Disney just bought into Hulu and will provide it with the content (including Mickey Mouse I hope).
Youtube watch out.
Saturday, May 2, 2009
Disney Buys Into Hulu. YouTube Should Be Worried.
Hulu is climbing the ladder in popularity and is ready to be No.2 .
Wednesday, April 29, 2009
Verizon and Microsoft
Vivek commented below on Apple and Verizon teaming up. Here is an article about Verizon and Microsoft teaming up to make a zune-ish phone... We'll see which of these happens, if not both. Verizon noted in their quarterly results the subscriber gains, which were larger than AT&T and iPhone last quarter by 100,000 subscribers or about 8%. A surprise given the popularity of the iphone.
It'll be interesting to see if this settles into a Microsoft-Verizon vs. Apple-AT&T battle. If both articles are correct it's a different dynamic Verizon is setting up by partnering with both Microsoft and Apple. Perhaps that's the smarter move but in the era of exclusive deals it seems unlikely Microsoft or Apple would be all that pleased about the dual approach. I can't imagine they woudl be competing products, but we'll see what happens...
It'll be interesting to see if this settles into a Microsoft-Verizon vs. Apple-AT&T battle. If both articles are correct it's a different dynamic Verizon is setting up by partnering with both Microsoft and Apple. Perhaps that's the smarter move but in the era of exclusive deals it seems unlikely Microsoft or Apple would be all that pleased about the dual approach. I can't imagine they woudl be competing products, but we'll see what happens...
Monday, April 27, 2009
Apple and Verizon
Newsweek reporter Spencer E. Ante reports that Apple and Verizon are in the discussion to launch two devices; an 'iPhone Lite' and a 'Media Pad'.
The article does a good job of laying out the resons for the success and failure of the possible partnership.
But, what if the partnership does happen. Is Mr. Jobs diluting the apple brand with partnering with multiple partners or is he knows hte market and thinks this is the right time to caputre all the consumers at different pricing poits in the market.
A media pad with the ability to make calls using WiFi is the second product that is expected to be launched this summer.
Amazon Kindle, Kindle app for iPhone, Sony reader and now the Apple media pad, are all these complementers, comeptitors or both?
I will update the blog with developments on this front.
Open Stream API (News on Facebook)
With Facebooks new redesign, users are getting more and more data pushed to them in the live feed section of their page. While there have been articles saying that this redesign is both a failure and a success, it is hard to argue that with all of this data available developers could make a new generation of Facebooks apps.
That is what is happening now, as Facebook is giving developers access to all of the data that is streamed and expects them to introduce apps that utilize a whole new realm of previously unavailable data.
http://news.cnet.com/8301-13577_3-10228056-36.html
That is what is happening now, as Facebook is giving developers access to all of the data that is streamed and expects them to introduce apps that utilize a whole new realm of previously unavailable data.
http://news.cnet.com/8301-13577_3-10228056-36.html
Memo to Renault CEO
(For those that still have free time to read some extra stuff)
Putting the consumer in the driver’s seat
As I started doing research about your company and the automotive industry in general I noticed that car innovations in the last decades have been focused on achieving car efficiencies and complying with environmental regulations. While Renault have spent a significant amount of money in research and development, on par with industry average, the results have been rather disappointing for the end consumer. In order for Renault to gain a significant competitive advantage in the auto industry I believe that it needs to change its design process and start putting the end consumer in the driver’s seat.
In the next lines I will develop my argument and explain what I mean by putting the consumer in the driver’s seat. The ideas that you will read might sound unrealistic at first, but you will realize that while they might be too futuristic for the present times, Renault has to invest in the future and change the ways the auto industry has operated since Ford created the production lines, Sloan announced GM mass customization and Toyota perfected the industry with its lean production system.
Why Renault, Why now
Renault is, without a doubt, one of the most significant players in the auto industry today. Its global positioning and access to world talent gives the company the minimum set of tools necessary to survive. However, in order to step ahead and differentiate, those attributes are not enough anymore and they will become less and less important as we move on. Renault’s history of innovation and futuristic design is a great foundation for the challenges ahead. Renault couldn’t be in a better position to set a precedent in the history of the automobile.
Now is the perfect time to invest. While Renault is doing so today in many different arenas, it seems to be doing so in the car of tomorrow but not on the car of the future. Green technologies, safety and efficiencies are mandatory investments today to survive, but I don’t see how any of these technologies are really revolutionizing the way we use and drive cars today.
Other car makers have started to do more for their customers, like GM’s OnStar, but that has not changed fundamentally the way we think about cars. Instead, it has simply broadened the spectrum of possibilities about what a car is and what can it do for its owner. Looking at history, cars are essentially the same as in the 1930’s, a compact steel mass with 4 wheels, an engine and a steering wheel. The panel provides drivers with basically the same information about speed, gas level, and total mileage, with some modernization, of course! I will grant here that the technologies that make the whole work are very different but the essence of the whole hasn’t changed much.
A massive amount of resources is being spent today in the development of a single technology, electric vehicles. So much could be gained if automakers could agree in one standard from the get-go and allocate the extra resources to the development of really revolutionizing technology. Renault could take the lead and start a major change.
The Driver of Tomorrow
Stop for a second to think. Do you believe 100 years from now people will drive cars the same way they do it today? The level of drivers’ sophistication and expectations will be completely different and companies will have to adapt to those user demands. Companies that don’t adapt will die and new players with innovative products and different ways of thinking will rise.
As an example, look at the kind of investment Honda is making today in brain machine interface technology. Simply imagine the possibilities and the impact of such technology in the automotive industry. Another breakthrough idea is self-driving cars. There has not being enough research and investment in this area, and especially big auto makers don’t seems to understand that this vision is not too far away.
The way I see it, there will be 2 well differentiated needs from the driver of tomorrow. First, the “urban driver”, that simply needs a way to get to and from home to the workplace. This need is very basic but important. People don’t want to get stuck wasting time in traffic and focus on driving. Instead, they want to use that time more productively by reading the news, connecting with other people (for work or personal affairs), read a book, etc. Public transportation is very inconvenient and people want the flexibility of having their own mean of transportation. In the future, I believe that “public transportation” will have a very different meaning.
Second, the “weekend driver”, that wants to enjoy driving in the open roads and have control over the automobile. However, the needs of this driver are completely different than today. This driver, even if s/he is in control of the car, s/he still wants easy access to road information, facilities and communication links with multiple other devices and people seamlessly.
Does this mean that each person will have 2 different cars? Maybe, I don’t have the answer and this is what Renault needs to figure out. The solution could be a vehicle that is able to adapt to the different needs.
Smart Roads, Smart Homes
We all know that movements towards a more integrated road system are on its way. Any vehicle will be able to exchange information with other vehicles in the road and with the road itself and the uses of this kind of technology are numerous. However, big auto makers don’t seem to see this as a priority and are delaying innovation. In the case of Renault, I have not found any information indicating that the company understands the need to change the type of innovation in which it invests.
Talking about interconnectivity, vehicles will not only be able to exchange information about the driving conditions, but they will connect with multiple devices at home, work and other locations. For example, a vehicle can retrieve food stock information from the house’s fridge, send the list of products to the supermarket while the driver is going out of work and going home. Smart homes will become more prevalent and cars will become part of the smart home interconnectivity.
Now the question is: can Renault do this alone? The answer is obviously no. I propose two approaches to take on this problem. First, Renault should forge new partnerships with a whole new set of players. Second, open the R&D lab.
Partnerships
In order to achieve high level of success and be a player in every sector of the market, Renault will have to create new links with players that it would not have imagined before. Let me start with an easy and obvious one, Microsoft. Microsoft Auto is helping to change the user experience in the cars by integrating seamlessly car functions with external devices.
Global telecommunication companies like Vodafone will also be of significant importance in the future. Vehicles will need to be connected all the time and exchange information with other devices (in and outside the car) nearby and faraway.
Other high tech companies like Sony, HP or IBM can help Renault to change the rules of the game. Rethinking new ways of satisfying drivers and integrating technologies that these companies already master well in their own domain should be adapted and incorporated in the vehicles of tomorrow.
If you think of data storage and processing, partnering with Google or Amazon could be a smart move from Renault. Renault doesn’t have to become an expert on things that already exist today and it doesn’t have to spend large amount of capital building infrastructure that can be accessed at a very low cost. Finally, with the advent of social networks, Renault could use Facebook or even Twitter to boost a new community of innovators working for Renault. This lead me to the last point: open design
Open Design
As of today, car makers are very secretive about their new designs and innovations. A small group of people spend years in an R&D lab before any of those ideas see the light of the day in a commercial vehicle. Many of those ideas don’t even see the light of the day and die in the lab. The main reason? They were not needed in the first place or they are way too expensive to commercialize. As you see in the graph below, only 17% of the options in cars today are actually sold to consumers.
Figure 1 - Source: http://www.car-innovation.com/pdf/studie_car_innovation_2015.pdf (Page 16)
In my opinion, if Renault were to use the same resources it dedicates to R&D today to foster an external community to brainstorm ideas and collaborate, the return on investment of those resources could double, if not triple. This way Renault would have access to a large pool of talent at a lower rate. Even more, ideas could come directly from Renault customers (or any driver) without them being design experts. Sometimes the smarter idea doesn’t come from the expert in the field.
By adopting this approach, Renault would lose part of what makes its cars unique but it has a lot more to gain. Producing cars that exactly match the needs of its customers and include many more useful features than any competitor can be a clear competitive advantage. Renault wouldn’t even need to produce the car itself, it could outsource that part of the process and become just the hub of ideas and development of final products.
Summing up
The goal of this memo is to start the conversation about the kind of investments Renault should make in the future and what should be the focus of the company in the years to come. Renault today masters the technologies of tomorrow, such as hybrid and electric cars and will be able to monetize those in the short term; I have no doubt about that. However, other auto makers are already thinking ahead and Renault needs to take an overarching vision of the auto industry. In the future, only the auto makers that are able to integrate with other technologies and think as cars in a completely different way, to the point of putting in danger their own business models, are the ones that will be able to reap the benefits of the change.
Memo to Mayor Adrian Fenty, Washington, DC City Government (Final Version)
Elected officials are often re-elected on their ability to avoid economic vicious cycles and create virtuous cycles. In the coming years, IT is going to play a major role for cities that wish to reinforce their virtuous circles of growth. Governments are going to have to become even more open while protecting privacy, increasing security, and facilitating business. All this will have to happen in the mist of cutting costs and reducing the overall burden of government.
Mr. Mayor, your next CTO should be someone who not only manages IT for the city government, but also helps set strategic priorities and implement organizational change for all departments. The next wave of IT for the city is not simple re-engineering the way groups of people do business, it will be about re-engineering the way the entire city government works.
Even the General Service Administration has recognized the intersection of IT and strategic priorities. In a recent report they argued that the country needs to: 1) create an open technology environment, 2) treat data as a national asset, and 3) foster a culture and framework for collaboration.
Swimming in Data
Cities collect massive amounts of data on their citizens and businesses. However, today much of this information remains in data silos, inaccessible to other government entities and the public at large. As both bandwidth and processing power increase, the ability to send much of this data over networks is getting easier.
Once upon a time, cutting edge things like posting land records and ordering duplicate drivers licenses online are now par for the course. Today's cutting edge cities are using this power to streamline complex approval processes, like the city of Brampton has done. Some governments are even employing agile methods to reduce the time to design and deliver. The sheer scale increases in processing power and network bandwidth are opening more and more doors. This will allow cities to set up more one-stop-shops, interact with citizens more online, and reduce frustrations and runarounds. In fact, Consolidation and Shared services are the top two priorities for state CIOs today.
Mashups represent one way of sharing and consolidating services. Mashups publish data and allow the community to create links between data as it suits their needs. Mashups are fast, flexible and provide rich information. Yet, they require a lot of granularity. Many powerful ideas came out of DC's own mashup contest. Imagine how much more could be accomplished if more data were made available.
Yet, mashups require some way of linking two pieces of information, so when it comes to individual people red flags go up. For a time, social security numbers were a de-facto national ID number that could be used to link data on individuals. Civil libertarians are concerned about the idea of a centralized ID number, in light of identity theft and the possibility that other sensitive information about a person could be released. Today the Federal government is revisiting the Federal ID mandate due in part to lack of funding and concerns from civil libertarians. Even still, governments need to find ways to make their databases interoperable while addressing privacy concerns.
Concerns surrounding privacy and security are justifiable and the mayor and CTO are going to have to work together to help define comprehensive rules. It seems that no data is truly safe in light of recent hackers' success in breaching pentagon war planes. Yet almost all records that the government maintains today are digitized in disparate databases. Keeping such information in a less-structured format does not make it more secure. In fact most of it is probably less secure than if it were subject to a comprehensive set of security rules.
So, is it important enough to risk political capital and wade into a morass of privacy issues? Yes. DC has a choice, it can help shape public issue life-cycle or it can wait and have a set of rules thrust upon it once the federal government and other states have set them. Many people have already begun to search for ways of both meeting privacy concerns and publishing valuable information. This isn't just a technology issue, it is a political issue that requires heavy involvement of the political establishment.
The next CTO should establish a working group to outline comprehensive guidelines for working with confidential records. Such a group should include some of the civil libertarians who are opposed to the creation of a national ID, elected officials, and of course technologists. The group will work to ensure that only the right people have access to confidential information.
Once government databases can talk to each other more effectively, governments can aggregate data, make it anonymous, and publish it for study. Civil society can help answer some of the most pressing questions and in some cases, using data that spans decades: How can we reduce the amount of government services a person will need over their lifetime? What predictive factors are there for certain undesirable activities such as crime, bankruptcy or even chronic diseases? We have much of this information today, but it isn't accessible. By studying such data we can contribute to a virtuous cycle by finding better ways of investing in people, developing their self sufficiency, and preventing some from ever falling ill. Otherwise, we will remain behind the curve, doling out cash when people get sick, wind up bankrupt or worse, after a crime has been committed.
Cities will also be able to build better predictive economic models. How much can we expect to collect in taxes from an individual (NPV of a taxpayer)? What programs will increase that person’s earning-power? If economic growth decreases, how much money will the city need to cope with increases in support payments such as unemployment and welfare? Which individuals are more likely to lose their jobs? Which individuals are more likely to lose their homes? What can be done to help them in advance? What neighborhoods are more likely to see an increase in crime?
We are just scratching the surface of such questions today. Having the answers to these questions represents a shift from reactive government to proactive government. And as we begun this post, governments that can be proactive will be able to support virtuous economic cycles. It will also allow government to help people to help other people.
Shared Services
Because the value of physical and social networks is high (proportional to the square of the number of participants) cities must not overlook the power of their own residents. Social networking sites like Facebook and Twitter may be a powerful tool to reshape the culture of cities and drive the decisions of business and social services.
Today, the District government relies on third-party organizations to supply services such as education, drug treatment and mental health. In the future, cities will be able to facilitate peer to peer networks to increase the quality of support and decrease the burden on government coffers. For example, Chicago uses a peer to peer network to monitor elderly during inclement weather. Similar efforts are in use to help those living with certain diseases, mental health illnesses, survivors of violent crimes and so forth.
Social networks also help industries to congregate, just as many pharmaceuticals have recently relocated around New York, Pennsylvania and New Jersey. It isn’t enough today to make an attempt to attract knowledge workers, all cities are making similar attempts. The District must target specific knowledge workers who can benefit from being closer to people with similar interests and work experience, as well as being integrated into DC’s current fabric of workers.
Social networking is also being used by law enforcement to publicize the activities of criminals and monitor the activities of high-school children. Police and neighborhood activists can coordinate to increase the amount of information on neighborhood crimes while limiting access to appropriate levels. This requires close coordination in addition to the ability to maintain confidential records.
Given the increasing prominence of social networking, perhaps the government should investigate the possibility of building an open-source government social networking platform to get more value out of the data in current silos. Then, just like Facebook, developers could write miniature applications to enhance performance. Such a system would undoubtedly prove more reliable and more comprehensive way of organization information than many of the methods we use today.
Change Management
Earlier we discussed how state CIO priorities are consolidation and shared services. This is going to require government agencies to open up even more than before. Resistance to change, especially sweeping changes, is often enough to derail such an undertaking. It isn't simply the technology of change that will be daunting; it is the internal politics of change too. Undoubtedly, workers will feel that their jobs and livelihood will be threatened, in some cases rightly and in some cases not.
To counter this resistance, the Mayor and CTO will need to coordinate closely. The next CTO is going to have to be skilled at establishing a vision for non-IT staff, negotiating with key agents, and building a guiding coalition. The District is going to need to step up spending on retraining staff for new roles. The greatest issues facing the CTO stem from the politics that have arisen because of the technology available today. If the CTO sees his role as battling civil libertarians then he will be doomed to failure. The CTO will need to see himself as a coalition builder who can lead a fractured group uncertain of its own destination.
Final Thoughts
Mr. Mayor, I hope this post has been useful for you. I've included a lot of links to relevant articles.
I hope that when you select your next CTO, you will choose someone who has the soft skills to succeed in addition to the technical skills. The next CTO will need your support to set strategic priorities and implement organizational change for all departments. You should work closely with the CTO to create groups that can tackle divisive issues such as a universal ID number. Remember, the next wave of IT for the city is not simple re-engineering the way groups of people do business, it will be about re-engineering the way the entire city government works.
PS, the posting below was for class discussion.
Mr. Mayor, your next CTO should be someone who not only manages IT for the city government, but also helps set strategic priorities and implement organizational change for all departments. The next wave of IT for the city is not simple re-engineering the way groups of people do business, it will be about re-engineering the way the entire city government works.
Even the General Service Administration has recognized the intersection of IT and strategic priorities. In a recent report they argued that the country needs to: 1) create an open technology environment, 2) treat data as a national asset, and 3) foster a culture and framework for collaboration.
Swimming in Data
Cities collect massive amounts of data on their citizens and businesses. However, today much of this information remains in data silos, inaccessible to other government entities and the public at large. As both bandwidth and processing power increase, the ability to send much of this data over networks is getting easier.
Once upon a time, cutting edge things like posting land records and ordering duplicate drivers licenses online are now par for the course. Today's cutting edge cities are using this power to streamline complex approval processes, like the city of Brampton has done. Some governments are even employing agile methods to reduce the time to design and deliver. The sheer scale increases in processing power and network bandwidth are opening more and more doors. This will allow cities to set up more one-stop-shops, interact with citizens more online, and reduce frustrations and runarounds. In fact, Consolidation and Shared services are the top two priorities for state CIOs today.
Mashups represent one way of sharing and consolidating services. Mashups publish data and allow the community to create links between data as it suits their needs. Mashups are fast, flexible and provide rich information. Yet, they require a lot of granularity. Many powerful ideas came out of DC's own mashup contest. Imagine how much more could be accomplished if more data were made available.
Yet, mashups require some way of linking two pieces of information, so when it comes to individual people red flags go up. For a time, social security numbers were a de-facto national ID number that could be used to link data on individuals. Civil libertarians are concerned about the idea of a centralized ID number, in light of identity theft and the possibility that other sensitive information about a person could be released. Today the Federal government is revisiting the Federal ID mandate due in part to lack of funding and concerns from civil libertarians. Even still, governments need to find ways to make their databases interoperable while addressing privacy concerns.
Concerns surrounding privacy and security are justifiable and the mayor and CTO are going to have to work together to help define comprehensive rules. It seems that no data is truly safe in light of recent hackers' success in breaching pentagon war planes. Yet almost all records that the government maintains today are digitized in disparate databases. Keeping such information in a less-structured format does not make it more secure. In fact most of it is probably less secure than if it were subject to a comprehensive set of security rules.
So, is it important enough to risk political capital and wade into a morass of privacy issues? Yes. DC has a choice, it can help shape public issue life-cycle or it can wait and have a set of rules thrust upon it once the federal government and other states have set them. Many people have already begun to search for ways of both meeting privacy concerns and publishing valuable information. This isn't just a technology issue, it is a political issue that requires heavy involvement of the political establishment.
The next CTO should establish a working group to outline comprehensive guidelines for working with confidential records. Such a group should include some of the civil libertarians who are opposed to the creation of a national ID, elected officials, and of course technologists. The group will work to ensure that only the right people have access to confidential information.
Once government databases can talk to each other more effectively, governments can aggregate data, make it anonymous, and publish it for study. Civil society can help answer some of the most pressing questions and in some cases, using data that spans decades: How can we reduce the amount of government services a person will need over their lifetime? What predictive factors are there for certain undesirable activities such as crime, bankruptcy or even chronic diseases? We have much of this information today, but it isn't accessible. By studying such data we can contribute to a virtuous cycle by finding better ways of investing in people, developing their self sufficiency, and preventing some from ever falling ill. Otherwise, we will remain behind the curve, doling out cash when people get sick, wind up bankrupt or worse, after a crime has been committed.
Cities will also be able to build better predictive economic models. How much can we expect to collect in taxes from an individual (NPV of a taxpayer)? What programs will increase that person’s earning-power? If economic growth decreases, how much money will the city need to cope with increases in support payments such as unemployment and welfare? Which individuals are more likely to lose their jobs? Which individuals are more likely to lose their homes? What can be done to help them in advance? What neighborhoods are more likely to see an increase in crime?
We are just scratching the surface of such questions today. Having the answers to these questions represents a shift from reactive government to proactive government. And as we begun this post, governments that can be proactive will be able to support virtuous economic cycles. It will also allow government to help people to help other people.
Shared Services
Because the value of physical and social networks is high (proportional to the square of the number of participants) cities must not overlook the power of their own residents. Social networking sites like Facebook and Twitter may be a powerful tool to reshape the culture of cities and drive the decisions of business and social services.
Today, the District government relies on third-party organizations to supply services such as education, drug treatment and mental health. In the future, cities will be able to facilitate peer to peer networks to increase the quality of support and decrease the burden on government coffers. For example, Chicago uses a peer to peer network to monitor elderly during inclement weather. Similar efforts are in use to help those living with certain diseases, mental health illnesses, survivors of violent crimes and so forth.
Social networks also help industries to congregate, just as many pharmaceuticals have recently relocated around New York, Pennsylvania and New Jersey. It isn’t enough today to make an attempt to attract knowledge workers, all cities are making similar attempts. The District must target specific knowledge workers who can benefit from being closer to people with similar interests and work experience, as well as being integrated into DC’s current fabric of workers.
Social networking is also being used by law enforcement to publicize the activities of criminals and monitor the activities of high-school children. Police and neighborhood activists can coordinate to increase the amount of information on neighborhood crimes while limiting access to appropriate levels. This requires close coordination in addition to the ability to maintain confidential records.
Given the increasing prominence of social networking, perhaps the government should investigate the possibility of building an open-source government social networking platform to get more value out of the data in current silos. Then, just like Facebook, developers could write miniature applications to enhance performance. Such a system would undoubtedly prove more reliable and more comprehensive way of organization information than many of the methods we use today.
Change Management
Earlier we discussed how state CIO priorities are consolidation and shared services. This is going to require government agencies to open up even more than before. Resistance to change, especially sweeping changes, is often enough to derail such an undertaking. It isn't simply the technology of change that will be daunting; it is the internal politics of change too. Undoubtedly, workers will feel that their jobs and livelihood will be threatened, in some cases rightly and in some cases not.
To counter this resistance, the Mayor and CTO will need to coordinate closely. The next CTO is going to have to be skilled at establishing a vision for non-IT staff, negotiating with key agents, and building a guiding coalition. The District is going to need to step up spending on retraining staff for new roles. The greatest issues facing the CTO stem from the politics that have arisen because of the technology available today. If the CTO sees his role as battling civil libertarians then he will be doomed to failure. The CTO will need to see himself as a coalition builder who can lead a fractured group uncertain of its own destination.
Final Thoughts
Mr. Mayor, I hope this post has been useful for you. I've included a lot of links to relevant articles.
I hope that when you select your next CTO, you will choose someone who has the soft skills to succeed in addition to the technical skills. The next CTO will need your support to set strategic priorities and implement organizational change for all departments. You should work closely with the CTO to create groups that can tackle divisive issues such as a universal ID number. Remember, the next wave of IT for the city is not simple re-engineering the way groups of people do business, it will be about re-engineering the way the entire city government works.
PS, the posting below was for class discussion.
Thursday, April 23, 2009
DC City Government
As a city government, profits are not a relevant way to measure performance. But we can examine revenues vs costs as a salient substitute. Costs and revenues provide feedback for each other. For example, in the late 1980’s the real estate market collapsed and DC soon began to run into fiscal problems. The cuts to city services drove many middle class black families out of the city and the subsequent loss of income taxes further exacerbated the fiscal problems. Abandoned and boarded up houses attracted crime and violence. The city soon had the highest per capita murder rate, highest per capita HIV/AIDS rate and one of the highest high school drop-out rates in the country. Ironically, the city’s decline benefited neighboring jurisdictions as young professionals moved to the suburbs for better schools and safer neighborhoods. The DC government eventually was forced to give up power to a financial control board. The control board, free from the types of political pressures an elected government turned around city finances and economy1.
Given that revenues stem from income taxes, corporate taxes, sales taxes, property taxes (based on home values), and fees the core competence of a government is its ability to bolster the local economy.
Therefore, this paper will examine how Moore’s Law, Metcalfe’s Law and Bandwidth law can reinforce a positive or negative feedback loop in a city economy. I believe that four of the items in the exhibit have the potential to revolutionize the way that city governments perform.
Cities collect massive amounts of data on their citizens and businesses. Such information include licensures, use of services, location, payment of taxes, qualifications for and receipt of city services. However, today much of this information remains in data silo’s, inaccessible to other government entities and even public researchers seeking to find solutions to problems facing cities. As both bandwidth and processing power increase, the ability to send much of this data over networks is also enhanced, provided that such information can be linked together.
For a time, social security numbers were a de-facto national id number. Governments are going to increasingly search for ways to make their databases interoperable. This will allow them to set up more one-stop shops and reduce frustrations and runarounds.
Once such linkages are created, governments can aggregate data, make it anonymous, and publish it for study. Society at large can help governments answer some of their most pressing questions and in some cases, using data that spans decades. How can we reduce the amount of government services a person will need over their lifetime? What predictive factors are there for certain undesirable activities (crime, bankruptcy…).
Cities will be able to facilitate peer to peer networks to decrease the burden on government coffers. Today, Chicago uses a peer to peer network to monitor elderly during inclement weather. Similar efforts are in use to help those living with certain diseases, mental health illnesses, survivors of violent crimes and so forth. Social networking is also being used by federal agencies to monitor the activities of criminals. Police and neighborhood activists can coordinate to increase the amount of information on neighborhood crimes while limiting access to appropriate levels. Further, social networks can be used to enforce compliance
Cities will be able to develop predictive economic models. How much can we expect to collect in taxes from an individual (NPV of a taxpayer)? What programs will increase that person’s earning-power? If economic growth decreases, how much money will the city need to cope with increases in support payments such as unemployment and welfare? Which individuals are more likely to lose their jobs? Which of them are more likely to lose their homes? What can be done to help them in advance? What neighborhoods are more likely to see an increase in crime?
Given that revenues stem from income taxes, corporate taxes, sales taxes, property taxes (based on home values), and fees the core competence of a government is its ability to bolster the local economy.
Therefore, this paper will examine how Moore’s Law, Metcalfe’s Law and Bandwidth law can reinforce a positive or negative feedback loop in a city economy. I believe that four of the items in the exhibit have the potential to revolutionize the way that city governments perform.
Cities collect massive amounts of data on their citizens and businesses. Such information include licensures, use of services, location, payment of taxes, qualifications for and receipt of city services. However, today much of this information remains in data silo’s, inaccessible to other government entities and even public researchers seeking to find solutions to problems facing cities. As both bandwidth and processing power increase, the ability to send much of this data over networks is also enhanced, provided that such information can be linked together.
For a time, social security numbers were a de-facto national id number. Governments are going to increasingly search for ways to make their databases interoperable. This will allow them to set up more one-stop shops and reduce frustrations and runarounds.
Once such linkages are created, governments can aggregate data, make it anonymous, and publish it for study. Society at large can help governments answer some of their most pressing questions and in some cases, using data that spans decades. How can we reduce the amount of government services a person will need over their lifetime? What predictive factors are there for certain undesirable activities (crime, bankruptcy…).
Cities will be able to facilitate peer to peer networks to decrease the burden on government coffers. Today, Chicago uses a peer to peer network to monitor elderly during inclement weather. Similar efforts are in use to help those living with certain diseases, mental health illnesses, survivors of violent crimes and so forth. Social networking is also being used by federal agencies to monitor the activities of criminals. Police and neighborhood activists can coordinate to increase the amount of information on neighborhood crimes while limiting access to appropriate levels. Further, social networks can be used to enforce compliance
Cities will be able to develop predictive economic models. How much can we expect to collect in taxes from an individual (NPV of a taxpayer)? What programs will increase that person’s earning-power? If economic growth decreases, how much money will the city need to cope with increases in support payments such as unemployment and welfare? Which individuals are more likely to lose their jobs? Which of them are more likely to lose their homes? What can be done to help them in advance? What neighborhoods are more likely to see an increase in crime?
Update on Shaws Supermarkets
Though my thoughts are finalized on this yet, here's an update on where I'm going with this at the moment.
Based on Scott and Prof Venkat’s comments, I have expanded my thinking away from the consumer a bit to include other ways a grocery chain can adopt its business model. Although I still think technological changes at the consumer level could have a greater immediate impact to Shaw’s profitability, it’s true that utilizing technology to develop new ways to expand the normal “sell food” business model of grocery stores has very significant longer term potential as well.
I plan to discuss what Shaws can do on a consumer level to get up to speed and even push boundaries in terms of technology, while also exploring what B2B side services can be enabled by technology improvements throughout the value chain.
I've previously mentioned many consumer technology related ideas. On the business side, I have a number of ideas related to Shaw's role of data capturere and retailer of other's goods.
For example, take the shopping data that Shaw's collects. if Shaws were to open or sell access to real-time customer shopping data, companies could add extra value to the shopping experience through coupons and suggestions that influence other products to be purchased. This would give the food suppliers a truly dynamic way to interact with customers and is an example of one of the ancillary revenue streams that Scott and Prof Venkat suggested. Additional examples could include allowing other retail partners access to information such as letting Weber cross sell grill equipment to people who buy lots of hamburgers, etc... At the core, Shaws knows food and retail, and should not deviate too far from their strength, however, creating value through the data they already collect (or will collect once their technology is updated) could be an intersting way to expand the business model. There is one example - I'm working on developing other ideas and ways they can expand their B2B offerings and create value.
Wednesday, April 22, 2009
Memo to Bernard Arnault Chairman and CEO of LVMH (1st Draft)
Memo to Bernard Arnault Chairman and CEO of LVMH
Introduction
LVMH is composed of a fashion side (LV) and a spirits side (MH). This recommendation pertains to the fashion side of LVMH, though could easily be expanded to incorporate the spirits side as well. The LV side of LVMH is made up of:
Louis Vuitton, Marc Jacobs, Pucci, Fendi, StefanoBi, Thomas Pink, Donna Karen, eluxury, Dior, Loewe, Celine, Berluti, Kenzo, Givenchy, Guerlian, Benefit, Fresh, Make Up For Ever, Acqua di Parma, Tag, Zenith, HUBLOT, Fred, Chaumet, De Beers, DSF, Sephora, MCS, La Bon Marche, Samaritaine and Groupe Les Echos along with various other sub brands within these companies, such as Dior Watches.
The future of retailing is of course uncertain, but there is certainty in that the industry is evolving in multiple different directions and no one can predict exactly what path it will follow.
Without an options strategy LV will not be poised to maintain their leadership in the ever-changing retail world, as their company is a behemoth without the ability to move in one cohesive direction. Whether it is Facebook apps, RFID, mirrors that talk to your friends and make fashion recommendations, or some unforeseen game changer, LVMH is not poised to successfully operate in the future.
Basis for Recommendation: The Dire Need for Change
My recommendation is to poise LVMH be completely integrated and nimble enough to turn on a dime and adapt to any new technology. It’s a small victory to be first to implement a new retail technology, but it is a major competitive advantage to organize your internal systems to be able to quickly utilize any new technology, thus ensuring that if your competitors implement something new, you are never far behind with a better iteration. The multi-year, one-brand-at-a-time technology adoption approach is archaic, and by the time the last brand implements a change, it is already out of date.
Currently each brand operates independently or semi-independently with various levels of corporate oversight. LVMH’s role in the fashion empire is essentially to manage each brand and maximize profit. Going forward their role needs to change to one of information broker, central corporate hub, and strategic innovator. LVMH should have pristine companywide data in which to analyze trends and modify their options strategy.
When Sephora has a customer, LVMH may eventually get their customer history and run some reports, but this customer will be entered separately in every brands POS system, and the data is not truly combined in any meaningful way.
Recommendation
I am proposing that LVMH uses their massive computing power from running over 50 separate companies, thousands of servers, massive citrix farms, and multiple underground data centers, and gets into the cloud computing business. LVMH’s job would be to maintain the cloud openly within its brands allowing for mass customization and development. In the long run they could offer cloud computing as an external service. While this is currently outside the scope of this recommendation, it is a feasible option with the computing power they currently control.
LVMH would use the POS system they developed in-house called RMS and host it as SaaS for all of their brands to connect to. Instead of dozens of POS systems and databases there is now only one. Each brand would no longer need their own technicians and legacy systems and would also not need to maintain their own servers and software.
An open API would be provided to every brand to customize the POS system to fit their individual needs. This could go as far as each sales associate and manager having a completely different POS interface when they log into the system.
Data fields such as customer name and address would run from one database provided as a service to all brands. While the display is customized, the data is uniform, and you now have corporate customers instead of individual brand customers. Inventory would be coded per brand for ease of use, but visible to all brands so that a “mirror of the future” can offer suggestions in the store from any of the brands and all items can be ordered on the spot.
System Flexibility: Cascading Benefits
The goal again is not to create a system that will work with the above mentioned mirror, but to create a system that will easily adapt to any new technology that arises. Using the mirror as an example, imagine if you are in Dior buying a dress and the mirror outfits you with Benefit makeup, an LV purse, a Fendi wallet, a Tag watch, a Marc Jacob coat and a De Beers diamond necklace. You friends give you the thumbs up, and The Dior sales associate then sells you this entire order. The dress is wrapped up for you and all of the other merchandise is shipped to your house. A sale of one item now turned into a profit for seven different LVMH brands, and the sales commission of that associate just skyrocketed.
The system provides the ability for your sales associates to make more money, thus increasing their motivation and their loyalty to the company and of course corporate profit. Brands become cross-promoted and the fashion empire becomes one integrated kingdom instead of 50 separate fiefdoms.
“Facebook-like” and “Facebook the Omnipresent”
The POS system would function in the same regard as Facebook with the open API that would allow LVMH to be increasingly more nimble. With Facebook everyone logs into the same site, but everyone’s experience is completely customized with unique apps, different preferences and unique pages. Data is shared in real time and users can talk about their experiences. The LVMH POS system will act in this exact way, having a common underpinning, but allowing for both direct and indirect network effects though the ability of any associate to create value capturing application.
For example say that an associate at Fendi creates an app that allows him to track the weather during each sale. Other Fendi stores like the idea and soon Fendi’s associates and LVMH corporate are rating and talking about the benefits of this app related to staffing and merchandising. This app is of course available for all other brands to utilize.
Next a sales associate at Pucci reads one of these reviews on his homepage, and adds the app to his computer. Shortly thereafter all weather data from both Fendi and Pucci is being captured and analyzed.
If the idea catches on, more and more brands could add this app. You have now given the brands a platform to create dynamic capabilities for the entire corporation. One sales associate can now influence the entire future of LVMH though the creation of these apps.
Furthermore data capture is no longer forced onto an entire brand. If only 5-10 stores from a few brands try a new app LVMH is still provided with great data to analyze. Maybe they deduce that sales are up an average of 7% in malls when it rains since people want to be inside and thus flock to shopping havens. This nugget of info appears for all brands to see and stores that did not even know about the weather app now reap the benefits of more accurate staffing and merchandising.
Retailers have trouble with distinguishing garbage data from useful data and another issue with being able to do anything useful with either type of data. Forcing all brands to track the weather may turn out to be pointless, but if one brand proves it useful others can join in. On the other side, apps that prove fruitless can be abandoned just as easily without other brands having to test them and waste time capturing useless data. This useless data can then be purged from the source system at a much lower cost than having thousands of POS terminals remove the weather flag from their system.
The advantage that this type of data agility gives LVMH is immeasurable. In the past one brand would come with an idea, another may adapt that idea to their legacy system and later both may find out that it was useless data. Now you have two systems with useless non-compatible data. On the other hand, if the data is useful now 50 other brands need to alter their legacy systems to track this new data, thus creating 50 non-compatible databases of the same data.
This system would also be directly linked to an actual Facebook app. Customers would add the app on Facebook, search for themselves in the LVMH database or add themselves as a new customer. They can then get shopping tips, alerts about sales, and track their history. LVMH can directly communicate with each customer, and gain even more information about them.
Shopping Experience
As a customer, when I walk into Thomas Pink, the associates will have my shopping history from all LVMH brands, and will be able to analyze my needs and wants with aggregated data. I would image that being a VIP at Dior and then walking into Fendi for the first time and being treated like a nobody is a big turn off to someone who spends thousands of dollars at a time shopping. This lack of data may quite possibly cost Fendi a large sale.
This new system would adapt to stop this situation. With an RFID store card from any brand the customer is instantly recognized by the system, the sales associates are alerted to the customer name and status, and a New York 5th Avenue Fashionista, can be treated as they are expect when they walk into a new store of a new LVMH brand in LA.
The New Role of LVMH
With the creation of this system the role of LVMH changes as noted above. They are now charged with maintaining data integrity, spotting emerging trends, enabling the system to adapt to these trends, and constantly innovating and adding features that advance the industry. As Apple has migrated from a hardware/software/manufacturing company to a design firm, so will LVMH migrate from a corporate enforcer to a constant innovator and player of the options game.
RFID, Facebook and intelligent mirrors are all potential options, and LVMH can interpret the data for themselves and decide which ones to invest in. However, this integrated SaaS system in the cloud allows LVMH to take an options strategy and quickly adapt to new technologies. No longer will 50 brands across thousands of store in dozens of countries have to individually upgrade their systems, and no longer will Benefit Cosmetics have to maintain a clone install of their POS machines and reapply this clone to every register worldwide upon every tiny change. Now all cosmetic modifications can be made at the associate level, but enterprise wide upgrades are made only once and are accessible to all stores.
These enterprise-wide upgrades will be along the lines of adding RFID functionality, or creating an interface to the personal mirror. As noted LVMH will be trying to predict the future, but they will now be armed with an organization that can quickly adapt to change, can instantly test pilot ideas across the globe, and can interact as never before.
Introduction
LVMH is composed of a fashion side (LV) and a spirits side (MH). This recommendation pertains to the fashion side of LVMH, though could easily be expanded to incorporate the spirits side as well. The LV side of LVMH is made up of:
Louis Vuitton, Marc Jacobs, Pucci, Fendi, StefanoBi, Thomas Pink, Donna Karen, eluxury, Dior, Loewe, Celine, Berluti, Kenzo, Givenchy, Guerlian, Benefit, Fresh, Make Up For Ever, Acqua di Parma, Tag, Zenith, HUBLOT, Fred, Chaumet, De Beers, DSF, Sephora, MCS, La Bon Marche, Samaritaine and Groupe Les Echos along with various other sub brands within these companies, such as Dior Watches.
The future of retailing is of course uncertain, but there is certainty in that the industry is evolving in multiple different directions and no one can predict exactly what path it will follow.
Without an options strategy LV will not be poised to maintain their leadership in the ever-changing retail world, as their company is a behemoth without the ability to move in one cohesive direction. Whether it is Facebook apps, RFID, mirrors that talk to your friends and make fashion recommendations, or some unforeseen game changer, LVMH is not poised to successfully operate in the future.
Basis for Recommendation: The Dire Need for Change
My recommendation is to poise LVMH be completely integrated and nimble enough to turn on a dime and adapt to any new technology. It’s a small victory to be first to implement a new retail technology, but it is a major competitive advantage to organize your internal systems to be able to quickly utilize any new technology, thus ensuring that if your competitors implement something new, you are never far behind with a better iteration. The multi-year, one-brand-at-a-time technology adoption approach is archaic, and by the time the last brand implements a change, it is already out of date.
Currently each brand operates independently or semi-independently with various levels of corporate oversight. LVMH’s role in the fashion empire is essentially to manage each brand and maximize profit. Going forward their role needs to change to one of information broker, central corporate hub, and strategic innovator. LVMH should have pristine companywide data in which to analyze trends and modify their options strategy.
When Sephora has a customer, LVMH may eventually get their customer history and run some reports, but this customer will be entered separately in every brands POS system, and the data is not truly combined in any meaningful way.
Recommendation
I am proposing that LVMH uses their massive computing power from running over 50 separate companies, thousands of servers, massive citrix farms, and multiple underground data centers, and gets into the cloud computing business. LVMH’s job would be to maintain the cloud openly within its brands allowing for mass customization and development. In the long run they could offer cloud computing as an external service. While this is currently outside the scope of this recommendation, it is a feasible option with the computing power they currently control.
LVMH would use the POS system they developed in-house called RMS and host it as SaaS for all of their brands to connect to. Instead of dozens of POS systems and databases there is now only one. Each brand would no longer need their own technicians and legacy systems and would also not need to maintain their own servers and software.
An open API would be provided to every brand to customize the POS system to fit their individual needs. This could go as far as each sales associate and manager having a completely different POS interface when they log into the system.
Data fields such as customer name and address would run from one database provided as a service to all brands. While the display is customized, the data is uniform, and you now have corporate customers instead of individual brand customers. Inventory would be coded per brand for ease of use, but visible to all brands so that a “mirror of the future” can offer suggestions in the store from any of the brands and all items can be ordered on the spot.
System Flexibility: Cascading Benefits
The goal again is not to create a system that will work with the above mentioned mirror, but to create a system that will easily adapt to any new technology that arises. Using the mirror as an example, imagine if you are in Dior buying a dress and the mirror outfits you with Benefit makeup, an LV purse, a Fendi wallet, a Tag watch, a Marc Jacob coat and a De Beers diamond necklace. You friends give you the thumbs up, and The Dior sales associate then sells you this entire order. The dress is wrapped up for you and all of the other merchandise is shipped to your house. A sale of one item now turned into a profit for seven different LVMH brands, and the sales commission of that associate just skyrocketed.
The system provides the ability for your sales associates to make more money, thus increasing their motivation and their loyalty to the company and of course corporate profit. Brands become cross-promoted and the fashion empire becomes one integrated kingdom instead of 50 separate fiefdoms.
“Facebook-like” and “Facebook the Omnipresent”
The POS system would function in the same regard as Facebook with the open API that would allow LVMH to be increasingly more nimble. With Facebook everyone logs into the same site, but everyone’s experience is completely customized with unique apps, different preferences and unique pages. Data is shared in real time and users can talk about their experiences. The LVMH POS system will act in this exact way, having a common underpinning, but allowing for both direct and indirect network effects though the ability of any associate to create value capturing application.
For example say that an associate at Fendi creates an app that allows him to track the weather during each sale. Other Fendi stores like the idea and soon Fendi’s associates and LVMH corporate are rating and talking about the benefits of this app related to staffing and merchandising. This app is of course available for all other brands to utilize.
Next a sales associate at Pucci reads one of these reviews on his homepage, and adds the app to his computer. Shortly thereafter all weather data from both Fendi and Pucci is being captured and analyzed.
If the idea catches on, more and more brands could add this app. You have now given the brands a platform to create dynamic capabilities for the entire corporation. One sales associate can now influence the entire future of LVMH though the creation of these apps.
Furthermore data capture is no longer forced onto an entire brand. If only 5-10 stores from a few brands try a new app LVMH is still provided with great data to analyze. Maybe they deduce that sales are up an average of 7% in malls when it rains since people want to be inside and thus flock to shopping havens. This nugget of info appears for all brands to see and stores that did not even know about the weather app now reap the benefits of more accurate staffing and merchandising.
Retailers have trouble with distinguishing garbage data from useful data and another issue with being able to do anything useful with either type of data. Forcing all brands to track the weather may turn out to be pointless, but if one brand proves it useful others can join in. On the other side, apps that prove fruitless can be abandoned just as easily without other brands having to test them and waste time capturing useless data. This useless data can then be purged from the source system at a much lower cost than having thousands of POS terminals remove the weather flag from their system.
The advantage that this type of data agility gives LVMH is immeasurable. In the past one brand would come with an idea, another may adapt that idea to their legacy system and later both may find out that it was useless data. Now you have two systems with useless non-compatible data. On the other hand, if the data is useful now 50 other brands need to alter their legacy systems to track this new data, thus creating 50 non-compatible databases of the same data.
This system would also be directly linked to an actual Facebook app. Customers would add the app on Facebook, search for themselves in the LVMH database or add themselves as a new customer. They can then get shopping tips, alerts about sales, and track their history. LVMH can directly communicate with each customer, and gain even more information about them.
Shopping Experience
As a customer, when I walk into Thomas Pink, the associates will have my shopping history from all LVMH brands, and will be able to analyze my needs and wants with aggregated data. I would image that being a VIP at Dior and then walking into Fendi for the first time and being treated like a nobody is a big turn off to someone who spends thousands of dollars at a time shopping. This lack of data may quite possibly cost Fendi a large sale.
This new system would adapt to stop this situation. With an RFID store card from any brand the customer is instantly recognized by the system, the sales associates are alerted to the customer name and status, and a New York 5th Avenue Fashionista, can be treated as they are expect when they walk into a new store of a new LVMH brand in LA.
The New Role of LVMH
With the creation of this system the role of LVMH changes as noted above. They are now charged with maintaining data integrity, spotting emerging trends, enabling the system to adapt to these trends, and constantly innovating and adding features that advance the industry. As Apple has migrated from a hardware/software/manufacturing company to a design firm, so will LVMH migrate from a corporate enforcer to a constant innovator and player of the options game.
RFID, Facebook and intelligent mirrors are all potential options, and LVMH can interpret the data for themselves and decide which ones to invest in. However, this integrated SaaS system in the cloud allows LVMH to take an options strategy and quickly adapt to new technologies. No longer will 50 brands across thousands of store in dozens of countries have to individually upgrade their systems, and no longer will Benefit Cosmetics have to maintain a clone install of their POS machines and reapply this clone to every register worldwide upon every tiny change. Now all cosmetic modifications can be made at the associate level, but enterprise wide upgrades are made only once and are accessible to all stores.
These enterprise-wide upgrades will be along the lines of adding RFID functionality, or creating an interface to the personal mirror. As noted LVMH will be trying to predict the future, but they will now be armed with an organization that can quickly adapt to change, can instantly test pilot ideas across the globe, and can interact as never before.
CEO Memo for Gap
Mr. Glenn Murphy, CEO of Gap,
The retail industry was originally a specialized model operating in local markets and offering limited selection – requiring shoppers to visit the local cheese shop to purchase cheese and the butcher for meat. The industry then gravitated to mass economies of scale and standardization. This had a tremendous effect on improving operational efficiencies, but at the cost of losing the intimate relationship with the customer. Today the industry, driven by the consumer’s appeal for self-identity and differentiation, is moving back towards specialization sparking initiatives of customer involvement and customization.
Gap is suffering from an identity crisis. It has terminated its unsuccessful Forth & Towne brand only a few years after its launch. For its three core brands, including its flagship Gap brand as well as Old Navy and Banana Republic, the company is undergoing store closings after years of overexpansion. No longer can it rely on producing khaki’s and chino’s on a mass scale. There are too many competent players with superior brand equity who have entered this space forcing Gap to compete on price.
Gap added piperlime.com last year as a continuing initiative to develop its online presence. By combining all three of its brands’ websites and with the addition of piperlime.com, Gap is trying to become an Amazon.com influenced one-stop marketplace for fashion apparel, accessories and footwear. Piperlime sells shoes and handbags, a market that had been underserved by Gap. Interestingly, Piperlime does not sell its own products, but rather is simply a marketplace selling third party branded products. Gap customers can select designer brand items to complete their entire wardrobe without leaving Gap’s domain. However, it is questionable whether Piperlime will be a success as it fails to help Gap differentiate itself from other competing online stores.
To succeed, I argue the need for Gap to rebuild its relationship with its customers by taking advantage of today’s interconnectedness. Gap can inexpensively leverage its scale with suppliers to offer a personalized solution to meet the popular consumer trend for customized clothing to suite the desire of individualism. Gap needs to leverage the expertise of its customer base through several social networking initiatives, two of which will be central to this memo; auction markets and customer design.
For too long retail has been getting innovation wrong by focusing on low order innovation, such as marginally improving the process of design, manufacture, or logistics. Small revolutionary retailers such as Netflix or Threadless have challenged the status quo, leaving past leading retailers behind. These unresponsive modes of behavior and self-defeating habits lead to the failure of retailers to meet the challenge of re-invention.
As a leading retailer, Gap ought to be at the forefront of this trend by innovating in ways that will create a more sustainable model of growth. A CEO ought not to focus on the lower end/reactionary innovations, but rather innovation of a different order. Simply having a Facebook page is not enough. To leverage the network through consumer engagement within their business model can be only accomplished with the stewardship of the CEO leading the transformation of Gap from a firm centric approach of design and innovation to a more network based approach.
Empowering the customer in the design process is a critical component to improving customer loyalty. Gap should offer customers a way to design and customize their clothing, such as modifying size, color, pockets, and other specs. Utilize social networking and social retailing to involve the customer in the design process. This should help control inventory by avoiding spoilage as well as reduce the need for discounting which tarnishes the brand in the long-run. Most importantly, customer design provides the customer with the feeling of involvement with the brand. Customers are more loyal to support a brand they feel a part of and have a stake in its success.
As fashion is a fickle industry it is a challenge for any design team to accurately predict the popular trends. Gap can leverage auction markets to better forecast demand. This will result in direct benefits such as a more efficient design process and an improved optimization of shelf space with the clothes that are most likely going to sell well. Having a better assessment of what will sell reduces inventory risk. Auction markets should not only be utilized prior to the new fashion season, but should be continued throughout the season to get a sense of consumer behavior, enabling Gap the flexibility to change what it manufacturers to reflect real time shifts in consumer preference and sales patterns. Speed to market and having the dynamic capabilities to adapt to changing conditions is as important as choosing the correct fashion.
Along with the auction system, Gap should consider holding design contests to help globalize their design department. This model is similar to Threadless, but with Gap’s globally recognized name, such a model could dramatically alter their design program. Rather than rely on a couple hundred designers in one of two locations, Gap could utilize millions of aspirational designers across the world. Gap’s design team decides which designs fit the Gap brand and which are feasible for production, and then allows the market to decide which design Gap should produce for the upcoming season. This should bring more traffic to the site as more and more people will be drawn to provide their input as well as should drive traffic into the stores as consumers are more willing to support a brand they feel they have a vested interest in seeing succeed.
What is most remarkable regarding the above recommendations is that they aren’t new ideas. In fact, these technologies are currently out in the marketplace and being used by companies in multiple industries across the world. With the advances we have seen in bandwidth, Metcalfe and Moore’s laws, the network infrastructure allows companies of all sizes to revolutionize their fundamental models. The critical success factor for companies is having a leader who believes in this shift to the network and is willing to change an organization that has been accustomed to its set of ways.
The retail industry was originally a specialized model operating in local markets and offering limited selection – requiring shoppers to visit the local cheese shop to purchase cheese and the butcher for meat. The industry then gravitated to mass economies of scale and standardization. This had a tremendous effect on improving operational efficiencies, but at the cost of losing the intimate relationship with the customer. Today the industry, driven by the consumer’s appeal for self-identity and differentiation, is moving back towards specialization sparking initiatives of customer involvement and customization.
Gap is suffering from an identity crisis. It has terminated its unsuccessful Forth & Towne brand only a few years after its launch. For its three core brands, including its flagship Gap brand as well as Old Navy and Banana Republic, the company is undergoing store closings after years of overexpansion. No longer can it rely on producing khaki’s and chino’s on a mass scale. There are too many competent players with superior brand equity who have entered this space forcing Gap to compete on price.
Gap added piperlime.com last year as a continuing initiative to develop its online presence. By combining all three of its brands’ websites and with the addition of piperlime.com, Gap is trying to become an Amazon.com influenced one-stop marketplace for fashion apparel, accessories and footwear. Piperlime sells shoes and handbags, a market that had been underserved by Gap. Interestingly, Piperlime does not sell its own products, but rather is simply a marketplace selling third party branded products. Gap customers can select designer brand items to complete their entire wardrobe without leaving Gap’s domain. However, it is questionable whether Piperlime will be a success as it fails to help Gap differentiate itself from other competing online stores.
To succeed, I argue the need for Gap to rebuild its relationship with its customers by taking advantage of today’s interconnectedness. Gap can inexpensively leverage its scale with suppliers to offer a personalized solution to meet the popular consumer trend for customized clothing to suite the desire of individualism. Gap needs to leverage the expertise of its customer base through several social networking initiatives, two of which will be central to this memo; auction markets and customer design.
For too long retail has been getting innovation wrong by focusing on low order innovation, such as marginally improving the process of design, manufacture, or logistics. Small revolutionary retailers such as Netflix or Threadless have challenged the status quo, leaving past leading retailers behind. These unresponsive modes of behavior and self-defeating habits lead to the failure of retailers to meet the challenge of re-invention.
As a leading retailer, Gap ought to be at the forefront of this trend by innovating in ways that will create a more sustainable model of growth. A CEO ought not to focus on the lower end/reactionary innovations, but rather innovation of a different order. Simply having a Facebook page is not enough. To leverage the network through consumer engagement within their business model can be only accomplished with the stewardship of the CEO leading the transformation of Gap from a firm centric approach of design and innovation to a more network based approach.
Empowering the customer in the design process is a critical component to improving customer loyalty. Gap should offer customers a way to design and customize their clothing, such as modifying size, color, pockets, and other specs. Utilize social networking and social retailing to involve the customer in the design process. This should help control inventory by avoiding spoilage as well as reduce the need for discounting which tarnishes the brand in the long-run. Most importantly, customer design provides the customer with the feeling of involvement with the brand. Customers are more loyal to support a brand they feel a part of and have a stake in its success.
As fashion is a fickle industry it is a challenge for any design team to accurately predict the popular trends. Gap can leverage auction markets to better forecast demand. This will result in direct benefits such as a more efficient design process and an improved optimization of shelf space with the clothes that are most likely going to sell well. Having a better assessment of what will sell reduces inventory risk. Auction markets should not only be utilized prior to the new fashion season, but should be continued throughout the season to get a sense of consumer behavior, enabling Gap the flexibility to change what it manufacturers to reflect real time shifts in consumer preference and sales patterns. Speed to market and having the dynamic capabilities to adapt to changing conditions is as important as choosing the correct fashion.
Along with the auction system, Gap should consider holding design contests to help globalize their design department. This model is similar to Threadless, but with Gap’s globally recognized name, such a model could dramatically alter their design program. Rather than rely on a couple hundred designers in one of two locations, Gap could utilize millions of aspirational designers across the world. Gap’s design team decides which designs fit the Gap brand and which are feasible for production, and then allows the market to decide which design Gap should produce for the upcoming season. This should bring more traffic to the site as more and more people will be drawn to provide their input as well as should drive traffic into the stores as consumers are more willing to support a brand they feel they have a vested interest in seeing succeed.
What is most remarkable regarding the above recommendations is that they aren’t new ideas. In fact, these technologies are currently out in the marketplace and being used by companies in multiple industries across the world. With the advances we have seen in bandwidth, Metcalfe and Moore’s laws, the network infrastructure allows companies of all sizes to revolutionize their fundamental models. The critical success factor for companies is having a leader who believes in this shift to the network and is willing to change an organization that has been accustomed to its set of ways.
Textron CEO Memo Update
Textron's long history has given them years of experience designing and repairing many of their products, including the world's most popular aircraft, the Cessna 172. While I believe they have leveraged IT within their organization, I cannot find any information that they have been able to use IT to leverage their vast customer base. For example, there are clubs dedicated to many of their products where users can share their experiences and knowledge of operating Textron products, but the company itself offers no such service nor does it seem to interact with these clubs in any way. I believe creating a network for larger scale customer interaction could allow Textron to do anything from maintain good customer relations to conduct analytics on equipment performance. This would enable the company to take advantage of a vast array of information currently only accessible to owners and local repair personnel.
.
In my memo, I plan to describe a strategy for the company to take advantage of many of the recent changes in information technology to allow the company to take advantage of their long running customer base. In addition to access to information, I believe this would allow Textron to pull a thread through areas of the value chain where they currently do not have a presence (such as with many localized service centers around the world).
Thoughts on CEO Memo
In thinking about my CEO memo for ThermoFisher Scientific, my mind keeps going back to the business shifts that have happened in both the financial industry and the retail industry where large amounts of processing capacity and bandwidth have dramatically altered the way that value propositions need to be made in those industries. The element that interests me the most is how the build up of processing power in the hands of Amazon led them to exploit cloud processing models, which was completely out of their original line of business, but has placed them at the forefront of an emerging new ecosystem of services.
In thinking about ThermoFisher, one of the worlds largest producers of scientific analysis equipment, I can't shake the thought that each one of these analysis assets (which is found in every biotech, pharmaceutical, hosipital, etc.) has a datasystem hooked up to it which in the past decade has been engineered to pool scientific data from multiple units for integrative analysis. If one follows the trends that we have discussed in this class to their logical conclusion, then a potential service must exist where a player could pool all of that scientific analysis together and run massive collective research functions at a cloud-based service structure and charge on a transaction basis, much in the same way Amazon is doing. This would allow for smaller laboratories to access massive amounts of research without making a huge investment in processing power (a business that ThermoFisher does not get anyway since they do not make computers) and also allow larger businesses to save money by being able to divest their server farms. This would also provide massive postive feedback effects to Thermo, since they would be able to get real-time live analysis of what kind of research is being done and therefore be able to invest their R&D dollars in the proper place (much like GE and the smart jet engines).
In thinking about ThermoFisher, one of the worlds largest producers of scientific analysis equipment, I can't shake the thought that each one of these analysis assets (which is found in every biotech, pharmaceutical, hosipital, etc.) has a datasystem hooked up to it which in the past decade has been engineered to pool scientific data from multiple units for integrative analysis. If one follows the trends that we have discussed in this class to their logical conclusion, then a potential service must exist where a player could pool all of that scientific analysis together and run massive collective research functions at a cloud-based service structure and charge on a transaction basis, much in the same way Amazon is doing. This would allow for smaller laboratories to access massive amounts of research without making a huge investment in processing power (a business that ThermoFisher does not get anyway since they do not make computers) and also allow larger businesses to save money by being able to divest their server farms. This would also provide massive postive feedback effects to Thermo, since they would be able to get real-time live analysis of what kind of research is being done and therefore be able to invest their R&D dollars in the proper place (much like GE and the smart jet engines).
Is our information safe?
I was surprised to see on cnn.com this morning and article that said, "hackers stole data on Pentagon's newest fighter jet". The article went on to say that, "thousands of confidential files on the U.S. military's most technologically advanced fighter aircraft have been compromised by unknown computer hackers over the past two years". Although no classified information was accessed, it is scary to think that the US government's "most technologically advanced fighter aircraft" is not impervious to attacks.
http://www.cnn.com/2009/US/04/21/pentagon.hacked/index.html
http://www.cnn.com/2009/US/04/21/pentagon.hacked/index.html
Tuesday, April 21, 2009
CEO Memo - New Balance
I have decided to change the company of my CEO memo to New Balance. I interned at New Balance over the summer so I have insights into the company both as an employee and consumer. Some of the issues I will focus on are: social networks, co-creation and data management.
Health 2.0
Following up on our previous discussions on health care and the use of social networks for patients and doctors, EHR, take a look at this article on health communities:
Oracle Sun Mashup
How come nobody has written about the Oracle Sun deal yet?! With this latest acquisition, Oracle will be all over that Microsoft chart from Prof. Venkat's class. This NYTimes article talks about how enterprises now prefer to get all their software and hardware needs from a single company. Although, wouldn't this make you highly dependent on your provider? They say Oracle has taken over Sun to enter into the hardware business. But along with all those cloud computing servers, comes Sun's pretty impressive software. Java, on which many software systems and mobile platforms run (including Oracle's own middleware), comes with this deal. MySQL the popular and free database from Sun, which has been a pain for database providers like Oracle, is also under Oracle's control now. Oracle could very well choose to "kill MySQL from neglect". This could have an impact on all those technologies (especially open source), which use MySQL.
Oracle acted quickly after IBM's failed attempt to grab Sun, and has put itself in an advantageous position against IBM (which is a strong competitor with its DB2).
Oracle acted quickly after IBM's failed attempt to grab Sun, and has put itself in an advantageous position against IBM (which is a strong competitor with its DB2).
Monday, April 20, 2009
Healthcare and IT
--
There is an interesting section in the latest Economist on Healthcare and IT. The synopsis starts as follows.. "The convergence of biology and engineering is turning health care into an information industry..." It covers some of the ideas that we have discussed in class-including personalized medicine and health 2.0. It is of interest to not only the two groups that focused on the transformation of healthcare but also those developing their memos to the CEOs in the healthcare sector.
There is an interesting section in the latest Economist on Healthcare and IT. The synopsis starts as follows.. "The convergence of biology and engineering is turning health care into an information industry..." It covers some of the ideas that we have discussed in class-including personalized medicine and health 2.0. It is of interest to not only the two groups that focused on the transformation of healthcare but also those developing their memos to the CEOs in the healthcare sector.
John Deere Memo Update
Over the last 10 years, John Deere, a maker of agricultural and construction equipment, has been an industry leader in using IT to maximize productivity and minimize costs for its customers. For Deere, the most important strategic question is not how it can create value for its customers w/IT - Deere has done a great job of that and will likely continue to be a leader in this area - the most important strategic questions are: 1) what can Deere do to capture its fair share of this value; 2) how can Deere maximize the total value it creates for its customers and, in turn, for itself; and 3) how can Deere ensure that it will continue to capture this value in the future?
I will focus on the agricultural sector in the memo and have come up with a recommendation that I think does a good job of addressing questions 1) and 2):
Deere's tractors are currently interface with 2 major IT systems: a telemetrics system, which is developed and operated in partnership with Qualcomm, and farm management software, which runs as standalone applications that process field data collected by sensors on the tractors. Since the tractors are GPS-enabled, the farm management software can determine exactly how each square foot of soil should be prepared the following year. This leads to significant reductions in pesticide and fertilizer costs and higher crop yields for the farmer.
I plan to recommend that Deere merge its farm management software with its telemetrics system so that it can offer the software as a service. This would allow Deere to charge on a per-acre basis each year (capture its fair share of the value) and would allow it to sell the service to farms of all sizes (maximize the total value by selling to all segments). The part I haven't quite figured out yet is how Deere can ensure that it will continue to capture the value into the future, which gets at the question of open vs. closed architecture.
So far, Deere has kept its architecture entirely open. This has served the company well, since it has enabled advanced operation of third party equipment, like sprayers and fertilizers, from the driver's seat. It has also allowed third-party software to be easily integrated with Deere's equipment to offer key functionality. However, an entirely open architecture could potentially allow 3rd parties to offer the same farm management software services as Deere, which would lead to lost revenue and pressure on margins. So, the question is should Deere change its open architecture policy and become "strategically open" to protect its software services business? If so, which services should it protect and what changes are required to do so?
My current thinking is that Deere should somehow close the architecture around data that can only be collected by its tractors (i.e. machine diagnostics and crop/soil info, although the latter gets a little tricky since it could also be collected by peripheral equipment) and remain open in all other areas so that Deere can continue to integrate with 3rd party operating software, equipment, and subcomponents. If anyone has thoughts on this I'd appreciate your comments.
I will focus on the agricultural sector in the memo and have come up with a recommendation that I think does a good job of addressing questions 1) and 2):
Deere's tractors are currently interface with 2 major IT systems: a telemetrics system, which is developed and operated in partnership with Qualcomm, and farm management software, which runs as standalone applications that process field data collected by sensors on the tractors. Since the tractors are GPS-enabled, the farm management software can determine exactly how each square foot of soil should be prepared the following year. This leads to significant reductions in pesticide and fertilizer costs and higher crop yields for the farmer.
I plan to recommend that Deere merge its farm management software with its telemetrics system so that it can offer the software as a service. This would allow Deere to charge on a per-acre basis each year (capture its fair share of the value) and would allow it to sell the service to farms of all sizes (maximize the total value by selling to all segments). The part I haven't quite figured out yet is how Deere can ensure that it will continue to capture the value into the future, which gets at the question of open vs. closed architecture.
So far, Deere has kept its architecture entirely open. This has served the company well, since it has enabled advanced operation of third party equipment, like sprayers and fertilizers, from the driver's seat. It has also allowed third-party software to be easily integrated with Deere's equipment to offer key functionality. However, an entirely open architecture could potentially allow 3rd parties to offer the same farm management software services as Deere, which would lead to lost revenue and pressure on margins. So, the question is should Deere change its open architecture policy and become "strategically open" to protect its software services business? If so, which services should it protect and what changes are required to do so?
My current thinking is that Deere should somehow close the architecture around data that can only be collected by its tractors (i.e. machine diagnostics and crop/soil info, although the latter gets a little tricky since it could also be collected by peripheral equipment) and remain open in all other areas so that Deere can continue to integrate with 3rd party operating software, equipment, and subcomponents. If anyone has thoughts on this I'd appreciate your comments.
Saturday, April 18, 2009
Ford Bets the Fiesta on Social Networking
Wired has an interesting article on Ford's efforts to make their cars appeal to the millennial generation. Part of their efforts to create buzz about the upcoming Fiesta models included giving 100 cars away to people who would discuss their experiences through their Facebook, Twitter, YouTube and Flickr accounts.
Pirate Bay verdict and its impact on Google
The owners and operators of Thepiratebay.org were sentenced to one year in prison and ordered to pay compensation and damages in totalling $3.6 million dollars.
Piratebay DOES not hold content but only provides index to the data stored on individual computers.Google provides similar indexing facility, thus there is abig debate about 'who is the bigger"pirate"?'.
Check out the news at
Why Google Is The New Pirate Bay
This verdict has again raised the same questions gain;
1. Will the law be able to keep up to technological developments.
2. What kind of revenue model can solve the problem without putting unnecessary load on the justice system time and time again.
Google has already been notified by the Newspaper industry to start paying up for the news that it aggregates , now with this verdict threatening the basic search model of Google, how will the whole industry shape up?
Thursday, April 16, 2009
A Discussion on Healthcare and IT
This blogpost from Microsoft elaborates on some of the issues that we have discussed in our class about the need for interoperability of data within the healthcare system. The two key issues holding us back are:
First, there is the “it’s-my-data” wall put up by hospitals, insurance plans, pharmacy benefit managers, and others......
The second wall is the “waiting-for-the-right-standards-set-by-government” wall. There are multiple excuses buttressing this wall; the core of which come down to technology, standards or policy excuses.
--
The blog is worth reviewing for those dealing with healthcare IT and in other sectors where similar ideas may be holding us back from making significant strides.
Wednesday, April 15, 2009
Reinventing the Home Phone? (Verizon)
Here is the businessweek article discussing the Verizon Hub. It shows that the hub even limits some functionality that Verizon already has built into their phones.
http://www.businessweek.com/magazine/content/09_15/b4126065685084.htm
Thought it would be useful to read after todays discussion.
--jz
http://www.businessweek.com/magazine/content/09_15/b4126065685084.htm
Thought it would be useful to read after todays discussion.
--jz
Tuesday, April 14, 2009
eBay Spinning Off Skype
Skype was mentioned again in the mobile presentation Monday, and eBay just announced that they will spin off Skype next year through an IPO. As most of you are aware, eBay has struggled to justify the price they paid for Skype and they later had to write down much of that value, and this "un-doing" of the acquisition is due to limited synergies with eBay's other services. However, Skype is still growing at a rapid pace, and it'll be interesting to see how this IPO will go down, especially during the current economic environment with very few IPOs taking place.
Thinking of a Social Network Strategy for your memos?
For those of you thinking of building a Social Network strategy for your memos I wanted to share with you this link to Forrester Research which gives some insight of how social network activity can be segmented and where should money be spend.
Monday, April 13, 2009
Disrupters: No more phone bills
Vonage, MagicJack and other such VoIP services are already luring customers away from traditional wireline phone services, but they all require users to pay a monthly/yearly fee. But there's a disrupter which only requires users to pay for the cost of the device - and no service fees thereafter.
http://money.cnn.com/2008/12/09/technology/copeland_ooma.fortune/index.htm?postversion=2008120915
http://money.cnn.com/2008/12/09/technology/copeland_ooma.fortune/index.htm?postversion=2008120915
CEO Memo to GE Healthcare
At the end of today's class we talked briefly about the importance of data in healthcare. The value of our health information cannot be underestimated and the ability for providers to access data literally saves lives. This is the reason why you hear about EHR's constantly. GE provides an EHR along with a suite of software solutions that are supposed to encompass the needs of an entire hospital (and its affiliated provider practices). Yet, many providers still prefer best of breed solutions rather than all-in-one packages. With interoperability in healthcare still a mess and the government pumping billions into EHR's across the country (http://news.cnet.com/8301-13578_3-10161233-38.html) how does GE position itself to capture the market?
I suggest one area they should consider is moving its solutions to the cloud. We all know about SaaS and the success of Salesforce.com, but in healthcare these ideas are relatively untapped (check athenahealth.com http://athenahealth.com/). GE still prefers the model of selling full software suites to consumers then adding maintenance service on top. I think there could be a mjor shift away from this model over the enxt ten years and I am not sure GE is positioned well to transition. Thoughts are welcome.
I suggest one area they should consider is moving its solutions to the cloud. We all know about SaaS and the success of Salesforce.com, but in healthcare these ideas are relatively untapped (check athenahealth.com http://athenahealth.com/). GE still prefers the model of selling full software suites to consumers then adding maintenance service on top. I think there could be a mjor shift away from this model over the enxt ten years and I am not sure GE is positioned well to transition. Thoughts are welcome.
Sunday, April 12, 2009
Sony Counters Amazon
As anticipated, Sony has countered Amazon's launch of Kindle 2: in partnership with Google, Sony has added 500,000 new titles to the 100,000 e-books currently available on the Sony Reader. Sony is giving away the books for free. Here's a link to the article.
More trouble for big-name publishers?
This article, published in BusinessWeek last week, predicts a big drop in the prices that major online publishers can charge for banner ads. Part of the disruptive force that is putting pressure on prices is a company called Quantcast, which uses cookies, mathematical models, and billions of direct observations each day to determine the demographic characteristics of the people that visit the millions of websites that it tracks (all of the data is anonymous). The article's theory is that if advertisers have access to this data, they will no longer need to place banners ads on marquee sites to reach their target customers.
The article also contends that publishers could use information like the data collected by Quantcast to sell ads for untapped reader segments. However, I doubt that these additional revenues would offset the revenue lost by big publishers due to the banner ad price reductions. It looks like more trouble for the big-name publishers...
The article also contends that publishers could use information like the data collected by Quantcast to sell ads for untapped reader segments. However, I doubt that these additional revenues would offset the revenue lost by big publishers due to the banner ad price reductions. It looks like more trouble for the big-name publishers...
Military to Adopt Electronic Health-Care Records
Last Friday, WSJ posted an interesting article about the plan to let the military adopt electronic medical records. The concept of EMR is still new and needs more efforts to make it available to everyone. So the plan probably could build a model for the civilian health care and be an important factor for the success of EMR.
More at http://online.wsj.com/article/SB123929168372205381.html#articleTabs%3Dcomments
More at http://online.wsj.com/article/SB123929168372205381.html#articleTabs%3Dcomments
Friday, April 10, 2009
Should Banking Be Mad Boring?
Yesterday, Paul Krugman argued in the NY Times that banking should be made boring again. Essentially, he thinks that the best financial reform would create a system that lessens household debt and the incentives for people to develop sophisticated and complex financial instruments that may lead to a recession like the one we're currently experiencing.
Do you believe this will happen? I think that to some extent that it may be a good idea to decrease the risk, but at the same time I don't think the innovation within the financial industry will (or should) be stopped. We discussed micro-financing during the presentation the other day as a relatively new phenomenon which has both its advantages (available credit and relatively good returns) and disadvantages (people increasing their debt even further), but I'm not sure that Krugman would agree that these kind of developments would be beneficial to the society as a whole.
Do you believe this will happen? I think that to some extent that it may be a good idea to decrease the risk, but at the same time I don't think the innovation within the financial industry will (or should) be stopped. We discussed micro-financing during the presentation the other day as a relatively new phenomenon which has both its advantages (available credit and relatively good returns) and disadvantages (people increasing their debt even further), but I'm not sure that Krugman would agree that these kind of developments would be beneficial to the society as a whole.
True/Slant Tests Another Model Of Web Journalism
I thought this demand based approach is an interesting way to ensure the survival of quality journalism on the internet.
-Scott
True/Slant Tests Another Model Of Web Journalism
By WALTER S. MOSSBERG
As newspapers, magazines and TV stations face dire economic challenges, and journalism moves increasingly online, debates are raging about how best to preserve quality news and commentary while still making money.
There's lots of experimentation with different approaches. Many journalists, old and new, are operating as stand-alone bloggers, but finding it hard to make a living. Web advertising has weakened with the economy, and often can't cover the costs of expensive reporting. A couple of respected traditional publications have successfully attracted large numbers of paid subscribers online, but many others who have tried have failed.
Web publisher True/Slant stands out in several ways, Walt Mossberg says. For starters, it treats its journalists as independent entrepreneurs and splits ad revenues with them.
Meanwhile, advertisers also are scrambling to figure out the best way to sell their products online, in a manner that both attracts potential customers and blends in well with the content and style of news sites. And publishers are trying to capture the conversation and sense of community that permeate services like Facebook and Twitter.
This week, a new Web news site is entering the fray, with a novel approach to journalistic entrepreneurship, new forms of advertising, and an effort to blend journalism and social networking.
The site, called True/Slant, at trueslant.com, is opening its doors via an odd preliminary status it calls an "open alpha." This means it's rough around the edges, and not yet taking in revenue, but hopes to attract enough participation to hone its design and operation.
True/Slant is run by a former news executive at America Online who worked at a variety of publications, including The Wall Street Journal. It covers a wide range of topics, such as politics, culture, sports, business, health, science and food.
It is launching with 65 journalists, or "knowledge experts," assigned to specific topics. Each of these contributors gets a page to house their journalism and, it is hoped, an active social network of followers who will regularly discuss the articles they read there. Each page also will feature headlines of stories elsewhere on the Web selected by the contributors. These "headline grabs" link back to the originating outside site.
The initial group of contributors includes current or former writers for publications such as the Financial Times, Rolling Stone, the New York Times, Time magazine and the Boston Globe.
Readers can go directly to the page of their favorite contributor, but the site's home page will knit together popular content and contributors, and each reader will be able to track multiple topics and contributors through a streaming feed called "I'm following."
True/Slant will run regular Web ads throughout. But, in a highly unusual move, the site plans to offer advertisers their own entire pages where they can run blogs and try to attract a network of followers. These will have the same design and features of the journalists' pages, but will be labeled as ad content.
The journalists are paid a small amount, but the plan is to turn them into minipublishers under the True/Slant umbrella. They will be offered a share of the advertising and sponsorship revenues their individual pages generate and, in some cases, equity in True/Slant, which is backed by venture capital.
Mossberg's Mailbox
Downloading Video Files
These contributors are allowed to keep writing elsewhere, either online or in traditional media, and even to promote these outside efforts on True/Slant. But they are expected to post original commentary and analysis to True/Slant. They also are allowed to arrange for their own advertising or sponsorships, in addition to what True/Slant can sell, and even, in some cases, to add other authors to their pages.
In another unusual move, the contributors also are required to actively engage with readers on the site. They must post a minimum number of comments in reader discussions about their articles and curate the comments, giving prominence to the most interesting. They are even expected to comment on each other's posts.
This required engagement is an attempt to capture some of the excitement of a social network, and it ties in directly with a contributor's success. On the home page, and elsewhere throughout the site, True/Slant promotes not only the most popular contributors, but also the most active ones. High rankings in these categories can lead to higher traffic on each contributor's page, and, indirectly, to higher income.
Readers who are active commenters can also gain prominence on the site, especially if those comments are popular or called out for special attention. A front-page panel will highlight the most active commenters, and the most called-out comments.
The layout of the site is clean and handsome, a decent effort to meld a news site and a social network. One layout flaw the company hopes to fix: There's no easy way to find a list of all topics, only those it considers hot at any moment.
It's way too early to know if True/Slant will succeed. For one thing, it is still dependent on advertising, not subscriptions. And ethical questions could arise, because the site's operators don't edit or preapprove the content, and the model of blended journalism and advertising could prove problematic.
But it's another example of how the Web is changing traditional media, and might be worth a look.
-Scott
True/Slant Tests Another Model Of Web Journalism
By WALTER S. MOSSBERG
As newspapers, magazines and TV stations face dire economic challenges, and journalism moves increasingly online, debates are raging about how best to preserve quality news and commentary while still making money.
There's lots of experimentation with different approaches. Many journalists, old and new, are operating as stand-alone bloggers, but finding it hard to make a living. Web advertising has weakened with the economy, and often can't cover the costs of expensive reporting. A couple of respected traditional publications have successfully attracted large numbers of paid subscribers online, but many others who have tried have failed.
Web publisher True/Slant stands out in several ways, Walt Mossberg says. For starters, it treats its journalists as independent entrepreneurs and splits ad revenues with them.
Meanwhile, advertisers also are scrambling to figure out the best way to sell their products online, in a manner that both attracts potential customers and blends in well with the content and style of news sites. And publishers are trying to capture the conversation and sense of community that permeate services like Facebook and Twitter.
This week, a new Web news site is entering the fray, with a novel approach to journalistic entrepreneurship, new forms of advertising, and an effort to blend journalism and social networking.
The site, called True/Slant, at trueslant.com, is opening its doors via an odd preliminary status it calls an "open alpha." This means it's rough around the edges, and not yet taking in revenue, but hopes to attract enough participation to hone its design and operation.
True/Slant is run by a former news executive at America Online who worked at a variety of publications, including The Wall Street Journal. It covers a wide range of topics, such as politics, culture, sports, business, health, science and food.
It is launching with 65 journalists, or "knowledge experts," assigned to specific topics. Each of these contributors gets a page to house their journalism and, it is hoped, an active social network of followers who will regularly discuss the articles they read there. Each page also will feature headlines of stories elsewhere on the Web selected by the contributors. These "headline grabs" link back to the originating outside site.
The initial group of contributors includes current or former writers for publications such as the Financial Times, Rolling Stone, the New York Times, Time magazine and the Boston Globe.
Readers can go directly to the page of their favorite contributor, but the site's home page will knit together popular content and contributors, and each reader will be able to track multiple topics and contributors through a streaming feed called "I'm following."
True/Slant will run regular Web ads throughout. But, in a highly unusual move, the site plans to offer advertisers their own entire pages where they can run blogs and try to attract a network of followers. These will have the same design and features of the journalists' pages, but will be labeled as ad content.
The journalists are paid a small amount, but the plan is to turn them into minipublishers under the True/Slant umbrella. They will be offered a share of the advertising and sponsorship revenues their individual pages generate and, in some cases, equity in True/Slant, which is backed by venture capital.
Mossberg's Mailbox
Downloading Video Files
These contributors are allowed to keep writing elsewhere, either online or in traditional media, and even to promote these outside efforts on True/Slant. But they are expected to post original commentary and analysis to True/Slant. They also are allowed to arrange for their own advertising or sponsorships, in addition to what True/Slant can sell, and even, in some cases, to add other authors to their pages.
In another unusual move, the contributors also are required to actively engage with readers on the site. They must post a minimum number of comments in reader discussions about their articles and curate the comments, giving prominence to the most interesting. They are even expected to comment on each other's posts.
This required engagement is an attempt to capture some of the excitement of a social network, and it ties in directly with a contributor's success. On the home page, and elsewhere throughout the site, True/Slant promotes not only the most popular contributors, but also the most active ones. High rankings in these categories can lead to higher traffic on each contributor's page, and, indirectly, to higher income.
Readers who are active commenters can also gain prominence on the site, especially if those comments are popular or called out for special attention. A front-page panel will highlight the most active commenters, and the most called-out comments.
The layout of the site is clean and handsome, a decent effort to meld a news site and a social network. One layout flaw the company hopes to fix: There's no easy way to find a list of all topics, only those it considers hot at any moment.
It's way too early to know if True/Slant will succeed. For one thing, it is still dependent on advertising, not subscriptions. And ethical questions could arise, because the site's operators don't edit or preapprove the content, and the model of blended journalism and advertising could prove problematic.
But it's another example of how the Web is changing traditional media, and might be worth a look.
Tuesday, April 7, 2009
Broken Record
Just an update on what has quickly gone from a cold war to a very hot one. A week after The Guardian asked the UK to look into news aggregators use of other people's original content to drive revenues, Rupert Murdoch suggested that services like Google News should start paying for content. A couple of days later the AP said they'd "pursue legal and legislative actions" against aggregators who use member content without permission. Google's response? Quit whining and create a product readers want. With newspapers going belly up left and right this is going to come to a head very soon. Stay tuned.
Social Media Marketing
In preparation for the presentation about the retailing industry, check some examples on how youtube, facebook and twitter are providing social media marketing:
some videos on bluecasting and interactive billboards, storefront windows..
http://www.youtube.com/watch?v=gJ3da2T4v74&feature=related
http://www.youtube.com/watch?v=gJ3da2T4v74&feature=related
Enjoy!
Monday, April 6, 2009
Google Health expands deal with CVS
Electronic Health Records may not be a standards war but is a war nonetheless and Google has landed the first blow by partnering with CVS.
By partnering with CVS google has improved on the use of Health records. Now the health records do not just sit on some google server for fun , but can be used for prescription at CVS.
Microsft..your turn!
iPhone Apps for Healthcare
---
I wonder if any of you have researched and compared different healthcare-related apps on Facebook (or Apple iPhone). I was interested to see what your assessment was as you develop insights on IT-enabled transformation in healthcare or your recommendations for the CEOs in the health sector..
retailing, role of consumer and the CEO Challenges
This ties back to the IBM CEO study that we reviewed at the beginning of the course.
--
Enjoy!
--
Enjoy!
Threat to Globe
There was an article in the Boston Globe last Saturday that addressed consumer concerns regarding the possibility of shutting down the Boston Globe. (After daily publishing for 137 years!)
http://www.boston.com/news/local/massachusetts/articles/2009/04/05/threat_to_globe_triggers_flood_of_feelings/
http://www.boston.com/news/local/massachusetts/articles/2009/04/05/threat_to_globe_triggers_flood_of_feelings/
GE QuietCare Video
A recent set of videos on IT in healthcare, which further elaborates on some of the ideas that we discussed in class.
--
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Jonathan Schwartz of Sun Microsystems details his vision for Sun
Not many CEOs blog as regularly and as insightfully as Jonathan Schwartz of Sun (in my opinion). Do take a look at his recent blogposts. I like to hear your reactions and responses..
Sunday, April 5, 2009
The iPhone Gold Rush
Good article for all those game developers out there
-Scott
April 5, 2009
The iPhone Gold Rush
By JENNA WORTHAM
IS there a good way to nail down a steady income? In this economy?
Try writing a successful program for the iPhone.
Last August, Ethan Nicholas and his wife, Nicole, were having trouble making their mortgage payments. Medical bills from the birth of their younger son were piling up. After learning that his employer, Sun Microsystems, was suspending employee bonuses for the year, Mr. Nicholas considered looking for a new job and putting their house in Wake Forest, N.C., on the market.
Then he remembered reading about the guy who had made a quarter-million dollars in a hurry by writing a video game called Trism for the iPhone. “I figured if I could even make a fraction of that, we’d be able to make ends meet,” he said.
Although he had years of programming experience, Mr. Nicholas, who is 30, had never built a game in Objective-C, the coding language of the iPhone. So he searched the Internet for tips and informal guides, and used them to figure out the iPhone software development kit that Apple puts out.
Because he grew up playing shoot-em-up computer games, he decided to write an artillery game. He sketched out some graphics and bought inexpensive stock photos and audio files.
For six weeks, he worked “morning, noon and night” — by day at his job on the Java development team at Sun, and after-hours on his side project. In the evenings he would relieve his wife by caring for their two sons, sometimes coding feverishly at his computer with one hand, while the other rocked baby Gavin to sleep or held his toddler, Spencer, on his lap.
After the project was finished, Mr. Nicholas sent it to Apple for approval, quickly granted, and iShoot was released into the online Apple store on Oct. 19.
When he checked his account with Apple to see how many copies the game had sold, Mr. Nicholas’s jaw dropped: On its first day, iShoot sold enough copies at $4.99 each to net him $1,000. He and Nicole were practically “dancing in the street,” he said.
The second day, his portion of the day’s sales was about $2,000.
On the third day, the figure slid down to $50, where it hovered for the next several weeks. “That’s nothing to sneeze at, but I wondered if we could do better,” Mr. Nicholas said.
In January, he released a free version of the game with fewer features, hoping to spark sales of the paid version. It worked: iShoot Lite has been downloaded more than 2 million times, and many people have upgraded to the paid version, which now costs $2.99. On its peak day — Jan. 11 — iShoot sold nearly 17,000 copies, which meant a $35,000 day’s take for Mr. Nicholas.
“That’s when I called my boss and said, ‘We need to talk,’ ” Mr. Nicholas said. “And I quit my job.”
To people who know a thing or two about computer code, stories like his are as tantalizing as a late-night infomercial, as full of promise as an Anthony Robbins self-help book. The first iPhones came out in June 2007, but it wasn’t until July 2008 that people could buy programs built by outsiders, which were introduced in an online market — called the App Store — along with the new iPhone 3G. (The store is also open to owners of the iPod Touch, which does everything that the iPhone does except make phone calls and incur a monthly bill from AT&T.)
There are now more than 25,000 programs, or applications, in the iPhone App Store, many of them written by people like Mr. Nicholas whose modern Horatio Alger dreams revolve around a SIM card. But the chances of hitting the iPhone jackpot keep getting slimmer: the Apple store is already crowded with look-alike games and kitschy applications, and fresh inventory keeps arriving daily. Many of the simple but clever concepts that sell briskly — applications, for instance, that make the iPhone screen look like a frothing pint of beer or a koi pond — are already taken.
And for every iShoot, which earned Mr. Nicholas $800,000 in five months, “there are hundreds or thousands who put all their efforts into creating something, and it just gets ignored in the store,” said Erica Sadun, a programmer and the author of “The iPhone Developer’s Cookbook.”
The long-shot odds haven’t stopped people from stampeding to classes and conferences about writing iPhone programs. At Stanford University, an undergraduate course called Computer Science 193P: iPhone Application Programming attracted 150 students for only 50 spots when it was introduced last fall.
“It completely surpassed our expectations,” said Troy Brant, a graduate student who helped teach the course. Turnout has been equally strong this semester, he said.
As early as the summer of 2007 — a week after the iPhone first hit the market, and long before Apple let outsiders sell software for it — Raven Zachary, a technology consultant, decided to organize an informal get-together for fans of the device. The event, held in San Francisco, drew nearly 500 people.
Since then, he said, dozens of similar conferences have taken place around the world. “The concept has spread quite far and wide,” said Mr. Zachary, who boasts on his Web site that he “directed the launch of two top-20 iPhone applications,” including one for the Obama campaign. He expects the turnout at his conference this summer to be huge. “We may have to find a larger venue and hold simultaneous satellite events to accommodate attendees,” he said.
The rush to stake a claim on the iPhone is a lot like what happened in Silicon Valley in the early dot-com era, said Matt Murphy, a partner at the venture capital firm Kleiner Perkins Caufield & Byers who oversees the iFund, a $100 million investment pot reserved for iPhone applications.
“People are realizing that by developing in their garage with a couple dollars, they could be the next Facebook,” he said. “It’s still early days for mobile development, but those days are coming.”
This time, however, the scale may be smaller. While iShoot is never going to be the next Google or Facebook, it is the type of program that people with minimal expertise view as within their reach. The fact that Apple handles the financial side of the transactions makes it particularly easy for mom-and-pop developers to sell their homemade software all around the world. (Apple keeps 30 percent of the revenue from each sale and gives the rest to the developer.)
“Even if you’re not a programming guru, you can still cobble something together and potentially have great success,” said James Katz, director of the Center for Mobile Communications Studies at Rutgers University.
If there is ever an iPhone hall of fame, Mr. Nicholas’s portrait might hang next to that of Kostas Eleftheriou, a young Greek entrepreneur who lives in London. He and two friends wrote a program in seven days called iSteam, which fogs up the face of an iPhone like a bathroom mirror. They made more than $100,000 in three months.
It is little more than a party trick. When someone swipes a finger across the phone’s surface, iSteam’s pretend moisture is wiped away with a realistic-sounding squeak. When the phone is tipped on its side, droplets of condensation roll as if pulled by gravity. “It’s quite a good illusion,” Mr. Eleftheriou said. “Everyone wants to show their friends.”
The application hit the App Store in late December, and already Mr. Eleftheriou, who is 25, has decided to postpone graduate school and seek his fortune as an iPhone developer. He and his friends Vassilis Samolis and Bill Rappos, both 22, have set up a company called GreatApps and have hired two more developers.
“We don’t want to stop with iSteam,” Mr. Eleftheriou said. “Our next step is to establish ourselves as a big player in the application store.”
Both the iSteam team and Mr. Nicholas were spurred by the success of Steve Demeter, an inspiration for starry-eyed iPhone developers. Mr. Demeter, who is 30, wrote the game called Trism, which involves aligning rows of brightly colored triangles; he released it into the App Store last July and says he made $250,000 in the first two months. He immediately quit his job writing software for Wells Fargo and started his own iPhone game development company, Demiforce.
It doesn’t take much money to write these programs, Mr. Demeter said, and a larger budget doesn’t always mean more success. “Novel concepts that come out of left field are going viral,” he said. “These are the kinds of applications that will endure.”
The mobile frenzy hasn’t gone unnoticed by other major cellphone and software companies. Last week, Research in Motion opened an application store for the BlackBerry. Google recently began selling applications based on Android, its operating system for cellphones. Nokia is in the early stages of opening a store for its handsets, and Microsoft is creating a store for phones running Windows Mobile.
As for Mr. Nicholas, he has sprung for a family vacation to Washington, hired a nanny and founded a company called Naughty Bits Software to keep developing iPhone programs (so far he is the only employee). “Oh, and I bought myself a new laptop,” he said. “I figured I deserved that.”
He is in talks to adapt iShoot to systems other than the iPhone, and says that investors and big video game companies have approached him about financing his sophomore effort. He is also in full-swing inventor mode, working on a new game that he will not describe for fear that another developer might poach it.
“I’m going to milk the gold rush as long as I can,” Mr. Nicholas said. “It’d be foolish not to.”
-Scott
April 5, 2009
The iPhone Gold Rush
By JENNA WORTHAM
IS there a good way to nail down a steady income? In this economy?
Try writing a successful program for the iPhone.
Last August, Ethan Nicholas and his wife, Nicole, were having trouble making their mortgage payments. Medical bills from the birth of their younger son were piling up. After learning that his employer, Sun Microsystems, was suspending employee bonuses for the year, Mr. Nicholas considered looking for a new job and putting their house in Wake Forest, N.C., on the market.
Then he remembered reading about the guy who had made a quarter-million dollars in a hurry by writing a video game called Trism for the iPhone. “I figured if I could even make a fraction of that, we’d be able to make ends meet,” he said.
Although he had years of programming experience, Mr. Nicholas, who is 30, had never built a game in Objective-C, the coding language of the iPhone. So he searched the Internet for tips and informal guides, and used them to figure out the iPhone software development kit that Apple puts out.
Because he grew up playing shoot-em-up computer games, he decided to write an artillery game. He sketched out some graphics and bought inexpensive stock photos and audio files.
For six weeks, he worked “morning, noon and night” — by day at his job on the Java development team at Sun, and after-hours on his side project. In the evenings he would relieve his wife by caring for their two sons, sometimes coding feverishly at his computer with one hand, while the other rocked baby Gavin to sleep or held his toddler, Spencer, on his lap.
After the project was finished, Mr. Nicholas sent it to Apple for approval, quickly granted, and iShoot was released into the online Apple store on Oct. 19.
When he checked his account with Apple to see how many copies the game had sold, Mr. Nicholas’s jaw dropped: On its first day, iShoot sold enough copies at $4.99 each to net him $1,000. He and Nicole were practically “dancing in the street,” he said.
The second day, his portion of the day’s sales was about $2,000.
On the third day, the figure slid down to $50, where it hovered for the next several weeks. “That’s nothing to sneeze at, but I wondered if we could do better,” Mr. Nicholas said.
In January, he released a free version of the game with fewer features, hoping to spark sales of the paid version. It worked: iShoot Lite has been downloaded more than 2 million times, and many people have upgraded to the paid version, which now costs $2.99. On its peak day — Jan. 11 — iShoot sold nearly 17,000 copies, which meant a $35,000 day’s take for Mr. Nicholas.
“That’s when I called my boss and said, ‘We need to talk,’ ” Mr. Nicholas said. “And I quit my job.”
To people who know a thing or two about computer code, stories like his are as tantalizing as a late-night infomercial, as full of promise as an Anthony Robbins self-help book. The first iPhones came out in June 2007, but it wasn’t until July 2008 that people could buy programs built by outsiders, which were introduced in an online market — called the App Store — along with the new iPhone 3G. (The store is also open to owners of the iPod Touch, which does everything that the iPhone does except make phone calls and incur a monthly bill from AT&T.)
There are now more than 25,000 programs, or applications, in the iPhone App Store, many of them written by people like Mr. Nicholas whose modern Horatio Alger dreams revolve around a SIM card. But the chances of hitting the iPhone jackpot keep getting slimmer: the Apple store is already crowded with look-alike games and kitschy applications, and fresh inventory keeps arriving daily. Many of the simple but clever concepts that sell briskly — applications, for instance, that make the iPhone screen look like a frothing pint of beer or a koi pond — are already taken.
And for every iShoot, which earned Mr. Nicholas $800,000 in five months, “there are hundreds or thousands who put all their efforts into creating something, and it just gets ignored in the store,” said Erica Sadun, a programmer and the author of “The iPhone Developer’s Cookbook.”
The long-shot odds haven’t stopped people from stampeding to classes and conferences about writing iPhone programs. At Stanford University, an undergraduate course called Computer Science 193P: iPhone Application Programming attracted 150 students for only 50 spots when it was introduced last fall.
“It completely surpassed our expectations,” said Troy Brant, a graduate student who helped teach the course. Turnout has been equally strong this semester, he said.
As early as the summer of 2007 — a week after the iPhone first hit the market, and long before Apple let outsiders sell software for it — Raven Zachary, a technology consultant, decided to organize an informal get-together for fans of the device. The event, held in San Francisco, drew nearly 500 people.
Since then, he said, dozens of similar conferences have taken place around the world. “The concept has spread quite far and wide,” said Mr. Zachary, who boasts on his Web site that he “directed the launch of two top-20 iPhone applications,” including one for the Obama campaign. He expects the turnout at his conference this summer to be huge. “We may have to find a larger venue and hold simultaneous satellite events to accommodate attendees,” he said.
The rush to stake a claim on the iPhone is a lot like what happened in Silicon Valley in the early dot-com era, said Matt Murphy, a partner at the venture capital firm Kleiner Perkins Caufield & Byers who oversees the iFund, a $100 million investment pot reserved for iPhone applications.
“People are realizing that by developing in their garage with a couple dollars, they could be the next Facebook,” he said. “It’s still early days for mobile development, but those days are coming.”
This time, however, the scale may be smaller. While iShoot is never going to be the next Google or Facebook, it is the type of program that people with minimal expertise view as within their reach. The fact that Apple handles the financial side of the transactions makes it particularly easy for mom-and-pop developers to sell their homemade software all around the world. (Apple keeps 30 percent of the revenue from each sale and gives the rest to the developer.)
“Even if you’re not a programming guru, you can still cobble something together and potentially have great success,” said James Katz, director of the Center for Mobile Communications Studies at Rutgers University.
If there is ever an iPhone hall of fame, Mr. Nicholas’s portrait might hang next to that of Kostas Eleftheriou, a young Greek entrepreneur who lives in London. He and two friends wrote a program in seven days called iSteam, which fogs up the face of an iPhone like a bathroom mirror. They made more than $100,000 in three months.
It is little more than a party trick. When someone swipes a finger across the phone’s surface, iSteam’s pretend moisture is wiped away with a realistic-sounding squeak. When the phone is tipped on its side, droplets of condensation roll as if pulled by gravity. “It’s quite a good illusion,” Mr. Eleftheriou said. “Everyone wants to show their friends.”
The application hit the App Store in late December, and already Mr. Eleftheriou, who is 25, has decided to postpone graduate school and seek his fortune as an iPhone developer. He and his friends Vassilis Samolis and Bill Rappos, both 22, have set up a company called GreatApps and have hired two more developers.
“We don’t want to stop with iSteam,” Mr. Eleftheriou said. “Our next step is to establish ourselves as a big player in the application store.”
Both the iSteam team and Mr. Nicholas were spurred by the success of Steve Demeter, an inspiration for starry-eyed iPhone developers. Mr. Demeter, who is 30, wrote the game called Trism, which involves aligning rows of brightly colored triangles; he released it into the App Store last July and says he made $250,000 in the first two months. He immediately quit his job writing software for Wells Fargo and started his own iPhone game development company, Demiforce.
It doesn’t take much money to write these programs, Mr. Demeter said, and a larger budget doesn’t always mean more success. “Novel concepts that come out of left field are going viral,” he said. “These are the kinds of applications that will endure.”
The mobile frenzy hasn’t gone unnoticed by other major cellphone and software companies. Last week, Research in Motion opened an application store for the BlackBerry. Google recently began selling applications based on Android, its operating system for cellphones. Nokia is in the early stages of opening a store for its handsets, and Microsoft is creating a store for phones running Windows Mobile.
As for Mr. Nicholas, he has sprung for a family vacation to Washington, hired a nanny and founded a company called Naughty Bits Software to keep developing iPhone programs (so far he is the only employee). “Oh, and I bought myself a new laptop,” he said. “I figured I deserved that.”
He is in talks to adapt iShoot to systems other than the iPhone, and says that investors and big video game companies have approached him about financing his sophomore effort. He is also in full-swing inventor mode, working on a new game that he will not describe for fear that another developer might poach it.
“I’m going to milk the gold rush as long as I can,” Mr. Nicholas said. “It’d be foolish not to.”
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