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Flashback: The iPhone and the Early Days of the Web
I remember my first real grownup and serious web project outside of the university environment. It was 1994 and SSL was a novelty. People were making insane predictions that one day up to $600 million (think Dr. Evil) worth of consumer goods would be sold on the web worldwide. In 2007, just Canadian B2C sales were US$12.9 Billion.
Some folks, especially startups and smaller companies, saw the web as an opportunity to shake up the established order and establish a new sales channel or an entirely new business model. They invested what they could in building the first of what became known as e-commerce sites. Among established players, and some more conservative smaller players, there was initial hostility toward the new medium. When in 1994 I proposed to Ameritech (now part of SBC/AT&T) that they bring their lucrative print yellowpages online, I was run out of Hoffman Estates on a rail.
Innovation and Punctuated Equilibrium
In my last post about innovation I referred to Clayton Christensen and his concepts of sustaining versus disruptive innovation. It reminded me a little bit of the concept of punctuated equilibrium in evolution.
The idea is simple: suppose you have a bunch of monkeys working in an office. You have the executive monkeys who eat healthy meals and exercise at lunch time. Then you have the office drone monkeys who go outside into the rain and cold for smoke breaks and eat gyros and fries for breakfast. The executive monkeys have nice glossy coats, get the best mates and have nice condos in desirable parts of town. The drone monkeys...not so much.
Topics: Evolution, Innovation
Why the Behemoths Can’t Innovate
In some past posts I've looked at some of the cultural, organizational and process issues on why large companies find it hard to innovate with new, quality software. Today I want to take that process a step further and look at why established players have such a hard time innovating in general.
First two anecdotes, where I will combine the topics of Susan Boyle, chess and the Kindle. First, chess and the Kindle.
So I now am the proud owner of two Kindles, the small format Kindle 2 and the large format DX. It's great for reading novels, less so for reading reference books where you jump around a lot (even setting and using bookmarks in a small 30 page PDF is a pain). There are two areas where the Kindle falls short: there are very few chess books for it and there are even fever German language books. Hopefully that will change with the advent of the international Kindles and soon amazon.de will start selling ebooks.
Topics: Amazon, Barnes & Noble, Borders, chess, Innovation, Susan Boyle
More Newspaper Industry Musings
There's a good article over at the Guardian entitled Memories of a Paywall Pioneer by former Salon.com managing editor Scott Rosenberg. He reflects on Salon's experiences with various subscription and advertising strategies and muses on how Rupert Murdoch's move to charge for content is likely to play out. I especially like this succinct formulation of the bad business strategy being followed by "old media":
I start with the assumption that internet-based media will gradually come to dominate news distribution and consumption over the next, say, quarter-century. TV and print won't vanish but they will steadily lose readers, influence and revenue. They ought to be using their "legacy" revenue to fund the expansion of their online presence and experiments; instead, they seem today to be eager to squeeze their online operations for revenue to subsidize the old newsroom. It's the same kind of short-term thinking that has already allowed so many newcomers and interlopers to seize their readers and advertisers.
His point that once readers get it in their heads that your site is "closed" to them, they hardly ever come back, should give Rupert pause.
Topics: newspapers
Destroying the Village — How not to Save the Newspaper Industry
A whole lot of years ago, maybe back in 1992, I went over to Gary Becker's home to install a gopher client on his mac. I remember it was one of those brick macs, though those were already being supplanted by newer mac models. I also remember making a decision to install an early web browser on his mac, even though there wasn't a whole lot of content there compared to gopher. I talked his ear off about how it was so easy to put in actual links to other documents, sort of like citations that would take you to the other documents instantaneously. I thought at the time that this would change the very nature of how people would read and use written materials. Given how little text was actually online at the time, this seemed pretty far fetched. Witness that I got fired from a project in 1994 for having the temerity to suggest that Ameritech put it's Yellow Pages online. Well, it turns out that I was right.
Fast forward 16 years. Now that same Gary Becker is sharing a blog with the well known Federal Appeals Court judge Richard Posner. In a post from this past June 23rd, Judge Posner takes on the accelerating decline of the newspaper industry and proposes some legal solutions to the crisis. The nutgraph is this:
[I]t is much easier to create a web site and free ride on other sites than to create a print newspaper and free ride on other print newspapers, in part because of the lag in print publication; what is staler than last week's news. Expanding copyright law to bar online access to copyrighted materials without the copyright holder's consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder's consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.
Judge Posner's assessment of the situation and his proposed solution constitute a cognitive, practical and freedom of speech failure.
Topics: newspapers
Contrasting Apple and Microsoft’s Product Strategy: A Tale of Two Spills
Daring Fireball had another insightful article on the contrasting product strategies of Microsoft and Apple last week. Well worth a read in it's entirety if you're thinking about your own product strategy.
A few observations were particularly trenchant and relevant to me in light of my own recent experience:
Microsoft is no longer ignoring Apple’s market share gains and successful “Get a Mac” ad campaign. But the crux of these ads from Apple is that Macs are better; Microsoft’s response is a message that everyone already knows — that Windows PCs are cheaper. Their marketing and retail executives publicly espouse the opinion that, now that everyone sees Apple computers as cool, Microsoft has Apple right where they want them.
They’re a software company whose primary platform no longer appeals to people who like computers the most. Their executives are either in denial of, or do not perceive, that there has emerged a consensus — not just among nerds but among a growing number of regular just-plain users — that Windows PCs are second-rate. They still dominate in terms of unit-sale market share, yes, but not because people don’t recognize Windows as second-rate, but because they don’t care, in the same way millions of people buy metric tons of second-rate products from Wal-Mart every hour of every day.
That’s the business Wal-Mart wants to be in — selling a zillion cheap low-margin items and turning a profit on volume. That’s not the business Microsoft is in.
The truth of this was particularly relevant to me because just a few hours before reading this, I had spilled a full glass of water all over the keyboard of my laptop. An occupational hazard of talking a lot with your hands, but one I'd successfully resisted for the last two years, since my last such incident. It's a still rather painful memory.
Continue reading »
Topics: apple, Microsoft, Product Strategy
Want to go viral?
This last weekend, my wife was sitting at the computer and laughing. I asked what was so funny, and she showed me a youtube video by Sons of Maxwell, a band from Halifax, Nova Scotia, called “United Breaks Guitars.” The song tells the story of how United Airlines broke the lead singer’s guitar, and the 12 month saga of trying to get reimbursement:
The video does not have a lot of production value, but its got humor, harmony, cheesy mustaches and sombreros. And it’s gotten over 2.6 million views over the last six days. Not bad for a band whose previous top video got about 25 thousand.
What does all of this have to do with software development?
Some of the same things that make the video a runaway success will help you in developing software that’s a runaway success:
- Solve your own problems. They’re their own target audience. They know the subject, what’s important, and what’s not. own subject. They know they’re not alone, so lots of other people have this problem. They’re passionate and that’s the best way to get others to feel passionate about it too. As it turns out, their problem is shared by millions, and their solution literally strikes a chord with millions.
- Be yourself. If they had been lawyers, they might have looked to start a class action lawsuit. But they’re a band that plays whimsical, fun country music, and so they made a song about it. They’re talented, not pretentious, and the song is catchy.
- What’s the big idea? It’s pretty simple - United breaks guitars, and they don’t care. The song has a simple vision, and it takes sides.
- Have an enemy. Pretty self explanatory in this case, but it’s equally applicable to software: “One bonus you get from having an enemy is a very clear marketing message. People are stoked by conflict. And they also understand a product by comparing it to others. With a chosen enemy, you're feeding people a story they want to hear. Not only will they understand your product better and faster, they'll take sides. And that's a sure-fire way to get attention and ignite passion.”*
- Essentials only. The video production qualities are low, the marketing budget was probably nil, but the song is funny, the tune is catchy, the harmonies are sweet, and the message is dead on.
None of this is a guarantee of success, but it sure helps.
Sounds a lot like Getting Real, doesn’t it?
* Have an Enemy, in Getting Real by 37 Signals.
Topics: Best Practices, viral marketing
What will Happen to a Giant
Although I’ve seen so many players rise and fall over the years, what has inspired this post is the irony of what is happening to Microsoft. In the early years of my technology career it was Microsoft’s ownership of the PC O/S market that primarily allowed other compatible hardware manufacturers to create innovation and eventually marginalize IBM’s dominance of that market.
In the early years of PCs, the applications on top of the O/S weren’t even Microsoft applications. It was only later that Microsoft started developing their own applications and with them the predatory practice of squeezing out other application providers to rule the desktop.
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If you read one or more of the Pathfinder blogs in our web interface, you may have noticed some tweaks to our navigation and top-level categories. Our goal in making these changes was to help different audiences drill down to the specific content that interests them. Instead of just a few top-level categories, we now boast around 20, though many posts appear in multiple categories. To subscribe via RSS to any specific category - or to our entire feed - just visit our Feeds page.
Topics: news
Everyblock, Another Missed Opportunity for Newspapers
Earlier this year I attended TECH cocktail's first Chicago conference. They've been filling a much needed local networking role for technology entrepreneurs, and their first conference here was both well attended and had a number of good speakers, with a heavy Chicago focus, from Threadless' Harper Reed & Scott VanDenPlas to Everyblock's Adrian Holovaty.
Recent events in the newspaper industry got me thinking about some of what Adrian has been saying on the subject.
Adrian, as some of you may know, developed an influential early mashup called chicagocrime.org that combined crime data from the Chicago police department with Google maps, and after a stint with the Washington Post, started Everyblock with a grant from the Knight Foundation.
Everyblock takes the concept of chicagocrime.org to it's logical conclusion, as a geographic filter that aims to collect all the news and civic goings-on that have happened recently in your city, and make it simple for you to keep track of news in particular areas. They collect information ranging from crime data, restaurant inspections and building permits to news stories and craigslist lost and found posts to help you answer the question "what's happening in my neighborhood?"
It's what newspapers everywhere have been trying to tackle with their hyperlocal strategy, but from a different perspective: The data is just as important as the story, if not more so.
That local data is what Newspapers are in a better position to collect than almost anyone else, if they made it their focus. Instead it's a means to an end for them, an end that is rapidly looking grimmer and grimmer. Meanwhile, folks for whom data collection, aggregation and synthesis are the end and not a means (like Everyblock, or business focused aggregators like IMS, Lexis Nexis, Factiva, Choicepoint and Thomson) look to have a much brighter present and future. Just another missed opportunity for Newspapers, I guess.
Topics: aggregation, everyblock, google maps, Mashups, newspapers
Everything’s Coming Up Windows
I've been beating the drum of cloud computing and the advantage that it gives to companies building solutions on Linux. Microsoft needed to respond. Well, now we have two solutions for Windows on demand:
- Amazon EC2 is offering Windows on EC2, with the pricing at $0.125 per hour for a small instance running Windows Server (as compared to $0.10 for a Linux instance). You can run SQL Server Express at no extra charge. The SQL Server Standard smallest instance (Stadard Large) rings in at $1.10 per hour, however, which ain't such a good deal.
- Microsoft's Azure Services Platform. It's still in community evaluation mode, but there is one thing that is already clear about it: it's as confusing as all git out. One of the advantages of Amazon's services like S3 and EC2 is that they are simple and can form the building blocks for other applications and services.
If I'm provisioning a web application, I'm pretty comfortable thinking in terms of virtual servers or instances. Not sure how to think about scaling and cost with Azure. I think MS would have done better to start out with a KISS approach to drive adoption. Time will tell if their "it can cure cancer" approach will work out.
Will Q4 iPhone Sales Surpass Expectations?
I went to the AT&T store on Friday to buy another testing phone for our developers, who are busily churning out more iPhone applications, and to switch one of my cell lines over from T-Mobile to my iPhone. It was an interesting experience, with T-Mobile's very friendly and courteous customer service reps pitching me strongly on the G phone, and my service getting switched over in the middle of a business call. I asked the AT&T store manager what percentage of their sales were iPhones, and after a bit of thought, he said about 65%.
Granted, that's only one location, but based on all of the annecdotal evidence I have, as well as how well the T-Mobile folks were trained to deal with the iPhone switch (not only on my request, but on my wife's similar call last week) I am expecting some pretty strong numbers form Apple tomorrow.
I'm also expecting decent G phone numbers for Q4, but I'm not sure how well they'll hold up later.
Update: It looks like Apple's Q4 iPhone sales topped 6.9 million, about 800,000 units more than RIM's 6.1 million in the equivalent period, beating most analyst expectations by a mile.
Interesting discussion on this over at Daring Fireball (of course) as well as a piece on Fortune on traditional analysts versus bloggers on Apple sales and earnings. The bloggers got the iPhone numbers better than the analysts, but everyone missed on mac sales.
Related Services: iPhone Application Development, Custom Software Development
Microsoft to Jump on Board EC2
Hold on to your hats; Microsoft has just made a radical change in business model. A couple of months ago I wrote about the competitive advantage that firms using Linux and Amazon's EC2 cloud computing had over their competitors.
Server-on-demand providers like Amazon's EC2, Joyent,
and others have reduced the capital necessary to launch scalable,
server intensive businesses. Google has just launched a similar
on-demand service, and companies like RightScale and CohesiveFT are building mature businesses around managing EC2 configurations....
Facebook applications are just the most extreme example of business initiatives that can be scaled on demand from $70/month on one EC2 server to $10,000/month on many dozens of servers running web, application and database server clusters and farms. Compare that with the old school of investing in a large data center with a significant fraction of the hardware and bandwidth that you might need if your business is a success. What used to cost $100k in capital can now be done with just a few hundreds of dollars.
...
And it's all possible as long as you are using a unix variant - Linux for the most part - to power your apps. So there is a whole class of companies out there using Linux that can out compete their Windows-using rivals - again, the capital they need to launch is much smaller because of cloud computing. That means Linux will win among the class of young entrepreneurial businesses that are so vital to the US economy.
“Build half a product, not a half-assed product” – tips on clarity and focus from Jason Fried of 37Signals
Jason Fried from 37Signals spoke yesterday at the ITA "Speaking of Success" event, about the history of 37Signals, their philosophy and culture, and the critical business decisions they've made to get them where they are today.
The software biz is fundamentally broken. Too many products fail because of the obsession of adding more and more, and trying to do too much.
Jason went on to say that the approach of adding more and more only works for companies that have lots of money and lots of time, but that for the average company the main goal should be to build something that is "good enough," get it out to the users, and improve the design based on their feedback. The challenge of which features to include, and which to say "No" to, is covered well in the "The Innovator's Dilemma," which he said "everyone in this room should have read." The book resonates the core philosophy of 37Signals, which is evident from their blogs, their book "Getting Real," and the design of the Rails framework. As an example of the "Good Enough" philosophy, Jason used his laptop and its basic webcam to stream the Q&A session out over justin.tv and send out a text to the 37signals Twitter group. "The quality probably isn't that great, but its good enough," and with that quick setup he had now broadened the audience by 1,000 users or so. (I searched for the video archive at justin.tv, but didn't find it yet.)
Betting Your Business on the iPhone
Monopsony - the market condition that exists when there is only one buyer.
We all have heard the term "monopoly" and even know a little bit of what it means - a market where there is only one seller. But the related term "monopsony," a market where there is only one buyer, is not as well known and it's dangers not as well understood.
Certainly both monopolies and monopsonies will reduce competition, innovation and consumer choice, but they further constitute a big risk for the sellers. For businesses on the seller side a monopsony can be the kiss of death. Just ask Walmart's suppliers how good it's been for them.
Not all monopsonies are as obvious or as overtly damaging to suppliers as that of Walmart, but Apple's iPhone and iTunes appstore looks like a benign monopsony. A monopsony in that although the iphone consumer is the ultimate buyer, Apple determines what is permitted in it's appstore, and benign in the fact that Apple hasn't flexed that restrictive muscle more than a few times.
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- Teamicide
- Who values your product and do you value them?
- Optimizing has_role? in acl9
- Pathfinder’s Mike Laurence wins Hack-a-thon for iPhone app
- Pathfinder sponsors the midVentures25
- Pathfinder sponsoring Day of Mobile in Chicago
- Refactoring versus Rewriting
- Storytelling in Design
- Remembered: Claude Shannon
- mort_calc gem: Rails Mortgage Calculation Gem