I spent some time at the studios of KRON-4 TV here in San Francisco on Friday evening, chatting with Catherine Heenan about that day’s launch of the iPhone 5S and iPhone 5C and answering reader questions. Thanks to Gabe Slate for inviting me on!
You can only put so many dents in the universe.
This week, Apple unveiled a respectable upgrade of its iPhone line.
So why do I feel so disappointed?
Maybe it’s because we expect so much from Apple. This is the company that brought us the first MP3 player that really mattered, the first smartphone to truly take the world by storm, the first successful touchscreen tablet, and the first ultralight notebook that people were really happy to use. And that’s all just in the past few years — reaching back further than that, Apple is responsible for the first all-in-one PC, the first commercially successful graphical user interface, and many more product design, manufacturing, and retail innovations.
This is what was so amazing about the late Steve Jobs: He drove the company to revolutionize industry after industry. Most successful entrepreneurs only get to change one industry, if they’re lucky; Jobs reinvented half a dozen.
It’s unfair to keep holding Apple to the same high expectations. After awhile, you run out of industries to reinvent. What’s next: Cars? The construction industry? Plumbing?
Not only that, even the best sluggers don’t hit home runs every single time they step up to bat.
Now, don’t get me wrong. This week’s upgrades look like excellent phones. The iPhone 5C has the same elongated, high-resolution screen of the iPhone 5, but it comes in a variety of primary colors and costs somewhat less than the original, at just $100 on contract or $549 off-contract. That should help Apple reach a bit further into the market for lower-cost smartphones.
Meanwhile, the iPhone 5S adds a much more powerful processor (the first in a smartphone to use a 64-bit processing bus), a substantially upgraded camera, and a spiffy new fingerprint sensor.
The company also said it was about to start rolling out iOS 7, the details of which it had fully explained a few months back, and which has been in developers’ hands since June. I’m underwhelmed by iOS 7, but it does offer a host of new features for developers and consumers — as well as some special “floating” effects that will help soak up some of that extra processing power. And iOS remains the most polished, coherent, and well-designed operating system available for a smartphone.
In all, it’s a solid upgrade to the iPhone line that should keep many current customers happy when it’s time to renew their contracts, and this might even attract a few new ones to Apple’s fold.
But the bigger issue is that Apple is facing an existential threat, and this week’s news suggests it has no clue about how to respond appropriately. Android now accounts for more than 80 percent of smartphone sales, while iOS is down in the mid-teens. This is a company that is slowly but surely losing the final stages of its war for the phone industry. Merely keeping the faithful happy is not working. Incremental upgrades are not going to stem the tide.
Consider the pricing of the iPhone 5C. It’s cheaper, yes. But as my colleague John Koetsier has pointed out, its unsubsidized price is still hundreds of dollars more expensive than competing Android phones. That makes a huge difference in countries where a few hundred dollars amount to a month’s worth of wages.
And consider the addition of the fingerprint sensor. I joked that Apple left out a key part of its technology diagram by not including the secret NSA backdoor. That’s a timely jab, given the recent news that the NSA has targeted iPhones for hacking and has successfully captured images from intelligence targets via the device. It’s also a bit unfair, since Apple assures us that the fingerprint data is encrypted and will make it out of the phone, let alone into the cloud — so until the iPhone 5S suffers a particularly hostile hack, that data is probably safe. But the real question is: Why? What is so great about a fingerprint sensor? It’s a nice, convenient way to unlock your phone — assuming it works more reliably than prior sensors — but it’s hardly redefining the rules of the smartphone game.
Finally, there’s the question of the iWatch. Many of us expected Apple to launch a wrist-mounted wearable device this week, but there wasn’t a peep about this in Cupertino on Tuesday.
Smartwatches are, for now, kind of a silly category. Fewer than a million of the things are sold each year, mostly to geeky tech enthusiasts. The biggest consumer entry into the smartwatch space was Samsung’s launch, last week, of its Galaxy Gear watch — a news event that got an extra bit of news hype when VentureBeat got an early look at the thing (you’re welcome, Samsung). But the Galaxy Gear is bulky, awkward, only works with Samsung phones (for now), and will probably cost about $300.
One of the reasons we were all hoping for an iWatch is that this is exactly the kind of product category Apple excels at doing. As it did with tablets, we all wanted Apple to come in and show us how to build a product that people will really want. No doubt Apple would come up with something more elegant, more svelte, and more desirable than anything that’s come before, and suddenly no one would mind spending $200 or $300 on a smart watch any more.
But Apple didn’t do that. There was no sign of a watch. So those of us in Silicon Valley are left watching, wondering, and feeling a little empty inside. Maybe it will show us something amazing later this fall, as CEO Tim Cook has promised. Maybe not. In the meantime, we’re left with these multicolored iPhones, and a growing sense that Apple is turning into a more ordinary tech company every day.
Jobs is gone. It looks like Apple’s magic is slowly seeping away now too.
I read the Times story on Amplify, Rupert Murdoch’s 650-person startup aimed at reinventing education via tablet games, with mixed feelings.
On the one hand, as I wrote in a piece today on VentureBeat, this is exactly the vision — shared by One Laptop per Child — first outlined in Neal Stephenson’s “The Diamond Age.” A self-guided curriculum, embedded in a digital book, that could teach children everything they need to know via engaging songs, games, and interactive projects.
On the other hand, like the Times writer, I have an urge to yell at the tablet-focused kids in the book: Go outside! Climb a tree! And in fact I probably do yell that at my own children, from time to time, when they are on the verge of disappearing into a screen-centric vortex of digital media.
But then it occurred to me that an interactive tablet is perhaps not the best way to use technology to engage children. It’s certainly not the only way.
Earlier this year, I visited the studios of Two Bit Circus, an exciting experiment in “STEAM” education (Science, Technology, Engineering, Arts, and Mathematics — the A is an addition that makes the acronym much more interesting, and inclusive, than the usual STEM). I wrote about Two Bit Circus and their STEAM Carnival project when it was just getting started on Kickstarter. The project achieved its funding goals, and the team has been busy putting together their act since then.
The project, in a nutshell, is to create a traveling “carnival” that would amaze children with steampunk- and Maker Faire-like circus attractions. Instead of slamming a hammer down to make a pellet ring a bell, the hammer would make an electrical arc rise up on a Jacob’s Ladder. Instead of a 3-ring circus with lions and clowns, the circus would offer the chance for kids to pit robots they’ve made against one another.
The Steam Carnival approach to educational technology is to make kids understand that tech is something they can build, not just something they use. I like that approach, and I think it’s increasingly important.
In other words, don’t just go outside and climb a tree. After you come down from that tree, figure out how to make a robot, a computer program, a musical score, or a digital video that you can show others. Put it together, wire it up, program it, direct it, edit it.
The tablet should be a tool for engaging creativity, not just a game that helps kids learn rote lessons mapped out by their state board of education. There’s room for both, I think. But the vision is not fully realized unless children are hacking into their tablets and writing their own software for it.
Or using their tablets to control battlebots.
Vineet Jain came to America with just $100 in his pocket — literally.
He laughs as he remembers arriving in the San Francisco airport in 1993.
“I had a single $100 bill, folded up in my shirt pocket,” he says.
Now, he’s running rapidly growing hybrid cloud company Egnyte — his second startup — and living the Silicon Valley dream. He is looking to buy a house somewhere on the San Francisco peninsula, planning for his company’s next funding round, and looking at schools for his almost kindergarten-age son.
Most importantly, he’s focused on taking Egnyte to an exit that will create wealth not only for him but for all of his employees (175 and counting) as well as his investors.
Egnyte is an interesting company, because its hybrid technology appeals to IT managers who are attracted to the flexibility of cloud storage solutions but are spooked about entrusting their company’s most intimate secrets to an outside party. As such, Egnyte offers a level of control and flexibility unmatched by most cloud providers. But as I got to know Jain through a few recent conversations, I realized his own journey as an entrepreneur is interesting in its own right.
For Jain, a successful exit is a deeply personal mission. Now in his mid forties, he is haunted by what he calls the “failure” of his previous startup, Valdero. But more importantly, he is driven by the memory of his father.
Jain’s father ran a successful iron and steel wholesale company in India, boosting Jain’s family into the uppermost echelons of society. As a young student, Jain went to a private school, the Modern School Barakhamba Road, along with the children of government ministers. But a series of poor business decisions sent his father’s company into a sudden decline and greatly reduced the family’s wealth. The family scrimped to keep Jain in the private school, but their lifestyle was diminished in other ways. Jain remembers asking to be dropped off several blocks from the school because his father didn’t even have a car — he took young Vineet to school on a two-wheeled scooter.
It’s clear he doesn’t want that kind of reversal to happen to his son — or his employees.
“I want to make it big,” he tells me. “I don’t want to sell too early.”
Coming to America
When Jain arrived in America, he wasn’t completely without means. A graduate of the Delhi College of Engineering, Jain had come to the U.S. with a job offer in hand from Bechtel. He took a modest room, arranged for him by the company, in a seedy hotel a few blocks from the company’s downtown San Francisco office.
After a year, he left Bechtel and took a job at KPMG, where he worked as a consultant for several years, rapidly rising through the ranks and pulling down an increasingly large salary.
Jain brags that his W-2 showed an income of $260,000 in 2000 — pretty good for a guy who was barely 30. But making money wasn’t enough: He wanted to run a company. So he left the fat salary behind and went out on his own.
He had little more than a PowerPoint deck outlining his plans plus a consulting contract to help seed the venture. That venture became Valdero, a company producing supply-chain management software to help companies manage their inventory.
Valdero had $7 million in revenue when One Network acquired it in 2005. The transaction made some money for Jain, but it wasn’t enough for an early retirement. More important for him, it didn’t result in a windfall for his employees.
One Network took the company’s customer list (including Motorola) and its technology. But most of the company’s 70 employees were laid off, and Jain himself left immediately.
“It wasn’t a great exit,” he concedes. “We failed.”
The second try
After that, Jain did consulting work for a couple of years, advising other companies on product development around Oracle Applications. But in 2007, he and his core team from Valdero came up with the idea for a hybrid cloud storage company.
Together with former Valdero partners Amrit Jassal, Rajesh Ram, and Kris Lahiri, Jain started Egnyte in 2008. Jassal is now the CTO of Egnyte, Ram is now the company’s vice president of product management, and Lahiri is the vice president of operations and chief security officer. Steve Sutter, another former Valdero employee, later joined Egnyte as its chief financial officer.
“It’s been a good team,” Jain says.
Egnyte has raised $32 million in three funding rounds from Google Ventures, Kleiner Perkins Caufield & Byers, Floodgate Fund, and Polaris Venture Partners. Its most recent (series C) round was for $16 million, which closed in July 2012.
While bigger startups often overshadow it in the cloud storage sector — Dropbox and Box — Egnyte’s hybrid technology is finding traction with companies that are concerned about maintaining more control over their files. It enables companies to store files locally or in Egnyte’s cloud, with complete transparency to the end users: Employees don’t have to worry about where their files are; they can simply access them from wherever they are.
For IT managers, many of whom are becoming reluctant to use public cloud infrastructures that could be monitored by government agencies or subject to unpredictable downtime, Egnyte’s hybrid proposition is a resonant one. (Egnyte investor Mike Maples is a strong believer in hybrid cloud technology — see our recent interview with Maples on hybrid clouds.)
Egnyte hasn’t published revenue figures, but Jain says that its bookings grew almost 2.5-fold from 2011 to 2012 and are on track to nearly triple in 2013, to between $20 million and $50 million. Egnyte also recently announced that its partner revenue (revenue generated by partners who resell Egnyte’s services) has been tripling quarter over quarter. And Egnyte says that companies share over 1 billion files daily using its technology.
Jain tells me that the company will be looking to close its fourth round of funding soon, perhaps as early as the end of September. His goal is to raise another $25 million.
A higher purpose
Jain appears to be the typical, successful immigrant entrepreneur. He sports an expensive watch, dresses well, and is the CEO of a company that is growing rapidly and provides a livelihood to nearly 200 people and their families. And Egnyte is hiring, as Jain’s personal LinkedIn profile declares.
But his ambitions are also balanced by a sense of purpose. If he becomes wealthy, Jain says, he already knows what he wants to do with his money: help provide medical care to people in India.
That’s because of his father.
Two years after Jain left for America, his father suffered a stroke. Despite the family’s relative wealth, the Jain family lived in a small town outside New Delhi — a place with no hospital.
The ambulance drove his father to a hospital in Delhi, a trip that took five hours. By the time they got there, his father had died.
As Jain tells me this story, he chokes up, almost starting to cry.
“I don’t want anyone to have to go through that again,” he says.
To that end, he tells me, he plans to donate 60 percent of his wealth to medical services.
His father, Jain says, was a collector of fancy fountain pens. But after he died, that collection of pens did nothing — it just sat there. Jain wants to do more with his success than collect pens. For his own writing, Jain uses a paper notebook and a pencil.
That’s not to say he is completely avoiding the trappings of wealth. He shows me his watch: A $9,000 Rolex. But as soon as he tells me its value, he also says that he wears it for business purposes, not to show off.
“I wear this because people look at it, in meetings, and they assume I must be smart,” Jain says. “But I don’t care about the watch. My favorite watch is a $35 Timex.”
I’ve only ever seen him with the Rolex, however.
A clear and focused goal
Jain still talks to his mother every day — she lives in India and runs one of the factories in a flourishing business his family has built over the last 15 years (Ratan Textiles, employing 3,000 people). His wife is Indian, and the young family visits India often.
But he waxes eloquent about the country that is his second home. (He became a U.S. citizen about seven years ago.) It’s a combination of America’s openness to strangers and its capability to reward innovation and hard work that gets him excited.
“In America, you can be in an elevator with someone and you can have a meaningful conversation, even though you’ll never see them again,” Jain says. “If you are smart and you work hard, this country will reward you. This is the smartest country in the world.”
The key being hard work. Jain clearly expects much out of his employees and executives, and he does not like to give praise to people simply for getting their jobs done. In his job, he’s all business.
While he’s not a touchy-feely manager, I’ve noticed in conversations that Jain has a keen awareness of what’s going on in his employees’ personal lives. For example, he told me with amazement about a recent employee who, despite being in his twenties, is supporting an extended family. When I asked him about a mutual friend who works in the industry, he made an insightful observation about that person’s personality.
But when one of his executives asked Jain to give a recent hire praise for getting up to speed quickly, he tells me that he refused. Why should he praise someone for doing their job? he told them.
In his private life, Jain remains focused on a singular goal: leading Egnyte to a successful exit that he can be proud of.
In fact, he tells me, Jain has a number in mind for that exit — a dollar figure that he wants Egnyte to be worth. Every morning, he wakes early, says his prayers (Jain is not just his last name: by religion, he is also a Jain), and then writes his number down on a notepad he keeps in his bedroom.
Every morning he writes the date, and next to it his goal. That goal is always the same number, day after day — although, Jain says, he’s revised it upward twice, as Egnyte has grown. To save paper, he fills each sheet with three columns before moving on to the next sheet.
And though he usually writes with a pencil, on this sheet, he uses a pen.
“So that it’s immutable,” he tells me.