Chunka Mui | Killer Platforms

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Android Longs for Killer App

Every new platform needs a killer app, an application so compelling that users will flock onto that platform.  The first electronic spreadsheets, led by Visicalc, for example, was the application that enticed many to adopt the first personal computers. Platform builders, however, face a chicken and egg problem.  Platforms need developers to build applications that will attract users, while developers want lots of users before investing the effort into new applications.  Every aspiring platform needs a catalyst to ignite the process.

The latest platform aspirant is Google's Android mobile device operating system, and its hoped for catalyst is a contest with ample prize money.

One Laptop Per Child...Every Child

OLPC is an education project, not a laptop project. Children are a mission, not a market.  -- Nicholas Negroponte

As you might know, the One Laptop Per Child (OLPC) Foundation has been working for several years to produce an ultra-low-cost, powerful, rugged and versatile laptop designed specifically for kids in developing countries and for the purpose of education.

The laptop is now in mass production and, starting today and for a few weeks only, the OLPC Foundation is launching “Give 1 Get 1,” a program that allows you to donate a $200 laptop to a child in a third world country and, in return, buy one for yourself.

It’s a beautiful machine, conceived, designed, and built from scratch for a noble purpose.  Here's a link to a detailed review.  There are many reasons you might want to have one.  For now, the only way to get one is to support an even better cause.

Here are some links that provide more information:

• OLPC Mission
• The "XO" Laptop
• New York Times article and video review by David Pogue
• "Give 1 Get 1" site

I’ve already contributed, I hope you’ll consider it too.

Forum de la Innovacio 2006, Barcelona

Here's a link to a video interview that I did for the Forum de la Innovacio, held in Barcelona in October, 2006.  The forum is hosted by the Generalitat de Catalunya.

Content Aware Image Resizing

Some fascinating work:

The related paper is here:

Shai Avidan, Ariel Shamir
Seam Carving for Content-Aware Image Resizing
ACM Transactions on Graphics,
Volume 26, Number 3,  SIGGRAPH 2007

Peer Pressure Advertising

Facebook.com is reportedly working on a system that allows advertisers to target users not just on basic demographic information like gender, age, and location, but also based on preferences, interests and other information in their personal Facebook pages.

Taking the approach one step further, the system would also allow what might be called peer pressure advertising, targeted advertising based upon information about a user’s friends and connections in the social network.  The possibilities are intriguing.  Imagine the millions of boys (of all ages) who will be defenseless against ads calculated by examing the preferences, wishes and desires of their female friends.

It will be interesting to see whether users accept this level of data mining, or will they perceive it as a violation of their social contract with their social network host?  It is a risky and perhaps ill-conceived strategy.  One aspect of the stickiness of social networks is that when users decide to leave, they tend to leave together.  They take their friends with them.

Facebook vs. MySpace

A couple of recent articles highlight contrasting platform strategies at Facebook and MySpace as they battle for the lead in social networking.  An article in The Wall Street Journal, “Facebook Gets Help From Its Friends,” describes how Facebook is opening its platform to applications from third-party developers.  This is not a revolutionary change, as many other sites including MySpace do so as well.  Facebook was actually notably behind in leveraging third party developers.  Facebook, however, goes one step further than MySpace by allowing third party modules to include revenue generating capabilities that its competitor keeps for itself, like retailing and advertising. 

At the same time, an article in The New York Times, “MySpace, Chasing YouTube, Upgrades Its Offerings,”  describes how MySpace is taking a step in the other direction.  In an ever shifting friend or foe calculation, MySpace is taking steps to outdo and nudge out YouTube as the preferred choice for member to member video sharing.  Video sharing, much of it enabled by YouTube was one of the capabilities that helped to propel MySpace usage.  Now MySpace wants to own that capability, as opposed to being satisfied with it helping to promote usage of its site. 

MySpace's move is a classic platform tactic: allow third parties to launch modules and then incorporate the most popular ones into the platform itself.  Microsoft has done this over and over again, most notably with the web browser.  And, as with Microsoft and the web browser, the move can be defensive as well.  Popular modules can have their own platfrm aspirations.  Netscape certainly did.  As does YouTube, which is experimenting with its own social networking capabilities.

Personalized Medical Monitors

The March/April 2007 issue of Technology Review has a very interesting article on personalized medical monitors.  The article by Jennifer Chu describes innovative work by MIT’s John Guttag to discover the emergent knowledge buried within the huge amounts of data generated by certain medical tests.

Update

My entries to this blog have been rather sparse lately, primarily because I’ve been focused on a new book project on strategic failure patterns (in collaboration with Paul Carroll).  I'm happy to report that the new book is moving along nicely.  Portfolio, an imprint of Penguin, has signed on as the publisher and we’re busy doing the research and writing.  The target publication date is early 2008.   Learn more about the book, tentatively titled “The Devil's Advocate, Avoiding the Strategic Mistakes that Cost Companies Billions,” at our book blog.

Now that The Devil’s Advocate is moving along, I’ll try to be more active on the focus of this blog, namely killer platforms and emergent knowledge.

Edge Technologies -- Reader Discussion

This is a discussion area for my essay on "Edge Technologies," which was published in the April issue of Optimize Magazine.  Please share your questions and comments here, or feel free to contact me directly.

Emergent Knowledge - Reader Discussion

This is a discussion area for the final version of my essay on "Emergent Knowledge," which is now available on Amazon.com.

I look forward to your comments and suggestions as I continue to explore the Killer Platforms arena.  (You might also be interested in seeing the comments on an earlier draft version of this essay.)

Also, consider writing a review of the essay on Amazon.com.

 

DX Summit

Emergent Knowledge:
The Spark for Information Advantage

Here are the slides for my March 7, 2006, presentation at the DX Summit, one of DiamondCluster International's DiamondExchange programs.  The presentation was based in part on the Amazon eDoc of the same title.

The overall theme of the conference was "Creating an Information Advantage."  Here is the description of my presentation from the conference program:

Some might argue that from a strategic standpoint, information technology doesn’t matter. But few would argue that the information that rides on top of information technology also doesn’t matter. Competition often depends on data; those with better information slaughter those with less. In this presentation, Chunka Mui, co-author of "Unleashing the Killer App," argues that emergent data is changing the strategic landscape in a range of industries. This class of data was once impractical to gather but is now made feasible by advances in technology. Emergent data related to product and process conditions, customer preferences, and other environmental factors is sparking numerous innovations. As such, it offers one promising route to developing asymmetric knowledge and information advantage. Chunka explores different kinds of emergent data, the competitive opportunities they are yielding, and the challenges of taking advantage of such information.

MIT Enterprise Forum

Below is an essay motivated by my presentation to The MIT Enterprise Forum's Annual Innovation and Technology Forecast conference. It is still a bit rough around the edges, comments and suggestions welcomed.

You can also download the essay in PDF form; and also get the presentation slides.

 
10 January 2006

Information Technology’s Disruption on Business:
Extend the Edges, Transform the Core

Whenever I am asked to make technology forecasts, a few words of caution jump to mind:

• Never mistake a clear view for a short distance.
• Existing technologies will continue to get better.
• We always overestimate technology in the short term and underestimate it in the long term.

With those provisos, a couple of recent examples highlight some of the major trends that I see playing out over the next few years. 

Preview: Emergent Data

[The is a pre-publication draft.  You can download a PDF of the entire essay here.  Please join the discussion by clicking on the "comments" button below.  I'm looking forward to your criticisms, witticisms, and queries.  As a small token of appreciation, I'll make sure to send a complimentary copy of the final essay to all respondents.]

Killer Platforms | Emergent Data
The Spark that Ignites Information Advantage

by Chunka Mui

"Too Much Information"

A few years ago, I asked Mike McGavick, the chief executive officer of Safeco Insurance Cos., to name the most disruptive development on his industry’s horizon.  McGavick, known in the industry for his thoughtfulness, answered: “too much information.” 

McGavick was not referring to the perennial problem of analyzing huge quantities of information in his data warehouses. Instead, he was worried about the strategic opportunities for and the potential challenges of handling much better and perhaps perfect information. McGavick was anticipating what I describe as emergent data, classes of information that were previously impossible, or at least impractical, to gather but now are made feasible by advances in information technology.

In a range of industries, including insurance, financial services, healthcare, and complex consumer and industrial products, emergent data is changing the strategic context in which companies manage their organizations, products, customers, and markets. In the right hands, new information about product and process conditions, customer preferences, and other environmental factors are sparking numerous innovations. But, because these data types are just appearing, their strategic significance is often not well understood, so it is usually ignored, and rarely leveraged.

This article explores different kinds of emergent data, the competitive opportunities they are yielding, and the challenges of taking advantage of such information. The most valuable uses of emergent data are often unforeseen secondary effects, that is, applications that lay outside the original purpose for generating or collecting the data. If companies design their business platforms to integrate streams of emergent data and make that data available across the enterprise, they can generate greater value. And the most effective platforms, the killer platforms, will be those that are designed to facilitate a series of innovations rather than isolated applications.

To read the entire essay ...

Download the PDF file.  EmergentData.pdf

Amazon Update

Amazon.com recently posted its second quarter, 2005, results.  You can find the company's investor presentation here.

Highlights include:

• revenue was $1.75 billion, up 26% year over year
• gross profit was $450 million, up 32% year over year
• operating profit margin was 6% down from 6.2% the prior year but up from 5.7% in the prior quarter
• sales related to third-party merchants was 28% of unit sales, up from 24% the prior year.  (This is significant because it represents the value of the Amazon platform as a revenue generating asset.)

The quarter marked the tenth anniversary of the company.  Sales in Q2, 1995, were $2.2 million.  By most measures, it has been a pretty remarkable ten years.  Amazon is both a direct success story and, as I wrote about it my recent essay, a significant contributor to the raising customer expectations for all companies, online or offline.

Of course, no company can afford to stand still and there are those who question Amazon's viability.

Killer Platforms

In Unleashing the Killer App, Larry Downes and I helped popularize the notion of a “killer app.”  We defined a killer app as “a new good or service that establishes an entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment.”  We predicted that the Internet and its related technologies would be the driving force behind a wide range of killer apps in almost every industry.  Even with the hindsight of the Internet bubble, it is safe to say that we were mostly right about the significance of the Internet.  Yet we were wrong in at least several respects.  First, we were wrong to define killer apps as necessarily being first.  As the contrast between Alta Vista and Google demonstrates, better design often trumps being first. But perhaps the more subtle and significant mistake we made was to focus on killer apps at all.  That problem is that killer apps, as even the name implies, are single applications. 

Innovation Dogma

Competitive advantage is as beautiful and as fleeting as a rose in bloom.  And, just as a beautiful scent soon goes unnoticed, yesterday's competitive differentiators just become part of the price of doing business tomorrow.  Rapid change, especially in the realm of information technology, spawns endless debates about the timing of innovation.  Nicholas Carr captures the zeitgeist of today’s technology pessimism when he offered "new imperatives for IT investment and management" under the chapter title, "Managing the Money Pit." [i]  His recommendation is "follow, don’t lead."  Others argue that since competitive advantage evaporates quickly, the most value accrues to first movers.  Some pundits evade the question with convoluted parsing, recommending instead that companies try to be first finishers.

A few words on Nicholas Carr's "IT Doesn't Matter"

Nicholas Carr’s argument builds on some grains of truth, but it is incomplete and reaches erroneous conclusions.  Throughout its history, aspects of IT have always slid towards commoditization.  Today, for example, when you buy the same standardized computer hardware and software packages as your competitors and then, as you must, modify your company to the “best practices” defined by those vendors, you should not expect any competitive differentiation.  You are buying a commodity.  As such, you should wait as long as you can before you buy, minimize the cost, and focus on implementation risks.  Program management is key; there is massive downside if you get the implementation wrong and little upside for getting it right. You would laugh your building manager out of your office if he tried to justify a new plumbing or electrical system on the basis of its strategic differentiation; you should do the same if your CIO makes that kind of argument for your next general ledger or ERP system.  In some situations, information technology is a potential money pit and you need to act cautiously.

Write an Amazon Review

If you enjoyed Killer Platforms: The Amazon Experience, or even if you didn't, consider writing a review of the essay on its Amazon reader review page.

As an incentive for thoughtful reviews (both positive and negative), I will for a limited time personally send a free PDF of the essay to a colleague and friend of your choosing with my compliments.  Just write the review and let me know when it is posted on Amazon.  In your message, include the name, email address, and any note that you want me to include to the recipient.  (I might also include a note of my own.)

Reader Discussion: The Amazon Experience

This thread is for reader comments and questions on the essay Killer Platforms: The Amazon Experience.

(For a text version of the essay, see the essay's posting on this blog.)

Preview: The Amazon Experience: Amazon Raises the Benchmarks for the Offline World

[The is a free preview of the pre-publication draft of this essay.  The final formatted version is available on Amazon.Com.  I am posting it in text form (for free) to facilitate comments and reader discussions.  If you find it worthwhile, consider buying the final document, writing a review, and recommending it to friends and colleagues.]

Killer Platforms | The Amazon Experience
Amazon Raises the Benchmarks for the Offline World

by Chunka Mui

Seven Lessons for Enhancing Customer Satisfaction

Overview

Once viewed as a competitive alternative to established companies, few now doubt that the online channel should be an integral part of every company’s strategy.  Yet most companies have fallen far short of harnessing the power of the Internet.  This article offers Amazon.com as a benchmark of what is possible and, by comparison, how far behind most companies are falling in the eyes of their customers. Amazon has by most measures capitalized on the early promises of the Internet.  It is efficient.  It is profitable.  It is designed to scale.  And it has the highest customer satisfaction rating of any services company, online or offline. When it comes to leveraging the Internet to enhance customer satisfaction, there are few better benchmarks than Amazon.  The retail giant has built a powerful business platform that sets new standards for online interaction, offline fulfillment, and long-term relationship management.  Whether or not Amazon operates in your markets, many of your customers are among Amazon’s 41 million active customers. As a result, Amazon is raising your customers’ expectations of you.  Can your company live up to the standards being set by Amazon?

Download a formatted PDF of this essay ($)