So if you haven't noticed, I haven't been publishing much recently. A lot of factors are to blame - friend visited from the east coast, laptop is at Best Buy being repaired, and, most importantly, I've been ramping up work on the project I've alluded to once or twice this summer.
I will keep up the blogging as well as I can (expect a post on the changing face of news soon), but the pace will be slow until I get my laptop back. I'll definitely be back blogging once every day or two once school kicks off Sept. 6. Sit tight, and stay tuned.
Wednesday, August 16, 2006
Tuesday, August 01, 2006
If it's free...
It's for me. Or those were the words of my old football coach. But they pretty much describe the common man's attitude to, for lack of a better word, stuff.
Over a dinner conversation with my Dad and his college buddy, my Dad pointed out a counterintuitive phenomena in the telecom industry - for all the advancement of cell phones technology, a hallmark of today's hand held era is consumers' tolerance of the system's imperfections - dropped calls, fuzzy voice, etc. Landlines never had those problems.
So anyway, that got me thinking of something I decided (but subsequently forgot) to blog about - free(dom). Not the Constitutional kind, but the "wow I'm getting so much free stuff" kind.
Confused? Think about it. How much do we get for free in today's world that we paid for just a decade (or less) ago. Contacting relatives on the east coast (or across the pond) took a phone call or, at the least, a letter. A few bucks or a stamp. But we were willing to pay for that contact. Now? Are you kidding me? An email, IM, or VoIP call is free, and even a cell or land line call is dirt cheap. The web has drastically altered the value we assign to a vast majority of services.
There's free wifi in Mountain View and London and coffee shops. Free music and movies on the internet. Free text messages, emails, and calls. Hell, even free APIs for mashup developers. Free, free, free.
The question really is what are people still willing to pay for? And it's a tough one. Hell, most start ups can't come up with a coherent answer. Seriously, my most popular question for entrepreneurs at Mashup Camp, "What's your business model?", was usually greeted with dropped eyes, stutters, and shuffling feet.
Sure, music and movies still have markets, but the revolutions that will transform those industries have already begun. I mean, iTunes does quite a bit of business, but free file sharing sites are thriving. People got a taste of free(dom) with Napster, and most never went back. And why should they?
We're getting used to free stuff. Paying for information, media, telecommunications, and much more is so 20th century. We just aren't willing to shell out for the same services we used to. And it's affected the way companies make money.
The key, then, is to find other ways to do so. Two answers the market has spat out other than simply selling stuff are advertising (Google) and taking cuts off transactions (eBay, Amazon, etc.). But other than those two models, online businesses aren't really making money. The Salesforce model has gained some popularity, and perhaps leveraging real life services in the virtual world is the answer to this dilemma. Whether it is or isn't, the future will belong to those who come up with unique applications of the two tried and true revenue streams and invent others.
Over a dinner conversation with my Dad and his college buddy, my Dad pointed out a counterintuitive phenomena in the telecom industry - for all the advancement of cell phones technology, a hallmark of today's hand held era is consumers' tolerance of the system's imperfections - dropped calls, fuzzy voice, etc. Landlines never had those problems.
So anyway, that got me thinking of something I decided (but subsequently forgot) to blog about - free(dom). Not the Constitutional kind, but the "wow I'm getting so much free stuff" kind.
Confused? Think about it. How much do we get for free in today's world that we paid for just a decade (or less) ago. Contacting relatives on the east coast (or across the pond) took a phone call or, at the least, a letter. A few bucks or a stamp. But we were willing to pay for that contact. Now? Are you kidding me? An email, IM, or VoIP call is free, and even a cell or land line call is dirt cheap. The web has drastically altered the value we assign to a vast majority of services.
There's free wifi in Mountain View and London and coffee shops. Free music and movies on the internet. Free text messages, emails, and calls. Hell, even free APIs for mashup developers. Free, free, free.
The question really is what are people still willing to pay for? And it's a tough one. Hell, most start ups can't come up with a coherent answer. Seriously, my most popular question for entrepreneurs at Mashup Camp, "What's your business model?", was usually greeted with dropped eyes, stutters, and shuffling feet.
Sure, music and movies still have markets, but the revolutions that will transform those industries have already begun. I mean, iTunes does quite a bit of business, but free file sharing sites are thriving. People got a taste of free(dom) with Napster, and most never went back. And why should they?
We're getting used to free stuff. Paying for information, media, telecommunications, and much more is so 20th century. We just aren't willing to shell out for the same services we used to. And it's affected the way companies make money.
The key, then, is to find other ways to do so. Two answers the market has spat out other than simply selling stuff are advertising (Google) and taking cuts off transactions (eBay, Amazon, etc.). But other than those two models, online businesses aren't really making money. The Salesforce model has gained some popularity, and perhaps leveraging real life services in the virtual world is the answer to this dilemma. Whether it is or isn't, the future will belong to those who come up with unique applications of the two tried and true revenue streams and invent others.
Saturday, July 29, 2006
The Empire Strikes Back
I'm sorry, I had to copy the Merc on the headline.
So it happened. Intel released the Core 2 Duo, their answer to AMD's assault on the industry Intel once ruled. As the Merc reports, the Core 2 Duo has up to 40% more processing power and uses 40% less electricity than today's chips, accomplished by putting two computing brains on the same chip.
Time will tell if this is the technological innovation Intel needs to leapfrog AMD. I'm going to refrain from taking my usual highly opinionated (and often minority) stance, but I will say that its success truly depends on the quality of the technology. For all the advancements in chips, I think customers still want more - this chip doesn't, in my opinion, surpass consumer demand in terms of processing power.
But then again, it won't be long until AMD answers, and once they come out with a similar quality chip, the price war will return, slashing margins and leaving Intel in the same position they are in now.
No biggie, though, as that's life in pretty much any industry.
So it happened. Intel released the Core 2 Duo, their answer to AMD's assault on the industry Intel once ruled. As the Merc reports, the Core 2 Duo has up to 40% more processing power and uses 40% less electricity than today's chips, accomplished by putting two computing brains on the same chip.
Time will tell if this is the technological innovation Intel needs to leapfrog AMD. I'm going to refrain from taking my usual highly opinionated (and often minority) stance, but I will say that its success truly depends on the quality of the technology. For all the advancements in chips, I think customers still want more - this chip doesn't, in my opinion, surpass consumer demand in terms of processing power.
But then again, it won't be long until AMD answers, and once they come out with a similar quality chip, the price war will return, slashing margins and leaving Intel in the same position they are in now.
No biggie, though, as that's life in pretty much any industry.
Wednesday, July 26, 2006
Zune (added)
So apparently, Microsoft has adopted the proprietary that I was so sure they'd be smart enough to avoid. Om writes about it, or rather writes about a Mac guy writing about it (who of course hates it). However, towards the end of his post, he mentions that Michael Wolf of ABI Research thinks that they're closed approach is fatal, which it is.
How Microsoft could make such a mistake is unimaginable. Chasing the iPod with an iPod clone with a couple cool extra features? Looks like life in the ivory tower is finally getting them. Unless this report is wrong and Microsoft comes out with an open platform, I partially retract my statements about Zune beating out the iPod. It's going to be much, much tougher.
How Microsoft could make such a mistake is unimaginable. Chasing the iPod with an iPod clone with a couple cool extra features? Looks like life in the ivory tower is finally getting them. Unless this report is wrong and Microsoft comes out with an open platform, I partially retract my statements about Zune beating out the iPod. It's going to be much, much tougher.
Tuesday, July 25, 2006
Mobile TV
VC's are just throwing money at Mobile TV start ups. Just today, between Techcrunch, SiliconBeat, and GigaOm, I've read 3 stories about mobile TV. Veeker is just one example, GigaOm reports.
Ok, I just don't get it. Granted, I think it's a great idea, but I don't think it's deserve of the shower of VC money it's getting. I mean, the numbers are ridiculous (I don't have stats now, I'll try and post some later). And the big names are leading the way.
I really just don't see it as being that cool. I mean, the screens are tiny. Maybe TV on a laptop could be cool, or even a tablet PC, but most of these companies target straight up mobile phones. Maybe I'm severely lacking foresight and vision on this, but who wants to watch TV on a cell phone? I can think of certain circumstances (like the train to work this morning), but I just don't see the market matching the hype.
Most importantly, (this being the point of my post), what do you guys think?
Ok, I just don't get it. Granted, I think it's a great idea, but I don't think it's deserve of the shower of VC money it's getting. I mean, the numbers are ridiculous (I don't have stats now, I'll try and post some later). And the big names are leading the way.
I really just don't see it as being that cool. I mean, the screens are tiny. Maybe TV on a laptop could be cool, or even a tablet PC, but most of these companies target straight up mobile phones. Maybe I'm severely lacking foresight and vision on this, but who wants to watch TV on a cell phone? I can think of certain circumstances (like the train to work this morning), but I just don't see the market matching the hype.
Most importantly, (this being the point of my post), what do you guys think?
Stuff
I think it's great that some of you have started to comment (Gordon and Cletus). Keep the comments coming, and all of you feel free to chime in.
I'll also try to have a post up soon with analysis of the various companies' earnings that were announced last week. I know it's late, I've (pretended to have) been busy.
I'll also try to have a post up soon with analysis of the various companies' earnings that were announced last week. I know it's late, I've (pretended to have) been busy.
Monday, July 24, 2006
SF Web Innovators
Tomorrow (July 25), there is an entrepreneurs event in SF, 6-9 pm. I'll be there, wearing the Mashery hat. You should too.
Sunday, July 23, 2006
Intel's dilemma
Last week, Intel announced low revenue and earnings and projected the same for at least next quarter. Revenue was $8 billion and earnings were $885 million for the second quarter, down 13% and 56%, respectively, from a year ago.
Of course, Intel's problems have been no secret - AMD has been taking back marketshare for a while now. So what is Intel to do? They are caught in a price war in a market that has finally been hit by commoditization.
Intel's storied past makes my answer all the harder to swallow. Founded by 3 of Fairchild's Treacherous 8 (Robert Noyce, Gordon Moore, and Andy Grove), the company has been the darling of the computer industry, almost as dominant as Microsoft and infinitely more likable, boasting superior technology and marketing.
In fact, the decay of the one of the most brilliant marketing campaigns in history, "Intel Inside," is one of the biggest reasons for Intel's current position. For 14 years, consumers truly believed that their computer was significantly better off with Intel chips inside and were willing to pay a premium for them. For some part of those 14 years, this may have been true, but chips have long since become a commodity, and performance across brands has become basically equal.
And, at last, the consumer has realized this. However, before I give my thoughts on what the firm should do, I will digress again. I am hearkened back, once again, to a case study in my Management 237 class last semester. Very much like Intel, Kodak had fought off commoditization in the film industry for years, but the market was finally beginning to catch up with them. We were asked what Kodak should do in this situation. A friend and I boldly convinced our group of 6 other people (or rather spoke for them before they could say anything) that Kodak should sell the company.
Yeah, you read that right. Why? Sure it's a little crazy, but it makes sense. Kodak, at the time, still had a huge brand name, but it was becoming increasingly obvious that Asian film makers would be able to match (or beat) Kodak's price and quality. So, instead of sticking around and struggling for survival in a commodity market, why not just cash out at the high price their name would allow? The company, of course, didn't do this and went on to become a market leader in other fields, but their film division kept losing market share and profits.
So do I think Intel should sell itself? No, but they should learn a lesson from the past. Currently, they're saying all the things investors want to hear (they're going to try to gain back market share, etc.), meaning they will pour vast amounts of money into marketing and production. But why? Instead of trying to fight the inevitable, they should scale back operations, cut production, and try to limit losses. By realizing the hard times ahead and saving cash now, they put themselves in a position to live to fight another day. The price war and commoditization of the chip industry means that Intel will never enjoy dominance and high profits until a discontinuous innovation comes along and turns the marketplace on its head. Intel needs to devote resources to discovering that next discontinuous innovation (i.e. R&D) and exploring other business opportunities and industries (outside chips) that give them a better shot at market dominance.
Though it's unpopular and unconventional, this is the way to go. But will they do any of it? Probably not.
Of course, Intel's problems have been no secret - AMD has been taking back marketshare for a while now. So what is Intel to do? They are caught in a price war in a market that has finally been hit by commoditization.
Intel's storied past makes my answer all the harder to swallow. Founded by 3 of Fairchild's Treacherous 8 (Robert Noyce, Gordon Moore, and Andy Grove), the company has been the darling of the computer industry, almost as dominant as Microsoft and infinitely more likable, boasting superior technology and marketing.
In fact, the decay of the one of the most brilliant marketing campaigns in history, "Intel Inside," is one of the biggest reasons for Intel's current position. For 14 years, consumers truly believed that their computer was significantly better off with Intel chips inside and were willing to pay a premium for them. For some part of those 14 years, this may have been true, but chips have long since become a commodity, and performance across brands has become basically equal.
And, at last, the consumer has realized this. However, before I give my thoughts on what the firm should do, I will digress again. I am hearkened back, once again, to a case study in my Management 237 class last semester. Very much like Intel, Kodak had fought off commoditization in the film industry for years, but the market was finally beginning to catch up with them. We were asked what Kodak should do in this situation. A friend and I boldly convinced our group of 6 other people (or rather spoke for them before they could say anything) that Kodak should sell the company.
Yeah, you read that right. Why? Sure it's a little crazy, but it makes sense. Kodak, at the time, still had a huge brand name, but it was becoming increasingly obvious that Asian film makers would be able to match (or beat) Kodak's price and quality. So, instead of sticking around and struggling for survival in a commodity market, why not just cash out at the high price their name would allow? The company, of course, didn't do this and went on to become a market leader in other fields, but their film division kept losing market share and profits.
So do I think Intel should sell itself? No, but they should learn a lesson from the past. Currently, they're saying all the things investors want to hear (they're going to try to gain back market share, etc.), meaning they will pour vast amounts of money into marketing and production. But why? Instead of trying to fight the inevitable, they should scale back operations, cut production, and try to limit losses. By realizing the hard times ahead and saving cash now, they put themselves in a position to live to fight another day. The price war and commoditization of the chip industry means that Intel will never enjoy dominance and high profits until a discontinuous innovation comes along and turns the marketplace on its head. Intel needs to devote resources to discovering that next discontinuous innovation (i.e. R&D) and exploring other business opportunities and industries (outside chips) that give them a better shot at market dominance.
Though it's unpopular and unconventional, this is the way to go. But will they do any of it? Probably not.
Zune
This is the story of a company with a cute logo and an insanely great (in some ways - not so much in others) CEO. The CEO unveils a killer product that captures the hearts and minds of the entire nation. But then along comes another company with a CEO who is so cunning it's scary. According to legend, he somehow convinces the first CEO to give him a couple prototypes of the product, and his company proceeds to reverse engineer it (albeit slowly) and build a competing one. The company understands the power of creating an open system and foresees the commoditization of hardware. With this insight, its product proceeds to conquer and rule the industry, despite its technical inferiority, leaving the first company to slowly wither away. It does just this, until it is saved by yet another killer product in a completely different field...
Side note: I write this blog for the Valley-savy, but I realize most of you are probably college kids who didn't grow up with stories like the one above, so I'll explain. The two companies are Apple Computer and Microsoft, respectively, and the tale refers to the OS wars, which Microsoft won by eschewing Apple's proprietary philosophy and allowing others to build the hardware and develop software, among other things.
Funny how history repeats itself. Just a few days ago (sorry, this post is late because the draft I was working on got deleted), Microsoft announced Zune (click for details), a hardware and software package aimed at the heart of Apple's iPod. Reactions have been mixed, but the majority opinion amongst pundits is that Zune will have a hard time catching up to the iPod.
I disagree, and history is on my side. The parallels with the OS wars are eerie. As long as Microsoft thoroughly analyzes the industry conditions, they should be able to build a product to knock off the iPod. They must recognize and capitalize on their inherent advantage: Windows (and Vista soon). Their product should offer an integrated solution (not unlike Apple's iPod/iTunes) and interface that ties in with the OS. Cool features are a must, but following through on this advantage will set them apart. Apple should be scared.
A caveat, though. Microsoft should realize that hardware isn't the path to victory in the industry. The iPod is nice and very much in vogue today, but its days are numbered even without Zune because commoditization will set in. The principles that governed the OS wars will also come into play here (software over hardware, open system, etc.). Apple has already made the mistake of creating a closed system around the iPod (they make the iPod and every related product, much like they tried to do with the Mac), Microsoft should not follow suit. The greed to capture every penny of profit in the marketplace has sunk many companies. Microsoft should be wary of delving into the hardware world, one that has not treated them kindly in previous forays.
All in all, this should be fun to watch.
Side note: I write this blog for the Valley-savy, but I realize most of you are probably college kids who didn't grow up with stories like the one above, so I'll explain. The two companies are Apple Computer and Microsoft, respectively, and the tale refers to the OS wars, which Microsoft won by eschewing Apple's proprietary philosophy and allowing others to build the hardware and develop software, among other things.
Funny how history repeats itself. Just a few days ago (sorry, this post is late because the draft I was working on got deleted), Microsoft announced Zune (click for details), a hardware and software package aimed at the heart of Apple's iPod. Reactions have been mixed, but the majority opinion amongst pundits is that Zune will have a hard time catching up to the iPod.
I disagree, and history is on my side. The parallels with the OS wars are eerie. As long as Microsoft thoroughly analyzes the industry conditions, they should be able to build a product to knock off the iPod. They must recognize and capitalize on their inherent advantage: Windows (and Vista soon). Their product should offer an integrated solution (not unlike Apple's iPod/iTunes) and interface that ties in with the OS. Cool features are a must, but following through on this advantage will set them apart. Apple should be scared.
A caveat, though. Microsoft should realize that hardware isn't the path to victory in the industry. The iPod is nice and very much in vogue today, but its days are numbered even without Zune because commoditization will set in. The principles that governed the OS wars will also come into play here (software over hardware, open system, etc.). Apple has already made the mistake of creating a closed system around the iPod (they make the iPod and every related product, much like they tried to do with the Mac), Microsoft should not follow suit. The greed to capture every penny of profit in the marketplace has sunk many companies. Microsoft should be wary of delving into the hardware world, one that has not treated them kindly in previous forays.
All in all, this should be fun to watch.
Subscribe to:
Posts (Atom)