It’s time for http://csjconferences.org/socon11, the 5th annual social media conference at Kennesaw State University. The dates are Friday and Saturday, Feb. 4-5, 2011. The theme is Social Media Meets Mobile.

I was a founding member of the SoCon conferences, so they are dear to my heart and Appcelerator will have a part again this year as sponsor and our own Appcelerator partner, Andrew Zuercher, Titanium Evangelist, will be running a breakout session entitled: Use Your Web Skills to Develop Native Mobile Apps.

He will be joined by some 25 other presenters and discussion moderators, including social media gurus from Ford Fiesta Movement, CNN, AT&T, Edelman, and the Pew Center’s Internet and American Life Project.

Here is the full information http://csjconferences.org/socon11/ , including how to register for the Friday Night 5th Anniversary Mixer, Social Networking party at the Carter Center. It’s your chance to network with some of the Southeast’s most influential figures and enjoy food, music, and lots of cool stuff.

Register now, last year, they closed down registration two weeks before the event. So this next week is fairly crucial if you definitely want to attend. You can register now at http://csjconferences.org/socon11/

Unfortunately, this year, unlike all the previous years since we started SoCon, I won’t be able to attend.  However, I’m very excited about how the event has grown and wish Lenn and the rest of the gang a great event – it looks to be the best and biggest yet!

At Appcelerator, we recently received permission from Apple to gain access to their full iTunes catalog which we receive through nightly updates.

I’ve been playing around with the data to see what kind of useful information I can gather to better understand the applications within the store; both today and over time as it matures.

Here’s some initial information about the iTunes marketplace as it relates to iPhone and iPad applications.  This data is from September 15th, 2010 for the US iTunes store.

What’s the average price per category?

The top 5 categories by average price are:

Medical – $7.65

Navigation – $5.08

Book – $5.07

Reference – $3.51

Education – $3.27

What’s the most expensive apps per category?

The top 5 categories by maximum price are:

Business – $999.99

Education – $999.99

Utilities – $999.99

Lifestyle – $999.99

Medical – $499.99

The bottom 5 categories are also interesting:

Weather – $9.99

News – $34.99

Social Networking – $99.99

Healthcare – $99.99

Travel – $109.99

How many apps are in each category? (i.e. how many apps am I competing against)

What’s interesting in the latest statistics is that Books have pulled way forward beyond Games recently.  There are now 45,542 books in the iTunes application marketplace vs. 38,033 Games.  Books represent 17.5% of all applications in the store and Games represent 14.6%.

The top 5 App categories:

Book – 45,542

Games – 38,033

Entertainment – 29,285

Education – 20,228

Lifestyle  - 16,592

The bottom 5 App categories:

Weather – 1,030

Medical – 3,941

Finance – 4,023

Social Networking – 4,138

Photography – 4,695

What are the average size (in MB) of each app by category?

The size of the application (in megabytes) has an interesting perspective since the size determines how much bandwidth is used to download an application (assuming over-the-air, which I believe most people use).  It also determines if you must download from the web and synchronize (apps over 20 MB).

The top 5 categories by size are:

Navigation – 50MB

Education – 26.8MB

Travel – 26.0MB

Healthcare – 24.5MB

Reference – 17.3MB

Wow, what’s interesting about this statistic is that 4 out of 5 of the applications in these categories cannot be downloaded over-the-air from your phone on the 3G/EDGE network – they must be downloaded from within iTunes and synchronized to install them.  However, you can install an application over wifi at any size.

The smallest applications on average by category?

Utilities – 2.3MB

Weather – 2.9MB

Productivity – 3.2MB

Social Networking – 3.5MB

Finance – 4.5MB

The average application on the iTunes store is 14.85 MB.  This means that the average application in the iTunes marketplace is storing a lot of content inside the application and taking advantage of the fact that these applications are resident on the device and don’t necessarily need to connect to the Internet to retrieve content.

What’s the largest application in the store?

The winner up is G-Map U.S. & Canada by XRoad Co., Ltd. at 2.12GB.  Yes, that’s right, Gigabytes.

This looks like an awesome application.  It costs $49.99 and has live traffic and text-to-speech.

What’s the smallest application in the iTunes store?

iJustLight comes in at the featherweight size of 14K.   It costs $0.99 and appears to — well — present a light to help you see.  I love their screenshot – it’s simply a white image (I can’t even insert it here, you can’t see anything).

Which developers has the most applications in the store?

We all know it’s not about quantity, but quality.  But which publishers creates the most applications in the store (based on total number of apps)?  Here’s the top 5:

Iceberg Reader – 7,708

Brighthouse Labs – 4,407

Andrews UK Limited – 2,604

PraiseMorgan – 1,720

Your Mobile Apps Inc. – 1,703

Who are the top game publishers by the most applications in the store?

Alain Fernandes – 333

Brighthouse Labs – 251

Quizicals – 207

M5 Systems LLC – 165

Gameloft - 161

Who are the top eBook publishers by the most applications in the store?

Iceberg Reader – 7,701

Andrews UK Limited – 1,723

Libriance Inc – 1,646

Your Mobile Apps, Inc. – 1,613

For-side.com – 1,550

How many unique application publishers are in the iTunes marketplace?

There are 52,354 publishers and 260,119 applications in the iTunes marketplace (US).

The top 50 publishers on average have produced 49,335 apps and an average of 986 apps per publisher.

The top 50 publishers produce 19% of all applications in the store.

The top 100 publishers product 24% of all application in the store.

This is a typical long-tail distribution of application publishers to applications.

What’s the breakdown of applications by content rating?

Publishers must rate each application according to a content rating. What’s the breakdown of applications by content rating?

What’s interesting is that 2,603 applications have no content rating – probably when Apple didn’t require it.

Here’s the breakdown:

4+ – 203,886 (78.38%)

9+ – 16,280 (6.26%)

12+ – 21,649 (8.32%)

17+ – 15,701 (6.04%)

None – 2,603 (1.00%)

This means that almost all publishers are trying to reach the youth/teen or above market with 93% of all applications rated 4+ or above.

In Summary

If you’re an application developer, it’s good to understand the economics of the app store.  Of course, these statistics above are specific to an individual day and only good for the U.S.  In the future, I’ll try and expand these statistics to include more regions and over a longer period of time.

Of course, if you’re not already building a native mobile application and would like to find out how, you should check out Appcelerator Titanium.  Titanium gives the power of building native applications to the web developer.

As of today, Titanium Developers have built over 4,453 applications for the app store – making Titanium developers collectively the 2nd largest publisher in the App Store. Congrats to the Appcelerator team and all the Titanium Developers!

(Updated: 9/19 with better charts)

We have been working closely with Yahoo on a number of fronts and we’re pretty excited about the Yahoo YQL integration in Titanium we released in the 0.8 release. More stuff will be coming soon.

Here’s a video that Yahoo Developer Network (YDN) featured about Appcelerator and Yahoo on their blog. Enjoy.

Today was a historic day in computing history. While the techno-geeks will argue for the next several months what this really means and what the Apple iPad is missing or why it’s only a large screen iPod Touch, I’m going to be focused on what I think this really means to some key industries and how Appcelerator can help. From my perspective, web developers are talking up and overwhelmingly are planning new application experiences for the new iPad. We surveyed just a small sample of our community of developers and found that over 90% of them plan on building an iPad application in the next 12 months.

But what’s probably more interesting, and certainly makes sense seeing the iPad today, is that this new device offers new innovations that could be much different (and quite possibly, better) than the existing iPhone/iPod.

We are seeing huge opportunities for developers to build applications that really leverage the unique and native device features of the iPad. Today, Steve Jobs demonstrated the new ebook system built-in to the soon-to-be-released iTunes “bookstore”. But, think about the application possibilities for publishers, media companies and companies such as ad agencies and interactive digital agencies can create. In fact, Steve Jobs might have single handily gave a life-line to the entire media world as it struggles to find a monetization model as they move from traditional print to digital. With over 175 million users ready with credit cards in the iTunes ecosystem and more than four years of micro payments of .99 and beyond, Apple may be able to turn over an industry struggling to find a path to transactions. The iPad offers an experience and consumer base that is already purchasing digital content and an compelling advantage that the normal web doesn’t offer. Users on the desktop web have had over 10 years of conditioning of “Free”, adding “Paywalls” to their websites are already offering significant challenges for some publishers. The iTunes ecosystem may be their new savior.

What’s also different spending the day with the Tablet SDK is that most of the current 100K apps will be completely re-tooled for the new device. While Apple is reporting (and in fact, in today’s testing with the SDK, fulfilling) that they’ll run all apps in the App Store unchanged, it’s very clear that apps will need to be rebuilt completely to take advantage of the new UI, new native features and the use cases that will be more appropriate for the new iPad. In fact, I think in less than 6 months after the devices are available for purchase, most of the apps that are used on the device on a day-to-day basis will be new iPad versions. It’s clear from the way the “emulated” iPhone apps are running on the tablet that developers will quickly move to change their apps to better adapt and that user’s will quickly find paths to one’s that take full advantage of the new device. This offers both a challenge and huge opportunity – not quite the same opportunity as the original iPhone – but close.

I’d advise developers and publishers that are on the iPhone today to start now at moving their apps. If you’re not on the bandwagon, you’ll really want to get on to it today. In either case, you’d really benefit from checking out Appcelerator as a way to help you move quickly to the new device and preserve your existing investments.

What are we doing at Appcelerator to support the iPad?

Like all iPhone apps, your Appcelerator Titanium-based apps will run on the iPad as-is in emulation mode. Today, we verified that the upcoming 0.9 release runs great both under emulation mode as well as the full native mode. We’ll have more details about that soon but we’ll be fully supporting new iPad projects in the 0.9 release and expect full support for the iPad native features soon thereafter. Because of the Apple NDA, we’ll not be able to talk specifically about the native features we’re working on for the iPad, but they’ll be awesome.

So, I’ll have more on this soon. I promise to try and blog more these days…

I’ll leave you with some parting thoughts I shared with Robert Scoble the day before the announcement.

Yesterday I gave a presentation about the future of mobile development at the Mobile 2.0 conference in Mountain View, California. It was the battle of the current emerging players in the space (if you could call it a “battle”) : Appcelerator, Rhomobile and Phonegap. Of course, all three of us have much different approaches to the market and different business models. And, consequently, I think all three of us are doing fine thank you very much. I like to think that we’re helping the entire industry improve by making it easier, cheaper and faster to build next generation mobile applications using web technologies.

Embedded below was my presentation, updated with some of the new stuff that has just come out in Appcelerator Titanium 0.7.

In Titanium 0.7 we released some super awesome mobile goodness like native Social APIs into Facebook, Yahoo and Twitter, module extensibility (see the awesome OpenGL demo or camera overlay demo) and lots of new UI widgets.

Today was a very busy day. I spoke about Appcelerator Titanium at the O’Reilly/360 Inside Mobile Conference in San Jose and later served on a discussion panel with Daniel Brusilovsky (Teens in Tech, Techcrunch), Phil Libin (CEO of Evernote) and Christian Sepulveda (Pivotal Labs).

I then spoke tonight at the iPhone Business Meetup in Santa Clara. Tonight, I spoke a little bit about iPhone and the Enterprise and gave some perspective on the opportunities and challenges for developers considering iPhone in the Enterprise.

Below are my slides from the presentation. As always, I generally try and post all of my public presentations on my Slideshare Slidespace.

iPhone in the Enterprise offers a lot of interesting opportunities and some big challenges today. However, some of the challenges are not just inherent in iPhone – they are overall challenges of a rapidly changing marketplace. We’re seeing a massive change in the dynamics of the mobile ecosystem. These changes aren’t just with the emergence of iPhone and Android – new mobile devices that have changed the smartphone marketplace almost overnight – but also in how these new entrants are disrupting carriers and handset manufacturers. In addition, we’re seeing new mobile handset entrants like HTC and Dell Computer also come into play. Of course, we’re also seeing old players like Palm make a play with WebOS in a very exciting way.

It’s an exciting time to be a web developer. I believe web technologies will continue to emerge as the most important pieces of the technology landscape. It’ll be fun to watch how this emerges. I think in the next 24 months we’ll see some pretty big ecosystem changes.

If you’re considering building an iPhone and/or Android application, please consider taking a look at our Appcelerator Titanium product. Titanium allows you to build native mobile applications using web technologies. That’s right – HTML, JavaScript and CSS. These are technologies, tools and skills you have today.

I gave a talk this week at the Mountain View JavaScript meetup hosted by Google at the Google headquarters in Mountain View, California. Thanks to Michael Carter who hosts this event on a monthly basis. The event was also video recorded by Google and is being made available on Youtube, although I don’t yet have a URL for it. Below are my slides from the talk, available on Slideshare.

If you haven’t yet tried Appcelerator Titanium, I would encourage you to do that now. It’s a pretty awesome product and makes it much easier and faster to bring the world of desktop and mobile applications to Javascript / Web Developers. Titanium Mobile provides a web platform for building native iphone and android applications using web technologies.

Today, Titanium Mobile is still in private beta. However, if you’d like early access, please email me or get in touch with me through Twitter and I’ll be glad to activate you.

With the announcement of Google Chrome OS tonight, it’s a great time to be a web developer. (And as an aside, I’m sure Redmond isn’t partying too hard either).

Why does the Google Chrome OS matter?

It’s not really a surprise that Google made the announcement. It’s been widely speculated for a long time that Google was working on this project. Google has continued to express that Chrome and the Web would be the basis of how they believed applications and software services would be delivered. The Google OS is simply part of the stack that will help Google fulfill this mission.

Of course, Microsoft tried this a decade or so ago and was hit with a Department of Justice lawsuit. That had a lot of implications to the web as we know it today. For example, with the DOJ lawsuit I believe Microsoft made 2 crucial decisions that have shaped today’s web:

- It removed Sun’s hopes of making Java the de facto programming language of applications running in the browser

- It removed Microsoft’s heavy investment in Internet Explorer, essentially freezing time (from a technical standpoint) for almost a decade as IE6 became the de facto web browser we were all forced to live with (and support).

Regardless of whether the DOJ decision or Microsoft’s reaction to it, our web world was impacted in a big way.

Beware of Free

There’s been a lot of relevant discussion around Free – both the good and the bad – recently from some large web and technology luminaries: Chris Andersen and Malcolm Gladwell. A number other important people have chimed in – but I think Alex Iskold at the Read/Write web makes some of the most interesting and relevant points about Freemium.

In his post, Beware of Freemium, Alex talks about how Free can be used by elite and powerful organizations to stiffle competition, create (or further) monopolistic markets and introduce complex transactions.

Tom Robinson (of 280 North fame) tweeted the following quote:

“One scary possibility [is they] create something far less expensive than a PC which is powerful enough for Web browsing”

This quote came from Bill Gates (then Chairman of Microsoft) in May 26, 1995. This was part of the Government’s evidence against in the DOJ antitrust case against Microsoft.

Back then, Microsoft was attempting to use Free as a way to enter a new market or more likely, block an emerging, threatening market, the web. Free was the concept that Internet Explorer could be given away as part of Microsoft’s dominant operating system, Windows, to eliminate the inventor of the web browser, Netscape. Prior to this, Netscape dominated (and literally created) the browser marketplace. In the early days, Netscape even sold Navigator in stores like CompUSA. But most people at the time received a subsidized version of the product from their ISP as part of your signup package.

Microsoft would give away IE, which meant that users didn’t have to install it (or worse at the time, download it from slow Internet connections over dial up). Since it was pre-installed in the Windows OS, users would just click the cleverly named “Connect to the Internet” shortcut on the desktop, thereby securing their dominant position literally overnight.

Sun and Java

At the time, Java was becoming very popular and both Netscape and Microsoft were supporting the JRE in the browser. In fact, the popular JavaScript language was created by Netscape and named (poorly, in retrospect) because of it’s quickly rising popularity. Back then, I was recruited by CSX (in Jacksonville, Florida) to work on one of the largest and most prominent Java initiatives (literally, many multimillions) – this was JDK 1.02 timeframe for some of the Java old timers reading this. Applets were the thing and lots of us envisioned that we would build rich applications delivered through a web browser using Java.

The DOJ intervened.

The world changed after this intervention. Not overnight, but close to it. Not too longer afterwards, Microsoft stopped supported the newest version of the Java runtime inside the browser – essentially eliminating Java’s chances to own the “Java in the browser” space. My guess it was more of Microsoft giving everyone (mainly Sun, given their hand in the DOJ lawsuit) the finger.

At the same time, I believe Microsoft made a conscious decision – partly understandable given the DOJ lawsuit – to stop investing in IE.

But the damage was done. Either through evil means or through a government intervention gone bad. I’m not smart enough to know the full implications of what could have happened if they didn’t intervene. However, I can make some educated conclusions based on what has happened because of the intervention. The Web innovation – in terms of the browser itself – was stifled.

Stifled, but not forever.

AJAX was an accidental success in my opinion. Timing is always the most interesting dimension of the success equation – and probably the least understood. We always remember things in more succinct historical matters where things happened nice and neatly. AJAX is an example – in my opinion – of a number of things converging over a long period of time and it just happened, quickly.

We had been using similar techniques for AJAX for a long, long time. At CSX, we used a technique that was common for a long time where all the client-to-server remoting was done using a hidden Java applet (and a technology called LiveConnect). This provided the ability to have real socket communication between the browser and the server and passing data between the Java VM and the browser’s JavaScript using the LiveConnect bridge.

Later lots of developer’s used Flash as a similar technique.

But Microsoft was really the first to introduce the XHR concept into IE. And the first main property Microsoft used this technique for was Microsoft Exchange Web. The other browser’s followed.

Also, back then, talking to the server was generally slow. We optimized around page turns. For different reasons than we optimize them today. Back then, we optimized them because it was expensive to talk to the server. We were using 96K lines (or even better, 128K ISDN). We used JavaScript sparingly and tried to reduce images (both in size and count). That’s how we rolled back then.

AJAX came along at a time when DSL and fast Internet was virtually everywhere and by then, PCs (and Macs) had many years of Moore’s Law improvement. In fact, lots of us believed (and still do) that we weren’t hardly taking much advantage of the PC itself. We had been frozen in technology time, stuck in the browser while our laptops and desktops were introducing dual-core processors and multiple gigabytes of RAM.

Google and the OS

Google is interesting and a different kind of Microsoft. But, the more time reveals, the more like Microsoft I think Google is becoming. I’m not making a value judgment about Google – I think Google is different in many, many ways than Microsoft. In fact, my belief is that technology companies gravitate toward a position of dominance and an orientation toward specific strategies that create unfair advantage, naturally, with success of their platform. Naturally, because as power is achieved through success, more power can be achieved by leverage. This is natural and mostly fair. This is our free market system at it’s best (or some would say, it’s worse).

Google wants to own the full stack. It’s logical, especially in their world view. If they can own the operating system, and the applications, and the services on top of the operating system and applications – they can extract the maximum value from the stack. It’s not evil, per se. It’s business. And they have plenty of cash, and plenty of time. For now, most people still view Google as the underdog and Microsoft as the evil monopoly.

But it’s not much different than Microsoft in the late 1980s and early 1990s. Faced with how to gain marketshare and continue to secure their dominance, Microsoft was able to make Free a lethal weapon. It’s taken over a decade for a company like Google to come along and challenge Microsoft – and it’s about time.

However, it is dangerous to believe that Google’s the white knight that will rescue the world from Microsoft dominance. They will certainly continue to put it into a more aggressive and innovative position and help level the playing field. I welcome that.

Most likely the immediate victims of the Google OS will not be Microsoft. The Google OS will first almost certainly challenge Linux – more specifically Ubuntu. This is the same as what Android will do to Symbian. While certainly Android competes with iPhone, more likely Android will challenge the rest of the Mobile OS than the Apple iPhone.

Google will also potentially stifle smaller competitors and innovative startups, first. Not because they necessarily intend to, but because they can. And they will. While Google is by far one of the largest (if not the largest) consumers and producers of open source, they have a hard time cooperating with open source communities and they don’t buy open source. This is completely OK – completely fair. It’s open source.

But I give Google credit, nonetheless. They try hard with I believe good intentions. But, it does hurt. Not personally, but as a whole. Their shear size, influence and impact have a way of simply locking out competition by simply talking about their intentions.

And, like Microsoft, Google will use Free as a way to do it. And, Free will give them a (free) pass – maybe with different means that Microsoft, but ultimately justifying the same end.

And what becomes of Google Chrome and the Google Chrome OS as it relates to Web standards?

What I like and admire about Google is that they’ve continued to support two important initiatives:

- Open Source

- Open Standards

However, this is a different means to an end than Microsoft used over a decade ago. Microsoft used proprietary and free to create unfair advantage. I believe strongly Google will use free and open to create an unfair advantage. And they will do it with the world cheering them on.

Google does these two initiatives because it makes their job easier. And it’s good for business, especially as it relates to their world view and their long-term strategy.

Let me reiterate – I don’t hate Google and I’m not trying to call Google evil. I believe it’s in their corporate interest to maximize shareholder value by creating the best and most dominant position in the marketplace. Google Chrome OS is a means to an end. And it’s a smart one.

But, the end to Google is still similar to Microsoft – albeit with different means and possibly different end goals. But, it most likely will have similar effects.

And this is the dilemma: What will Google do (WWGD)?

I started off by saying it’s a great time to be a web developer. This is because web technologies are the mainstay of all of these emerging and competing trends. And, in the end, I hope web technologies will continue to win, regardless of which desktop, phone, netbook or ebook reader we’re using in the next decade. That’s why we created Titanium. It’s going to be interesting.

Russell Jurney’s blog post has spurred me out of my blog-laziness to talk about something I’m passionate about – starting companies and helping entrepreneurs. If you haven’t read his most excellent post, titled “The California State of Mind” – stop now and read it.

As a follow-up from his post, I wanted to share something not widely known in Atlanta circles about how Nolan and I funded Appcelerator. Sure, everyone by now around town has heard that Appcelerator was funded by Storm Ventures, a well-known Silicon Valley VC. They’ve probably also heard that we moved Appcelerator from Atlanta to Mountain View, California last summer – almost a year ago now.

But that’s not the full story and I’d short change you if I don’t tell you the rest of the story. How did we get there? So, you know that we moved and that we raised money to follow our dream. But, how did we get there and how did we survive before that?

We had been in business almost a year and half before we raised money and had almost 15 employees when we raised money. The other little known fact – and for good reason – is we also generated just shy of about $1.5M in revenue in ~12 months *before we raised money*. Yes, our little ‘ole poor startup in Atlanta had real revenue from some real customers. Mind you, our revenue was largely services based and was revenue we generated by helping a few select customers implement our technology.

That’s the rest of the story – the back story to the funding. And there’s a lot to learn from that. Of course, as a small private company, I’m not really a big fan of talking about revenue. It’s just not usually fruitful to do that for a lot of reasons. However, it’s easy to misread the situation when you talk about our situation and your situation and the greater situation of the Atlanta startup scene. That’s because, most entrepreneurs get fixated on raising money to build their business – that they forget about what matters: solving real problems for real customers and translating that into cash. Remember the goal of that wonderful startup? Yeah, create revenue. Your cool product idea sucks if it doesn’t somehow, someway, create a path to value – which most of the modern world ultimately weighs as cold hard cash. Facebook’s doing it. Google’s printing it. Even Yahoo, that company we all thought was “dead” is generating billions of it.

The new VC is the old VC and it’s got the best terms on earth: cash.

No equity and no board meetings required. Just build something that they need and they’ll pay you for it.

Do that and you’ll transform your startup. You’ll have lots of options. Worse case, you’ll have a lifestyle business. (I’ve heard that 2 cadillacs and a boat is better than an office at the ATDC these days.)

So, I’m sure I’ve made it sound easy. Well, solving a real problem for a customer that will pay you isn’t always easy. But, guess what, if you can’t do that, you can’t raise money outside of the Bay Area anyway – give it up. And, guess what, the myth is that Valley companies don’t make money. Well, some don’t, sure. But, the pressure here to perform, to measure, to execute … much much much more than Atlanta. Steel sharpens steel.

Here’s what I did to make it happen

I was very, very fortunate to have a few trusted customers that believed in me. That’s right, not too much different than investors. They bought my vision and believed I could help them – and that by doing that, they would also help me (key point). They were willing to take a risk on me and what we were trying to accomplish and that there would be a mutually beneficial outcome.

The mutually beneficial outcome was that if we could help them solve some problems at a certain price and within a smaller than usual timeframe, it would be worth it to them (read: they would pay money). In trade, it would help us improve the product, work to refine our value proposition and give us cash. I love working hands-on with customers because there’s where it matters the most. It’s not as fun as just getting a pile of money to spend and getting in a nice little bubble… but trust me, if you’re not working with customers, you might as well assume you’re doing it all wrong – because you are.

We also tried on purpose to limit how many customers we worked with and what types of deals we did. We were small and wanted to keep it that way. In our case, we didn’t want to build a big services business. We wanted to continue to generate enough incremental revenue to hire 2 more engineers and still have 4-5 months of cash in the bank in case things slowed down. We funded almost 15 souls through around 5-6 full-time billable employees (granted, a number of us were working well over 70-80 hours per week on multiple customers).

But, we couldn’t have done this if we didn’t have great customers that helped. And they were willing to take risks. And we’re forever grateful for that. (One note, our customers weren’t all in Atlanta and in fact, we covered Boston and another area too).

So, why did we raise money?

Nolan and I both have experience in services companies and both have started services companies before Appcelerator. Most service companies are awesome lifestyle business. They’re also feast or famine and very difficult to scale. We’re software guys. I like software – a lot. So, we viewed our strategy as a way to work with customers to help us develop the product and to give us enough runway to figure out how we could scale the product (and really, what the product we wanted to build would be). It always takes a lot longer from the beginning to create “the product”.

We got to a certain point (read: revenue) that we had a choice. We needed to either ramp up considerably given the size of revenue and potential pipeline of new services revenue, or, we needed to raise enough capital to allow us to transition out of the services business to focus on the product full-time. It’s almost impossible, in my opinion, to build out a real product and do services at the same time. We knew that.

So, we had options. I had experience raising VC money and I had contacts. Once we got to a certain level, our advisors and Nolan and I started thinking that it would be time to think about bringing in outside capital. We also were lucky on the timing. We timed things just right, and that’s pretty hard to do given where the economy ended up just 6 months later.

My advice to you is simple. And, it’s a slight twist on Russell’s.

Either:

1/ Move to the Valley and shut up.

2/ Stay in Atlanta and stop complaining.

In either case, you’ll need customers. Fund your startup with customers. Build something that customer’s need and will pay for. If you do that, #1 or #2 really makes little difference in the scheme of things.

(P.S. This advice applies to everywhere else outside of the Bay Area too).

Appcelerator vs. Software Interrupted