One of the Prices of Bigoted Demagoguery

Professional Islamophobe Pam Geller brings her trademark (lack of) insight to the Ahmed Mohamed incident, the boy who was arrested for bringing a homemade clock to school:

"If you ever see a Muslim with a suspicious object, remember the lesson of Ahmed Mohamed: to say something would be 'racism,'" she wrote. "That could end up being the epitaph of America and the free world."

A rational mind might observe that the biggest difference between a homemade clock and a homemade bomb is that the latter involves explosives. Without actual explosives, you have no bomb. Without make-believe explosives, you have no make-believe bomb. But more than that, the reason why the boy's clock looks like a bomb to people like Geller, and the reason any circuit board is going to look like a bomb to the equally addle Frank Gaffney, is because by all appearances everything they know about electronics and bomb-making comes from watching movies.

If we're going to embrace hysterics and suggest that any person in possession of something that looks like it could be used as a trigger device for a bomb should be arrested, whether or not they possess real, fake or imaginary explosives, we can start by arresting any person found in possession of a cellular phone. Meanwhile, if Geller is truly concerned that arresting kids for possessing homemade clocks is going to prevent the arrest of actual criminals, I suggest that she get herself a copy of "The Boy Who Cried Wolf", read it, then take a long look at herself in the mirror.

Google and Apple vs. the Patent Trolls

With Apple and Google settling their patent disputes, some have noted that the two companies are now teaming up to urge legal reforms directed at patent trolls. In simple terms, a patent troll is a company that does not produce anything, but instead builds a library of patents that it uses to make demands for compensation or to launch lawsuits, often strategically timed to coerce a quick settlement, against companies that they allege are violating their patents. Many start-ups end up having to choose between settlement or burning through hundreds of thousands of dollars in legal fees, often significantly more than the patent troll demands to settle the claim, instead of investing that money in their business. The patent troll may wait to file a lawsuit until a company is in merger or acquisition talks or announces an IPO, knowing that in those contexts companies will often want to quickly settle any litigation.

At the same time, large companies are notorious for being unwilling to license outside technology and, upon learning of an innovation, of trying to find a way to replicate its best features without running afoul of the existing patent. Also, absent a huge bankroll, it is a rare private inventor who can afford to litigate even an egregious patent violation. Although I am not claiming it to be at all typical, or at all common, it's not difficult to see why an inventor who lacks the resources to directly capitalize on a patent, who can't find a manufacturer willing to license or buy the patent, and who sees what appear to be violations of his patent by existing companies, might choose to license or sell a patent to a company that could reasonably be described as a "patent troll".

One reform that is sometimes proposed as a way to greatly reduce patent trolling is to eliminate software patents. However, we're now in an era in which traditionally patentable devices covered with switches, buttons and knobs can be replicated on a touch screen, purely through software. We're in an era in which the patentable elements of a breakthrough computer innovation may be entirely software-based, and where product development could involve the investment of millions, even tens or hundreds of millions of dollars, but where replication of the idea is comparatively cheap and easy. That's the context of the Samsung-Apple litigation, with Apple having spent $150 billion or more developing the iPhone and Samsung, displeased with its own efforts, choosing the much easier path of imitation.

If you deprive the innovator of any patent protection, it's highly unlikely that they're going to make the necessary investment to produce that type of innovative product as they would be concerned that immediate imitators would prevent them from obtaining a return on their investment -- or might turn that investment into a gargantuan loss. Also, given the $billions that major companies have spent building their patent portfolios, even if it would make sense in the long-term to narrow the protection available through software patents, it's difficult to imagine that those companies will support reforms that would significantly reduce the value of their patents. At the same time, it should be possible to get broad support to narrow eligibility for software patents, and perhaps even to significantly shorten their duration, reforms that would help keep dubious patents from being used coercively against manufacturers and service providers, and allow companies to recover their investments while limiting the amount of time in which competitors are reluctant to build upon a patent holder's breakthrough or essential technology.

Another reform that is often suggested, and which seems quite reasonable, is to provide that a patent holder can only obtain injunctive relief is if it actually manufactures a product covered by its patent. A reform along that line seems reasonable, although I think it would be appropriate to provide for injunctions if the patent holder can demonstrate that it is in the process of developing products or that the alleged violation is intentional. Otherwise, the coercive impact of an injunction could cause a company to settle a frivolous claim in order to keep a key product on the market or to reassure investors or its distribution network.

I've also seen it suggested that, if sued, a company should be permitted to ask a court to declare that the patent holder is a patent troll and, if the court agrees, that the company should be required to post a bond to cover the alleged violator's legal fees if its patent litigation is not successful. While the most noteworthy example I've seen, the proposed Shield Act, attempts to define "patent troll", its definitions remain problematic. For example, the requirement that a company seeking to protect an acquired patent "provide documentation to the court of substantial investment made by such party in the exploitation of the patent through production or sale of an item covered by the patent" would put a significant hurdle in front of a patent holder trying to sell a patent that is already being infringed, or in front of a company that acquires a patent that is infringed prior to its commencement of production and sale of a covered product.

The bond requirement imposed on a company determined to fall under the act would be oppressive to a company bringing a legitimate patent claim, but there's no reciprocal requirement -- either for a bond requirement or for an award of legal fees against a defendant company that loses its defense of a patent case -- that would discourage a company from defending a patent that it believes is, or probably is, valid. While there's something to be said for reducing a patent troll's ability to coerce a settlement from a company that might prevail if the case were litigated, the Shield Act seems to substitute one problem for another -- now a willful infringer can create a litigation environment in which a company that has acquired a valid patent could come under intense financial pressure to settle for far less than the claim is worth.

A more modest reform bill is pending in Congress, and it does include a reciprocal attorney fee provision, but it is not widely viewed as having a large chance of passing. The bill includes some interesting elements that attempt to limit the ability of a patent holder to coerce another company based upon nebulous claims of patent infringement, and potentially create a cause of action against a patent holder who violates those provisions.

Google and Apple are in a powerful position to push for meaningful patent reform. Let's hope that they push for balanced reforms, even at risk of devaluing their patent portfolios, and that more tech companies join their effort.

Where We Could Really Use the "Next Steve Jobs"

A lot of people focus on the smartphone market, and complain with each new Apple product that... Steve Jobs would have done something different, or better, or both. Steve Jobs brought something unusual to Apple, specifically a willingness to make huge gambles on theoretical technology, and to release products that could turn out to be failures. Apple seems to have become exceedingly cautious, but I'm not sure that is so much the result of a change in the company's philosophy as it is a change in consumer expectations. The iPhone 4 antenna issue, and the Apple Maps brouhaha, suggest that consumers want nothing less than perfect and, rather than launching risky products that might inspire a mixed reaction or turn out to be the next Newton (or Zune), caution has spread across the industry.

The real story behind the focus on portable electronics is not so much that a life-changing innovation is just around the corner. It's much more that there is profit in the upper end of the market, the mass market having already been commoditized. Smartphone advances reflect the importance of competition as, even though Apple sees the rise and fall of Nokia as a cautionary tale, history suggests that product development in a commoditized market tends to be slow. Most companies see little to no point in spending hundreds of millions of dollars to marginally improve a product that will likely sell at the same price point as before. That's the sort of context in which a short-sighted CEO of a company like Hewlett-Packard might decide that it no longer makes sense to fund research that is not directly aimed at turning a profit, or why a similarly short-sighted company's products might go from excellent to "good enough" in order to increase margins by decreasing production costs. (Am I talking about the same company?)

One might argue that televisions have seen marked advances in technology despite being a largely commoditized market, but that has been driven in no small part by the introduction of HDTV and the money poured into the development of new displays for computer users and commercial settings. Even in that context, major players like Panasonic have a very difficult time turning a profit, and the pool of companies that produce television displays and sets is not expanding.

One area that has seen a surprising lack of innovation is the desktop computer market. That's in part because it's a tough nut to crack - computers do pretty much what we want them to do, there are no obvious ways to dramatically improve the user interface, and the technologies for interacting with computers other than through a mouse and keyboard tend to focus on niche users or turn out to be largely impractical. It may be that one day we'll have displays and "no touch" gesture controls as shown in the film, "Minority Report", but that's not on the horizon. Basically, the desktop computer market seems a lot like the television market. To the extent that incremental improvements are seen, they're in no small part the result of R&D in the mobile marketplace. The biggest "innovation" we've seen in a desktop operating system was Microsoft's annoying, clumsy interference with the user experience by putting a "smart tile" display between the computer user and the desktop - that is, they tried to make the desktop experience more like mobile, never mind whether that makes sense. Apple has made similar, albeit less in-your-face changes to its desktop operating system, with its Launchpad and App store, but they're really not part of the ordinary desktop experience.

Somebody commented to me recently that Apple seemed to be "giving up" on the competition for desktop computers. I responded that they're chasing money and market share, and that right now they can find both in the mobile space while there is little incentive to try to claw out a greater market share in the desktop market. The cost of significantly expanding their desktop presence would be significant, and there's really not much money to be made in that market. Were Apple to start producing $300 - $600 portable computers it might find a market, but it would have to make the quality cuts that are readily apparent in computers in that price range, potentially costing it brand loyalty over the long run in the same manner that the low quality Apple products of the Sculley era damaged Apple's reputation and competitiveness. Why mass produce low-cost computers that have to be sold at tiny margins and that would likely have an impaired user experience, when you can continue to sell $1000+ computers that people enjoy using, and sell millions of highly profitable iPads to the sub-$1,000 market?

Really, though, the desktop industry needs to be woken from its complacency, much in the manner that Google and Apple rebooted then-stagnant browser development with Chrome and Safari. The problem being, you either need a company that sees a long-term gain in developing new technology at a significant short-term cost, the way Xerox PARC laid the foundation for the computer mouse and windows-driven displays, or because they don't want to be indentured to a competitor's product. And if you take the HP Labs / Xerox PARC approach, you also need a visionary who can see how a new idea can be improved and put into widespread use - after all it was Apple, not Xerox, that turned the mouse and menu/windows-driven interface from an impractical lab-based demo to the desktop standard.

The manner in which the world, and Apple, has changed is perhaps best illustrated by today's quiet announcement that the iMac has been updated. You can go to the Apple Store and buy one today - but the new version isn't even flagged as "new". A secondary illustration comes from the Mac Pro, the high-end computer Apple develops for the professional market, which is soon to be released in an innovative new case. But that's innovation in the same sense as the Mac Mini was an innovation - great design and packaging, but nothing you couldn't have accomplished in a traditional mini tower case. Apple did promote the redesigned Mac Pro, some months back, but when will it actually come to market? Later this year. There's no sense of urgency, as there is in the highly competitive mobile marketplace.

An argument can be made that when a technology reaches a certain point of maturity, all new developments will be incremental. Perhaps the keyboard and mouse-driven desktop computer are pretty much it - and unless the entire concept is reinvented (much as the iPhone reinvented the smartphone market) this is it. People seem disappointed when the new "state of the art" smartphone looks like the old one - as if there's a great deal you can do to differentiate the hardware of a typical smartphone in ways that are obvious or exciting. Even in that market, unless a new, disruptive technology comes along the biggest future changes will come through software. In fifteen years, today's typical smartphone and tablet apps are likely to look about as sophisticated as Pong. But still, it would be nice to have a sense that somebody out there - somebody positioned to disrupt the market - was looking at "impractical, unworkable" new ideas from a different angle, and asking, "What if...."

Apple and the Decline of Microsoft

If the take-away is that big companies can sometimes lose track of how to compete effectively with smaller, nimbler, more innovative successors, there's nothing new to that story - it bears repeating, it's something companies should try to remember as they get big, and it's something most companies seem to forget given enough time, success, and/or an unfortunate choice of leadership. Paul Krugman argues that Apple could follow Microsoft into decline, and that it's situation could potentially be worse as it sells consumer products and thus isn't as insulated from market forces as Microsoft, which benefits from having lazy IT departments refuse to support Apple products. But that makes Apple more like Hewlett-Packard, a once great and innovative company that produced quality products, then lost its way under incompetent, bean-counting management that slashed its research budget and didn't care about quality. For that matter, you could compare the future theoretical decline of Apple to the past, actual decline of Apple, where bad decisions by Steve Jobs and his successor all-but-destroyed the company before Steve Jobs returned from NeXT with a much improved vision for the company. But for Apple's reinvention of itself, odds are that we wouldn't be fretting over whether the next iPhone will be only incrementally improved over the prior model and that Android would still be a Blackberry clone. Let's recall, Apple's big profits come not from software, but from hardware.

Krugman writes,

The story of how that state of affairs arose is tangled, but I don’t think it’s too unfair to say that Apple mistakenly believed that ordinary buyers would value its superior quality as much as its own people did. So it charged premium prices, and by the time it realized how many people were choosing cheaper machines that weren’t insanely great but did the job, Microsoft’s dominance was locked in.

On the contrary, I think Apple is painfully aware of the fact that many consumers, particularly those at the low end of the market, are choosing Android devices. Although Apple still suffers more than a bit from the Steve Jobs attitude of, "We know what you want better than you do" (an attitude Krugman notes in a blog entry on the subject) - and in fairness to Steve Jobs, at least during his second tenure at Apple he was often correct - they don't market their most profitable products in the manner that Krugman suggests. They're not trying to convince you to buy a $599 iPhone versus a bottom-of-the-market $100 Android phone. They're trying to get you to sign up for a two year contract with your phone carrier, with much of the purchase price being built into your service contract and your nominal purchase price being not much different from a low-end phone.

In terms of quality and pricing, for quite some time Apple's computers have stacked up quite well, feature-for-feature, with the diminishing pool of well-constructed PC's. But it has been my impression from the lack of development of their desktop market that they aren't interested in trying to make a huge - or even a modest - push for market share within that diminishing market. Not surprisingly, they like to manufacture products that are profitable, something that very few cell phone manufacturers do. They and Samsung presently sell cellular phones at a profit. Thanks to the increased quality of competing products, I suspect that Samsung will soon find itself facing a commoditized market for higher-end cell phones and Apple will be the last cell phone company that makes a significant profit from its hardware. Then, barring the unlikely event that we get something as disruptive to the industry as another iPhone, Apple will no longer be able to sell its cell phones for an appreciable premium over the commodity price - and the entire industry will have to glean its profits elsewhere. Apple is trying to establish a reliable ecosystem - hardware and software that work well together, allow most products that remain in service to be upgradable to the current operating system, and are easy and reliable platforms upon which third party software and hardware developers can manufacture apps and iOS-compatible products. Despite Android's quality, the fragmentation of its operating system and the fact that many phone manufacturers don't care if a two-year-old handset can be upgraded will impair its ability to offer the same opportunities. Apple intends to make money, even in a commoditized market, from app sales and licensing fees.

Krugman appears to be focusing on major disruption rather than modest innovation, even as he brings Yahoo! and Marisa Mayer into the discussion. If the resurgence of Yahoo! is a story to be believed... and I'm a skeptic... its resurgence will be the result of improvements at the margins. And that story would not be atypical. The biggest fortunes tend to be made not by the person who comes up with a concept or invents the early version, but with the person who comes up with an upgraded version of the product - something that ships better, something that's easier to manufacture, something that's easier to use. When Steve Jobs saw early versions of a window-based operating system and mouse at HP's then-famous labs, he saw the potential to transform them and turn them into products for a mass market. Jobs wasn't the inventor of the cell phone, display panel or touch screen - but he and his company came up with an innovative way to combine them.

Microsoft committed some odd, oversized errors over the past couple of decades that have contributed to its downward slide. As Krugman notes, they didn't see the potential of the iPhone, but more than that they didn't see the potential of the Internet. As Krugman noted, a lot of Microsoft's past success was built on its monopoly power, but its best and most profitable products were not major innovations. Windows built upon work that Microsoft performed for Apple, in developing the operating system for the Macintosh. It's office suite built upon software products that offered similar functionality, perhaps with modest improvement (but often without, or with 'innovative' features that you couldn't wait to turn off), and became dominant through bundling. Its browser became dominant through bundling, leading to the decline of Netscape, but it lost interest in developing a cutting edge browser pretty much the moment it no longer perceived Netscape as a threat.

Contrary to Krugman's inferences, having never been a user of Apple products, Apple did not always have a quality advantage over Microsoft or its associated hardware developers. Windows 95 incorporated some features that it took Apple years to emulate, and after Jobs left Apple's hardware quality plummeted. For that matter, for all of its innovative features, the early Macintosh suffered from having too few programs and too little RAM, as well as the odd design compromises that came from Steve Jobs' disdain for internal fans. Microsoft's present plight emerges from its failure to effectively enter new markets as the old ones faded - as operating systems became "good enough" that companies felt no need to upgrade every year or two, and as its Office suite became "good enough" that any changes it made from year-to-year were not likely to bring new sales, and as its customers tired of its game of modifying Word files such that you had to jump through hoops to save a document that would open on an older version of its software. In that sense we're back to the legitimate fear for Apple as a hardware company - that unless it comes up with a remarkable hardware innovation it's looking at a future where its products are commoditized and while, despite some people sticking with the company due to their library of iOS apps, many customers come to see little reason not to change platforms. Apple is trying to look beyond that day, and Google is struggling to convince Android developers to follow standards that will allow it to keep up.

Apple's biggest problems seem to come from copyright law, and entrenched monopolies and oligopolies. It is having difficulty coming up with a television product because of the difficulty of licensing content from media companies. Its products rely on Internet bandwidth, with many customers obtaining that bandwidth from cable monopolies. The iPhone demonstrated how you can create a breakthrough, profitable product in a tired, commoditized market, but without content there's no apparent room for a similar move in television. Also, most televisions these days would qualify as reasonably powerful computers, so it's not clear that Apple could offer a disruptive product that would not quickly be emulated, perhaps less artfully, by its competitors. People talk about an iWatch, and I think it is inevitable that Apple will produce a wearable device of some sort... although I don't think it is likely to be a watch in the sense that we have traditionally used that word, either in how it's worn or what it does, but all we can do at this point is speculate.

Google is, in a sense, playing Microsoft to Apple's iOS, offering a version of highly similar software for free, Microsoft Internet Exploder vs. Netscape's browser. I sometimes wonder if Google will continue to provide free operating system development for the world, or at least if it will be as quick to make its greatest innovations part of the core as opposed to part of a proprietary add-on, particularly as it attempts to spin Motorola up into a dominant manufacturer of Android phones. As with all of this stuff, time will tell.

Résumés? What's a Résumé?

Touching on the job-seeking post from a couple of days ago...

We've learned more details about Apple's new 'GPU Design Center' in Orlando, Florida, following our reporting from earlier this week.

Sources told MacRumors that the engineers Apple hired recently were not laid off from AMD, but were instead actively recruited -- largely via their LinkedIn profiles. Apple is said to have learned that many of AMD's 3D graphics patents were issued from its Orlando offices and targeted this area specifically. AMD has job listings for its Orlando offices to fill several of these recently vacated positions.

They probably didn't even know they were looking for jobs before the recruiter called.

A Tablet as a Replacement for, Not Addition to, a Car Display

Apparently Apple is in talks to do... something in along that line. It has had some niche successes with having auto makers use tablets instead of a proprietary in-car entertainment system. In past years the profit margins for entertainment and navigation systems would have made it difficult to convince auto makers to fully integrate with a third party device, but now... if you pay $2500 for in-car entertainment or navigation, or even $1,500, even if you don't feel like a chump it's difficult to imagine that you've viewed in any other manner by the car dealership.

So why not become, in essence, a large tablet retailer? Have the device fully integrate into the vehicle, seamlessly controlling navigation, entertainment, climate control, and the like? Sure, you have to somehow control for people watching movies while they drive....

The Logic Behind Control Freaky iPhones

I have sympathy for the argument that Apple has a history of being something of a control freak with its hardware, and that its tendency to want to control what users do is manifest in its iOS devices, the iPhone and iPad. If you're the sort who likes to customize your experience within the OS, you have very few options. If you're the sort who likes to dig deeper into the device to change appearance or function, Apple works hard to prevent that. If your intentions are good, than can be frustrating.

That's not to say that it's not frustrating, also, when your intentions are bad. Although some people jailbreak their iOS devices in order to use them on a network that does not yet support the iPhone, or because they enjoy hacking the device, let's be honest: Most people looking to jailbreak an iPhone or iPod, or complaining bitterly about how Apple restricts their freedom as compared to Android, are primarily interested in installing bootleg apps or making "free" in-app purchases.

As it stands, iOS looks its age. There are pro's and con's to that, the most obvious pro's being that it's easy to use and remains compatible with most older iOS devices. On the other hand... it's somewhat inefficient, the constraints on file organization make it somewhat clumsy, it screams out for new features, some of its functionality is clumsy (adding an event to the calendar, for example), and its quaint adherence to skeuomorphs (e.g., making a calendar look like an old, on-paper desktop calendar) needs to go. (Rumor is that skeuomorphs are on their way out in the next iOS update.)

When you look at the latest version of Android, or when you look at Android's present market share, the question I heard a while back, "Why do developers still tend to develop an iOS app first, instead of starting with Androd," seems fair. I think the answer is this: Because Apple is enough of a control freak to ensure that a majority of iOS device holders will buy their apps, instead of installing "free" bootleg versions. That's an issue I expect to only become more pronounced as Android starts to saturate the market for lower-cost smartphones.

Although I'm not sure that they expected it to happen so quickly, Apple has known for many years (really, all along) that it's only a matter of time before any computer technology becomes commoditized. You can create a premium product and sell it at a premium price, but if the run-of-the-mill product is almost as good as yours that is likely to result in your rapid loss of market share. People seem to forget that while Apple is competing with Samsung (and, indirectly, Google) for the lion's share of the smartphone market, it's competing with Amazon (and Google) to be a dominant vendor of electronic books and media. Google doesn't give away Android in order to give its competitors an advantage in the marketplace - it does so to give its own software product an advantage, and to better position itself to compete in the mobile space for ads, apps and media.

To the extent that Apple can make itself the device maker that is most likely to provide royalties to developers and content owners, and Android doesn't find a way to rein in bootlegging, that aspect of Apple's control freaky nature is likely going to provide it with a significant advantage when negotiating with content providers.

The End of Google Reader and the Future of Blogging

For those who use it, Google's announcement that it's killing off Google Reader is probably a bit of a surprise. After all, with the simplification of the Reader shortly after the introduction of Google Plus, it seemed like it was in a pretty easily supported maintenance mode. But... there's no profit, and no future, in maintenance mode products.

The actual announcement has resulted in some reactions that are, oh, perhaps a bit over-the-top. The idea that you won't use a new Google product because an older one you like is being phased out is superficially understandable, but the fact is that even products that are immensely profitable for a company can eventually become obsolete. There's nowhere you can go in the online world with certainty that the product you know and love won't be discontinued, in some form of maintenance mode, or suddenly and dramatically reinvented into something you barely recognize.

What Google's action says to me is that people are continuing to shift from using RSS feeds to follow blogs and news sources and toward other means of aggregating content or finding interesting links. Yes, the skeptics are likely correct that Google wants Reader users to shift over to Google Plus, even if it doesn't offer the same functionality. But I suspect that the biggest issue for Google is that people truly are shifting away from Reader, and although those of us who use Reader may find it extremely useful, we're a shrinking minority of Internet users.

My personal reaction to the news was two-fold. First, it's difficult to monetize RSS feeds, so people have been pretty passive about pushing them on the public. Second, people are shifting away from blogging, as such, and are switching over to more casual or less time-intensive means of sharing their thoughts or keeping in touch with friends. The push toward Google Plus is not just about use our new product, not our old one, it's consistent with a general shift away from blogging.

Although the numbers are approximate, blogger is shown by compete.com as being down by more than 2 million unique visitors per month over the course of a year, more than 40% of its traffic. Although the drop-off on blogspot (the URL that serves blogs hosted by Google) is less significant,

If the content is being created elsewhere, eventually the traffic will go there as well.

I am left wondering about the future of blogging. I've never seen blogs as much more than a simple CMS (content management system) that allows people to easily publish content, albeit in a somewhat constrained format. It's treated a bit differently than other content by search engines - on the whole, it appears to be treated as being of shorter-term interest so, although a page can generate authority by drawing in links or hitting a sweet spot for search terms, for the most part blog posts are lost to time. I haven't spent enough time browsing blogs in general to see whether blogs are becoming "more serious" - whether on the whole it's the lighter, more casual conduct is what's drifting off to other mediums. If it is, then perhaps blogging will ultimately evolve into something more serious. But if the trend is across-the-board, it's quite possible that conventional blogging platforms will go the way of livejournal - once an Internet phenomenon that remains significant, but... appears to have lost about half of its traffic over the past year.

One way or another, if public interest is plummeting and the future lies in another direction, major companies are going to shift their resources in the new direction - and eventually will discontinue their support for the dying platforms. If it worries you that because Google discontinues one product it might later discontinue another, you're right - it could happen. But unless you're content to limit yourself to what you save on your own hard drive, that's true of any company and product. If you are going to grouse, "I won't use Google Keep because Google is killing Reader", great... and are you switching your phone to Apple, a company that has at times killed products and services, Microsoft, a company that has also at times killed products and services, or RIM/Blackberry, a company that is in danger of being unable to support its proprietary mobile OS?

If you're posting your complaint on a blog, as I intimate above, you may be missing the forest for the trees.

Do You Really Want a Touch-Screen Notebook Computer?

I'll admit it, one of my pet peeves is going to my portable computer, opening it up, and finding somebody's fingerprints all over my screen. I have at times found myself telling people, "Please point, don't touch", when they're drawing my attention to a detail displayed on my computer monitor. When I have to sit and stare at a screen, I want it to be nice and clean. And I'm far from a "neat freak".

The idea of touch screens on portable computers is interesting. I can see how some of the elements of the iPad interface would translate well to a portable computer, or even a desktop computer. But even with an iPad, sometimes you move to a new location, experience a shift in the lighting, or find that something is stuck to its surface and... it's cleaning time! I suspect that the few times I would want to use a touch-screen interface on a fully featured portable or desktop computer would be vastly outnumbered by the number of times I would find myself wishing for a clean screen, and that in most of those occasions I can do just fine with a mouse or trackpad.

Perhaps the concept will work better on a computer that's more of a tablet than a portable, an iPad-plus. Microsoft appears to believe so. But I'm presently leaning toward Steve Jobs-style skepticism that, once the novelty wears off, people will get much use out of touch screens on their regular computers.

The New [Brand] [Device] Could Upend the Industry

Yes, we get it. A mini iPad could disrupt the 7" tablet market. An Amazon phone could disrupt the smartphone market. Or.... they may not. Thanks for sharing that type of insight, as it's unlikely people would otherwise have figured it out.

Mobility vs. Portability

A CNET column, speculating on the future of Facebook and its theoretical successors, comments,

The company doesn't get mobile -- never has. Young as he is, Mark Zuckerberg was raised on the Web, on computers. Remember him saying in 2010 that the company didn't have an iPad app because the iPad "isn't mobile, it's a computer"? Facebook just plain missed it.

I think there's a language disconnect here. A notebook computer is "mobile" in the sense that you can take it with you and use it from remote locations. Zuckerberg wouldn't argue with that - he just might use a different word, like "portable". While it's fair to point out that an iPad uses iOS, an operating system designed for mobile devices, due to the much larger screen size the experience of using apps on an iPad can be quite different than the experience on an iPhone. Facebook's platform and profits come from the browser, not the app. If Facebook produces a half-hearted app, inspiring people to use their browser to get a full or even adequate experience, Facebook makes more money both through advertising and by the advancement of its platform. If it allows you to take full advantage of the social world of Facebook via an app, but cannot effectively monetize the app or support social gaming through the app, it's harming itself.

That is to say, Zuckerberg is correct to be concerned about Facebook's becoming "just another app", when he needs to to be a platform.

Recent rumors of Facebook's interest in acquiring Opera may relate to its difficulty gaining traction on tablets and mobile devices. Opera doesn't have much traction on the desktop, but it might be feasible to create a heavily Facebook-flavored browser that would take the place of a hobbled Facebook app on mobile devices, including tablets. If you get people to spend 20% of their online time in your proprietary browser looking at your own content, and get them used to accessing the rest of the Internet through your browser instead of the default browser that comes with the device, you are much better positioned to monetize mobile traffic than if you're "just another app".

Meanwhile, a generation of kids my son's age and older are living their lives solely on mobile devices -- tablets and phones and whatever iterations the future holds. For them, Facebook will be something their parents do, and it's still fundamentally a Web-based experience. It's likely to hold little appeal to them -- and somewhere out there, entrepreneurs thinking along the lines of, say, Dave Morin at Path (ironically, a former Facebooker) are working on products that are born mobile, that skip the Web entirely, that live in the world the next generation lives in.

It makes no more sense to pretend that the entire world is mobile than it does to pretend that the entire world is sitting at a desk in front of a traditional, desktop computer. A big part of Facebook's success has been its ability to be inclusive - getting people who barely even use a computer to sign up in order to see photos of distant friends and relatives. No doubt, being the next, big, hot idea among the younger generation or on the mobile platform can translate into profit and success. We've all heard about Instagram. But a future with a hundred "Instagrams" vying for your attention on mobile devices is one of fragmented social media, something quite different than what Facebook offers.

I expect that the actual business plan behind apps "that skip the Web entirely" is to go the way of Instagram, to get snapped up by one of the giant players for a quick, significant profit, not to reinvent the online social world as a mobile-only environment. My guess is that no small number of them will let you register and log in through your Facebook account - in no small part because they're apps and Facebook is a platform.

One last thing,

Simply put: the world is going mobile, it's hard to make money on mobile, and no one is feeling that more painfully than Facebook.

But someone will figure it out. Someone always does, and there's always money to be made where the people are. It just won't be Facebook.

Am I the only person who has a problem with the conceit that someone "always" figures out how to monetize online information? If an edition of a newspaper is worth $2 in print, 5 cents when read via a browser, and a cent when read via a mobile device, is the proper conclusion that the newspaper "figured out" how to monetize its online and mobile content, or would it be more accurate to say that some types of content cannot be monetized in the online world at a level that sustains their historic business model? The reality is this: when faced with new business realities some businesses and industries find ways to evolve and make money, others go the way of the stagecoach company and village blacksmith.

War of the Platforms

How quickly we forget Microsoft (not that we should).... From an interview of Larry Page,

We are in an interesting place in tech where almost none of the big companies—Apple (AAPL), Facebook, Amazon.com (AMZN)—are working together. Why is that?

Big companies have always needed and cooperated in areas where it made sense. I don’t know that I believe there is some huge, strange change in that.

We were real interested in getting instant messaging to work across networks back in the day, and we worked really hard with AOL (AOL) to do that. You know, integration between Google Talk and AOL Instant Messaging. It ended up being a tremendous amount of technical effort. There were some user benefits generated by it, but I’m not sure it was ultimately worth the effort. I would say that my experience with these things is that they have been somewhat difficult.

As I interpret the first part of the answer, that's the important part: "We (Apple, Facebook, Amazon and Google) don't see cooperation as being in our self-interest." The second part, about technical difficulties, is peripherally relevant - if you are trying to merge multiple platforms into a single interface you will encounter technical issues. But we're really talking VHS / Betamax here - the parties aren't interested in merging their platforms because they all want to win.

A number of years ago, Netscape created an Internet browser. After a sluggish start, Microsoft started listening to concerns that the browser might be the platform of the future, displacing or marginalizing the operating system, and used its massive market power to make Internet Explorer the dominant browser. Judging from their subsequent treatment of Explorer, they apparently then decided that they had killed the threat and went back to sleep.

Also, for pretty much as long as there has been an Internet, there have been efforts to bring the Internet to television. Microsoft was an early competitor for Internet TV, but between poor resolution, a poor interface and a difference in how people traditionally interact with their televisions as opposed to their computers, that didn't work out so well. Which isn't to say that Microsoft has given up - it is trying to turn the Xbox into an interface to television and movie programming.

There was a lot of hype a few months back about the possibility of an Apple television, with a lot of talk about interface. I would not be surprised if Apple is devoting considerable resources to researching television technology, how to improve displays, how to improve streaming, how to improve interface. But I'm increasingly skeptical that they are going to become so territorial about the television space that they attempt to enter the commoditized space of high definition televisions.

If television and movie producers were as eager to sign on to distribution through iTunes in the same manner as the music industry, perhaps there would be a greater opportunity for a premium-priced Apple branded television with an impeccable interface to their store, a brilliant screen, a wonderful interface, and packages of content that would allow owners to avoid subscribing to Cable (although they would have to get high speed Internet access somewhere). But the stars aren't aligning in that manner, so I expect Apple will continue to emphasize its products as an interface to Television. In friendly to not-so-friendly competition with Google, Microsoft and Netflix, with Amazon's recent Playstation deal suggesting that it, also, is entering the game.

Fundamentally, this appears to be a platform war. Microsoft is reportedly fashioning its next OS to integrate well with its relatively unsuccessful smartphone OS and its upcoming tablet OS. Amazon is happy to build its Kindle OS on Android, but strips out the parts of Android that most benefit Google. Google is pushing television integration and Google Play. Facebook is... I'm not sure, but as long as a huge percentage of social network traffic and gaming occurs through their platform, they're a possible contender. And all of them want you to buy entertainment products and software through their proprietary stores, taking a commission on the sale of each new song, TV show, movie or application you purchase.

The iPad has turned out to be an amazing platform. Although people talk about Facebook as a potential advertising company, it is only profitable by virtue of the commission it charges to third parties for the use of its platform. Microsoft understands that Windows for PC is eroding as a platform, and is hoping to reestablish itself through the Xbox and various Windows 8 products. Google is taking a gamble with Android as a platform, with Amazon demonstrating how a third party can take full advantage of its work in developing a fully featured, stable mobile operating system and swap in its own web store, but they'll keep pushing it as a platform and will probably try to come up with a revenue sharing model to keep other smartphone and tablet manufacturers from following Amazon's suit or switching to Windows.

And yes, those platform wars are going to creep into your living room. If you have a gaming system, Apple TV or iPad, arguably even a smart phone, they're already in your living room looking for opportunities to expand their reach. Huge numbers of TV viewers already have a second device running while they watch TV - how do you bring the two (or more) screens together? How do you make your smart device the default interface or control for the television and, from there, perhaps the default source for premium, purchased or rented video content? And as server-based games get more powerful, can even the promised exceptional graphics performance of the next generation of game stations continue to hold n advantage over app-based purchased, subscription or freemium gaming? Take your game from tablet to TV, back to tablet, to smartphone, to car, to friend's house, to friend's TV.... It's going to be interesting.

Thomas Friedman's 'Lake Wobegon' America

Thomas Friedman trips over his own words with his claim, "Average is Over". He skips over the easiest ways to join the wealthiest Americans - being born rich - and the second best way, his personal method, marrying an exceptionally wealthy heir or heiress.

In the past, workers with average skills, doing an average job, could earn an average lifestyle. But, today, average is officially over. Being average just won’t earn you what it used to. It can’t when so many more employers have so much more access to so much more above average cheap foreign labor, cheap robotics, cheap software, cheap automation and cheap genius. Therefore, everyone needs to find their extra — their unique value contribution that makes them stand out in whatever is their field of employment. Average is over.

This is fair to a point. I do sense that unless you're firmly ensconced in the privileged class, a typical job of the future will demand a lot of you - continuously working to stay at the top of your field. Fewer and fewer jobs will let you coast, or allow you to be the person who knows the way things used to work.

But Friedman doesn't appear to understand the law of averages, or the joke of Lake Wobegon. Average is determined mathematically, so even if everybody improves there will remain an average. It's not possible for everybody in every field to find an "extra" that makes them above average. People who can distinguish themselves and prove their value will find it easier to earn a decent wage, and some will rise in wealth and position, but that won't eliminate either the average or the fact that our society includes a lot of dead-end jobs in which being above average simply means you work harder for the same or a slightly higher rate of pay.

Friedman is excited at the idea of going to a restaurant and ordering his food using a tablet rather than being served by a waiter. I expect he's excited for the rest of us, as it's difficult for me to imagine Friedman spending much time in a restaurant where his napkin is not recovered and folded neatly, awaiting his return from the restroom.¹ That is to say, Friedman is in a class of wealth that makes it unlikely that he wants to play with a tablet computer to learn what's on the menu, or where he would have to tap the equivalent of a call button to get his water glass refilled.

I think a tablet could be an effective tool at restaurants where people presently queue to place their orders. Rather than waiting in line, trying to decide what you want, you can sit down, take your time, and not have the person behind you sighing loudly at your lack of familiarity with the menu.

There's something else that Friedman is missing in his excitement over iWaiters. The fact that they're not actually a labor saving device - they're a labor shifting device. Perhaps that's why I see them falling into place in a restaurant that doesn't have waiters. In those restaurants you're already used to having what was once the restaurant's job shifted to you - collecting your food at the counter, carrying it to your table, filling your own drink, throwing away the trash at the end of your meal. Banks use ATMs and online banking, grocery stores have self-serve checkout, bag your own groceries. In most states it's rare to find a full-service gas pump. The need for labor hasn't disappeared - it has just been shifted from the provider to the customer.

Friedman is also excited at the idea that a Chinese factory can retool on a moment's notice, and can pull its thousands of workers out of their dormitories to be retrained for the new system. "Sorry for waking you up - here's a biscuit and a cup of tea." No American plant can match that? Well, yeah. But for those of us who don't fetishize China, it would not be such a big deal if workers were trained on a more human schedule when they came to work from their homes, where they live with their families. As excited as Friedman gets about the idea that China is turning all of its workers into highly educated high performers, his anecdote belies that idea - he's describing a society of drones. Where does the reward of not being average fit into that world? "Good for you, you were 3% more efficient than your peers in fitting screens into frames. You get another biscuit."

Friedman is also excited about Siri, the voice interface to the latest iPhone. He quotes an executive of the company that developed the software, gushing about how good it is.

“Siri is the beginning of a huge transformation in how we interact with banks, insurance companies, retail stores, health care providers, information retrieval services and product services.”

Well, yeah, I guess I can see how Siri and similar programs going to take over the world's voice mail systems, perhaps reducing the frustration of the absurd menus most companies impose on consumers by allowing you to have a "conversation" with a computer. But we're not even to that point of the revolution. And many people, particularly those with more complex problems, will still prefer to talk to a human being.

I can imagine the frustration, also, of having a computer keep redirecting you from real answers to your issues, a'la Comcast, because the last thing they want to do is actually help you resolve a problem that should involve their crediting your account. Siri may become smart enough to understand what you're asking, but I can see her being programmed to give you a partial or inaccurate answer, anyway.

Friedman states that, as we enter an era in which "average is officially over,... nothing would be more important than passing some kind of G.I. Bill for the 21st century that ensures that every American has access to post-high school education." Friedman should take a hard look at China, or at least his perceptions of China, as if he thinks about what is happening in that country he should be able to see that they are not trying to turn everybody into an "above average" performer. They'll help the children of the wealthy and of party elites through special schools and opportunities, and will identify some students by talent and nurture that talent, but in large part they understand that they need a lot of drones and, ultimately, their system collapses if their drones become too few or too expensive.

By G.I. Bill, does Friedman actually mean a G.I. bill? Join the military, get a college education? It seems not - I think he means a "G.I. bill" that does not actually require being a G.I. I agree with the sentiment that every American should have access to college, and will take it a step further and state that they should also have access to a K-12 education that gives them a chance to succeed in college. But I think Friedman falls into the class of people who believe that school makes you smarter, and that everybody is or can be college material. We will do better for our society by recognizing that some people aren't cut out for college, or should do something else first, than by trying to push everybody into college without regard for interest or aptitude. We do our nation no favors by pretending that everybody can be above average, or that everybody needs to be. We're a long way from being a true meritocracy.
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1. In fairness, perhaps Friedman believes the iWaiter tablet will have an app that refolds his napkin.

Computers Can't Eliminate Poverty

I recently read a particularly cynical take on the effort to distribute computers to children in impoverished areas of the world:

What a child needs is to be sequestered from human contact with the latest technology. A third world educational initiative should be conducted in the manner of an experiment in developing the cognitive power of chimpanzees. Feel the techno-idiocy: it burns.

I remember this idea getting serious momentum years ago until it was pointed out to some of the philanthropists that the places they were planning to distribuite computing to didn't have electricity. Now they've figured out how to put solar panels in the things, so its let them eat laptops: the sequel.

In fairness to the cynic, the actual proposal literally involved "tak[ing] tablets and drop[ping] them out of helicopters", unaccompanied by "any adults or teaching resources" to "see if the tablets could be used to teach them to read without additional instruction", with allusions to the Coke bottle in "The Gods Must Be Crazy", an approach that does seem rather absurd.

Thomas Friedman's recent column on an initiative to distribute inexpensive tablet computers to children in India brought it to mind, sharing a second-hand account of a maid's reaction to learning of the program:

"'What can you do on it?’ she asked me. I said, ‘If your daughter goes to school, she can use it to download videos of class lessons,’ just like she had seen my son download physics lectures every week from M.I.T.’s [OpenCourseWare]. I said, ‘You have seen our son sitting at the computer listening to a teacher who is speaking. That teacher is actually in America.’ She just kept getting wider- and wider-eyed. Then she asked me will her kids be able to learn English on it. I said, ‘Yes, they will definitely be able to learn English,’ which is the passport for upward mobility here. I said, ‘It will be so cheap you will be able to buy one for your son and one for your daughter!'"

I think that a decent computer, along with an adequate source of power and access to content, can be a powerful learning tool. But let's be honest here. Even if we assume that they have access to quality instruction, most kids aren't going to spend hours staring at the screen of a notebook computer trying to learn math or English. We may be dealing with a particularly motivated population of students and parents, but even within that context there is going to be a lot of frustration and failure. Hardware is the easy part - creating and distributing quality, up-to-date, accessible software and content is costly and difficult. Even if you create it, absent strong motivation it's likely to be underutilized.

If a school district were to propose to Friedman that it was going to totally eliminate classroom instruction in favor of having kids buy notebooks, no verification of Internet access, lessons and content to be developed at some point in the future, I would hope he would be skeptical and critical. This type of technology distribution is much more of an "every little bit helps" approach than a magic bullet.

I would like to see India push forward and invest the necessary money in content, software and infrastructure to make distance learning a reality for every one of the nation's children. Even if we assume only 5% of kids will actually see a significant benefit, advancing academically at or above 'grade level' despite a lack of access to schools and teachers, or using the computer to push beyond what they can learn in class, that's a lot of kids. Although I agree that you can't eat computers, it is not likely that the kids who most need this type of program will have reasonable, equivalent access to educational opportunity.

Will Mini-Tablets Carry the Day

Everywhere I look it seems that I'm reading that Amazon has released a major competitor to the iPad, in the form of a small tablet computer that runs a modified version of Android. Amazon is, of course, attempting to grab market share and is reportedly selling these small tablets at a loss. Apple has a very comfortable lead in the tabloid market and sells its products at very healthy margins, but can be expected to respond to any significant competitor. Good stuff for consumers.

But when I read articles that suggest that a smaller, plastic notebook is the first serious competitor to the iPad because "it seriously undercut[s] the iPad in price," I can't help but think that the author has all the sophistication of somebody who would suggest that the Yugo was the first serious competitors to Volvo. No, I'm not suggesting that Amazon's quality is comparable to Yugo's, but you really do have to look at more than "it's a tablet". You should be considering size, quality, components and functionality when comparing products, not just declare, "They both have tires, gas motor, seats - they're cars! Who wouldn't choose the Yugo?"

Rumor has it that Steve Jobs consistently rejected proposals to produce a smaller version of the iPad. I am not going to venture a guess as to whether that was a, "No, it would be a bad product," or, "No, I don't want to increase our costs and divide our market by making a smaller iPad when we're functionally the only game in town," but one way or another Amazon is doing real world market research into the viability of smaller tablet computers. If the "Kindle Fire"¹ sells millions of units, I don't expect Apple to take long to offer a competitively priced mini-iPad.

I don't want a smaller tablet computer - but if I were a Kindle user I might consider the "Fire" if it were time to upgrade. Even there, with the ability to compare products, I would be inclined toward the larger iPad screen, but if cost were a serious issue.... Let's just say, it will be interesting to watch this play out.

What I see in looking at the Fire, and at the expansion of "Amazon Prime" streamed content, is a potential - and the foundation of a plan - to offer serious competition to the iPad, but I see the Fire as being more of a serious attack on the Nook, crossed with a perception that it's a good time to strike at Netflix.
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1. Are Amazon's references to fire in relation to its book readers part of a marketing strategy? For me, they evoke Fahrenheit 451, but I don't think that's the marketing message Amazon intends.

Lessons for CEO's Who Want to be Liked

Will Wilkinson has noticed that life isn't fair... for billionaire CEO's who aren't named Steve Jobs.

As I was watching my social media streams froth with praise for the man in the black turtleneck, it occurred to me that, as lovely as I find Apple's gizmos, Mr Jobs's wealth, like that of other billionaire barons of the information age, was built in no small part upon an intellectual-property regime that I and many others believe to retard progress while concentrating massive rewards upon a privileged few, generating unfair and unproductive inequality.... I endorse [the] point that charity very often does rather less to improve quality of life than selling people ever better products at ever lower prices. But this line of reasoning hasn't convinced very many of us that, say, Charles and David Koch's vast wealth is proof of their successful service to humankind.

There are some obvious retorts:

First, people don't detest Charles and David Koch, or direct wild anti-Semitic conspiracy theories against George Soros, because they're rich, because they ran companies, or for any reason other than how they're trying to use their fortunes to influence legislators and elections. If you could retroactively change the recipients of their contributions, such that the Koch brothers gave to Soros' causes and vice versa, the effect would be to flip the sentiments of those who love and hate them.

Second, while charitable contributions might help a corporation or CEO deal with public relations problems, or even to rehabilitate their public image, for the most part people neither know nor care about a particular corporation's charitable activities. You're more likely to get a strong reaction to corporate "charity work" if it is revealed that what corporation is portraying as charity turns out to be a thinly veiled measure to expand its markets and market share, to advance its lobbying goals, or some other form of self-interested behavior.

Third, few pay attention to the CEO's of the world. Most people don't know or care who runs any given company. When does that change? When there's a scandal or problem that results in media attention. Why does Steve Jobs get good press, while peole like Ken Lay, Jeffrey Skilling, Conrad Black, Bernie Ebbers, Dennis Kozlowski, and Bernie Madoff get bad press? In no small part because Jobs hasn't looted his company, committed massive financial fraud or other crimes, and ended up being criminal prosecuted, convicted and/or jailed.

Wilkinson also forgets how the public perception of Jobs has changed over the years. Jobs wasn't a nationally beloved figure when he was forced out of Apple, and both he and his company were viewed with skepticism when he returned. For that matter, Wilkinson forgets how the public perception of Bill Gates has changed over the years. Gates received considerable praise and acclaim during the rise of Microsoft, and even through the era when, under his leadership, Microsoft stopped innovating in favor of producing products that mirrored the functionality of other people's innovations, then using anti-competitive tactics such as bundling in order to crush their competitors in the marketplace. Although the Bill and Melinda Gates Foundation has helped establish Gates as a philanthropist, and it does appear that Gates wants the public to appreciate his genius, it's never been clear to me that Gates has <em>personally</em> cared whether the perception is that he's a benevolent genius or an evil genius. As a family man, though, he had to start thinking about the impact of his reputation on his family and, frankly, you or I would feel the pinch from a $100 donation far more significantly than Gates has felt the pinch of his $billion+ contributions.

The number one lesson for CEO's is probably to stay out of the public eye. Run your company adequately, avoid major scandals, and retire with your billions. But let's say that you are running a large company, look at Steve Jobs and turn green with envy. What can you do?

1. Start By Doing Your Job

When you look at your stock market valuation and say, "My job as CEO is to bring new value to this company," do your thoughts immediately turn to, "So how do I rent-seek from local, state and the federal government, get massive subsidies, talk up my stock to investment houses, leverage any monopolistic advantage my company enjoys, and otherwise game the system," or do your thoughts turn to, "How do I innovate, create new products and services, improve existing products and services, and increase value to the consumer?" With due respect to the modern idea that a CEO's primary job is to pimp the stock, the public will like you better if you build wealth through innovation.

Don't play the "whocouldaknowed" game. "Whocouldaknowed that if we neglected quality for twenty years, we would go from being the world's number one manufacturer to being bankrupt?" "Whocouldaknowed that 10-20% annual inflation in housing values reflected a bubble?" Since you ask, when that question is applied to your industry, you could have known. Unless we're talking earthquakes and tsunamis, in which case it's your job to be prepared, it's your job to know. You don't think you're paid enough to understand your industry and the competition? C'mon.

2. Present Yourself in a Positive Manner

Don't wait for the press to come to you. You need to go to the press, on your terms. Work with public relations professionals to create buzz and excitement about your company, its products and services. Even when creating that buzz, try to under-promise. Then when you step before the cameras to unveil the genius of yourself and your company, do your best to over-deliver.

If you deliberately take actions that you know are going to alienate millions of people, stop and think about whether you're going to be happy only being liked by some percentage of the remaining population. If the answer is "no," consider putting off your actions until after you leave your company, or finding a different means to your desired end.

3. Perhaps You Need an Alter-Ego

Let's face it. If you're a successful CEO you're probably not the nicest, warmest person in the world. You may be a world-class jerk. That's not the face you want to show to the public. Look for an archetype that works for your industry. Kindly grandfather, cool uncle, something that will resonate with the public. That's the face you need to consistently present to the public. You can't do the cool uncle with wire rimmed glasses and a black turtleneck who doesn't visit very often but, when he does, always brings the coolest presents - that's been done. But you get the concept, right?

4. Perhaps You Need... A Funny Suit, or Clown Make-Up?

Perhaps due you your appearance, personality, industry, or other factors you need to take the alter ego thing a step further. You can't make a silk purse of of a sow's ear - or maybe you tried to convince your customers that you in fact had created "sow's ear silk" and that's why you have a public relations problem. Perhaps you want to benefit your company by having a Steve Jobs-type public perception of the corporation's leadership and, despite being a warm, telegenic person, you recognize that your tenure won't be long enough for the company to truly benefit from making you its public face.

Quickly: Who is the CEO of KFC? Who is the CEO of McDonalds? Who is the CEO of Wendy's? The average consumer is probably thinking, "Colonel Sanders, Ronald McDonald and Dave Thomas," never mind that two are deceased and the third is a fiction. Dave Thomas didn't become the public face of the company until a number of years after he resigned from leading the company. Harland Sanders was never in the military and didn't start wearing his trademark outfit until he was 55. If you can create an effective fictional face for the company, even if it's a fictionalized version of "you", you may find that your public image persists far beyond your tenure with your company.

5. Don't Claim Accidental Successes as Great Personal Achievements

You're the CEO and are stepping forward as the public face of your company, so you get to claim credit for your company's work. But if your company has not done anything noteworthy, an increase in profits due to government subsidies, war, natural disasters, and the like isn't something the public is apt to see as a great accomplishment. Ask yourself, do you actually contribute anything to your company? You may tell yourself that nobody else can do your job, but the odds are overwhelming that it's not true - and even if it's true right now, it won't remain true. Had somebody other than you been CEO of the company, what would be different? If the answer is "nothing", you're nothing special.

6. Be Special

If you want the world to think that you're special, prove that you are special. Let's take a look at Steve Jobs: He started a computer company out of a garage that helped bring about the era of the personal computer, spearheaded the development of a GUI-based operating system that led to a transformation in the way people interact with technology, when forced out of his company started NeXT and acquired Pixar, sticking with the former until he returned to Apple and (in the face of considerable skepticism) rolled the technology into a next-generation operating system and sticking with the latter through its transition from an unsuccessful computer hardware company to a highly successful animation studio, then produced innovations in the manner in which people buy music, in the music player, and ultimately in the cellular phone and tablet computer technology, with the rest of the market playing catch-up and producing copycat devices. You... did what, again?

7. Stop Letting the Bean Counters Define Your Business Model

Steve Jobs has a wonderful list of successes, but he also has a long list of expensive failures, both in terms of product releases and business decisions. Apple gave up market share with the Apple II because he didn't want to market it to small businesses, but the Apple III was a colossal failure. Outsourcing the development of key portions of its GUI OS to Microsoft, without a non-compete? Major fail. Apple computers were bigger and boxier than a lot of competing products because of a fixation on design - with a well-designed computer having no need for a fan. Do you recall the first Apple "portable" computer? The Lisa. The Newton. Not bouncing back from the Newton and letting other companies create then dominate the PDA market. But when you look back on a lot of Apple's discontinued products or failures - those that occurred under Jobs, not those attributable to John Sculley - you often see the kernel of what is to come. Cutting edge stuff that's hitting the market too early, or at too high of a price point, but which ultimately becomes commonplace.

Do you want to lead your company into making the mistakes of a Sculley, focusing on limiting the experimentation and innovation of somebody like Jobs and ultimately forcing him out of the company? Do you want to be like Bill Hewlett and David Packard, whose investment in HP Labs made the company an innovated and market leader, or a Carly Fiorina who presided over what appears to be an era of outsourcing, R&D cuts and reduced quality control in the name of short-term profits? Do you want to be like Dell, so focused on cost-accouting and increase margins that you don't even realize that you're giving away the core of your business? Maybe your company can't afford to make mistakes on the same scale as Steve Jobs, but don't expect to be as famous or to have successes on the same scale if you eschew quality and innovation in favor of risk-avoidance and short-term profit.

8. Recognize When It's Time to Give Up

Sad to say, some industries and industry practices simply aren't compatible with your having a great public image as CEO. For example, if your company makes its fortune by chopping the tops off of mountains to extract coal, leaving behind a poisoned, scarred landscape, odds are you're better off keeping your head down. "That's not fair", you say? "Steve Jobs hasn't made much noise about it, but under his leadership Apple has taken advantage of tax breaks, funneled revenues through overseas shell companies to avoid taxes, used cheap labor in Chinese factories, and appears to have concerned himself with environmental issues only to the extent that there's a P.R. advantage"? Who said life was fair?

Manufacturing, Outsourcing and Jobs

Forbes recently ran a series of blog posts examining, among other things, how Dell's focus on short-term profits led to their outsourcing more and more of their business, to the point that the company to which they had outsourced their operations effectively became a competitor. The issue, according to the author, is less that Dell outsourced and more that they focused on costs and profit margins without considering what they were bringing to the consumer experience:

This comment is in fact an illustration of the mental guide-rails generated by cost accounting. There is an automatic assumption that when faced with a market challenge the way to be more competitive is to cut costs. The possibility of adding more value is unconsciously eliminated. It would be wrong though to say that cost accounting is the main cause of these problems. But it is a contributing factor. With decisions and thinking and values based on cost-accounting and short-term profits, Dell’s fate was sealed. If decisions and thinking and values had been based on how could Dell deliver more value to customers sooner, the outcome would not have been predetermined, as Apple [AAPL] has shown.

The articles explain how, due to outsourcing, an economy can bleed high tech jobs to the locations at which the outsourcing occurs:

The U.S. has lost or is on the verge of losing its ability to develop and manufacture a slew of high-tech products. Amazon’s Kindle 2 couldn’t be made in the U.S., even if Amazon wanted to:

• The flex circuit connectors are made in China because the US supplier base migrated to Asia.
• The electrophoretic display is made in Taiwan because the expertise developed from producting flat-panel LCDs migrated to Asia with semiconductor manufacturing.
• The highly polished injection-molded case is made in China because the U.S. supplier base eroded as the manufacture of toys, consumer electronics and computers migrated to China.
• The wireless card is made in South Korea because that country became a center for making mobile phone components and handsets.
• The controller board is made in China because U.S. companies long ago transferred manufacture of printed circuit boards to Asia.
• The Lithium polymer battery is made in China because battery development and manufacturing migrated to China along with the development and manufacture of consumer electronics and notebook computers.

An exception is Apple [AAPL], which “has been able to preserve a first-rate design capability in the States so far by remaining deeply involved in the selection of components, in industrial design, in software development, and in the articulation of the concept of its products and how they address users’ needs.”

The series is offered under the theme, "Why Amazon Can't Make A Kindle In the USA", which, as the counter-example of Apple indicates, is not the principal problem. The problem is that when you outsource high tech manufacturing, you make it more likely that a lot of the jobs associated with any given technology will end up being located in the foreign nation. It's much less of a concern that Kindles (and Apple products) are assembled in Asia, or even that components of those products are manufactured in Asia, as compared to the loss of the industrial design, software, and similar jobs associated with the products and industries. This is the source of my skepticism of the conceit of Michael Boskin, that it is irrelevant to our nation's future whether we manufacture computer chips or potato chips. It may be that on the factory floor, there's little difference between making $10/hour frying potatoes as opposed to $10/hour assembling iPods, but when you start thinking about what our economy needs to sustain a healthy middle class, let alone to be a future leader in the design and production of high tech products, you need to avoid exporting the design and manufacturing expertise associated with those products. The articles note that even as our nation talks about developing future technologies, we tend not to ignore the fact that the associated manufacturing job opportunities are most likely to arise in other nations:

The lithium battery for GM’s [GM] Chevy Volt is being manufactured in South Korea. Making it in the U.S. wasn’t feasible: rechargeable battery manufacturing left the US long ago. Some efforts are being made to resurrect rechargeable battery manufacture in the U.S., such as the GE-backed [GE] A123Systems, but it’s difficult to go it alone when much of the expertise is now in Asia.

It's not "all bad" to export manufacturing jobs, particularly low-skilled jobs in dirty industries. Leaving issues of the environment and worker exploitation in those countries aside for the moment, there is a domestic gain in obtaining certain components and products from other nations at lower prices, while minimizing the domestic impact of many of the environmental issues associated with those industries. Even back in the 1980's, computers were packed full of components manufactured in overseas factories.

The view that the migration of mature manufacturing industries away from developed countries like the USA is just part of the healthy natural process of economic evolution that allows resources to be redeployed to new, higher potential businesses is certainly widespread. It is however mistaken. As Pisano and Shih point out in their HBR article, “It ignores the fact that new cutting-edge high-tech products often depend in some critical way on the commons of a mature industry. Lose that commons, and you lose the opportunity to be the home of the hot new businesses of tomorrow.” For instance: once silicon-processing and thin-film deposition capabilities are gone, it’s hard to become a major player in solar panels.

As the author puts it, focusing on "short-term financial gain at the expense of core capabilities is a very dangerous way to go if the company wants to survive." Apple almost died at the hands of its bean counters who, having forced Steve Jobs out, neglected product development and quality control, and authorized clone-makers only to yank the carpet out from under them the moment they realized that the clone-makers were building cheaper and arguably better machines. I don't know if Jobs had to remind people of that history as he rebuilt the company, or if by the time Apple was again turning real profits the major shareholders decided that you don't argue with success. While I have no particular reason to be optimistic, let's hope that at least some U.S. companies are taking a longer view of profit and asking, "Why can't we be more like Apple?"

What's the Benefit of an Amazon Tablet

According to the Wall Street Journal, an "analyst" has proposed that Amazon could produce a low-cost tablet computer that could "disrupt a tablet market dominated by Apple".

Forrester Research analyst Sarah Rotman Epps wrote that while "Amazon taking on Apple is a bit like David taking on Goliath," if Amazon proves willing to sell its tablet relatively cheaply and leverage its brand and surplus of online content, it could make a significant mark.

Specifically, if Amazon prices the as-yet-undisclosed tablet at less than $300, the Seattle-based company could sell up to 5 million units in the fourth quarter of this year, the analyst wrote.

By the same token, any electronics manufacturer could produce a high quality, low price tablet computer and "disrupt" the tabloid market. I recognize that the key factor here is "Amazon" - the idea being that Amazon sells a ton of ebooks and manufactures the Kindle, and thus could in theory achieve economies of scale that would be difficult for others to achieve. Even a Photoshopped logo on a medium-sized tablet can create a certain level of excitement.

What we all want is a hybrid of the [Kindle and iPad] - a kindle that is a full blown tablet computer with a browser, apps, and an OS. It looks like Amazon is going to bring that to market this fall. I'm getting one for myself and one for the Gotham Gal. And I'm pretty sure my mom and dad are getting them too. It looks like a killer product.

Except what I hear from Kindle fans is, "It's small, light, easy to hold, and liquid ink is wonderful to read," versus the larger format, heavier iPad with its much greater functionality and color display. Why not read ebooks on your smart phone? Too small, and no liquid ink? To me it seems like the "hybrid" misses the mark: You lose the larger screen size and quality display of the tablet, but you also lose the liquid ink offered by the Kindle. (It is theoretically possible to create a display that incorporates both LCD and liquid ink, and I believe I saw an Apple patent application for such a display, but I have no reason to expect that the early generations of those screens will be available on entry model devices.)

If you end up with a table that's too small to be an effective tablet, too large to replace your cellular phone, needs to be carried in a purse or briefcase instead of a pocket, and is best used for reading ebooks, you're really talking about a Kindle. When you add color, apps and additional Internet functionality, you have something that's much more of a "Kindle plus" than an iPad-Kindle hybrid. That is to say, rather than appealing to people who might be choosing between a Kindle and an iPad, such a mid-sized, mid-functionality device seems aimed at people who want a device that falls between a smart phone and a tablet - something to buy in addition to or (for those who are willing to forego liquid ink) instead of a Kindle. I'm reminded of Steve Jobs' reaction, a while back, to rumors of a smaller-sized iPad. Once you use the iPad, I don't think you yearn for a smaller version. But people who use the Kindle seem eager to get a color version, or an Android model that runs a browser and their favorite apps. So the excitement isn't, "Apple might make a smaller iPad," but, "Amazon might sell a branded version of a small tablet that could have some of the functionality of an iPad." When phrased that way, it's not particularly exciting.

Something else to consider: Apple's control of its supply chain and manufacturing allows it to sell iPads at a highly competitive price while achieving significant profit margins. When it saw the first round of competitors' tablets on the horizon, it came out with the iPad 2 so that it would stay equal to or ahead of those products while it prepared to leapfrog them with the iPad 3. Amazon can afford to sell a smaller, inexpensive tablet at close to cost, but how would that help Amazon? Amazon will add functionality to the Kindle in order to maintain its position as the market-leading ebook reader, and it would no doubt try to boost its own app store through the next-generation Kindle or "hybrid" device, but it's difficult to imagine that a smaller sized tablet, sold near cost, is going to have a significant impact on the tablet market, and without the generation of profits for R&D it's difficult to see how any short-term market gain would be sustainable. If in fact Amazon reveals a significant market for smaller tablets, Steve Jobs' past dismissals aside, Apple will produce a product for that niche.

Here's something for Apple's competitors to consider: Do you want to take the path of pharmaceutical companies, trying to design products that do the same thing as your competitors' blockbuster drugs but which provide little additional benefit to patients, or do you want to be like the company whose products you're copying - and produce well-engineered, breakthrough, market leading products in your own right? If Amazon decides that its future Kindles should be mini-iPads, it would be abandoning the latter approach in favor of the former.

Job Reviews Should Be Continuous, Not Scheduled

Thomas Friedman has described what he sees as an innovation in the supervision of employees:

Today’s college grads need to be aware that the rising trend in Silicon Valley is to evaluate employees every quarter, not annually. Because the merger of globalization and the I.T. revolution means new products are being phased in and out so fast that companies cannot afford to wait until the end of the year to figure out whether a team leader is doing a good job.

Performance review is an important part of supervision, but in my experience it's largely a bureaucratic wasted effort. Supervisors "do their job" by interviewing their employees once per year, checking a few boxes on a form, perhaps typing up a few paragraphs of commentary, and calling it a day. When performance falls within the acceptable range, and sometimes when it falls below the acceptable, all too often the content of a review is driven more by personality than performance. It's not unusual to hear an employee complain, "I had fantastic reviews every year, but my new supervisor hates me and gave me a bad review" - but the real issue may be that the former supervisor didn't want to hurt their feelings or didn't have the courage to give an honest review of the employee's mediocre work.

To be effective, review needs to be ongoing. You'll do much better for your employee and company if you identify a problem in its early stages and start mentoring (or, if necessary, disciplining) the employee at that time. If you have a problem with an employee that has been brewing for a year, you are seriously derelict in your supervision of that employee if the first time he hears about it is during his annual review.

Moving reviews to a quarterly basis may help overcome the "annual review" effect, because issues are more likely to be addressed close to the time they arise. The quality of the review process, and whether the supervisor sees it as part of mentoring employees or as paperwork that will go, unread by anybody else, into a personnel file, still matters. But if done correctly there is an increased opportunity to reward competence and correct problems, and a structure that may help identify issues that might fall beneath the notice of a supervisor if no formal review plan were in place. Done wrong, it will simply waste more of everybody's time.

Friedman is speaking about something else, the need for employees to stay at the top of their fields. In association with that, he overstates the product cycle for a typical company - it's a rare high tech or Internet firm that rolls out new products by the quarter instead of the year, and it's a rare product that will be developed inside of one to two quarters. He also misunderstands that many to most workers, even in high tech fields, are not actively developing products. The supervision of support personnel can provide a better environment for the innovators, and can help ensure quality customer service, improved cash flow and the like, but in most industries a relatively small percentage of the employees are charged with innovation or spearheading the most important new products. For many employees, even in tech firms, it will be personality issues, core competence and work ethic that are the principal considerations in their performance review, not whether they've mastered the latest programming tools and techniques.

Time to Change or Eliminate Software Patents

Fred Wilson on patent trolls:

The whole thing is nuts. I can't understand why our goverment allows this shit to go on. It's wrong and its bad for society to have this cancer growing inside our economy. Every time I get a meeting with a legislator or goverment employee working in and around the innovation sector, I bring up the patent system and in particular software patents. We need to change the laws. We need to eliminate software patents. This ridiculous Lodsys situation is the perfect example of why. We need to say "enough is enough."

I've commented on this issue before; it's one that affects most people but few know about and fewer care about, hence the status quo. Once big companies build a portfolio of patents and have sufficient revenue to pay off trolls as necessary, they mostly seem to become complacent about the current system as it serves as a barrier to entry for potential competitors.