Avoiding Market Failure Should Be Your Only Focus

I am assuming that whatever you are working on, whether it is your instrument playing skills, programming chops, or a tech startup, that you want to work on it/do it for a long time. I mean many, many years.

That doesn’t mean that you want to continue working on the same tech startup or you want to continuing hacking away at PHP (only) for the next 30 years. It just means that you want to continue building startups, or programming for the better part of the next 30 years.

Given that, your #1 priority should be avoiding market failure. Paul Graham simplified it to ‘make something people want’. But it is broader than just making. It is, whatever you are doing - e.g. playing the violin, make sure other people are interested in what you are doing (and how you are doing it). Really interested. i.e. follow you on Twitter and jones for every video you post, every mp3 you give away free, every album of photos you release, every product iteration you roll out.

There may not be a direct correlation between the number of people interested in what you do, and the number of customers you have, but once you can get people interested (i.e. consistently avoid market failure) and keep them interested - you have a much higher probability of financial success. By financial success I mean, the ability to earn a living doing what you love - so you can continue doing what you love for a long time (in a sustainable way).

It sounds so simple, but it is very hard. In fact, it is the hardest thing to do - because the market is ruthless. People have seen all manners of things, and their tastes change. They get bored and tired easily. So to build a sustainable following, you have to be sincere and you have to be innovatively unique. It takes a long time, and there are no shortcuts. 

That’s the hard part. That’s the only thing that should matter. So, don’t worry about raising money, using the best/latest technology, running 200 A/B tests looking for that copy that will improve your conversions by 20% or anything else that is inconsequential in the early days. Once you focus on avoiding market failure - that forces you to figure out how you can add value in a way that no one else is doing currently, which will dictate everything else. It will dictate the technology you ultimately use, your marketing plan, the features you implement, the team you build, and the investors you raise money from.

That’s the great thing about helping people build their minimum viable product. The best part is helping them figure out/begin to figure out, where that unique value proposition is. 

Once you avoid market failure - or conversely achieve product/market fit - the market will forgive you for all the other mistakes. They will forgive your servers constantly crashing for the first few months/years, your PR gaffes, your sloppy marketing page copy and even your animated gifs. As if not having to worry about those issues killing you, an added bonus is….once you have done the hard-work on your own….you will have maximum control and maximum leverage. When you want to raise money, it will be on your terms. You can hire the people you want, because you will have the pick of the litter. It won’t be a cakewalk, but in comparison to avoiding market failure it will sure feel like it.

If the market never notices you, and you fail there first….then the upside is you won’t need to worry about all those other problems.

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How a $20 MVP Has Made Me $X0,000

For months before I launched 5KMVP, I had been running experiments on Hacker News.

Part of the experiment was to validate my thesis.

Thesis: At some fixed price point, people are willing to invest in building an MVP.

After getting some leads (and projects), over the space of a few months, from HN and talking to many people (from Twitter and HN), a few things jumped out at me.

  1. The $5K price point is perfect for what I want to do. It is high enough to weed out people that would likely not value what I bring to the table. It is low enough to reduce friction to get potential customers to say ‘Yes’. It also provides the perfect jumping off point for larger projects. I tried other price points too, from $3K to $7K to $10K. $5K works best for MVPs.
  2. Fixed budget & timeline work well - leaving variable scope (to be negotiated with the client). Given that this is an MVP, that works well - because the focus should be on the core ‘viable product’ portion of the MVP. So bells & whistles need to be cut.
  3. Targeting customers that know what an MVP is, also helps to improve the quality of clients I interact with. They don’t want a web page that their cousin’s son-in-law’s first cousin can build for them, when s(he) is not fixing computers. They want helping figuring out what is their MVP and how should they build it.
These realizations gave me the confidence to setup a landing page for a service dedicated to building minimum viable products.

The next decision I had to make was….what will my landing page do? Given that I am a Rails dev, will it be a Rails App? I spoke to a few trusted colleagues and got a variety of responses. Some feedback I got was that I should build a minimalist Rails App that handles the entire engagement (i.e. someone fills out a form, and it pushes that form down a funnel and has all these nice features that allow them to pay easily and keep track of the project as it progresses).

I liked the idea at first, but it didn’t quite sit well with the notion of an MVP. What kept playing in a loop in my head is that I needed to validate the $5K MVP idea before devoting any significant development time to building an app for it.

So I bought a theme from Themeforest (roughly $20) and decided to go meta. Make as minimal an MVP as I can, that validates my hypothesis.

I have one call to action button which is a simple ‘mailto:’ button - that launches your email client. Perfect? No…..but it gets the job done. People that want an MVP built, don’t want to have to interact with a fancy system. They just want the quickest and easiest way to get in touch with me. Email is that way.

I worked on the copy, got my portfolio together and just put it together in a day or 2.

Then, I used Github Pages to host it (free) along with Google Apps (also free) and launched.

Tweeted it, posted on HN, and wrote a guest post on Techcrunch.

I am pleased to announce that it has been validated many times over.

I have gotten multiple projects directly from 5KMVP - at least 1 of which is a multiple of a 5KMVP. It is a multi-phase project that is broken up into manageable chunks. 

The best thing about this experiment is that 5KMVP is proof positive of me eating my own dogfood. It is also a “successful” case study, about correctly deciding what your MVP should be based on what your business goals are. 

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IE 8 Filter Style + Heroku Rake Asset Pre-Compile Error

If you are getting an error that looks like this:
could not connect to server: Connection refused Is the server running on host "127.0.0.1" and accepting TCP/IP connections on port xxxx?
…when pushing your Rails 3.2+ app to Heroku, there could be two problems at play. 
If that is all that you are seeing, then it likely means that Heroku is trying to initialize your app when it does `rake asset:precompile`. The issue is that there is no DB configured in a `non-initialized` state, so Heroku throws a fit. 
To fix that, they have a nice guide here (which basically involves just adding 1 line to your `config/application.rb` file).
However, if you are seeing something like this:
Running: rake assets:precompile
      rake aborted!
      Invalid CSS after "...: alpha(opacity": expected comma, was ":0);"
      (in /tmp/build_1lypjy898u7o0/app/assets/stylesheets/application.css.scss)     (sass):3665
Then it is very likely that you have another issue.
Apparently, the common css style rule that is used to apply an opacity filter to CSS objects in IE8 and below is illegal syntax.
Meaning that: `filter: alpha(opacity:0);` is an illegal CSS rule. As a result of that, SASS throws an error when it’s parser comes across these rules - which causes the entire precompile process to fail.
It is apparently a problem discussed and addressed in Rails before, but given that it is a SASS issue - and also that it involves illegal CSS syntax - the Rails maintainers have decided not to do anything to allow this call (understandably so).
So…the simple fix is to comment out all occurrences of that call in your stylesheets. IE9 allows the regular, `opacity: 0;`, I believe - so you should be fine for all browsers in the future.
An easy way to test this further, locally, is just to create a new git branch and run ‘rake asset:precompile’. You will see the errors it generates locally and you can work your way through it like that.
However, I went through many different solutions and commenting them out - turned out to be the easiest.
Let me know if you come up with any other solutions.
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Wanted for the Caribbean: Digital Craftsmen.

Whenever I think about our regional tech industry, I struggle to understand the disconnect between what other people are doing in the world and what we are doing. There are many exemplary tech companies from all over the world that compete well on the world stage. There are at least two from Australia, many from China, India, and many other countries.

What creates even more confusion on my part is when I look at our other local industries. The Caribbean and Jamaica in particular have many industries that we participate on the world stage in and excel.

From the obvious reggae & dancehall break-out mainstream artistes (The Marley Men, Sean Paul, Shaggy) to less mainstream but with major followings (Mavado, Kartel, Tami Chynn, Jah Cure, Beres Hammond, etc.).

Not to mention our tourism product. That is by definition a global competitor, and we also excel there - with Jamaica being one of the few Caribbean territories to experience an increase in tourist arrivals in the midst of the global recession. What better to test the quality of our product offering than a global recession that hits all tourism markets?

We also have our track & field industry, where we absolutely dominate. Not just on the field, but also off the field with branding, marketing & revenue generation. This despite having a track that isn’t the best in the world - yet we produce the best athletes in the world, in almost every category.

The common thread in all of these cases is that all the participants didn’t have outside help (i.e. help from outside of the region). They all had to pull themselves up by their bootstraps and compete in harsh conditions. They all earn USD as their primary revenue stream (in most cases). They speak to a global audience. They are unique & innovative in their own right.

I am constantly marveled by the lyrics that our dancehall artistes come up with. While I don’t condone or support the vast majority of the lyrics, there were 2 lines that jumped out at me yesterday while listening to the radio from Mavado. Now, please don’t interpret my appreciation of the wordsmithness of this phrase as support/endorsement of any intent behind the lines. I just love seeing people innovate in their craft - even if I don’t necessarily agree with their position.

I don’t remember the name of the song (if you know it, please leave it in the comments and I will update my post), but Mavado said this:

I am not a fish/Because I am not afraid of the gully-side.

If you are not Jamaican (or have an interest in Dancehall), and don’t understand the nuance of that line let me break it down for you.

In Jamaica, gay people are called ‘fish’ - colloquially. Mavado refers to himself as ‘gully god’. He is from a ‘ghetto’ in Jamaica called Casava Piece (spelling??). That community is built around one large gully. Hence his name ‘gully god’.

He is reiterating the oft-repeated maxim that many artists say “I don’t hang out with gays” - i.e. no gay people can hang out on the gully-side. So, by extension, if you are gay you should be afraid of the gully side.

He is drawing a parallel to gay people and the culture of homophobia on the gully-side, to literal fish that swim in water and their fear of being washed up on the gully-side where they will be stuck and likely die.

In 2 lines, he captured the essence of Jamaican pop culture, his status in the local dancehall scene, where he grew up, and made a clever pun out of it. This is wordsmanship at its best.

Yes, many Jamaican artistes do crappy work and pirate other people’s lyrics and songs. But many come up with original content. They study their craft, they train, and they innovate.

That is what is missing from our tech scene.

We need to make a conscious effort to invest in our craft, learn about how we can generate revenue from customers all over the world - while still living in Jamaica - and compete on a world stage. After discussing this at length with David Bain & Matthew McNaughton yesterday at an informal meetup, David discusses it here, we have all decided that we are going to make a conscious effort to talk more about ‘Digital Craftsmanship’. Not just to raise awareness, but also to do our part - either through workshops or mentoring or anyway we can. 

We, our industry, get too complacent by aiming for “The first in Jamaica” or “The first in the Caribbean”. Imagine if Merlene Ottey aimed to just be fast in Jamaica - and didn’t compete on the world stage. Imagine if Bob Marley never toured and kept his music to himself and to Trench Town. Imagine if Butch Stewart didn’t pioneer all-inclusive hotels and raise the standards of the Jamaican Tourism product. We wouldn’t have those industries that we take for granted.

In a day and age when you can create any digital product your mind can imagine, when you can live in Australia and run a tech company that competes with Silicon Valley’s best - I challenge the entire tech industry to not try to be a “Silicon Valley in Jamaica” or even a “Silicon Mountain”.

Let people say….first they dominate reggae, tourism and track…now they are dominating tech. 

There is no reason we shouldn’t be able to, our peers have shown us the way. Any reasons you come up with, are just excuses. 

If you are a developer and want to become a digital craftsman, please feel free to reach out to me. I am on that journey myself, and I would be glad to lend a helping hand where I can. 

You can either Tweet @me on Twitter or contact me via the form on my blog.

Empathy for the “Other” Side

People tend to be tribalistic. Whether it is politics, religion, football (Jamaican and American), technology (vim vs TextMate, Ruby vs Java), etc.

It’s very easy to be caught up in your own dogma, but at the very least (I would encourage you to) be reasonable. Before denigrating/slandering/ridiculing someone else because they prefer something different than you, be cognizant of the fact that they may prefer it because of different circumstances than you.

For instance, not because you support Obama means that everyone that supports Romney/Ryan are idiots/stupid/crazy/dumb.

There could be a lot of reasons people support Romney/Ryan.

For starters, they could generally be disenchanted with what Obama has done - or hasn’t. 
  • He promised that the bailouts will jump start the economy and the economic recovery would be more robust than it has been.
  • He has come out in support of gay marriage - there are many that voted for him that are uncomfortable with that, and it could be a deal breaker for them. 
  • He has allowed the Republicans to hold many things hostage - like tackling the deficit in a comprehensive way, and such. In my opinion, he managed that process sub-optimally. 
  • He seems to be quick to spend, and not quick to fix the budget gap. I am not saying that he hasn’t offered any suggestions on how to fix it - but it clearly has not been his priority. I am also not saying that it SHOULD have been his priority, but that could be a perception (especially when Europe is melting down as a result of fiscal issues).
  • He will raise taxes on a bunch of people - both middle class and high income earners. He will offset those higher taxes with more tax credits for middle class - hoping that the net effect will be lower taxes for the middle class - but the fact is, there is a lot of uncertainty when it comes to taxes for a lot of people. Keep in mind that ‘middle class’ is up to $250K/year - i.e. small business owners.
  • He has done A LOT more for ‘large corporations’ than he has for small businesses - or rather, the effects of the stuff he has done for small businesses, won’t be felt for another few years.
  • Not to mention the fact that people might not like the idea of being forced to buy health insurance. I do agree that people should be forced, like they are with auto insurance - but not because someone doesn’t want to buy it, means that they are “dumb”. It could be a better financial move for MOST people (especially young people) to not do it. For the vast majority of the people that buy it, they won’t need to consume as much as they pay in premiums. That’s the very basis of the reason that insurance works. So there are many people that think they won’t need it right now - so they shouldn’t be forced to buy it. 
  • There are many people in many industries that will be displaced as a result of Obama’s policies - for instance, many middle class workers in the Oil industry that will be laid off and forced to learn new skills if Obama closes the tax loopholes that they take advantage of. Those people might not want to go through the headache of learning a new trade/skill/profession after 30 years on the job!
There are many reasons that people will support Obama too - that you may not be able to identify with.

The same goes for your local Orange or Green politician, black or white, rich or poor.

Let’s have a little more empathy for the “other” side, and try not to paint with a broad brush.

If you liked this, you should probably follow me on Twitter here.

What the Media Is Missing About the Apple vs Samsung Case

I made a comment in response to a blog post about the Apple vs Samsung case on Hacker News recently - that got a ton more upvotes than I thought it would have (and a few friends of mine encouraged me to write this post), so I thought I would post the jist of my thoughts here.

Apple wasn’t suing Samsung because they ‘copied’ one of their products. What Samsung has done is straight up IP (Intellectual property) theft.

There are many other companies that come out with many features in their products that Apple doesn’t sue. See Windows, Safari vs Chrome, iPod vs Zune, Adobe Premiere vs Final Cut Pro, most “ultrabooks” vs Macbook Air, etc. The issue here is that Samsung, HTC, et al. essentially have done what many manufacturers in China have done (and are still doing). 

They acted like a hardware manufacturing partner - then using the inside knowledge they gained of the intimate architecture of the products, they reverse engineered them and competed directly.
That’s like you hiring a web developer to build your startup - and both of you build it to traction, and once you take all the risk and prove the market, (s)he leaves and builds a direct competitor using his insider knowledge. It’s the most insiduous kind of ‘IP stealing’ that exists.

So Apple’s response is perfectly rational. 

If you had that done to you, and your ex-developer (in fact, he is still managing your codebase) is making a ton of money off of your ideas and IP in your market, I am sure you would be pissed too. The money is just sprinkling on top…and a definitive statement to other “partners”.

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Einstein’s Productivity Is a Model for All Entrepreneuers

The next time you think “I will start {X} another time. I have too much going on now….” consider this.

During the period when Albert Einstein wrote his 4 papers that revolutionized physics (including “The General Theory of Relativity”), he had a few things going in his life….including but not limited to:
  • A full-time job in a patent office in Bern, Switzerland where he worked 6 days - 8 hours a day (yes 6 days).
  • A relatively new wife (who most of his family hated/despised, at least initially)
  • They had a daughter, but there is no record of what happened with the daughter (insinuating that maybe his wife lost the baby or they gave her up for adoption - though there is no evidence to suggest as much). Either way, this must have been taxing emotionally.
  • They then had a son - Hans Albert Einstein
  • Einstein played in a string quartet once a week.
  • He had no access to a library to read other publications (because the library was usually closed when he wasn’t at work).
  • Oh…and he had no computer & no Google =)
Even despite these obstacles, he wrote 4 papers that fundamentally transformed physics and subsequently engineering.

Source - Einstein: His Life & Universe


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The Biggest Problem, for Jamaica’s Tech Industry, Is the Sum of Our Smaller Problems

I just came from lunch with Chad Cunningham and Gordon Swaby. We are trying to figure out, and put into words, the issues facing tech (more specifically internet/web) companies in Jamaica for a meeting with a government official coming up shortly.

After going through many scenarios of issues we face, the recurring theme always came back to the “small problems”. 
  • Registering an LLC easily & cheaply
  • Getting all documentation and tax compliance information in order for everything to be above board.
  • Getting health insurance for the owner and the handful of employees (and their families)
  • Accepting VISA, Mastercard, Discover, American Express from any consumer around the world
  • Doing business with US-based organizations
  • Importing any equipment we may need (laptops, computers, networking equipment, iPads, etc.) for everyday use - with a predictable cost. Right now, you never know what the end cost will be once the various duties and levies are attached.
Right now, all of the above are a headache in one way or another.

I have had to register a US-based Delaware Corp to get a US bank account to allow me to get a US payment processor account to process US-issued credit cards. All of that was easier (not easy) than working with the local banks. Not to mention that the local banks don’t process (the last I checked) Discover and American Express issued cards.

Gordon eloquently summed up our current problems with this phrase that I love so much that I had to write a post about it.

“Our biggest problem is the sum of our smaller problems.”
  • Tech startups don’t need a government run Venture Capital arm - what we need is a regulatory & justice system that allows investors to purchase preferred shares (or even common shares) in our companies and be adequately protected (both from culpability & liability for the wrong-doings of any companies they invest in). Just like a typical equity investment in the US.
  • Tech startups don’t need a government run health insurance program - what we need is to be able to buy insurance from the existing entities on similar terms that any individual can get by joining Churches Credit Union, or JN.
  • Tech startups don’t need large tax incentives because our net margins are high, and paying taxes is a good problem to have.
  • Tech startups don’t need any government land or buildings - because we can get by in our own homes/garages/offices.
  • Tech startups don’t need special treatment - all we need is fair treatment. We need the government to either issue new banking licenses to encourage competition in the banking industry - specifically to a bank interested in specializing in e-commerce transactions. From selling products online, to managing subscription payments in Software-as-a-Service (SaaS) apps.  Or heavily lean on existing institutions to be more e-commerce friendly, although…the skeptic in me thinks we would be better off with good old-fashioned competition. Issuing a new banking license to an entity interested in mobile & e-commerce would probably be the best bet.
  • Tech startups don’t even need import waivers, we just need certainty. We need to know that if we are bringing in an iPad, once it touches the shores we will be paying a flat fee (that is reasonable, 50%+ is NOT reasonable) for duty. We already know, via Mailpac, what the flat fee for the shipping will be. We need to know all the other flat fees.
Once those problems are fixed, the last thing we need is for JAMPRO to tell the world that Jamaica’s tech industry is open for business.

Show investors that there is a clear path to liquidity via our Junior Stock Exchange and JSE (especially through a USD offering). 

In short, we just need the government to streamline the basic issues that we have to deal with - i.e. the “small, every day problems”, and we will take care of the rest.

If you liked this post, you should follow me on Twitter here.

The Life of a Bootstrapper - Canada Denied Me a Visitors Visa Because “I Am Too Poor”

Update: I re-applied with additional information about my business and financial situation and they approved the visa for 2 - 3 years. 

 

Refusal-letter

 

I recently applied for a visitors visa to Canada (officially known as a ‘Temporary Residents Visa’) because my best friend is getting married in July. I went to Canada about 3 years ago for his brother’s wedding - around the same time of year - and it was nice. I have been looking forward to the trip.

Granted, I had my suspicions that my application was weaker than it could be - for a number of reasons.

I am a bootstrapper. A few months ago, I started doing freelance web development to pay the bills. The issue with that is the cash flow fluctuates significantly. So when a good month happens, I have to put aside for slower months. 

Needless to say, I couldn’t provide a ‘job letter’ or show any ‘proof of employment’ to a Jamaican company that requires that I live in Jamaica - because no such thing exists. The best I can do is show company registration documentation, and bank account statements in all my bank accounts (locally, and US-based). Also, the application process has collided with a “slower period” - so the bank statements are not flattering, to say the least.

I don’t own where I live, I rent. 

I purposely chose not to use my parents as financial support, because…well…I am almost 30 and have 2 kids (with 1 on the way). Plus…I earn my own living (kinda), damnit!

Before deciding to go down this road, I read ENDLESS stories and blog posts about others that have trod a similar path. I debated doing something where I raise money, or bootstrap. I hated the idea of losing control and I seem to have an affinity to doing things the hard way (not that raising money isn’t the hard way).

One of the things I didn’t quite realize is that even though you are bootstrapping, life doesn’t stop. You still need to interact with institutions that don’t understand the concept of a bootstrapper or even the startup life or even freelancing.

So let this be another data point you should consider when you think about bootstrapping. I always thought, “nah…that will never happen to me”. Seems it’s more the rule than the exception.

Now, it seems, I will be missing my best friend’s wedding in July. 

I read about rock-bottom, but never knew what it felt like. I know you might scoff “Pfftt…I used to live in my car”, but compared to what I am accustomed to, these last few months have been pretty damn hard and this almost feels like the nail in the coffin.

I am a pretty private guy, but I didn’t know what else to do other than let it all out.

The worst part about this all, is that I can’t see myself doing anything else - no matter how tempting it may be.

In other news, I am working on another product that I hope to launch in the coming days/week. If you are a freelancer, and want to find new business leads easier, follow me on Twitter so you can know when I launch that.

Can’t stop, won’t stop.

This is the life I chose, or better yet, the life that chose me.

The Simplicity of Apple

My mom just got a Macbook Air for Christmas, and I got the wonderful job of setting it up for her. I am a geek and for some reason, even though my Macbook Pro is about 2.5 years old, I get giddy just holding such a small but sturdy form factor in my hand. I might seem like a fan boy, but I am a cautious one. Even though I do development on my MBP, I still have a Windows 7 machine (dual-monitor) for ‘everyday use’. I can’t quite make the jump fully.

Anyway, back to the migration. I started thinking like I would for any normal PC migration. Where are the Application CDs, let’s get an external hard drive to track down her files and move everything there - then from the drive to the new machine. I immediately started to wrack my brain to figure out where her ‘profile’ files are stored - i.e. when you are doing a PC migration, to save your bookmarks and browser information (pre-Chrome sync), you had to manually search for those files in My Documents and transfer them.

I also started thinking about setting up iTunes and adding the new files and folders to iTunes so she can find it EXACTLY the way she had it - otherwise I would get ENDLESS support phone calls about finding her music and other media files (which I just treasure to get - Hi Mom :)) 

So I boot the Macbook Air, and about 2 screens in, it asks me for WiFi credentials. I enter password and move on. ~2 screens later it asks if I want to migrate anything from an old machine.

“Holy crap” I think…this cannot possibly be suggesting what I think it is.

I see a screen that looks like it is scanning for a WiFi network with some directions (go to old computer, go to Applications -> Migration Assistant and select the option ‘Migrate FROM this computer’). I do that, then come back to the Macbook Air. It finds my mom’s old machine, and asks me for the verification code that’s on her screen. I confirm it, and press ok.

It then calculates the amount of things that need to be migrated, 13.5GB. 

5.3GB of which are APPLICATIONS. “No way, I think. That can’t be possible.”

So I press continue and it goes. I leave it for about 6 hours while it transfers everything via WiFi from the old machine….I go back to the Macbook Air….literally everything is transferred. Office is installed and registered with the same product key (as her old machine) and in her name, Skype is installed with her credentials, it even transfers her OS X username and password, all her documents, pictures, music and movies. Dropbox is installed and configured properly and everything is in it’s place. The only thing that had a problem was an HP utility app for her printer/scanner. So I went online, downloaded the latest drivers and installed that - like I expected to have to do for everything else.

That’s it….everything installed. All programs setup, all documents in place, iTunes works with all her music, everything.

From an OLD computer to a brand spanking new one, with everything intact, with a few clicks + a few hours waiting for the transfer via WiFi, then a few corrections.

I don’t think I will ever be able to do another PC migration and not be more annoyed than I used to be.

Mind. Blown!

P.S. You can follow me on Twitter here.