YA @ Sadko Mobile

Cnet has a good article based on CTIA sppeches of Open Handset Alliance members citing danger of market fragmentation (i.e. every operator coding their own Android version)

Can carriers do it? Quite possibly! It is difficult to see doing business without locking user in 2-year contracts with locked handsets, especially if you are a US/EU carrier (in some countries like my native Russia, mobile operators only sell service, and all GSM handsets are sold free and unlocked, believe it or not).

Well, one man’s man is another’s lemonade. This can be quite a business - tweaking Android for carriers. Thus said, it is still better to avoid it: this really ruins platform adoption. The more apps, the happier is the end user about the platform.

See Apple with AppleStore - SDK mix. I bid $10K on Apple Store having 200+ programs at launch. 200+ games? Easy!

Says Google employee:

“we are focused on shipping the first devices”

So we ARE going to get Android phones this year, and it is not only manufacturers that work on it. It is Google too - and possibly more Google than manufacturers.

Great Android @ World Mobile Congress coverage at InfoWorld that counted new Andrpid devices:

Freescale, Marvell, NEC Electronics, Qualcomm, and Texas Instruments all had Android on show. Most of them expect to see Android phones based on their chips on the market in the second half of this year. The hardware ranged from bulky development boards with daughter cards sticking out at unlikely angles to more compact devices small enough to slip into your pocket. All were built around chips containing processor cores designed by Arm, a British fabless semiconductor company.

Of these, TI looks the best but is only an emulator, others seem to be genuine deployments but are circuit board devices only. No plastic bodies yet.

The Forbes challenged that Android is likely to have an impact, pointing to LiMo instead, but InfoWorld found support for the opposite:

NEC staff expressed surprise at the level of interest in Android, saying they expected more attention for the completed phones based on the Medity2 at the next table. Manufactured for NTT DoCoMo, those phones contained the version of Linux promoted by the LiMo Foundation.

For me as software developer LiMo is pretty useless: LiMo SDK is only promised for 2H 2008, and to get your hands on the code, you need to pay EUR 40 000 in membership fees… to hell with LiMo for this kind of money!

TheStreet.com found that Android speed is also good, very good! Which is even more important news if true:

From what I saw at today’s short demonstration, it’s very possible that Android phones could give Apple’s (AAPL - Cramer’s Take - Stockpickr) iPhone a run for its money. I was amazed at how well — and how quickly — Android worked on a phone with a simple processor. I can just imagine what it will be able to do on handsets with even more capable, faster, better and smarter processors.

And some good market intelligence:

Developing software for a new phone typically takes 14 to 18 months, said Ramesh Iyer, mobile Internet device product manager at TI. “Android cuts that dramatically. It’s a disruptor,” he said. Google is shaking the market in other ways, Iyer said. “Android is a single stack. You don’t have to go looking for third-party solutions. Suddenly, they have defragmented the whole Linux ecosystem into one building block,” he said.

“Only Linux offers the combination of modular extensibility, robustness and low overhead that is needed to meet the consumer demands of more functionality on cheaper and smaller mobile handsets,” added Kattilakoski.

Richard Wong of Accel Partners makes a relatively conservative prediction: “It will probably be at least one more MWC before we start to see Android phones in substantive volume. In my view, given the long cycles required to get new phones to market, the growth of Nokia N-Series, Symbian, and Windows Mobile phones will have greater impact than Android in the next 1-2 years.” My estimate would be that in 1 year WMC will be full of Android phones ready to go to market but scheduled for shipment in 2Q and 3Q 2009. In 2 years Android phones either have to be in the hands of at least 3-5% mobile users worldwide or the platform will perish in process. The cycle should be about like this in normal circumstances. I for one do not anticipate any revenue from mobile software for Android any sooner than in 2010.

Motorola and NTT released a number of LiMo models. Both are members of Open Handset Alliance. Diversification - Moto and NTT hedge their open source bets.

On the same day, Microsoft bought Danger. Danger is more an online sync service than a device, and I guess the device stands a good chance to be trashed or die in a corner - it is not WinMobile. I guess, MS just gave online emails, contacts and calendar of Google a nod of approval. However, backup often!

If you look at Sequoia’s business plan standard and encounter this:

Market Size

* Identify/profile the customer you cater to.
* Calculate the TAM (top down), SAM (bottoms up) and SOM.

- WTH is TAM-SAM-SOM ?

Do not panic. It is extremely simple:
Total Available Market - the absolute maximum that can be reached by the product
Served Available Market - the fraction of the total available market that is accessed by the product now
Share Of Market - the fraction of the served available market that the product controls
(see more —

http://windowmanager.blogspot.com/2005/05/wth-is-tam-sam-som.html)

For example, for Android software:

TAM is Android-based phones (non-phone devices such as GPS receivers are not included),
SAM is Android-based phones that allow to install third party software (some may be locked by manufacturers or belong to corporations),
and SOM … Well, given there are NO Android phones on the market yet, and even the Android is still in preview/alpha, this is zero for everyone. Or 100%, whiever you like. Opposites match where the market does not exist yet.

Marc Andreessen wrote some time ago a series of post on startup that I could have written myself:

there are many more reasons to not do a startup.

First, and most importantly, realize that a startup puts you on an emotional rollercoaster unlike anything you have ever experienced.

You will flip rapidly from a day in which you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again.

Over and over and over.

And I’m talking about what happens to stable entrepreneurs.

There is so much uncertainty and so much risk around practically everything you are doing. Will the product ship on time? Will it be fast enough? Will it have too many bugs? Will it be easy to use? Will anyone use it? Will your competitor beat you to market? Will you get any press coverage? Will anyone invest in the company? Will that key new engineer join? Will your key user interface designer quit and go to Google? And on and on and on…

Also:

The Pmarca Guide to Startups, part 2: When the VCs say “no”

The Pmarca Guide to Startups, part 3: “But I don’t know any VCs!”

The Pmarca Guide to Startups, part 4: The only thing that matters

The Pmarca Guide to Startups, part 5: The Moby Dick theory of big companies

The Pmarca Guide to Startups, part 6: How much funding is too little? Too much?

The Pmarca Guide to Startups, part 7: Why a startup’s initial business plan doesn’t matter that much

The Pmarca Guide to Startups, part 8: Hiring, managing, promoting, and firing executives

The Pmarca Guide to Startups, part 9: How to hire a professional CEO

This all is certainly not everything you NEED TO know, but definitely everything you MUST know (plus much more).

As I said, I could have written this myself, but I cannot write this much, because doing things you would want to use on your Android phone takes all the time you can contribute. But once I have my own story to tell, I will. Rest assured.

In the meantime, read Marc Andreessen, it is worth the time.

 It seems that Mobile World Congress in Barcelona will be full of Android news (even new SDK is promised to be released there)

British chip designer ARM (ARM.L: Quote, Profile, Research) will demonstrate a prototype of Google Inc’s (GOOG.O: Quote, Profile, Research) Android mobile phone platform in action next week at the world’s biggest wireless fair, a source close to the company said.

It was not immediately clear on Thursday what the working model that ARM plans to show at Mobile World Congress in Barcelona would look like or who would supply the parts.

Google plans to deploy phones and services using the Android platform commercially in the second half of this year.

 Research firm Strategy Analytics has estimated that Android will be in 2 percent of smartphones this year.

What really surprised me is new market data. 2% of smartphones! This is more than current iPhone installed base. I personally feel this is an exaggeration but I might be underestimating the momentum.

When I just started Sadko Mobile, I thought that to deal with my investors, all I need is a sample convertible note template from http://docstock.com My bank, however, persuaded me to hire a law firm. It is not as awful as it sounds. Established law firms can offer you a deal to give you some free service (usually $15K) in exchange for a warrant to buy some shares or simply for a promise to pay once you get revenues or venture funding. A very good deal.

Docstock is a great site, however now I understand that it has its own limitations. You need to really understand the legal process side of financing to pick the right documents there. If I just took a template without knowing what other documents must accompany it, I could have been in trouble. The stack of document, I have now includes in addition to regular incorporation documents (bylaws, incorporation certificate and tax id application):
- Convertible note
- Convertible note purchase agreement
- Board action authorizing the company to issue a note
- IRS forms for investors to confirm they are accredited
This all you need to have to properly close the angel financing. What are the risk if you do it improperly at start? The least is that you will spend several more weeks or months in due diligence doing housekeeping. The worse - the venture funds will see the legal mess you created and pull back the term sheet, and you will be left with good company but without investors, left to die in the cold. And the worst (God forbid), someone will sue you.

Plus, there is a document called “Founders’ stock purchase agreement” also full of uncommon things, and “Indemnification agreement” that is fairly much beyond human comprehension. More in some other post.

Uh-oh. My startup just hit its first major challenge. Google Android Challnege deadline was extended by 6 weeks to April 14 !

We’d like to let you know that we are extending the submission deadline for the first Android Developers Challenge to 14 April 2008. Based on the great feedback you’ve given us, we’ve made significant updates to the SDK that we’ll be releasing in several weeks. In order to give you extra time to take advantage of these forthcoming UI and API enhancements, we’ve decided to extend the submission deadline.

In other words, upgraded (with many needed features) SDK is weeks away at best. That means my business strategy must be modified and my product roadmap must be modified. Better and more complex products, different customer focus (maybe), different budget and benchmarks - start steering off to the new course.

Welcome to the real world, Mr. Ammosov.

PS. Other developers also face similar strategy challenges.

http://groups.google.com/group/android-developers/browse_thread/thread/e02649f553aace46?hl=en
http://groups.google.com/group/android-challenge/browse_thread/thread/d52a5f17d3a71136?hl=en
http://groups.google.com/group/android-challenge/browse_thread/thread/c5985763892219a5?hl=en

Android got some critical press last week - in Business Week:

Still, the success of Android hinges on Google’s ability to get the platform in better working order. One developer who really needs help is Peter Wojtowicz. He and several collaborators are using Android to build a cell-phone game called Wi-Fi Army, where competing teams would hunt each other using Google Maps and location data from the Wi-Fi hotspots nearest the rival camp’s cell phones. Upon finding an enemy, a player uses the phone’s camera as a rifle scope to shoot.

But Wi-Fi Army faces a more significant hurdle than enemy bullets: Android doesn’t yet support Wi-Fi wireless technology. And the lack of support for Bluetooth means that Wojtowicz and his co-developers can’t get going on a feature that would enable team members to strategize their moves using wireless headsets. Writing the game application “is not easy,” Wojtowicz says. “But we are looking at it in the long run. Google has a lot of money to burn.”

and in San Jose Mercury News:

But Google has yet to deliver. “What have they been doing for three years?” said Sean Byrnes, chief executive of Flurry, a San Francisco start-up that offers free e-mail software that makes regular mobile phones more like smart-phones. … For the first time, developers are griping about Google the way they used to complain about Bill Gates & Co. The search giant’s phone software is buggy, they say, and lacks key features.

In fact, Android lacks more than that. Even photos in contacts are not supported yet. For CallFreq, for example, we had to create our own database of associated photos - but Android’s original dialer does not display photos while showing call progress interface.

The press criticism in my opinion is exaggerated. Too much, too soon. But the risk of slow Android development is still real.

We can provide Google with extended time credit on Android development - we are in this business ourselves, and we realize how hard it is. But we still have to deliver critical functions to our customers, and if the OS development lags behind, no one will be happy. Android is a huge investment for Google, and while Google can afford wasting it, it does not mean it should.

So, Google should keep steady progress if it really committed to become a mobile space leader. There are no “years” or “months” in mobile space, rather “weeks”.