Page 147 - 6 Secrets to Startup Success

126 6 SECRETS TO STARTUP SUCCESS

In 2006 and 2007, Mark Williams and his team poured their time,
energy, and capital into building out a range of learning products for
Apple’s click-wheel iPod, creating digital versions of well-known ti-
tles, such as Netter’s Anatomy for medical students, Frommer’s Travel
Guides for vacationers, and BrainQuest digital flash cards for kids. The
click-wheel device would soon seem as ancient as the rotary phone,
but in 2007 it remained one of the hottest mobile devices on the
planet.

As 2007 drew to a close, Modality’s early product sales were slug-
gish—not nearly enough to cover its monthly burn rate—but Mark
and his team remained optimistic because of advances in several areas.
The iPod’s internal architecture was virtually closed to third-party
developers, so Modality built software that would write content di-
rectly to hidden database files on users’ devices. Although technical
barriers prevented Modality from selling products through Apple’s
iTunes platform, it created a web portal to allow iPod owners to di-
rectly buy and install the company’s products. And, in a move that
symbolized its growing support, Apple provided a spot in its popular
retail stores for a test run of Modality’s BrainQuest learning products.

Thanks to the team’s passion and tenacity, Modality was begin-
ning to gain momentum. It had finally figured out how to sell and dis-
tribute early products, and relationships with Apple and publishing
partners were improving week by week. Mark Williams looked toward
2008 as the year when his team’s innovation and persistence would
pay off.

But in January of 2008, he learned that paradigm-rattling changes
were on the way. After years of closely guarding the operational guts
of its devices, Apple was preparing to open up the iPhone to software
developers around the world. The company planned to release a Soft-
ware Development Kit (SDK) in March, hoping to spark a flood of
innovative iPhone applications from both professional and amateur
programmers. Mark had kept an eye on the iPhone since its release
six months earlier, thinking it would be the next logical device for his
products. But Apple’s 180-degree shift from super secrecy to wide-
open invitation caught nearly everyone by surprise.

Apple’s turnabout presented a painful choice for Mark and his

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