Strategies for a discontinuous future.

Wednesday, August 24, 2005

DRM vs Plasticity

Gen commented and gave this killer data set on the hypergrowth (no kidding) of KDDI's new mobile music download service...nice confirmation of the intuition that, when it's done right, this space offers hhhuge potential.

-- umair // 5:29 PM //


Microsoft vs Yahoo vs Google

Rafat nicely points out what's got a lot of people buzzing: that Konfabulator and Sidebar are really the beginnings of entry into the productivity software market - ultimately, the beginnings of attacks on Office.

I don't know that this is going to be such an interesting space to track, just because MS's anti-innovation/strategy decay has exposed so many obvious weak spots relative to lightweight service-based solutions, the evolution of market dynamics seem pretty straightforward (but YMMV).

-- umair // 4:36 PM //


Social Machines

Japanese house-sitting robot. I don't normally do /. pieces, but I think this trend is worth tracking in a big way - the market size is immense, barriers to entry are high, and consumer adoption, if it follows the accelerating CE curves, should be very rapid.

-- umair // 4:33 PM //


Content vs Distribution vs Edge Competences

Jeff has a cool post arguing that the content vs distribution false dichotomy is about to be exploded, and that conversations are about to capture/create most value in Media 2.0.

I think this is spot on, and I would contextualize the argument a bit - conversations are another example of what I call an edge competence. Value shifts to the edges of atomized value chains (like Media 2.0) - and at one end of the chain, we have reconstruction/smart aggregation.

Now, we can think about conversation this way: it only really becomes possible when attention is allocated relatively efficiently. You won't have a conversation with just anyone about anything (well, maybe at the pub) - on average, you know what you want to talk about. So conversation is an edge competence that's built on strategies which efficiently allocate attention.

Think about it this way: content becomes cheap in a world of citizen journalists; and makes reconstructing and exposing the right content valuable. How do you know you're achieving this goal? Well, you can easily check to see if you're building an edge competence in conversations, which should be flowing if you're getting the basics right.

-- umair // 4:10 PM //


Micromedia Explosion

Ourmedia needs help, because it's growing so fast - a nice data point to track, if you buy my argument that the micromedia explosion is going to explode supply much faster than demand, accelerating media deflation.

-- umair // 4:08 PM //


Peer Production - Social Search

Jeteye is a new entrant - kind of like a del.icio.us 2.0; you share 'jetpaks' of similar multimedia content. The value prop is that you've already added value by organizing the content into the 'pak', dropping future search costs for other users.

Interesting, very cool. My thoughts:

1) The terminology is not that great an idea - it just makes things more confusing.

2) I have to put in some serious effort to make a 'pak' - much more than to bookmark a link. Where's my incentive? In a social bookmarking/del.icio.us style system, the value prop is inverted - bookmarks are beneficial to me, but they have an externality: they're also beneficial to you (especially when aggregated).

How does making 'paks' benefit me more than bookmarking and tagging stuff? Put another way, is heavy decentralization - decentralizing organization and selection (or search and coordination, or bookmarks and tags) more economical than light decentralization (in Jeteye, organzation and selection/search and coordination are more centralized: they're both done by you, when you make the 'pak').

It's this that I'm a lil concerned about, because it can lead to scale diseconomies, where totally decentralized solutions can lead to scale economies: look, this is jargony, so here's an example. Note how many cars 'paks' there are - it's not clear how or why they differ; I don't think a tags-based (read: totally decentralized) solution would have this (relatively inefficient) outcome.

I still think it's a wickedly cool idea, and notably cooler than the social search efforts of bigger players, who I hope are looking at this closely. (Via SiliconBeat).

-- umair // 3:57 PM //


Google vs Skype

OK. Om has a nice summary, if you wanna read more. Leaving aside tech issues of XMPP vs VoIP, let's begin with the proposition that GTalk is, in fact, a substitute for Skype (etc). How many people are gonna run both? Not many.

There are a few interesting points to consider here. First, I wanted to post last week that the Google buys Skype rumours were probably off the mark. It wouldn't make a lot of sense for Google to pay Skype's current valuation - it's much cheaper to roll their own, and then leverage scope economies (viz Gmail, etc) to cheaply drive adoption.

IMHO, the players that will (might) pay such a huge valuation for Skype are those that don't already have strong competences in this area (read: FIM). But I think this puts Skype in a bit of a tough spot - IPOs in this space aren't exactly roaring, and strategic buyers with such deep pockets are few and far between.

Point two. Techies that are telling the rest of us that this is a nonevent because it's built on Jabber are missing what's going on here - which is that Skype, I think, has shown a lot of incumbents across spaces that there is huge value creation potential in driving mass-market adoption of voice chat (let alone full blown VoIP). A lot of those incumbents are also discovering that entry barriers in this space aren't exactly huge (and Skype hasn't focused on building many), and so this market is going to get (even more) crowded pretty fast.

A bit of a heretical POV, but maybe Skype is kind of missing it's window? Just a thought.

-- umair // 3:38 PM //

Monday, August 22, 2005

Comment Responses Coming Soon

Sorry...heavy travelling, a new flat = moving + jetlag = zzzz.

-- umair // 5:33 PM //


Discovery vs ...

So the notion of 'discovery' has been gaining traction amongst the digerati in the last few months (uhh...again, that is).

I think discovery is a not-so-great term because it conflates two concepts which should be disaggregated if you wanna understand what's really going on.

Let me put it this way. In a Media 2.0 world, if we're talking about discovery, what is it that we're discovering? Blogs? Entries? Sentences? Podcasts? People? All of the above?

The point is that 'discovery' conflates plasticity and attention allocation. I think disaggregating the two lets us see that half the problem in 'discovering' micromedia is that it's plastic.

If you make this distinction, you can come up with cool ideas like Flock - which is fundamentally about plasticity (and how it can, when leveraged, actually drive efficient attention allocation, instead of otherwise, which is a brilliant insight, if you ask me).

Preferences usually aren't as plastic micromedia - which is why we increasingly need reconstructors to de/reconstruct casts to us. But this isn't the same as 'discovering' what we like.

I have the same problem with 'relevance', but that's another story...

-- umair // 4:39 PM //


Edge Competences

Telepocalypse says about Last.fm:

"...And remember: these folks give away the music, but charge for social contact. Exactly the oppostive of your IPTV triple-play push."

OK. Let's start with core competences. I'm sure you all know what those are; but briefly, they're specialization economies in value activities. (Full disclosure: I've done research with Gary Hamel, who's 1/2 of the team that came up with core competences)

My own work has made me think hard about what happens to competences in a networked, always on world. At recent engagements, I've been arguing for the notion of edge competences.

Rather than resort to jargon, or attempt a really deep explanation, let me use the quote above and simply illustrate. What's happening in this ecosystem (music) is that the core is atomizing: all the value's being sucked out, because of hypercommoditization (cheap technology, blah, blah). This is the fate of most totally networked value chains.

When this happens, smart players build new kinds of competences at the edges of the network. Last.fm is one of my absolute favorite examples: they've realized that music is getting hypercommoditized, so attention is what's become scarce. But we could also take Amazon (reviews/recs), eBay (PayPal), Google (AdSense). These are all edge competences that helped each player dominate it's market space.

We could also take the example of players who haven't developed edge competences, but who have stayed core - and it's cost them. The canonical example that I've discussed for the last year or so is Yahoo - who tried to develop a core competence as publisher/aggregator forever - and has only now shown signs of realizing that this is valueless without corresponding edge competences.

Here's a very interesting example of a developing edge competence, which helps us understand just how powerful they can be in entering new markets and leapfrogging competitors.

-- umair // 4:26 PM //

Sunday, August 21, 2005

SiliconBeat: Big hairy audacious thoughts on transformation in VC-land

What took you so long?

-- Mahashunyam // 7:53 PM //


Business Week does the obligatory India/China thing. Not a whole lot that we haven't already heard, but I liked these ones:

1.Asking the right questions

2.China and India: partners?

3.How Cummins Does It

4.Taking a page from Toyota's playbook

-- Mahashunyam // 9:30 AM //


International Trade

The Globe and Mail: Trading with the 'schoolyard bully'

Am I the only one who finds the US media's utter neglect of the trade crisis between US and Canada to be weird? I would've thought that a huge row making the front page in pretty well every major newspaper across the board in America's largest trading partner would deserve at least a few column inches. But then what do I know : I am just an ignorant Canuck outraged by the conduct of American trade policy.

As a strategist, I keep wondering about how I'd solve the problem of grabbing a share of the American citizen's attention minutes market for issues that are normally not seen as pertinent to their lives. It is easy to dismiss this issue with empty hand-wringing about the Ignorant American stereotypes, but it does not help the rest of the world because we end up paying a huge price for some US policies. Clearly, we're not US citizens so we're not going to have any franchise in the US electoral process but at the same time, US policies have enormous and disproportionate influence on our lives. As Kishore Mahbubani points out in The Age of innocence, "The curious paradox is that America has done more than any other country to change the world. Yet Americans are among the least prepared to cope with the world they have changed. Without intending to, America has entered the lives of most people on Earth."

I think that a lot of these idiotic policies get past the American people only as a result of the utter apathy of American media to delve upon the issues of international importance. As the latest issue of the Economist points out, in the entire year of 2004, "NBC's evening news show devoted just five minutes to the genocide in Darfur, CBS a mere three and ABC, thanks to Peter Jennings, 18. In contrast, they together devoted 130 minutes to the plight of Martha Stewart". Another example is the recent spate of bomb-blasts in Bangladesh. Hundreds of bombs going off in a volatile Islamic country was hardly deemed newsworthy in the US media.

An argument can be made that since the US media is doing only what is to be expected : they are serving exactly what their market needs. No demand, and hence no supply. At the same time, one can clearly see the need for exposure to important policy issues for a healthy debate in the US. This would then make the required media exposure to be a public good that needs to be funded by the tax payer. The recent PBS series "Foreign Exchange" by Fareed Zakaria is a case in point : Zakaria is an awesome choice as an articulate and intelligent policy pundit who would've found it hard to get this gig on CNN or CNBC.

I am still left wondering about what we as interested actors can do to participate better. There's gotta be a micromedia/peer production strategy to make this work.

-- Mahashunyam // 3:55 AM //




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