We gave all the Fog Creek programmers a choice of which conference to attend this spring, from a long list of about 12 conferences, and all of them wanted to go to ETech. So that’s where you’ll find us next March. It was incredibly interesting last year — most of the presentations, especially the ones that weren’t given by the sponsors, were great, but the best part was interacting with the interesting attendees.

Agckphbft. I didn’t expect so many of you to order the DVD of the movie we made here, Aardvark’d: 12 Weeks with Geeks. I thought we’d get about 1000 orders. So far, we’ve received about 2600 orders, which went to 55 different countries, including Kazakhstan. We even sent a copy to someone in New Orleans.

Now, anyone in their right mind would have found a fulfillment house to actually package and ship these damn things, but here at Fog Creek we seem to have developed a do-it-yourself kind of culture. That led to a three day packing and shipping ordeal to get the first batch out the door, which is finally over.

The way I justify this silly exercise in hard labor is that I can write it off as a learning experience! Here’s what I learned:

• Barcodes are the greatest thing since sliced bread. I didn’t think we’d need a barcode because all we had to type was an eight digit order ID.  Lo and behold, typing an eight digit order ID three thousand times adds up. The three day ordeal would have been a two day ordeal if we had thought to put barcodes on the packing slip and had a scanner to read it.
• It is amazing how much easier our life would have been if we had found a way to get the packing slip and the shipping label onto the same physical piece of paper. Otherwise you need to spend a remarkable amount of effort trying to keep your packing slips in the same sequence as your shipping labels. If they can both be printed on the same sheet somehow, the sequence stops mattering and everything you do is just that much easier. You can throw things on piles as you assemble the packages instead of carefully keeping things in sequence. You’ll notice that a lot of shippers use special paper that is half peel-off-label, half plain paper for this exact reason.
• The difference between desk/table height (intended for working sitting down) and counter height (intended for working standing up) makes a huge difference ergonomically. Three days of working with things at various heights while standing up taught me that lesson in a visceral way. Luckily our new office expansion was not completely set in stone so we were able to alter the design of the new mailroom shipping station to use counters instead of desks.
• You can’t send Global Priority Mail to Italy. Who knew?

So far we’ve shipped to just about everyone who ordered, except for the last 100 people who ordered the NTSC edition, because we flat ran out. More NTSC DVDs will arrive on December 14th and will go out quickly. We still have some PAL in stock, so those are now going out the same day.

In case you’re wondering how much it really costs to produce a movie like this, here’s the approximate breakdown.

Incremental Expenses (per unit)

$2.00 – DVD production and delivery
$5.00 – Royalty to filmmaker
$0.30 – Envelope for shipping
$2.52 – Postage (weighted average)
$0.20 – Other supplies for shipping (labels, paper for packing slips, toner, boxes, etc)
$1.00 – Shipping labor (estimate, since most labor came from Fog Creek employees on the payroll anyway).

Total per unit: $11.02. Since we’re selling at $19.95 that’s $8.93 gross profit.

Fixed Expenses:

$5,000 – Stipend paid to Boondoggle Films
$5,000 – expense reimbursement to Boondoggle Films
$925 – English-language subtitles
$3000 – Terabyte storage server used to hold footage while editing
$1000 – Graphic design of DVD cover and silkscreen
$200 – Damaged goods, accidental double shipments (due to lack of bar codes!), spoiled postage, etc.

Total: $15125. So we need to sell 1694 copies to break even. As of today, we’ve sold 2595, so we made a profit on the movie of about $8048.

There’s one thing this doesn’t account for: since we buy the DVDs in lots of 1000, at some point in the future we’re going to have a bunch of DVDs that we just can’t sell and we’ll have to write those off. With 2 SKUs and batches of 1000 we’ll waste an expected 500 units per SKU which is $2000, so deduct $2000 from the profit giving you a final figure of $6048.

Not bad! I was hoping to break even on the movie, and make a “profit” through more applications to our summer internship program from people who saw the movie and were inspired to work for Fog Creek.

I’ve posted a very preliminary reading list for the Fog Creek Software Management Training Program.

Who do I imagine will be interested in this program? Based on the applications we’ve received so far, it’s the kind of people who would have gone into entry-level associates programs at management consulting firms and technology integrators. They’re expecting to work like crazy for two or three years, either as preparation for graduate school (especially MBA programs, the best of which require several years of real-world work experience for admission), or in hopes of delaying the inevitable decision about real life.

Those programs have a fatal flaw though: they really only care about getting cheap labor that will work hard and can be billed out at high hourly rates. Life as a recent BA graduate in a management consulting firm consists of tons of travel, never to pleasant places, living out of a suitcase in a hotel somewhere unlovely, and working ridiculous hours on the most mundane aspects of a project, all for the sake of “paying your dues” in hopes of a better career later. Only a small fraction of the people that start these programs end up working as management consultants.

As long as you’re ready to work hard, why not do it at Fog Creek? We’ll actually teach you everything we know about the software industry instead of giving you grunt work, we won’t make you travel, and by the end of three years you’ll be far more qualified to lead technology projects and technology companies.

Venture Voice

Gregory Galant came by the Fog Creek office a couple of weeks ago and interviewed me for his podcast Venture Voice; the MP3 interview is now available for download (it’s about 55MB).

Aardvark’d: 12 Weeks With Geeks

More about this crazy movie: it has now been accepted to both the Los Angeles and New York Independent Film and Video festivals! Congratulations to Lerone Wilson of Boondoggle Films, the filmmaker.

So that’s one place you can see it. We have completely sold out of the first DVD printing and are desperately trying to get more replicated. If you order the DVD now, you’ll probably get it around December 15th. This is probably your last chance to order copies this year. Someone emailed me to ask about region codes: this DVD is not region locked and will play anywhere, although for best results you should get the right format (NTSC or PAL) for your country. There are English subtitles.

Forbes: “EMI Group boss Alain Levy said at press conference today that he believed Jobs would introduce multiple price points for iTunes music within the next year.”

The story they’re trying to tell you is that “older, less popular songs could be discounted, and in-demand singles could go for more than a dollar.”

Let’s think this through, because I think the recording industry is lying about why they want different prices.

Before I start with that, have you ever noticed that movie theaters charge the same price for all movies, whether they are Steven Spielberg blockbusters or crappy John Travolta religious quackery disguised as science fiction that nobody in their right mind would want to see?

Theoretically, when a super-duper-blockbuster comes out, like, say, Lord of the Rings, there’s so much demand that the movie theaters just end up turning people away. Econ 101 says that they should raise the price on these ultra-popular movies. As long as the movie is sold out, why not jack up the price and make more money?

Similarly, when stinkers like Lesbian Gangster Yoga with Ben Affleck come out, the movie theatre is going to be pretty much empty anyway … so Econ 101 says they should lower the price and try to get a few more bucks filling up the theater with price-sensitive moviegoers.

And indeed this is what the recording industry is telling you that they want to do on iTunes. But they don’t do it in movie theaters. Why not?

The answer is that pricing sends a signal. People have come to believe that “you get what you pay for.” If you lowered the price of a movie, people would immediately infer from the low price that it’s a crappy movie and they wouldn’t go see it. If you had different prices for movies, the $4 movies would have a lot less customers than they get anyway. The entertainment industry has to maintain a straight face and tell you that Gigli or Battlefield Earth are every bit as valuable as Wedding Crashers or Star Wars or nobody will go see them.

Now, the reason the music recording industry wants different prices has nothing to do with making a premium on the best songs. What they really want is a system they can manipulate to send signals about what songs are worth, and thus what songs you should buy. I assure you that when really bad songs come out, as long as they’re new and the recording industry wants to promote those songs, they’ll charge the full $2.49 or whatever it is to send a fake signal that the songs are better than they really are. It’s the same reason we’ve had to put up with crappy radio for the last few decades: the music industry promotes what they want to promote, whether it’s good or bad, and the main reason they want to promote something is because that’s a bargaining chip they can use in their negotiations with artists.

Here’s the dream world for the EMI Group, Sony/BMG, etc.: there are two prices for songs on iTunes, say, $2.49 and $0.99. All the new releases come out at $2.49. Some classic rock (Sweet Home Alabama) is at $2.49. Unwanted, old, crap, like, say, Brandy (You’re A Fine Girl) — the crap we only know because it was pushed on us in the 70s by paid-off disk jockeys — would be deliberately priced at $0.99 to send a clear message that $0.99 = crap.

And now when a musician gets uppity, all the recording industry has to do is threaten to release their next single straight into the $0.99 category, which will kill it dead no matter how good it is. And suddenly the music industry has a lot more leverage over their artists in negotiations: the kind of leverage they are used to having. Their favorite kind of leverage. The “we won’t promote your music if you don’t let us put rootkits on your CDs” kind of leverage.

And Apple? Apple wants the signaling to come from what they promote on the front page of the iTunes Music Store. In the battle between Apple and the recording industry over who gets to manipulate what songs you buy, Apple (like movie theaters) is going to be in favor of fixed prices, while the recording industry is going to want variable prices.

Brief News

The Fog Creek Copilot team has launched monthly subscriptions. This lets you remote control computers over the Internet whenever you need to without entering payment information each time. There are a variety of plans offering 0 – 5000 minutes per month.

If you’re interested in watching the story of the summer interns who built Fog Creek Copilot 1.0, or watching my silver-screen premiere, we’re taking orders for the movie Aardvark’d: 12 Weeks With Geeks on DVD. You can watch the trailer on Google Video. The number of orders we’ve received has surprised us; even though we tripled our order for DVDs it looks like we’re pretty close to selling out.

If you are a student looking for a summer internship in software development, hurry up and apply; applications are due February 1.

Last March, when we were starting to plan our summer internships, I was disappointed by the massive bogusness of the so-called “business challenges” on the TV show The Apprentice. From the posts over on the discussion groups, it was apparent to me that people were really excited to see each new episode, and then consistently disappointed when the management challenge turned out to consist of two hours of inspecting chocolate bars in a factory, or hawking on street corners to get people to go into a restaurant. Management challenge, indeed! Those are two of the lowest-paying jobs in New York City. Most of the people on the streets handing out flyers are homeless and working for minimum wage.

At the same time, I noticed that there were very few decent documentaries about the software development process. Since the idea of our summer internship was to build a new product, from beginning to end, during the course of one summer, I thought it would be a great opportunity to have a filmmaker come into our offices and film the whole thing. And I thought that the audience that’s excited to see inside the business world would be just as enthusiastic to get a view of the software development process at Fog Creek.

So I put out a call for a documentary filmmaker. We got a half-dozen serious applications and picked Lerone Wilson, a recent NYU grad, to invade our office for the summer and make a movie. Instead of paying for the production ourselves, we provided a minimum subsidy, so the filmmaker could maintain complete editorial control. My friends at Thought Equity, a stock footage company, loaned Lerone a great HDV camera. Dan Bricklin, the co-creator of VisiCalc, the first electronic spreadsheet, agreed to appear, as did Lisp-luminary and e-commerce pioneer Paul Graham, currently a partner in Y Combinator, which provides seed funding for startups.

The movie is called Aardvark’d: 12 Weeks With Geeks and it’s in the final phases of editing now. So far, I’ve only seen an early cut of the movie, but it looks great, if I say so myself. The only other recent documentaries I’ve seen about software development, Code Rush and Startup.com, totally pale in comparison.

Of course, we’ll try to get this movie into multiplexes worldwide, but you probably shouldn’t hold your breath. In the meantime we’ve negotiated with Lerone to make DVDs available to Joel on Software readers as cheaply as we can make them: $19.95 (free shipping in the US, cheap shipping elsewhere). The DVDs are not quite ready yet but they will be shipping by December 1st. Given the holidays coming up, it’s very hard to find DVD manufacturing capacity this time of year, so we’re not sure how many we’re going to be able to produce in time for the holidays. We’re now taking pre-orders on our website for guaranteed shipment on December 1st, but once the initial manufacturing run has been sold out we can’t guarantee delivery before the holidays, so order early if you plan on giving this as a gift. There’s a trailer online in Windows Media and Quicktime formats if you want to preview it, and the order form is here.

Update—June, 2011—The entire film is now available on YouTube for free. Watch Aardvark’d Online Free.

CIO Magazine Technology Editor Christopher Lindquist has a podcast up interviewing me about Asterisk, Ajax, and Astronauts.

I’m looking forward to speaking at Webstock, a web conference next May in Wellington, New Zealand.

This will be fun. I haven’t been to New Zealand since 1987. It’s such a long trip from New York City (something like 24 hours, I think) that I really should to try to combine this trip with some other meetings or conferences in the South Pacific / Australia / New Zealand area.

Microsoft’s new (beta!) portal page, live.com, doesn’t work in Firefox, and doesn’t work too great in IE either. The first thing I used it for was to search for “firefox market share.”

Like every search engine, you get a list of search results. I clicked on the first one, read the article, and then clicked “back” to find the next result.

Oops! What happened to the search results?

Live.com uses dynamic HTML in a broken way such that clicking “back” takes you all the way back to the home page, not the search results. Which makes it pretty unusable as a search engine. I noticed this right away, because just yesterday we spent a lot of time thinking about this very issue in our own product, FogBugz.

I played around with the RSS subscription feature for a minute or two. It crashed IE. Oh well. I don’t remember Microsoft ever shipping anything quite this half-baked. Maybe that means that they’re moving firmly into the “agile” camp: ship early and often.

Does ship-early-and-often really work for a huge company doing massive PR pushes that’s going to get millions of people checking out their early release?

I don’t think it does. This is a classic example of what I’ve always called the Marimba Phenomenon. The Marimba Phenomenon is what happens when you spend more on PR and marketing than on development. “Result: everybody checks out your code, and it’s not good yet. These people will be permanently convinced that your code is simple and inadequate, even if you improve it drastically later.”

The Marimba Phenomenon is very hard to avoid when you spend too much money trying to launch a new product. It’s easy to spend on marketing and PR, since that just takes cash, but it’s hard to spend on software development, because that actually takes time and talent. So cash-rich companies, whether Microsoft or VC-backed startups, run the risk of launching to a bigger audience than they really should have, getting millions of people to be thoroughly unimpressed by version 1.0 and never bothering to come back again to see if 2.0 might have gotten it right.

By contrast, small companies that don’t have great marketing budgets are in a great position to launch early and often. In the first few weeks after we launched our remote assistance product, Fog Creek Copilot, we found some pretty serious bugs handling proxy servers that affected about 5% of our customers. But we only had a few customers every day, since the service was new and didn’t have a superbowl ad. We fixed the bugs in a matter of days and now there are only a tiny number of people wandering around who had a bad experience with Copilot. And now as the service builds in popularity we’ve rolled out dozens of new builds and fixed hundreds of bugs and even added some major cool features, like automatic screen resizing, which makes it easy to control a computer with a large monitor from a computer with a smaller monitor.

By the way, Firefox is probably around 10%.

Jason Lefkowitz: “Live.com is the perfect example: as far as I can tell, it’s just a customizable portal page. We had those in 1998 and they sucked then. Seven years later, they haven’t gotten any better.”

PS. I don’t get the difference between start.com and live.com, two remarkably similar Microsoft websites. Start.com already works in Firefox, launches search results in a new browser window, which is awkward but not as bad as what live.com does, and seems to be more polished.

Here’s what I’m trying to accomplish with the slightly redesigned homepage you see here.

Notice the new column of text over on the left? That’s the first big change. What used to be there was a lot of links and little graphic blobs and other bits and pieces of the flotsam and jetsam that bloggers like to put in their marginalia that links to other stuff. Most people on the web today have learned to completely tune out the navigation column; it seems about as exciting as the credits at the end of a movie.

The trouble was that new users would land on my site, having followed a link from somewhere, and they would have absolutely no idea what was going on. They were on some kind of site, there was this guy, Joel, he was saying things, so what? The home page, like the home page of many blogs, wasn’t really serving first-time visitors.

I was finally motivated to get off my butt and fix it by reading Jakob Nielsen’s recent post about Weblog Usability.

The theory here is to divide the home page into two columns, one for first-time visitors and one for everybody else, and by using narrative and full sentences in the navigation/first time visitor column, I’ll actually seduce some people into checking out what’s over there.

There are two other small changes. My public calendar has moved up to the top right corner. And home page postings will now have titles, instead of dates, because the RSS people kept complaining about that.

Non goals: I made no attempt to be slick. A long time ago I paid a top web designer, Dave Shea, who created a stunningly beautiful design for me to use. It ended up looking a little bit too shiny, though, so I never used it. This is a site designed by me, badly, using my poor Corel PHOTO-PAINT skills and my crappy amateur photos and my affection for the font “Georgia” and my poor eyesight (thus the largish font). It’s not some kind of corporate blog developed by the marcomm department at a company that desperately wants to get people to pay attention to their new brand of laundry detergent. The more it looks like it was designed by a geek, not a graphic designer, the happier I am, because I am a geek.

The changes haven’t completely permeated the inner pages yet, but that’s only a matter of time.