Two eCommerce Opposites

Washington Post looks at the two contrasting approaches taken by eBay and Amazon:

EBay raised its prices this month for the fourth year in a row, while Amazon renewed its pledge to keep cutting prices even if it means lower profits. The contrast reflects how much more power the highly profitable eBay wields than Amazon.com, which reported its first-ever annual profit this week. Their business models differ, too, since eBay owns no inventory and its prices are commissions charged to sellers. But their diverging strategies also suggest a difference in attitude that may bode well for Amazon and ill for eBay.

Starting next week, an item selling for $150 on eBay will cost a seller $7.15 in fees, or about 5 percent of the sales price. And that doesn’t count payment processing fees eBay collects from many sellers through PayPal, its payment subsidiary. You have to wonder how long eBay can sock it to sellers in the form of annual price increases before small sellers start fleeing to rivals such as Yahoo and Amazon.

It’s interesting to watch eBay and Amazon marching toward some middle ground in retailing after each started in opposite corners. For years, eBay was home to small merchants who sold mostly used goods at auction prices. It has since added loads of big retailers who sell new merchandise, some at fixed prices. At the same time, Amazon started as a direct seller of new books and subsequently invited other merchants to sell both used and new merchandise on its site. Amazon collects commissions on those third-party sales, just like eBay does, which yields higher profits for Amazon in part because it doesn’t have to buy those goods.

Gateway to buy eMachines

A few years ago, eMachines was given up for dead. It was revived by Wayne Inouye. Now, the fairytale turnaround (a rarity in the Dell-dominated PC industry) has attracted an embattled Gateway, which is buying eMachines for USD 266 million in stock and cash.

News.com: “The companies’ combined PC businesses would constitute the third-largest PC manufacturer in the United States, Gateway said, and rank it eighth in the world. By making a bid for eMachines, Gateway is hoping to combine the best of two worlds, creating a much larger PC business and giving itself additional sales channels for consumer electronics, such as its Gateway televisions, both inside and outside the United States. The move could allow Gateway to double its annual PC volume from about 2 million to about 4 million units and position itself as a very strong No. 3 to Hewlett-Packard and Dell, Ted Waitt, Gateway’s CEO said.”

The secret behind eMachines’ success: “eMachines has been one of the fastest-growing PC companies in the United States. Last quarter it posted a higher unit shipment growth rate than any of the other top manufacturers in the United States. It grew unit shipments almost 21 percent year over year to 498,000 units, which moved it back into the top five manufacturers in the U.S. market, according to IDC. eMachines also operates with a unique business model, designed to help keep its costs low. It only builds enough PCs to satisfy orders from retailers. It also aims to sell all of those PCs by the end of each quarter. Meanwhile, it does not accept returns or provide price protection to retailers against future price drops, two measures that could also cut into profits.”

Another News.com report gives the background to the acquisition from eMachines’ viewpoint:

In late 2001, the company’s shareholders agreed to its acquisition by one of the company’s directors in a buyout that took eMachines private in a deal worth about $161 million.

Rather than fade into oblivion, like so many other PC makers of the previous 20 years, eMachines found itself at the start of a turnaround. The company was able to boost its share of the U.S. PC market from 2.1 percent in the first quarter of 2002 to 3.4 percent by the end of last year, rising from ninth to fourth in terms of market share, based on units sold. During the same period, Gateway’s share of the U.S. market dipped from nearly 6 percent to just below eMachines’, also at about 3.4 percent, for the last quarter of 2003, according to IDC.

Despite its success, eMachines faced challenges for the future, some of which led it into Gateway’s arms. One of the most pressing issues was where to get the money needed to continue the company’s expansion into notebook computers and overseas markets.

“Clearly, eMachines had been struggling with how to bring capital into the company,” IDC analyst Roger Kay said. “They had even talked about going public.”

Although the company was profitable, analysts doubt that eMachines was making much money, likely posting margins of just 2 percent or 3 percent. “They had to work really hard to make $20 million or $30 million (a year),” said Stephen Baker, an analyst at the NPD Group. “That’s hard work.”

More inputs from Fortune and WSJ.

Linksys Story

Inc crowns Janie and Victor Tsao who co-founded Linksys as Entrepreneurs of the Year. Cisco acquired Linksys for USD 500 million last year. Here’s how they began:

Like not a few business owners before them, the Tsaos heard the entrepreneurial clock ticking: They were determined to be independent before they reached the age of 40. Victor was 37 and Janie was 35 when they decided to put to use their familiarity with Taiwan (where they’d met at Tamkang University). They were both working in information technology–Janie at Carter Hawley Hale and Victor at Taco Bell–and with Victor a step higher on the corporate ladder they decided that he would continue to punch the clock while Janie launched the business, a consultancy they named DEW International. The new company mated American technology vendors like Northgate Computer with Taiwanese manufacturers that could make their wares cheaply.

Soon, one of those manufacturers brought them an idea. At the time, the cables used to connect printers and PCs could extend only 15 feet before the data began to degrade. To solve this, the manufacturer invented a setup that used telephone wire to extend the reach to 100 feet. This company needed someone to market the thing in the U.S. “With companies like that,” says Victor, “actual English was not their strength.” The manufacturer came up with products that connected multiple PCs to multiple printers, and the Tsaos renamed their company Linksys. Victor quit his job in 1991, and within two years Linksys had moved twice, eventually to a 2,000-square-foot office, and each month was selling 8,000 Multishares, as those units were called, through tech catalogs like Black Box. In these early years, the Tsaos invested $7,000 in Linksys, the only capital the company required until it tapped a bank loan for the one and only time, in 2001. (They paid that loan off in less than six months.)

Linksys slowly expanded from printer-to-PC connectors to PC-to-PC Ethernet hubs, cards, and cords, gear that let small businesses and nerdy households connect computers so that they could share data. It was a niche market, and with 1994 revenue of $6.5 million the company was far from a behemoth. But slow growth was the only way the Tsaos could expand without taking on debt or investors. While Victor managed operations and finances as CEO, Janie handled sales in her job as vice president of business development. As Mike Wagner, the company’s director of marketing, puts it, “Janie brings the money in, Victor keeps everyone from spending it.”

Fast and frugal – that sums up Linksys.

Blogs and Business

Computerworld writes about how blogs are making their way into business:

Using blogs, companies can easily and quickly communicate information such as project updates, research, and product and industry news both inside and outside the business. Security issues are the same as with any Internet-based application.

Even though blogging technology has the potential to become important to their companies, most CIOs haven’t paid much attention to blogging, and it’s not one of the tools they’re considering to solve their myriad IT problems, according to John Patrick, president of Attitude LLC in Ridgefield, Conn., and former vice president of Internet technology at IBM.

“I believe it is important to the CIO and the enterprise, because blogging introduces a new way to create, share and leverage knowledge in the enterprise,” Patrick says.

“You can do things like start one weblog for each project and have it run its course,” says Anil Dash, vice president of business development at Six Apart. “As the project continues along, everybody can do status updates and be able to link to every other relevant resource, whether it’s on the Web or in a Word document or in a proprietary company database. So for internal use, you have a lot of flexibility, and it respects the firewalls and the other boundaries you’ve already put in place.”

Michael Masnick, president of Techdirt Inc. in Foster City, Calif., says that while most corporations have knowledge management tools and corporate portals to organize internal data, they don’t have an effective way to deal with external information. A blog allows users to integrate internal and external information.

Enterprise blogs provide companies with easy-to-use tools to manage external information, which is extremely critical because it affects relationships with customers, partners and investors, as well as internal decision-makers.

“Having an enterprise blog provides a strategic advantage over the competition and helps companies gain market share and respond faster to their rapidly changing business environments,” Masnick says.

Desktop Decisions

SearchWin2000.com has a 3-part series “to look at issues that enterprises must consider when deciding which desktop system is right for them.”

Part 1: Desktop Linux looks for a Windows equalizer: Manageability features that are being created for Linux could be a catalyst for convincing enterprise customers that the Linux desktop is ready for the mainstream.

Part 2: Windows feeling open source draft: Manageability features that are being created for Linux could be a catalyst for convincing enterprise customers that the Linux desktop is ready for the mainstream.

Part 3: Longhorn may bridge the thin, fat client worlds: If all goes as planned, Microsoft’s Longhorn will offer a compromise for those mired in the debate over thin versus fat clients.

Manufacturing in China

Strategy+Business writes:

China currently accounts for more than half of the emerging-market electronics production and 8 percent of the total global production. In the future, it will take a commanding lead in key value chain elements; for example, it will account for more than half of all final assembly activity by 2005. Higher-margin activity, such as design and engineering, will move there as well, but not as rapidly as production will.

Several factors explain Chinas attraction. First, it has made electronics a priority, and it is sweetening the pot with highly subsidized financing. In some cases, to draw multinational investment, the government even provides facilities and equipment. As a result, electronics production in China is expected to surpass Western Europes production, reaching $80 billion in 2005. Chinas growing base of talent and experience is also a lure; some Chinese who study engineering and other disciplines in the United States are now returning to China to provide leadership.

In addition, a cluster effect is taking hold: As the electronics industry in China matures, foreign manufacturers can find suppliers nearby, which makes manufacturing more efficient. The traditional fears of developed-country manufacturers operating there that China is too far from the markets to which they are selling, that their products are too high-tech to be produced in a developing country, that the transportation infrastructure isnt good enough, and that the necessary parts for manufacturing arent available are slowly disappearing.

Multinational electronics producers are also interested in China because they want to penetrate its huge market, now the worlds largest market for cell phones and color televisions, and the second largest for personal computers, after the United States.

Developing World Companies and Innovation

HBS Working Knowledge looks at learnings from companies in the emerging markets, and “how three businesses in developing countries overcome a lack of resources to succeed.” The companies: CEMEX (Cementos Mexicanos), the Mexican cement giant; Natura, a leader in Brazil’s cosmetics arena; and China’s Haier, which sells appliances in one of the world’s most demanding markets.

Know your customers’ mindsetsintimately: Employees of China’s Haier, for example, discovered through visiting rural customers that they frequently used their washing machines not only to launder clothes but also to clean vegetables. By making a few minor modifications to the washers they manufactured, Haier was able to market the machines as versatile enough to wash both clothing and vegetables, and rapidly became the market leader in rural areas of its home country.

Innovate aroundrather than throughthe technology: Consider the challenge of delivering ready-mix concrete. Contractors often change their orders at the last minute, but CEMEX found that, on average, it took three hours between the time when a change order was received and when the order could be delivered. To decrease turnaround time in its Mexican market, CEMEX equipped most of its fleet of concrete mixing trucks with global positioning satellite (GPS) locators, allowing dispatchers to arrange deliveries within a twenty-minute window, versus the three hours CEMEX’s competitors require. This systemwhich did not emerge from a central R&D lab but rather from CEMEX’s internal innovation efforts, as described belowhas allowed CEMEX to increase its market share, charge a premium to time-conscious contractors, and reduce costs resulting from unused concrete.

Scour the globe for good ideas: Recognizing that the company could never compete on technical innovation with global competitors such as Procter & Gamble, Este Lauder, and Shiseidoall of which spend hundreds of millions of dollars on R&D every yearNatura’s executives have developed close connections with universities in France and the United States, and license technology from universities and research centers around the world. Says Philippe Pommez, Natura’s R&D director, “The hard part is not finding the new technology; it is knowing what you are looking for. This is where our conceptualization of new products and new lines that serve local needs becomes indispensable.”

Microsoft and its Battles

The Economist looks at Microsoft’s showdown with the European Commission over its Windows Media Player (WMP):

The crux of the matter is, can Microsoft lawfully integrate other pieces of software into Windows? This was also, of course, at the heart of the American action. In that case it was the web browser, rather than the media player, that was under consideration, and Microsoft was found guilty of illegally exploiting its monopoly by tying its web browser to Windows.

Short of a break-up, however, there is no effective antidote to tying. Forcing Microsoft to produce a Europe-specific version of Windows without WMP (or any other specific features) would, in effect, impose an inferior product on European consumers. It is difficult to argue that this would be in their interests. And it would, in any case, probably result in a grey market as the full version of Windows was imported from elsewhere. There are also problems with the must-carry approach: which other media players would be included? Presumably those with the greatest market share. But that would itself be anti-competitive, since it would entrench the positions of the existing players. Furthermore, WMP would still be ubiquitous.

…and the forthcoming battle with Google:

Google’s power makes it just the sort of company that Microsoft typically tries to squash. At the World Economic Forum in Davos last week, Mr Gates admitted that Google’s search technology was way better than Microsoft’s, and identified internet search as a key focus for his company. Microsoft already offers searches through MSN, its web portal. But until this week it had yet to play its trump card: exploiting its dominance of the web-browser and operating-system markets to extend the reach of its search service. That changed on January 26th when it launched a toolbar plug-in for its Internet Explorer browser, enabling instant searches (via MSN) from any web page. It is an imitation of Google’s toolbar, which has helped to contribute to the search engine’s success: on a computer screen, as with real estate, location is everything.

Initially, the MSN toolbar is a free optional download, as Microsoft’s web browser and media player once were. The next step, inevitably, will be to integrate such search functions into Windows, on the grounds that it constitutes a core technology that should be part of the operating system. In his keynote speech at last November’s Comdex show in Las Vegas, Mr Gates demonstrated a prototype technology called Stuff I’ve Seen which does just that. It allows computer users to search for context-specific words in e-mails and in recently visited web pages, as well as in documents on their computers.

In other words, Microsoft is preparing to use its dominance in web-browser and operating-system software to promote itself in yet another separate marketsearch engines this timeat the expense of competitors. Is that tying? It is entirely possible that, in a few years, the same arguments heard in the American and European cases will again be raging, unresolved. Microsoft will insist that it has done nothing wrong, as competitors cry foul and wizened regulators launch further investigations.

The Economist’s conclusion: “This newspaper has long argued, and still believes, that a break-up of Microsoft is the only remedy that would have any impact on its conduct, by removing its key weapon, Windows. At the moment that seems out of the question. How else might Microsoft be stopped from illegally exploiting its monopoly? By the long-awaited rise of open-source software such as Linux, maybe, though that seems unlikely. Perhaps the company will eventually conclude that the costs, in bad publicity and constant legal battles, of maintaining its monopoly exceed the benefits, and choose to divest or open up Windows itself. But that also seems implausible when there are large monopoly rents to be had. Some day a break-up of this too-mighty firm will again have to be considered.”

I think the third major battle Microsoft faces is in the emerging markets – and there it has to contend with piracy, non-consumption and Linux. Long-term, this is going to be the hardest battle, because the emerging markets are computing’s next markets with a billion users waiting. The winner(s) will need to provide whole solutions at affordable price-points.

TECH TALK: Rethinking Search: The Next Indian Search Engine (Part 2)

Continuing with the attributes of the Next Indian Search Engine (NISE):

Leverage RSS: For a glimpse into what Search can become, take a look at Feedster. Even as it focuses on narrow content vertical (RSS feeds), it also provides results as an RSS feed which can be subscribed in news aggregators. This means that the incrementally new content which matches the search strings can be delivered on an ongoing basis to users.

Websites Ping-back: It should be possible to websites which want to be included in the search results to alert NISE via a ping service whenever the site is updated. This alerts the search engine to get the new information.

User Customisation: Users should be able to personalise the way they do search via a mapping of the language available think of these as macros. This will also serve as a lock-in: the more familiar users get with the usage of NISE, the greater will be the barrier to switching.

So, the focus for NISE should be on building a search platform which can be customised and extended for users, and which thinks of not just the web browser but also the mobile devices as the primary target access method. Here is a 5-step action plan to operationalise NISE within 60-90 days:

1. Define the Search Language: The first word is the specifier of the domain (eg. films, PIN, people, company, train, flight, stock). The focus should be on identifying those domains which are likely to have the greatest user interest. The inspiration for this search language should come from the Unix shell. Asking users to specify what they are searching for by entering an extra word can actually be quite useful in narrowing the search and providing more specific results.

2. Source the Content: This may require partnerships with specific information providers. XML can be used to get the content from these sites if the search request is from a cellphone, or the result can be shown directly on the content providers website. For example, train 2345up can take the user to a page on the Indian Railways site which shows the status of the train, or can return text (microcontent) which shows the brief details of where the train is currently as compared to its schedule.

3. Solicit User Participation: NISE should be built for and by the users. So, getting feedback from them is very important. This can be done by leveraging collaboration ideas via Wikis and group blogs. Providing an OPML platform to leverage expertise that users have in identifying the best sites in verticals is another idea.

4. Leverage the Publish-Subscribe Web: It is very important to look at the future, emerging technologies. RSS is one of them. So, building RSS support from day one is very important. Getting sites (publishers) to provide information on site updates right at the start can be very helpful.

5. Launch and Improvise: NISE will be work in progress for sometime this is because it is going to evolve based on feedback. What is really being down in the early development is to build a platform that can be the foundation for future ideas.

NISE has the potential to make the Internet a utility in the lives of Indians even as the always-on access infrastructure and low-cost access devices become available. Indian users and Indian advertisers need NISE. Search is hot once again and it can be the trick that provides just the fillip the Indian information space needs.

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50 Book Challenge

[via McGee] David Harris writes about the 50 book challenge: “The idea is to read 50 books in a year and, in some versions, blog about them.”

Interesting. I was thinking a few days ago that I needed to set up a discipline of reading something different and educating myself via a few books for 1-1.5 hours a day. I identified a few areas in which I need to learn more and starting books (and guides):

– Psychology: Influence by Cialdini
– Economics and Finance: Samuelson and Raghuram Rajan
– Marketing: Kotler
– History: Jared Diamond and David Landes
– Management: Magretta’s What Management Is

Its almost like doing a semester of learning in school…in this one has to pick the right teachers. Maybe I should take up the challenge…

In case you decide to do so too, David has some suggestions:

1) Don’t read to hit the target: Reading just to hit a target is silly. However, reading to hit a target is a very useful excuse to have when your life is busy, you generally want to get through some decent reading, but the rest of life is dragging you away. In other words, in the absence of good time management, the 50 book challenge could be a worthwhile approach.

2) No filler: This is a really a corollary to rule 1. There shouldn’t be any books on the list that are merely there to increase your count. You should want to read the books, independently of the challenge existing.

3) Re-reads can count (sometimes): Re-reading a book doesn’t count if it is done to add something to your count quickly. However, there are plenty of books that are worth re-reading and they should count. Roughly speaking, it should count if a) you haven’t read it for a long time, b) you can’t remember much about it, or c) it’s a book that you get more out of on each re-reading.

4) No genre domination: The list should be somewhat diverse. Of course, the rules shouldn’t prescribe or proscribe particular books but it seems sensible that you shouldn’t be able to fill your list with trashy sci-fi or fantasy. Good sci-fi or fantasy belongs on the list but you won’t find 50 good titles anyway.

5) No planning: You shouldn’t plan the list beforehand. You can have some general guidelines that satisfy your personal desires but there should be enough flexibility to read new releases, or to cover a new interest, or follow up on something inspired by a title you just read.

6) Ignore the rules: You should not pay attention to any of the rules. After all, this is really about reading for enjoyment, so read whatever the hell you want. Keeping a list can be useful if you have a terrible memory (like me) or you just want to share your reading experience – but it shouldn’t be about the list.

Wired on Indian Outsourcing

Wired (Daniel Pink) describes how “India became the capital of the computing revolution”:

What begins to seep through their well-tiled arguments about quality, efficiency, and optimization is a view that Americans, who have long celebrated the sweetness of dynamic capitalism, must get used to the concept that it works for non-Americans, too. Programming jobs have delivered a nice upper-middle-class lifestyle to the people in this room [in India]. They own apartments. They drive new cars. They surf the Internet and watch American television and sip cappuccinos. Isn’t the emergence of a vibrant middle class in an otherwise poor country a spectacular achievement, the very confirmation of the wonders of globalization – not to mention a new market for American goods and services? And if this transition pinches a little, aren’t Americans being a tad hypocritical by whining about it? After all, where is it written that IT jobs somehow belong to Americans – and that any non-American who does such work is stealing the job from its rightful owner?

A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all but two countries. Fifty years ago, most of the US labor force worked in factories. Today, only about 14 percent is in manufacturing. But we’ve still got the largest manufacturing economy in the world – worth about $1.9 trillion in 2002. We’ve seen this movie before – and it’s always had a happy ending. The only difference this time is that the protagonists are forging pixels instead of steel. And accountants, financial analysts, and other number crunchers, prepare for your close-up. Your jobs are next. After all, to export sneakers or sweatshirts, companies need an intercontinental supply chain. To export software or spreadsheets, somebody just needs to hit Return.

What makes this latest upheaval so disorienting for Americans is its speed. Agriculture jobs provided decent livelihoods for at least 80 years before the rules changed and working in the factory became the norm. Those industrial jobs endured for some 40 years before the twin pressures of cheap competition overseas and labor-saving automation at home rewrote the rules again. IT jobs – the kind of high-skill knowledge work that was supposed to be our future – are facing the same sort of realignment after only 20 years or so. The upheaval is occurring not across generations, but within individual careers. The rules are being rewritten while people are still playing the game. And that seems unjust.

As I meet programmers and executives, I hear lots of talk about quality and focus and ISO and CMM certifications and getting the details right. But never – not once – does anybody mention innovation, creativity, or changing the world. Again, it reminds me of Japan in the ’80s – dedicated to continuous improvement but often at the expense of bolder leaps of possibility.

And therein lies the opportunity for Americans. It’s inevitable that certain things – fabrication, maintenance, testing, upgrades, and other routine knowledge work – will be done overseas. But that leaves plenty for us to do. After all, before these Indian programmers have something to fabricate, maintain, test, or upgrade, that something first must be imagined and invented. And these creations must be explained to customers and marketed to suppliers and entered into the swirl of commerce in a fashion that people notice, all of which require aptitudes that are more difficult to outsource – imagination, empathy, and the ability to forge relationships. After a week in India, it seems clear that the white-collar jobs with any lasting potential in the US won’t be classically high tech. Instead, they’ll be high concept and high touch.

Adds Dana Blankenhorn:

Programming is rapidly being split into two separate disciplines. One is coding. The other is developing, by which I mean conceiving and designing new jobs that software might do.

Development, as opposed to programming, is a job of the imagination. It’s like the writing I am doing now. It is not a job that has a “price” or “value” on it. No Indian has my mind, nor my imagination, nor yours for that matter. We are all, each of us, irreplaceable in that sense.

Programming, on the other hand, is a learned skill, like any other. The market value of such a skill depends on supply and demand. If you can code 10 times faster than an Indian you’re worth 10 times their price.

There are many directions in which imagination can take us. We can create new programming tools that increase our efficiency. We can create new programs that do jobs no one has previously imagined.

That’s why The World of Always-On is so important. It’s a big new dream, a great new realm in which developers might ply their trade, creating enough work to keep all the Indian, American, Russian, and Chinese programmers in the world happily occupied for years to come.”

Outsourcing is good for India – but it will only provide a few million jobs at best. What’s also needed is for Indians to come up with innovations to raise the incomes of the rest of India – the 700 million in rural India. Only then will India will start to make the transition from an agricultural economy.

Business and Innovation

Dave Pollard writes that businesses are once again starting at look at innovation as a way to grow, and discusses a survey by the Boston Consulting Group:

In what I think is the most useful section of the article, several innovation ‘traps’ are outlined:

  • The Denominator Trap — believing an innovation can capture 100% of an existing product’s market from competitors
  • The Sustainability Trap — underestimating the costs of sustaining market share for the product in years after the initial launch
  • The Substitution Trap — not anticipating how an innovation can cannibalize the market for the company’s existing products
  • The Uniformity Trap — not treating every new product launch as unique, requiring different approach and sustenance
  • The Tactical Trap — short range thinking, not assessing the strategic impact of the new product, competitors’ likely response, and the ‘fit’ of the product with the rest of the company’s line, image etc.

    Some additional ideas that I suggest in my Innovation Incubator process:

  • Consider having your core innovation team in a separate, autonomous business unit or company. Creative minds are often very entrepreneurial, and flourish when they are relatively free from bureaucracy, and when they have some of their own skin in the game.

  • Use ‘pathfinder’ customers on your advisory team — the select few existing customers who always seem to be a step ahead of the pack, open to new ideas, but solidly aware of marketplace realities

  • Learn the process of ‘thinking customers ahead’. Through scenarios, iterative ‘what if’ exercises, future state visioning and other practices, you can help your customers imagine where their own business will be and could be three or five years from now, and hence what they might want to buy from you by that time to stay ahead of the competition.

  • Don’t leave valuable knowledge on the table. An understanding of how consumer tastes are changing in completely different areas from those in which your business operates, an understanding of where the economy is going, and an understanding of demographic changes can provide enormous insight into the potential market for your innovations.

  • In assessing ideas, don’t overlook aspects other than customer enthusiasm: deliverability, quality assurance, sourcing of materials, strategic ‘fit’ with your other products, your company’s image and your corporate ‘culture’, the ‘packagability’ of the product (easy to explain, distribute and use), possible alternatives, and possible conflicts (competing with your customers, regulatory hurdles). Some wonderful ideas have crashed and burned for reasons that had nothing to do with market acceptance.

  • There’s no such thing as too much testing. Small, continuous testing of every aspect of your innovations — checking and rechecking the market, product quality, timing, ease-of-use, perceived value, life cycle, competitors’ offerings, and many other things will allow you to ‘fail fast and fail early’, so that the probability of a successful launch is maximized.

  • Bus. Std: Say Hello to the Always-On World

    My recent column in Business Standard:

    Imagine a world where access to networks is the norm and not the exception, where information is available and notified in real time, where people are reachable independent of their location, and where objects can talk to other objects. This is a world where pervasive wireless networks create an atmospheric layer of connectedness between people, computers and things. This is the always-on world. It is a world that is being born, creating new applications and opportunities.

    The 1980s saw the computing revolution, while the 1990s saw the communications revolution – in the form of mobile telephony and the internet. This decade is seeing it all merge into an IP-based wireless and broadband revolution. The cellphones have greater power than the early personal computers, and computers are coming with in-built wireless connectivity. Even as wireless and the ethernet are combining to provide high-speed access to homes and offices in the coming months, optical fibre networks provide the backbone to connect networks.

    India, too, is starting to see the first glimpses of the always-on world. Telcos have started offering always-on, narrowband internet connectivity at fixed, affordable prices. Code division multiple access and general radio packet switching cellphones offer internet access. Service providers are setting up Wi-Fi hotspots and broadband-enabled cybercafes. Computer prices are falling, driven by a reduction in levies and increased competition. This year will see India add over 30 million cellphones and four million computers. Low-cost “thin” computers have the potential to accelerate the penetration of computing even more. The lack of a legacy installed base means that India can leapfrog directly to the always-on world. The availability of networks and access devices is helping to create the infrastructure for the always-on world.

    What is missing is the content and applications that can take advantage of this ubiquitous platform. This development in India has so far been hobbled by the lack of a delivery infrastructure and the limited access device base. Suddenly, these limitations of the past are disappearing. What application developers and service providers can expect in the always-on world is a computing and communications platform that is real time, affordable and everywhere. Here are a few examples of solutions that can be created for the new, emerging world:

    Connected homes: Low-cost terminals can be used to offer e-mail, chat, local information and limited transactions (bill payments, ticketing) for lower middle-class homes, for which the PC may still be too expensive. Services for tiny businesses: Small shops and neighbourhood stores can be provided networked terminals for providing updates on sales and inventory levels to wholesalers, and doing their accounting electronically. This can help bring down inventory costs across the value chain.

    Sales force automation for SMEs: The mobile workforce in small and medium-sized enterprises can be given wireless-enabled handheld devices which can be used for real-time sales management.

    Logistics and distribution for large enterprises: There is a need for fleet management applications to track trucks and other delivery vehicles as they move across the country. In the coming years, technologies like radio frequency identification (RFID) will enable individual items also to be tracked as they move across the value chain.

    IT for education: With the increasing focus on universal primary education, schools can be given graphical terminals with a server for computer and computer-enabled education. Multimedia content can be created by the best teachers and distributed through the network to schools.

    Today’s interactions on the web are in the form of request-response – we type the address of a website (or click on a link), and then are taken to the destination page (or website). We need to drive the interaction. What always-on infrastructure does is create the base for the publish-subscribe-web (PubSubWeb).

    The PubSubWeb makes possible a new class of information that has the following four attributes:

  • It is frequently updated (as opposed to being static)
  • It needs to be repeatedly distributed to a continuously interested set of entities (as opposed to one-off, need-based access)
  • It is incrementally accessed (as opposed to getting the complete chunk and figuring out what has changed)
  • It needs to be “pushed” in real time (as opposed to demand-driven “pull”).

    In essence, the PubSubWeb establishes an information stream between information producers (publishers) and consumers (subscribers), making possible a whole range of new applications and services. For example, cricket updates, stock quotes, news alerts can be streamed to interested users in the form of microcontent – just the relevant and incremental snippet that has changed, rather than full pages with a lot of redundant information. On the PubSubWeb, information is syndicated by publishers and subscribed to by users. Weblogs and news aggregators are a good example of what the PubSubWeb makes possible. When a weblog is updated, it notifies a central server of its update, which in turn alerts users who have subscribed to receive the updates. Special software (news aggregators) can now go to the weblog, pick up an XML file, parse it, and make the incremental updates available to readers. This process eliminates the need for readers to keep scanning websites to see what content has changed.

    Just as HTML powered the request-response web, rich site summary (RSS) will power the PubSubWeb. Think of the PubSubWeb as the next upgrade to the web as we know it today. It is made possible by the always-on infrastructure that is being constructed. The tools and building blocks for the PubSubWeb exist. What is needed is for service providers to aggregate these tools and integrate them in a seamless manner to build a complete information and events refinery.

    The always-on world will thus bring forth new innovations. It is an idea whose time has come.

  • GlobalSpec: A Parts Catalog Aggregator

    Rafe Needleman writes:

    If you want to find a specialized electronic component for your engineering project, you can search the Web for it, but that can be a frustrating experience. While almost all component manufacturers put their catalogs online, they don’t do it in a consistent, data-driven way that helps people looking for parts, much less looking to compare them between manufacturers. While the data is all on the Web, it often doesn’t seem like it, since it is so hard to find.

    So GlobalSpec has created a system that collects information about parts from 10,000 catalogs that list about 50 million different parts and services, from transistors to air compressors to contract machine shop services. GlobalSpec president John Schneider thinks that of all the parts an engineer could order for a project, he has about 20% accounted for in his system.

    Compared to Froogle or a site like NexTag, GlobalSpec’s difference is the granularity of its data. Compared to Ariba, GlobalSpec is less ambitiousit’s just a catalog aggregator. But that may be just what engineers need. If you’re looking for a control valve, you can specify the range of maximum flow it has to handle (in your choice of 15 units of measurement), as well as precisely what centering mechanism (spring centered, spring offset, etc.) you’re looking for.

    It is, in other words, a fairly typical online publishing enterprise, combined with some well-understood search engine economics. But I find it interesting because lately I’ve been seeing more and more specialized search tools and catalogs.

    Despite the many advances in Web searching, and in the protocols and standards that make it easier to publish information on the Internet, there seems to be a growing need for specialized directories to make sense of all this information.

    Specialty (vertical) search engines look like the next niche.

    TECH TALK: Rethinking Search: The Next Indian Search Engine

    As we look at the attributes of the next Indian Search Engine, there are two principles from open-source software development which we should keep in mind: user customisability and distributed collaboration. These two ideas have laid the foundation for the development of Linux and various other software applications by thousands of committed individuals worldwide. Well see how we can leverage these ideas to build the Next-generation Indian Search Engine (NISE).

    Beyond Google: There is no point in trying to replicate what Google has. The goal should be to do what Google is not able to do. So, rather than trying to crawl millions of pages and try and run PageRank-like algorithms, the focus should be on trying to working around Google, not trying to compete with it.

    Multi-Word Search: This idea stems from the Unix shell and command-line interface. The goal for NISE should be to provide precise results based on what the user wants. For this, the user should be given a single interface which provides a window on other specific websites. For example, a search for films Mumbai should be able to provide a list of the theatres. This is what Google is trying to do in the US context it should be possible to quite effectively create a language for search.

    Not One Directory: The Web has become too big for one directory to hold all the information. Instead, users should be given a platform to create their own directories on topics which they understand. Using OPML, it should be possible to create an infinite network of transcluded distributed directories.

    Better Visualisation: Amazingly, it is only now that ideas from information visualisation (for example, Groxis) are making their way for viewing of search results. By clustering results and providing visualisation techniques, it should be possible to provide rich interfaces for navigation.

    Mobile Devices Search: The current search results are best shown on a web browser. Yet, in countries like India, the number of mobile devices outnumber the computers. So, the focus should be on how NISE can provide accurate results for what users want to do in the form of microcontent that can be sent and displayed on mobile devices.

    Local Focus: NISE needs to have a local focus. Much of our life is spent in neighbourhoods. It is quite hard to find local information in the vicinity of where we live and work. NISE should focus on providing a platform for local providers to update content which can then be distributed to interested users in the neighbourhood via RSS.

    Target SMEs: The big set of enterprises which need a vehicle to reach their customers are the SMEs (small- and medium-sized enterprises). NISE must cater to this set of advertisers. They have very few alternatives to reach out to users yellow pages, local banners, flyers in newspapers. Giving them a cost-effective electronic delivery vehicle for as low as Rs 50-100 a day can provide a win-win service for connecting consumers and local, small businesses.

    Context: Googles focus is on providing the same, consistent results irrespective of who does the search. NISE should focus on leveraging context and personalization by knowing more about the user, it should be possible to provide more accurate information, and not just links to tens of thousands of pages.

    Tomorrow: The Next Indian Search Engine (continued)

    Continue reading

    The Power of One

    Tomas Krag looks at ICT projects and asks “What is it that makes a successful grassroots school connectivity project happen in Indonesia, and in Namibia, but not in the Phillipines and Angola?” and answers: “A large part of the answer is a specific individual, geek, hacker, leader, creator.”

    What are these potential barriers? It seems logical that a person could be out there with the energy and skills to make something happen, but without the personal circumstances to allow him/her to deciate themself to a project. Equally obvious barriers could include legal and policy problems, and finally there may be people out there who would take the initative if only they knew such a thing were possible.

    Is it too much of a stretch of the imagination to believe that there are people out there in every country in the world who could and would intiate and drive their own grassroots project of only they were nudged in the right direction?

    Peronsally I am a big fan of Amercian Author Paul Auster, and his novels, that basically all revolve around the immense role of chance in our lives. The little chance meeting that makies a complete change in our careers, or the tiny little decisions that means we meet the love of our life. I want to play with this chance. I want to experiment with identifying potential grassroots hackers with the power, will and desire to make a difference and see if I cant trigger a few projects in that way.

    If we succeed we may help starting some amazing projects that can do incredible stuff with little or no funding. If we fail well still only have spent a few hundred thousand dollars, which is such a pathetic fraction of the total money spent on infrastructure in the developing world, that it seems to me it will be money well spent on a valuable lesson.

    It is always a few who change the world.

    Isomorphic Smart Client

    Ramdhan points to Isomorphic Software’s solution which translates to “Rich client + Thin client = Isomorphic SmartClient”:

    Isomorphic SmartClient (ISC) brings the speed and functionality of desktop applications to standard web browsers. The ISC presentation layer is the first web application framework that spans across client and server, enabling live transactions and rich GUI interactivity without page reloads. ISC provides an easy, declarative authoring style for rapid development in either XML or JavaScript. And with a client-side system built upon standard browser technologies, ISC enables true zero-install applications.

    Looks interesting. Try the test drive.

    OS-enabled Mobile Phones

    News.com writes about the increasing sales of smartphones, with Symbian, Microsoft, Palm and Linux all battling for a piece of the action.

    Market research firm Zelos Group said sales of full-feature handsets will surpass those of PCs in 2006, when those handsets will be available for as little as $157, only slightly above the average price of $138 for a mobile phone. In 2008, shipments of full-feature handsets will rise to about 290 million, according to Zelos, making up about 43 percent of global handset sales.

    So-called full-feature handsets are based on operating systems such as Palm, Linux or Windows Mobile, McAteer said, meaning that consumers can more easily upgrade the phones’ software beyond what’s now capable with Qualcomm’s binary run-time environment for wireless or Sun Microsystems’ Java.

    Such a trend could be “disruptive” to the wireless, personal electronics and computing segments, as consumers adopt full-feature handsets in place of mobile devices such as personal digital assistants, digital cameras, game consoles and music players, the research firm said. An early indication of this is Nokia becoming a leading distributor of digital cameras, Zelos said.

    Getting Your Resume Read

    Joel Spolsky provides some tips:

  • Proofread everything a hundred times and have one other person proofread it. Someone who got really good grades in English.

  • Write a personal cover letter that is customized for the job you are applying for. Try to sound like a human in the cover letter. You want people to think of you as a human being.

  • Study the directions that are given for how to apply. They are there for a reason. For example our website instructs you to send a rsum to jobs@fogcreek.com. This goes into an email folder which we go through to find good candidates. If you think for some reason that your rsum will get more attention if you print it out and send it through the mail, that you’ll “stand out” somehow, disabuse yourself of that notion. Paper rsums can’t get into the email folder we’re using to keep track of applicants unless we scan them in, and, you know what? The scanner is right next to the shredder in my office and the shredder is easier to use.

  • Don’t apply for too many jobs. I don’t think there’s ever a reason to apply for more than three or four jobs at a time. Rsumspam, or any sign that you’re applying for 100 jobs, just makes you look desperate which makes you look unqualified. You want to look like you are good enough to be in heavy demand. You’re going to decide where you want to work, because you’re smart enough to have a choice in the matter, so you only need to apply for one or two jobs. A personalized cover letter that shows that you understand what the company does goes a long way to proving that you care enough to deserve a chance.

  • Productivity as New Engine of Wealth

    That’s according to Cisco CEO John Chambers. NYTimes writes:

    “The next big thing in technology is going to change dramatically our standard of living,” Mr. Chambers said in an interview. “If productivity grows 1 percent per year, your standard of living doubles every 72 years. If it grows at 3 percent, which I think is probable, you’re talking every 24 years.”

    While economists agree that countries with a more productive labor force grow faster, the drive for productivity is spurring many Western companies to relocate jobs, increasingly white-collar ones, to cheaper markets including India and China.

    At Cisco, where Chambers is pushing for productivity gains of 10 to 15 percent a year over the next five years…Cisco’s productivity jumped 9 percent in the last quarter, Mr. Chambers said, contributing to an 87.5 percent increase in profit per share.

    Moving jobs to lower-cost countries is part of that, Mr. Chambers said. Cisco, based in San Jose, Calif., has moved jobs to India and China, though he said he did not know the exact number.

    “If you’re talking about an engineering job in the U.S., or here in Europe, versus an engineering job in China or India, the price differential is 5 or 10 to 1,” he said. “That’s not going to change.”

    Mr. Chambers said, though, that the number of people Cisco employs in advanced economies had not decreased because it trains its displaced workers for new jobs. It is a prescription he offers for countries, as well.

    “The jobs over time will go to the best-educated places with the best infrastructure and the most supportive governments,” Mr. Chambers said. “How you create an environment where the jobs stay is going to be a key element.”