In any business area where value is truly created (=technology) you gotta think about value creation vs. value capture. You write code, develop products, make a new chip or doohickey; you create value, but how much of the payoff can you secure?
Microsoft, Apple, and Nintendo have made so much money not because they have created the most value, but rather because they have created a lot of value AND managed (with amazing shrewdness relative to everyone else) to capture most of the bucks that that value can produce. Plenty of value creation (e.g., the average new, neat cell phone) is too easily imitated.
Doubts about Google's business model? They are such: Google continues to create tremendous value, but without capture (unlike the early and ongoing beautiful marriage of search and ads).
Facebook vs. LinkedIn. Facebook creates more value; it's cooler, does more, people love it more, it's just all around contributing to society more. But LinkedIn does provide value, and it captures that value better because it's an environment in which it's sensible to charge some users (and for them to pay) for premium services. You could say Facebook is the better company from the public's eye, but LinkedIn is the better business.
Monday, February 2, 2009
The Lure of Technology and Excuses about Blogging
My Lenovo died over the weekend. It never worked perfectly; I had problems with the graphics card from purchase, and it performed consistently slower than it should have, despite my persistent efforts to remove bloatware and guard against spyware.
The Lenovo/IBM came from a company best known for its quality commodity products, but in my case it came with RAM, memory, and extra doohickeys that were state-of-the-art when I bought it a year and a half ago. By getting a product that way, I violated my previous mentor Larry's advice about buying "at the knee of the curve."
Larry was one of my mentors in 1999 when I took a year off from school and worked in a laboratory environment. I had never worked in a laboratory and I constantly did stuff to piss Larry off, mostly because I was motivated and looking for ways to be helpful in an environment that had no idea what to do with me (I thought this problem was particular to that lab, and then I thought it was particular to academia; now I understand it's normal for older people managing motivated youngsters - they know nothing, but they are more motivated and in some ways smarter).
Larry taught me a few excellent lessons. Probably the most important one was that he taught me computer programming. Not everyone would be impressed by my computer programming, but I know some stuff, and he got me off on the right foot. It has been said, "Good programmers code; great programmers reuse." Larry taught me that by giving me a bunch of his code to jump-start me in writing code to control a test apparatus in the laboratory. Without ever having taken a class, I learned coding in a way that was appropriate to me, akin to language immersion. I still have never taken a class in programming, and I still code everything by reuse. I might not be the greatest programmer ever, but I'm fast and the stuff works. (I just wish Larry had taught me css because Linkspank could use some style, despite Darkspank.)
The Larry lesson at hand was buying at the knee of the curve. We bought plenty of computers and equipment in our laboratory environment, and since it was a high-physics lab all of these prosaic decisions were made by physicists rather than procurement managers or engineers or business people. Larry explained that you were best off buying a computer or anything else at the "knee of the curve" and he drew a graph to explain it (like a good physicist). The cost of what you are getting rises gently in a line, but when you get to newer technology the cost suddenly rockets up. You want to buy the stuff that is just before where it rockets up - that's the knee of the curve.
It may be that the knee of the curve solves some sort of optimization for the value you are getting for your money. But viewed from a business lens as well as a physicist-economist lens, it makes sense to buy at the curve because the more expensive technology is "bleeding edge", and the people who are bleeding edge are not the developers of the technology (who are making the only profits they can make in their line of business, since the cheaper stuff ain't profitable), but consumers like you and me. We bleed because the stuff breaks.
Expensive technology is not better; it's worse, because it breaks. My Lenovo is an example. The Nokia N series is an example. All-in-one printers are lost in a no-man's land between commodities and luxury products.
In my opinion, if you are buying technology, you should buy the best thing in the arena of completely cheap stuff.
There are two exceptions: toys, and special needs. Here is where it gets complicated, because people tend to file computers under one or both of these areas. But I would suggest that life is much nicer and more fun if you can draw crisp lines around the toys and special needs, away from the stuff that you actually need to work. I use my iPod touch to work (I wrote about 10-15% of my novel on it) but it's a toy; if it breaks, I can do pretty much everything anyway on my Blackberry.
For this reason, if you are a gamer, maybe it's better to go for Xbox over WoW. Or have separate computers.
Actually Larry taught me that too: about having production configurations. You don't install anything on a computer that you're doing work on. It's the only way to avoid messing it up (rather, it's a necessary, but not sufficient step).
If you view the knee of the curve philosophy more broadly as pertaining to non-monetary expenditures, you could think of it as a mantra by which you can allocate how you spend your time. Spend your time on things where it's easy, and you get good returns. Don't work too hard on anything, and don't dabble in anything. Work on things a proper, middle amount until you don't have any time left.
I'm not sure what that means about blogging. It would imply that blogging just a tiny amount is a total waste, and that putting tons of effort in is a waste (no problem there, since there is no professionally written blog on the web). Maybe it's telling about how a venture is going: you put in your effort up to the knee of the curve, and either the venture is working or it's not. If it's not, maybe you should drop it rather than going up into the high-cost zone (sweating blood to get anywhere); either it fundamentally works or it doesn't.
Life should be full of toys and commodities; may the twain never meet.
The Lenovo/IBM came from a company best known for its quality commodity products, but in my case it came with RAM, memory, and extra doohickeys that were state-of-the-art when I bought it a year and a half ago. By getting a product that way, I violated my previous mentor Larry's advice about buying "at the knee of the curve."
Larry was one of my mentors in 1999 when I took a year off from school and worked in a laboratory environment. I had never worked in a laboratory and I constantly did stuff to piss Larry off, mostly because I was motivated and looking for ways to be helpful in an environment that had no idea what to do with me (I thought this problem was particular to that lab, and then I thought it was particular to academia; now I understand it's normal for older people managing motivated youngsters - they know nothing, but they are more motivated and in some ways smarter).
Larry taught me a few excellent lessons. Probably the most important one was that he taught me computer programming. Not everyone would be impressed by my computer programming, but I know some stuff, and he got me off on the right foot. It has been said, "Good programmers code; great programmers reuse." Larry taught me that by giving me a bunch of his code to jump-start me in writing code to control a test apparatus in the laboratory. Without ever having taken a class, I learned coding in a way that was appropriate to me, akin to language immersion. I still have never taken a class in programming, and I still code everything by reuse. I might not be the greatest programmer ever, but I'm fast and the stuff works. (I just wish Larry had taught me css because Linkspank could use some style, despite Darkspank.)
The Larry lesson at hand was buying at the knee of the curve. We bought plenty of computers and equipment in our laboratory environment, and since it was a high-physics lab all of these prosaic decisions were made by physicists rather than procurement managers or engineers or business people. Larry explained that you were best off buying a computer or anything else at the "knee of the curve" and he drew a graph to explain it (like a good physicist). The cost of what you are getting rises gently in a line, but when you get to newer technology the cost suddenly rockets up. You want to buy the stuff that is just before where it rockets up - that's the knee of the curve.
It may be that the knee of the curve solves some sort of optimization for the value you are getting for your money. But viewed from a business lens as well as a physicist-economist lens, it makes sense to buy at the curve because the more expensive technology is "bleeding edge", and the people who are bleeding edge are not the developers of the technology (who are making the only profits they can make in their line of business, since the cheaper stuff ain't profitable), but consumers like you and me. We bleed because the stuff breaks.
Expensive technology is not better; it's worse, because it breaks. My Lenovo is an example. The Nokia N series is an example. All-in-one printers are lost in a no-man's land between commodities and luxury products.
In my opinion, if you are buying technology, you should buy the best thing in the arena of completely cheap stuff.
There are two exceptions: toys, and special needs. Here is where it gets complicated, because people tend to file computers under one or both of these areas. But I would suggest that life is much nicer and more fun if you can draw crisp lines around the toys and special needs, away from the stuff that you actually need to work. I use my iPod touch to work (I wrote about 10-15% of my novel on it) but it's a toy; if it breaks, I can do pretty much everything anyway on my Blackberry.
For this reason, if you are a gamer, maybe it's better to go for Xbox over WoW. Or have separate computers.
Actually Larry taught me that too: about having production configurations. You don't install anything on a computer that you're doing work on. It's the only way to avoid messing it up (rather, it's a necessary, but not sufficient step).
If you view the knee of the curve philosophy more broadly as pertaining to non-monetary expenditures, you could think of it as a mantra by which you can allocate how you spend your time. Spend your time on things where it's easy, and you get good returns. Don't work too hard on anything, and don't dabble in anything. Work on things a proper, middle amount until you don't have any time left.
I'm not sure what that means about blogging. It would imply that blogging just a tiny amount is a total waste, and that putting tons of effort in is a waste (no problem there, since there is no professionally written blog on the web). Maybe it's telling about how a venture is going: you put in your effort up to the knee of the curve, and either the venture is working or it's not. If it's not, maybe you should drop it rather than going up into the high-cost zone (sweating blood to get anywhere); either it fundamentally works or it doesn't.
Life should be full of toys and commodities; may the twain never meet.
Wednesday, January 21, 2009
Two features: Categories + DARKSPANK
1. Homepage Categories.
You can change your default homepage categories. Want gossip staring
you in the face when you open linkspank? Voila.
http://www.linkspank.com/index.php?page=edithome
You can change your default homepage categories. Want gossip staring
you in the face when you open linkspank? Voila.
http://www.linkspank.com/index.php?page=edithome
2. Themes
We are testing just one site theme - Darkspank. More are to follow.
http://www.linkspank.com/index.php?page=editskin
Hopefully you enjoy them. If not, keep it to yourself. (Just
kidding; feedback desired.)
On using Twitter / what I'm doing
Twitter is best designed for providing a firehose of data about what
you're doing and thinking. That's what it's built to do with it's
short format and flexible alert system, and (unlike facebook) it's not
built to do anything else.
you're doing and thinking. That's what it's built to do with it's
short format and flexible alert system, and (unlike facebook) it's not
built to do anything else.
Why would anyone want to know what I'm doing and thinking eight times
a day? I have no idea. The main person who would is my mom, and she's
not on Twitter. But come to think of it, there are several people who
I'd like blow-by-blow accounts from.
You can "follow" someone without getting text messages about them on
Twitter, but I think this option is overused too. The main question is
whether you want to step up to the firehose at all.
Anyway, if you're interested in my firehose (!), you can find it under
bitchell on Twitter. If not: I understand.
--
Sent from my mobile device
Saturday, January 17, 2009
There is no such thing as a universal economic downturn.
There is no such thing as a universal economic downturn.
Strategy hinges on tradeoffs. The misfortune of one company, industry, region, or point in space-time is the opportunity of another. On this I think of Porter and Blue Ocean Strategy. Even if the overall market cap out there falls, the potential for any individual or company to profit is constant.
An example:
Recession? Not for These Businesses
For the VERY lastest in news, articles, videos, you can search for recession on Linkspank.
Strategy hinges on tradeoffs. The misfortune of one company, industry, region, or point in space-time is the opportunity of another. On this I think of Porter and Blue Ocean Strategy. Even if the overall market cap out there falls, the potential for any individual or company to profit is constant.
An example:
Recession? Not for These Businesses
For the VERY lastest in news, articles, videos, you can search for recession on Linkspank.
Thursday, January 15, 2009
20 second analysis: Apple after Steve Jobs
There's been a lot of non-analysis about speculation about the fate of Apple after Steve Jobs, who's taken six months leave from Apple and whose return is speculative.
Say he did depart in June 2009, rather than return. Here's my quick analysis, broken into two parts:
You could sum up Apple's business strategy as innovation + ecosystem.
The innovation that Jobs has personally brought to the company and directed is probably the hardest thing to replace. And repeated, profitable innovation has proved impossible for most companies.
Apple's strategy doesn't require constant innovation (like a chip designer or a Nokia or Motorola), so much as the occasional disruptive innovation (Mac/iPod/iPhone), because the company does a good job of selling their products in a protected environment in which they get to capture all the value (iTunes and the whole Mac "ecosystem"). Even without another major innovation, they are good for another several years (and even if Jobs stuck around, it would be tough to expect another major innovation). You should doubt that another major innovation is going to come even WITH Jobs, because they are so hard to come by. So the situation doesn't change in his absence.
As for the ecosystem, the whole point of the ecosystem is that it tends to protect itself (with care and maintenance of the brand and partnerships); we should expect any other competent CEO to run with it correctly.
The corporate culture of Apple is much discussed. But since I'm discounting Apple's ability to sustain innovation post-Jobs, it doesn't matter whether the culture would support further innovation (though there good reasons to think it wouldn't). On the other hand, squeezing money of the ecosystem is something that the culture is currently build for.
You can search for the newest stuff about Apple on Linkspank.
Say he did depart in June 2009, rather than return. Here's my quick analysis, broken into two parts:
You could sum up Apple's business strategy as innovation + ecosystem.
The innovation that Jobs has personally brought to the company and directed is probably the hardest thing to replace. And repeated, profitable innovation has proved impossible for most companies.
Apple's strategy doesn't require constant innovation (like a chip designer or a Nokia or Motorola), so much as the occasional disruptive innovation (Mac/iPod/iPhone), because the company does a good job of selling their products in a protected environment in which they get to capture all the value (iTunes and the whole Mac "ecosystem"). Even without another major innovation, they are good for another several years (and even if Jobs stuck around, it would be tough to expect another major innovation). You should doubt that another major innovation is going to come even WITH Jobs, because they are so hard to come by. So the situation doesn't change in his absence.
As for the ecosystem, the whole point of the ecosystem is that it tends to protect itself (with care and maintenance of the brand and partnerships); we should expect any other competent CEO to run with it correctly.
The corporate culture of Apple is much discussed. But since I'm discounting Apple's ability to sustain innovation post-Jobs, it doesn't matter whether the culture would support further innovation (though there good reasons to think it wouldn't). On the other hand, squeezing money of the ecosystem is something that the culture is currently build for.
You can search for the newest stuff about Apple on Linkspank.
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