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:
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:
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?
- 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?
...
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?
