Evaluating new product and enhancement ideas

Some HR software vendors trigger-happy to get on the web 2.0 bandwagon
could heed some of Evan Williams’ (founder of Twitter) advice listed here.  Particularly the points around "Personally
Compelling" and "Obviousness." 

Some snippets are copied below to whet your appetite, but I recommend reading the whole entry at Evan’s blog.

Obviousness

Question: Is it clear why people should use it?

Personally Compelling

Question: Do you really want it to exist in the world?

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Chris Anderson’s Take on the Technology Life Cycle

I am (finally) reading Chris Anderson’s The Long Tail.  This is one of probably 5 books that I am reading or have read lately and have thus far failed to write about.

In the meantime, I also came across this TED Talk, where he shares his own view of the Technology Life Cycle. Not nearly as nuanced as either Clayton Christensen‘s or Geoffrey Moore‘s point of view, but his examples are quite interesting.  Definitely worth a look.

 

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BusinessWeek on Innovation

I found the linked articles (1 and 2) pretty underwhelming – it seems like a good example of the mainstream business media having less to contribute to the dialogue around innovation and technology. I thought I would post it anyway, however, in case I’m being too harsh and need to be corrected.

Personally, I would venture to say that:

– People are not going to start fleeing more open communities like Facebook and MySpace for "gated networks."  Do people really believe that!?

-The Kindle is going to continue to be a controversial and only moderately successful product.

-Placing SaaS for the enterprise under "Innovation Predictions" is a bit silly.

Actually, the first few slides made me think of the IBM Innovation Man commercial that began airing recently.  I could only find it in Italian (just listen for ‘implementazione’). –

It doesn’t make me terribly eager to pick up Fortune to read through their new Technology section, either.

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See the world without leaving home

Truly amazing stuff. 

For more on TED, go here.  Or watch the video below.

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Back in the saddle, part II

My recent post on CO2 allowances and trading actually only touched on the economics behind allowances.  Since the concept of building environmental degradation into a firm’s fixed production costs could be implemented a number of ways, including via an emissions tax, I thought it important to offer quick comments on why it makes sense to enact by way of a market mechanism.

There are two primary reasons to do it this way, as I see it.

1. Allows our global society to reduce emissions in a more cost-effective manner. 

I’ll illustrate with a simple example.  Suppose GE and GM each receive 1000 emissions "credits."  So whatever the units are, they can use 1,000 of them every calendar year before they are assessed a fee for overuse of the world’s environmental resources. To date, suppose each has been actually using 1200 of those units.

However, GE, with its leading edge technology, is able to reduce emissions at a cost of $20/unit, while it costs GM $35/unit to do the same.  So if both were to independently take action to reduce emissions, they could both become compliant to the tune of $4000 + $7000 = $11,000.

Now, let’s put a market for emissions in place that is demanding $25/unit for CO2 credits.

If you’re GE, you suddenly have incentive to not only become compliant, but to continue innovating and applying new technology to the business in order to emit well below quota.  For example, you might lower emissions by 400 units to put you at 800 total.  That way, you can turn around and sell your excess 200 units to GM a cost much lower than what they would pay to become compliant otherwise.

Instead of $11,000 being spent, the total for the two firms looks like this: (Cost of bringing GE to 1,000 units + GE profit from additional 200 unit trade) – (Cost of credits to GM) = ($4000 – $1000) + $5000 = $8000.

The same reduction in emissions is produced at about 70% of the cost.  Everybody wins.

2. Companies are incented to innovate to bring emissions below compliance levels.

For the reasons already made clear the by example above, putting a market in place encourages companies to innovate in their products, processes, and business models to minimize their environmental impact and establish comparative advantage.  This way, they can make a buck off of the difference and perhaps even turn their compliance unit into a profit center.

Ironically, this latter point is also one of the reasons that divvying up allowances between and within countries is so highly political.  Those already at an advantage in terms of access to affordable, clean technology potentially have more to gain from such a system.

Anyhow, basic economic concepts, but interesting to explore in some detail to see how the numbers work out. I hope it’s informative.

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Apple’s conundrum

This month’s edition of Fast Company has some fabulous analysis of Apple’s current market dominance and the company’s future outlook (here for article).

I read it proudly, seeing nice parallels between some of my recent commentary on the company and the author’s point of view.  Not bad for a novice.

Be sure to check out the sidebar content, as well.

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Amazon’s venture into ebooks

Amazon.com announced the release of their e-book reader, Kindle, today. 

There’s been quite a bit of hullabaloo surrounding the device since Amazon started putting out vibes over a year ago. Sony has seen limited success with its Reader and ebooks have always been a bit controversial.

The last bastion of analog (as Jeff Bezo’s puts it) still seems to be fairly impenetrable.

Looking through the product profile, I’m personally underwhelmed. 

Admittedly, the Kindle is a huge step forward from the first Sony Reader (don’t remember the name it had then) I owned about 13 years ago.  That one was big and heavy and took disks a bit larger than a 3.5" floppy.  It broke when I let it fall off the couch; I fell asleep reading. Go figure.

The Kindle boasts wireless connectivity and downloads, great search functionality, the ability to store around 200+ books, etc. 

Still, I’m such a bibliophile that reading books on an electronic device, no matter how great, may never appeal to me.

What I see that is interesting about the story are two things.

1.  The business model.  At $400 a pop, Amazon is clearly trying to get a return on its investment by charging a sizable amount for the device itself.  In fact, they are apparently eating losses on many books initially as a way to market the Kindle (claiming lower TCO). As demand (hopefully) increases and other players enter the market, Kindle prices will drop and ebook prices will inevitably creep back up.  This is Amazon’s sweet spot anyway, so it makes sense that they would want to make money on the ebooks long-term. 

Still, I see a couple of issues with their approach:

– Users will likely be upset about the shift.  The value proposition will change as the ratio of device:book prices moves, and early adopters are bound to be unhappy.

– They want to have their cake and eat it, too. If you ultimately plan to be a razor and blades business, don’t start by charging a lot for the razor on the promise that the blades will be cheap to replace. Really, this is the same as the previous point, just stated differently.

2. The role of web 2.0.  Amazon has long been a leader in providing an online shopping experience that is social and interactive. However, one look at the product’s site and you’ll see how wikis, customer reviews, and review "analytics" may not be working in their favor this time.  As I write this, the overall rating stands at 2.5 out of 5 stars, with 132 reviews (in one day!) and LOTS of disparaging comments in the forums.  If the product tanks, it would be interesting to know what the role of collaboration tools was in the outcome.

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“Why we really love Google” OR “Death of the iPhone”

I had to give this post two names because, really, there are two ways to look at the Google/Open Handset Alliance release of the Android SDK today.

Firstly, you can view it as a beautiful example of what has made Google so successful. As part of the anti-Microsoft “Don’t be evil” generation in Silicon Valley, they continue to demonstrate their commitment to open and user-centered innovation.

With this latest initiative, they are attempting to make a market-leading, next-generation mobile OS that will transform the industry by spurring innovation and (finally!) making mobile computing about as easy, productive, and powerful as using a PC – something Microsoft and Symbian have largely failed to do so far (see their responses to Android here).

But rather than taking a proprietary approach and creating their own code base and/or “G-phone” handset, they intend to make this happen by offering a Linux-based platform and comprehensive SDK for free to developers and handset makers (of course with the expectation that they will eventually be able to make money –a lot of money – through unobtrusive ads or similar means).

For exactly the same reasons, Android’s potential success could spell near death for the iPhone, as the second title of this post indicates. I don’t claim to be terribly prescient when it comes to this industry, but the pattern seems all too familiar.

Apple’s initial success rested on its ability to utilize its proprietary architecture to provide a more user-friendly and stable PC environment. However, once Windows had matured to a point where this was no longer a point of differentiation, the ability to build on top of the OS became the basis for competition. Apple’s reluctance to open up its architecture and resulting compatibility issues nearly spelled its demise.

More recently, the company has resurged by once again leveraging its proprietary, integrated architecture to close the gap in usability and functionality. This time in key consumer devices – digital music players and cell phones.

Before the iPod, for example, the general public was dying for an mp3 player that would do the heavy lifting for them. Everything on the market really did suck wind. Apple swooped in with a device that would quickly and easily synch up with your media player software and also take care of file organization so you wouldn’t have to. (Ironically, what paved the road for iPod’s success was the free iTunes software offered long before the iPod was ever released.)

The iPhone has served a similar need for many mobile device users.

However, Apple’s engineering and design dominance will again only last so long. Case in point… what makes the iPhone so cool – its multi-touch screen, Wi-Fi capability, music player functionality, 3-D graphics, friendly UI – are already available from other handset makers. These companies are just struggling to pull the pieces together in a device that is as graceful as what Apple has provided. Plus, the not so great factors are pretty significant. The five-year exclusive deal with ATT doesn’t help, for example, and the lack of 3G capability means that those outside the US have taken little interest in the device thus far. So all in all, the cool factor won’t provide any lasting competitive advantage.

What has staying power, I believe, is what Google is providing through Android – an open source mobile platform that will allow users to easily work with the content they are looking for, in whatever applications they like, on the handset that fits their personal budget and style.

The open quality of the platform will also allow natural selection processes in mobile software to finally take hold, driving low value-add apps from the market and bolstering better software design through user choice. Always a good thing.

Although Apple is talking about releasing a SDK in February, some protest (and I tend to agree) that it’s unlikely it will be as extensive and extensible as what Google is providing. Plus, the point will be getting developers to write for one company and one device, which will limit its momentum.

So in the end, while Apple continues to bask in the 10% of the market made up of hardcore Steve Jobs enthusiasts, Google will be laughing all the way to the bank. That is, if Google is able to convince the handset makers to offer Android as the native OS on their devices.

Call me hopelessly optimistic, but I imagine a few game-changing applications written using Android’s comprehensive APIs will do the convincing for them.

As always, please tell me if you think I’m nuts.

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Why we love Google

More on Android later today.  For now, enjoy the demo.

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fuerza bruta

A wonderful example of how much the West can learn from the innovative genius that exists outside our borders (in this case, from two Argentine creatives). 

Search youTube for more videos or check out their website – FuerzaBruta.net.  Or, if you’re fortunate enough, go see them in New York.

Just don’t miss the video below.  This is ridiculous.

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