DesiSi

Mark Frauenfelder at BoingBoing points to a yahoo article on the the fastest internet connection in the world:

In less than 2 seconds, Lothberg can download a full-length movie on her home computer — many thousand times faster than most residential connections... The speed is reached using a new modulation technique...The article says she uses her connection to read online newspapers, and nothing more

For the record, Lothberg may also be the most overshot consumer in the world

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Mashable looks at Loopt, one in a series of companies that help you geo-locate friends using mobile phones. Will Loopt succeed? I have no idea. Apparently a few venture investors like it. I am more curious about geolocation-based social networks on mobile phones. Dodgeball (purchased by Google a while back) is one of the best known.

These services are all positioned as a great way to stay in touch with friends and are probably useful if you are trying to meet up at bars, restaurants, clubs & etc. Of course, this may or may not work when one or more parties are indoors (exactly the time when users are unable to see and relay cross street information) but the concept is simple and appealing.

I wonder about other uses for mobile social networks. What if I had a network of friends who would verify my identity in a transaction? What if I had a network of friends who would send me a cellphone picture if they caught my kid smoking or tagging the local park benches? A network where I could discuss microclimates, a network that would help me negotiate rent on my new apartment, a network that would help me recruit a rabbi for the local synagouge. Given the growth in micro-social networks built around smaller and smaller affinity groups I suspect that I will soon be able to find a network for every activity. The Brooklyn neighborhood, with nosy neighbors and extended families and local associations will be rebuilt first online and then on our mobile phones and then on our mixed mobile devices. As these networks develop over the next five years, I should expect to see more and more efforts to tackle the "fourth wall" of data by developing interfaces that allow us to interact in natural ways, so that I might get the sense that I am sitting at a real honest-to-goodness backyard party when I interact with a group of friends over a shared mobile phone network. I wonder how this will look. If I had a barbecue today, what is the best way to invite someone remotely so that they can wander around and engage with other people? Further, what commonly accepted guidelines for social interactions will develop? How will I get someone's attention when I am a remote participant in a party? These questions are very standard but they can be revisited in new ways, week in and week out, as new technologies emerge.

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Treehugger looks at a new plush lightswitch design that just received UL approval. Looking at it, I automatically associate the fabric surface with unpredictability. Will the light go on when I touch the panel? How long will it take? If the variation is less than I second, I might find this comforting. If the variation is considerably longer, I might not be able to use the object. Curiously, if the light "snaps" on each time I press the button, I might find the switch to be dissonant. Maybe this panel would be better if it served as a dimmer [UPDATE: Ah ha!, I just looked at the full article.. it is a dimmer!]. Would the same thing be true if I developed a textile mobile phone interface. Will I automatically posit a parallel between the "softness" of the phone and any delays in the interface. Should a crisp linen phone be more responsive than a plush felt phone?



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Lifehacker looks at Phonevite, a website that allows users to send mass invitations over the phone. When will carriers (or service providers such as Grandcentral and Skype) allow me to tag voicemail boxes and then make intelligent pull decisions. I might like phonevite if the invitations were automatically forwarded to an "event" voicemail box that I'd check once or twice a day. At present, if an invitation is important enough to enter my phone layer, I'd hope that I was being called directly rather than being spammed by my friends. Makes it sound like I am full of it but really I am just phone averse....

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According to Engadget, NYC cabbies are planning a strike over proposed passenger seat GPS system installations, claiming privacy concerns. Is this a foothold customer problem. If I were a cab driver who paid a daily fee for the car, I might be less concerned that someone was tracking me. I am incentivised to stay on the road because the penalty for hanging out in the driveway all day is the steep cost of the daily car rental. Could there be other problems? I'd be concerned that credit card payments (enabled by the machines) would drive down tips. How would I deal with this? Well, the passenger system also offers a video screen that will allow passengers to check the news. How about storing a brief video about each cab driver in the video system? Tips go way up once we make a connection. The systems also allow passengers to watch the cab on a map as it hones in on the drop point, will this increase back seat instructioneering (also a real pain for cab drivers)? How about offering a system that will allow- in some instances- primes to be paid when the cab driver selects the best route. This might only work when two cabs were leaving from the same pickup point and going to the same drop point at the same time. It might also encourage unsafe driving (ach).

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Engadget also looks at the Cybook Gen-3 EBook reader. In the review they state:

Cybook Gen3, the device makes use of E Ink's Vizplex e-paper technology to give you a 166 dpi resolution on its 6-inch screen, and promises to last for 8,000 page flips before needing a recharge.

8,000 page flips. What a great metric. I want to find other "analog metrics" for online services.

Posted by JB at 10:59 AM | Permalink | Comments

The Wall Street Journal notes that Amazon now allows consumers to purchase and send movies directly to Tivo. This is great, but it does not seem suitably different and maybe a bit less convenient than the movies on demand services already offered via cable. That said, I look forward to the day when Amazon allows me to purchase and send a movie to Tivo as a gift. In that case, I'd send cheap movie shorts (ideally with an attached video message that I would store at Amazon) as a new form of high quality video e-card. I am a little bit surprised that Youtube is not offering video e-cards in similar fashion (through email rather than to Tivo)

Update: well, I was kinda wrong
Update 2: Something closer to a video e-card offering

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The Immigrant Technologist points to an interesting working paper written by several researchers within the HBS Entrepreneurial Management unit. The paper, "Platform Envelopment" takes a look at competition against entrenched platforms with large networks- from digital music players to online recruiters and shipping providers- where competitors may either compliment each other or share some functionality.

The researchers use a variety of case examples to generate three competitive approaches as follows:

A "conglomeration attack" where a company bundles together platforms that share a common user base but provide different services to those users. Examples includeDoCoMo offering payment platforms to mobile users who presumably have credit card accounts and phone companies offering bundled phone, cable, andinternet services

An "intermodal attack" where two companies offering similar (but not identical) platforms begin offering similar services. Examples include DHL offering overnight services in response to new FedEx offerings and Monster.com offering social network-style profiles as Linkedin launched a jobs board

A "foreclosure attack" where a firm begins offering a substitute service in order to place pressure on a complementary service offered by a competitor. Examples include Microsoft offering a "save as .pdf" option with Office 2007 in order to put pressure on Adobe and EBay offering Billpoint (until it failed) to put pressure on paypal.

The writers go on to ask about the factors that may impact success within each of these competitive approaches in the context of user valuations, asking whether a user will see more value in using two or more goods/ services together rather than separately. They suggest that this is a matter of relative valuations suggesting that two platforms should be bundled (conglomeration attack) together when the user valuations of one or both goods and services is substantially higher than the marginal cost of said goods and services at the profit maximizing price.

This suggests to me that the strategies are oriented toward a base of power users, if only because the "average user" should have a valuation closely linked with the price point at which the marginal cost and marginal revenue curves meet (ie, the profit maximizing price). This further suggests something that should be somewhat obvious: convergent services succeed when the user valuation of the sum of the products exceeds the summed valuation of each of the discrete parts. In statistics, we might identify these cases via a test for interaction (*). The paper (because it is a working paper) does not verify this assertion by defining the users (from power users to casual users) who will see the value in bundling.

"Aha!" I say. Consumer valuation is closely related to the "fit" between a particular solution and a job to be done. What if I were to re-frame this in terms of jobs to be done?

Conglomeration Attack: Here we have two functionally independent technologies. Users have adopted one technology to address one set of jobs and happily use a second platform to address a different set of jobs. In theDoCoMo case, I use a mobile phone to keep in contact with other people and I use a credit card to make purchases. In order for bundling to work in this case, the bundled platform will need to satisfy a new, previously unsatisfied job that is important to some consumer subset. It will not be enough to simply treat a phone as an extra credit card. My credit card jobs are suitably satisfied. It should not surprise me that bundling efforts often fail until they move away from consumers who already use both platforms and toward consumers who have access to one platform but not both. Phones become a channel formicropayments in cash based economies with low credit card penetration. To place this in the context of valuation and marginal cost, the MC/V of the bundle increases over the MC/V for each of the constituents because the dominant platform in the bundle (here, the phone) sharply lowers the marginal cost of access to the new component (purchasing) so that the value of being able to make a purchase without cash can suddenly exceed the cost of obtaining access to small amounts of credit.

Intermodal Attack: Power users are likely to use both competing systems concurrently, so switching costs will be low. A DHL power user will also have an online account with FedEx. The most demanding Monster.com users will also have LinkedIn accounts. These users will typically employ both services to address a focal job, whether "I want to reduce my worry when delivering critical packages" or "I want to be sure that I am not missing out on a new and interesting career opportunity." The services are left to compete in their ability to address these core jobs (actually, the jobs/ restrictiontradeoffs). It makes sense, then, that intermodal attacks often result in mirrored behavior. An improved strategy in this arena might result in designing new servcies that really fit consumer jobs to be done instead of just mirroring competing services.

That said, the LinkedIn jobs posting could really be recast as a conglomeration attack while the Monster social network could really be recast as a foreclosure attack. All of these approaches exist in a spectrum. UnlikeDHL/ Fedex, which are conceptually "closer," LinkedIn & Monster approach career networks from very different angles and this creates an asymmetry of switching costs. I imagine that it is more of a pain for aLinkedIn user to recreate a social network within Monster than it is for a Monster user to repost information in a larval profile on LinkedIn. At the same time, it is easier for a LinkedIn user to employ the LinkedIn job search service even while using the Monster.com service in parallel. This creates a market that is advantageous to LinkedIn in the long run even if LinkedIn faces real challenges in replicating Monster.com's voluminous jobs database and even if it is a pain for employers to repost inquiries on LinkedIn. In this case, the jobs are similar but the "ease of adoption" restrictions drive meaningful differences between the services.

Foreclosure Attack: Consumers often employ multiple goods and services in multistep processes in order to address a given job. If I want to get a large couch back from a retail store, I might employ a rental service, a van, a gas station and a dolly. I am often aware of the total cost of this "supply chain" and I favor markets where steps in the supply chain are decoupled in such a way that competition at a given step will drive pricing down, lowering the total cost of the chain. I might rent aUHaul van, but I might avoid it if I were locked into buying gas only from a UHaul gas station along the route. This is one important aspect of the tension between modularity and interdependence. With this in mind, a foreclosure attack will work best when:

The combined steps make it easier to navigate a job "supply chain"
The total cost of the supply chain is lowered
I do not feel that I am placing future costs along the supply chain at risk

Apple's iTunes provides a great example. By rectifying the multiple steps between downloading, organizing, and synchronizing music, Apple made things far easier for consumers with the job of "I want an easy way to consume the music that interests me." Consumers were willing to pay a premium for this access, roughly a dollar per song more than could be obtained through music sharing sites. At the same time, Apples sales have been stunted by the layers of digital right management technology packed around each song file, repelling users (often power users) who worry that future supply chain costs are being placed at risk and who worry in particular than the value of a present purchase may erode if Apple changes its policies regarding music transfer to CD or some other media. This is a case of a great jobs to be done fit running into shortfalls on restrictions held by a specific user group. This is not normally interesting toInnosight, which avoids power users, but it is relevant to this paper.

So this paper is useful, because it provides a new avenue toward looking at competitive strategies and this new avenue can be (roughly)reframed in Innosight language even if the focus on power users makes this less relevant to Innosight core IP . That said, I'd like to recast this paper in the future in terms of new market and overshot users, both of whom work with product component valuations that sit below, rather than above marginal cost.

[(*)As a complete side note, tests for interaction demand large sample sizes. Online services have an advantage when sandboxing new products because it is easy to obtain large samples in a low cost way. This is not true for every product.]

Posted by JB at 11:19 AM | Permalink | Comments

A big week in the news last week. At least three interesting things have either happened or become apparent:

- While programming teams have been making small web applications for years, small website-embedded applications (widgets) have proliferated over the last six months, buoyed by improved widget construction tools such as Yahoo Pipes, popular channels from Lifehacker to Facebook, and an abundance of online data that demands aggregation. Services such as Quantcast, have been developed to aggregate these widgets. Collectively, this amounts to a shift in the ways that clients and end users relate to data. I suspect that we will see a similar shift fairly soon in the mobile phone arena and I suspect that widget aggregation swill drive very fundamental differences between web 2.0 operating environments and their legacy desktop OS competitors.

- In the cellular arena, T-mobile has announced their Hotspot@home service, based on new phones that switch seamlessly between cellular and wifi networks, allowing callers to place free calls whenever they are in a wifi network that does not demand a user registration/ login process. This ranges from home wifi networks to Starbucks, which has worked around the normal registration process for new T-Mobile subscribers. The wifi cellular concept has been receiving lots of attention over the last year and T Mobile began testing this service in 2006. Sprint and others have been developing similar services in response to threats from Vonage and Skype. Back in October of last year, the NYT covered T Mobile's test market launch and included the following quote:

Though consumers conceivably will use fewer cellular minutes with these phones, Mr. Entner said T-Mobile still benefits because consumers have to buy some kind of rate plan. T-Mobile can also lower its costs because some phone traffic that would otherwise travel on its cellular network will move to a competitor’s broadband network.

So this is less of a disruptive move and more of a response to looming disruption in cellular. I suspect that some of this was driven in response to growth in 'cordless' Skype phones intended for in-house use as well as workarounds, such as iskoot, which have allowed callers to utilize Skype or other voip platforms over their mobile networks. [Link to explanation here] since at least 2005.

-In manufacturing & design, Core77 covered a small company called Pokono, which is attempting to extend the DIY T-shirt supply chain model used by Threadless and others into product manufacturing. This comapny falls under the radar and has not formally launched but if it succeeds it could offer a very important sustaining service to the same DIY design culture that supports Etsy and Make. Ten years from now, we will look back on the 2003-2010 period as an inflection point for design, when major design houses stumbled and began to go the way of major music labels. This reminds me that we should revisit Ronald Coase' essay on company structures.

From the wikipedia entry on Ronald Coase:

The Nature of the Firm was a brief but highly influential essay in which Coase tries to explain why the economy is populated by a number of business firms, instead of consisting exclusively of a multitude of independent, self-employed people who contract with one another. Given that "production could be carried on without any organization [that is, firms] at all", Coase asks, why and under what conditions should we expect firms to emerge?
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The traditional economic theory of the time suggested that, because the market is "efficient" (that is, those who are best at providing each good or service most cheaply are already doing so), it should always be cheaper to contract out than to hire.

Coase noted, however, that there are a number of transaction costs to using the market; the cost of obtaining a good or service via the market is actually more than just the price of the good. Other costs, including search and information costs, bargaining costs, keeping trade secrets, and policing and enforcement costs, can all potentially add to the cost of procuring something with a firm. This suggests that firms will arise when they can arrange to produce what they need internally and somehow avoid these costs.

As the internet has improved contractor visibility and as basic contracts themselves have become easier to enforce and as the cost of "small batch" production has come down, companies like Pokono are shifting the horizon point where companies need to be formed. As this "Coase Horzion" gets pushed farther out, we may see larger and larger manufacturing concerns which operate less as a company and more as a collective of individuals whose incentives are balanced out through a network of contracts. What will services to these companies look like? What new "jobs to be done" will appear?

Posted by JB at 10:49 AM | Permalink | Comments