Haystack Developer: Listen to Your Customers

At WWDC, TMO’s Dave Hamilton caught up with Stefan Reitshamer, founder of Haystack Software. His company makes Arq, online backup software as well as photo utilities software. They chatted about Mr. Reisthamer’s history as a Mac developer, what happend when he put his phone number on the website and his extraordinary business model.

Dave Hamilton: Tell us about your software, in addition to Arq.

Stefan Reitshamer: I have two other apps: one that syncs photos across computers. (Laughs, thinking about Apple’s keynote and the iCloud.) And I have an app that finds duplicate photos in iPhoto.

DH: What are those apps called?

SR: The first is SyncPhotos and the second is Duplifinder.

DH: Aha, I remember now. We’ve talked abut Duplifinder on Mac Geek Gab. So… how long have you been developing Apple products?

SR: I’m thinking … since about 2006.

DH: Relatively speaking, a new developer then.

SR: I guess so. I’ve been developing since I was 12, but not on the Macintosh. That was a long, long time ago.

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DH: What platsforms were you developing for back then?

SR: Well, the last time I had a real job, I was doing Java development for the enterprise. Lots of Java before then. I even did Windows programming. Actually, before I did Arq, I wrote an app for managing a shared photo collection. Several people thought that was a great idea. I wrote that in Java, and it ran on the Mac and Windows … then I showed it to my wife — she was a little stressed out — and she said, “Does this mean I can’t use iPhoto?” So I figured if I can’t get my wife to use it … so I killed that. So I took part of the code and created Arq because I couldn’t find a decent backup app.

DH: Tell me more about that process because I’m sure, as it is with many app developers, you solve a problem for yourself and then make it a commercial product.

SR: Yeah, pretty much. There were lots of backup apps in 2008, but they all had these weird restrictions that were good for their own business model but bad for the user. For example, they refused to backup external drives. Or they’d refuse to backup applications. Weird. As for me, I don’t want limits: I’ll pay what it costs, I just want to back my stuff up. And there wasn’t really anything out there.

Well, Amazon has this cloud storage service, and I thought, I could just build an API to that because they don’t offer any software. So I built an app that use that API and made it really, really easy to use. I started with the idea that I wanted it to be usable by people who aren’t that comfortable with computers, but it turned out that most of clients were programmers! They liked it because it was easy to use.

DH: [Laughs] I guess, comparing Arq to Backblaze or Mozy or one of those others — it’s not quite one stop shopping, right, because you have to use your Amazon account. That could actually could be attractive to geeks and programmers because they know where their stuff’s going. As opposed to it being nebulous.

SR: Right. That’s it. They have a lot more trust that it’s actually there in the cloud.

DH: Right It’s their account. It’s still on Amazon servers.

SR: And it’s encrypted, and I can’t access it. It’s like separation of powers. I wrote the app, but I can’t access their data. And Amazon didn’t write the app, so they can’t decrypt the data.

DH: So you use an individual encryption key per user that’s defined by the user?

SR: Right. When you first run the app, you have to define your S3 [Amazon Simple Storage Service] keys and you also have to pick an encryption key. And that never leaves your computer.

DH: How has that process been for people working with Amazon? Other than the recent outage…

SR: It’s not a problem generally. Unless I get a customer who’s not a very technical person. Actually, I put a phone number on my website recently — which has been great. I mean, I’m a one person shop and most people think, omigod, you don’t want people calling you, you’ll never get anything done. But they don’t really call. Well, the only people who call are the ones who aren’t that comfortable and would rather talk to someone on the phone. And that interaction is invaluable. Just learning the way they think about things. I can’t put myself in their place: I know too much, and I can’t look at the issues the way they do. so when they call me and they ask me these questions, I think, aha, so that’s how you see it. And it’s just really invaluable feedback.

DH: That’s great! So then you’re able to take that and iterate the app and do more with it.

SR: And make it a lot easier to use. Yeah, I think everybody should put a phone number on their website.

DH: I always say, we don’t spend enough time talking to people. We don’t spend enough time on the phone. Especially in our technology world.

SR: I agree. Very cool.

DH: So… any thoughts about where things are going with Lion? Of course, there’s some stuff we can’t talk about [due to the NDA].

SR: Yeah, the keynote was interesting. They rolled out photo syncing and some backup stuff, and I thought, hmm, that’s what I do. And that’s all right — that’s the risk you take when you build apps that are dependent on a platform. If I wrote an app for dentists, I don’t think Apple’s going to invade the dentist market. But if I write an app that’s backup for Macs, I’m going to have to expect that.

I’ve noticed that Apple is so single user focused. I wrote my sync photos product because my wife and I share photos. So when she plugs her camera into her Mac, the photos come over to my Mac. And vice versa. It doesn’t sound like iCloud’s really going to fix that because iCloud is just for your stuff — not yours and someone else.

DH: I think there are going to be very specific use cases where iCloud rocks. And this whole thing where documents are tied to the app — maybe it’s just because I’m an old-school computer user — I want to be able to edit my docs in my app of choice. So if I don’t like the way Microsoft Word is editing my doc, I like the ability to open it in [Apple’s] Pages. But with iCloud … no, no, no.

SR: Right. Apple doesn’t like [the concept of] files. There are no files is iOS and there never will be. It’s really too bad there are files on OS X. If they did, there would just be apps and app data. Did you see? They never showed a Finder window in the keynote. Ever. They never even said the word file.

DH: Apple just wants every app full screen, and it just manages its data. For a lot of people that’ll just work.

SR: I have a tangent for you. We set my mother-in-law up with the simplest computer ever. She’d never used a computer before. All she wanted to do was send e-mail. So she’s set up with two things on the desktop: Internet and mail. So she double-clicks on the Internet one and up comes her mail — because her home page is Gmail. So she’s clicked on one thing, and it’s already confusing. She’s thinking, “Why’s my mail here?” But with Apple’s iOS stuff, you don’t end up with that. So the it’s a totally valid concept by Apple. We all just need to get over it, I guess.

DH: I guess so. I was thinking that today, sitting in one of the in-depth iCloud sessions. Thinking … I hate this … I hate this … Can I like it?

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SR: The problem is the sharing thing, right? I have customers with a NAS [Network Attached Storage] with a terabyte of Photoshop files. And it needs to be backed up. That’s not an iCloud scenario. First, you don’t want any of that stuff on your iPhone or your iPad. Or even your Mac. But you do have some informal protocol for sharing those files in the office, hopefully not too much conflict and it works. iCloud doesn’t think about that scenario. Groupware has never ben Apple’s focus.

DH: Yep. That’s interesting. I wonder if or how Apple intends to address that.

SR: They could. Easily. But I doubt they will.

DH: You said Photoshop, but that made me think of very other photo editing app that exists. You’ve got Acorn and Pixelmator and a jillion others. What do I do if I want to edit in one, and then I realize that another would be better. Now, do I have duplicate copies of the image owned by each app?

SR: I guess you shouldn’t want to have to do that.

DH: I think there’s going to be a vocal minority.  It’ll be interesting to see how vocal and for how long that remains. Okay, let’s switch gears for a moment. Tell me about how things are going as a developer.

SR: It’s been a lot of fun. As I said I used to be a corporate developer of enterprise apps. And now, it’s so much nicer to just say no to people. It’s self sustaining at this point. And I don’t do marketing — it’s all word of mouth. I don’t know where these people come from. It’s really hard to track. But I hope they keep coming and buying my software. And that might be the best business model. Because, in 2011, word of mouth is an order of magnitude more powerful than anything else. It propagates so quickly now.

From the get-go I said, I’m just going to be relentlessly positive And very responsive. If you send me an e-mail, I’ll almost certainly respond the same day. Often in just a few minutes. What other vendor can you e-mail and get a response in a couple of minutes? People love that. And of course, backup software is all about trust. So I always admit when there’s a problem. If you’re honest with people, they totally give you a lot of leeway to screw up. So if you’re honest about your mistakes and working to fix them, that’s awesome — as opposed to giving the customer some B.S. and trying to get rid of them. That helps the word of mouth go. That’s my business model.

DH: That’s a business model for any company. At least a good part of it.

SR: I don’t understand these companies that outsource customer service. That’s the most valuable channel into your business. You should do that yourself. You don’t want to get them off the phone; you want to keep them on the phone. It just works.

And you can’t be too niche. That’s the other thing. When I first told people about Arq, they said, “That sounds like Black Blaze or Mozy — only more expensive.” And I thought, you might be right, but I really want this app, so I’m going to finish it. And it’s so niche. it only runs on the Mac. It only backs up to Amazon S3. I don’t have any competitors. So if that’s what you want, you’re gonna buy it from me. So you can’t be too niche in this world. Because now you can reach everybody on the planet, so you only have to get a tiny percentage of them.

DH: Stefan, this has been great. Thank you so much for your time and insights.