iTunes jackpot: Billions and billions
[Via Brainstorm Tech:]

Apple has paid out more than $2 billion to developers, $12 billion to music labels

Source: Asymco

Sometime in the next week or so, the zeros on the App Store countdown odometer will roll over and Apple (AAPL) will announce that 10 billion apps have been downloaded since the store opened two and a half years ago.

Asymco’s Horace Dediu has used the approaching milestone to run series of analytical charts. The first group, posted Sunday, showed that the number of apps downloaded per iOS device is accelerating and has grown from about 10 per iPhone and iPod touch in the fall of 2008 to more than 60 per iOS device today. Sometime later this year, the number of app downloads since 2008 will overtake the number of songs downloaded since 2003.

Of course, we pay for the music we buy from iTunes, while most of those apps are free. But there is money to be made supplying both kinds of content, and on Monday Dediu took a crack at estimating how much.

His conclusion: Apple has paid more than $2 billion to third-party app developers and about $12 billion to the music labels. To see his math, click here.

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I wrote about the app economy a few weeks ago. Here we have another example. Just from Apple – $2 billion to developers for products that did not exist 3 years ago. How many markets go from zero to $2 billion in that time?

The ability of groups to generate capital with rapid creative cycles drives this. It is not built on monolithic applications that take years and hundred of man-hours to develop. Quick, rapid and fast are the hallmarks of this economy.

by kevindooley

Oregon must create a market of early adopters
[Via Climate Solutions]

One reason we created the New Energy Cities program at Climate Solutions was to elevate the conversation and focus on a small number of city and utility partnerships that are serious about the degree of innovation needed to create a clean, efficient energy system at the local level.

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Early adopters are a small portion of any community – the ones most in tune with new ideas and processes. The majority of people do not want new ideas or processes – they just want to continue using what they have because they know that these will work.

These doers really only change, only adopt innovative processes, when either of two things happen: 1) the people they know all change; or, 2) a thought leader they respect tells them to.

These thought leaders often act as mediators between the doers and the early adopters, two populations that often do not communicate well. The early adopters are always coming up with new things that just distract the doers.

Most communities do not have enough of these mediators and do not effectively leverage those they do have. People seldom get kudos for acting to facilitate change like this.

To create a community of change, one needs to identify and leverage these thought leaders who can effectively mediate between the early adopters and the doers. The more efficient this can be done, the more rapidly the entire community can adapt to change.

by Collin Allen

Wikileaks: traditional liberalism with balls?
[Via Boing Boing]

The mainstream media likes to suggest, with a nudge and a wink and abuse of the word “cyber,” that Wikileaks represents a radical ideological position. But if there’s a moral crusade to be found, maybe it’s rooted in a tradition closer to home: classical Western liberal-democratic principles.

In The New Republic, Noam Scheiber takes for granted that Wikileaks is here to stay, with relentless pressure on big business and big government that permanently hampers their ability to prevent leaks. This will result in smaller, more humane organizations.

I have no idea what size organization is optimal for preventing leaks, but, presumably, it should be small enough to avoid wide-scale alienation, which clearly excludes big bureaucracies. Ideally, you’d want to stay small enough to preserve a sense of community, so that people’s ties to one another and the leadership act as a powerful check against leaking.

To make this point, Scheiber reminds us that Wikileaks’ stated aim–making organizations operate more ethically–is a mainstream one: “It’s easier for honest CEOs to run an honest business, if the dishonest businesses are more affected negatively by leaks than honest businesses,” he quotes Julian Assange.

Scheiber’s argument seems to be that Wikileaks’ disclosures could have more subtle and far-reaching effects on organizations than it expects.

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Apple demonstrates today the sort of company Scheiber discusses. Maybe it is because Jobs hates leaks.

Scheiber’s article is one that should be read by everyone. It is a very important one in its implications. Wikileaks, and the ideas behind it, may alter how businesses work and adapt. It touches on some of the ideas of David Brin in The Transparent Society – the same technologies that permit the powerful to spy on us can, and should, be used to spy on the powerful.

Scheiber postulates, and I agree, that the inability of large companies to stem leaks may result in the greater proliferation of corporate ‘cells – it is easier to control the flow in smaller groups without stemming the tide totally. Inefficiencies in small groups can be overcome when needed. In larger groups, it can be deadly.

Luckily, we also have the ability today for smaller organizations to leverage the abilities of others to succeed. The small biotech company I was VP, Research at had perhaps 3 of us who were working in the lab. But we did not need more because we could have other companies do the sequencing for us – no need for a core facility with tens of people. We could have other companies synthesize DNA for us – no need for a core facility with tens of people. We were able to accomplish great work with a company with 10-20 fold fewer people than it would have taken just 10 years earlier.

So, there will be business pressures to become smaller and more adaptive as well as information pressures.

That is why I think Apple is the first of its kind – a truly large company that has somehow maintained the abilty for small company adaptability. It acts small, has research abilities that are far beyond the modest number of people it has doing R&D. It is able to run rings consistently around other companies. It is one of the largest companies by capital value on the planet yet it acts like a startup.

I don’t know all the details of why but we all know that Jobs is the reason. But I think part of the way this new sort of company came about was because of Jobs’ reaction to leaks.

Apple used to leak like a sieve with whole websites devoted to writing about them. Jobs pretty much stopped that, so much so that a lost iPhone became a cause celebré.

One would have expected this sort of iron control on information leaks would have harmed Apple. Most organizations respond to by clamping down on information flow but, and this is especially true of large ones, this is like giving themselves a lobotomy. Information flow slows, making it very hard to make good decisions and adapt properly to changing conditions.

That is what Assange claims he wants to do with Wikileaks – cause the old dinosaurs to react in ways that result in their own downfall.

Well, Apple shut down leaks and actually became a better and stronger company. I’d love to know the details but I expect that Jobs actually implemented some of what Scheiber discusses. Break the groups down into more manageable units and use pressures to make leaking a violation of social mores.

Of course, this is a two way street and these same social mores can push back on the company to be more ethical, etc. Even the smallest group is open to leaks when some feel the company is acting unethically. It all becomes a system of controls and feedbacks that does not harm the information flow needed to adapt.

I believe that when it is all said and done, we will discover that the same things that ended most of Apple’s leaks also led to a large amount of their success. That somehow Jobs’ response actually did not stifle creativity but enhanced it.

If we can replicate this elsewhere, then things like Wikileaks would not need to be feared by most organizations. In fact, Wikileaks would become irrelevant for the vast majority of us.

by bfishadow

Instagram Hits One Million Users in First Ten Weeks
[Via Daring Fireball]

Off the top of my head, I’d say Instagram is my favorite new app of 2010.

Update: As a point of reference, it took Twitter two years to get to one million users.

[More]

One million in 10 weeks. The dynamics of that are just insane.

And the app market place requires them to be very, very attentive to what their customers want. Otherwise, another app could steal those one million even faster.

This rapid adaption to what customers want requires a very different organizational structure than at many companies. It must be able to adapt rapidly to new information and it must move that information around rapidly.

Because now there are a million people who want this app to continue to provide them with new ways to interact with their photos.

You see this in games now. Updates are not just for bug fixes, etc. They include new levels – as seen with Angry Birds – or new swords and enemies – as seen with Infinity Blade. These were both free upgrades that could be developed in a couple of months rather than years. They keep the game in front of people because the updates are downloaded automatically from iTunes. No new marketing costs.

Then when a new version comes out, people are ready to pop some more cash.

Staying engaged and being adaptive – the successful companies will have both of these attributes.

On September 14, I moderated a discussion between Ash Awad, Vice President of Energy & Facility Services at McKinstry; and Daniel Friedman, Dean of the College of Built Environments at the University of Washington.

The topic was A Conversation About Sustainable Design and the Seattle Channel videotaped it. It was a fantastic evening and I had a wonderful time sitting between two great speakers.

by doortoriver

Feature: There is no Plan B: why the IPv4-to-IPv6 transition will be ugly
[Via Ars Technica]

Twenty years ago, the fastest Internet backbone links were 1.5Mbps. Today we argue whether that’s a fast enough minimum to connect home users. In 1993, 1.3 million machines were connected to the Internet. By this past summer, that number had risen to 769 million— and this only counts systems that have DNS names. The notion of a computer that is not connected to the Internet is patently absurd these days.

But all of this rapid progress is going to slow in the next few years. The Internet will soon be sailing in very rough seas, as it’s about to run out of addresses, needing to be gutted and reconfigured for continued growth in the second half of the 2010s and beyond. Originally, the idea was that this upgrade would happen quietly in the background, but over the past few years, it has become clear that the change from the current Internet Protocol version 4, which is quickly running out of addresses, to the new version 6 will be quite a messy affair.

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While somewhat technological babble, the problems seen with running out of Internet addresses are very similar to ones we will continue to face over the coming years – having to make massive changes at the last moment because we did not do a good job thinking about the transition.

Like climate change, redoing the Internet’s addressing protocol will happen whether we want it or are prepared for it. And like climate change, we have wasted 20 years dithering.

And the transition may end up costing money, as older devices have to be replaced because they no longer work properly.

So, the next few years might be a nice demonstration of just how adaptive and resilient many organizations are. And not isolated organizations but almost all of them. One failure along the route can remove access for many.

We will be forced into a new regime where we have no experience and no real way to test possible solutions. Instead of one organization dropped in the deep end to sink or swim, imagine 50 all tied together, so if one goes down, the others may be dragged down also.

I figure we will muddle through like we have but a lot of productivity may be lost for some time as we make the transition that everyone knew we were going to have to make 20 years ago.

It does not give much hope that we will be any different with other complex problems facing us unless we change the way we do things.

Where Good Ideas Come From, 4 minute version

Via Boing Boing]

Here’s a short video promo for Steven Johnson’s upcoming Where Good Ideas Come From: The Natural History of Innovation, a lecture on the way that transformative ideas incubate for long times, come out of left field, and thrive best when there’s no one foreclosing on them because they’re too weird or disruptive.

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I love this video. It encapsulates how new ideas come into being and that communication is critical. Organizations that make it easy for individuals to communicate and exchange ideas will have more innovative ideas.

This is slightly different than creating a social network that adopts and adapts to change easily, although they go hand in hand. Both reduce the friction of information exchange. What Johnson discusses are the connections that help disruptive innovators come up with their disruptive technologies. They connect to a wide range of other communities which can provide great ideas.

An adaptive community has the ability to filter and adopt new ideas rapidly. The good ideas get moved through rapidly, often interacting with others along the way to evolve into great ideas. There will also be strong links back to the disruptors, creating a knowledge cycle that gets to a solution faster.

A poorly adaptive community puts a road block on the ability of disruptors to connect to outside communities while at the same time providing sparse routes for their ideas to percolate through the organization. These communities not only have fewer innovative ideas, because of the lack of good communication linkages but will also be very resistant to adopting anything new, even if shown that the innovation is useful.

In a well balanced community, the communication between people has little to slow it down, disruptors connect to the communities they need for generating ideas, filters and mediators help discover the great ideas and pass them onto the doers, who can often reduce these ideas to practice. With the right feedback loops, this can be very efficient.

Web 2.0 approaches can be very effective in helping identify and support these types of adaptive communities.

by Stig Nygaard

Is Narcissism Good for Business?
[Via ScienceNOW]

Narcissists, new experiments show, are great at convincing others that their ideas are creative even though they’re just average. Still, groups with a handful of narcissists come up with better ideas than those with none, suggesting that self-love contributes to real-world success.

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The narcissists – a term I think may be misused here – are more likely to draw from the disrupter or mediator side of a network. They deviate from the normal flow of things in a network.

I hate the term ‘innovators’ applied to the earliest adopters in a network. Anyone can be innovative. WHat we are looking for here are those that most rapidly adopt changes and then are the most able to convince the community to adopt them

These experiments showed that a passionate pitcher could get people to adopt their idea, even when the idea was rated average by reading about it. The personal interactions were needed to pitch even an average idea.

But what was really interesting in the work was that teams of only disruptors (called narcissists) or only doers (no narcissists) were very poor at coming up with great ideas and innovations.

There are 5 steps everyone goes through when presented with a new idea and when deciding whether to adopt it. A key one is evaluation. I would suspect that teams with only disruptors race through this step so fast – that is why they are the earliest to change – that they really do not arrive at much that is worthwhile. Every idea seems as good as any other.

On the other hand, doers usually get stuck at the evaluation stage, only slowly taking the leap to adoption.the slowness to adopt change. So a team of doers would not get much done because they could never decide, getting stuck at evaluation.

But a well mixed team, one with both disruptors and doers, was the best one. This makes absolute sense. Because the doers slowed down the disruptors, forcing them to explain and rationalize all those novel ideas. The doers are also forced to make a decision because of the pressure from the disruptors.

By mixing both types, the ideas get much better evaluation, making it more likely that the best ideas will be adopted by the group. Each type overcomes the blind spots of the other – preventing the disruptors from moving too many ideas too rapidly through evaluation, while forcing the doers to pick the best ideas to adopt.

I can hardly wait for this paper to come out. It demonstrates that the best communities has the right mix of traits and that a community that is overbalanced in any one sector will be very slow to create and adopt innovative ideas.

by jurvetson

What Google Could Learn From Pixar
[Via Daring Fireball]

Peter Sims:

Despite an unbroken string of 11 blockbuster films, Catmull regularly says, “Success hides problems.” It’s an insight Google should acknowledge and act on.

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One thing the article mentions is that Pixar is always working to find solutions to problems. I wrote about this before, where I sketched out some of the technical problems each Pixar movie was designed to solve.

As Pixar says, “Success hides problems.” The complementary idea, that “Failure reveals problems”, is one very few organizations want to examine. At many companies, failure leads to loss of employment. The organizations seem to believe that as long as someone never fails, then they must be better than others. Fear of failure prevents innovation. This leads to a maladaptive company, one that is not resilient enough to deal with failure when it inevitably happens, because the hidden problems do eventually pierce the bubble of complacency.

In a complex world, failure often tell you more than success. I use the game I learned in Junior High School called Bulls and Creots as an example. Here, outright failure to get anything right actually gives you more knowledge than any other single guess.

Similarly, with some very complex systems, the only way to get to clarity is to make something fail, to make it work wrong. In biological systems, some of the most insightful work has come from disabling a part of the system and seeing what happens. So, for example, in a metabolic pathway with a large number of enzymes, looking at a single enzyme tells us little about the process, since in many cases we do not know what the enzyme really does.

But disable the enzyme and what will happen? If it is a critical part of the pathway, then none of the final product will be produced. Instead, a large amount of an intermediary product will build up – the intermediary product that the disabled enzyme was supposed to work with but can’t. So, like throwing a wrench in an assembly line backs up everything behind the wrench, a disabled enzyme results in a backup of intermediary product. Study that product and you will know what the enzyme does. Do this for each enzyme in the pathway and you can then delineated what happens at each step as you add material at the beginning of the pathway.

This and other approaches yielded understanding like this, which shows the complex intermediary metabolic pathways in cells. Pretty complicated but it was only revealed through things like designed failure.

Failure and the continuing drive to solve problems is how you keep innovation fresh and creative. Pixar gets that. Companies that do not will discover that Failure does eventually reveal problems in even successful companies and if they do not deal with that failure in a productive way, the organization could go down in flames.

And this is quite likely simply because the company has no experience with failure and will lack the resilience to deal with that Failure in a successful fashion.

[Crossposted at A Man with a PhD]

Apple’s iTunes Remote app was developed by one person – report
[Via AppleInsider]

Apple’s iTunes Remote application for the iPhone has not been updated in over 8 months because the software was written by just one person, and he is currently busy with other projects, according to a new report which describes Apple as “a huge startup.”

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Here is how he describes the way Apple runs things:

Apple doesn’t build large teams to work on every product they make. Instead, they hire very few, but very intelligent people who can work on different projects and move around as needed.

One day you might be working on the Remote app, and the next day you might get pulled on to another project that needs your help.

The engineers on the Mac OS and iOS teams move back and forth between the two projects based on release cycles and what needs to ship next.

That is how we worked at Immunex – whatever was on fire got the bucket brigade approach. we all worked on multiple projects at the same time, allowing us to drop something that was going slow and pick up on something that needed more attention.Once we had gotten our role done, we handed it off to the next member of the bucket brigade and picked up another project.

In order to make this work well, there needs to be constant vetting of the progression by everyone involved. Any bumps in the road can be smoothed over if more eyes are on the prize.

Thus everyone feels a part of a successful project, even if they had a little part. Immunex’s great drug was Enbrel. I had a very small part working on that molecule quire early. While only peripheral to the amazing work done by others, I felt every bit as proud of its success.

Plus this approach keeps smart people interested and helps prevent empire building, which can be a real detriment to the rapid actions a small team needs to make.

Any company basing its success on the creativity of its employees needs to have a management style closer to Apple’s or Immunex’s.