Back to Familiar Territory
It’s been about five years since most of us at AppFive have had any direct connection with the microscopy community. We’ve been on an interesting path since the days when we felt very much in tune with the EM world as part of Emispec. So for those of you who might have wondered where we’ve been (maybe I should say “both of you”), let me fill in some details.
Many of the days over my 10 years with Emispec were wonderful. We got to interact with many, many interesting people from all around the world. We got to work on challenging, interesting problems and some cutting-edge research. We had a nice mix of software, hardware and microscopy.
But, believe me, there were difficult days, too. We had to try to interface with dozens of older instruments with sometimes sketchy documentation. We had to deal with countless versions of hardware and software with questionable (or just plain nonexistent) compatibility. And we had to try to innovate while still supporting all our existing customers.
Those of you who knew us at Emispec knew that we were dreamers — idealists. We couldn’t just incrementally improve our products and bring out an enhancement here or there. We wanted to really move things forward, push the envelope, and make a difference. So when the opportunity arose in late 2003 to merge with FEI Company, we saw it as a way to finally realize a lot of the dreams we had.
We thought that being attached to a column manufacturer would give us the level of access to the instrument that we needed to do the kind of control we thought was necessary. We thought that a company with the development resources of FEI would enable us to focus on our specialty, which was writing applications. And we thought that FEI’s huge customer base would feed us a neverending stream of interesting and relevant projects.
Well, somehow things didn’t quite work out how we expected. I don’t want to try to explain why here, partly because I don’t completely understand it myself, and partly because it’s too complicated for this limited forum. But I will say that for myself, part of it is that I found it difficult to work for “The Man” (a term popularized here by Steve Kim). It was pretty obvious to myself and to several of the other ex-Emispecers that we needed to get back to our small business roots after FEI Tempe closed.
So this is when we thought we would try something new, which came to be known as Enoetic. We laid out several requirements for the new venture:
- Software only – try to avoid past problems trying to support computer and detector hardware
- New market – for something new, try something outside of EM, and maybe outside of science entirely
- Make use of our unique skills – we thought we should do something that made use of our specialized scientific programming skills
- Try to make a difference
I can’t tell you the whole reasoning process, but we decided to create a consumer desktop product for organizing digital photos. What would be unique about it is that it would use the content of the photos, along with all sorts of sophisticated image processing and artificial intelligence, to automatically classify your photos. We saw all sorts of benefits of this product, the two major ones being that it would be fun and challenging for us and it would also solve a problem experienced by millions of digital camera users. So we went off for a year to create our product, called Photology.
The only problem with our plan was that after Photology was released, it didn’t generate enough revenue for any of us to make a living off of it. The product worked, received good reviews, and people seemed to be interested and seemed to like it. So what happened?
I think we made two fundamental mistakes. The first is that we didn’t see clearly enough the direction that consumer software was going, even when we started the project. It seems obvious to us now that consumers don’t want to buy software; they expect to get it for free (at least in the beginning). There are several business models by which you can generate revenue from consumer software (ad-based, freeware/premium, subscription services, etc.), and they don’t involve selling the software at first release. Not to mention that the number of hits you need to support any of these models is not in the thousands per month, it’s in the hundreds of thousands, or even millions.
But the main reason I think Photology didn’t sell is that we didn’t know our market well enough. Part of this is reflected in the first reason above, where we didn’t know how our market gets its software, how many hits we would need, and how difficult it would be to get those hits. I realize now that we also made assumptions about our market that turned out to questionable. Namely, we assumed that our customers had a problem organizing their photos, and also that we would give them a way they would prefer over how they currently do their organization. As soon as you can’t count on those assumptions, the product loses a lot of its value.
So what’s the moral of the story? I would put it most simply as stick with what you know. I realize that this doesn’t sound very attractive to aggressive, risk-taking entrepreneurs out there, but I think they would be more successful overall if they followed that philosophy. I don’t want to imply that you should never attempt things you haven’t done before – how boring would that be? But I have to stress that you should never base any significant portion of your business model or career choice on things with which you don’t have considerable experience.
So here we are back in our familiar territory. The microscopy world is small enough that one person can get a pretty good grasp on the entire market. Since we were thoroughly entrenched in that market for a long time (myself about 20 years), we know most of the people and companies already.
And there are a lot of good people and good companies out there. I’m looking forward to reconnecting with them.
