I’ve been reading a massive amount of coverage about Yahoo shutting down Buzz (competition to digg.com), AltaVista / AllTheWeb (competition to google.com) and del.icio.us. There is far, far more coverage and opinions presented over at www.techmeme.com

I don’t really want to harp on Yahoo!’s woes, they messed up when they didn’t shuffle all that mess to Microsoft and in business sometimes arrogance trumps your business opportunities. That’s just a part of it all so you can’t feel too bad for Yahoo.

However, these moves have two problems:

1) Lack of faith in management

2) Lack of adoption of new technologies by developers

We can ignore #1 since that’s a backwards looking aspect. People that made the mistakes of purchasing these properties for millions or billions of dollars are long gone.

You can’t quite ignore #2. When your development excitement dies, you die. Look at Windows Mobile for example, it had been so neglected that poor Microsoft had to give it the ol’ yeller treatment behind the shed and come out with the device that is modeled after it’s second most popular consumer electronics product after Xbox – Zune! If you’ve seen all the AT&T commercials (and are a marketing freak that pays attention to those things) you’ve noticed that even the Zune penis monster is back in the commercial as a little green or purple beast:

As we learned in Super Bad, people don’t forget.

And like developers haven’t forgotten about Microsoft’s mobile woes, they will not forget about Yahoo’s either. Microsoft, despite a relatively decent platform and truckloads of money, is not having much success drawing people to develop for them. Not because the platform sucks. Not just because their app store is reportedly stiffing developers and reporting that many won’t be paid until sometime in late January… I can go on but you get the picture.

After the Kin apocalypse and the Microsoft mobile resurrection, many who would likely be ecstatic to develop for the new platform that is so closely tied to the most successful software product of all time.. will likely stay on the sidelines.

Two Sides To This Story

Sometimes you have to admit to yourself (and your shareholders) that some of your investments aren’t all you’ve expected them to be. Lord knows we all have our own share of failures.

However, this is where honesty helps more than bravado. You don’t just take an axe to the leg and start chopping. You explain why it’s necessary. You admit the mistakes that you’ve made that eventually lead to the end result of having the product line killed.

You will never, ever, see the above happen. Ever. Never ever. Because organizations ran by VC and shareholders that overpower the management have a secret handshake agreement that absolutely prohibits honesty.

Being honest about f’ing up not only gets you fired, it makes sure you never work again. It also opens up a stream of class action lawsuits from angry shareholders and scumbag lawyers that make the new managements job of rebuilding the company even more difficult.

Lesson

Communication matters.

Honest communication matters even more.

Transparency matters even more.

Once you lose control of what you are building, and you do so with other people’s money, makes you both more risk averse (“I don’t want to be the one to burn this building down”) and less innovative (“Can’t we just buy something that looks like what we want instead of building it?”)

But let’s say that you can’t do any of the above for whatever reason. Can’t be honest cause you’ll get sued. Can’t be transparent because people will call you on your BS and point out everything you’re doing wrong. Can’t “un-VC-yourself”. Let’s say all of those are dead ends, what now?

Only one thing: Put your head down and focus on what you’re good at – and focus on being the best you can possibly be at the thing that people value about you or your organization the most. In a fast paced technology world where hype is at times more valued than common sense, consider the fundamentals and perhaps even allow to be passed by once in a while. If your foundation is strong, you can experiment – if not, it’s just a gamble (and a dumb one at that).

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