Tech’s Young Entrepreneurs

Business Week has a special report: “These folks are a little older and more experienced than back in the ’90s heyday. However, they’re just as inspired and determined.” Among those profiled:

  • Marc Fleury is taking open-source software to Corporate America with his JBoss.

  • Ross Mayfield’s Socialtext uses the collaborative power of the Internet as a whole new way to build technology.

  • Svetlozar Nestorov is a computer-science grad who studied data-mining with the founders of Google and last year launched travel search engine Mobissimo.

  • Mike Horton is hoping to be the Bill Gates of sensor technology with his company, Crossbow Technology.

  • And the youths of the crowd, Hosain Raham and Alex Asseily are trying to change the world of speech and voice technology with their startup, Aliph.

  • Wireless Hotspots Reality

    WSJ writes: “The simple truth may be that outside of homes and offices, and outside of obvious white-collar tar pits like hotels and airport lounges, there really may not be much of a market for high-speed mobile Internet connectivity. The proverbial killer app could always emerge, like being able to watch movies over the Web, the way they do in Hong Kong. It’s just as likely, though, that people would prefer to watch them at home.”

    McDonald’s Turnaround

    We have all eaten at McDonald’s in our lives – and continue to do. So, it is interesting to read this story in The Economist on how the company is bouncing back:

    The company reached a low point in 2001, when customer-satisfaction surveys showed McDonald’s was falling well behind its direct rivals, Wendy’s and Burger King. Customers were also switching to healthier offerings, such as Subway’s freshly filled sandwiches. Lots of money was spent opening yet more stores, but margins were shrinking and complaints about dirty restaurants and indifferent staff were growing. The firm’s philosophy of QSC&Vquality, service, cleanliness and valuejust was not working any more. McDonald’s ended 2002 with its first quarterly loss since 1954, the year Mr Kroc persuaded the McDonald brothers to let him franchise their new Speedee self-service restaurant system.

    Instead of opening lots of new restaurants, McDonald’s has switched to generating more sales from its existing ones. This year, some 90% of McDonald’s growth is likely to come from incremental sales at its existing restaurants, compared with around half last year.

    McDonald’s insists that its businesses will remain, in effect, lots of local restaurants, although ones expected to operate within clearly defined parameters. That still allows for plenty of variation. In some Latin American cities, McDonald’s is even experimenting with differential pricing: charging different prices for meals according to the relative wealth of their neighbourhoods. If you are looking for a command centre with one push button that operates our restaurants in every corner of the world, you won’t find it, says Jim Skinner, McDonald’s vice-chairman.

    And like any local restaurant, it is what is on the menu that is really important. The average sale in a McDonald’s is just under $5. Typically what might happen is a mother comes in, buys her children a Happy Meal, and herself just a coffee. Now that salads and other lighter options have been added to the menu, many of those mothers now buy themselves a meal too, lifting the order value to around $12. The lighter options also encourage existing customers to come back more often because there is a greater variety of things to eat. Nevertheless, for now, the Big Mac remains the most popular item worldwide.

    McDonald’s does not publicly break down sales and profits of its individual items. But anything that involves fresh, perishable produce that does not come in a standardised and easily storable form (ie, a lettuce compared with a frozen hamburger patty), increases complexity and cost. McDonald’s officials insist their salads are priced to be profitable, arguing that if they were not its franchisees would not want to sell them. But then, by some measures, supermarket loss-leaders are also profitable because they bring in customers who buy other products. Nevertheless, salads are sending a message to millions of customers: that it is now acceptable to eat at McDonald’s again because the menu is healthiereven though the vast majority still order a burger and fries.

    The Extinction of the Programming Species

    Slashdot points to a series by Max Goff, who writes that “the postmodern programmer (the entire sub-species, not just those domiciled in the U.S.) shares much with the blacksmith of old, and will become just as extinct in relatively short order. It is not due to work visas or outsourcing, but has much more to do with the evolution of work itself.”

    Measuring Popularity, Authority, Credibility Online

    Robin Good writes about PACmeter, and the various tools which can help in assessments. “This mini-guide brings together the best public resources available today on the Web that facilitate the task of assessing the credibility, authority and popularity of any Web site. When this is not directly feasible it offers resources and guidelines on how to personally assess and evaluate such factors. In general, it can be said that there is not one unique, reliable indicator of credibility, authority and popularity for public Web sites. Rather, there are a multiplicity of Web indicators that can be utilized to gather valuable data about a web site depending on the specific needs and scope of such research. ”

    The article discusses the following:
    a) Public Link Popularity Indicators
    b) Google PageRank
    c) Site Stats – (from server logs, live tracker, ad impressions, etc.)
    d) Advertising Performance Indicators
    e) Other Popularity Indicators

    Radio’s Future

    Dan Gillmor writes:

    Technology and creative thinking have come to our rescue. Producers of audio programming have an array of inexpensive and easy-to-use tools, and much more flexibility in delivering what they create. Listeners are huge winners. From satellites in outer space to neighborhood broadcasting to our portable MP3 players and even our phones, we can get what we want, when we want it.

    There will still be room, when the transition is finished, for traditional radio stations and networks — assuming they don’t successfully conspire with politicians and their entertainment-industry buddies to stifle the innovators, as they’ve pretty much done with Internet radio. The old guard will have to provide higher quality if it wants to survive.

    Satellite radio isn’t just a mass-audience medium. It enables niche programming to succeed, when the niche can attract a national audience that would not be sufficient in a given community to support the program.

    The niche a neighborhood can support is truly local programming, something that most commercial stations do half-heartedly at best. Despite the traditional broadcasters’ best efforts to erect roadblocks, we’re making slow progress toward small-scale service. Low-powered radio stations, serving neighborhoods as opposed to large geographical areas, are showing signs of emerging from the regulatory morass where they’ve been bogged down.

    The broadcasters have insisted that low-powered radio would interfere with their signals. The evidence is otherwise.

    One real value of traditional local radio for many of us is traffic reports and other truly local news. Even here, niche players will erode the franchise of the big broadcasters.

    We can already get traffic reports on mobile phones, using services like TellMe and emerging competitors. As mobile networks get more sophisticated and start feeding data to in-car map displays and other gear, we’ll get real-time suggestions on the best personal routing to our destinations. Today’s radio stations should realize that mobile networks could also become the delivery systems for other kinds of news.

    Meanwhile, down in the trenches of the technology world, some clever folks are creating something they’re calling “podcasting,” delivering audio programming to MP3 players like Apple’s iPod. The genre is at the distant periphery of radio today, but it has major potential.

    Its significance is the flexibility it adds to the ecosystem. It helps us collect radio-like programming, some of which is being created by people using low-cost yet adequate audio tools, that we can put on our MP3 players and then listen to at our leisure. More intriguing, this is going to be a delivery system for gifted amateurs and, if they’re smart, professional programmers as well.

    We can already save Internet radio broadcasts to our PCs and MP3 players. Now, devices designed to record radio straight off the air at designated times are starting to appear. Just as TiVo and other hard disk recorders are changing the way we watch TV, we can adapt radio to our own purposes, too.

    It is interesting to see how a medium that was once written off is making a comeback aided by technology and creativity.

    TECH TALK: Massputers, Redux: The Time Has Come

    Last week has an interesting one from the point of view of affordable computing solutions. Microsofts Steve Ballmer talked about the need for $100 computers, and AMD announced a $185 computer ($249 with monitor). I will discuss the significance and impact of these developments. But first, let us look at the motivation that is driving the need for computers for the next users what I will refer to as Massputers (a term coined by Om Malik).

    There are two key factors which are making computer makers finally wake up to the opportunity in emerging markets:

    Slowing Growth in Current Markets: The developed world is awash in computers there are over 500 million users across these countries. This is now primarily an upgrade market almost everyone who needs a computer has one. While computer growth continues to be strong (176 million computers will be bought in 2004, according to ZDNet which quotes IDC), this is being driven by two factors: depressed growth in previous years, and increasing offtake in emerging markets. The next new fast machine is no longer a driving factor in purchase, as evidenced by Intels decision to de-emphasise clock speeds for its processors.

    Increasing Demand in Emerging Markets: The developing countries of the world are where the next users of computing are going to come from. China and India are emerging as two hot growth markets. China overtook Japan in 2003 to become the second largest PC market with sales of over 13 million units (US led with 51 million units), according to India is expected to have sales of about 3.5-4 million computers in 2004. Affordability is going to be increasingly important in these markets.

    The emerging market opportunity was elaborated on by Om Malik in his Massputers blog post: Technologys biggest opportunity that is staring them in the face. It is what I call a Massputer a computer that costs $300 for the computing hungry masses in emerging economies like India, China and Brazil. Users of this massputer should be able to do basic tasks like writing documents, Internet surfing, email and perhaps some business-related tasks like data entry. There are nearly four billion people who live in these emerging markets and assuming that only 10 per cent of them can afford $300 it is still a market of 400 million.

    Business Week did a cover story recently entitled Techs Future and wrote: During the first 50 years of the info-tech era, about 1 billion people have come to use computers, the vast majority of them in North America, Western Europe, and Japan. But those markets are maturing. Computer industry sales in the U.S. are expected to increase just 6% per year from now to 2008, according to market researcher IDC. To thrive, the industry must reach out to the next 1 billion customers. And many of those people will come not from the same old places but from far-flung frontiers like Shanghai, Cape Town, and Andhra PradeshLed by China, India, Russia, and Brazil, emerging markets are expected to see tech sales surge 11% per year over the next half decade, to $230 billion, according to IDC. What makes these markets so appealing is not just the poor, but also the growing ranks of the middle-class consumers.

    The time has come for the IT industry to look at, the fortune at the bottom of the pyramid and the next billion.

    I will argue in this series (as I have often done on my blog) that the strategies being currently adopted by the likes of Microsoft and AMD are deeply flawed. Affordable $100-200 computers is just one dimension for attracting the next users of computing. What is needed is a fundamental reinvention of the computing architecture and business model. The IT majors are reluctant to do this because it threatens to be disruptive to their business. And that is where the real opportunity lies for innovators.

    Tomorrow: Ballmer Talk