The Myth of The Billion Dollar Startup

Venture Capitalists try to invest in a potential billion dollar startup.

The other day I ran across the web site of a company claiming to be the next billion dollar startup. The startup is ResumeAddress.com, and if you take a few minutes to watch the video on the front page you’ll see what I’m talking about. The video pitches that the startup will be a lot more popular than monster.com, Career Builder, Linkedin, and the plethora of other career and job related web sites.

The presentation has plenty of flawed points. For instance the speaker says that most internet startups rely on advertising as their sole stream of revenue. In contrast, Resume Address is also going to include premium accounts and employment services. However, neither idea is a particularly unique considering that Linkedin provides premium accounts, and sites like monster.com make most of their money from employers who post job listings.

The slick sounding sales pitch concludes by saying that everyone has a resume and thus would be using the service. The goals of the startup is not 100 million members or 800 million members, the speaker says. Rather, the expectation is that everyone who has a resume will be using the service. Since the video established earlier on that everyone has a resume, I can only assume that the expectation is for every adult on the planet to be a customer.

Billion Dollar Startup

I’m sure you’d agree that this startup’s goal is a tad unrealistic. Yet the dream of making it big — billion dollar big — is not so uncommon. The rags-to-riches stories of college dropouts striking it rich began in the early 80’s. Many of today’s most prominent technology company founders were college dropouts. Bill Gates, Steve Jobs, Michael Dell, Mark Zuckerberg, Larry Ellison, and even the founders of Twitter have one thing in common — none of them graduated from college

Bill Gates dropped out of college in 1975, two years after he began his enrollment. Steve Jobs enrolled two years earlier and dropped out after six months. Both of them went on to become founders of multi-billion dollar companies. Apple’s was first to go public with an IPO that generated more capital than any company prior since 1956. Microsoft went public five years later. Both Steve Jobs and Bill Gates became instant millionaires.

The idea that dropping out of college to become the founder of the next Google is popularized in the media. To make things worse, prominent angel investors and venture capitalists like Paul Graham further reinforce this myth. Graham touts the benefits of startups and claims that joining or founding a startup is the best way to get rich.

Graham got wealthy from selling a company he co-founded to Yahoo!, so it may seem that he simply encourages others to do what worked for him. However, Graham himself is a VC and runs the Y Combinator. Such startup incubators typically draw a younger crowd and are great for VCs to scout out new talent. However, incubator investors are mainly interested in a quick ROI turnaround, and VCs can sell a fledgling startup for a few hundred thousand dollars — hardly the millions many expect.

No Roadmap To Riches

In addition to having no formal education, the influential founders I mentioned above have something else in common — none of them planned to be billionaires. In fact I am not aware of anyone who actually set a goal of creating a billion dollar company and succeeded. Bill Gates didn’t wake up one day in 1975 and said “I’m going to found a 200 billion dollar startup”. In fact the first venture Gates attempted, called Traf-O-Data did not go very far.

According to Steve Wozniak, Steve Jobs never had grand plans either. His initial idea was to make a $20 computer board and sell it for $40. Mark Zuckerberg created Facebook in response the lack of a web based student directory at Harvard. Michael Dell started his company when he began putting together computers out of bulk purchased parts in his dorm room.

Google’s founders initially tried to sell their technology to Yahoo! as well as a number of other, now defunct search engines. It was only when they couldn’t sell their search engine that they started Google. Ironically nobody wanted buy Page and Brin’s brilliant search engine because it worked too well. Many search engines at the time (such as AltaVista and Excite) were web portals that wanted visitors to stay on the site as long as possible. A good search engine meant that users would quickly find what they were looking for and leave.

The Startup Culture

I once went to startup oriented event where a VC bluntly called small companies a “lifestyle business”. Although the VC was careful to say that the term is not being used in a derogatory manner, VCs clearly frown upon the concept. It makes sense since a venture capitalist is essentially a proxy investor for a wealthy client who is simply looking for the maximum return on their investment. Small business is not the place to invest if you are looking for a large ROI.

The startup culture is focused on creating rapidly growing companies that either end up going public or being bought by a Fortune 500 corporation at a hefty sum. Much like a Hollywood studio does with its movies, a VC expects most of his startups to fail and a handful to go public or be bought out (the more common outcome). In that regard a VC is not looking to fund a startup that delivers the most value, but rather a startup that is most likely to fetch a high price.

In essence VCs are not looking to fund a world changing company, nor a company that intends to go public. Going public is fairly risky — for instance Groupon’s stock price tumbled 90% after it’s IPO. An ideal case for a startup from a VC’s perspective is investing $10 million and selling for $100 million. However as I mentioned before, the chances of this happening are very small. Most startups will fail, some will generate a return two to three times the investment, and one rare startup will fetch a large ROI.

Value Is Where It’s At

Nobody creates a multi-billion dollar company because they consciously chose to. Something like this is impossible to predict and involves a great deal of luck. When Steve Jobs came back to Apple in 1997 even he didn’t think it was possible to revive the company. Jobs immediately sold all of the Apple stock he received from the acquisition of NeXT.

In spite of his own doubts about Apple’s future Jobs managed not only to revive the company but also turn it into a leader in technology. For the year of 2012 Apple beat Exxon in market capitalization value, making Apple the most valuable company in the world. Jobs didn’t plan to turn Apple into a 400 billion dollar powerhouse. He simply focused on delivering great value to consumers, and profits followed suit.

Yet despite the fact that none of these successful entrepreneurs planned to create billion dollar corporations, many startups are trying to replicate their success. When entrepreneurs get caught up in the startup culture they forget that their goal should be to create unique, valuable products or services. A startup can’t control whether it becomes a billion dollar corporation, but it can certainly control how much value it provides to the world at large.

This post includes a derivative work of Money in Hands by 401(K) 2013 used under the Creative Commons Attribution-ShareAlike 2.0 Generic license.

The Rise And Fall Of Microsoft (Part 2)

Steve Jobs and Bill Gates

In Part 1 of this series I talked about the rise of Microsoft. From the early 80’s to the bursting of the dot com bubble Microsoft was steadily climbing the ladder of success. However it wasn’t the dot com bust that caused Microsoft to fall off its pedestal. The seeds of its decline were planted long before then.

Microsoft’s Monopoly

Microsoft’s PC domination began with MS-DOS, but DOS had a limited lifespan. With the advent of the Graphical User Interface spearheaded by Apple in the mid-80’s Microsoft focused its efforts on Windows. Apple gave Microsoft unique permission to use graphical interface elements from the Macintosh OS. During that period Microsoft ended up being the only company that was able to develop a graphical OS without being sued by Apple. This gave Microsoft a huge advantage — they were effectively left without competition in the PC market.

Bill Gates fully capitalized on the opportunity to become the dominant vendor for a graphical OS on the PC. By the mid 90’s Microsoft controlled over 90% of the OS market. Microsoft became so successful that it ended up getting sued by the US government for anti-trust monopoly abuse. It was proclaimed a monopoly, but the judgment was overturned on appeal. Regardless of this outcome Microsoft still had a de facto monopoly in operating systems.

Having a monopoly in a market is a double edged sword for a company. On one hand a monopoly means the consumer has only one effective choice. This lets the company set hefty prices and reap the benefits of high profit margins. On the other hand a monopoly lulls the company into a sense of security. Other companies cannot effectively compete in the market the monopoly has a grip on. However, there is nothing stopping them from disrupting related markets through innovation.

Asleep At The Switch

Once it reached monopoly status Microsoft more or less ceased to innovate. After Windows XP was released in 2001 Microsoft fell into a major rut. Internet Explorer remained at version 6 for the next five years while Mozilla’s Firefox evolved and gained market share. A new version of Windows would not be released until 2007 — a full six years after the release of XP. Dubbed Vista, the successor to Windows XP was a disaster for Microsoft. Despite this the company has retained its market dominance. Microsoft’s monopoly effectively means that the only competition Windows has is from older versions of Windows itself.

Microsoft’s monopoly has propped up the company’s incompetence for over a decade. Product after product released by Microsoft during this time has been a failure. Instead of innovating and expanding into new markets the company chose to be reactive and copy successful competitors. First was Apple with the iPod. Microsoft’s response came late and ineffectively with the Zune. The product sold poorly and died a relatively quick death.

When Apple came out with the iPhone in 2007, Steve Ballmer famously laughed at the device as being too expensive. The iPhone became a major success, and Microsoft took years to develop a competing product. By the time Windows Phone was released in 2010 the market was already dominated by the iPhone and smartphones running Google’s Android OS. Both had a major lead on Microsoft with their products. Microsoft took another two years to make a truly competitive offering with Windows Phone 8. A similar situation occurred in the tablet market with Apple’s iPad still largely dominant.

A problem for Microsoft has been the tried and true business model that has served them well in the past. The company’s road to success was paved in large part by licensing DOS and Windows to computer makers. In contrast, Apple’s vertical integration strategy with the Macintosh was a relative failure. However, vertical integration has turned out to be very effective in the MP3 player, smartphone, and tablet markets. Microsoft chose to ignore this fact until it was too late.

Toxic Company Culture

In addition to the lack of incentive to innovate due to its monopoly status Microsoft developed a toxic company culture. Former Microsoft VP Dick Brass commented on this in an op-ed he wrote for the New York Times.

Microsoft's Organizational Chart
Microsoft’s Organizational Chart by Manu Cornet. See full comic at Bonkers World.

Brass writes that rather than working together in the best interests of the company, many employees were threatened by the success of their peers. This caused internal fighting between teams and department heads instead of the cooperation needed for innovation and success. One example he gives is the development of ClearType. Brass says:

“Engineers in the Windows group falsely claimed it made the display go haywire when certain colors were used. The head of Office products said it was fuzzy and gave him headaches. The vice president for pocket devices was blunter: he’d support ClearType and use it, but only if I transferred the program and the programmers to his control. As a result, even though it received much public praise, internal promotion and patents, a decade passed before a fully operational version of ClearType finally made it into Windows.”

Only by having a monopoly in the OS market could Microsoft be successful with this kind of infighting. In the computer industry a decade is an eternity. If Microsoft took 10 years to develop something that a competitor could do in a fifth of the time they would not survive for long.

Another example Brass gives is Microsoft’s attempt at developing a tablet computer. The VP in charge of Office sabotaged the effort by refusing to support the stylus interface in the Office suite. His reason for this was his personal dislike of using a stylus. The culture at Microsoft had ensured that nothing innovative conceived at the company would see the light of day.

In spite of the internal power struggles and its destructive culture Microsoft has remained very profitable. Thanks to its operating system monopoly Microsoft has survived with a culture that would destroy most companies. The constant influx of cash from Windows and Office has essentially protected the company from itself, and has compensated for its failure to innovate.

Microsoft’s Outlook

Microsoft is still highly profitable due its dominance of the PC market. However, the Windows and Office cash cows that the company has relied on for so long will not last forever. Faced with a stagnant PC market Microsoft needs a major change in its company culture to become an innovative enterprise. Successful reorganization would probably require a reshuffling of the company’s upper management, and putting in charge a new CEO.

Steve Ballmer and his executive team are making the mistake of treating post-PC devices as a subset of the PC market. However tablets are not simply “small laptops”. Ballmer’s strategy of slapping Windows on every new device that appears and hoping that OEMs will fall in line to license the OS is not going to be successful.

It’s possible that nothing can truly save the company from decline now. In order to revive itself Microsoft has to succeed in carving out a portion of the smartphone and tablet markets — an uphill battle for the company at this point. If Microsoft fails to establish a beachhead in these new markets then it will forced to relegate itself to the enterprise market. It certainly doesn’t face financial ruin, but it may never again be the major technology powerhouse that it was in the 90’s.

Perhaps I am wrong and Microsoft will rise again the way Apple rose from the brink of bankruptcy with the return of Steve Jobs. It’s impossible to say whether Bill Gates or another visionary will one day take the reins and bring Microsoft back to its former glory. We’ll just have to wait and see.

This post includes Steve Jobs and Bill Gates by Joi Ito used under the Creative Commons Attribution 2.0 Generic license.

The Rise and Fall Of Microsoft (Part 1)

Bill Gates mugshot

If you follow the daily comics on dilbert.com you may have noticed this Dilbert comic strip from a few months ago. In the strip, the iconic CEO of Dilbert’s company is being advised by a character whose name is given only as “the ugly truth”. The character tells the CEO that the company is doomed to irrelevance, and his advice happens to be very similar to what Microsoft recently did (change the company logo and release a tablet computer).

There was no hint or mention of Microsoft itself anywhere in the comic. Yet almost anyone who is familiar with the technology industry would recognize exactly who Scott Adams was taking a jab at. Microsoft was once a highly successful giant with unheard of profit margins. It controlled more than 90% of the desktop OS market and had computer makers in its pocket. How did Microsoft go from being hugely successful to finding itself on the path to irrelevance?

The Year Of Microsoft

When I first got into computers, Microsoft was impossible to ignore. The PC market was ruled by DOS 6.22 and Windows 3.1. A few years earlier IBM released their OS/2 operating system. While it was a great OS, IBM completely bungled its marketing campaign. IBM’s ads touted OS/2 as “a better Windows than Windows”. This served to further reinforce Microsoft’s position in the market, and OS/2 never gained traction.

By the mid 90’s the only real competition was from Apple, a company that was on a slow spiral to bankruptcy. On August 24, 1995 Microsoft released the long awaited Windows 95. It was a resounding success, and sales of the OS catapulted Microsoft’s stock to its historical maximum.

In 1995 Microsoft seemed unstoppable. The company was riding high on the rapid growth of the PC market, where almost every single computer sold came with Windows. Apple’s strategy of vertical integration failed because IBM made the mistake of opening the PC to cloning. This created an influx of inexpensive IBM PC compatibles, causing IBM to lose the market it created and leaving Apple unable to compete due to the comparably high cost of Mac production.

Microsoft’s Early Days

This massive success did not come to Microsoft overnight. In an interview with Robert X. Cringely, Steve Jobs says (albeit begrudgingly) that Microsoft has “earned their success”. In fact the company owes its success largely to its co-founder Bill Gates. Somewhat improperly stereotyped as a computer nerd, Bill Gates was in fact a very shrewd and brilliant businessman.

Microsoft started out as a very small software company. One of their earliest products was Microsoft Basic which was highly popular. It was licensed and ported to many computer systems. The next big success for Microsoft was its famous contract to provide IBM with an OS for its new IBM PC.

Quick & Dirty Operating System

A commonly told story is that Microsoft offered IBM an operating system called QDOS (quck and dirty operating system) which was developed by SCP. The story goes that Microsoft bought QDOS from SCP for a small sum, and then resold it to IBM thereby cutting SCP out of a large share of potential profits. However what is often missing from this story is that Microsoft was not IBM’s first choice, nor was QDOS an original product.

IBM was initially interested in a very high quality operating system named CP/M which was sold by Digital Research. When the two companies could not agree on a deal, IBM was left without an OS for its computers. This is when IBM turned to Microsoft which at the time did not actually have an OS to deliver. Bill Gates promised IBM an operating system before he even had one to sell.

Unaware that Gates was selling them an unlicensed clone of CP/M, IBM agreed to a deal with Microsoft. QDOS was rebranded by IBM to “PC-DOS” and offered at a much lower price than CP/M which led to its eventual decline. Microsoft’s success in this case came from IBM’s double blunder. First, IBM did not perform enough research into the OS Microsoft was offering, and second they allowed Gates to license the OS rather than buying it outright. This licensing scheme would become Microsoft’s flagship strategy for years to come.

Bite The Apple That Feeds You

While Microsoft saw huge success on the IBM PC with DOS, Gates was not oblivious to the fact that graphical user interfaces were the future. Apple’s Macintosh computer was the first mainstream system to present users with a GUI instead of a command prompt. Microsoft did not sit idly and developed a plethora of applications for the Mac, including the well known MS Office suite.

Microsoft of course did not want to be relegated to being an applications vendor. They wanted to create their own graphical OS. A commonly held belief is that Apple stole the GUI from Xerox, and Microsoft then stole it from Apple. Despite the famous Steve Jobs remark that “good artists copy, great artists steal”, Apple in fact got permission to reference the GUI developed at Xerox PARC. In exchange for a demonstration of their technology, Xerox was allowed to invest in Apple at a time when Apple’s stock was experiencing rapid growth.

Microsoft had advance access to the Macintosh, and Gates saw a major opportunity in Apple’s refusal to license its OS. He immediately tasked his engineers with creating Windows 1.0. When Apple’s CEO John Sculley got wind of this, he threatened to sue Microsoft. Gates responded by threatening to pull all of Microsoft’s products from the Mac. Seeing little threat in the primitive Windows OS, Sculley agreed to license the look and feel of Apple’s GUI to Microsoft. In exchange Gates would guarantee continued development of Mac software by his company.

Since Apple refused to license its GUI to any other company, it effectively squashed any competition that Microsoft had in the PC market. Apple unwittingly removed any barriers Microsoft had to becoming the sole provider of a graphical OS on the PC. Sculley’s decision turned out to be one of the biggest blunders in history of computing, and secured Microsoft’s domination of the PC market.

Microsoft: A One Trick Pony?

A series of competitor blunders that Bill Gates fully capitalized on got Microsoft to where it is today. The company rode the wave of Windows 95 success for half a decade, at which point Bill Gates handed over his position as CEO to Steve Ballmer. After peaking Microsoft with the Dot Com bubble, Microsoft began a gradual slide into irrelevance a decade ago.

While it still controls most of the PC operating system market, Microsoft has failed in its attempts to diversify its offerings. Microsoft is relying on an increasingly stagnant PC market as its primary source of revenue. So far the company has been unable to successfully establish itself in important post-PC markets consisting of smartphones and tablets, with just 2.9% of smartphone market share as of this writing.

Continue to Part 2 of this series where I examine the root causes for Microsoft’s current situation.

This post includes Bill’s Mugshot by Pedro Vera used under the Creative Commons Attribution 2.0 Generic license.

Replace Your Landline With Google Voice

Bell Telephone Company Phone Booth

If you are reading this it is very likely that you have phone service provided by your cable TV company. Cable companies popularized their VoIP offering through their “triple play” packages. By getting cable TV, internet, and phone together you save a bit of money. However operating a VoIP service is very inexpensive, and you can get it literally at no cost by switching to Google Voice.

The High Cost Of Phone Service

The average cost of VoIP service with a triple play package is $30 per month. It may seem like a good deal, but in reality you are being significantly overcharged. VoIP service is very different from PSTN analog landlines which used a physical network of dedicated switches and cables. When you picked up the phone and made a call you literally created a physical connection in the telephone company’s network. This network cost money to build and maintain, and thus a fee (particularly for long distance calls) was justified.

With VoIP technology the call travels over the internet. A pure VoIP to VoIP call is actually 100% free, which is why Skype doesn’t charge for PC to PC calls. Money comes into the equation only when you call a landline or cell phone. In this case the company on the receiving end of the call charges the caller’s provider a fee called the Termination Rate. In the US this fee is 1 cent or less per minute. If you are paying $30 per month for your phone service then from your provider’s perspective you are paying for at least 3,000 minutes. This means that even if you clock in 50 hours of phone usage in a month your cable company should still make a profit.

What Is Google Voice?

At its most basic, Google’s service lets you make free PC to PC calls between yourself and other Google users. For the last couple of years Google has also provided free calls from PC to phone within North America. This is the key feature necessary for replacing your current home phone service with Google Voice. Although Google has not made long term promises to keep the service free, it is likely to remain so for the foreseeable future. Even if Google were to begin charging for calls it would likely be around 1 cent per minute — the amount necessary to cover their expenses. At that price you are still going to get a better deal than a flat rate plan with your cable company.

What’s worth noting is that Google’s intent with their service is not to replace your landline. Rather, their goal is to provide a unified phone number solution. Google Voice can do many things, such as letting you use a single phone number to ring all your existing phones. It also supports sending and receiving text messages. For the purposes of using Google Voice to replace your landline however, these are not very important.

Google’s offering is not the only option available. Before I settled on Google Voice I considered using a Skype number, which is much cheaper than phone service from a cable company. The cost of a phone number with unlimited calls in North America is $60 per year. However the high cost of Skype compatible handsets ultimately led me to abandon the idea.

Setting Up Google Voice

Google Voice is currently available only in the US, and requires creating a Google account. If you don’t have a Google account then creating one is very simple. To add Google Voice to an existing Google Account simply go to google.com/voice. When asked whether you want a new phone number or use an existing mobile number, select “I want a new number”. You will be required to enter an existing US phone number that you are currently using. Google will then call you to verify that the number is yours. You will then be asked to choose a new phone number which will become your Google Voice number.

Once you set everything up go to settings and make sure that calls are only being forwarded to Google Chat. Note that Call Screening is enabled by default. You can turn it off in the Calls tab. Now you can start making free calls to North American phone numbers via Google Talk, and you have a phone number you can be reached at when you’re on your computer. While you’re here, make a test call from Google Talk to your phone. This is a required step for setting up the Obi100 bridge I cover in the next section.

Obi100 — A Bridge To Google Voice

As I mentioned before, I decided against using Skype for phone calls because it required special and expensive phones. What’s nice about Google Voice is you can use a regular phone with it. Of course you can’t directly connect a phone to your computer, but you can get a device that will translate your phone’s analog signal to VoIP.

The one I personally settled on is ObiHai’s OBi100. While certainly not your only hope, the Obi100 is inexpensive and is compatible with Google Voice. Also available from ObiHai is the OBi110. This model costs slightly more, but allows you to retain your analog landline. This is useful if you want a backup in case of a power outage. Another reason to keep the landline is for 911 emergency calls. Google Voice on its own does not support E911 which is routes the call and reports the caller’s location to the 911 operator.

ObiHai has a tutorial explaining how to configure your Obi device for Google Voice. To set up your Obi, you will have to create an account on the ObiTalk site. In addition to configuring your Obi device there you will have to provide your Google account user name (Gmail address) and password. Note that the connection used to transfer your credentials is secure, and your password is stored only on your Obi device. Keep in mind that if you ever change your Google account password you will need to update the password on the ObiTalk site. Otherwise the Obi device will be unable to place or receive calls through Google Voice.

Once your Obi device is set up, you will be able to place and receive calls through a phone that is connected to the Obi. Simply give out your Google Voice number as your home number, and you are all set. When you make an outgoing call this number will appear on the recipient’s caller ID, thus making it look like a regular phone call. At this point no further configuration is necessary and you can enjoy a free phone line that acts identically to phone service from your cable or phone company.

Google Voice and 911 Service

If you live in the US you are quite familiar with the 911 emergency number. In the old days when you called 911 the PSTN was configured to connect you with the nearest call center. Since your phone number was tied to a physical location (such as your home) the 911 operator would instantly know where you were calling from. If you have a backup landline connected to an Obi110 device you are all set. 911 calls made from your home phone will be routed through your landline and you have nothing to worry about.

If however you are relying solely on Google Voice for calls, things are not so cut and dry. Much like a cell phone, VoIP calls can originate from anywhere. Although you are setting up Google Voice for a home line, there’s nothing stopping you from using Google Talk on a laptop to make a call from work, school, or a friend’s house. In other words, a VoIP phone number by default has no location information associated with it.

Commercial VoIP providers such as your cable company are required by the FCC to provide E911 service. Instead of trying to determine the caller’s location however, they simply provide the 911 operator with the address associated with the customer’s account. Since the service provided is for a fixed phone line, this method of locating the caller is pretty reliable.

Google does not require you to provide your street address, and even if they did it may not be economically viable for them to provide E911 for free. This may be why they decided not to provide E911 service for the time being. If you want to have 911 capability with your free Google Voice line, you will have to pay a small monthly fee. Based on my research VoIP providers charge a “E911 recovery fee” between $1 and $2 for the service.

ObiHai has a guide that explains how 911 services work with an Obi device. They recommend using a service such as Callcentric to add E911 service to Google Voice. Callcentric has a pay-per-call plan with no monthly fee and charges $1.50 for E911. Companies like Callcentric use a similar approach to a cable company — they ask you to provide the address where you are using your VoIP service and pass it along to the 911 operator.

Altogether you will pay an average of $18 per year to get unlimited calling across North America and E911 capability. That’s a much better deal than the $360+ per year you would pay your cable company for the same service.

This post includes a derivative work of Phone Booth by Ben Husmann used under the Creative Commons Attribution 2.0 Generic license.

5 Reasons To Use NetBeans For PHP Development

My story with programming and IDEs began way before NetBeans was around. During my time as a game developer I started out with Visual C++ 6, but when it came time to port my game to Linux and Mac OS X I had to find something else. In order to keep things as consistent as possible for myself across platforms, I settled on Eclipse. Eclipse is a versatile open source IDE which was originally created by IBM. Just as NetBeans, Eclipse is written in Java and runs on each of the Big Three operating systems (Windows, Mac, Linux).

I used Eclipse for many years for various C++ development work, mainly on Linux. Eventually as I got into PHP development I saw it as a natural progression to keep using Eclipse, since it has support for PHP. As great as Eclipse is, it has a very steep learning curve. The myriad of configuration settings will make you go through all five stages of grief over the course of about 15 minutes as you struggle to get things working. Nevertheless, I was using Eclipse with PHP for a while when a colleague pointed me to an IDE I heard of but never tried. It was called (wait for it..) NetBeans.

NetBeans has a similar history to Eclipse in that both were initially intended to be Java IDEs. In its current incarnation, NetBeans was developed by Sun Microsystems (now Oracle), and considering the fact that Sun created Java it makes sense that they’d write an IDE for it. However, much like Eclipse, NetBeans can be easily extended to work with other languages including PHP. Here are five reasons why you should consider NetBeans if you are a PHP developer:

1. NetBeans is fast

If Eclipse is an aircraft carrier, NetBeans is a gunboat. It will literally run circles around Eclipse when it comes to performance. This is simply because NetBeans is a much smaller application. Being that both are written in Java, the smaller the application the better. Eclipse is quite a memory hog, requiring up to 1 GB of RAM reserved to it for efficient operation.

2. NetBeans is simple

The IDE is streamlined, intuitive, and to the point. There aren’t many configuration settings, and there isn’t much configuration to do out of the box. I didn’t even have to point it to xdebug, which NetBeans found on its own. Eclipse is not quite so intelligent and would require you to set up pretty much everything manually.

3. NetBeans has SCM integration

NetBeans integrates natively with Git, Mercurial, and Subversion, which covers three of the most popular open source SCM tools at the moment. In addition, Clearcase is supported via a plugin. The only native SCM support I am aware of in Eclipse is for the archaic CVS. Other source control systems are supported via a plugin. In my experience these plugins often either didn’t work or required confusing configuration that was very frustrating. Needless to say, native support is very nice to have.

4. NetBeans is portable

Being that it’s written in Java, NetBeans can be used on your choice of operating system. This is particularly useful since many PHP developers write for Linux servers, and nothing is more handy than being able to run Apache locally to test your code as you are working on it. Of course your case may be as simple as being required to use a different OS at work than you do at home. In either case, IDE portability is very convenient.

5. NetBeans supports PHPUnit

Unit testing is very important, particularly in large and complex projects. PHPUnit is the most popular unit testing framework for PHP, and NetBeans has native integration with it. Much like with xdebug, NetBeans will detect and recognize PHPUnit automatically. The only thing you need to do is install PHPUnit via PEAR. This is particularly trivial if you are using Linux.

As you can see there are plenty of good reasons to use NetBeans. If you have never tried it or haven’t used it in a long time I encourage you to give NetBeans a shot. It’s quite a good development environment