How We Eat – an example of the new segmentation the nerds at McKinsey would have you think about. Very interestink!
And here’s how the profits stack up by the segments:
Lots more interesting stuff from their e-book.
Dimitar Vesselinov: The World 2 Come
The World 2 Come is a wonderful blog by Dimitar Vesselinov from Plovdiv, Bulgaria.
Dimitar has a knack for finding really cool stuff on innovation and soccer! For example, see his entry: Marissa Mayer on Innovation at Google and his Event of the Month – you guessed it, the FIFA World Cup!
Go check it out >>
The World’s Most Innovative Companies
The Boston Consulting Group and BusinessWeek tell us that these are the 100 most innovative companies in the world:
Rank Company
1 Apple
2 Google
3 3M
4 Toyota
5 Microsoft
6 General Electric
7 Procter & Gamble
8 Nokia
9 Starbucks
10 IBM
11 Virgin
12 Samsung
13 Sony
14 Dell
15 IDEO
16 BMW
17 Intel
18 eBay
19 IKEA
20 Wal-Mart
21 Amazon
22 Target
23 Honda
24 Research In Motion
25 Southwest
26 Porsche
27 Genentech
28 Cisco
29 Nike
30 Motorola
31 DaimlerChrysler
32 Infosys
33 Ryanair
34 Pixar
35 SonyEricsson
36 Whole Foods
37 Capital One
38 Tesco
39 Danone
40 BP
41 PepsiCo
42 Hewlett Packard
43 Disney
44 jetBlue
45 W.L. Gore & Associates
46 Skype Technologies
47 FedEx
48 Bang & Olufsen
49 Renault
50 L’Oreal
51 ExxonMobil
52 Siemens
53 Johnson & Johnson
54 Shell
55 Pfizer
56 Singapore Airlines
57 Nissan
58 DuPont
59 Zara
60 TiVo
61 Yahoo!
62 Macquarie Bank
63 Audi
64 Harley Davidson
65 Progressive Insurance
66 Volvo
67 Philips Electronics
68 ING Bank
69 Nestle
70 Boeing
71 Matsushita Electric Industrial
72 easyJet
73 UPS
74 Coca-Cola
75 Cirque du Soleil (tied)
75 McKinsey (tied)
75 Woolworths (tied)
78 Hutchison Telecommunications
79 Salesforce.com
80 ACS
81 ITC
82 Time Warner
83 Danaher
84 Costco Wholesale
85 LG Electronics
86 bankinter
87 Amgen
88 Caterpillar
89 Accenture
90 SAP
91 SK Telecom
92 Home Depot
93 LVMH
94 Gap
95 Unilever
96 Goldman Sachs
97 John Deere & Co.
98 Whirlpool
99 Entel
100 McDonald’s
To me this makes no sense. This is in fact a list of the world’s most innovative dinosaurs. Massive companies which are still able to create value using new ideas. But these companies (w/ the exception of IDEO and a few others) are NOT at the forefront of innovation. Rather, that honor belongs to small companies, often at the periphery, which introduce the dinosaurs to these innovations.
Furthermore, innovation is relative, and needs to be measured in the industry or marketspace of the company. IDEO is more innovative than McDonald’s in absolute terms, but what really matters is how innovative McDonald’s is against its competitors.
What I enjoyed was the cover story:
Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it’s about selecting and executing the right ideas and bringing them to market in record time.
In the 1990s, innovation was about technology and control of quality and cost. Today, it’s about taking corporate organizations built for efficiency and rewiring them for creativity and growth. “There are a lot of different things that fall under the rubric of innovation,” says Vijay Govindarajan, a professor at Dartmouth College’s Tuck School of Business and author of Ten Rules for Strategic Innovators: From Idea to Execution. “Innovation does not have to have anything to do with technology.”
Here’s an article from Tom Davenport on the types of innovation. I think it helps make the point that product innovation is just one type of innovation.
Another great insight comes to us from John Hagel, who talks about the limits of western thinking in his critique of Gary Hamel‘s latest thinking. Hagel tells us to focus on understanding the continuous management innovations across enterprises that are emerging in Asia.
Question: How does one link innovation to brand? to shareholder value? to sustainability? Branding, design, eco-imagination. They’re all linked…
Steel Pulse & Damian Marley: No More Weapons
Sing along:
We don’t really need…
There’s no time to beat around the BUSH
Now all the world is living in fear
The consequence a great disaster zone
The thought alone I cannot bear
And now that war has raised its ugly head
And all I can predict is woe yeah!
This claim for power paints the city red
I isolate the Status Quo.
We no want no weapons of mass destruction
We no want no weapons of mass destruction
No we no really need
No no weapons no
This has got to be the final conflict
Bestowed upon humanity
So much for a global coalition
A false sense of security
We are just pawns in the scheme of things
No matter what our race or creed
Survivors of this holocaust
We international refugees
We no want no weapons of mass destruction
We no want no weapons of mass destruction
No no no lethal weapons
No no lethal weapons
No weapons no weapons
This crave for power
Is one disaster, destruction’s in the air
These ego trips, by heads of states, who giveth not a care
For all your children and all my children
The future’s in despair
No no no No no no
We do want no weapons no…
Rules for Innovators?
From the Talentism blog, a great list for wanna-be innovators:
(1) Innovation starts with “And”
(2) Not Just Smart, But Always Focused
(3) Make Sure You Have the “No But” Critic in the Room
(4) Build Crappy Prototypes Fast
(5) Don’t Listen To Customers, Watch Them
(6) If It’s Right, Change It
(7) Sell it Like you Play It
(8) Iterate ‘Till You Drop
(9) Appoint One Person Bad Cop and Follow Their Command
(10) Innovation Is About Learning, not Genius
Here’s one more:
(11) Constancy of Purpose!
Vinod Khosla’s Eco-imagination
From my other favorite, the Economist:
A lesson he [Vinod Khosla] learned from India, he says, is that one has to think big: “Unless you influence the lives of at least a million people, it simply doesn’t matter.”
And:
“Mr Khosla is particularly enthused by “cellulosic” ethanol, a highly efficient way of making fuel from agricultural waste. President Bush touted this new technology in his recent state-of-the-union speech, suggesting that it may come to market in six years. In typically impatient form, Mr Khosla wants to halve that gestation period. Anyone who spends time with him is liable to be hit with his well-researched but mind-numbing PowerPoint presentation on ethanol—unveiled with the affection that some men reserve for pictures of their grandchildren.”
But this is not a joke, guys. It’s the next wave of capitalism- natural capitalism, as some call it.
Wake up Amrica. It is time.
Again:
“It is easy to dismiss this enthusiasm as the irrelevant obsession of a rich hobbyist or the harmless utopianism of a capitalist who has made his pile. But the big oil companies are certainly not taking Mr Khosla lightly. The oil industry is funding a lavish counter-campaign to his ballot initiative called “Californians Against Higher Taxes”. Perhaps the best reason to take Mr Khosla seriously is that his professional success and Republican leanings mean that he has the ears of powerful people. He has been making the rounds, from the White House and Capitol Hill to the World Economic Forum at Davos and the TED conference (a big annual gathering for top venture capitalists), banging the drum for ethanol. Before Larry Page, Google’s co-founder, attended a recent TED conference in Monterey, California, he was sceptical about ethanol. After hearing Mr Khosla, he decided to help fund the cause. “When have you ever seen greens, farmers and guys like me and Larry on the same page?” demands Mr Khosla.”
Read the article >>
The BBC as a Global Online Brand
“The BBC is both an entrepreneurial anomaly and an illustration of the importance of branding on the internet. It has received considerable financial backing – from a government- mandated licence fee rather than venture capitalists. But its growth stems mostly from the reputation the BBC has earned through its old-media activities in radio and television.” writes the FT.
Darn right. The BBC has done what Rupert Murdoch could not (and would not) – it has become the online brand for trusted news, blowing away the pathetic efforts of the CBS, ABC, NBC, and FOX.
Why? Because the BBC is truly more fair and balanced. And it has something no American network has- constancy of purpose.
Read the article >>
PS- The other global British success story is the good old Economist.
The Idea Ecosystem
How’s this for an idea –
“An internal market where any employee can propose that the company acquire a new technology, enter a new business or make an efficiency improvement. These proposals become stocks, complete with ticker symbols, discussion lists and e-mail alerts. Employees buy or sell the stocks, and prices change to reflect the sentiments of the company’s engineers, computer scientists and project managers – as well as its marketers, accountants and even the receptionist.”
Idea marketplaces are happening now at Rite-Solutions and InnoCentive, according to Here’s an idea: Let everyone have ideas, an article in the IHT:
The next frontier is to tap the quiet genius that exists outside organizations – to attract innovations from people who are prepared to work with a company, even if they don’t work for it. An intriguing case in point is InnoCentive, a virtual research and development lab through which major corporations invite scientists and engineers worldwide to contribute ideas and solve problems they haven’t been able to crack themselves.
InnoCentive, based in Andover, Mass., is literally a marketplace of ideas. It has signed up more than 30 blue-chip companies, including Procter & Gamble, Boeing and DuPont, whose research labs are groaning under the weight of unsolved problems and unfinished projects. It has also signed up more than 90,000 biologists, chemists and other professionals from more than 175 countries. These “solvers” compete to meet thorny technical challenges posted by “seeker” companies. Each challenge has a detailed scientific description, a deadline and an award, which can run as high as $100,000.
“We are talking about the democratization of science,” said Alpheus Bingham, who spent 28 years as a scientist and senior research executive at Eli Lilly & Company before becoming the president and chief executive of InnoCentive. “What happens when you open your company to thousands and thousands of minds, each of them with a totally different set of life experiences?”
InnoCentive, founded as an independent start-up by Lilly in 2001, has an impressive record. It can point to a long list of valuable scientific ideas that have arrived, with surprising speed, from faraway places. In addition to the United States, the top countries for solvers are China, India and Russia.
It’s all about your company’s innovation ecosystem. Do you have one? How do you build one? How do you participate in the ecosystem which exists already?
Jonathan Schwartz on Open Source
“…fighting against things like open source is, in a way, fighting gravity.”
in this article on Always-On >>
Soccer Blog: The Start of Something
Well, I’m just doing it.
After years of talking and discussion- our soccer blog is finally launched. We have 8 contributors signed up from various parts of the world.
Let me know if you’re interested in contributing. Prerequisite: you must know who Edson Arantes do Nascimento is!
Bratz vs. Barbie: The Power of Strategic Innovation
In her book – The Power of the Purse: How Smart Businesses Are Adapting to the World’s Most Important Consumers – Women, Fara Warner describes how the MGA’s Bratz line of brash, but fashionable, dolls toppled Mattel’s Barbie — by focusing on consumer behavior.
Says Warner:
– Don’t allow personal history or preconceived ideas of women — in this case, young girls — to overshadow insight from consumers.
– Read, listen, and respond to correspondence from consumers — not their parents. MGA used this strategy to create a line of boy Bratz.
– Consider the consumers’ whole world, not just the time when they are using the product. This strategy was used to expand Bratz beyond dolls and clothes.
– Move with consumer trends, not industry timelines. MGA creates new clothing lines for its dolls every three to six months, not just once a year.
Read this chapter — Toppling Barbie: Bratz Predict the Future — from her book.
The Bratz example serves as a powerful reminder that companies like Mattel cannot afford to rest on their laurels, but need to selectively forget the past, as Vijay Govindarajan would say.
Fara has also started a blog. Her introductory post is here.
Maybe there’s a place for an environmental girl doll one of these days — perhaps a Jane Goodall do-good activist doll? I mean why do toy companies focus on girls, malls and fashion? All right, I know the answer… it was a rhetorical question.
The Time is Now for “Narrowcasting”
According to the NYTimes:
“In the last six months, major media companies have received much attention for starting to move their own programming online, whether downloads for video iPods or streaming programs that can be watched over high-speed Internet connections.
“Perhaps more interesting — and, arguably, more important — are the thousands of producers whose programming would never make it into prime time but who have very dedicated small audiences. It’s a phenomenon that could be called slivercasting.”
The web has always been a narrowcasting medium.
More from the article:
Discovery Communications, which has been a master of the current system, creating 15 different cable channels including Animal Planet and Discovery Health, is now exploring even more specialized services over the Internet. One will be introduced tomorrow for $9.95 a month. It will offer 30,000 video clips excerpted from its library of documentaries and other educational programs to help grade school and high school students with their homework. In the future, other services will offer content focused on narrow topics in travel, science and health.
Discovery, Mr. Hendricks says, is in a good position to create such services because of its large archive. “We have a wealth of programming just related to cancer, just related to Alaska and so on,” he said.
In addition to offering Internet distribution, Discovery will start to broadcast some of these programs late at night on its regular channels and encourage people to record them, he said.
To be sure, there are doubters. “I’ve never been a believer that we should create channels for all these niches like beach volleyball,” said John Skipper, a senior vice president of ESPN, a unit of the Walt Disney Company. “They just don’t pencil out. Because if you have 12,000 people, you can’t afford to do it. And if you can’t afford to do it, you can’t make any money on it.”
One reason that ESPN has shied away from this sort of niche programming, he said, is that its brand stands for a level of high-quality visual production that would be difficult for small channels to afford. Indeed, ESPN has been investing millions of dollars to produce programs in high-definition formats.
But reticence by some big media companies is making room for independent programmers to explore all sorts of niches.
Hmmm. ESPN doesn’t get it… perhaps Steve Jobs will wake them up.
Here’s the article in full>>
Nicholas Carr: The Editor beats the Wisdom of the Crowd
Nicholas “IT Doesn’t Matter” Carr talks about human editors versus algorithms in his post, “The editor and the crowd“:
“As the comparison of Memeorandum and Slashdot shows, the software-mediated crowd is a poor replacement for a living, breathing, thinking editor. But there are other things that the crowd is quite good at. The crowd tends, for instance, to be much better than any of its members at predicting an uncertain future result that is influenced by many variables. That’s why stock market indexes beat individual money managers over the long run. It’s easy to understand why. First, there are limits to the ability of any single individual to understand the complexities in how a large number of variables change and influence one another over time. Second, every individual’s thinking is subject to idiosyncracies and biases – some conscious, some not. The crowd aggregates all individuals’ knowledge about variables while balancing out their personal biases and idiosyncracies. It’s not the “wisdom” of crowds that makes crowds useful, in other words; it’s their fundamental mindlessness. What crowds are good for is producing average results that are not subject to the biases and other quirks of human minds.”
and
“That’s also why search engines work pretty well with algorithms (until, at least, they begin to be gamed by individuals using their minds): They produce the result that best suits what the average searcher is looking for. You don’t want generally used search engines to reflect individual biases. Indeed, one of their main jobs is to filter out those biases – and revert to the average.”
But, says Carr:
“But that’s also why algorithms don’t work very well as editors. With an editor, you don’t want mindlessness; you want mindfulness. A good editor combines an understanding of what the audience wants with a healthy respect for the idiosyncracies of his own mind and the minds of others. A good editor doesn’t aim to provide a bland “average result”; he wants to wander widely around the average, at times even to strike out in the opposite direction altogether. The mindless crowd filters out personality along with idiosyncracy and bias. The mindful editor is all about personality.”
I couldn’t agree with Carr more. And that’s why one of my latest projects is 100% human powered; powered by personality. I could have used software and algorithms to do the heavy lifting, but decided in favor of people. Thanks Nick!
Googlespace vs. Microsoft: Will they call it G-office?
Here we go. Says Red Herring:
“In an overt challenge to Microsoft, search giant Google said Thursday it had acquired Writely, an online word processing tool, for an undisclosed amount.
“Writely, a project of Upstartle, functions much like Microsoft Word but in a web browser. The online environment allows for collaboration between multiple authors and the benefit of someone else hosting your document.”
I wrote about this a while back… wonder why is Microsoft just sitting there milking dead cows like Office?
Marc Benioff of salesforce.com says: “It demonstrates that on demand is the death knell of Microsoft. Google is firing a shot directly into the heart of Microsoft Office.”
What can you do with Writely?
According to the website:
You can:
– Upload Word documents, OpenOffice, RTF, HTML or text (or create documents from scratch).
– Use our simple WYSIWYG editor to format your documents, spell-check them, etc.
– Invite others to share your documents (by e-mail address).
– Edit documents online with whomever you choose.
– View your documents’ revision history and roll back to any version.
– Publish documents online to the world, or to just who you choose.
– Download documents to your desktop as Word, OpenOffice, RTF, PDF*, HTML or zip.
– Post your documents to your blog.
The next question is: will it be free? ad-supported? free basic, paid premium-version??
C’mon Gates. You know what to do. Just kill Office, now- before Google kills it for you.
Building a Digital Business Platform
For over five years now I’ve been working on the problem of how companies can build a community for prospective customers. The question I asked myself was:
How can we get customers to collaborate with the company/companies to co-create products and services that benefit everyone involved?
I had some long discussions on this with John Hagel and the late John Rheinfrank. Here’s what we were thinking:
[click to enlarge]
Any suggestions?
Open Source Collaboration: The Flu Wiki
The purpose of the Flu Wiki is to help local communities prepare for and perhaps cope with a possible influenza pandemic. This is a task previously ceded to local, state and national governmental public health agencies. Our goal is to be:
– a reliable source of information, as neutral as possible, about important facts useful for a public health approach to pandemic influenza
– a venue for anticipating the vast range of problems that may arise if a pandemic does occur
– a venue for thinking about implementable solutions to foreseeable problems
This is how the Internet is democratizing society… collaborative problem-solving in public health. Public health is too important to leave to the bureaucrats… Remember Katrina?
See their avian influenza outbreak maps.
This level of detailed information is what we want from our public institutions, but you can bet we won’t get it- for several reasons- political, economic, and sadly, policy.
Who Won the Superbowl Ad Contest? Let the Brains Decide…
So who won this year’s Superbowl ad-wars?
This year, at the UCLA Ahmanson-Lovelace Brain Mapping Center (don’t you love that name), Marco Iacoboni and his group used functional magnetic resonance imaging (fMRI) to measure brain responses in a group of subjects while they watched the Super Bowl ads. The way fMRI works is relatively simple: different levels of cerebral blood oxygenation have different magnetic properties. Moreover, changes in blood oxygenation correlate with changes in neural activity. Thus, without using any contrast agent, fMRI can measure how much brain areas are activated during sensory, cognitive and motor experiences.
According to the brain-waves, “the overwhelming winner among the Super Bowl ads is the Disney – NFL ‘I am going to Disney’ ad. The Disney ad elicited strong responses in orbito-frontal cortex and ventral striatum, two brain regions associated with processing of rewards. Also, the Disney ad induced robust responses in mirror neuron areas, indicating identification and empathy. Further, the circuit for cognitive control, encompassing anterior cingulate cortex and dorsolateral prefrontal cortex, was highly active while watching the Disney ad. We consider all these features positive markers of brain responses to the ad. In second place, the Sierra Mist ad, activated the same brain regions but less so than the Disney ad.”
Great. Disney? Give me a break. That said, I know someone (a famous business guru) who is visiting Disney this week, so maybe the ad worked after all!
Here’s the one I picked as the winner. (Doug Smith agrees!) >>
Anyway, read all about the brain wave theory of advertising effectiveness here >>
Stupid Research: The Importance of Being Pretty
Here we go again. Wired has a story on The Importance of Being Pretty.
They’re talking about your website.
Says Wired: “Internet users can give websites a thumbs up or thumbs down in less than the blink of an eye, according to a study by Canadian researchers. In just a brief one-twentieth of a second — less than half the time it takes to blink — people make aesthetic judgments that influence the rest of their experience with an internet site.”
The study in question comes to us from Dr. Gitte Lindgaard, a psychology professor at Carleton University in Ottawa. She’s the “NSERC/Cognos Industrial Research Chair in User-Centred Design” at Carleton.
No one mentions the report title, but I believe it’s this one: “Attention web designers: you have 50 milliseconds to make a good first impression”, Behaviour & Information Technology, 25, 115-126, Lindgaard, G., Dudek, C., Fernandes, G. & Brown, J., 2005.
In the study, researchers discovered that people could rate the visual appeal of sites after seeing them for just one-twentieth of a second. These judgments were not random, the researchers found — sites that were flashed up twice were given similar ratings both times.
“Unless the first impression is favorable, visitors will be out of your site before they even know that you might be offering more than your competitors,” said Lindegaard.
But the results did not show how to win a positive reaction from users, admitted Lindgaard. “When we looked at the websites that we tested, there is really nothing there that tells us what leads to dislike or to like.”
And while further research may offer more clues, she said the vagaries of personal taste would always be a limiting factor. “If design were reducible to a set of principles, wouldn’t we find an awful lot of similar houses, gardens, cars, rooms?” said Lindgaard. “You’d have no variety.”
This study is just another example of lab-myopia. It’s dangerous. And detrimental to real-world business performance. Lindgaard doesn’t get it.
The real question is: how many people who come to your website do something you want them to do – buy something, opt-in, download a whitepaper, join a discussion, etc. The question is NOT if you have a pretty site, but: “How effective is your site?”
I’m not the only one turned off by this type of stupidity:
– Gerry McGovern: “It is unquestionably true that people are highly impatient on the Web. However, it is hard to understand how people can get an impression of a website in one twentieth of a second, when most webpages takes several seconds to download. (Laboratory conditions are not the same as real-life conditions.) Function and visual appeal do not have to be in conflict. However, it is clear that the websites that are making the most money are focusing much more on function than visual appeal. What would be the value of asking people to rate the visual appeal of Ryanair.com, Aerlingus.com, eBay.com, or Yahoo? We need to be careful about the questions we ask because they could lead us down the wrong path.
– Jakob Nielsen: It’s a dangerous mistake to believe that statistical research is somehow more scientific or credible than insight-based observational research. In fact, most statistical research is less credible than qualitative studies. Design research is not like medical science: ethnography is its closest analogy in traditional fields of science. User interfaces and usability are highly contextual, and their effectiveness depends on a broad understanding of human behavior. Typically, designers must combine and trade-off design guidelines, which requires some understanding of the rationale and principles behind the recommendations. Issues that are so specific that a formula can pinpoint them are usually irrelevant for practical design projects.
Online, form without function is a disaster.
And that’s why I get mad at “lab-researchers” like Lindgaard.
Design Korea: Interview with Lee Kun Pyo
From BusinessWeek:
“Over the past decade, Korea’s Samsung Electronics has transformed itself from a copycat producer of uninspiring goods into one of the world’s top consumer-electronics brands. Much of that transformation is due to a shift in power at the company from engineers to designers. Samsung’s rebirth has inspired other Korean companies to place a greater emphasis on design — in fact, it has energized the country’s design community.”
An interview with Lee Kun Pyo, director of the Human-Centered Interaction Design Laboratory at the Korea Advanced Institute of Science & Technology on the changes sweeping Korean design >>
What I found interesting:
“Koreans traditionally don’t articulate what they’re doing beforehand. They’re very contextual. Of course they do customer research and product planning and user-centered design and so on. But they quickly arrive at solutions, then look at the solution to find any further problems. Some might say that’s unsystematic, but it’s really very dynamic. And it works well for products with a short lifecycle, like mobile phones or MP3 players.”
and
“Things are changing. In the past, product planning was done by marketing people who would choose product concepts by statistics, and engineers would present the structural requirements. The designers always lost the game. But now the head of Samsung’s mobile division asks the designer to make a mockup and throws it to the engineer and says, “Make it.” The opportunity has been handed over to the designers.”
and
“Korea has 230 design schools — more than America.”
hmmm…
PR vs. Advertising: Barking up the Wrong Tree
Again, from the Economist:
“…PR is surprisingly effective, at least according to a recent study by Procter & Gamble, the world’s biggest consumer-products group. P&G is a firm that marketers pay a lot of attention to, not least because of its advertising budget of some $4 billion. It has always been at the cutting-edge of marketing—P&G is credited with inventing the television soap opera as a new way to sell goods. But with fewer people watching television and the circulation of many papers and magazines declining, the firm has become pickier about where it spends its advertising budget. Increasingly, it wants a measurable return on investment from its campaigns.”
Read it in the news >>
My point- at least PR is trying to tell a story.
So how does advertising fight back? With knowledge and entertainment, and yes, branded-experiences. Problem is most agencies are too stupid. Maybe it’s the stupidity of the clients.
Both PR and Ad agencies are inauthentic. Why do you want to hear propaganda and lies all day long? Give us truth, knowledge, insight, and a little bit of humor. Talk, don’t preach. Get a conversation going. And don’t talk about your products unless I ask you a question.
Of course, I’m talking about double loop marketing.
Britannica vs. Wikipedia vs. Digital Universe vs. Squidoo vs. ?
Who wants to be the knowledge repository for all mankind?
The race is on:
– Encyclopædia Britannica: the free stuff is weak! [rank= 2,839]
– Wikipedia: a controversy on quality [rank = 31]
– Digital Universe: slow going in building out the “portals” [rank = 150,326]
– Squidoo: too quirky? [rank = 6,290]
and of course there’s Google…
I’m betting on two things: “free” and “ease-of-use” – and the winner (today) is Wikipedia.
Will Steve Jobs Start Blogging?
Jobs in a Newsweek interview:
Your new iLife software has a blogging application. When will you start your own blog?
(Laughs.) “After I get a few days of rest.”
He’ll never get a few days of rest. So the answer is no, the man will not be blogging!
P.S. – Here’s a great commencement speech by Jobs. >>
Clayton Christensen on How Apple can Mess Up
Here’s a great interview with Professor Christensen in BusinessWeek:
Apple is doing phenomenally well these days. It seems it’s doing a textbook job of maintaining huge market share in digital music players, long after most experts thought that share would erode. And it’s doing so with the same proprietary strategy that many thought would never stand up to an onslaught from the likes of Microsoft (MSFT), Wal-Mart (WMT), and Yahoo! (YHOO). Can Apple keep it up?
I don’t think so. Look at any industry — not just computers and MP3 players. You also see it in aircrafts and software, and medical devices, and over and over. During the early stages of an industry, when the functionality and reliability of a product isn’t yet adequate to meet customer’s needs, a proprietary solution is almost always the right solution — because it allows you to knit all the pieces together in an optimized way.
But once the technology matures and becomes good enough, industry standards emerge. That leads to the standardization of interfaces, which lets companies specialize on pieces of the overall system, and the product becomes modular. At that point, the competitive advantage of the early leader dissipates, and the ability to make money migrates to whoever controls the performance-defining subsystem.
In the modular PC world, that meant Microsoft and Intel (INTC), and the same thing will happen in the iPod world as well. Apple may think the proprietary iPod is their competitive advantage, but it’s temporary. In the future, what will matter will be the software inside that lets users find exactly the kind of music they want to listen to, when and where they want to, with minimal effort.
But Apple has that software. It can be the one to provide that to everyone else, if it chose to, right?
I’m concerned that they’ll miss it. It’s the fork in the road — and it’s comparable to the fork they faced when they chose not to open up the Mac in the 1980s, when they let Microsoft become Microsoft.
How long will Apple have to make this change?
I’d be very surprised if three years from now, the proprietary architecture is as dominant as it is now. Think about the PC. Apple dominated the market in 1983, but by 1987, the industry-standard companies, such as IBM (IBM) and Compaq, had begun to take over.
Christensen also says something interesting about hedge funds: don’t even think about them as shareholders!
Read the BW article >>
See also my post: Clayton Christensen: The Innovator’s Battle Plan and my interview with Clayton Christensen >>
Soccer Fun on Google Video
Soccer is the global attention magnet.
Don’t believe it? Check out Google Video: one of the most popular clips is this one. I’ve watched it twice already. Henry, Roberto Carlos, Beckham, Ronaldinho, Ronaldo, Ziddane – you name ’em!
See this clip as well (it ends with Maradona’s infamous “hand-of-God” goal against England)… and this, and this!
Google – you have a winner!
Bill Gates Worries about Big Blue, not Google
“The biggest company in the computer industry by far is IBM. They have the four times the employees that I have, way more revenues than I have. IBM has always been our biggest competitor. The press just doesn’t like to write about IBM,” said Gates in an interview on Wednesday ahead of his keynote speech at the Consumer Electronics Show in Las Vegas…
Wait till the Google-Desktop takes over MS-Office.
What’s Google-Desktop? It’s how Google will take over your PC via the web. Fits in nicely with a $100 PC don’t you think?
What does a web-based desktop look like? Take a look at this.
OK, I admit it has a ways to go, but I know Google will do this right. They’re going to add an “open-office” component to the web-desktop. You’ll be able to do your word-processing, your spreadsheets, your presentations, your email, your calendar, your RSS subscriptions, your blog, your IM, your VOIP, your video-conferencing, your downloading, your podcasts, your news, your search, and your shopping all at Google.com. That’s going to be the real Google Pack!
And that’s why AOL went with Google, not Microsoft.
Microsoft will become a B2B software company, and yes, IBM will be the biggest competitor in that space.
Googlespace Update: Video-On-Demand
Let’s see, what is Google’s innovation rate? One new service per month, per week?
Today we’ll see Google-Video and Google-Wallet. CBS is in on the deal with Google. So is the NBA.
Will Google go after the World Cup? If they do, it’s goodbye, Yahoo!
Another interesting day in Googlespace…
Piper Jaffray on Google: Target Price = $600
We believe the stock will hold its multiple a year from now for the following reasons:
• Given the company’s performance, market share gain, and the pipeline of new
products, we believe outperformance is still very likely;
• We expect the global search market to grow by 41% in 2006 and maintain a
CAGR of 37% over the next five years;
• We expect Google to continue to gain market share in 2006. In 2005, the
company gained an additional 5% market share in the U.S. alone;
• Google’s brand continued to gain strength as the release of new innovative
products such as Google Maps and Gmail enhanced the consumer’s Internet
experience;
• Google’s innovations are fueling an impressive pipeline of new initiatives
particularly Google’s Ad Network and Google Base, which should become
notable revenue generators by the end of 2006;
• Expectations for Google most likely remain conservative – we note that we have
raised our forward estimates every quarter of 2005 from our 2006 net revenue
estimate of $4.7B before Google’s Q1 reporting to our current estimate of $8.8B,
an increase of more than 87% since April;
• Despite being the most talked about stock of 2005, GOOG remains significantly
less widely owned than other key technology names and has yet to be added to
the S&P 500.
While the stock may have its ups and downs throughout the year, we believe it will
reach $600 by the end of 2006 and we prefer to have one 12-month price target
rather than raise it every quarter.
The above factors are leading us to raise our one-year price target to $600, sharply higher than our previous $445 target, but based on fundamentally the same reasoning taken one year further out. Our previous target of $445, which GOOG exceeded briefly in intra-day trading in mid-December, was based on 50x our proforma 2006 EPS estimate. Our new price target, which we feel is attainable by GOOG 12 months from now, is based on 50x our 2007 proforma EPS estimate. Although such a high multiple may seem aggressive, we believe that given Google’s dominant position in an already large yet still rapidly growing market, its phenomenal brand power, and its status as a technology leader justifies such a valuation. Also, importantly, it’s likely 2007 estimates will come up throughout the year, as we have seen this pattern for 2006 estimates play out in 2005. As such, we believe the ending multiple will be well below 50x.
We believe Google is an iconic company that, like Microsoft and eBay before it, has defined a new and vital industry. Such market leading technology companies have traditionally traded with peak valuations in the 50x-60x range. EBAY, for example, has traded between 38x and 158x its one-year forward earnings estimate since 2000 with an average forward multiple of 70x. Even excluding the bubble years of pre-2001, eBay had maintained a multiple generally above 55x. Currently the other leading Internet companies, Yahoo, eBay, and Amazon trade at an average of 45x 2006 proforma EPS estimates, with Google only slightly higher than average at 47x (and notably below Amazon’s multiple of 52x). We believe that over the next year as Google’s lead in search and online advertising becomes even more apparent and its growth far exceeds its closest comparables (we predict GOOG will grow revenue by 52% in 2006 while YHOO, EBAY, and AMZN will only grow by 27%, 34%, and 19%, respectively), investors, who may be inclined to take some profit now given GOOG’s gains in 2005, will increase their holdings of Google.
Read the full report on Battelle’s site >>
Another Service in Googlespace
Google keeps on introducing micro-services. Here’s one I find very, very interesting: Blogger Web Comments for Firefox.
Despite the geek-inspired name of the service, it’s another brilliant move. Here’s how it works:
As you visit any given page in Firefox, a comment panel featuring blog posts linking to this page will appear on the bottom right of your browser. Clicking on any of the entries will open that blog post in a new tab. You can toggle between the compact and extended comment lists, or even hide the panel completely. To bring it back, just click the icon or the icon in the lower right corner of your browser and select “View comments.” When there are lots of comments, you can click on the “Show lots more…” link, which will open a new tab in your browser with all Google Blog Search results.
Pretty nifty, ha?
Of course, to add your own comments on the page you’re on, you’ll need to have a Blogger account.
What it does for Google is take it one giant step further into the social-networking-wisdom-of-crowds space. And they didn’t have to acquire anyone to do it.
Learn more about Google’s product development process >>
Joe Vitale: How to Write a Press Release to Get Attention
Just before the last US presidential election, I asked Joe Vitale to write a product press release for one of my clients. The product was a political toy- a frisbee for dogs- one for Kerry-bashers, and one for Bush-bashers.
Here’s what he wrote:
Who Would Your Pet Vote For?
New Online Poll Lets Pets Decide Next US President
If you can’t decide who to vote for this November, there’s a better way to make a decision than flipping a coin: Let your pet decide.
“This race is going to the dogs anyway,” says the three mysterious men in Arizona who created the world’s first polling booth online for pets at http://www.xxxxxx.com
“We thought we would simplify the process by creating a poll where our pets can go vote,” they explain.
The creators also developed a way to determine if your pet is a Republican or Democrat. There are twenty categories of statements. For example:
If your pet likes to display affection in public, it may be a Democrat. If it doesn’t like to show affection, it may be a Republican.
If you pet sues incompetent vets, it may be a Democrat. If it always gets the best in vet care, it may be a Republican.
“We didn’t stop with just the poll,” says the creators. “If your pet wants to get out some aggression, it can get one of our chewable Frisbees and tear the heck out of it.”
It’s a cloth Frisbee with a caricature of either George Bush or John Kerry that has the international sign for “no” across the face. There’s a navy-blue border with stars, and a squeak toy inside.
“People may find it comforting to chew on one, too.”
Who will the pets decide should be our next President?
Watch for the results at http://www.xxxxxx.com
*** end ***
The results? In 48 hours we got 12 responses, 8 for national radio-talk shows. Part of it was the product, part of it was the “is your pet a Democrat or a Republican” angle I dreamed up, part of it was the distribution of the press release. But the most important part was the way in which Joe Vitale captured your attention with words. It was a press release that had to be read.
Copy is king. Hypnotic copy builds kingdoms.
Santa Goes Online: Record Holiday Sales for Online Retailers
Several online merchants reported record sales during the holiday shopping season, including online retail giant Amazon.com, which said popular items were iPod music players, video games, coats and jewelry.
Amazon said it had its best holiday sales season ever, with more than 108 million items ordered. The busiest day for the world’s largest online store was Monday, Dec. 12, when more than 3.6 million items were ordered, or 41 items per second. The most expensive item purchased during the period was a pair of diamond earrings worth $94,000.
A study from Nielsen/NetRatings, Goldman Sachs and Harris Interactive found that between Oct. 29 and Dec. 16 holiday online retail spending reached $25 billion, a 25 percent increase from the same period last year. Shoppers spent the most on clothing, followed by computers and hardware, consumer electronics, books and toys, and video games, the study found.
Read all about it >>
Linking Strategy to Execution
One of these company’s got their strategy right, the other was not so lucky. Of course, it wasn’t luck…
Read this MercerMC commentary on strategic planning >>
Robots Easier to Talk to than Humans
“When answering the android’s questions…Japanese subjects were much more likely to look it in the eye than they were a real person.”
The Economist highlights the agenda behind Japan’s race to perfect their robots:
“Many workers from low-wage countries are eager to work in Japan. The Philippines, for example, has over 350,000 trained nurses, and has been pleading with Japan—which accepts only a token few—to let more in. Foreign pundits keep telling Japan to do itself a favour and make better use of cheap imported labour. But the consensus among Japanese is that visions of a future in which immigrant workers live harmoniously and unobtrusively in Japan are pure fancy. Making humanoid robots is clearly the simple and practical way to go.”
Ouch. Read the article here >.
The Amazon.com Work Process in Pictures
From BusinessWeek: See how the world’s largest online retailer ensures that gifts get delivered on one of the busiest shopping — and shipping — days of the year.
Here >>
Eric Schmidt’s 70 Percent Solution
In an interview in Business 2.0, Google’s CEO explains the magic behind Google’s success: 70/20/10.
What is 70/20/10? It’s how they spend their time at Google:
– 70 percent on the CORE BUSINESS (AdSense, AdWords, Google Search)
– 20 percent on RELATED PROJECTS (Froogle, Google Desktop, Google Local, Google News, Google Print, Google Stocks, Google Toolbar, Google Video)
– 10 percent on NEW BUSINESSES (Blogger, Google Mini, Google Movies, Google Reader, Google Talk, Google Wi-Fi, Picasa)
Here’s how Schmidt describes it:
“…how it works for management: We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative — which I haven’t kept up with myself. God knows what they’ve done in the last week. I’ve been too busy on core search and ads.”
There are some more interesting things in the article. Read it here >>
For more on the Google R&D process, read my post: Google’s Product Development & Management Process Revealed >>
What is Yahoo Really Doing?
“You can probably stitch together our plan from the moves we’ve made, the acquisitions we’ve made, the products we’ve put out to market,” says Bradley Horowitz, Yahoo’s senior director of technology development.
That plan: to try and make social search the next stage in the evolution of search engines.
First Yahoo bought photo-sharing site Flickr, and now it has snapped up bookmarking phenomenon Delicious. Why is Yahoo investing so heavily in the social networking stars of Web 2.0? And why team up with Six Apart to offer blog hosting?
“the real point seems to be the building of an innovative culture that can widen Yahoo’s lens.”
Read all about it in the Guardian
Top 13 Web 2.0 Moments of 2005
Richard Mc Manus has a great post on Web 2.0 highlights in 2005:
– Bloglines acquisition by Ask Jeeves and weblogsinc sale to AOL
– Amazon’s innovations- the Mechanical Turk and Alexa web services
– Microsoft embracing RSS (I’m not impressed with SSE, however)
– Asynchronous JavaScript + XML or AJAX
– Memeoradum and diggs.com
– Googlebase
– Yahoo acquires Flickr and del.icio.us
– eBay buys Skype
– Microsoft’s wakeup to software as a service (see leaked memo here)
– Web 2.0 Conference
– iTunes support of podcasting
– HousingMaps
– Tsunami-help blogs
Read the post here, and add your own highlights to the list!
Innocentive: Open Source Innovation?
The answer to your problem lies outside your company. Why? Because there are more smart people outside your company than in it.
That’s the premise behind InnoCentive, a web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe.
Here’s how it works:
– Companies contract with InnoCentive as “Seekers” to post R&D challenges to the Innocentive web site
– Each Challenge includes a detailed description and requirements, a deadline, and an award amount for the best solution.
– Award amounts are determined by the Seeker and range from $10,000 to $100,000. You can view the list of previous award recipients here.
– The name of the Seeker company posting the Challenge remains confidential and secure.
– Scientists worldwide are eligible to register on the web site as “Solvers.”
– Anyone may view summaries of Challenges at InnoCentive.com. But to view detailed descriptions and actually work on challenges, registration is required.
– To register as a Solver, scientists fill out a short online form, select a username and password, and log in.
– InnoCentive has registered scientists from over 170 countries around the world.
How about that for open source innovation? Vist the site >>
Pheed Read: RSS ads blow away Banner ads
Findings from a very interesting study on RSS advertising by Pheedo:
– Standalone RSS ads are far more successful than inline ads
– Placing RSS ads in every other post yields the highest percentage of click throughs
– RSS content CTR varies significantly based on day of the week
– Mid-week readership of RSS feeds highest
– RSS ads are outperforming similar Web ads
[standalone RSS ads= average CTR of 7.99% versus 20% to 1.17% CTR for rich-media ads]
– Bloglines leads RSS readers in market share
I must say I’m impressed by Pheedo.
Here are the details on their research.
RoCE: Return on Customer Experience
From Lippincott Mercer:
How structural equation modeling helps drive decision-making at a theme park
[click on image to enlarge]
see page 17 from this brilliant issue of Sense.