Strategies for a discontinuous future.

Consulting & advisory, research notes, in the press, about bubblegen,
next wednesdays.

Friday, August 25, 2006

Politics of the Day

"...Sati's gone, nobody in India burns widows, so when Indians immigrate to Sydney, or London or Toronto, they're not building pyres in the front yard for grandma anymore."

Surely - you jest?

"...multiculturalism isn't the first ideology founded on the denial of truth. You recall Herman Goering's memorable assertion that 'two plus two makes five, if the Fuhrer wills it'."

OK - maybe not...

"...Multiculturalism seems to operate to the same even-handedness as the old Cold War joke, in which the American tells the Soviet that 'in my country, everyone is free to criticise the President' and the Soviet guy replies 'same here! In my country everyone is free to criticise your President'."

I don't understand why people on the hard right are mostly so...uhh...dumb.

My kid sister could point out to this guy that comparing the USA and Soviet Union (or Afghanistan, etc) is not exactly worthy of any kind of debate - it's just empty rhetoric.

Or that "multiculturalism" is a social ideal, not a political one, and that he's just comparing apples and oranges, and telling us apples aren't orange.

But what's the point.

-- umair // 7:08 PM //


Industry Note: Facebook + MS = Error

Got a few emails for thoughts on Facebook + MSN deal.

I think it's pretty simple. MSN offered a sweeter deal, Facebook went for it. If the rumour is accurate, the offers on the table the Facebook kru turned down (justifiably so) tell us that money counts for them. Fair enough.

The larger context of this deal is that serving ads isn't going to make or break the next media revolution, which is going to be squarely about redefining branding.

But it's difficult to see how a supplier without edge competencies is going to have much success at revolutionizing branding. And if there's a single company in the world who I would pick to never, ever succeed at the edge, it's MS.

They violate nearly every single one of the new principles of management that are the roots of edge competencies every day (you know, transparency, sharing, all that good stuff). Being evil is in the Microsoftian DNA. Unfortunately, returns to evil must necessarily diminish in a world where markets, networks, and communities are redefining value creation.

It doesn't matter how much money they throw at redefining brands - in fact, more often than not, $$ kills innovation dead. Rather, what matters are all the things we keep talking about here - all of which are anathema to MS, etc, etc.

-- umair // 2:10 PM //


Admin: Intern Wanted

Hi everyone, I'm looking for an intern to help me do a bit of research/editorial for my forthcoming book. Preferably a student doing undergrad/grad work in econ or an MBA. Bonus points if you can name at least three viral funpacks.

You don't get $$ (but if you're really desperate, we can talk), you do get time with me, an understanding of bleeding-edge strategy, potential contacts across the media/www/consumer space, and most importantly...insight.

Someone based in NYC/SF/London is also preferable.

-- umair // 1:37 PM //

Wednesday, August 23, 2006

Humour of the Day

While we're talking politics, I think this may be the most tragicomic political cartoon I've seen in a very long time - absolutely brilliant (although this was a close second, and this was a very close third).

-- umair // 7:26 PM //


The Decay of the Core and the Rise of the Edge

Ford mini case study is a textbook example.

-- umair // 7:07 PM //


Bush Smackdown of the Day, Strategy Edition

"...As for Iraq, it's no news that Bush has no strategy. What did come as news�and, really, a bit of a shocker�is that he doesn't seem to know what "strategy" means.

Asked if it might be time for a new strategy in Iraq, given the unceasing rise in casualties and chaos, Bush replied, "The strategy is to help the Iraqi people achieve their objectives and dreams, which is a democratic society. That's the strategy. � Either you say, 'It's important we stay there and get it done,' or we leave. We're not leaving, so long as I'm the president."

The reporter followed up, "Sir, that's not really the question. The strategy�"

Bush interrupted, "Sounded like the question to me."

First, it's not clear that the Iraqi people want a "democratic society" in the Western sense. Second, and more to the point, "helping Iraqis achieve a democratic society" may be a strategic objective, but it's not a strategy�any more than "ending poverty" or "going to the moon" is a strategy.

...Could it be that he doesn't grasp the distinction between an "objective" and a "strategy," and so doesn't see that there might be alternatives? Might our situation be that grim?

...Nicely administered - and it's probably a lot grimmer than that, considering that foreign policy is just the tip of the Bush iceberg that's about to sink America - consider water, hunger, global warming, energy, poverty, crime, the growing innovation gap or the macropocalypse, for example.

Hey, and, just when you thought things couldn't get any worse - look, it's our old pals from the Taliban back in action again. What a huge surprise.

-- umair // 6:58 PM //


Politics of the Day - Why We <3 Bush Edition

So, by now you know that the friendly guys at Powerline are Bush's biggest supporters and fans. It was Assrocket who wrote the still-unrivalled:

"...It must be very strange to be President Bush. A man of extraordinary vision and brilliance approaching to genius, he can't get anyone to notice. He is like a great painter or musician who is ahead of his time, and who unveils one masterpiece after another to a reception that, when not bored, is hostile."


Bush = Picasso? Bush = Beethoven? Both - and more.

Now, I thought it would be difficult to improve on such a beautifully written and poignant paragraph. But I was underestimating Assrocket. Today, he writes:

"...I had the opportunity this afternoon to be part of a relatively small group who heard President Bush talk, extemporaneously, for around forty minutes. It was an absolutely riveting experience. It was the best I've ever seen him. Not only that; it may have been the best I've ever seen any politician...the digressions and interpolations were priceless.

...He was by turns instructive, persuasive, and funny. His persona is very much that of the big brother."

What? A Freudian slip by the lunatic fringe of the right telling us that they love Bush because they really do see him as Big Brother?

You can't make this stuff up. The irony is so thick and perverse it would take the devil's own chainsaw to cut through it.

I'm sure Orwell would be delighted.

-- umair // 1:22 PM //


How Not to Think Strategically About the Edge, pt 1733 - Special Grouper + Sony Edition

"...Grouper will promote Sony�s content and seek to build communities of users around Sony movies and television shows, Mr. Felser said."

Sony jumps into the acquisition pond with a $65 million bet on Grouper. I'm not a huge Grouper fan, but that's another story.

The real story here is how much Sony doesn't get edge strategy - how this acquisition is likely to destroy, rather than create, value. Check the quote above.

Is there any better way to implode value creation at the edge? Imagine a Grouper focused on Sony "content". How lame would that be?

Focusing on the core, in this case, is a huge strategic error. Vertical integration is the kiss of death in an atomizing value chain - unless it is done to multiply and create market space at the edges, rather than focus on controlling a decaying core. More simply, when open is the new closed, the edge is worth more than the core.

Even more simply: Sony has decided to get 2.0, by buying a community - only to forget about the economics of the edge that are letting communities revolutionize moribund industries. community. Nice one - that's pretty high on the list of strategic errors at the edge.

-- umair // 1:05 PM //


Rise of the Edge: The Social

A great article and a great idea - do not miss.

What I find interesting is that the States has been so hypperrationalized that simple, obvious ideas like this were completely outside and contradictory to the dominant logic of our culture - it was only bureaucratic, machinelike ideas grounded in the naively simple language of physics and economics that were considered legitimate.

This is an old idea, which has taken literally a century to come back to the fore - policing originally was less about guns-->control than social-->control. Fascinating, if tragic.

-- umair // 1:00 PM //


Industry Note: Viral Funpacks

Yesterday, Paul left a great comment making fun of 2.0 "strategy" mentioning "viral funpacks".

It was pretty hilarious. But also pretty insightful. Why? Because the realization is slowly dawning in the Valley and other assorted 2.0 scenes of the world that "widgets" are the next big thing.

In no small part, this is due to the revolutionary Myspace music player - the widget that made Myspace more 2.0 than 2.0, by exploding the social value proposition.

Now, the problem with this setup is simple. "Widget" is about as Valley a word as you can get. It cuts to the big problem at the heart of 2.0: a handful of old geeks and beancounters trying (and largely failing) to invest in cool services consumers luv; a bunch of hipsters trying (and failing) to revolutionize mass markets with radical management innovation.

"Widget", let's recall, is a term to reflect the banality of business: the generic, homogeneous, standardized, meaningless "product" churned out by industrial era business.

Calling the microchunked components of a new breed of radically innovative services, then, which connect consumers socially and culturally "widgets" is just setting the stage for (yet another) round of 2.0 funding gone awry.

"Viral funpacks", as hilarious as it is, gets much closer to the truth of what these things are supposed to be (and I'm sure Paul and the rest of us fading hipsters will appreciate the layers of Kafkaesque irony in this).

Now, I'm not suggesting we call these things "viral funpacks" always and everywhere (I shudder at the thought of balding venture guys asking just a bit too seriously "how will your viral funpacks scale??"); but I am suggesting we stop calling them widgets, so we can try and think a lil more deeply about why they are economically powerful.

-- umair // 12:34 PM //

Tuesday, August 22, 2006

More 2.0 Than 2.0

And the sad part is I'm only half-kidding (you know the score, plasticity, the social, etc). Somebody, do this right, and make $$$$.

-- umair // 4:26 PM //


Racism of the Day

LaShawn asks:

"Last year while on a flight back to D.C. after a road trip, I saw several men I suspected were up to no good. They were young men of Middle Eastern appearance, and one in particular was acting suspiciously...

...Do you have a �Muslims on a plane� story?"

What a coincidence, LaShawn!"�!%!

Why, in fact, I do have a "Muslims on a Plane" story.

A couple of weeks ago, I flew first-class to JFK, thanks to a very nice client. I hung out at the lounge, went to the spa, got on the plane, drank lots of champagne, revised my presentation, flirted with the cute stewardess, watched half of a crap movie, read half of a great book, took a nap, and had a very nice meal. It rocked.

Then, two days later, I did it all over again.

Amazingly enough, neither of the planes blew up.

OMG teh terror!%!!%!%^^%%!

NB - Sarcasm aside, the absolutely greatest part of LaShawn's post is her argument:

"...As a human being, I can�t help but regret and even resent the pain of others. But pain is part of a fallen world. I can support profiling and � incredible as it may seem � feel bad that it has to be done."

Now, note that this appeal to religion is uhhh.....exactly the same logic that justified the Inquisition. Or even....uhhh....suicide bombing - just replace "profiling" with "blowing people up" - see how easy that was!

Oh, the irony.

-- umair // 3:53 PM //

Monday, August 21, 2006

The First World is the New Third World

A poignant example:

"...Four days after her death, the evacuation began. The National Guard prodded the evacuees aboard buses, even a man whose mother was lying dead a short distance away.

"I wanted to go and be with her," says Freeman, his voice a monotone. "The National Guard told me I had to get on the bus. And they all had AK-47s. He told me he was doing his job. I said, 'Let me just go back there just to see her before I leave.' He said, 'No, you're not going to do anything. You're just going to get on this bus.' So I had to make a decision. . . . So I prayed to myself and the voice within me told me just to get on the bus, don't do anything, just stand still and watch my salvation." His mother was left behind."

What was it - first history, then farce? Amazing, mind-boggling, sad, that the end of the USA looks like the beginning of a third-world country.

-- umair // 12:23 PM //

Sunday, August 20, 2006

Research Note: The Great 2.0 Shakeout and Why It (Really) Matters

"...Debate now centers around whether this is a harbinger of things to come. Robert Scoble thinks so. So does Dharmesh Shah. And of course, they're right. The market has no need for so many startups doing similar things."

Ah, hysteria on a Sunday evening. Let me try and clarify the economics of the shakeout.

1) When revolutionary things happen, lots of startups jump into the market. Entry explodes.

2) There is always a shakeout, because not all of these new players can make it. Just like not every rock band gets to be the Rolling Stones (ha ha), or just like not every baby grows up to be Dick Cheney (ha ha ha). That's the nature of competition.

Even if a 2.0 startup revolutionized every industry under the sun, many would still be left to go under.

3) This doesn't mean the revolutionary thing doesn't go on to be revolutionary. Let me quote you a few examples: cars, railroads, telegraphy, wireless, etc...

4) Yes, there will be a 2.0 shakeout. If only because there about 12 billion 2.0 startups in the universe.

5) The only people that will really suffer (deservedly so) are most VCs. And even that's only for a few months - then they can go back to golfing most of the time and failing to invest in all the plays that earn enormous returns. At least they're consistent.

5.5) This is not a bubble (=inflow of capital dependent on irrational expectations, or the like). This is a Long Boom. There's a big difference: Long Booms are characterized by an ongoing and fairly ruthless winnowing of winners from losers. They are marked, in other words, by the opposite of what happens in bubbles: relative market efficiency. Think railways in the 1800s, and then consider that P&G getting 2.0 and making real money from doing so is vastly more Long Boom than bubble.

To the 2.0 crowd, because no correction has happened for a year or two, it looks like a bubble. Of course, they're ignoring the massive, persistent, and thoroughly rational transfer of value from traditional media/IT/entertainment to new media.

6) Don't focus on the hysteria - focus on the cool (I'd tell you where it is, but I'd have to charge you).

-- umair // 5:43 PM //



Recent & upcoming sessions:

Supernova 2007 (video)




due diligence
a vc
tj's weblog
venture chronicles
the big picture
bill burnham
babak nivi
n-c thoughts
london gsb

chicago fed
dallas fed
ny fed
world bank
nouriel roubini


uhaque (dot) mba2003 (at) london (dot) edu


atom feed

technorati profile

blog archives