We recently moved from Atlanta, Georgia to Mountain View, California and during the move I had a chance to go through some old boxes I’ve had for years — twenty years to be exact.

Tonight, I decided to open up some of the boxes and try and see if I could find some old pictures after seeing some of my high school friend’s pictures on Facebook.

I came across a Newsweek magazine in almost perfect shape from almost 20 years ago to the date: October 24, 1988. Spooky?

And on the cover, today’s hero was the wonder kid 20 years ago: Steve Jobs. Yep, that’s right, the man on top of Apple (once again) and by far, one of the world’s most influential technology snobs.

The title: “Mr. Chips”. The subtitle: “Steve Jobs puts the ‘wow’ back in computers.”

How apropos for then, and today.

As an aside, another big box read: “Why Bush is winning: The GOP’s Campaign Machine”. Yeah, that was Bush senior. 20 years later and we’re still talking about a Bush in the white house. But, that’s another story.

Flipping through this issue was literally going back in time. A number of computers advertisements, several cigerrate ads and an article on how “more consumers are ducking the price of perpetual interest by paying off bank cards in full”.

This was the IBM 280 PC. It ran DOS, had VGA graphics, 4MB of memory on the system board, proprietary PS/2 devices and could be configured to run IBM’s OS/2.

You don’t see cigarette ads anymore. This article predicted: “Heads you win. Tails you win.” However, fearing thousands of separate, costly lawsuits from customers with smoke-related health problems, the major U.S. tobacco companies and 46 states signed the Master Settlement Agreement (MSA) on Nov. 23, 1998. The MSA placed restrictions on future tobacco advertising and cigarette sales practices and also provided for a $250 Billion settlement.

The Epson PC? This one was the Equity ET with the tagline: “I don’t need a laptop computer. I need a desktop computer that fits on my lap.” Great vision, terrible execution.

Walmart was on the leading edge of technology stores with this tagline: “Name brand electronics. Always at lower prices: The switch is on to Wal-mart electronics”.

Let’s first start with the cover article on Mr. Jobs - the whiz kid, 33 years old back then.

The article is mainly about Steve Jobs’ comeback after Apple Computer with the NeXT computer. “Love him or hate him, people in the computer world couldn’t wait to see what Jobs had secretly worked on for three years in his Palo Alto headquarters.” The price tag for the initial model (with a university discount): $6,500.

Even Esther Dyson, back then the publisher of the Release 1.0 newsletter, said: “It’s a neat, neat box.”

And Steve Jobs was aimed “where the smart money is going”: the workstation market was $2.5 Billion and broken into the following market leaders:

25.5% - Sun Microsystems
18.6% - Apollo Computer
17.8% - Digital Equipment Corp
17.2% - Hewlett-Packard
17.0% - “Other”
3.9% - Silicon Graphics

Notice anybody missing? IBM, Toshiba, Sony, Dell, Apple?

Notice some that are gone? Apollo, DEC ? I would imagine Sun and SGI together probably own less than 3.9% of the workstation market these days.

The article also had a very familiar name in the article, Bill Gates, with an awesome photo. Back then, Gates was only 32. The article states that Gates is “a virtuoso software engineer with virtually zero charisma, he is the ultimate entreprenerd.” According to the article, Jobs invited Gates to contribute software to the NeXT, but Gates declined, saying there wasn’t enough money in the narrow market Jobs was pursuing. It also has Gates saying: “Steve always yells at me.”

Well, NeXT didn’t exactly take over the computer world, but Steve Jobs did and he did regain control of Apple (along with a number of key people and technologies from NeXT) after Apple bought NeXT only 8 years later for $429 million. Jobs returned as CEO in 2000 and NeXTSTEP was the foundation for the next generation of Apple operating system, OS X.

In this same issue, they outlined some interesting predictions for the future of technology.

Let’s see how we did 20 years later.

Education

Grade school
Prediction: Desktop computers will replace pens and papers.
Reality: Not only do classrooms have desktop and laptop computers, most students now have the full power of a handheld computer in their pocket.

Language
Prediction: Voice simulation will make it possible to learn foreign tongues from mechanical tutors.
Reality: Rosetta Stone, one of the leaders in language tutoring uses voice recognition and a computer to teach foreign languages.

Libraries
Prediction: Buildings full of books will be stored on optical disks.
Reality: Not only stored on optical disk, but stored in the global computer network and instantly available by keyword search thanks to the Google Book Search Library Project.

Programming
Prediction: Flexible software will make it easy for students to create their own computer programs.
Reality: With languages like Squeak, Ruby and HTML, students have a variety of programming languages they are learning way before they reach college.

Business

Design
Prediction: Everyone from architects to dressmakers will be able to make simulations of products - in 3-D.
Reality: Computer Aided Design (CAD) software has become common-place and producers and consumers worldwide can use software provided by companies like MFG.com to work with each other to build just about anything.

Secretarial work
Predictions: Machines will take calls, write memos and organize the busiest of executive schedules.
Reality: Secretaries? The secretary pool has been retired and replaced by the PC, Gates’ multi-billion dollar Office productivity suite and email. Only venture capitalists are the dinosaurs left that still use secretaries.

Networking
Predictions: Using groupware, machines will talk with each other.
Reality: Not only will machines talk with each other all over the world, called the Internet, but people also communicate in social and virtual reality networks.

Travel
Predictions: Laptops will be small enough to slip into a vest pocket.
Reality: Laptops aren’t quite that small, but full-fledged mobile devices from computer pens, mobile phones and RFID chips are fueling the nano revolution.

Science

Medicine
Prediction: Doctors will walk through surgery beforehand - on screen.
Reality: Doctors, even one’s across the world, can now operate on patients using computers and sophisticated video conferencing systems. We’re even now starting to see biocomputers which can enter the body to perform certain medical tasks.

Technology
Prediction: Sophisticated imaging will revolutionize high-tech design.
Reality: Imaging in all parts of science have revolutionized the world. Pocket cameras and mobile phones have more sophisticated imaging software and lenses than expensive professional photography equipment less than a decade ago. 3D ultrasound imaging can produce an almost photorealistic image of a fetus in utero.

Meteorology
Prediction: Computer “models” will track weather patterns and predict major shifts far in advance.
Reality: Computers have become more advanced at tracking weather patterns and creating more accurate prediction models.

Criminology
Prediction: Police will be able to recreate the scene of a crime - and simulate the moves of the criminal.
Reality: Police are using more sophisticated technology - from chemical analysis to DNA to find and prosecute criminals.

The Arts

Graphics
Prediction: Any artist will be able to do super-sophisticated animation or create images that look real.
Reality: Computer software gives artists the ability to create and mash up music, video, animation and photos and produce and distribute them at very little cost.

Music
Prediction: Compositions will be written and stored on computers.
Reality: Not only are they written and stored, music is distributed, re-mixed and stolen all over the world by millions of people each day with the click of a button or mouse.

Video
Prediction: High-resolution screens will revolutionize the field.
Reality: High-resolution video screens are everywhere, from the football field to the local bar to the airport check-in desk. High-definition television is available in many homes.

Games
Prediction: Home computers will be able to generate sounds and special effects of a “Star Wars” movie.
Reality: Not only have home computer games been able to generate sounds and special effects, the gaming industry has grown larger than Hollywood and music labels combined and has bigger production budgets than most movies. Multi-player interactive games can be played on-line at any time of the day, worldwide.

Alan Kay of Xerox’s PARC fame predicted that “portable computers will require built-in cellular-telephone connections - so you can tap into big data banks while sitting under the apple tree.” (The “apple” keyword has a particular significance today as the Apple iPhone takes a predicted 25% of the smart phone market share after only one year on the scene).

Mitch Kapor of Lotus fame said: “We need to build a national infrastructure that will be the information equivalent of the national highway-building of the ’50s and ’60s”. The World Wide Web was invented by English scientist Tim Berners-Lee one year later in 1989.

Wayne Rosig, at the time at Sun Microsystems, predicted: “It’s a waste to have hundreds of computers in a building that share nothing but AC power.” The article predicted that “Groupware will permit an officeful of people to collaborate on, for example, a magazine advertisement, with artists, copywriters and salespeople all contributing, via computer, to the project. When a writer changes a line of copy, it will instantly show up in the layout on the designer’s computer screen.” Today, we have applications like Google Docs and Zoho that have similar capabilities.

John Seely Brown of Xerox’s PARC fame, envisioned “meetings at which every participant has a computer - and the meeting’s progress appears on a ‘decision spreadsheet’ projected on one wall, on which the pros and cons of the argument are analyzed for all to see.” In most meetings today, it’s not uncommon for everyone to have a laptop and mobile device during a meeting. Today, virtual meetings are commonly held online using services like WebEx.

My favorite prediction was from Lawrence Tesler, then the VP of advanced technology at Apple and now at Yahoo: “Sooner or later, more people will carry their computers around than keep them fixed to a desk.” With more than several billion mobile computer devices worldwide in use today, this was probably the one prediction that was difficult to understand in its impact. In some countries like Japan, there are more mobile devices than personal computers. And, with the price of computer chips, storage and memory continuing to fall and with the advent of modern nano technology, we’re seeing more and more miniaturized computers in all sorts of products.

And, as a final bonus, the political carton section from this issue:

Even then, Donald Trump ruled the world. After a rise, and fall, and rise again, he’s back on top just like Steve Jobs. Funny how much things have changed, and in some ways, they’re still the same.

What will the next 20 years bring us? Any predictions for the next 20 years you’d like to share?

I just received this nice little drawing from Tyrus and the gang from appcelerator….

Thanks guys…. Good to see I share a birthday with the hanson kid. Fun.

It’s not fully ready for prime time yet but it should come together in the next few days. However, if you’d like to start following the dev, hop on over to GitHub and check out TestMonkey.

TestMonkey is an open source (Apache License) UI test framework we’re introducing today. It’s going to be fully integrated into Appcelerator (with some additional cool features on top if you’re using in an Appcelerator app). Additionally, it’s completely standalone as well and you can use on any web application - appcelerator-based or not.

Our main goal is to create a better UI framework for building out front-end test cases. We’re initially focused on unit tests. However, we’ll introduce higher level testing like use case testing soon. We’re going to offer some really neat features in the coming months to do much more advanced automated testing and quality control. So, stay tuned!

There’s a lot of great frameworks for testing out there. But, in open source style, we’ve continued to experience a lot of difficulty trying to do it with everything we’ve found so we’re going to introduce our own product. I’ll talk more in an upcoming post as we get closer to an official release about some of the differences and why we think our approach is easier, faster and ultimately, better.

Here’s some cool things you can do today with it:

1. All test suites run inside their own iframe sandbox. so, if you have any weird issues in one test suite or set of specific tests, you won’t screw up the others…

2. We’re providing a lot of convenience assertions for common UI testing .. thinks like checking for element attributes, element values, checkbox states, etc. are all as easy as pie.

3. We’re building a super cool UI on top for driving tests and the reporting of tests. Right now it’s pretty limited but we’re going to blow that out. Our goal is to provide as much information about failures, location of failures, expected results, etc. so it’s easy to figure out the issues.

4. TestMonkey has a clean API and can easily be extended, for example, to create your own assertion helper functions or test monkey plugin for handling results. In fact, our UI driver is simply an implementation of this plugin. You can easily hook into your own system if you’d like to handle results or do interesting things with them.

5. TestMonkey itself is very small and you don’t need to include anything in your application related to it. Test monkey can load your HTML files up in the sandbox and then your tests can run against the real source, no crazy includes or manually adding of test framework into the real app. It cleanly separates your tests from the real app.

And, there’s more…. And a lot more planned.

From an Appcelerator perspective, we’re essentially re-writing all our unit tests for the entire front-end in Test Monkey now for the upcoming 3.0 release. This will make it much faster to run through all the UI tests across multiple browsers and platforms. Our current web unit test framework is very manually intensive and takes about an hour to run (by a person, not a computer) for each browser + platform combo. With TestMonkey, we’ll be able to run around 90% of the unit tests on an automated basis across multiple platform concurrently. We’re also going to add this to our nightly build as well as continuous build system in the near future. This should really improve the speed and quality of the product.

It’s time to hunker down and take my own advice - advice that I think every startup (and every business in general) should be considering right now.

The economic future is uncertain for everyone around the globe - and Appcelerator is not immune from this uncertainty. I’ve heard a lot of talk that the startup/VC environment won’t be too badly affected by the macro economy. I’m by nature a “betting man” as I’m a serial entrepreneur. However, I’m also not an idiot and I try and learn from past mistakes. This global economic spiral will be protracted and all aspects of the economy will suffer for a period of time in my opinion.

Today, I’m making a very difficult decision for the sustainability of our business and for capital conservation. We’re going to shut down our Atlanta office, layoff the six remaining employees and attempt to completely reduce all expenses related to this location immediately.

For a company that just recently closed a $4.1M series A venture round and has a very healthy amount of cash on the balance sheet, this may seem nonsensical. However, in these uncertain times, my main priority is survival and ensuring we have at least 2 years worth of cash on hand even in a worse case revenue scenario. With some of the adjustments we are making today, this will give us that runway.

This is also a difficult situation because we are letting go six very wonderful team members, some of which have been with us for almost 2 years and some which I have worked with now at 2 startups and have known for a long time. Appcelerator wouldn’t “be” if it weren’t for every single person in Atlanta. The decision on who remains and who stays is always a difficult one and this decision isn’t reflective of their value, but rather, our plan for how we’ll continue for the next period of time and the skills we need to fit that plan. In a more perfect world, none of us would be where we are at today. However, tough times require tough decisions. We’re going to miss everyone very dearly.

Our plan going forward is to continue to focus on building a great set of products and continue the work of building and nurturing our fast growing community. We appreciate your support and continued best wishes during this difficult time.

As everyone is aware, the global economic downturn is upon us and we’re all standing around trying to figure out what this means for all of us — especially us startups. I hope nobody is living in a bubble and believes we’re at the bottom and it can’t get much worse. My prediction, and plenty of others, is that it’s going to get much, much worse and last a lot longer than we can imagine. Maybe decades at this point, although that’s even hard to fathom.

The public markets are going to take a really bad beating and many companies, even companies with fairly strong balance sheets and business fundamentals, could find themselves in terrible terriority - either by a takeover or massive layoffs and cost reductions.

All-in-all, I do believe that this is a necessary cycle - part of the normal cycle of things. If you look at the chart for the past 30 years, we’ve been on the up and up for a long time. An overall correction is due.

DOW since 1970

I also believe that a large portion of the spiral is psychological. Nonetheless, the spiral will spin out of control for a good bit of time and we all need to be prepared. As a startup, you’ve got some really, really tough choices to make. Some are obvious, some are not so obvious. My advice would be to think long and hard about survival, forget everything you thought you knew a week ago and assume you’re going to have to get heads down and grunt through this. Even well funded startups are going to be in big trouble soon if they’re not careful. All your models, your predictions, yours forecasts and best guesses are gone. Throw them out and assume ZERO.

My advice to a startup that’s not cash flow positive right now is to assume ZERO revenue for 24 months. If you can’t survive right now with the cash you have in the bank for 24 months, you have a few options you should consider right now:

1. If you have access to capital, get it now. (And assume you won’t get it)
2. If you have access to debt of any kind, get it now.
3. If you have anyone you can live without, get rid of them now.
4. If you have outstanding AR, collect it right now - offer a discount or more product to get it in the bank.
5. If you’re negotiating a term sheet, sign one right now - regardless of the terms.
6. If you have a business line of credit, use it now.
7. Look to cut as many fixed expenses as you can right now. Get rid of anything that is monthly if you possibly can — even consider the cost of breaking obligations short-term over the long-term cost.
8. Look at your business and strongly consider simplifying everything you can.

If you’re cash flow positive, well, you’re in a different position but most likely have similar things you should consider (including above):

1. Cut your 12 month forecast by 50%. IF you make it up, wonderful, you’ll be that much better. Assume that your customer is going to get killed as well and will be going through similar cuts and reductions and assume you’re on that list.
2. Examine your bottom 25% of your sales force and eliminate it now.
3. Take the top 15% of your sales force and consider changing the incentive plan — consider lowering bases (they’re already top performers) considerably and making it up for consistency of exceeding their numbers. Consider increasing your accelerators, but try to tie your accelerators (even consider compounding them) to consistency on a quarterly basis. If you do #1, you’ll be in an even better position.
4. Reserve your cash as much as you can, you’ll be in a good position to sweep up around your market and get some of your competition on the cheap in the next 18 months.
5. Don’t hire anyone unless you absolutely have to for the next 3-6 months. There is going to be top talent on the street soon and you want to have reserves to pick them up opportunistically.

I remember quite vividly the first dot com crash. I was in the middle of it and it was very depressing for a long time. This feels much, much worse and feels like it’s going to sweep much faster than even the dot com crash. Why? This is much more widespread - global even. Because of that, it’s going to hit all very, very hard. And each part of society will be affected, not just one sector or set of markets.

There’s a lot more qualified people out there giving some good advice this week. I received this internal letter (below) that Benchmark sent out to their portfolio CEOs:

The recent downtown in the public markets (now known affectionately as “the U.S. Financial Crisis”) is obviously on everyone’s mind. Some of the entrepreneurs and executives with which we are privileged to work have reached out and asked what this means for private companies, the VC world, and Benchmark. As such, I thought it might be a good idea to send you our thoughts on the current situation, and specifically what it means for venture backed companies.

From a high level, this downturn is different from the Internet bubble of 1999. First, the last downturn started in our backyard. We were the speculators; this time it is someone else. This means that the “crash on the beach” won’t be nearly as severe. In the Internet crash, many times the customer was actually another VC-backed company and as such, there was strong negative spiral. That said, while this downturn might be shallower than last; it could last longer in terms of absolute time. The American consumer is super-leveraged which wasn’t true before the 1930’s or the 1970’s. The overall economy will have trouble gaining momentum with this debt anchor, and my best guess is the contraction is not yet finished. As such, it might take a long, long time before we see glory days again.

Like every major shift in the environment, this one will offer opportunities as well as risks. JP Morgan was able to buy two great assets at substantial discounts with government assurances, precisely because they played the game frugally while others were more risk seeking. The real key is to have a keen understanding of the game on the field and to be the one that adjusts swiftly, rather than the one that moves after it’s become blatantly obvious to everyone else it’s time to move. Many companies that thrived post 2001-2003 were simply “Last Man Standing” in their industry. It doesn’t sound all that glamorous, but it was the exact right strategy to deploy at the time.

In terms of defining our current situation, let’s start with the impact on the actual capital in “venture capital”. The institutions (limited partners) that typically invest with Benchmark and other venture funds are not the ones on the cover of the financial news everyday. In fact, these limited partners are typically quite conservative and have a very long-term perspective. Certainly, new precedents are being set every day, so it’s hard to say the word “never” in this environment. Still, we are unaware of any situation where capital availability for us or any other VC firm is in question.

One would also expect across-the-board reductions in follow-on financing valuations. As financial markets deteriorate three things happen. First, investors get nervous. As such, they tend to “choke up on the bat” and be more conservative. We have already witnessed skittishness on behalf of follow-on funders, as well as a lengthening of the time it takes to complete a fundraising. The second reason valuations will fall is that the public market comparable valuations have fallen materially. This will have a direct impact on exit prices, be they an eventual I.P.O, or M&A. In fact, I was recently at a gathering of corporate development execs, and their number one concern was that private company executives have not realized that the scoring system was just reset (expectations too high). Lastly, investors are more concerned that a protracted economic downturn will negatively impact each private company’s specific results, increasing the likelihood of a revenue or cash flow miss.

If we leave you with one message it would be this: financings as we know it just got a whole lot tougher. Basically, the cost of capital is going way up. This is, of course, a sweeping generalization. Some of you have tons of cash, and some of you are profitable, so the immediate impact will obviously be less. That said, if you do need to go to the market for capital in the foreseeable future, you should consider that the environment will be much less hospitable than it has been for the past 3-4 years (which have actually been pretty benign), and that this less hospitable environment could first for time measured in years not quarters.

Another obvious strategy is to extend the runway. Hopefully, everyone is aware of exactly how many “months of cash” they have at their current cash level and burn rate. If you have a method for increasing this runway, we think you should do it, and quickly. This serves two purposes. First, it gives you the opportunity to outlast the competition, and second, it puts more time between now and when you are forced to re-enter the capital markets. One could argue you should draw down your bank lines right now. Why? When you need the money, the funding source may just say no (they did last time). What are you going to do? Sue them? Take away their warrant coverage? So what. If they get cold feet - you won’t see the cash, I don’t care what the term sheet says. The bottom line is that you should watch “months of cash” as your most important variable.

Be calm, but pragmatic. The purpose of this letter isn’t to send everyone off in a panic. It’s simply to convey that the rules of the game have changed. One key problem is that during these market downturns, most people don’t adjust quickly enough. As an example, not hiring heads that were previous TBH isn’t really a reduction in expense. Also, 10% cuts rarely lead to anything other than multiple rounds of cuts, which have a harrowing affect on culture. It’s easy to mentally understand this is the right thing to do. It is ten times harder to make the actual decisions to affect change. These are extremely hard decisions.

You may know that I am involved in Zillow. They did a survey of their users to ask what they thought was the current impact on home prices across America. The average answer was that homes in America were down 20-30% in value. The survey then asked what the user thought had happened to the value of their own home. Miraculously they thought their own home had retained value against the odds! Surprised? It is human nature. As most of you read this, you will be thinking in the back of your mind why your company is different than the average company (like these homeowners) and why you are the exception that doesn’t need to take action right now. This could be rationalization.

Recently, I spoke with an entrepreneur who as CEO during the dot-com crash and oversaw a headcount reduction from 130 to 28 (through two major layoffs), and eventually back to profitability and an IPO. If you think a 10% layoff is tough, imaging laying-off 78% of your employees. It is one of the hardest things I have ever seen anyone do. I recently asked him how that experience has shaped the way he would advise people on running a startup. He had a list at the tip of his tongue (included now):

1. You don’t realize how fast things spin out of control. There are self-reinforcing negative effects in a downturn.

2. Don’t spend money until you have to:
a. Don’t move out of your office until you are sitting on top of one another
b. Don’t hire any incremental employee until you just can’t stand it
c. Don’t get more capacity in your data center until your site is going down

3. Better to be “late to the party” than to be early and run out of money

4. Line item review of the budget every month (legal, accounting, everything)

5. Not just a CEO mindset, but a company mindset:
a. Everyone must buy in to the process
b. But in a calm way - not run for the hills

6. Create 2 or 3 different burn scenarios - know at any point in time how many months cash is left

I include this mainly because it highlights a “very high bar” in terms of frugality. It’s one thing to say you don’t “waste money” and another to live as lean as you possibly can. As mentioned before, in market downturns, frugality is not only a virtue, but also it could be the difference between survival and failure.

Many great companies emerged from the 2001-2002 time-frame. Companies built during tough times typically have incredible focus, great cultures, and true desire to compete and win in all environments. For many, this downturn period could be opportunistic: a real chance to differentiate yourselves from the other players in the market. However, it is imperative to understand that the environment has just shifted to one where differentiation will likely be defined not be aggressiveness, but rather by adaptability.

Folks, the game has changed. Time to get serious, get focused and sober up. The world’s going to be a much different place for awhile. And, I sure hope we’re all much better off for it in the long term.