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Strategies for a discontinuous future.












Wednesday, March 10, 2004
 


RSS and Atom to possibly merge. A nice illustration of standards wars? No, a nice illustration of the exponentially falling coordination costs that have make 'owning a standard' a less and less meaningful tactic. More at Dave Winer's.

-- umair // 9:50 PM //


 


Links of the Week

I've been talking less these days about how to create and execute succesful succesful strategy and innovation, so here are two case studies: porn and TiVo. Porn harnesses innovation with massive success consistently - often because it's a massive platform for user innovation (as crass as that sounds). TiVo's fighting it's way out of an extremely tough strategic situation (the convergence of DVR with set-top boxes) with brilliant strategy and tactics, based on a sound understanding of platform economics and hypercomplementarity. In both cases, the value equation and market landscape are thoroughly and deeply understood.

-- umair // 8:34 PM //


 


How Not to Build the Dominant Design, Pt 5.

Napster, IBM, and Super-Peer. Just read and take note - anything this far divorced from solving the value equation is going to be spectacularly cool to watch crash and burn. Note to Napster - cutting bandwidth costs is not the problem in this market. In fact, because you've ignored the real problem (ending the big record labels' market hegemony) the real market (music listeners) is going to attach a massivley negative value to Super-Peer.

-- umair // 8:26 PM //


 


Apparently job-seekers lie. HR consultants moan. Why? I think it's because the HR industry is effectively broken. How many HR departments add significant value? How many act as brakes on the firm's innovation capabilities and social capital accumulation? I think the balance is clearly with the latter - and job-seekers lie because HR gives them exactly the right incentives to, because on average, they mostly tick boxes against lists.

If you're an entrepreneur, this would be a nice industry to destroy.

-- umair // 8:22 PM //


 


Spam Wars - Pt 1

You should really only read this if you're very bored. It's meaningless and the real fireworks are going to happen in a few months - when new architectures for mail surface and are tested (and discarded) by the markets. Markets, plural, because the only real insight here is to remember that any viable mail architecture will be accepted by two kinds of consumers (or buyers and sellers if you want to model it that way): spammers and mail readers.

While I'm talking about spam, Eric Allman had an article titled 'The Economics of Spam' a few weeks ago, where he made some good points but got the econ backwards. The real economics of spam are about information - Bob Cringely made the real point here: that to stop spam, we have to make spam more effective, not less effective. Spammers don't spam because their marginal cost is zero (it isn't - addresses to spam cost very real money), but because their marginal benefit is incredibly low: they never know when they'll finally make a hit, and on average, they almost never do. Put another way, the point is that the rate of effectiveness for spammers has to go way up for spam to effectively stop.

If you don't follow this, think about it this way: what's ended the Red Queen race in web advertising? Models like Google's, which increase effectiveness rates, making it unnecessary to enter the arms race of flying logos and massive interstitials.

-- umair // 8:11 PM //


 


Symbiot is a security startup that's planning information warfare by launching things like 'ddos counterstrikes'. Interesting, if a bit predictable - when I look at the infrastructure of net security and it's evolution, I think of the way immune systems evolved across time and species.

-- umair // 8:07 PM //


 


The rise of Net radio (well...not exactly recent unless you're USAToday). During the replication wars, it seemed a lot of people missed this industry, it's growth, and it's search for a viable business model. All the other components are in place - even extortionate RIAA licensing fees. My personal favorite is at Tresor, which is a record label/club in Berlin.

-- umair // 8:05 PM //


 


Intel won't support China's WiFi standard, which incorporates proprietary encryption. What a surprise. They have little to gain and a lot to lose (right now).

-- umair // 7:59 PM //


 


Not a bad article about the state of the robotics industry. I want an Aibo. Now.

-- umair // 7:57 PM //


 


Convergence in complements: OpenText adds IM to LiveLink, with heavy monitoring and security features for the big corporates that are LiveLink addicts. You are watching complements converge to a new dominant design, driven by global hypercompetition.

-- umair // 7:56 PM //


 


Marketing is not automatism. This rant tells us more than a little bit about the value equation that is not being solved - the future of marketing will (must) speak directly it.

-- umair // 7:52 PM //


 


Read Warren Buffett's 2003 Letter to Shareholders. If you haven't read the rest, read them - it's the best short course on economics and finance you will ever have.

-- umair // 7:49 PM //


 


Dot Com 2.0

Why is dot com 2.0 happening? Technological discontinuity takes some time - because the dominant design for many innovations is still waiting to be discovered: BigString, for example, now offers erasable-recallable email. Or because those that have discovered something close to a dominant design have created massive new niches - like Amazon's done with it's (lame) attempts at price discrimination, paving the way for Pricenoia, which compares Amazon prices across markets. Or because shifts in regulation shift the value equation: Adnoodle wants to let consumers auction their privacy from direct marketers, driven by do-not-call/spam laws.

Will any of these succeed? Forget about that - ask yourself what the value equation is going to be, and how the dominant design must answer it.

-- umair // 7:48 PM //


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