Anyone in the tech industry thinks a lot about consumer adoption. Growth is often powered by consumers accepting new technology to make their lives easier. When there aren't any new customers to aquire, a market is considered "saturated", which causes a problem since firms then simply fight to steal customers from other firms.
This weekend I saw something that shocked me, and led me to believe that the cell phone market has reached a critical saturation point. While my wife and I were walking to dinner this past weekend we walked by a homeless person in downtown Seattle talking on his cell phone. If this isn't market saturation, I am not sure what is.
Sunday, September 26, 2004
Saturday, September 18, 2004
A9 - Innovating in the right way
When it became obvious that Google was going to hit is rich hundreds of search companies formed to try and become "the next Google". Many lumped A9, the search subsidiary from Amazon into that group, but in reality A9 approached the market in a MUCH smarter way than others.
Rather than focusing on creating the best algorithms for searching the web, A9 left that task to Google and decided to innovate on the user experience, and I must say I am very impressed. The site is simple and fast like Google, but much more powerful at the same time. I can conduct my simple searches and get Google quality results, but for searches that require it I can easily layer on top of the search results page additional information like images, reference info, etc. As a side benefit of having signed in with an A9 account (which is just my Amazon account) I get 1.57% off all my Amazon purchases.
Bottom line: Amazon approached their A9 venture in a very smart way, let Google handle the plumbing, and let A9 innovate on the experience.
Rather than focusing on creating the best algorithms for searching the web, A9 left that task to Google and decided to innovate on the user experience, and I must say I am very impressed. The site is simple and fast like Google, but much more powerful at the same time. I can conduct my simple searches and get Google quality results, but for searches that require it I can easily layer on top of the search results page additional information like images, reference info, etc. As a side benefit of having signed in with an A9 account (which is just my Amazon account) I get 1.57% off all my Amazon purchases.
Bottom line: Amazon approached their A9 venture in a very smart way, let Google handle the plumbing, and let A9 innovate on the experience.
Monday, September 13, 2004
Another reason blogs shouldn't be ignored
I have often heard blogs characterized as "online diaries" for geeks. While this might have been the case a few years ago, blogs today have become a powerful force in journalism and business. There have been some recent examples, but here is one I experienced first hand.
Late last Friday Engadget (the best gadget blog out there) reported that Yahoo! was launching a line of branded CE products. Today Engadget confirmed this story as the real deal, and CBS Marketwatch is also covering the news.
As more and more companies understand the power of blogging, expect more news to be "released" this way... I say "released" because I am sure that Yahoo! leaked the news. No matter how the news was obtained this event just goes to show every company should be scanning blogs for information.
Late last Friday Engadget (the best gadget blog out there) reported that Yahoo! was launching a line of branded CE products. Today Engadget confirmed this story as the real deal, and CBS Marketwatch is also covering the news.
As more and more companies understand the power of blogging, expect more news to be "released" this way... I say "released" because I am sure that Yahoo! leaked the news. No matter how the news was obtained this event just goes to show every company should be scanning blogs for information.
Time to kill some competition
I normally don't comment on non-tech industries, but this one has been bugging me for a while.
I am a big believer that competition is great for consumers. Free markets promote competition and when competition gets too competitive, markets have a solution, companies get put out of business. Well it is time for the government to stop interfering with the free markets within the airline industry. For the second time in two years US Airways has declared bankruptcy.
Since coming out of regulation, the airline industry has proven inept at maintaining a healthy market dynamic. Airline after airline has entered into bankruptcy, and far to many have been allowed to clear their balance sheet and renter the market. US Airways should simply be put out of business and not allowed to emerge from bankruptcy. If they can clean the debt off their balance sheet and come out of bankruptcy they will simply be capable of entering into more price wars and force someone else into bankruptcy... and the cycle will continue.
I am a big believer that competition is great for consumers. Free markets promote competition and when competition gets too competitive, markets have a solution, companies get put out of business. Well it is time for the government to stop interfering with the free markets within the airline industry. For the second time in two years US Airways has declared bankruptcy.
Since coming out of regulation, the airline industry has proven inept at maintaining a healthy market dynamic. Airline after airline has entered into bankruptcy, and far to many have been allowed to clear their balance sheet and renter the market. US Airways should simply be put out of business and not allowed to emerge from bankruptcy. If they can clean the debt off their balance sheet and come out of bankruptcy they will simply be capable of entering into more price wars and force someone else into bankruptcy... and the cycle will continue.
Tuesday, September 07, 2004
TiVo & Netflix: What took so long?
So I have publicly stated when I screwed up, (see my missed calls about Microsoft's dividends), but this time I finally got one right... really right.
Netflix & TiVo are about to enter a partnership... read about it here from Newsweek
Back in April I wrote a piece called "Netflix & TiVo - a partnership waiting to happen". I outlined how the two companies clearly should partner up since they have complimentary assets (TiVo has boxes in the home, Netflix needs to deliver content to a box in the home) and have close executive ties.
This all is in the context of the posting I wrote about TiVo's marketing strategy, which I characterized as "Becoming a platform". The real question that everyone should be asking themselves is does this partnership really help TiVo's real problem... which is that approx. 75% of all their subscribers are from DirectTV which doesn't allow them to offer the digital media option which is the key component of becoming a platform to offer services like Netflix on demand.
Given these circumstances, I have been calling for TiVo to literally give away their product and take a loss in order to get a real user base to become a platform.
So TiVo, if you are listening, start giving away those simple 40 hour boxes... get a user base, become a platform, then launch services like Netflix. That should be your strategy... don't put the cart before the horse.
Netflix & TiVo are about to enter a partnership... read about it here from Newsweek
Back in April I wrote a piece called "Netflix & TiVo - a partnership waiting to happen". I outlined how the two companies clearly should partner up since they have complimentary assets (TiVo has boxes in the home, Netflix needs to deliver content to a box in the home) and have close executive ties.
This all is in the context of the posting I wrote about TiVo's marketing strategy, which I characterized as "Becoming a platform". The real question that everyone should be asking themselves is does this partnership really help TiVo's real problem... which is that approx. 75% of all their subscribers are from DirectTV which doesn't allow them to offer the digital media option which is the key component of becoming a platform to offer services like Netflix on demand.
Given these circumstances, I have been calling for TiVo to literally give away their product and take a loss in order to get a real user base to become a platform.
So TiVo, if you are listening, start giving away those simple 40 hour boxes... get a user base, become a platform, then launch services like Netflix. That should be your strategy... don't put the cart before the horse.
Monday, September 06, 2004
Cuban has it wrong on Outsourcing
Mark Cuban, the owner of the Dallas Mavericks and one of the founders of Broadcast.com which was sold to Yahoo! for Billions, maintains a GREAT blog over at Blog Maverick. Mark writes on everything from sports to the future of digital entertainment. This week he wrote a piece that centered around outsourcing, expensing stock options, prescription drugs, and social security. While this list of topics sounds more appropriate for a campaign stop than for commentary by a basketball owner, Mark is really an incredibly bright guy whose opinion on any topic is often thought provoking and important.
Having said that, Mark is flat out wrong in his comments about outsourcing. The premise of Mark's argument, which can be found here, is that he doesn't have a problem with outsourcing in general, he has a problem with how the money saved by companies is distributed. He says that the majority of cost savings associated with outsourcing are then kicked back to executives in forms of bonuses, stock options, etc. His solution is that insiders should not be able to sell stock or get corporate bonuses in any year they outsource jobs.
Let me break down his argument component by component. First, yes, executives that outsource are often paid more in bonuses and rewarded with stock options. This compensation is based on the fact that the companies which outsource are more likely hitting their corporate goals which execs are measured on, and therefore they get rewarded appropriately. The notion that there is a conspiracy to send jobs overseas to line execs pockets is crazy... execs are motivated by hitting the goals they are measured on and therefore will do what it takes to raise revenue and lower costs. If they do this they should rewarded as long as it is in the best interest of the company over the long term.
His solution to this "problem" is that execs shouldn't sell stock or get bonuses in years they outsource. This is a terrible idea. The solution Mark proposes will directly create a conflict between corporate goals and personal goals for execs. An exec might be able to save $1 Million a year by outsourcing some component of work, but he will think twice if his child is headed to college and needs to cash out some stock to pay the bills. Now the exec needs to decide between what is right for the company and what is right for him personally. We need to do more to align the incentives of execs and the firms they run, not create obvious misalignments.
Having said that, Mark is flat out wrong in his comments about outsourcing. The premise of Mark's argument, which can be found here, is that he doesn't have a problem with outsourcing in general, he has a problem with how the money saved by companies is distributed. He says that the majority of cost savings associated with outsourcing are then kicked back to executives in forms of bonuses, stock options, etc. His solution is that insiders should not be able to sell stock or get corporate bonuses in any year they outsource jobs.
Let me break down his argument component by component. First, yes, executives that outsource are often paid more in bonuses and rewarded with stock options. This compensation is based on the fact that the companies which outsource are more likely hitting their corporate goals which execs are measured on, and therefore they get rewarded appropriately. The notion that there is a conspiracy to send jobs overseas to line execs pockets is crazy... execs are motivated by hitting the goals they are measured on and therefore will do what it takes to raise revenue and lower costs. If they do this they should rewarded as long as it is in the best interest of the company over the long term.
His solution to this "problem" is that execs shouldn't sell stock or get bonuses in years they outsource. This is a terrible idea. The solution Mark proposes will directly create a conflict between corporate goals and personal goals for execs. An exec might be able to save $1 Million a year by outsourcing some component of work, but he will think twice if his child is headed to college and needs to cash out some stock to pay the bills. Now the exec needs to decide between what is right for the company and what is right for him personally. We need to do more to align the incentives of execs and the firms they run, not create obvious misalignments.
Friday, September 03, 2004
MSN Launches Search
Microsoft has quietly launched their new search engine. The company description can be found here: MSN Search Description
This is a smart move to launch late on the Friday of Labor day weekend b/c it allows the company to fine tune the application out of the media spot light and they can do a big push when people get back to work on Tuesday.
This is a smart move to launch late on the Friday of Labor day weekend b/c it allows the company to fine tune the application out of the media spot light and they can do a big push when people get back to work on Tuesday.
Free Gmail Accounts
I have 5 free accounts to give away... so just click on one of the five links below and sign up. I will modify this posting when all the accounts are taken.
All 5 accounts have been taken... I will be giving more away as they become available.
All 5 accounts have been taken... I will be giving more away as they become available.
Thursday, September 02, 2004
Research made easy
I spent half a day digging around the Net for some market data information the other day, and I came across the Google Answers site. I had forgotten about Google Answers... but I won't make this mistake again. For all the grief I give Google around their IPO and Gmail, they deserve major credit for Google Answers. The site allows you to ask a question and post a dollar amount you are willing to pay for the answer. But the best thing about the site is that the answers are there for EVERYONE to read. This site really is cool and you can learn a lot browsing through it. Next time you are in a bind looking for some information make sure to check the site out.
Gmail thinks Adsense is Spam
I recently added the Adsense program to this blog. I really wanted to get a better understanding of how content owners generate revenue through ads and how difficult it is for them to manage the ad process.
So far the ads are doing fine... and I will write more about this entire experience later, but today something interesting happened. I was in my Gmail account and Gmail automatically filtered an email from the Adsens team to my spam... thought that was interesting.
So far the ads are doing fine... and I will write more about this entire experience later, but today something interesting happened. I was in my Gmail account and Gmail automatically filtered an email from the Adsens team to my spam... thought that was interesting.
Radio Silence
So I have been really quiet over the past few days. It is because I have been really busy at work these days and because I am still trying to find the right balance of what I should comment on and what I shouldn't comment on.
As you all know Microsoft launched 3 major products this week... their music store, the new media player 10, and the portable media center devices. I would love to hear your thoughts on all three of these products via email or the comments below.
As you all know Microsoft launched 3 major products this week... their music store, the new media player 10, and the portable media center devices. I would love to hear your thoughts on all three of these products via email or the comments below.
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