The following video transcript is generated automatically by a computer algorithm that learns and gets better on a daily basis. Please accept our apologies if some content below doesn’t make sense:
Good, thank you. We’ve got three topics today that we want to talk about, a couple of sort of more general newsy topics and something that’s a bit more specific to product development. So first off, a big theme that I’ve seen on Twitter in other places and a lot of sort of discussion forums and things like that is the question of will cities survive this crisis that we’re currently in? And so what’s been going on, particularly in the States and particularly in. It would seem San Francisco and New York, there’s a lot of people in the sort of venture capital and Start-Up and sort of starting business entrepreneurial scenes who are all saying, oh, I’m going to leave the city. I want to find somewhere else to live. That’s cheaper, better, less crowded. It seems to be a function of a couple of things, one is people are obviously, you know, stuck at home with all the stuff that’s going on. People are, you know, working from home. There’s a lot of remote work going on. So a lot people are now thinking, oh, OK, well, you know, I don’t need to live within commuting distance of work anymore because I can do it remotely. So there are other places in the country or in other countries where I can live for a sort of a a better and better living space, better sort of lifestyle, far cheaper than I’m currently paying in New York, San Francisco, where we might be where rents are sort of infamously through the roof and going crazy. And there’s been a lot of opinion pieces, particularly the last few days. James Elst, you write one about will New York survive this current downturn? So there’s a lot of doom and gloom that’s sort of coming in and different opinions and things that people are thinking about, why it’s happening and what might happen. What’s your opinion on this?
I definitely think it’s a trend that’s gone on. I think COPD accelerated, but the prices were already too high by way too high to a point that if rent was too high, then I recall Peter Deal saying that he would want to invest in San Francisco any more because most of his money was going to landlords. So then like him, Needham, Mass. They moved to Los Angeles. But even now, they’re moving out of Los Los Angeles. I think the many people I mean, they’re high profile case of Joe Rogan. Top podcast down in the US. He hasn’t been living in California for 20 or 20 or plus years, I think. And now he announced he’s moving to Texas. He well, he’s sharing this issue with many other people saying it’s overcrowded, like Los Angeles, like 20 million people, I think. And, of course, it’s getting difficult to manage that size of a city from a traffic point of view. People on the street living on the streets as well. And and they ramp up taxes. See, that was the solution. So then people say, how long? But why? What I’m doing here. So and then other places. Also, the Kovik put pressure on the system to show why the fragility of some policies. There was this high profile case as well, were saying to us, there are very outspoken on this issue. We’ve quarantined the quarantine of people, you know, forcing people to stay home and businesses not to open at the same time.
So that’s yet has been widely criticised by many. And from Fruchter point of view, the hyperfocus was in a mosque trying to open their chicken factory in California, and it’s not allowed. I think he end up doing it anyway. But now he plans to launch a second tier factory in Texas. So not in California. Maybe he will start hanging out more in other states as well. So what do you have those on those are like two big cases, high profile cases that can definitely be, you know, influence other people doing so. Then you have there has been a trend for quite a while, less wealth for off of ally, high profile hedge fund managers or just financial guys from New York moving to Florida because of Texas mainly as well. They’ve got to beat New York at any time with a flight or flight. They live in sunny Florida where they pay, think it’s like six percent or you Bence, of course, on the structures they cut.
What is a maximum 10 percent worse? California, New York.
You will be looking at half of your income plus. Oh, so, of course, higher cost of living as well.
Yeah. And it’s packed so and especially so leaving aside those, you know, high profile business moguls, just a regular guy having a family or not even having a family. Yeah. You can make if you have more space brawly, you can choose swell. You have more options if you can work remotely. So Facebook announced is going to encourage Masterfoods workforce to work remotely. So if big corporate star, big, big and corporate starts encouraging that, then you have all these critical mass of people going to other cities to. That they believe value not their income, because they can keep it properly. But other stuff die, whether that you. How much space can they afford to buy a house? How schools like education, et cetera. So whereas nowadays it was more what did the order of priorities was work. And I get a job on then. How close can I leave from there? Or even from a transport link point of view and then allegation. Then like their lifestyle was at the very bottom thoroughly because you’ve got you don’t get to choose or you didn’t. But maybe now you can. So I personally moved after living 10 years in London to Barcelona and even not into Barcelona, but a little bit outside of Barcelona. And I’m talking with our entrepreneurs and people before making that move.
They highly appreciate that saying. Yeah, I think it’s a good move. A few can I sleep commuted to London to Kobe, but still four kids have more space. Different whether it’s. Yeah, it could be important. So it depends on one. Maybe we don’t like the beach or people value other things, but probably at the core everyone wants to pay less and have more space. So yeah, I think cities would survive. But I think they will need to re adapt properly. That hype can keep going forever. But let’s see. I think also, if globalisation is that safe, it reached its peak.
That can make can change things as well because guy really international hubs like New York or London, they can get away with, you know, high rent because it’s not even their own market like the US, UK. But the global demand for. For being in those cities for whatever reason. So then they can. They could. Now get away with it. But if locals are not that interested anymore, they can find another way of working remotely. And then it’s harder for international citizens to come on living to those cities because of visas or whatever, then. Yeah, I think situation should normalise. Actually not it will not be probably a crisis. It would just normalise. But we’ll see.
I’m not so sure that global demand will decrease that easily. So yes, there will be many factors playing at same time.
Someone made quite a good point in one of the Twitter threads I was reading about it. So people were making all of those kind of arguments you just made there in terms of, you know, the cost benefit analysis has changed. So, you know, the way the system was sort of set up previously was to you know, there were pros living a citizen. There were cons living in cities. And some of those pros have been knocked off because you can’t do anything at the moment. And a bunch of the cons of increase because there’s more problems. And so a lot of people are doing the maths and going elsewhere. But someone made a really interesting point, which stuck out to me. And they were saying.
You know, cities grow by usually by an influx of young people, right? So you find so young people move into the city for work. And then older people tend to move out to the suburbs and other places when they get a bit older, start to have families and their cost benefit analysis changes. Right. And that actually, you know, the thing underpinning the influx of people to the city is jobs and things like that. But also fundamentally sex. Right. If you’re a young person and you’re single and you’re looking to find lots of other young people in a similar frame of mind and to, you know, find partners and do whatever, then you want to go somewhere where there’s a decent proportion of those people to find your best possible partner. And so in a lot of people do do that, either consciously or subconsciously. You know, that’s that’s a big tick in the pro box for the young people. And that’s not going to change. Right. So you still want to go where there’s a big concentration of people that you’re interested in particular when you’re young and single. So that and a lot of the people who are saying, like, oh, I want to move out is are actually sort of at the stage in a situation of life where they would typically be moving out anyway. But this is just another different set of reasons for doing it as opposed to the normal ones.
Yeah, I think God. Yeah. The night life or just clubs and bars. It’s very important in the city. And definitely people will still be interested on that, but not at all price.
They come find secondary cities like student cities, you know, like maybe not London, but maybe Oxford or Cambridge or maybe other cities. Yes. So. Yes. We’ll see. But, yeah, definitely that’s. I don’t know. Maybe it’s better for online dating sites, but that’s a different podcast.
Yes, we are dating. That’s something else entirely. So I’m talking about entertainment. If you could consider what we’re just discusses. Entertainment. Another thing that’s been sort of big in the news over the last week or so has been the fight, outcall fight between epic games and Apple. So epic games are a very large company who make the very popular game fortnight, amongst many other things. And basically what’s happened is, is that Apple has banned the sale of fortnight or their distribution a fortnight on the App Store. And the reason being is because Apple, for every app that’s on the App Store, if there’s some sort of monetisation associate with that app, then Apple charges like a 30 percent cut or fee on any of the income from that. And so epic games argument is that that’s sort of like it’s a monopoly kind of distribution channel. And that Apple aren’t really adding too much into the mix in terms of distribution. They already have a massive distribution outside of the App Store. You know, they sell plenty on consoles and pieces and other platforms and things like that. So why should they pay the 30 percent tax? And they’re also they’re not the first ones to complain about this a few weeks ago. The base camp people were complaining of the same thing for their new email product called Hey. And so basically, EPIC has has forced this issue by doing something that was going to force Apple’s hand. Basically, they they were doing these in in-game virtual currency that you could buy. And so they were changing the way that work, which meant that Apple couldn’t get their cut. So then Apple turned around and stopped it, which then epic it obviously pre pre created this lawsuit that was just sitting there waiting for Apple to sort of pull the plug before they sort of rolled out, complete with a massive PR push where they had a spoof Apple 1984. And all this kind of stuff. So they’re probably well prepared for it. And then they did they turn around, did exactly say Google, because, you know, the Google App Store play or whatever it’s called on the Android platform, that’s the same thing. So they’re suing them as well. And it’s all coming to a massive head. And I think it’s basically it’s been characterised as the fight between the two teams. So there’s Tim Cook of Apple on this, Tim Sweeney of Epic and Tim Sweeney. Tim Sweeney is a very sound like nerdy programmer guy, and he’s characterising all of this as a sort of freedom of software and freedom of. Freedom from Monopoly and sort of closed ecosystems. But there’s obviously a lot of money behind both companies. You know, Epic Games is a multibillion dollar company. Apple is obviously, you know, at various points either the largest or second largest company in the world. So there’s a lot of money on each side. But I think there’s some fairly important kind of economic, straight, philosophical kind of arguments to be made on each side here. What’s what’s your take on this?
Yeah, it’s a very interesting dynamic that’s going on. Yes. If you’re pragmatic from capitalism point of view, Apple has the platform so they have the right to charge for dad. Whatever they want, if they abuse on what they charge, then people may end up going somewhere else. So that’s the playing very, you know, minimalistic and simplistic argument, which is fine. But what they are, I think fortnight, as you said, they were well prepared. So they know exactly what they are doing, that 30 percent tax. It’s so much money that for them, like you and going on out, they can afford to go on a big lawsuit with them. Big five long term it will be when cheaper than paying that tax. So I think problème yet regulation would need to catch up. And there is all these. Well, not like I think we talked about that. She will break up the monopolies on big tech. So it was like one month ago so that they were in Congress. So it’s not a fortnight on alone. Yes. So many others are feeling this pressure, let’s say.
So were there grey lines start merging? So I would I would say my my black and white opinion, Apple is right. But then there should start being some grace on regulation for that, because then you have all these cases were, for example, fortnight. They as you said, they’re worrying consults or they have their own website or whatever. So then they have customers that they source those customers first and then it happens that those customers have an iPhone.
So about those customers who are paying for denied already in other decision channels and then just for the sake of convenience. They want to allow them to also play on their iPhone.
But it’s arguably the saw. Apple is not bringing them new customers or new revenue, but it’s aiming to take a cut of 30 percent off the existing revenue, which came from somewhere else. That’s a bit insane.
You know, like probably you could go on a grey line there and say, OK, any after they download the app, any light in app or additional revenue that they are generating, you will need to pay us 30 percent. I think that will be a fair claim. How you track that.
Yeah, that’s also said that is what that is what they’re arguing about at the moment. So you can download Fortnight for Free on the App Store and you can then buy upgraded stuff from within the app stores in purchases.
And it’s the upside eight percent that they’re arguing over.
Yeah. I think for that there will need to pay. But if the customer let’s say if they are on subscription, that it started outside the ecosystem, I’m not so sure. So, yeah. And there is lots of it will take a while. Probably others would join. For sure.
It will be interesting to see what’s the end game of for fortnight.
But whatever they get a better deal, let’s say, which is clearly what they are looking for. Probably others will try to get well.
So yeah, it’s know I do say I do think it’s very it’s very related to the discussion that we had about sort of breaking up the tech monopolies because. You know, the Apple App Store platform is a it’s a de facto monopoly on their own ecosystem, right. So, like, that is the only place if you if you want to sell to anyone with an Apple device, that’s the only place you can sell it through, which is, you know, fair enough. But when the apple market share gets above a certain kind of gets to a majority of devices or a majority of stuff, then there is an argument to be made. A way then becomes a de facto monopoly in general. And then there’s an argument about, you know, well, actually is that, you know, if you’re a small player and you’ve got a platform, then then if someone wants to play on your platform, there’s benefits to them, then obviously there’s a quid pro quo. Okay, you should you know, you pay us for access and then you choose to pay us for access because it’s beneficial to you. As you said, because there’s you know, there’s more customers on that platform or you benefit. And so it’s a win win in both directions. Right. Whereas with the Apple stuff, it’s now becoming because they have they have such a large market share that it’s now becoming it’s just a straight up rent seeking tax to to get involved. And, you know, usually when something like that happens, then that’s that’s you know, that’s getting into the legal definitions of monopoly monopolies. Right. Where it then becomes, you know, regulators or government or whatever need to need to start thinking about what is the Apple App Store or the ecosystem. Actually, a public commons, i.e., is something which the majority of people have access to. And so therefore, it needs to be regulated differently to know that, you know, that’s that’s effectively that’s almost a mark of success for Apple. Right. You know, they’ve become so good that they are now like the de facto way of doing things. And so therefore, they they do need to be sort of treated in a different sort of regulation, should you. So epic. Now, another point about epic.
So they themselves, as well as selling fortnights, doing stuff like that, is they themselves are a platform. So on P.C. games, there is if you want to buy a piece of game lives, you can go to a store or Amazon, whatever. But the place that most people get their games from is a platform called Steam, which is run by a company called Valve out of Bellevue in Washington, US. And they’re a platform where you can go in there, you buy and download games like digital games. And most people who play games on PCs, that’s where they mostly get their games and they charge 30 percent fee for selling stuff on there. So epic a couple years ago set up their own store called the Epic Store, and they charge 12 percent. And so epic set up in competition to steam as a platform so that people can come along to their store. And, you know, and they only charge twelve percent. So there they were actively trying to sort of disrupt this platform as it existed on the P.c. And they’re getting a bit of a fight back from people saying, well, you’re a platform company yourself. You know, they have they create and market the underlying game engine, which one of which sort of drives 50 per cent of games on the planet. They’ve got their own store platform on p.c, et cetera, et cetera. But their argument is, well, the P.C. is an open platform. I you don’t you don’t have to distribute your game through our store. You can choose to do so. You don’t have to like, you know, anyone can produce a game if they’ve got the sort of programming mouse and sell it in however they want. And someone else can get it, buy it and get it onto their P.C.. Whereas with Apple. By definition, you have to go through this marketplace in order to get it on your device. There’s no side loading, there’s no other ways of doing it is literally it has to be through that direction or nothing.
I think it’s still it’s I still if I go black and white and you respect the underlying principles of capitalism, have things. All right. I’m a meritocracy. So then are police, right? Basically because they build the hardware and so forth. People you start. So then if you don’t want to know, platform, go somewhere else. And by the way, they charge the same high school as many others. So they can. They can also argue, go further and say fortnight became really popular and grew because of Apple’s distribution. At some point and now that they grew enough, they don’t want to pay us much. So it’s a battle between the big boys. But I think it’s so you have even even though I think Apple is right from a technical point of view, potentially black and white being very, very simplistic, I think fortnight is doing a favour on behalf of everyone else. So you need one of those big guys to stand up to it. Otherwise, no one can do anything. So then if there is someone that they can do it on, then if you are up a bit more of these cases, like two, three, five, 10 of those big players, they can do something about it which ultimately will benefit the end user. So, yeah, I think that it’s interesting. So I have, you know, my support to the underdog in this case for the oral benefit, even if I don’t think it’s right.
Absolutely. I happen to agree. So next up, we’ve got a topic with a bit more specific about sort of start ups and entrepreneurism and product management. So if you have some sort of products, particularly some sort of digital product like a sassed, this is quite applicable. But actually it’s applicable in some service industries as well. But I saw a couple of tweets that touched upon customer feedback and customer requests for features of your product. Right. So I’ve run a couple of products in the past. And what you often get is people on the support, on the live chat or e-mails or whatever or in sales conversation, who will turn out to say all your stuff’s great, but it really needs this extra thing over here. This feature is missing. This feature or another classic one in sales is like, I would buy this if it had this other thing. This extra thing.
And you get it all the time, and especially when your, you know, living month to month with your cash flow and you’re in this of early stages, the growth stages of your Start-Up or your business, and you need that money in through the door. The temptation is to say, right, well, OK.
The customer is always right. Let’s. Engineers, please take this feature requests and build it and stick it in. Let’s go, because then we’ve got another sale. So it’s worth doing and all that comes up. So there’s a couple of guys on Twitter who are tweeting about this. Had a couple of different views on the same kind of topic ones, Ben but Bradberry. And the other one was Tyler Trinkaus, who’s Earnest Capital.
And Ben Bradberry says, if you want fluffy products, ask customers what features they want next. If you want useful products, ask customers about their biggest pain points. Future features a speculative present. Pain points equals reality. And so what he’s describing there is, is that. Customer like the place where customers are coming from, when they’re asking you for features, is they have underlying issues or underlying problems, problems that they need solving. And then in their heads, they go, oh, what a way to solve this problem is this. I’m going to ask them for this. That makes total sense. But what he’s saying there is, is that the customer doesn’t necessarily have the full picture of. What other people’s problems are, whether this is a general class or problem, can be solved in a broader way or whether this is very specific, solve a problem just for this particular customer. And that if you as this sort of customer support person or the product management kind of person can dig a bit deeper and ask the deeper questions and get to the underlying problem, then that gives you a chance to solve a deeper thing in a better way for more people or to bring more value to your customers and also add more value to you. And then solitariness was talking about it from a slight different direction. So his tweet was, oh, my customers are asking me for feature X, should you build feature X question mark. So anyways, if you’re getting a lot of people asking for the same thing, should you build it? And he had quite an interesting framework on how to approach that kind of problem. And his approach is like data driven. So he’s saying, listen to your metrics. Is not having feature X effecting one retention or customers cancelling because the feature doesn’t exist to growth? A customer is not signing up because the feature doesn’t exist. And three annual average revenue per user, would existing customers pay more if that feature existed?
And I think that’s quite a good mental framework to dig in particular with your team because, you know, you’re going to be making decisions in coordination with your UI, you X people, your engineers, your growth people, whatever it might be. And that gives you a really good framework to say, right, okay, we might have ten feature requests for 10 different features that a lot of people are asking for. Which one do we prioritise? Which ones do we do versus not do?
And so if you go through and do do, your best guess is by under retention grace, an average revenue per user, then that gives you a framework for basically prioritising production. So you can you can make sure you’re working on the thing that’s got the biggest bang for back up front. And then gradually, what you write down the list and some things you could give up completely. So myself, I know that you’ve had various sort of products in the past with an almost infinite wish list of feature sets. What’s been your experience?
Yeah, I think you hit a critical point on that.
It’s not that lots of customers are asking just one new feature you need to prioritise because you have a ton of box that you need to fix. So you have a limited team of engineers also. You know, it’s everything is always urgent. You know, Start-Up as well.
So then then you have limited resources and then you have bugs. Some of them are like suburbian. So that’s for sure. It in some time, then you have less urgent bugs and then you have even features that are not made for your customers, but are for internal processes like how to improve, become more efficient. So it maybe will not bring you safe, but it will reduce costs. So that’s another way of looking at it. So then and then you have all that customers are requesting. So from from there, from all the things they are asking, I think that mini roadmap or a checklist on it, is it affecting like retention on sign ups sales? And if it’s not, I will put it on a low priority list. Yeah, for sure.
Thank you very much for listening. We’ll be back next week with some more nuggets of knowledge. In the meantime, please cheque out our YouTube channel, which is where we post this and our other podcasts. You can search for net workers, two words or you can find the link in the show notes here. If you’re interested in a deeper dive into all things entrepreneurial, including more detailed information, help mentorship and courses, please do cheque out our Web site, which is at Networkers Dot Co. See your next on sale. But.