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[unable to retrieve full-text content]If you think obtaining funding is you’re biggest priority, think again
Facebook’s massively lucrative advertising model relies on tracking its one billion users—as well as the billions on WhatsApp and Instagram—across the web and smartphone apps, collecting data on which sites and apps they visit, where they shop, what they like, and combining all that information into comprehensive user profiles. Facebook has maintained that collecting all this data allows the company to serve ads that are more relevant to users’ interests. Privacy advocates have argued that the company isn’t transparent enough about what data it has and what it does with it. As a result, most people don’t understand the massive trade-off they are making with their information when they sign up for the “free” site.
On Thursday, Germany’s Federal Cartel Office, the country’s antitrust regulator, ruled that Facebook was exploiting consumers by requiring them to agree to this kind of data collection in order to have an account, and has prohibited the practice going forward.
“Facebook will no longer be allowed to force its users to agree to the practically unrestricted collection and assigning of non-Facebook data to their Facebook user accounts,” FCO president Andreas Mundt said in a statement announcing the decision.
“We disagree with their conclusions and intend to appeal so that people in Germany continue to benefit fully from all our services,” Facebook wrote in a blog post responding to the ruling. The company has one month to appeal. If it fails, Facebook would have to change how it processes data internally for German users, and could only combine the data into a single profile for a Facebook account with that user’s explicit consent.
“This is significant,” says Lina Khan, an antitrust expert affiliated with Columbia Law School and the think tank Open Markets. She notes that authorities haven’t done a good job of articulating why privacy is an antitrust issue. Here, the German regulator makes it clear. “The FCO’s theory is that Facebook’s dominance is what allows it to impose on users contractual terms that require them to allow Facebook to track them all over,” Khan says. “When there is a lack of competition, users accepting terms of service are often not truly consenting. The consent is a fiction.”
According to the FCO, Facebook had 32 million monthly active users in Germany at the end of last year, amounting to a market share of more than 80 percent. The regulator argues this dominance gives it jurisdiction to oversee the company’s data collection practices.
“As a dominant company Facebook is subject to special obligations under competition law. In the operation of its business model the company must take into account that Facebook users practically cannot switch to other social networks,” said Mundt. “The only choice the user has is either to accept the comprehensive combination of data or to refrain from using the social network. In such a difficult situation the user’s choice cannot be referred to as voluntary consent.”
The FCO further argues that Facebook used its vast data collection to build up its market dominance, creating a feedback loop wherein people have no choice but to use the site and allow it to track them, which makes the site even more dominant and entrenches its privacy violations.
“The Bundeskartellamt [FCO] underestimates the fierce competition we face in Germany, misinterprets our compliance with GDPR and undermines the mechanisms European law provides for ensuring consistent data protection standards across the EU,” Facebook wrote in response to the ruling. They cite Snapchat, Twitter, and YouTube as direct competitors, hoping to illustrate that there isn’t lack of competition, and therefore the FCO has no standing to apply rules based on Facebook’s dominance. “Popularity,” they write, “is not dominance.”
The FCO disagreed, explaining that Snapchat, YouTube, and Twitter serve totally different functions from Facebook, and therefore can’t be seen as viable alternatives to the service.
Antitrust regulators used to consider data and privacy outside their purview. The old philosophy held that antitrust was concerned with price, and if a product was free then consumers couldn’t be harmed, says Maurice Stucke, antitrust expert and law professor at the University of Tennessee. “What we’re seeing now is those myths are being largely discredited.”
The most remarkable part of the ruling is the way it makes clear that privacy and competition are inextricably intertwined. “On the one hand there is a service provided to users free of charge. On the other hand, the attractiveness and value of the advertising spaces increase with the amount and detail of user data,” Mundt said. “It is therefore precisely in the area of data collection and data use where Facebook, as a dominant company, must comply with the rules and laws applicable in Germany and Europe.”
“This is the first instance where [regulators] are saying that because [a company has] such market power that consent is not freely given,” says Stucke.
The FCO ruling explains that the harm to users from Facebook’s data collection is not in cost but in “loss of control.” “They are no longer able to control how their personal data are used. They cannot perceive which data from which sources are combined for which purposes with data from Facebook accounts and used e.g. for creating user profiles,” the FAQ on the ruling reads. That combining of data gives it a “significance the user cannot foresee.”
That fact is underscored by people’s ignorance of Facebook data practices. Roughly 74 percent of American Facebook users surveyed recently by the Pew Charitable Trusts did not know that Facebook maintained profiles about their interests. Fifty-one percent of those surveyed said they weren’t comfortable with the practice.
But Facebook says that tracking people makes the services safer and better, and that the FCO misses how much the company has done in order to comply with the General Data Protection regulation passed by the European Union in 2018.
The FCO’s ruling, however, directly addresses the GDPR, writing that under its principles Facebook has “no effective justification for collecting data from other company-owned services and Facebook Business Tools or for assigning these data to the Facebook user accounts.” (Facebook Business Tools are the Like and Share buttons that appear all over the internet, and which allow Facebook to track you on sites they don’t own.) In other words, in addition to being anticompetitive in its view, the FCO believes Facebook hasn’t proven that data collection and bundling is in the best interest of every consumer and that its sites couldn’t function without it.
If Facebook loses the appeal, then Germany will become a grand experiment in whether the surveillance economy is actually essential to the operation of social media. Other Europeans and Americans may demand they are given the same option. “This ruling is really an icebreaker. Icebreakers break through the ice in order to lead the path for other vessels to follow,” says Stucke.
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My dad, who would be mortified if he knew I was doing this, has been my greatest inspiration in business. Thanks to his disdain for any sort of self-aggrandizement, I’m doing this behind his back (sorry, dad).
If I’ve had any success in business, it’s because my dad lived his life according to the doctrine of entrepreneurship and I got to watch from the sidelines. He was living proof that you’re not confined to the hand you’ve been dealt and you can determine your own outcomes in this life.
Over the years, my dad’s shared countless bits of wisdom with me that we endearingly refer to as, “The Marty Lecture Series.” Today, in honor of Father’s Day, I’d like to share some of my personal favorite “Lecture Series” quotes with you.
When You Lose, Don’t Lose The Lesson
My dad never took “no” as no. “No” was always a starting point for negotiation. Where others saw obstacles or setbacks, my dad saw (and still sees) opportunity.
Every time I came home with a perceived failure, he’d reframe it with how it taught me something or made me stronger.
It was infuriating as a 14-year-old who relished in self-pity and just wanted a “normal parent” who would indulge her, but it’s been invaluable as an entrepreneur. It’s impossible to be derailed by failure when you’re forced to find a lesson.
Sometimes You Gotta Be Ok With “Good ‘Nuff”
I was complaining about a mediocre grade on something when my dad spit this quote at me for the first time. Irate, I thought he meant you should settle for less than you deserve or are capable. It took me years before I realized what he meant was “done is better than perfect.”
He was teaching me how to ship.
Patience and Shuffle the Cards
In a world where my contemporaries are obsessed with quick Instagram-worthy wins, my dad always shared this quote from Cervantes. He was never impressed with status, fame, or fancy things. Perhaps it was the Texan in him, but he was never influenced by those who projected the illusion of success.
He was impressed with people who had passion, determination, and (most importantly) the wherewithal to endure the setbacks that come at you as you go down the road less traveled. People who played the long game.
Any day I felt like everything was over, the world was collapsing, and I should quit (aka: every other day in business), he’d remind me today was one of many.
This is a long game. You gotta have patience and shuffle the cards.
Some Days Just Need to Be Over
This one is a crowd favorite, especially in a culture obsessed with self-improvement and maximizing everything. Some days, you gotta accept that you can’t win.
Don’t dwell on it. Accept your losses, go for a run, do something else productive, but don’t waste your time beating yourself up over a crap day.
Some days just need to be over.
You Gotta Fight Em In The Streets
This one is my favorite.
To my dad, there’s nothing more respectable than someone who is “fightin’ em in the streets.” In other words, there is no substitute for doing the work. The tireless work that no one sees, the stuff people won’t thank you for, the things no one will recognize or know you did. All the “not sexy” parts of entrepreneurship.
This mentality also inspired the name of my virtual co-working space, The Arena. The Arena is a metaphor for “fighting in the streets.” It’s where you show up and do your best. Win, lose, or draw, you show up. You fight. You do your best.
My dad always said he’d never judge me for losing. He’d judge me for not having tried.
To my dad and all the other entrepreneurial father’s out there, Happy Father’s Day.
In his recently released book, Unscaled, venture capitalist Hemant Taneja writes about the next chapter in the Silicon Valley story. The book chronicles Silicon Valley’s transition over the last few years from an enterprise software-focused community to one developing platforms for all facets of society. Taneja, who has been a successful entrepreneur and venture capitalist in Boston and the Bay Area, uses several of his portfolio companies, including Stripe and Snapchat, as examples of the ambitious technology platforms that entrepreneurs are building.
The prequel to this story is the well-chronicled rise of “social, mobile and cloud” – or social media, mobile phones and tablets, and the migration to cloud computing solutions. Taneja adds two important links to this chain – artificial intelligence and Big Data. With new tools for AI and analytics, and an already reduced cost of doing business, writes Taneja, even early-stage Silicon Valley startups have been able to compete head-on with large companies in their core business areas. Instead of just developing software to make business more efficient, startups are becoming platform enablers of commerce using Big Data, analytics and AI to increase the speed of product iteration. Taneja uses Stripe, Snap and Warby Parker as examples of companies that have remained, by and large, extraordinarily product-focused, and were able to ignore other things that go with being a global company, such as infrastructure, human resources and operations, until they had to. They “rent” as much as they can for as long as they can.
When speaking with Taneja, he recognizes, as do most Silicon Valley veterans, that this model doesn’t yet work well for more complicated sectors, such as life sciences, space, hard sciences, or anything requiring the management of intellectual property, which defies iteration. While many scientists are trying to use Silicon Valley principles to speed drug discovery and share knowledge (pre-patent), there are vested interests and government regulations that prevent them from doing so. Today software for the sciences is still predominantly about efficiency. It will slowly move towards discovery, and according to Taneja, will help shift the biotech and pharma sectors from the blockbuster model to more narrowly targeted communities and populations.
The recent scandals at Facebook and Uber underline the growing pains facing fast-growing, unscaled companies that are readily embraced by consumers but unprepared for their responsibilities as a corporate actor. “Move fast and break things” might have been okay in the past, but not in an economy where a small startup is also a household brand. Taneja cites Warby Parker as an example of a company that has been thoughtful about its growth, and identified the right time to invest in corporate leadership, infrastructure and HR as it moved from a web-based retailer to bricks and mortar stores.
The book also provokes some important public policy questions that have yet to be discussed in Washington or state capitals. Taneja talks about Khan Academy, a non-profit online learning platform used by an enormous number of schools and families around the world. And yet, the tenets of Khan Academy’s successful use of technology to simplify and teach concepts has yet to be embraced in education policy or practice.
Likewise, the unscaled phenomenon and the rise of unicorns presents interesting questions for our oversight of the corporate sector. Is a unscaled company like Airbnb a monopoly? It has the largest share of rooms of any hospitality brand, but has minimal assets. It’s not like Microsoft or ATT – where market share could be measured in traditional ways and anti-competitive practices could be monitored and remedied with oversight. Its not clear how that our federal agencies or policies are prepared to regulate an Airbnb or Uber in this way.
Taneja talks about the importance of connecting technology, and it’s often-insulated workforce, with the values of society. He hopes the book leads to a discussion about responsible innovation that focuses on transparency, accountability and plain English explanations about technology and its impact. He calls for an “algorithmic canary” for bad actors in technology that sounds the alarm for industry and the general public before its too late.
I’m a baseball fan. When I lived in the Bay Area, I was a season ticket holder to the San Francisco Giants. And every baseball fan knows about Pete Rose, the preternaturally talented player who scandalized his sport when it was revealed he bet on baseball, including games involving his own team. Now, no one is contemplating allowing players or managers to bet on games in their own sport. But the Pete Rose story serves as a grim reminder of what can happen with sports gambling.
The trouble is that sports gambling is fun! The thrill of making some dough on your team just adds to the excitement of the sport. It’s also hugely profitable for business and government. So when the Supreme Court of the United States released their decision on Murphy vs. NCAA last week, the gambling-loving world rejoiced. SCOTUS determined that the 1992 federal law called Professional and Amateur Sports Protection Act (PAPSA) violated the Constitution’s anti-commandeering clause, thus striking down the law.
Mark Conrad is a professor of law and ethics at Fordham University, where he has taught in the School of Law and in the Gabelli School of Business. He’s also the director of Gabelli’s Sports Business Concentration, and is the author of The Business of Sports -; Off the Field, In the Office, On the News. Professor Conrad was kind enough to share with me some of his thoughts on this landmark decision.
1. Nothing’s Actually Changed…Yet.
The Court’s decision caused an avalanche of news and commentary, but, “At the moment, not much has changed,” says Conrad. The decision opened the door to huge change, but nothing is actually different yet. Conrad explains, “The court declared unconstitutional the Federal law that prohibits sports gambling. It did not sanction or permit sports gambling.” So what happens now? Conrad says no one really knows: “It is now up to the states, or the federal government, to decide.” Here’s where it get interesting!
2. The Devil Is in the Details.
“This story is only beginning,” says Conrad, who also has a degree from Columbia’s School of Journalism. “No state has enact a gambling scheme, although New Jersey may soon,” he says. The question is what happens next. For starters, Conrad asks, “Will states legalize it? And if so, which ones, and when?” Next comes the what. Conrad wants to know, “Will it apply to all sports or just pro sports?” And finally, the how. Conrad ponders: “What will be the license fees for companies wishing to do business in the state? Taxes? Anti-corruption measures?” The potential complexities are endless.
3. Congress May Not Be Done.
The Court may have struck down Congress’ PAPSA law, but that doesn’t mean Congress can’t still have the final word. Conrad explains, “The problem with PAPSA was it prevented states from exercising their powers. The law did not mandate a ban on sports gambling – rather, it told the states they were not allowed to enact laws ‘authorizing’ such gambling schemes.” The problem was the way this law was structured, but not the idea behind the law. In fact, Conrad says, “The decision did state that Congress has the power to enact a ban on gambling.” It’s possible Congress could throw some very cold water on all the excitement.
4. Integrity May Be an Issue…Or May Not.
The potential implications for the integrity of sport are fascinating. As with any gambling, there’s risk of corruption. Conrad recalls, “It has occurred in the past, notably in point-shaving in college sports.” But cheating isn’t a given. “In fact, the risk of corruption may decrease with a properly regulated integrity oversight,” Conrad explains. There are examples the US could look to for inspiration. Conrad says, “The UK model has worked well. The betting companies engage in analytics and metric systems to police suspicious gambling patterns and report these anomalies.” The key is not to over-regulate or over-tax it, which may push otherwise legal gambling underground.
5. This Decision Could Have Major Implications for State Versus Federal Authority.
“This is the underlying constitutional issue in this ruling,” Conrad explains. “Ultimately, it is a constitutional law case regarding state powers under the Tenth Amendment.” Here’s his plain-English explanation of the finer constitutional points: “PAPSA was problematic because it ‘commandeered’ states rights. Instead of banning sports gambling, it said could not enact laws authorizing gambling. It’s a subtle difference, but a constitutionally defective one.” This is an important decision in part of a greater shift. According to Conrad, “It continues a trend to give greater deference to state sovereignty.” It will be fascinating to watch as the complexities continue to develop.
Tax time is no one’s favorite time of year. But for small business owners, this year’s filing deadline at least comes with the promise of better rates ahead: Many of the changes included in the Tax Cuts and Jobs Act, passed by Congress in December, are going into effect.
As entrepreneurs, we should expect to benefit–at least, temporarily–from the new tax plan. My company, Manta, conducted a poll in January and found that 83 percent of business owners anticipate their companies will be positively impacted by the changes. Nearly as many, 80 percent, said they support the Tax Cuts and Jobs Act.
Some are already feeling the benefits of having more money in their pockets, according to another poll we conducted last month. 34 percent of small business owners said their business income had increased as a result of the tax reform, just three months into the year. 42 percent have already changed their budgeting or financial planning because of the new tax law.
It’s time to start preparing for the changes–if you haven’t already.
For the most part, the provisions of the Tax Cuts and Jobs Act that benefit small businesses go into effect this tax year — meaning they won’t impact the returns that are due this month.
The 58 percent of small business owners who have not yet adjusted their budgets should get started, however. While that big refund check may be a year away, it’s not too early to plan accordingly and make sure you take full advantage of the potential savings.
The first step is to review your company’s legal structure and determine how it will affect your taxes. One of the most important changes in the new tax law allows pass-through entities (such as S corporations and LLCs) to deduct up to 20 percent of their business income.
However, this doesn’t apply to certain professional services firms. Review your situation with a tax professional or attorney–you might be able to adjust your business structure to take advantage of this deduction.
Make the most of your company’s tax savings.
The Tax Cuts and Jobs Acts allows businesses to immediately write off the full cost of new equipment and other property, instead of depreciating the expense over five or more years. The new law also protects these write-offs from being rescinded in the future.
This is great news for business owners who want to invest in their growth. According to our polls, 28 percent of small business owners plan to use their tax savings to invest in new technology and 21 percent plan to open a new location or expand. The immediate write-off should make these investments (and your cash flow) much more manageable in the short term.
Just check with your tax advisor before making a major purchase–you could run into unforeseen obstacles. For example, the depreciation rules for “heavy” SUVs–those with a gross vehicle weight above 6,000 pounds–are different than for light trucks and vans. You want to be prepared for the potential impact on your taxes.
Streamline your expense tracking and tax prep.
Make sure you accurately track and document all business expenses. Our polls found that 21 percent of small business owners still use paper receipts to track expenses.
Think about that for a second. It’s messy and inefficient, and you risk losing receipts or miscategorizing expenses.
Hiring a pro is probably the best way to ensure that you take full advantage of the new deductions and stay on the right side of the law. The U.S. tax code is confounding to even the most experienced business owners–20 percent of poll respondents told us they didn’t understand all the deductions available to them. Whatever else Congress accomplished with the Tax Cuts and Jobs Act, they definitely didn’t simplify things.
Use a mobile application or accounting software to scan and save digital copies of your receipts and categorize the expenses. Then, when tax time rolls around, you can output a well-organized report or import the data directly into your tax prep software. And if you use an outside accountant or tax preparer, they’ll greatly appreciate you providing a digitized expense report instead of handing over shoeboxes full of paper receipts.
I was in the first 24 months of my first startup, a B2B services business. My team and I had been pursuing a contract at one of the highest-profile early stage companies in the United States, and to our amazement we actually won the deal.
Our revenues tripled overnight, and it put our company on the map. As excited as we were to win the business, had I known then what I was about to experience I would have managed things very, very differently.
Winning this deal nearly became a death sentence for my business. Here’s why:
Servicing the account consumed all of our resources.
Winning this deal was akin to the dog catching the car: we latched on to the bumper and quickly realized that we had zero control over what would happen next.
I knew that this account would require us to marshal most of our resources – cash, time and people – to deliver on our promises. Quickly we realized just how understaffed we were in order to meet expectations, and pulled nearly everyone into the mix; we more than doubled the company’s headcount within 60 days of the program going live.
Our cash funded the headcount growth, our new hires consumed all of our management time, and our inability to do anything but service this customer prevented us from developing the systems and processes that would have made the model replicable. Our lack of bandwidth also prevented us from winning any new business, which became problematic down the road.
This customer knew they were our biggest account by far, and they took full advantage of that dynamic. Every meeting request, every late night phone call, every weekend email barrage — we couldn’t say no.
Customer concentration put our balance sheet under immense stress.
I didn’t have the bandwidth to service new business, and I didn’t have the cash flow to expand the sales team to add more business. In fact, the last thing I wanted at the time was another account to service. This was flawed thinking, as I came to find out soon enough.
Our customer’s business was growing exponentially, and our relationship with them grew in lockstep. It was exhilarating, but it was during this time that I learned a priceless lesson about hyper-growth: it’s a cash furnace.
Our billings with the customer doubled, we doubled our headcount, and our payroll would also double. The payroll debits hit every two weeks, but our customer’s checks came every 60 days. Before I knew it, I was tapped out on a $ 1 million line of credit (personally guaranteed, of course) just to float our customer’s growing receivables. They weren’t aging more than 60 days, but they were growing so rapidly that my credit line couldn’t keep up. I nearly grew myself out of business.
Losing the business was catastrophic.
I received the call two years into the relationship at the contract renewal: this company was bringing these operations in-house. There was no hint that this result was going to happen. Over forty percent of my revenue evaporated overnight.
We hadn’t done the work to diversify the business (we were cash poor, after all) so I had nowhere to put all of these now-idled people. In one of the toughest days of my entrepreneurial career, I had to send 20 amazing individuals packing on little notice. It was one of those soul-crushing moments that hardens you as an entrepreneur.
About those receivables: the customer’s interest in paying us in a timely fashion for services already billed dropped precipitously after the cancellation. I spent the next six months fighting off the bank while I worked to get this now former customer to pay their outstanding invoices. On more than one occasion, I tapped personal savings (including a 401(k) loan) to make payroll. It was a decidedly not-fun experience.
Looking back on this entire episode, the mistakes that I made are glaringly obvious. Seeing only massive revenue gains, I failed to anticipate the negative impact on our operations. We didn’t add new customers, because we didn’t have the cash flow or bandwidth. I was naive about setting a customer credit policy.
Sometimes, landing the whale can be the worst thing possible for your business. In this case, the worst thing for my last company became the best hard-knock education as an entrepreneur that I’ve ever received.
I have talked with hundreds of people about starting a business. People often tell me would love to start a business–then follow up with a list of reasons why they aren’t able to take the first step. From “I’m not good enough” to “not enough savings” and everything in between, there are many reasons starting a business can feel impossible.
And I understand. Starting a business feels overwhelming. Though I knew from my first lemonade stand that startup life was for me, it took me years of hesitating before I finally took the plunge. Here are the seven common reasons you might be hesitating–and seven ways to overcome these fears.
1. I don’t know how.
The beauty of business is that you can learn everything as you go from web resources, books, and peers. Most libraries have a business desk staffed with knowledgeable librarians who specialize in helping people just like you get started with business planning. Many libraries have free online access to the Lynda.com training database so you can learn online free and at your own pace. When I first started my company, Google was my best friend–anything I didn’t know was only a few clicks away.
With increasing numbers of people working for themselves, chances are you know at least one person who is self-employed. Take them for coffee, ask them how they got started. It doesn’t have to be in the same industry. Ask for introductions to other entrepreneurs they know.
2. I’m too young or too old.
I hear twentysomethings say they’re too young and sixty somethings say they’re too old. But it doesn’t matter. The average American will change careers 5-7 times. That’s careers, not jobs. Age is truly one of the most meaningless measures of readiness. You can learn new things, you can adapt to change, and you can start a business at any age. You’re never too young or too old do change your life and start something you’re proud of.
3. What if I fail?
I fail frequently and you will, too. Get comfortable with the reality that 99 percent of everything you do won’t work. But the 1 percent that does work is magical.
4. My parents don’t support my startup dreams.
There are a lot of difficult dynamics at play when discussing your life choices with parents. But unless you’re asking your parents to bankroll your startup, it’s not really up to them. You only have one life, build one that you’re proud of without worrying about the opinions of others.
5. I don’t have the cash.
It’s a common misconception that you need a lot of capital to start a business. If you have access to a computer and the internet, you can start any number of businesses. I started my business with a $ 500 credit card loan and a hefty chunk of student loans. A lot of the software you need is available free and there are a variety of businesses you can start small. As you start collecting payments, you can grow your business.
6. What will my friends or partner think?
If your friends or partner don’t support your dreams, get new ones. Seriously. It’s hard to let friends and lovers go, but if they are only contributing negatively to your dreams, it’s time to let them go. Practice now by telling your friends about your business idea–they might surprise you.
7. I’m not good enough.
Stop it. You know you’re wrong about that. It’s going to be scary, but no one else is better equipped to make your ideas and dreams into reality.
Running your own business is a lot work and there are many stressful moments. But the real rewards of building something you’re proud of far outweigh the imagined obstacles. Now you’re ready to start a business–no excuses!
Video: Microservices and containers: Eight challenges to this approach
We love containers. And, for most of us, containers means Docker. As RightScale observed in its RightScale 2018 State of the Cloud report, Docker’s adoption by the industry has increased to 49 percent from 35 percent in 2017.
All’s not well in Docker-land
There’s only one problem with this: While Docker, the technology, is going great guns, Docker, the business, isn’t doing half as well.
For users, this isn’t that much of a problem. Whatever Docker the business’ future, Docker the technology is both open source and a standard. Docker could close up shop today, and you’d still be using Docker containers tomorrow.
Of course, it’s a different story if you have a contract with Docker. But, while that would prove annoying — not to mention an ugly mark on the balance sheet — it shouldn’t impact your business flow. Containers are now a well-known technology. Securing and managing them continue to be troublesome, but deploying and running them? Not so much.
Still, you should be aware that all’s not well in Docker-land.
What’s the business plan?
Docker’s problem is simple: It doesn’t have a viable business plan.
It’s not the market. According to 451 Research, “the application container market will explode over the next five years. Annual revenue is expected to increase by 4x, growing from $ 749 million in 2016 to more than $ 3.4 billon by 2021, representing a compound annual growth rate (CAGR) of 35 percent.”
But to make that revenue, you need a business that can exploit containers. So, Google, Microsoft, Amazon Web Services (AWS), and all the rest of the big public cloud companies, earn their dollars from customers eager to make the most of their server resources. Others, like Red Hat/CoreOS, Canonical, and Mirantis, provide easy-to-use container approaches for private clouds.
Docker? It provides the open-source framework for the most popular container format. That’s great, but it’s not a business plan.
Confusion is not what you want
Docker’s plan had been, according to former CEO Ben Golub, to build up a subscription business model. The driver behind its Enterprise Edition, with its three levels of service and functionality, was container orchestration using Docker Engine’s swarm mode. Docker, the company, also rebranded Docker, the open-source software, to Moby while continuing to use Docker as the name for its commercial software products.
Read also: Docker appoints industry veteran as new CEO
This led to more than a little confusion. Quick! How many of you knew Moby was now the “official” name for Docker the program? Confusion is not what you want in sales.
Mere weeks later, Golub was out, and Steve Singh, from SAP, was in.
Docker has never explained why Singh was brought in from outside to become the leader, but it doesn’t take a genius to see that core container technologies were becoming commoditized. The Cloud Native Computing Foundation (CNCF)‘s Open Container Initiative (OCI) standard turned today’s container fundamentals, including Docker containers themselves, into open standards. There wasn’t much value-add that Docker could offer its enterprise customers.
As Dave Bartoletti, a Forrester analyst, told The Register at the time: “The poor guy has to figure out how to make money at Docker. That’s not easy when a lot of people in the community just bristle at anyone trying to make money.”
The rise of Kubernetes
When your main value-add is container orchestration and everyone and their uncle has adopted another container orchestration program, what can you offer customers? Good question.
Docker has also been dealing with internal changes. Solomon Hykes, a co-founder and former CTO, was kicked upstairs to vice chairman of the board of directors and chief architect. Hykes, a controversy lightning rod, was also the public face of the company. He’s been far more quiet lately.
Red Hat’s answer was to buy Docker’s chief rival, CoreOS. That gave Red Hat not only its own container platform, but its own enterprise Kubernetes platform: Tectonic.
Docker really needs cash from customers
So, what should you do if you depend on Docker the company’s support? I’d look to my operating system and cloud vendors for help. After all, most of them, Red Hat, AWS, Google Cloud Platform, Microsoft Azure, SUSE, VMware, etc., already incorporate Docker.
Read also: Docker, IBM expand partnership
In the last few months, Docker raised another $ 75 million in venture capital. This brings the total capitalization of Docker to a rather amazing $ 250 million from ME Cloud Ventures, Benchmark, Coatue Management, Goldman Sachs, and Greylock Partners. That’s a lot of money, but I still don’t see how Docker will pay out.
Cash from investors is great, but what Docker really needs is cash from customers.
For most enterprise users, there are no real worries here. Docker or Moby, the container standard is both open source and an open standard. For Docker investors, well, that’s another story.
I wear the same thing every day. My banking is 100% automated. Once a year, I go to Costco and stock up on an entire year’s worth of essentials. My wife thinks I’m a little OCD (and you probably do too!) … but I firmly believe systematizing my life has made me more successful.
I run my life the same way I run my company: with streamlined systems and processes to guarantee success. You can’t go in blind and expect to land in the right place; you need to be planful, create a vision, and establish actionable ways to achieve your goals. It’s not for everyone, but I believe we all can benefit from implementing systems into our day-to-day lives.
There’s a System For That
Entrepreneurs spend so much time building out processes to keep their business running like a well-oiled machine. These systems are the nuts and bolts of everything the business does; without them, the whole thing would fall apart.
Few of us apply the same mentality to our personal lives. Most people are insanely busy all the time — myself included. I run four companies, I have three kids, and I value my personal time, too. The more tasks I can systematize, the more time I have to focus on everything that matters.
Take packing, for example. Most people make a new list every time they pack, but that’s just not efficient: not only are you wasting time on a repetitive task, you also run the risk of forgetting something. I travel a lot so I have a ready-made list that I use every time. This way, I don’t have to overthink it and the process is more efficient. Systematizing my life is about being purposeful with my time and never wasting a minute.
Systems Are Reliable — and Fixable
I’ve always believed in Michael Gerber’s sentiment, “People don’t fail, systems do.” Systems are meant to function cohesively and to set you up for success; if something goes wrong, it can almost always be traced back to a glitch somewhere.
I schedule my working days down to the minute — from the moment I wake up to when I go to sleep. This allows me to maximize my time so there’s never a second wasted, not even my commute: my assistant schedules all my phone calls for when I’m driving, so I can be just as productive enroute as I am in-office. (Don’t worry, I’m always hands free!). If I tried to squeeze calls into my office hours, I’d never get anything done.
It comes down to your mindset: when you start looking at each aspect of your life as a distinct system, it becomes easier to identify, address and streamline for the future.
A Systematized Life is a Simplified Life
Over the years I’ve learned that the less complicated the system, the more likely it is to work. That’s why our systems for our businesses are incredibly simple — as in, they fit on one page. Anyone who reads our operations manual can run a successful franchise. I apply this same philosophy to my life.
How’s this for a simple system: I wear the same jeans, T-shirt and Chucks almost every day. It’s my way of removing an unnecessary step from my life. The less time I waste on decisions like what to wear, the more time I have for more important things like my family and the business.
Maybe it’s because I’m a minimalist, but inefficiency is one of my biggest pet peeves. I swear it’s not just an oddball quirk; being efficient lets you spend less time working and more time living. After all, a simple life is a happier life.