator so that developers can now see what their apps will look like when running on an Android device, with a choice of screens sizes and form factors.

So if you’re a programmer stuck for something to do over the Christmas / New Year break, try your hand at crafting an application for Android - it could just net you anywhere from US$25,000 to a cool US$275,000!

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Russia successfully launched a rocket on Tuesday carrying the last three satellites to complete a navigation system to rival America’s GPS.

The military-run GLONASS mapping system works over most of Russia and is expected to cover the globe by the end of 2009, once all its 24 navigational satellites are operating.

A space rocket blasted off from Russia’s Baikonur cosmodrome on the steppes of neighboring ex-Soviet Kazakhstan, from which Russia rents the facility.

“The launch was carried out smoothly at 10:32 p.m. (1932 GMT),” RIA news agency quoted a spokesman for the Russian space agency as saying. “We expect satellites to separate from the booster on the orbit at 2:24 a.m. (2324 GMT)”.

Work on GLONASS — or Global Navigation Satellite System — began in the Soviet Union in the mid-1970s to give its armed forces exact bearings around the world.

The collapse of the Russian economy in the late 1990s drained funds and the plans withered, but President Vladimir Putin has ensured the project is now being lavishly funded from a brimming government budget.

Officials said GLONASS would mainly be used alongside the U.S. global positioning system, which Washington can switch off for civilian subscribers, as it did during recent military operations in Iraq.

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If Microsoft Corp. co-founder Paul Allen succeeds in acquiring spectrum at the Federal Communications Commission auction next month, it would add to the valuable collection of airwaves he already has amassed in the Pacific Northwest.

Mr. Allen, through his Vulcan Spectrum LLC, disclosed a commitment last week to bid at the Jan. 24 auction, alongside Internet giant Google Inc., wireless operator AT&T Inc. and others.

While his intention to bid came as a surprise to many, it could allow him to add to the swath of spectrum he has acquired through Vulcan in the valuable 700-megahertz band. This low-frequency variety …

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What Web applications and trends will make it big in 2008? In this post the RWW authors ruminate on the current trends in Web technology and look forward to what 2008 might bring us. Topics include Google, semantic web, online advertising, recommendation systems, Facebook, digg, open standards, Mobile Web, search engines, and much more!

Richard MacManus, Editor, ReadWriteWeb:

1. Semantic Apps will become popular in 2008, due to their ability to get better content results and make better data connections. Think search engines like Hakia and Powerset, wikipedia-like efforts like Twine and Freebase, and apps that use semantic technologies under the hood (such as AdaptiveBlue and Snap).

2. In tandem with #1, Google will experiment more with Semantic Apps in ‘08. The Knols project, although not overly semantic, is a hint of this direction.

3. Web Services platforms will be a fierce battleground in ‘08, with Amazon, Microsoft, Google, Mozilla and others competing to provide ‘Web OS’ and online storage to consumers. Unfortunately this may spell the end of a number of startups in this space.

4. Zoho and/or ThinkFree will be acquired by big companies wanting to leapfrog into the Web Office space.

5. The online advertising market will consolidate, after the spate of acquisitions in 2007. CPM will continue to dominate for media brands and CPC for niche sites, although there will be experimentation in VRM and other forms of highly specific targeting of ads. Privacy issues will prevent the latter from becoming mainstream though. The much-hyped CPA (Cost per Action) will continue to be a pipe dream, because publishers simply don’t want it.

6. The big Internet companies will surprise us all by embracing open standards, and attempting to compete with each other with features instead of data lock-in (OK, this could just be wishful thinking!).

7. The most interesting innovations on the Web in 2008 won’t happen in Silicon Valley, but in Asia (China, Japan, Korea). At least one startup from China will break through in the US market with Twitter-like success in 2008 - and it will almost certainly be a Mobile Web app.

Marshall Kirkpatrick, Lead Writer, ReadWriteWeb:

1. Twitter will be acquired.

2. Most ad networks will start producing their own content to advertise against; and some content companies today will get acquired by ad networks.

3. Online video will become so ubiquitous, including live and mobile, that everyone will wonder how the internet existed without it. It won’t feel like a big deal, though.

4. A handful of big companies will let you start logging in with an OpenID associated with your account.

5. The value of recommendation engines will become all the more clear; the era of data will be celebrated.

6. People will rebel against Google, at least a little bit. Maybe.

7. People engaged in the new web will do some really awesome stuff that we’ll all be in awe of.

Josh Catone, Lead Writer, ReadWriteWeb:

1. Tumblr will be acquired.

2. Privacy will be a growing concern in the mainstream, but ultimately people won’t really take any action and for the most part, things won’t change. Some companies and groups (think Mozilla) will push for better privacy controls for users, while others (think Facebook) will continue to push the envelope and continue down a slippery slope. Users will eventually push back, but I am hesitant to say that proverbial “straw that breaks the camel’s back” will come in 2008.

3. OpenID will be adopted by more startups and larger web companies, but most people (mainstream users) still won’t use it - that’s a couple of years off.

4. Facebook will continue to grow and their platform will be adopted by other large social networks. Google will sweat.

5. Mobile web usage will be a big story in 2008. It’s already big in many parts of the world; and Westerners are about to get hooked. With new mobile devices that makes web surfing less painful, people will be more and more connected away from their computers.

6. Mainstream media coverage will be a catalyst for the adoption of Web Office apps by consumers; and Microsoft will eventually be forced to change their Web Office strategy and offer a fully online office suite (but that latter won’t happen in 2008). Offline mode (Gears, AIR, Silverlight, etc.) will be what really tips the scales and causes mainstream users to to embrace the as-of-yet unfamiliar world of Web Office applications.

Alex Iskold, Feature Writer, ReadWriteWeb:

1. 2008 will be slow and cautious, with the first half dominated by recession or fear of recession.

2. Facebook is going to see the same kind of decline in popularity in 2008 that MySpace saw in 2007.

3. Digg is going to be acquired by one of the mainstream media conglomerates.

4. Implicit applications, which monitor our habits and automatically infer our likes, will rise.

Emre Sokullu, Feature Writer, ReadWriteWeb:

1. Facebook will acquire companies that do the following, in order to strengthen their advertising unit: personalization, behavior tracking, image recognition (Riya?)

2. Facebook will release a browser.

3. However, despite all that… Facebook will decline.

4. Google OpenSocial will be a failure; Google will try to create its own social networking empire by making acquisitions in this space.

5. Microsoft will become more aggresive and buy many popular companies at once (remember Ballmer’s quote). Candidates include SixApart, Technorati.

Sean Ammirati, Editor, ReadWriteTalk:

1. Google will really start looking vulnerable in 2008. While the ‘one trick pony’ comment by Steve Ballmer drew sarcastic responses, this will begin to look prophetic. While they’ll maintain market share in the search industry, the lack of traction in any other of their other initiatives will start to cause frustration. Plus, they will increasingly be perceived as the ‘evil’ company in many of these new initiatives.

2. Closely related, Yahoo’s Hack strategy (see ReadWriteTalk’s podcast with Bradley Horowitz) will start to bear fruit and things will look much more optimistic in Sunnyvale this year.

3. Facebook will start to feel pressure from two trends that will emerge on the web: distributed social networks and distributed commerce systems. For distributed commerce systems, look to see a first proof of concept from the VRM project. Chris Messina’s diso project with Wordpress will be a great proof of concept for distributed social neworks.

4. Non-search advertising on the web will increase in value significantly. This will be done through a lot of innovation in the ad targeting systems (both behavioral and contextual) and new metrics being adopted by Madison Ave beyond CPC and CPM.

5. There will be a lot of innovation in the hyper-local space, putting the final nail in the newspaper industry’s coffin. This will include companies like Outside.in and Yelp moving toward widespread use and new web properties (from both startups and big Internet Cos) emerging.

6. Finally, a 3G iPhone! OK, I don’t know if this is a prediction, but I really really want it to be true

Charles Knight, Editor, AltSearchEngines:

1. In the 1st Q 2008, the true “Google Killer” in search will be in Stealth Mode. In 2nd Q 2008 the first prototype will begin in closed Alpha mode. In 3rd Q 2008 it will be ready for the final closed Beta testing. In 4th Q 2008 it will launch and “Rock and Shock” the world!

2. The classic Vertical Search Engines (Job Search, Health, Consumer Electronics, Shopping, Video, People, more…) will continue their dominance over all other Search Engines in their various niches.

3. The Alternative Search Engines will pick up the pace of partnerships and cooperation, for their solid mutual benefit.

4. Mainstream Media interest in the Alts will increase until it begins to rival coverage of the five major search engines.

5. The trend towards ‘widgetization’ of the Alts will continue. Approximately 2 in 10 Alternative Search Engines (20%) have widgets now, and that number will double in 2008 to 4 in 10 or 40%.

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Despite fierce competition from machines with more than twice the memory and price points hundreds of dollars lower, Apple’s (AAPL) white 120 GB MacBook has captured the top spot on Amazon’s (AMZN) list of bestselling computers this Christmas eve.

Helped along by rebates ranging from $75 to $150, three Apple-brand notebooks are on the top 10 list this morning. The other bestsellers are the 80 GB MacBook (No. 7) and the 120 GB MacBook Pro (No. 10).

Price cutting among the competition is even steeper. HP’s (HPQ) 250 GB Pavilion (No. 5) is selling for $999.99, 27% off the $1,375 list price.

The least expensive computer on the list, at No. 8, is the $381 Linux-based Asus Galaxy with a 7-inch screen and 4 GB of flash memory rather than a hard drive. Many expect Steve Jobs to announce at Macworld that Apple is entering the market for flash-based notebook computes. Apple’s thin MacBook, however, is likely to be larger, carry more memory, and cost a whole lot more than $381.

In Amazon’s list of top-selling electronics, a late surge by a heavily discounted portable hard drive has pushed an iPod off the stack. Apple had five of the top 10 spots for much of the pre-Christmas shopping period; it’s now down to four.

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