Software Engineering Daily

The New York Times makes most of its money off of subscriptions. Facebook makes its money off of native advertising. Hacker News is funded by Y-Combinator. Each of these business models creates biases in the information that gets promoted on the respective platforms.

This is why I like to know the origin story and the business models behind the publications that I read. Published content is shaped by the profit motive of the publication.

And yet, last month, I repeatedly found myself reading high quality content on a Medium publication that I did not know the origin of: Hacker Noon. Hacker Noon is a popular Medium publication that syndicates curated content written about software.

Let me explain “syndication.” Imagine that I just spent three days on a Medium post about functional programming, and I have zero followers on social media. How can I get people to read awesome post? The answer is syndication. I can submit my Medium post to Hacker Noon. This gives me free distribution, and it gives Hacker Noon free content—a win-win relationship.

But why was it worth it for Hacker Noon to spend time curating content? That syndication process takes time. You have to read through lots of submissions, sometimes you have to send it back to the author to have it edited. And this is all to build a following on Medium. I have not heard of Medium being a profitable platform to build a business.

It’s worth pointing out the difference between Medium and WordPress.

On WordPress, this model of curated syndication has worked to massive success—for example, the Huffington Post and TechCrunch. These businesses make millions of dollars from advertising networks, because they are built on WordPress, and WordPress is an open model.

A publisher on WordPress can install plugins that serve ads from third party providers like Outbrain and Taboola. A WordPress site can also install any kind of data collection scripts, to gather data on visitors, and sell it to the highest bidder.

The lack of third party plugins is the blessing and the curse of Medium.

Because there is no third party ecosystem, reading content on Medium is a beautiful experience. The page loads quickly and predictably. There are no random scripts that are blocking the page as they hog your browser’s resources. When you go to close the page, there is never a popup that asks you to subscribe to a newsletter.

When I read content on Medium, I am not getting slapped across the face with ads for reverse mortgages and açaí berries. I am not being tagged for retargeting. It’s a beautiful experience. But Medium seems like an ecosystem that would not allow for the content syndication business like Hacker Noon.

I wanted to know who was running Hacker Noon, how the business works, and what it says about Medium as a publishing platform.

Hacker Noon turns out to be part of a network of Medium publications called AMI. AMI’s network includes sites like Art + Marketing, Future Travel, and Fit Yourself Club–all of which are distinct syndication platforms. David Smooke is the CEO of AMI, and he joins this episode to explain how his business works, how he has scaled the content syndication business, and why he is betting on Medium. It was a detailed look into the state of online publishing and where it might be headed.

If you don’t read Hacker Noon already, one article to start with that shows off the quality of content is Learn Blockchains By Building One. I interviewed the author of that article, Daniel Van Flymen, and it has been one of the most popular episodes of Software Engineering Daily.

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The values system of a company guides the actions of the engineers who work at that company.

Some companies value open communication and a flat organization where anybody can talk to anyone else. Other companies encourage hierarchy and secrecy so that employees are focused on their specific section of the company.

Some companies take themselves seriously and have a work environment that is as stoic as the military. Other companies pride themselves on having a good beer and a friendly, laid back atmosphere.

When company values are properly defined, the values can be used as reference points when making decisions. At Amazon, one of the core company values is “bias for action.” As an engineer, you are often in a situation where you can wait for more information, or you can start a project with an incomplete picture for how you will finish it. The “bias for action” lets you know that you should usually start the project despite having an incomplete picture.

Another use of a company values system is for hiring.

When a company publishes their values, prospective employees can use those stated values as a way to know if they would be a good cultural fit. For example “move fast and break things” was a value that allowed Facebook to ship new products faster than any other company before it. But the speed of movement is not for everyone. Some engineers like to have their code unit tested, and free of all bugs before shipping to production.

Every company has values that define their company. And every engineer has values that define how they want to work.

Lynne Tye started her company Key Values as a platform to index companies by their values systems. This allows engineers to find companies that are a good cultural fit for their values system. Lynne joins the show today to explain how engineers and companies define their values systems, and how that affects the outcomes of engineering organizations.

Lynne also talks about her time at HomeJoy, one of the first companies in the “gig economy”. HomeJoy was an on-demand house cleaning service that grew extremely fast, but ultimately went under due to lawsuits. The challenges of HomeJoy were a predictor of the challenges later faced by Uber and Airbnb, and it was fascinating to hear Lynne reflect on her time spent managing operations at HomeJoy–which was about as operationally intensive a company as you can imagine!

Thanks to Courtland Allen for the intro to Lynne, and if you haven’t checked out the Indie Hackers podcast, which is hosted by Courtland, you should subscribe to it. Indie Hackers breaks down the engineering and business models behind small software companies–it’s one of my favorite shows.

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Imagine that you are a lawyer.

Your work involves managing files with dense, technical text. Your co-workers collaborate with you to accomplish a complex goal that can be broken down into smaller pieces. Your work has formal specifications, but there are degrees of freedom in how you express an idea. In all of these ways, the job of a lawyer is similar to the job of a software engineer–so why don’t lawyers use tools to improve their workflow?

As a software engineer, you have project management tools like Asana that improve collaboration. You have APIs like Stripe that reduce the time spent on a complicated implementation. You have tools like linters and source control that prevent you from making fatal errors. All of these tools save you time.

At many law firms, lawyers do not have incentive to save time. They are paid based on billable hours, not individual milestones. Historically, this hourly billing made sense–lawyers have been around since long before computers. The amount of work that might go into a legal task was hard to predict before you had computers to log data, sort documents, and standardize communications.

In contrast, a software engineer has always had the ability to automate work. That’s why (in most cases) we are not rewarded based on our time spent solving a task. We are paid based on hitting our KPIs and our milestones. With the legacy of hourly billing, lawyers can look at repetitive, administrative tasks as opportunities to make more money.

Justin Kan has been building startups for a decade, and in that time he has interacted with lots of lawyers. From incorporation to fundraising to selling his company Twitch, the interactions with lawyers consistently seemed less transparent and less efficient than would be optimal.

For an engineer like Justin, the natural inclination here was to build software and sell it to lawyers. But there would be so much resistance–you would have to convince the lawyers to change their pricing model to fixed-pricing, which would give them the incentive to buy software and work more efficiently.

Instead, Justin teamed up with a few entrepreneurial lawyers who were willing to start a new law firm from scratch, and use software on day 1. The software company is called Atrium Legal Technology Services (or Atrium LTS for short), and the law firm that uses the software is Atrium LLP. Both of these companies are very new, and were publicly announced a few months ago.

The two companies work side-by-side in undecorated office in downtown San Francisco. When I took the elevator up to see the company, the elevator doors opened and revealed two paper signs pointing to opposite ends of the office. On the Atrium LTS side of the office, engineers were writing software to extract the meaning from documents.

Today, lawyers at old law firms are paid hundreds of dollars an hour to fill in document templates by editing a text document. As the Atrium LTS software gets better, document preparation will be done through web applications, with the variable names disambiguated from the parts of the document that never change from client to client.

On the other side of the office sat Atrium LLP. The legal team was dressed a little more formally than their engineer counterparts, but there was nothing close to the formality of a traditional Silicon Valley law firm. Far from the decor of a Menlo Park law firm, the office space was actually more spartan than most well-funded startups, signaling to the employees that this is an unproven business strategy, and there is a ton of work to be done to validate it.

This sentiment was echoed in my conversation with Justin. It’s possible (even plausible) that Atrium LLP could become the biggest law firm in the world, but the road to getting there will take patience and steady execution. I enjoyed hearing Justin explain the motivation for starting Atrium LTS, and look forward to covering the company in the future.

We have done several other shows about the intersection of software engineering and law, including our show dissecting software antitrust with law professor Harry First.  To find our old episodes, you can download the free Software Engineering Daily app for iOS and for Android. In other podcast players, you can only access the most recent 100 episodes.

With these apps, we are building a new way to consume content about software engineering. They are open-sourced at github.com/softwareengineeringdaily. If you are looking for an open source project to get involved with, we would love to get your help.

Shout out to today’s featured contributor Craig Holliday. Craig has worked on the Software Engineering Daily iOS app to iron out performance issues and implement features like 2x playback. Big thanks to Craig.

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An engineer who wants to start a business using investment capital needs to understand the expectations of investors. The market for the business needs to be huge. The team needs to have a differentiated understanding of the market, or a differentiated product. The CEO needs to have the determination to continue operating the company even when it gets very difficult. And the price needs to be right for the investor.

Even if you are just working at a startup, or considering joining a startup, you must understand how the investment market works. From a raw financial standpoint, it only makes sense to spend your time at a startup that has equity with a high expected value. Your equity will only have high expected value if the company continues to exist long enough to have an exit–the company must either go public or get acquired.

In order to make it down the long and winding road to an exit, a technology company often needs to raise money on multiple occasions. That money is used to pay employees like you! If the company can’t earn enough revenues or raise money, you are going to get fired. Then, you may not have the spare cash to execute your stock options, and you might lose the rights to the equity that you worked so hard for.

The best way to avoid this is to learn to think like an investor–because as an engineer working for equity, you are an investor.

Semil Shah is an early stage seed investor with Haystack, a fund that he started. He also works with GGV Capital, a venture firm investing out of the United States and China. Semil has been blogging about technology for many years, and eventually evolved from a commentator to an investor. In this episode, we explore the dynamics between investors and founders of early-stage technology companies. We also explore the strange market of podcasting. Semil worked at a company called Concept.io, which was acquired by Apple for $30M.

We have done some great shows with other engineering investors like Chris Dixon and Adrian Colyer. To find these old episodes, you can download the Software Engineering Daily app for iOS and for Android. In other podcast players, you can only access the most recent 100 episodes. With these apps, we are building a new way to consume content about software engineering. They are open-sourced at github.com/softwareengineeringdaily. If you are looking for an open source project to get involved with, we would love to get your help.

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In 2003, Paul Martino co-founded Tribe.net, one of the earliest social networking sites.  Tribe had significant traction, with hundreds of thousands of users.

In the early 2000s, hundreds of thousands of users was enough traffic to pose a company with engineering challenges. Paul had studied computer science, and was able to use his knowledge of high-performance computing to write an efficient graph database, and solve the other technical puzzles that the company faced–but the business did not ultimately work out.

The failure of Tribe made the founders even hungrier for success–and it taught them lessons that they carried into subsequent businesses.

Paul went on to start Aggregate Knowledge, a marketing technology company that sold for $119 million. His Tribe co-founder Mark Pincus went on to start Zynga, the multi-billion dollar gaming company. Another Tribe employee co-founded Yammer, which sold to Microsoft for a billion dollars.

Since his exit from Aggregate Knowledge, Paul Martino started Bullpen Capital, which makes post-seed investments. The Bullpen Capital portfolio is appealing to me–partly because of the number of Internet gambling companies. Paul and I talked about gambling and other taboo business sectors–as well as what makes a good investment in the “post-seed” category.

I enjoyed speaking to Paul because he has a straightforward, no-nonsense way of talking about things–it’s very charismatic and uncommon.

We have done some great shows with other engineering investors like Chris Dixon and Adrian Colyer. To find these old episodes, you can download the Software Engineering Daily app for iOS and for Android. In other podcast players, you can only access the most recent 100 episodes. With these apps, we are building a new way to consume content about software engineering. They are open-sourced at github.com/softwareengineeringdaily. If you are looking for an open source project to get involved with, we would love to get your help.

Shout out to today’s featured contributor Kurian Vithayathil. He has made significant contributions to the Software Engineering Daily Android app. Thanks again Kurian for your work.

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