Category Archives: 21st Century Company

The app economy changes everything

Don’t Quit Your Day Job: Creativity Is About Passion, Not Paychecks
[Via Techdirt]

There are many who argue, despite historical and ongoing evidence to the contrary, that creativity will die out if creators cannot be guaranteed some sort of livable wage. It’s almost as if any creator who creates as a hobby or potential second job either a) is being shortchanged by disruption, piracy, etc., or b) shouldn’t be taken seriously because they haven’t abandoned their day job.

It’s an odd assertion. Most groundbreaking creative efforts were conceived and carried out while the creators worked in a variety of other non-creative jobs. It was only after these breakthroughs that these artists went on to live solely on the earnings of their creative works. Somehow, we’re now expected to believe that without piracy and other disruptions, creators would be making better, livable wages, possibly right out of the gate.

That whole thought process ignores the reality. Not having a paycheck tied to your creative endeavors means being able to fail more often and experiment more freely, without having to worry about hurting your current source of income. Case in point: three developers who solved a problem most companies didn’t know they had, all without having to “give up the day job.”

For the past two years, Brandon Medenwald, Justin Kalvoda, and Bill Burgess have held down full-time jobs while also launching their company, Simply Made Apps.

Their only product is an app called Simple In/Out, which solves a problem that drove Brandon crazy. He explains, “In my fulltime job as a web programmer, we had an old magnetic in/out board like they use in sales offices to keep track of who is in the office and who isn’t. Five or six years ago, they transitioned to a Web-based version.

“I was constantly frustrated with it, because some of the roughly 40 people in our firm wouldn’t use it. The board became extremely out of date. For years, I was joking that I could write a better piece of software in a weekend, but then over beers in a bar with two friends, it dawned on me we could solve this problem by using the GPS chips in cell phones.”

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Read the whole article as it demonstrates how the app economy allows passionate people to create new products in a weekend for a few hundred dollars.

That few hundred dollars can rapidly expand to thousands or more. All without having to quit a day job.

Low barriers ti entry, rapid bootstrapping and exponential economies all merge to disrupt the very act of creating a business.

Reinventing the wheel by ignoring your internal experts

wheelby lusikkolbaskin

Charlie Kindel on Microsoft, the Hardware Company
[Via Daring Fireball]

Charlie Kindel:

I know some of the people who drove the Xbox360 hardware design and supply chain management. They are now war scarred and seasoned experts. They are the type of people you want working on the next big thing. None of them even knew about Surface until it was announced. Typical Microsoft organizational silos.

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Microsoft is a software company that makes a couple of successful hardware products.

There are a couple of big differences between hardware and software that are relevant – hardware has to be physically assembled and it has to be physically distributed, neither of which is required for software.

Microsoft has had some real glitches with modern hardware.

Now it talks about competing with the largest high tech company in the world by producing a tablet that it will only sell at its online store and at its own retail Microsoft stores. There are only 29 of these in the world – 26 of them in the US. Hard to see how that will compete with Apple which has 373 stores in 13 countries.

The fact that they did not even connect internally with anyone who had real life experience with assembling and shipping a hardware component is also worrisome.

Rediscovering the wheel is a common problem with large, process driven companies. It can not be something that 21st century companies routinely allow.

Because they will be outflanked by those companies that do not reinvent the wheel, that are much more efficient with their resources.

And here is another example of how Apple is doing things differently – using thought leaders

leaderby Hamed Saber

★ Mountain Lion
[Via Daring Fireball]

“We’re starting to do some things differently,” Phil Schiller said to me.

We were sitting in a comfortable hotel suite in Manhattan just over a week ago. I’d been summoned a few days earlier by Apple PR with the offer of a private “product briefing”. I had no idea heading into the meeting what it was about. I had no idea how it would be conducted. This was new territory for me, and I think, for Apple.

I knew it wasn’t about the iPad 3 — that would get a full-force press event in California. Perhaps new retina display MacBooks, I thought. But that was just a wild guess, and it was wrong. It was about Mac OS X — or, as Apple now calls it almost everywhere, OS X. The meeting was structured and conducted very much like an Apple product announcement event. But instead of an auditorium with a stage and theater seating, it was simply with a couch, a chair, an iMac, and an Apple TV hooked up to a Sony HDTV. And instead of a room full of writers, journalists, and analysts, it was just me, Schiller, and two others from Apple — Brian Croll from product marketing and Bill Evans from PR. (From the outside, at least in my own experience, Apple’s product marketing and PR people are so well-coordinated that it’s hard to discern the difference between the two.)

Handshakes, a few pleasantries, good hot coffee, and then, well, then I got an Apple press event for one. Keynote slides that would have looked perfect had they been projected on stage at Moscone West or the Yerba Buena Center, but instead were shown on a big iMac on a coffee table in front of us. A presentation that started with the day’s focus (“We wanted you here today to talk about OS X”) and a review of the Mac’s success over the past few years (5.2 million Macs sold last quarter; 23 (soon to be 24) consecutive quarters of sales growth exceeding the overall PC industry; tremendous uptake among Mac users of the Mac App Store and the rapid adoption of Lion).

And then the reveal: Mac OS X — sorry, OS X — is going on an iOS-esque one-major-update-per-year development schedule. This year’s update is scheduled for release in the summer, and is ready now for a developer preview release. Its name is Mountain Lion.

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Yep, Apple gave a complete event,  just like Jobs did for hundreds if not thousands via the web, but for just one person.

I really wonder how efficient this might be but it certainly offers something quite different for this sort of an announcement.

Because if done well, this sort of presentation can be tracked much better for identifying who gets the information out to the widest targeted groups. Apple chose Gruber because his site is very influential and followed.

Gruber is a thought leader and is listened to by many people. Thought leaders are those who move ideas from the edges to the mainstream. They are listened to by the vast majority of people in a community.

If you convince a thought leader of something, it becomes much, much easier to convince the group. This could be another instance of Apple’s genius.

Instead of hosting large events where many people may hear about the information but few are actually able to accomplish change, hold one-on-ones with well informed thought leaders and they will accomplish the change for you.

That, after all, is their role.

Wow. It will be interesting to see if that is what happens.

There is a reason techno-libertarians do not run everything yet

NewImageby jurvetson

How Technology Will Change Governments, Corporations, and the Rest of Our Stubborn Institutions
[Via American Times]

Can technology overcome and change institutions otherwise overcome by inertia and stagnation? Will technology help overcome tyrants and change the relationship between state and citizen in positive and hopeful ways, or will it enable dictators and make governments even more oppressive?

These were some of the questions posed at Techonomy this past November.

These aren’t merely political questions. The corporation as it has been conceived of for quite some time – that massive bureaucracy built upon a steep hierarchy – is also threatened by innovation and technological change. The old boss model may be facing its own near-extinction as the gig economy grows. Tech is changing everything.

The Techno-Futurists Are On to Something

In many ways, this is the same thinking behind Nick Gillespie and Matt Welch’s new book on libertarianism and its effects on stagnant institutions and mainstream culture. The free-wheeling nature of cultural libertarianism and economic freedom lead innovation and creative expression in ways that subvert and invariably alter the nature of the status quo.

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Society is not defined by when the disruptive technologists adopt something – it is defined by when the majority – the doers – finally do.

In my opinion, Libertarianism actually works well for a very small percentage of people. For the rest of the population, it results in the tragedy of the commons, the rise of bandits and thieves and a society in which a few benefit while most struggle for existence.

We are a social animal and we survive because our societies survive. Cooperation is as important for our species as competition – sometimes more important. The most resilient, adaptive and sustainable societies have always been those that best found ways to balance those competing needs with new technologies that threatened to disrupt things.

Technologists love the disruptive effects of new things – they switch from new toy to toy like a bee. I say that as a disruptive technologist.

But a society built entirely upon that type of personality would rapidly fail – the constant disruption with new things would prevent much from being done. The endless wars – between Mac and PC, between Apple and Google, between LCD  and LED, between Star Trek and Star Wars– provide too much disruption.

Society is made up mostly of people who accept change slowly and carefully. And a good thing they do. It greatly reduces the chance we might chose some technology that rapidly destroys the underpinnings of the society and how we interact.

We thrive because we provide important social roles for both the disruptors and the doers. Too much of either type threatens to produce either a stagnant or a chaotic organization or society.

It is all well and good to wish we could make a trip back and redo things to create a Jetson’s future. but we did not at the time and Toffler explained why over 40 years ago.

We have now hit a plateau. It is similar to a change of state of a liquid to a gas. The temperature does not change at all as more energy is added until a certain point – then the liquid becomes a gas.

There is the same sort of dynamic taking hold now. A whole generation has grown up without the same sort of Future Shock previous generations were suffering from. Their doers are much better prepared to deal with the rapid change now found in many sectors of society. Society can now make the transition to a new state very rapidly.

I expect 2022 will be very different because that change in state is now ready to happen. On my optimistic days, it will be great to have a world were most of society is more adaptive and resilient than today, having found ways to sustain itself without being totally reliant on current resources.

But it could also be very bad, as the old dinosaurs trample the faster mammals before they finally die off.

We need a society that permits the disruptors to continue to experiment with new approaches. But society will also still adapt slower than they might want because not every experiment  deserves to spread throughout society.

Good thing too.

Dealing with disruptive technologies from within

disruptby aroid

How Autodesk Disrupted Itself with an App – Technology Review
[Via Technology Review]

When Chris Cheung and Thomas Heermann, two middle managers at the software company Autodesk, first showed off their new iPhone drawing app, they got some skeptical looks. Why would anyone want to doodle on that tiny screen? And what could a $2.99 app matter to a company with around $2 billion in annual revenue?

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This is a great example of how the app economy changes things and how adaptive companies deal with that change,

Two middle managers, charged with working on one project, are able to see the possible impact of new technology on their products. The app economy allowed them to bootstrap themselves without much investment of time, resources, or even permission from the company.

The products their small group created were big hits. The managers hoped for 100,000 downloads in a year. They got one million in 50 days.

These sorts of numbers are disruptive and mind boggling to a company with revenues in the billions. In fact, their entire PC-driven business could disappear in a few years due to this sort of economy – one where new competitors can arise so fast.

But Autodesk essentially competed with itself, now knows what is needed and could expand rapidly into this new niche.

Heermann thinks the timing of the apps may prove critical because consumer-style products are beginning to gain popularity among the corporate workforce, a phenomenon known as consumerization. That shift could spell trouble for companies that are slow to adapt. Now that Autodesk is a top-ranked app seller, says Heerman, who is now the company’s director of consumer products, “it’s almost like having the company shape up and get ready for the future.”

Disruptive technologies always start small and in niche areas. #12 million is small potatoes to a billion dollar company. But that small amount can grow and is Autodesk is snot adaptive enough, could eventually destroy Autodesk”s value.

Now, however, the disruption is happening inside and Autodesk might be resilient enough to capitalize.

Because one thing that disruptive technologies do – they destroy business models.


Blindsided by Apple – followed by a poor response

Analyst Shaw Wu: RIM ‘Blindsided’ by Kindle Fire Pricing
[Via Daring Fireball]

What exactly has RIM actually been prepared for in the last five years? Remember this one, where they thought the iPhone was impossible after Steve Jobs unveiled it?

[More]

Check out the older article from Electronista. All the big competitors, like RIM, Microsoft and toerhs, thought Apple was outright lying about the iPhone. They had all convinced themselves that a large touch screen was impossible without destroying battery life. So none of the thought very deeply about it.

That explains why Google seems to have added touch to its Android OS as an afterthought. They suffered from all three of Clarke’s Laws.

A hallmark of an adaptive, resilient company, one that can survive in the 21st century is to be able to recognize Clarke’s laws and utilize them. Obviously RIM could not and looks to fail.

Android might always be jerkier than iOS

Why Android Will Always Be Laggier Than iOS
[Via Cult of Mac]

One of the things that really stands out using an iPhone is just how smooth it feels compared to using Android. Where as Android is laggy, with a measurable interim between when you touch the screen and when the OS responds, iOS almost seems to anticipate what you want to do before your finger touches the display.

How has Apple managed this incredible feat? A better question might be: “How has Google managed to screw up Android’s multitouch so much?” According to Andrew Munn — a software engineering student and ex-Google intern — Android is so messed up that Google might never be able to match an iPhone or iPad’s performance. Ouch!

Before we begin, here’s some background. In the past, it has been said that Android’s UI is laggy compared to iOS because the UI elements weren’t hardware accelerated until Honeycomb. In other words, every time you swipe the screen on an Android phone, the CPU needs to draw every single pixel over again, and that’s not something CPUs are very good at.

That argument makes sense, except if it were true, Android would have stopped measurably lagging in touch responsiveness compared to iOS when Android 3.0 Honeycomb was released. Except guess what? Android devices are still laggy even after Honeycomb is installed on them.

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The problem arises from a fundamental choice the developers of Android made years before the idea of touch even occurred to them They developed the Android to be used with a keyboard or trackball, just as every other smartphone of the time did – no touch.

When using a keyboard or other input, normal priority for the keyboarding tasks could be used. We text so slow that other background processes could take place. No need to give input a higher priority.

But rendering touch well requires a lot of the device’s power, so Apple made sure that anytime you use touch, it gets the highest priority, stopping anything that might slow down the touch interface. As stated in the article:

In other words, every time you touch your finger to your iPhone’s display, the OS literally goes crazy: “Someone’s touching us! Someone’s touching us! Stop everything else you’re doing, someone’s touching us!”

So moving anything on an iPad gives it all the resources the iPad can provide, making sure the movements are smooth.

But Google did not do this because they had to rush their operating system out to compete with Apple. They apparently did not  – or could not – rewrite the system to give touch the highest priority. So now, it gets the same amount of attention from the device as any housekeeping or app driven process.

And it may well be too late to change this without every app already out there to be rendered obsolete.

This is an example of why the well-thought out reasoning of Apple results in a great user experience versus the jury rigged, rushed efforts of their competitors.

Apple’s net income per employee leads everyone

Apple’s headcount, up 30%, still industry’s most productive
[Via Brainstorm Tech: Technology blogs, news and analysis from Fortune Magazine » Apple 2.0]

With one seventh as many employees as IBM, Apple generates 13 times more profit

In most recent quarter. Source: Google Finance, Apple Inc. Click to enlarge.

As of September, Apple (AAPL) had 60,400 full-time equivalent employees, according to the SEC Form 10-K it filed Wednesday, nearly 30% more than the 46,600 it reported in Q4 2010.

But those employees generate more profit per capita — by far — than any of Apple’s peers in the industry.

In the quarter that ended in September — not its best, mind you — the company generated sales of $28.3 billion and net income of $6.62 billion, or nearly $110,000 profit per employee.

[More]

Amazon generated about $1500 per employee, almost 10 times less than Apple. In fact, as Apple has gotten larger, its profit per employee has increased.

Since 2008, the profits per employee have gone up almost 3-fold.

How many companies make more money per employee even as they grow? Well, Amazon, Dell and HP make the same amount per employee today as they did in 2008. Microsoft shows a little increase – maybe 20%. Not the almost 300% that Apple has.

Only Google has shown anything close to Apple and it is only up 75% per employee since 2008.

Apple really is some different kind of company. It continues to demonstrate the increasing returns that accrue to 21st Century companies. It also indicates that Apple continues to answer the questions Arthur posed in his paper Increasing Returns  and the New World of Business.

I wonder when others will begin to answer them also.

Why Google losing sight of search comes at a bad time

siriby AndersP

How Siri Disrupts Search
[Via Daring Fireball]

Rich Mogull, at TidBITS:

Siri doesn’t replace search, but in many cases it circumvents it by directing users straight to integrated partner services. When you ask for the nearest Indian restaurant there’s still a search taking place, but it’s through Yelp, not a generic search engine that would include Yelp plus various other results.

By skipping the search engine and going straight to a designated source there is no place to insert advertising.

I wrote earlier about the apparent trend of Google to modify search in ways that actually make it less useful. This is a bad time for it to lose sight of its primary product.

Because Siri is about to change mobile search. 2/3rds of mobile search comes from iOS devices. But Siri reduces directed search that Google needs in order to get revenue.

In fact, Siri uses things like Yelp and thus supports their models while Google actually actively works to harm Yelp.

So Apple now has a method to reduce ad revenue that Google is used to getting and to also help Google’s competitors.

I’m thinking that Google shouldn’t aughta have ticked Steve off.