Wireless Unleashed

A new group blog, Wireless Unleashed, has as its contributors Kevin Werbach, Clay Shirky, Andrew Odlyzko, and David Isenberg. “The site focuses on the benefits of reallocating low-frequency wireless capacity from broadcasting to unlicensed applications, both here and around the world. There is a huge amount of capacity which could be used for two-way applications like broadband to the home, but which is locked up in broadcast allocations based on 1950s technology. Freeing it up could create massive opportunities for innovation, and could dramatically lower the costs of wireless connectivity in developing countries.”

Hope some of our policy-makers in India read it!

Websites as Blogs

Dana Blankenhorn suggests that every site ought to be a blog:

A blog defines a template with dynamic content in the center and static content along the sides.

Most blogs are built on a database metaphor, to make searching for items easy. Why couldn’t those be product searches?

The best blog packages are also scalable. They enable community as a basic function.

So why do we still see so many static home pages?

Both corporate and political sites still use static home pages and reserve the “blog” for an inside page.

What people most want in pages they bookmark is dynamic content. They want to know that each time they hit the page there will be something new to see. Blogging software enables just that.

The blogging metaphor also makes it simple to build a site that’s dynamic, scalable and easy-to-maintain.

So dump your current site. Do a redesign. Get Movable Type, or Radio, and create a dynamic, scalable, database-driven, easy-to-update site in minutes.

Great points!

The Next Internet

Excerpts from a USA Today panel discussion:

John Chambers (Cisco): This next decade’s going to be really when the Internet comes home to the average American. This is the decade you see the applications, the gaming, the video coming to the home, the health care, the education that will truly change every aspect of our lives. The way people work, live, learn and play.

Steve Jurvetson (Draper Fisher Jurvetson): You’re going to see an explosion in voice and video over Internet protocol networks instead of over traditional switch-line networks. It gives you amazing flexibility, the ability to pick from 10,000 channels of television programming, every possible fetish you could imagine in sports and hobbies.

Marc Andreessen (Opsware): In the middle of what was a pretty horrific recession we now have 10 times more people on the Internet now than we did five years ago. We’ve got 10 times or a hundred times more broadband. We’ve got Internet advertising, which is a real phenomenon. We have a whole generation of citizens now used to doing business online, used to buying things online, and used to communicating online.

On the technology side, we’ve had over that period about a 10 times reduction in price in a lot of components that go into building the Internet and building services on the Internet, like servers and software and networking equipment.

All that’s really adding up. The economics of the Internet have undergone something like a thousand-times swing. If you’re going to launch an Internet site or an Internet business today, it’s probably going to cost about a tenth of what it would have cost five years ago, but you’re going to have 10 times more consumers you can address and probably 10 times the advertising revenue. There’s a seriousness and commitment and dedication and effort and investment going into it now that is a lot more interesting and a lot more real than what was happening in the ’90s.

Jurvetson: There are a lot of broken things with search. Getting too many results is one of them. We have too much information. We don’t have control or coherency.

Some people are tackling that information glut with visualization tools. (Software that arranges information in graphical form.) The optic nerve is like the broadband pipe to the brain.

Sometimes when you’re looking for information, it’s not “the answer” you need, but it’s “who in my large corporation has the answer to the question I need to ask?” Maybe the answer isn’t on the Web yet. Maybe it’s only in your e-mail system. So companies like Tacit (which can find key words in e-mail and try to match people with similar interests) and others are helping mine that.

Search: Today and Tomorrow

ResourceShelf [1 2] has an interview with Gary Flake, Head of Yahoo Research Labs. Exceprts:

RS: What’s wrong with web search today?

GF: It’s easier for me to point to what web search should be and then highlight the differences. If web search were perfect, then it would produce an answer to every query that would be as good — or better — than if the smartest people in the world had as much time, data, and contextual information (about the user) required to fulfill the query; and it would do all of this in a split second. In other words, the search engine would be an artificial intelligence (AI) so smart that if a correct answer could be found in theory with close to infinite resources, then it would find it. If a correct answer did not exist, then the search engine would give you the next best thing: an approximation, or perhaps even an explanation as to why your query has no perfect result. (And by the way, if we realized all of the above within my lifetime, I would consider myself lucky. That should give you an idea of what sort of time frame I am talking about.)

Alternative interfaces, like cell phones, voice, and snazzy graphical results are all nice, but in the end they represent relatively easy technology problems when compared to the challenges involved in realizing our hypothetical search engine. What really matters is what is under the hood.

Today, search engines have almost no understanding of words or language in any significant way. They exploit the statistical properties of words and links, but in no way is there anything going on akin to understanding. Search engines don’t recognize user intent, can’t distinguish goal-oriented search from browsing search, and are completely ignorant of the subtleties of how different concepts relate to one another. Moreover, they completely lack wisdom — i.e., they are very poor at distinguishing between trivia and something profound.

RS: What’s your feeling about trying to place structured data like a library catalog/bibliographic record or an indexed article into an unstructured database? Asked another way, what’s the role of structured data in an unstructured web world? How can we bring both types of resources together and still allow users to take advantage of all of the additional access points that a structured database and its retrieval mechanism make available?

GF: The beautiful thing about a relational database is that its structure tells you a lot about what is important. Database designers have been brilliant at optimizing databases (both the organization of the information as well as the algorithms) to best exploit this regularity. When you flatten out a database, those paths towards optimization often aren’t available.

A middle ground — which is not perfect, but adds a lot of utility — is to convert structured into a semi-structured form. Today, we treat documents as a big bag of words and index those words. In this semi-structured approach, we take structured information (say, the value of specific fields) and synthesize fake words that represent the fact that “document X has field Y with value Z.? Now, clearly I can’t run a SQL query on this representation; but at least I can search for documents with specific field:value pairs.

I’d like to tell you that we will be able to make an unstructured database as powerful as a structured database; but that simply is not the case. Nonetheless, the fusion of structured and unstructured data and approaches will add a lot of utility to the lives of most users.

In parallel to the above, we have started on a different approach through the launch of our Content Acquisition Program, working with such partners as NPR and the Library of Congress, as well as with universities such as Northwestern, UCLA and University of Michigan — all so we can bring their structured data to a larger audience.

RS: What’s going to be the “next big thing” in web search?

GF: I believe that the next big thing in web search will be a form of personalization that is simple, unobtrusive, intuitive, and almost without exception better than the non-personalized version of web search. Two ways of getting this wrong are to (1) keep the GUI as is, implicitly build a user model, and show personalized results all the time, or (2) expose many new GUI elements to the user to give a great deal of explicit control for personalization.

The sweet spot — the thing that works — will most likely be a slight modification to the GUI, say a single new GUI element, that gives the user the power to tell the search engine what they like or dislike. If done correctly, we will all wonder how we ever searched without it, and it will be as if we get the best of both worlds: more control with minimal complication and a search experience that seems tailored to our own needs.

ITC’s e-Choupals

The Economist profiles Yogi Deveshwar, ITC’s chief, and discusses its rural foray with e-Choupals. ITC is India’s largest tobacco company.

Shaded by the generous boughs of an ancient neem tree and overlooked by the village temple is the traditional choupal, or meeting-place, of Badamungalaya in the Indian state of Madhya Pradesh. A few narrow lanes away, in the spartan front room of Rajesh Nagodia, a local farmer, is the e-choupal: a desktop computer, with an internet connection and revolutionary implications for Badamungalaya and 4,150 other villages. The upset in India’s recent general election was seen as a rebuff from such villages to a ruling party that boasted of shining successes. They had passed the countryside by. The e-choupal initiative is an attempt to join the urban India of rapid growth and a world-beating information-technology industry, to the rural one, where 72% of Indians live, many of them in feudal poverty.

In Badamungalaya, farmers use the e-choupal to check prices for their soya beans at the nearest government-run market, or even on the Chicago futures exchange. They look at weather forecasts. They order fertiliser and herbicide, and consult an agronomist by e-mail when their crops turn yellow. Some buy life insurance. The local shopkeeper orders salt, flour and sweets. Two wealthy villagers have even bought motorcycles. Others club together to rent tractors. School children check their exam results. Distance has been killed, says Mr Nagodia. The village is only about 40km (25 miles) from Madhya Pradesh’s capital, Bhopal. But it is a spine-jolting journey along a dirt road.

[ITC’s] chairman, Yogesh Deveshwar, is fired with missionary zeal. The e-choupal will transform the rural life of India. In May it won the inaugural World Business Award, for corporate do-gooders in poor countries, bestowed jointly by the International Chamber of Commerce, the United Nations Development Programme, and the Prince of Wales’s business forum.

. ITC establishes them where it is already buying agricultural produce. There are websites for each of the crops covered: soya, wheat, coffee and aquaculture (shrimp). Locations are mostly chosen from the 87% of India’s 600,000 villages with under 5,000 inhabitantstypically, over 1,000 and fairly accessible. To the obvious shortages, of phone lines, electricity and literate farmers, the answers are VSAT satellite links, solar batteries and carefully chosen sanchalaksor conductorswhom ITC equips with the technology.

The sanchalak is usually an educated local farmer (ideally with children soon to become computer nerds) from the dominant local casteso some worry that such schemes reinforce local elites. He earns a commission for any ITC procurement, as well as for sales by third parties. For Badamungalaya’s Mr Nogadia, it has become almost a full-time business. The farmers gain market knowledge and, if they wish, sell their product online. They can haggle better with the middlemen, who have tended to skim a huge proportion of rural revenue. And by bundling together demand, farmers can secure better prices for inputs.

Two of the big difficulties faced by the rural economy are mitigated: virtual aggregation disguises the tiny size of most landholdings; better information helps overcome the uncertainty that translates into a reluctance to spend. The possibilities are endless. Once a commercially viable way is found to put a computer in a village, there are plenty of potential users: state governments, putting their services online; consumer-goods firms, whose distribution networks rarely get to smaller villages; microcredit-providers; and so on. Mr Deveshwar’s jubilation is that we will be owners of the road! and, of course, charge a toll.

ITC’s e-Choupals are the spokes in rural India. They need hubs built around the RISC to be more effective.

TECH TALK: Good Books: The Art of Profitability (Part 2)

What makes Adrian Slywotzkys The Art of Profitability a good read is its conversational style, contemporary business examples and the simple graphics which illustrate each of the business models. What is a business model? Slywotzky says: A business model is the answer to a few questions. What is my unique value proposition? Who are my customers? How do I make money? What is my strategic control and how do I protect it?

The focus of the book is on addressing some key questions about profit models, each of which hinges on fully understanding the customer:

  • Which of these profit models are at work in my business? Can I identify others?
  • How does profit happen in my competitors businesses?
  • What can I do in the next ninety days to intensity my organizations focus on profitability?
  • Which profit models would enable us to maximise profit this year?
  • Is my organization aligned to capitalize on the profit models in my business?
  • Slywotzky was interviewed by the CEO Fresher about the book. Here are some excerpts from the interview:

    What exactly is a profit model?

    Wherever there is profit, you can find the essential forces that cause it to happen in a particular situation. Ohno at Toyota always said, “Ask ‘Why?'” five times. By the fifth time, you’ll start getting close to the real answer.” You have to treat profitability as a puzzle and find out how it can happen for your business. I’ve chosen 23 profit models for this book and used illustrations and stories to show readers how they work.

    What’s the biggest mistake that companies are making that is preventing them from making a profit?

    Profitability has to be understood by each company on its own terms. They can’t just copy a profit model that worked for another company. They have to choose the right model after carefully analyzing their business, their customers, and their competitors.

    How can a company stay profitable if their competitors keep coming in with copies of its products at lower prices?

    Several ways. Intel uses a “time profit” model. When they are first to market with a new product, profits happen in the first four or five quarters and then drop down very quickly to almost zero after that. To make a profit, Intel must work hard to maintain a two to three-year lead over its competitors. Diffusing the product as instantly as possible helps extend their period of profitability.

    Why does a company like SMH, makers of Swatch, bother selling all those low-profit margin plastic watches when the majority of their profit comes from their luxury lines of watches? Isn’t that keeping the company less profitable?

    You’re right that the plastic Swatches made by the parent company SMH have low profit margins, but actually they are just as important to SMH’s profitability as the high-margin watches. By producing the plastic watches, SMH builds a firewall against competitors who may try to produce cheaper imitations. They won’t be able to develop the economics to move up the pyramid. This is called a Pyramid Profit Model because the profit-generating watches are at the top of the pyramid and the defensive plastic watches at the bottom. It turns out that 70% to 80% of SMH’s profit is from the top of the pyramid, but the base of the pyramid is just as important.

    I can see how you can sell the same product to different levels of customers at different prices, but can you sell the same product to the same customer at different prices?

    It happens all the time. Coca-Cola, for example, sells you a soda for 8 to 10 cents per ounce in a vending machine, 10 or more cents per ounce at a restaurant, but only 2 cents per ounce at a grocery store. All of us as customers behave differently in different situations; therefore, to maintain profitability, prices should reflect different price sensitivities in different environments.

    In an interview with the Wharton Journal, Slywotzky said: Someone recently told me that if you want to understand leadership and you are in an organization, don’t look up. Look in the mirror. And so, I think the first step is to understand that anybody with the right ideas can play a leadership role. I think the second thing is to have the right content and the right agenda. And I think a fantastic way to begin is to start asking the series of questions that are posed in The Art of Profitability. 1. How does profit happen? 2. How do we get everybody in our organization to understand it and act on it? 3. What’s our next profit model? No profit model is forever. And no. 4 is the greatest achievement doesn’t happen very often but it is phenomenally valuable. It is to ask the question, can we create a unique way of being profitable? Dell has done it. Starbucks has done it. Toyota has done it. It is most important to understand how profit happens and get everybody aligned behind it. But it is exceptionally valuable to ask the question can we develop a unique profit model in our industry, so that we can compete differently from the others. And the rewards of that are just phenomenally high.

    So, read the book and operationalise the ideas embedded in there!

    Tomorrow: The Business of Software

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