No blogging this week due to travel so I have posted some links to recent popular posts:
The Digital Age is Not a Solution
Social Entrepreneurship, Corporate Social Responsibility and Shared Value
In July 2010 I wrote a very popular post titled "A Strategy for LinkedIn". In the post I recommended:
"The second feature I would add to LinkedIn is a Hacker News for business. Hacker News is a very simple site where people post the best posts on technology from a wide range of sources including blogs, corporate media (e.g. NYT) and white papers. The content is not moderated but the users create such rich content that I sometimes think that if I had only one RSS feed to read every day it would be Hacker News. A "Business News" on LinkedIn would bring readers to the website more often to post articles, would over time probably produce a better source of business information for the members than the automated sites such as Google News or Yahoo News and again could be a new revenue source for LinkedIn through ad revenue."
In mid-2011 LinkedIn started LinkedIn Today, member curated business news. I have been a reader every day since it launched and the quality of the articles is very high. I recommend it.
Probably just a coincidence that LinkedIn did what I said in a post, but if anyone needs a consultant to increase web traffic maybe I can help:)
Schopenhauer, not Christensen from Wikipedia
Clayton Christensen, the well known HBS professor, once said that MIT has the highest density of creativity on the planet. Every time I spend a day at MIT I come to the same conclusion. Two observations inspired by things at MIT last week:
Wonder if Schopenhauer would have received a Ph.D from MIT?
It is well documented that new information is being created at the fastest pace in history. For much of history new information was developed at a pace where it was comparatively easy to disseminate the new ideas to students.
Today curating information is a challenge for which there are yet no really effective tools. Curators, such as text book writers, have a much greater challenge and responsibility. Abusing this responsibility has always been a problem (e.g. Japanese textbooks on WWII). As information proliferates the tendency toward abuse probably increases either purposefully or by accident. Given the power of lobbyists in Washington and at the state level, particularly in education matters, one becomes even more concerned about selective presentation of information.
The solution may be to give the students more autonomy in shaping their reading and experiences. Tools for students such as computers and Internet connectivity provide the access in real time to information. Learning to tell "truth from fiction" and critical thinking are important life skills and probably increasingly important in this age of Twitter, Google search and open access to government information. Teachers would become the guides to this student process of discovery.
This post was inspired by a quote from Seymour Papert in the Daily Papert:
“I do not suppose that all children were ever given full access to the ideas of any society. But at least in times of slower change, an equilibrium could be maintained between what society needed its members to know and the learning opportunities it offered (deliberately or mostly not) to its children. Since there is no reason to suppose that this is true today, and since, in any case, it is no longer acceptable that blind social forces be allowed to assign stations in life through differences in access to learning, deliberate effort is needed to bring to children knowledge that was not intended for them. School, even at its best, is too sluggish and timid to do this.”
Papert, S. (1993) The Children’s Machine: Rethinking School in the Age of the Computer. NY: Basic Books. Page 180.
This quote from Friedrich Hayek's the Fatal Conceit appears to support the same point:
"Life exists only so long as it provides for its own continuance. Whatever men live for, today most live only because of the market order. We have become civilized by the increase of our numbers just as civilization made that increase possible: we can be few and savage, or many and civilized. If reduced to its population of ten thousand years ago, mankind could not preserve civilization. Indeed, even if knowledge already gained were preserved in libraries, men could make little use of it without numbers sufficient to fill the jobs demanded for extensive specialization and division of labour." Source: cafehayek.com
Yet another thought on the same theme comes from Harvard Business Review in the article "Are You Learning as Fast as the World is Changing?".
I give alot of presentations and about half of them are sales presentations. With the popularity of Powerpoint, everybody expects to sit in a room and watch the projected information. With the advent of the iPad I have abandoned projectors in sales presentations in favor of sitting next to the decisionmaker and showing them the iPad screen. Anybody else in the room can look over my shoulder.
The great advantage of using the iPad this way is that you establish a very personal connection with the audience when everybody huddles around the device. Establishing that personal connection increases trust and credibility and there is an inherent openness through close physical proximity. Also, there is much less tendency for confrontation because most people need distance to argue.
Of course, in such a setting the content becomes even more important. Good presentations today use large images and very little text. This approach is particularly important when the audience is sitting next to you. Nobody expects a lecture from somebody sitting next to them showing them pictures.
Also remember that in such a setting the presentation needs to be shorter. People get uncomfortable sitting close to strangers for too long.
I do not know if this technique works for selling enterprise software, but it works for any product where the customer is emotionally engaged.
Image credit: Amillionlives.net
Education Futures advocates for an education system that trains students to be "knowmads". A Knowmads is a "creative, imaginative, and innovative person who can work with almost anybody, anytime, and anywhere".
Knowmads have nine characteristics:
This concept of the skills or traits required of students and/or future workers is very consistent with my view, as described in this post "How to Survive the End of the Industrial Age".
My friend @John_Menezes sent me this link to Clear Story after yesterday's post on "Data-based New Business Ideas". Clear Story is working on tools to manipualte big data sets, analyze the data and draw meaningful insights. What is particularly noteworthy are the blue chip investors-Google Ventures, Andreessen Horowitz and Khosla Ventures. These three firms are all top tier VCs, which suggests that the opportunity in big data analytics is very large.
IP Carrier is an excellent blog that focuses on new business models in telecom and related areas such as data. A recent story, "Is there a Tablet Killer App?", raised an interesting point not just about tablets but all computing devices.
From the early days of computing, a new device succeeded if there was a "killer app". A killer app was a software application that had such high utility that people bought the device to get the app. The classic killer app was the spreadsheet running on the PC. The conventional wisdom is that VisiCalc, Lotus 1,2,3 and Quattro Pro, the early spreadsheet apps, made the PC market. However, we all know that Microsoft Office, which integrated several useful apps, is the most profitable Microsoft product. What Microsoft realized is that the suite of productivity apps, and not a single product (app) was the way to satisfy the customer need. Effectively, Microsoft looked beyond the product and looked at what was the customer need. (Perhaps Microsoft's last great insight until they became a game company.)
This issue of looking at product and not the real customer need may explain the decline of BlackBerry. The "killer app" for Blackberry is generally considered to be email. However, email was available on PCs and the real benefit to the customer was reliable, remote access... to email. Reliable, remote access explains the popularity of BB Messenger in many developing countries where network quality is not good. Many people in such countries buy their Blackberry just for BB Messenger as a chat device. If Blackberry had realized that the way the device was used and not the app was important they might have dominated chat worldwide and not have their current problems.
If we now turn to the tablet, we should not be considering killer apps but rather why do people use the device. Fortunately there is no "killer app" on the tablet to confuse the analysis. In talking to hundreds of people about their tablet, nobody singles out a particular app consistently to explain their tablet purchase. The manufacturers all highlight their app stores but nobody ever says they bought an iPad because they can easily add new apps. Maybe early adopters mention such "geek nonsense" but typical users never mention it. What people typically cite is the interface and how everybody in the family can use the device--even two year olds. Maybe tablets are "family" entertainment devices or maybe they will become "childrens' connectivity devices".
When the tablet first emerged, Frog Design, the world renown design firm, said that the tablet was a new interface and not a new product (SF story, Frog Design article, both from March 2010). Frog focused on the customer and why they would use the device and not the device or its apps. This is the same point IP Carrier made in their story. It is a point that cannot be over emphasized. Understand the use case of the customer and not the product.
Last week I met with a young engineer to discuss his early stage company. The company has about $1.5 million in revenue and provides a sophisticated telecom service using proprietary software to manage real time data. The company has one large customer and the entrepreneur wanted to discuss how to find the next customer(s).
In the course of the discussion, I realized that the company, as a by-product of providing its service, was capturing information about company operations that the client did not have. Making the engineer realize this point was a challenge because he thought he was in the telecom services business. Any company that is capturing a large amount of real time data should step back and see if there is a more valuable use of the data.
For example, a company that does processing of insurance claim collections for doctors has a huge data base on the different procedures and costs for a standard medical procedure--a broken leg. Every legitimate doctor bills the same services and procedures. Any doctor that consistently bills insurance companies differently is probably a crook. We could use this database to identify Medicare fraud by doctors. Yes, the company does medicall billing to insurance companies but using the data to prevent Medicare fraud may be a more valuable business for the company.
This story last week in the NYT about GT Nexus also illustrates my point. The company has a cloud-based service that integrates the supply chain logistics data of large international companies and their thousnds of suppliers. Effectively the status of a shipment can be traced from point of origin to the ultimate customer. Taking this data in its entirety and you have a detailed view into the world economy, a data base that few, if any, other organizations have. GT Nexus has the ability to forecast economic performance based on leading trade indicators, calculate the balance of payments for countries and identify new sources of products by country (e.g. formally China and shifting to Indonesia). The by-product data of supplying logistics tracking is perhaps more valuable than the underlying service.
I frequently write about the need to understand the customer and not get trapped in constantly focusing on product development (especially for engineers). In companies that capture large amounts of real time data, perhaps one should consider if there is a more valuable use of the data for a new customer.
Fred Wilson did a nice post on his personal history in computing, which inspired me to recall my own history.
I first used a computer in 1969. It was a time share service provided by NORAD to high school students. The free dial-in service prompted us to make long distance calls rather than program the computer. Missed the chance to invent VOIP.
In 1982 I invested in my first IT company, a provider of videotext. Learned the importance of not being ahead of the market when investing. The Internet came along about 10-12 years later. Went off to Japan for eight years instead of continuing to invest in IT companies.
In 1983 I had my first email account on Compuserve. Used the account to surf Compuserve content from hotels around the world on weekends. Licensed Compuserve in Japan, which lead to the first ISP there.
In 1995 I made my first Powerpoint presentation at a conference. Everybody else still used transparencies or slide dollies.
In 1996 I established the first networked company in Indonesia for email. Also I built the first private voice network using satelite. Saw my first business card with just an email address for contact information.
I bought my first personal organizer in 1997, a Palm 1000. I bought my first BlackBerry in 1999 when it was an email only device. Wish they still made the email only version.
In 1999 I raised $35 million for an Internet-based company. The first Internet bubble burst shortly thereafter.
In 2000 I ran a telephone company and correctly called the growth in data services. Data service revenue grew to $18 million in one year. Experimented with private wireless networks for companies, which never caught on.
Started blogging in 2007. July will be five years. Great decision for me and hopefully the readers.
Started tweeting in 2008. Spanish language tweets give me great access to links and info I do not normally see. Have met some great people through Twitter (and blogging).
Joined OLPC in 2009 and began a serious education in operating systems and hardware components. 40 years after my first use of a computer I actually understand the engineering.
Image via Wikipedia
PsychCentral has an interesting article about AutoTutor, a software application developed at the University of Notre Dame. The app use artificial intelligence to improve learning outcomes by identifying student misconceptions about a subject and proactively correcting them.
Sidney D’Mello, an assistant professor of computer science and engineering at Notre Dame, states:
“Most of the 20th-century systems required humans to communicate with computers through windows, icons, menus, and pointing devices.”... “But humans have always communicated with each other through speech and a host of nonverbal cues, such as facial expressions, eye contact, posture, and gesture. In addition to enhancing the content of the message, the new technology provides information regarding the cognitive states, motivation levels, and social dynamics of the students.”
The riddle of educational software has perplexed educators and software developers since the advent of computers. This approach using AI is an interesting direction.
Thanks to Walter Bender for the heads up.
@espitia7 tweeted me an article from Frog Design, one of my favorite blogs. In the tweet he asked if I thought this new technology would be disruptive (as in Clayton Christensen's "disruptive innovation"). Thanks German.
Frog Design forecasts that most apps resident on a smartphone will disappear in favor of "just-in- time" cloud-based apps that provide information on the phone when you need it. For example, the cereal box in the supermarket sends a message to your smartphone and automatically nutrition information appears on an open browser page. Nice idea, but I can search that information in seconds on Google and see little value in an automated version. Where I do see value is in a scenario where I arrive at the airport, the airline recognizes I am there for a flight (like every other week) and sends the boarding pass automatically to my cell phone so I can proceed immediately through security. Or in my dreams, based on a statistical profile that shows I took fifty flights in the last two years, no planes blew up and I can go directly to the gate by showing a special pass delivered to my phone. These last two options would have value to me. This level of convenience would be disruptive.
Another benefit to just in time apps would be lower storage requirements on phones due to less software and updates. Phone manufacturers are looking to replace components through software as a means to lower phone cost in developing markets. These component replacement apps could use the space freed up from traditional resident apps.
Many thanks to all the people who have recently tweeted me interesting articles, including @miam_twopcharts, @john_menezes, @canningcollege, @siontele and @OLPC_Mexico.
Note: the Frog article includes a nice discussion of value creation and customer perception.
I have written frequently about the need to start entrepreneurship education at a much earlier age, perhaps as early as middle school. (Previous posts are here and here.) Two stories support this trend:
The related articles below talk about programs supported by the Kauffman Foundation and the University of Chicago. The quality of the people experimenting in this space and the exceptionally insightful early stage programs suggest that this trend should quickly become mainstream.
Early takeaways from these programs:
If anyone needs an advisor on such a program or an easy to read book on developing a new business concept, you might look here.
Image credit: business.wsu.edu
Recently I have been hearing much criticism of Android. Some people are suggesting that Android will survive on smart phones but not on tablets. The problem is that the user interface on Android is not satisfactory for many apps.
A very interesting article, "Nothing in Android makes sense except in the light of its original vision" explains the Android strategy. Android was designed to solve the hard problems in operating system development, as the author explains:
"The hardest part of building advanced mobile phones...was writing the lower-level software that the operating system uses to communicate with the hardware, including the radio baseband and audio/video controllers"
This strategy left the higher level issues in the software stack to manufacturers, app developers and carriers. They would be responsible for the user experience and interface. However, the Android toolkit to assist developers was not very sophisticated and resulted in slow run times. The developers were consequently very challenged and the user experience suffered. Some of these issues still continue and may undermine the long term viability of Android on the more sophisticated tablets.
While Android provided a great service in addressing the "hard problems" they left the all important user interface to others and consequently the user experience.
Image via CrunchBase
I have been thinking about collaboration more and more. There is no doubt that all the different new IT technologies are changing the way we collaborate. However, I was trained in the traditional command and control hierarchy which drove the economic growth of the U.S. after WWII and I do not give up proven systems easily. Also, I was raised in the Lone Ranger mode and did not even accept teamwork until I was about 40. Teamwork and collaboration are different concepts, but the point is that I was slow to see the value of groups and the value of combined output.
This story from Business Insider about Red Hat, one of the great companies built on open source Linux, illustrates some interesting points about collaboration:
From talking to people in open source cultures, there is also a higher requirement to hire A and A+ employees. Lesser types have trouble keeping up in a more free form management structure based on collaboration.
Image via CrunchBase
Everyone knows that Wednesday Facebook filed an S-1 with the SEC for an IPO, initial public offering. Tech Crunch covered the story and included a public letter from Mark Zuckerberg, the CEO of Facebook. In the letter Zuckerberg states:
"Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries.”
Tech Crunch interprets this quote to mean:
"Zuckerberg compares Facebook to transformative technologies like the printing press and the television".
First we should recognize that every big IPO has a fair share of hyperbole. Hyperbole often helps people to understand the larger but more complex part of the investment thesis. However, hyperbole works best when solidly grounded in fact. I do not agree that Facebook is a "transformative technology" comparable to the printing press, the telephone, the automobile or even Google.
All of these technologies or business concepts launched a new phase of the industrial revolution. Each of these concepts lead to multiple, large valuable derivative industries. For example, printing presses made possible magazines and newspapers, the telephone launched remote customer service and Google made possible You Tube and Wolfram Alpha. While Google may prove to be a catalyst comparable to the automobile, it is too early to tell. The automobile launched innumerable major industries, such as taxis, car leasing, parking lots, gas stations, car repair and even fast food restaurants.
My concern in comparing Facebook to these major innovations is that I do not think it will produce derivative industries. Facebook is a closed garden that companies pay to access. I think that Facebook is more like the phonebook was to the telephone. The phonebook was a great idea but few businesses were derived from the phonebook. The phonebook did not take the industrial revolution to a new more productive level.
While I do question the hyperbole in the Facebook IPO, I think Facebook will be a successful transaction. Hopefully it will launch a strong IPO market for tech companies over the following twelve months.
Image via Wikipedia
Back in December I posted a new business idea about electronic portfolios for students. Turns out this idea has been around since at least 2008. Boston University started their project that year and about 10,000 students have created portfolios to date. Perhaps these numbers do not suggest a viral adoption rate but 10,000 is a significant percentage of the BU student population.
Perhaps some commercial support for the idea of e-portfolios could make it viral. There are many articles recently about how the interviewing process is going digital, with companies asking for videos, digital content libraries, etc. What could be more informative than a history of student work and intellectual development.
More on the BU project is here. The project is under the direction of Evangeline Harris Stefanakis, an associate professor.
Many have recently written on the end of the industrial age of mass production and the new economy that is emerging. Seth Godin's article is particularly good and another post from Business Insider is equally thoughtful. My first post on the subject, "A Future of Individuals", is here.
Most commentators agree that jobs in big business (and perhaps government) will be greatly reduced and that individuals will need to manage their economic survival much more aggressively. Few have offered plans for how to do this, so I share a few thoughts:
"However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays." New York Times Not just the manufacturing jobs but all the design, engineering and logistics jobs.
"In any democratic nation with the freedom of speech, information can never be as strongly regulated by the public as our food, water, and air. Yet information is just as vital to our survival as the other three things we consume. That’s why personal responsibility in an age of mostly free information is vital to individual and social health." Clay Johnson The Information Diet: A Case for Conscious Consumption from Brain Pickings
“One of my central mathetic tenets is that the construction that takes place “in the head” often happens especially felicitously when it is supported by construction of a more public son “in the world” – a sand castle or a cake, a LEGO house or a corporation, a computer program, a poem, or a theory of the universe. Part of what I mean by “in the world” is that the product can be shown, discussed, examined, probed, and admired. It is out there.” Seymour Papert The Daily Papert
Image via CrunchBase
An article on Brooks Review, "If I Were CEO", got me thinking about what the new CEO of Rim should propose as a go forward strategy. The task is daunting in part because the simple choice to sell the company is probably not viable. I seriously doubt anybody would buy an broken underperforming company in the most competitive tech markets--handsets and tablets. This chart from Google Finance of the RIM stock price may support my view.
In considering a new strategy the CEO needs to recognize three facts:
Setting out the market situation is the easy part. Finding a new strategy is the hard part. My thoughts on the new strategy:
Alternative A: Do a Nokia+ strategy
In addition to exchanging cash for exclusivity with Microsoft for their phone operating system, I would do the same deal with Intel. Intel is looking for a big splash for their new low energy chips and I think they would part with significant upfront cash in return for a RIM deal. I would use the cash to heavily promote the new Windows smartphones and tablets, put some money into building out the Windows app store and..drum roll...focus on the developing world where consumers like the free BB messenger and fewer consumers have chosen smart phones and tablets.
I do not particularly like this strategy because essentially all intellectual property is under the control of Microsoft and Intel, neither of whom play well with others. Also, the cost of this IP would be comparatively high, which would put pressure on margins. The advantage of the strategy would be a cash horde that provides time to try a new strategy.
Alternative B: Bet the Company
I think the Samsung Note demonstrates a new product category--the merging of the smartphone and the tablet. Except for Samsung nobody has a quality product in the space and most competitors are more focused on a 7" tablet similar to the Kindle Fire. With RIM's historic strength in enterprise, they could market the Blackberry Note (need to work on the name) to companies as a lower cost alternative to buying employees both smart phones and tablets. The device would run Android to solve the app store problem. All of RIM's encryption and interface know-how for corporate apps would also be attractive to enterprise buyers. Samsung tends to over price their products so RIM could probably establish a lower price point and still maintain good margins.
The advantage of this strategy is that corporate IT executives would like the opportunity to roll back the push for consumer devices to dictate corporate devices. Supporting only one device would also be attractive to these executives. If we opted for the Windows OS instead of Android, it might be a love fest with millions of redundant corporate IT execs pushing the product. (This situation might also happen in Alternative A.) The disadvantage to the strategy is that no one really knows whether the Note will be a successful product, but it is a new category where RIM could establish itself as a market leader. It also plays to RIM's strength in enterprise where they have internal supporters.
