I'm loving this analysis of Microsoft by John Kirk on Microsoft.
His premise is Microsoft ignores every rule of warfare in how they decide to compete with products made by other companies.
Like when Microsoft took on the iPod with the Zune:
From a strategic standpoint, Microsoft's move to create the Zune was inane and bordering on the insane. Its strategy:
- 1) Obliged Microsoft to betray its existing allies (hardware manufacturing partners);
- 2) Required Microsoft to abandon its greatest and most powerful weapon (licensing software to hardware manufacturers);
- 3) Compelled Microsoft to fight with unfamiliar weapons (hardware);
- 4) Forced Microsoft to fight on the battlefield of its opponent's choosing and where its opponent could could leverage its strongest assets (integrated software and hardware).
And then again with Bing:
Google was founded in 1998 and soon became a very real threat to Microsoft. A response by Microsoft was appropriate and called for...but not the response Microsoft made. As usual, Microsoft went right at 'em by challenging Google where Google was strongest and where Microsoft was nonexistent -- in search.
Let's examine this from a strategic perspective:
1) Attack opponent where opponent is strongest. Check.
2) Attack opponent with a weapon with which you have little or no expertise (search engine/machine language). Check.
3) Attack opponent where they live, thus guaranteeing that they will they will be inspired to fight with desperation in order to ensure their very survival. Check.
4) Attack where even success gains you little or nothing. Check.
For too long, Microsoft has been in reaction mode to every other company doing something innovative (and profitable).
It begs the question, what do they really love to create? What are they good at?
To play devil's advocate to my vinyl post, some things do die:
Wednesday's demise of Code Spaces is a cautionary tale, not just for services in the business of storing sensitive data, but also for end users who entrust their most valuable assets to such services. Within the span of 12 hours, the service experienced the permanent destruction of most Apache Subversion repositories and Elastic Block Store volumes and all of the service's virtual machines. With no way to restore the data, Code Spaces officials said they were winding down the operation and helping customers migrate any remaining data to other services.
What he said.
"Traditional" taxi companies and drivers are not down with Über:
Europe's taxi drivers on Wednesday picked a fight with Uber, an increasingly popular smartphone car-paging service, and dared consumers to choose sides.
From London to Lyon and Madrid to Milan, thousands of taxi drivers protested the rise of Uber, an American upstart, stopping in the middle of streets and shutting down major portions of cities.
The public display laid bare the growing tension between some of Europe's traditional industries that have barely changed in decades and the rising influence of companies from Silicon Valley, for which disruptive technologies are badges of honor.
So what's the reaction to this public tempter tantrum?
Oh, just a 850% increased in sign-ups for Über.
If you want to be assholes and cause road shut-downs, this is what you get. Everyone should be allowed to protest for what they believe is right, but don't fuck up things for everyone else.
Adapt or be left behind.
The Hill now reports that Comcast is "waging a campaign of shock and awe for its proposed merger with Time Warner Cable by fielding one of the biggest lobbying teams ever seen in Washington," as the cable giant "has added seven lobbying firms to its roster since first proposing the deal earlier this year, and it is adopting a posture of overwhelming force to try to win approval from federal regulators."
—Brad Reed, BGR
Democracy in action! Fuck yeah!
Chris Hayashi, head of San Francisco's taxi industry, is stepping down amidst the disruption of the industry brought on by Uber and Lyft (via Co.Exist):
But DeSoto Cab Co. president Hansu Kim, who agreed that Hayashi shepherded the industry through some of its most trying times, said that with Uber, Lyft and the like, he would be surprised if the cab industry survives another 18 months in The City.
What's happening to the taxi industry is not unlike the disruption of the horse carriage industry when the automobile was first introduced over 100 years ago.
I'm not happy that 'traditional' cabbies will be losing their jobs because of this, but to try and ban companies like Uber and Lyft like the state of Virginia is doing is counterproductive and delaying the inevitable. This is dustruption in the true sense of the word and is a byproduct of innovation.
I stand firm with my mantra and favorite quote by Charles Darwin: "It is not the strongest nor the most intelligent species that survives, but the one most adaptable to change.
In the world of mobile applications and social networking, a term was coined earlier this year for the splitting up of services into smaller, more focused apps: The Great Unbundling. Foursquare, Google, Facebook and Dropbox are a few of the big dogs who started the trend.
Now it seems we're seeing something similar happen in the world of television. The Great Un-Cabling, if you will.
HBO is making a handful of its shows available on Amazon's Prime Instant Video service. Netflix is also on a successful roll with 10 new and returning original series in 2014.
Cable companies say they have to bundle everything together to pay for the good stuff like HBO and Showtime, but their business models are becoming less and less relevant.
Greg Hoy on the future of design/digital shops/studios/agencies (whatever the fuck you call yourself) (via A List Apart):
I recently spoke to quite a few digital design shop owners, and the consensus is that the first quarter of 2014 sucked, and for some, criminally so. Shops depleted their cash reserves, struggled to meet payroll, extended their lines of credit, and yes, downsized.
Finally, there's this thought from another successful agency head: there is a massive amount of untapped work out there that is waiting for you. You don't have to change a thing with your business, you just have to find it. Again, this speaks to the fact that you need to spend money on marketing. The industry has many more talented players than it used to.
One correction to on this last quote: You DO have to change your business. You can't just throw money at marketing. You have to know how to market your company.
If you don't know about marketing, I suggest you start reading Seth Godin's books now.
As usual, the mutants will survive.
WSJ: AngelList's Newest Experiment: a $25 Million Fund to Invest in Angel Investors:
A new experiment in startup funding could have widespread ramifications for the way venture capitalists place bets on young companies.
On Tuesday, crowdsourced fundraising site AngelList unveiled a new fund that has raised about $25 million from limited partners who traditionally invest in venture-capital funds. The fund, called Maiden Lane, will bet about $200,000 each on the site's top investors and on select startups picked by them.
...aaaaand Silicon Valley sticks its head up its own ass.
Amazon continues to chip away on tradition retail stores.
Interesting shit indeed.
Indeed, since the launch of the iPhone the net profits earned by the collection of protagonists shown was $215 billion. 60% has been earned by Apple, a newcomer to the market. That figure is also consistent on an ongoing basis, having reached 60% as early as 2011 and remained in a band around that figure since.
The fact that this happened without corresponding dominance in units shipped shows evidence of something startling: Consistent value creation.
To earn profit is hard, to do so in an outsized way is very hard and to do so with consistency shows a defensibility of market access that is rarest of all. The only cases where this typical is in a monopoly or protected market situation (aka cronyism.) Apple's lack of market monopoly coupled with a (near-) monopoly in profits can only be explained by disproportionate value creation.
Value creation is one of those things Wall Street has a problem with because they can't quantify value beyond the tangibles like the quality of manufacturing.
Apple perplexes analysts because they create different types of value, the most elusive being emotional value. "You can't put a number on emotional value," they say.
Meanwhile, Apple continues to do just that.
Editorially is shutting down. It was a site that allowed for collaborative editing and writing, and had gardered a lot of positive reviews.
Seems, despite being able to design a great product, they couldn't make money off it:
WHY NOT JUST CHARGE FOR USE?
We thought of that, and in fact, it was always our plan to do so. But Editorially is a sophisticated application that requires a team of engineers to maintain and develop. Even if all of our users paid up, it wouldn't be enough.
I'm not happy a great product failed, but that sounds like a pretty shitty business model.
After doing a little digging, their Crunchbase profile reveals they received Series A funding in January of 2012. Sounds like they didn't come up with a monetization strategy in the 2 years since and the money ran out.
This is why I think in more cases than not, taking on investors in a new business is bad if you haven't figured out your business model. Most companies don't have the scaling power of Facebook or Twitter. Those guys can integrate advertising and be okay.
Supply chains, pricing models and marketing are just as important as how pretty your product is and how well it works.