Subba’s Serendipitous moments

October 28, 2010

Extrapolating the past Vs Inventing the future.

Filed under: Business,Innovation,Leadership,Learning,Perspective,Strategy — Subbaraman Iyer @ 10:41 pm
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Vinod Khosla –a co-founder of Sun Microsystems and its first Chairman is a highly respected Silicon Valley investor as the general partner of Kleiner Perkins. Over the last few years, he has moved away from technology to Energy and Greentech.

Yesterday he delivered an interesting talk at Caltech on Extrapolating the past Vs Inventing the future. The talk was peppered with some brilliant statements, some philosophical musings and scenarios for the future. I found the talk scintillating The entire talk can be viewed here. (The audio quality at the beginning of the session is poor quality, but when Vinod begins his talk, the audio quality is excellent)

Here are some of the excerpts:

Extrapolating the past is ridden with mistakes starting from forecasts:

On why forecasts go wrong (he talks about a number of forecasts that’s gone completely haywire:

Assumptions get embedded in our system. We don’t question our assumptions. Forecasting is about our embedded assumptions not explicitly stated.

On quantitative modeling:

Chasing the false precision, chasing the 3rd order effects

Input the measurable, ignore the immeasurable

Obscured embedded assumptions.

He concludes the section after giving several instances by saying that “The more rapid the change, the less likely are the assumptions to be right”.

On why inventing the future is absolutely critical:

He starts by explaining the Black Swan effect giving several examples and declares that much of what we assume to be true is retrospective predictability. Some great statements that he makes:

Improbable doesn’t equal unimportant and the only thing that’s important is the improbable.

No matter where you look, there’s room for innovation, however unlikely it looks

Bring me the ideas that has a 90% chance of failure!

If you take enough shots at the goal, failure doesn’t matter; it doesn’t exist.

“Imagine the possible”.

His final words in response to a question from the audience sums it all: “The talk is just to give a perspective; but most importantly is to convey an attitude”.

Well said, Sir !

October 26, 2010

Ray Ozzie’s new memo to Microsoft

Filed under: Business,Model,Strategy — Subbaraman Iyer @ 3:58 pm
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Ray Ozzie is a legend. Bill Gates rated him as one of the five best programmers in the world. Ray created Lotus Notes – the popular email and collaborative workspace solutions in the world. Ray succeeded Bill Gates as the Chief Software Architect when Bill decided to leave Microsoft. He is truly a visionary and I had found his earlier memo The Internet services disruption very interesting

Now as Ray prepares to leave Microsoft, he has penned a farewell memo titled Dawn of a new Day. It makes interested reading as he explains several new shifts about where the “post PC world” is headed.

When I read both the memos I get a feeling that despite the 5 years that he spent there and his exhortation for changing, he hasn’t been effective enough. After his routine praise of Microsoft, he makes a subtle but pointed criticism of Microsoft’s business model when he says:

Yet, for all our great progress, some of the opportunities I laid out in my memo five years ago remain elusive and are yet to be realized.

Certain of our competitors’ products and their rapid advancement & refinement of new usage scenarios have been quite noteworthy. Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction.

There is also a veiled pointer to Microsoft’s seemingly glaring weakness of not being able to conceive the future when he says:

In our industry, if you can imagine something, you can build it.  We at Microsoft know from our common past – even the past five years – that if we know what needs to be done, and if we act decisively, any challenge can be transformed into a significant opportunity.  And so, the first step for each of us is to imagine fearlessly; to dream.

The one irrefutable truth is that in any large organization, any transformation that is to ‘stick’ must emerge from within.  Those on the outside can strongly influence, particularly with their wallets.  Those above are responsible for developing and articulating a compelling vision, eliminating obstacles, prioritizing resources, and generally setting the stage with a principled approach.

But the power and responsibility to truly effect transformation exists in no small part at the edge.  Within those who, led or inspired, feel personally and collectively motivated to make; to act; to do.

In taking the time to read this, most likely it’s you.

At times, it almost seems that he is endorsing Google’s strategy and technology approach.

August 28, 2010

Another evidence that social phenomenon is growing!

Filed under: Business,Innovation,Strategy — Subbaraman Iyer @ 6:26 pm
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I have been saying everywhere that social is driving business and sharing is the new currency. The evidence is daunting and the photo medium is compelling.

Facebook reports that Facebook photos became the harbinger for everything social. The photo product that we have is maybe five or six times more used than every other product on the web — combined,” Mark Zuckerberg stated at a developer garage event. This is despite the fact that they didn’t have all of the features that their competitors did when they launched the photos section. For example, they didn’t have high-resolution photos and you couldn’t print them. But one thing they did have was the social element — and this changed everything.

Because of the social element, every vertical would be transformed. I agree completely and I wrote about it here , here and here.

 

August 17, 2010

Google wants to find the next winner in search – Maybe Search 2.0!

Over the weekend, the Wall Street Journal published an interesting interview with Eric Schmidt – CEO of Google and a great tech visionary. Disclosure: I am a great admirer of Eric Schmidt.

The interview comes at an interesting juncture when Android seems to be on a roll powering 200,000 devices a daily and slated to be the dominant operating system on the mobile platform. Yet, of late, the media has been critical of Google, probably taking the cue from a weak stock price. Add to that the mindshare belongs now to Facebook.

Notwithstanding the negative media reports on Google, Eric in this interview shares several new insights about where Google is headed. Some of his insights and quotes are interesting:

Asked to comment on Android being given free as compared to the fat margins made by Apple he says:

"You get a billion people doing something, there’s lots of ways to make money. Absolutely, trust me. We’ll get lots of money for it."

"In general in technology," he says, "if you own a platform that’s valuable, you can monetize it." Example: Google is obliged to share with Apple search revenue generated by iPhone users. On Android, Google gets to keep 100%.”

That difference alone, says Mr. Schmidt, is more than enough to foot the bill for Android’s continued development.

Google’s real challenge though it dominates the search business:

The real challenge is one not yet on most investors’ minds: how to preserve Google’s franchise in Web advertising, the source of almost all its profits, when "search" is outmoded.

The day is coming when the Google search box—and the activity known as Googling—no longer will be at the center of our online lives. Then what? "We’re trying to figure out what the future of search is."

Now that’s what being visionary is all about – not reacting to Wall Street but figuring out the future before Wall Street has had the chance to position you. Maybe he’s taking the cue from Andy Grove’s philosophy of Only the paranoid survive.

 Google’s intriguing aspect of Search 2.0 can be summed neatly as he says:

"We know roughly who you are, roughly what you care about, roughly who your friends are." Google also knows, to within a foot, where you are.

Mr. Schmidt leaves it to a listener to imagine the possibilities of this social search and what its implications could be. In fact, Google is acutely aware that we are on the cusp of a new phenomenon called “Social search” which may be powered by the Facebook phenomena.

Google the creator of targeted advertising believes that it will dominate the category raises the bar:

"The power of individual targeting—the technology will be so good it will be very hard for people to watch or consume something that has not in some sense been tailored for them."

Finally, Eric presents the most intriguing and scary possibility of the future when he says:

"I don’t believe society understands what happens when everything is available, knowable and recorded by everyone all the time," he says. He predicts, apparently seriously, that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites.

"I mean we really have to think about these things as a society," he adds. "I’m not even talking about the really terrible stuff, terrorism and access to evil things."

April 22, 2010

Facebook wants to be the Internet

Filed under: Business,Competition,Leadership,Strategy — Subbaraman Iyer @ 12:01 pm
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Facebook’s f8 conference yesterday is a significant event. The Facebook juggernaut seems unstoppable. It will go down in history when Facebook revealed its intent to revolutionize not just the Internet, but act as the default Internet.

Facebook launched 3 major “features”, all of which may seem pretty much innocuous but that could have a dramatic and profound impact. Though I had referred to some of the implications in my talk on How Facebook will impact us and Why CIOs should meet the Facebook at the CIO conference in Singapore, I didn’t expect it would come to us so soon.

Becoming social is default: Facebook repackaged the Social graph as Open graph. With this it is not only possible to see social connections between people, but also connect people with the interests – be it books, movies, places, brands and the list is endless. As Mark Zuckerberg  said: “The web can can become a series of personally and semantically meaningful connections”. There’s nothing more sticky in the world than a Social graph.

This will surely accelerate the move to search becoming more social. I am quite sure that the “social search” phenomenon will be something that will gain preference over the normal search in many product categories. Businesses and brands will perhaps consider shifting marketing campaigns to leverage this in lieu of the traditional web page.

As a corollary, the Web which has been defined by hyperlinks (which Google exploited to its advantage), will gradually morph into social connections – with likes, dislikes, interests, behavioral patterns etc. that could become increasingly machine readable and all social interactions get assembled in a large database which Facebook can exploit.

Social plugins:The social plugins may be viewed as mere widgets, but again the impact is far reaching. The LIKE button offers not just “instant personalization” but enables to create a persistent and continuous relationship with the entity – be it a book, music album, food, almost anything. It feeds into the Open graph seamlessly. Any user who searches for the book will immediately bring it to the Open graph from Facebook’s search engine and with another click can take it to any book site.

Mark mentioned in his address that he expects to have 1 billion LIKES within 24 hours of the launch.  Quite possible given that Facebook now has over 30 major partners like CNN, ESPN, IMDb and others. With about 30 billion LIKES a month, in addition to over over 25 billion shares a month (without LIKES), Facebook will become the largest sharing site in the world.

The social plugins will be the much needed catalyst for viral marketing or buzz marketing. Nothing else comes close. It will take a while before marketers learn to exploit this, but the tools are already there.

There are other features targeted a t developers and its implications will become clearer soon.

Other interesting developments:

Growing numbers:Facebook is approaching 500 million subscribers and close to 100 million subscribers access this through the mobile. In fact my view is that the killer application for the smartphone is Facebook quite serendipitiously. The Facebook Connect itself has close to 100 million. With the social plugins and open graph, Facebook Connect has become unassailable.

Microsoft alliance:One clear application that may not strictly qualify as social plugin, could be Microsoft’s Docs.com which enables users to share, edit, view web based documents with their Facebook’s friends. Obviously this is a frontal attack on Google Docs.

The implications of Facebook’s initiatives promise both unparalleled benefit and great risk depending on one’s worldview. While on the one hand it will make sharing and connecting a snap, it will enable Facebook to own every activity on the Internet. If people were scared of Google’s power and influence, Facebook takes this fear to new heights – it will become the Web itself from the big glue that tied the Web itself.

In that role, Facebook will have to be the most trusted entity in the world. It is awesome but on second thoughts leaves me scared.

April 16, 2010

Android and Nexus One shows momentum

Filed under: Business,Competition,Innovation,Strategy — Subbaraman Iyer @ 11:29 am
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Contrary to perceptions that the Nexus One is a failed product, Google actually announced in its Q1 2010 earnings report that Nexus One is meeting expectations, if not exceeding them.

Google mentioned that “driving the business (the Nexus One)  to be a profitable business from the get go. and is happy with device uptake and impact it has had raising the bar showing what a Smartphone can do.”

Report from Mark Huber SVP of Engineering on Android:

Huber: We believe in open platforms.. Our efforts in mobile are a great example of this at work. Schmidt said Google is taking mobile first approach. Your Smartphone knows where you are, so this location launched near-me-now. Turns your location into the search query. New stars in search feature, you click star next to result to save it. Makes it easier to find later (from mobile device). Android and Chrome gaining lots of momentum.

Android powering 34 devices from 12 OEMs. Over 60,000 Android devices sold/activated a day. Our mantra with Android is “open”. The platform and Market. 38,000 Apps, up 70% quarter over quarter.

Now with such an apps surge, it is no surprise that Apple wants to make it difficult for developers to be in both camps – the Android camp and the iPhone camp. It is trying to rewrite history.

April 14, 2010

Is Apple rewriting history?

Filed under: Business,Competition,Model,Perspective,Strategy — Subbaraman Iyer @ 12:27 pm
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Recent moves by Apple clearly indicate that Apple seems intent on rewriting history. Time will tell whether this is a brilliant move or a move that is just more than a misstep!

First, the attempted lock in of developers into its walled garden. The garden may be beautiful, but it is walled; not open. So far Apple has defied the odds of making its  walled gardens innovative and “developer friendly”. Now it is offering a mixed bag.

The iPhone and iPad is becoming a closed system which Apple only can control. Its current rift with Adobe is well known. The fight with Adobe is not about Flash but Apple’s fundamental approach to developers . Apple is insisting that all apps be developed using Apple’s proprietary tools with its SDK and discouraging porting of apps developed on other platforms based on its most recent license agreement. It clearly is an affront to all developers alike. It is clearly a move to limit developers from building apps for other platforms (read: Android)

Second, as a sop to developers, than as a new line of business, Apple offered the iAds an advertising platform for developers and offered to share advertising revenues. Advertisers can place ads in apps and when clicked direct users to a web site without leaving the app. Apple would serve up the ads and offered to give developers 60% of the advertising revenue to developers.

Just another way to keep the developers of more than 180,000 apps happy and help them make some money in the process!

As much as the media portrays this as yet another battle between Apple and Google, I do not see this way! The entire market for mobile advertising is less than U.S. $ 500 million accounting for just 2% of the total U.S. online advertising market. The revenue stream for Apple is insignificant. It is clearly a battle for keeping the developers firmly in the Apple fold and trying to deprive Google to build the developer community for the Android platform.

So make no mistake: It is not Apple taking on Google for advertising dollars, it is about developers!

Will the walled garden work or will open systems succeed or will both co-exist? Time will tell!

February 10, 2010

Google puts Buzz in the Gmail

Filed under: Business,Competition,Strategy — Subbaraman Iyer @ 11:47 am
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Google woke up to the Facebook and the Twitter challenge. Finally.

Google Buzz is the latest product from the Google family and its best attempt to build a social network after the early attempts like Orkut and Open Social saw marginal success.

To me Google Buzz looks like FriendFeed 2.0 (Facebook acquired FriendFeed last year) with its stream of updates, pictures, links from one’s friends. The biggest advantage that Google has in launching Buzz is that this is built into the Gmail application which already has over 175 million users. And Buzz is available on the iPhone and the Android as well.

Google is giving a lot of granular controls but the default social graph is based on the Gmail settings (mail recipients and senders of mail). Whether they indeed are actually the desired social graph for someone is something that I am not sure. For me, it surely is not!

Will Google win against Twitter with the Buzz? Twitter is simple and the tweets go to all the people who follow the tweet sender. “Buzzing” is not. There is a public and private buzz and this could make it complicated.

At first glance Google Buzz has a few advantages: It combines the best from Twitter, FriendFeed, Facebook Connect, Flickr and a few others. It has nice email integration as they show up in the Inbox and as a tab within Gmail. It highlights items that friends like and share. You can read about the functionality here

The key challenge is how will Google square off against Facebook when Facebook introduces email. And whether Google Buzz will integrate with Facebook connect.

That will be interesting to watch!

October 21, 2009

The Apple juggernaut rolls on

Filed under: Business,Competition,Leadership,Strategy — Subbaraman Iyer @ 1:23 pm
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Apple’s juggernaut continues unabated going by the latest results. Thanks to the iPhone’s game changing play that’s elaborated here. A blow out quarter.

Record shipments:Apple sold 7.4 million iPhones this quarter (ending Sept 2009)which is a 7% growth from last year. It sold 3.05 million Macs in this quarter up 17% a year ago. Both of these are milestones in Apple’s history. Sales of iPod touch were up 100% year over year. iTunes store is now in 23 countries and has become the world’s largest retailer.

Cash: Apple has $34 billion in cash this quarter compared to $31 billion last quarter. There’s a hint that there could be a share buyback soon. No debt. And to put this in context, this cash hoard is greater than that of Microsoft and more than the market cap of Dell.

Profit: A quarterly profit of $1.67 billion on revenues of $9.87 billion. It is the most profitable quarter ever in Apple’s history.

Future outlook: The future outlook seems still better with iPhone making an entry in on of the largest markets in the world — China, followed by Korea and a few other additional countries.

New accounting rules: Apple can recognize revenues from its subscription devices immediately rather than spreading it over a 2 year period.

Competition: Apple’s competition is actually languishing. Nokia the largest mobile device vendor reported a $834 million loss — the first in a decade due to falling mobile sales. Its smart phone sales saw a huge decline in market share as well. Sony Ericsson also suffered losses.

I am wondering whether Nokia or Sony Ericsson will make a bid to acquire Palm.

October 3, 2009

Salesforce.com into financial applications

Unit 4 Agresso has now teamed up Salesforce.com — the poster boy of SaaS to create FinancialForce.com that will produce SaaS based accounting, and financial management applications.

Well SaaS has been growing, but CFOs are mostly conservative and would not want to the data to be in the cloud. Hence the success of Financialforce.com will be keenly watched.

Now there are several interesting issues that come about with this joint venture.

For a start, it seems that Salesforce.com is a minority investor. Salesforce.com’s presence will undoubtedly create higher visibility for SaaS based financial applications. Hence other vendors will follow suit giving the SaaS proposition a greater momentum. Enterrpise software vendors who offer products in the mid market space like Oracle, Microsoft and SAP will have to respond quickly to this trend.

But with this association, Salesforce.com also seem to be sending mixed signals to its App Exchange partners who use the Salesforce.com’s Force.com platform to build new applications. Well, they could build an application only to realize that Salesforce.com might one day compete with them. Recent acquisitions by Salesforce.com in many of the App Exchange parnters’ businesses have not made Salesforce.com popular with many of the partners. Yet, there’s no compelling SaaS platform currently.

It looks like Salesforce.com needs to clearly clarify its positioning, strategic goals and its partnering model.

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