Apple Earpods Still Delayed: Wireless Audio - Genius!

I came across this article on Macrumors today noting the continued delay in bringing Apple's Earpod's to market. It seems the technology is still struggling. Here's a quote from the article:

While the exact reason for the delay remains unclear, a person familiar with the development of AirPods told The Wall Street Journal that Apple's troubles appear to be related to its "efforts to chart a new path for wireless headphones," in addition to resolving what happens when users lose one of the earpieces or the battery dies.

All of this is more evidence of the secret behind the decision to remove the "worked for decades" audio port -- Genius. Not the brilliant kind, but the Wile E. Coyote kind.

Or perhaps Super Genius -- as it's pretty obvious seeing the Audio Port train coming...

Innovations in Horse Hockey - James Surowiecki Spins Uber Pricing

Unbelievable. Let me start by saying how shocked I am -- I've read James Surowiecki's The Wisdom of Crowds and I think it's awesome. It's on my recommended reading list. So imagine my surprise when I realized that this article that I just read on the MIT Technology Review site about Uber's surge pricing was, in fact, written by Surowiecki. Mind-blowing, and not in a good way.

The headline and subhead provide a pretty good synopsis of the theme here:

In Praise of Efficient Price Gouging
Uber’s most important innovation is the way it prices its services. But that innovation has not been unreservedly welcomed by customers. They’re wrong.

While he addresses the controversy around Uber's surge pricing including highlighting some of the public criticisms, Surowiecki eventually gets to characterizing this surge pricing model as similar to airlines, hotels, and happy hours -- all using variations on pricing to address demand at different hours. He then endorses the Uber position that their surge pricing helps put additional drivers on the road.

What this means is that in the case of Uber, surge pricing doesn’t just make rides more expensive (as is the case with airline tickets or hotel rooms at times of high demand). It also expands the number of people who are actually able to get a ride. Customers pay more, but they also get a ride that they otherwise would not have gotten. This is exactly how a market is supposed to work: higher demand induces more supply.

You know who else is a fan of Uber's surge pricing, "venture capitalist Bill Gurley, who’s an Uber board member." Surowiecki links to Gurley's blog post noting,

that when Uber first tested dynamic pricing in Boston in 2012, it was able to “increase on-the-road supply of drivers by 70 to 80 percent."

In Surowiecki's article and Gurley's blog post, much is made of this aspect of increasing supply as though multiplying the rate a customer pays mines black cars from empty space. It's as though price multipliers suddenly connect with the philanthropic aspects of humanity -- "my God, it's after 1:00am on a Saturday in Boston -- there are people who need rides in black town cars. Jeeves, bring the vehicle around. There is money to be made and riders to be saved." Or, "sure it's snowing and I'd rather be inside where it's warm, but there are desperate people out there willing to pay 8X the normal fare for a ride. I must help them."

The more nuanced reality is that there are only so many vehicles that are around in the first place. First and foremost, these drivers and cars that Uber is "putting on the road" with their surge pricing don't just appear from the clouds. We're talking about people who've signed up with Uber and met certain, rather specific vehicle requirements. Them "not being available" is not a question of not existing, instead it's a function of a free market where one side says, "you know, I have better things to do with my time than participating in the Uber system."

The way that the business is set up, drivers aren't Uber employees. This is a fundamental element of the problem. Uber can't make them stay on the clock, but it does "fix" the pricing. So instead they say, "suppose we change the system and give you license to gouge riders during these periods?" 

My favorite quote around this comes from the Gurley blog. In "Clarifying Certain Specifics Regarding Uber", Gurley says,

Uber is remarkably transparent about its dynamic rates. Ever since the company first encountered feedback about its pricing model, the company has gone out of its way to make sure that customers are aware of the policy and how it works.

The emphasis is mine. But that's one of the other elements that's missing from these surge pricing justifications. When Uber first rolled out surge pricing, they didn't even tell you it was in effect. Your first notice was when you received the bill. You can argue that those are the pains of a growing start-up, but I think it speaks to the company values.

Regulation. It's one of the words that the Libertarians and the followers of Ayn Rand hate. It's that thing that they're trying to disrupt, the thing that they claim is that's holding us all back. It's the rules and policies that govern the taxi industry and the limo industry. Somebody from Uber's PR team can probably tell you about all of the crazy rules that they impose...

But if you look around the world, there are places where you are warned about trusting the taxis. You're warned about getting ripped off, charged crazy amounts, driven on circuitous routes. Even here in the states, some cities offer flat rates from the airport to downtown so that you can feel comfortable about not getting ripped off as your welcome to the city. Taxis are part of our transportation infrastructure, and many aspects -- including the fare -- are part of the social contract that we set up with these companies in trade for letting them work that business.

While there isn't the existing software infrastructure to make the taxi experience equivalent to the Uber experience, there are certain things that you can count on with a metered taxi. When you get in, the metered rate will be the same, regardless of time of day or day of the week.

I Like Aspects of Uber, but...
Don't get me wrong. I've used Uber and I like aspects of their service. I think that, overall, the software interface for requesting a car, the detailed receipt, and the streamlined payment process are all excellent. Often, we'll choose an Uber ride because the vehicles are usually clean and and free of unusual or unpleasant smells. At the same time, many aspects of the way they do business offend me. And I refuse to use Uber when they run surge pricing.

Ethical existence is not as simple as supply and demand. As a society we frown on certain types of marketplace behavior like war profiteering or profiting on disaster. Surge pricing during floods and snow storms is an example of that same kind of bad behavior. But with their surge pricing, Uber's ethical lapse is more than just billing during disasters. The "multiplier" function that they use for surge pricing is particularly egregious. Not only does a multiplier make it more difficult to estimate what your final fare will be, it magnifies all of the negative aspects of the transaction.

There has already been a lot of digital ink spilled over Uber's surge pricing. What spurred me to write this post was not the overwhelming need to rehash those same points. Rather, it was Surowiecki's contention that, "Uber's most important innovation isn't a car service, it's a pricing algorithm". I call bullshit on that. There are of historical examples of dynamic and surge pricing. And profiteering. No, I don't see how this is innovative.

Innovative might be something like, an electronic pre-commitment to a tip amount as an incentive for a pick-up during "high-demand" periods. Innovative might be something like a capped price -- sort of a reference price -- with all rates discounted from that defined cap.

When I first read Surowiecki's article, my instinct was that this was an astroturf piece. That's why I was so disappointed when I realized who's name was on the byline. My biggest take-away from this is sort of a "please, say it isn't so..."

Moneyball and Hiring: Why Businesses Don't Know How to Find Talent

By this time, most people are familiar with Moneyball, whether through the book or the movie, so it's not unfair to expect people to have applied some of the general ideas to their areas of expertise. If you were to search right now, you could find a number pieces posted on Moneyball and hiring. I think that we can safely say that the overall thematic notion has permeated our collective conscious. So why then do so many businesses suck at hiring and building amazing teams?

Forget about individuals for a minute. Instead, think about the predefined restrictions we place on the people we hire. I talked about ageism in this previous post, but there are many other ways. Google, famously, had it's brain teasers even though they later came out and said that the puzzles didn't correlate to better employees. Similarly, they have made college ranking and GPA into an important criteria. And what about all of those job listings that specify experience within a given industry -- sure it might get you off the ground faster, but are you excluding some exceptional talent because of your one-dimensional conventional thinking (e.g. Scott Hatteberg only being a catcher)?

Consider, most tech job listings tend to set Engineering or Business degrees as the preferred background, while liberal arts degrees tend to outperform them on GMAT tests. Why are we focused on Business and Engineering degrees? Conventional wisdom says that they will have the background and training needed to succeed. But what if the real secret to a great team member is the ability to learn new things, to understand complex concepts, to analyze and problem solve? And what about communication? What if communication does not equal cutting and pasting bullets from a Powerpoint?

In that way, the Moneyball strategy is looking for undervalued aspects and using that as the target criteria. If the market puts a premium on young, on engineering degrees, on GPAs and top tier schools, then those aspects are probably expensive. Meanwhile, there are probably lots of bargain talent in the pool of older, experienced workers with liberal arts degrees. And yet, so many businesses and recruiters are reluctant to consider candidates from this pool. Why? Here are three reasons that I can think of immediately:

1. An inclination to hire "like us" accompanied by an overall disregard for all things liberal arts. Remember President Obama's art history joke? When the guy who goes out of his way to avoid offending anyone uses a demographic as the focus of a joke, it's a telling perspective on 'common knowledge perception' of a liberal arts degree. The thematic aspect of this is the idea that, during college, we worked, we were focused on our future, while those liberal arts students all just read books, looked at art, film and music, or argued about philosophy. We were real world. They were the crazy ones, the dreamers.
2. The inability to measure or score capabilities and understanding accurately. We all want smart people who fit well in our team, but so many aspects of the interview are stacked against us. There are typical questions that we're expected to ask -- we've published a list of requirements and most interviews are like standardized tests on those topics. Meanwhile, as candidates, we review the test criteria, prepare our answers, practice our delivery and look for tactical ways to deflect things that probe our weaknesses. But companies really want thinking, analyzing, capable, so companies like Google explore techniques like brain teasers -- and candidates begin preparing for brain teasers. But the real problem is, just like in academics, somebody can go through an exercise and produce an answer, an essay or a result that matches the accepted response, but still not have thought about it, analyzed it, or understood the why behind it. But with school, you have several months to shake things up, to ask variations on structure and content in an effort to explore the processing capabilities of the student. Job candidates are typically decided in a couple of interviews, but you never really get a measure until they are on the team and under fire.
3. Recruiters, hiring managers, and what I'd call the "not shooting at the center effect". Some time ago, The Freakanomics guys did this podcast on soccer and the penalty kick. The basic premise was that, while it was a statistically underexploited approach that should yield more goals, when they have the opportunity to take a penalty shot, few players kick it toward the middle of the goal. The reasoning behind is that, if they do and the goalie stops it, the player looks like an idiot. In that same way, imagine a recruiter saying, "I found this really talented candidate, but they don't have the background that matches your criteria -- but I think that they are amazing." Not only will the amazing candidate probably still going to be looking for work, the recruiter probably will be as well.

Of course, all of this only matters if you need cognitive skills. Just because you understand the effect of heat on proteins doesn't mean you can fry an egg. If your looking for a production person like a line cook, you're probably better suited to hire someone that has repeatedly cooked eggs over an MIT thermal engineering graduate. But in the same way that most real world problems don't look like those word problems you saw on math tests, determining how to solve a problem isn't usually a basic execution problem. Consider the problem, "we need a brochure". Or another common one, "we need to find a new product that we can sell to a new market."

Years ago I was in Las Vegas as part of our company's team to help set up a networked product demonstration. We'd broght along a number of sample products, plus a product manager, an application engineering manager, our ace networking guy, and myself. On the night before the event, we spent several hours trying to set up this demonstration that involved a complicated bit of network routing. For hours, the network guy was trying different things to make it work, without success. After letting the experts bang away at it in frustration, at one point I asked some questions to better understand the problem. Shortly thereafter, I had to ask the question, couldn't you just do this? It was like a light clicked on for the network guy, and suddenly a solution to the problem became apparent. While, at the time, I lacked the specific vocabulary to detail the solution or the technical chops to implement it, I understood enough of the problem to spark a solution.

It's a different kind of thinking that enables these kinds of solutions. You may not need this kind of creative thinking if you're banging out eggs, but if you're an organization dedicated to creating something new under conditions of extreme uncertainty, then you need to be able to learn, adapt, and travel down new paths.

Moneyball Versus The Cheapskate
There are some businesses that look at the idea of bargain candidates as people that we don't have to pay very much because they will be grateful to get paid something. These types of businesses keep the threshold on salaries so low that only the most desperate will accept the salary and working conditions involved.

While you might be able to read this strategy into a Moneyball philosphy, it misses a key element in the psychology of enabling talent. Specifically, in order to get the best performances out of your team, you need people who are engaged, motivated, and want to participate. I could be the Albert Einstein of solving your business problem, but if you ask me to spend my day changing diapers, I'm relatively unlikely to direct much energy or passion into anything you put in front of me.

In that way, while Moneyball may seem like it's all about not paying people very much, what it's really about is finding undervalued talent. With the Scott Hatteberg example, the market was said you're worth zero as a player now and the A's said, we value you. From the mindset of the person being hired, they are being valued at more that their perceived market value versus not less. In practical terms, that means that you are offering them an opportunity, not exploiting them, which also correlates to engaged, involved output.

Moneyball and Your Hiring Strategy
So, if you're not thinking Moneyball in your hiring strategy, perhaps you should ask yourself why. More to the point, if you don't say anything, you're hiring team is also probably avoiding shooting at the center. Somebody like me -- I would probably never make it through even your first round of screening. So, the question is, do you want to keep playing to conventional wisdom or do you want to explore new approaches to building something great.

Mary Meeker Gives Internet Trends Presentation for 2013

At All Things D's D11 Conference yesterday, Mary Meeker took the stage to present her 2013 Internet Trends presentation. All in all, it's a great overview of the state of technology and a look at trends -- totally worth your time to go through. Here's a link to story and presentation on All Things D:
Mary Meeker’s Internet Trends Report is Back, at D11 (Slides)

The Economics of Austerity, Silicon Valley Style

The election is over and, for those of us that haven't been making mad money on all of the campaign advertising, we're back to the realities of our current economic situation. And while many now associate Silicon Valley with software companies like Google, Facebook and Twitter, there are still some of those old school businesses that design and produce actual silicon. Unfortunately, the economy is not really smiling on the semiconductor industry these days.

Semi is notoriously cyclical, but what we're seeing now is in many ways part of a larger evolution that is reshaping the industry. Over the past year and a half, there's been some consolidation among the larger manufacturing equipment players -- the merger of Lam Research and Novellus, the acquisition of Varian by Applied Materials -- that speaks to the dwindling opportunities at the root of the ecosystem.

There are fewer fabs. CapEx news releases are sporadic. There are still a lot of questions about when, if, and how much these manufacturing facilities will invest in next generation process technologies. Further upstream, you don't have the pull of a Moore's Law fueled PC industry driving waves of new system purchases each year. Sure, there are ICs being designed, chips being sold and devices being built, but there isn't the same momentum.

But the biggest boon to the industry in the past five years has been things associated with green technology. While the technology for photovoltaics and LEDs have been around for a long time, the push for innovation and broad scale implementation spurred a host of new businesses, new equipment and industry transformation. All of those things meant investment, spending, and new opportunities.

So here's a quick history refresher. In 2008, we had the collapse of the economy courtesy of the financial markets, the sub-prime and all of that. Then 2009 was a bleak year -- everything was down. That was also the year when the government pushed through the stimulus with a push towards green tech. But things started to come back in 2010 and by midway through the year, the Semi industry motor (and emerging green tech) was going. In 2011, you started to see some shake-out, consolidation and the collapse of Solyndra, price wars happening in solar panels, and the market starting to pucker. And now 2012 has been another year of poor performance.

So what happened? Well, on the one hand, if we look at things from the not-a-big-enough-stimulus perspective, it looks like we poured gasoline in the carburetor for a few minutes of action, but we didn't getting the car running. Add to that the Congressional Republican's efforts to bring government to a halt and make Obama a one-term president, and you basically have limited government incentives to drive the market for green tech. Instead, you had conservative media pushing climate change as a hoax and Solyndra being pumped as a scandal. Green tech became a political liability.

However you want to frame it, the simple reality is that the economics of austerity -- the cut, cut, cut, and cut that we've been subjected to since 2010 -- has choked the life out of our economy. Instead of investing in growth and a strategic future, we've been railroaded down a path of zero investment wrapped in 'thrifty, debt-conscious' packaging.

Governments have unique powers to influence markets. By defining incentives for strategic goals, they drive fuel from the investment tank into the engine of the economy. By establishing incentives like mandating that all buildings meet certain levels of green compliance or all residences add solar panels, governments establish a pull that draws energy and investment into the market. In the same way, if the government codified a mandated goal of having 1 Gbps universal broadband, it would spawn a surge in many tech markets.

Keep in mind that this is not like the government saying, "we need a million Justin Bieber dolls". Nobody is pushing for frivolous investments. Things like green technology, broadband, and transportation infrastructure are CapEx investments in the future of the country and in the future of the economy.

The Speed of Hype: Facebook and the Social Media Economy

Three years ago, there was a lot of excitement in the air around here. The Social economy was booming and the untapped potential of the mobile market seemed like another gold mine that was ripe for harvesting. And yet, for all of the potential, for all of the dreams, we now find ourselves in a bit of a malaise.

Over the past year, we've seen the Facebook IPO and a number of exits and pivots by long-running start-ups. Many of the businesses that were so full of promise have struggled to deliver consistent earnings. What was once a thriving Web 2.0 ecosystem of interconnected APIs has deteriorated into a series of platform wars as many of those same businesses have built walls and and grasped for monetization. If all of this were an action movie, this might be that moment in the movie when everything looks darkest, the moment before the hero manages to perform that amazing feat that turns everything around.

History may look back and mark Steve Jobs' passing as the end of that golden era of innovation, but I think that the real defining moment was the Facebook IPO. While some may attribute some of the current malaise to the Nasdaq, computerized trading, or the other problems in the Facebook IPO, the underlying driver goes beyond that. Sure, if the Facebook IPO had been a glorious event and our friends were all telling stories of the epic fortunes that they made on Facebook stock, some percentage of the industry might feel better. But, realistically, the issue runs deeper than that.

Prior to their IPO, Facebook was a massive reservoir of potential energy. It had tremendous wealth was stored in the possibilities. It was the platform for the future, the platform for everything. It was a changing how software worked. It was the next Google, and everyone tied to it was going to make a fortune. It was like a newly discovered treasure map or Al Capone's unopened safe, the perfect candidate for drawing people in to place bets.

These aren't just bets on Facebook, their bets on a platform and the entire emerging market. They are bets on the ecosystem that is linked to Facebook, bets on businesses and technology that use 'social' to sell their ideas, or anyone riding the wave of Facebook hype to sell a dream of an untapped future.

This is technology at the speed of hype. It's selling the idea that, in the same way that Facebook has built a market around sharing personal information with your friends, that market remains undefined when it comes to sharing information with your coworkers about the office supplies that you use -- and that exploiting that segment is inevitable.

Facebook's IPO shifted all of that potential energy into an unmetered system to one with a real ruler. Not only was it an opportunity for all of those speculators to pull out of their bets on who would win that initial spot in Facebook's market, it was an actual measurement on what the market thought that it was all worth. Fifty billion dollars? Perhaps not. Even if the actual value of Facebook was substantial, with the IPO, the size of the hype balloon that carried the dreams of all of those others shrank.

Looking back, it's easy to see aspects of the market that were oversold and dreams that were built on a foundation of hype. But remember, it isn't just social. When we saw the green technology boom, the valley was swimming in solar equipment companies. Same with mobile apps. Or telecom and broadband technology companies back in the days when we were building out the Internet infrastructure. This is normal market behavior surrounding technology at the speed of hype.

The Tour de France Brings Bike Marketing Season

We're wrapping up that time of year again, the time when the ecosystem that surrounds cycling can take advantage of the world's greatest bike race to pimp their wares. For people that are new to cycling, it can be an exciting time filled with amazing demonstrations of new products and new technologies. But for those of us who've logged a few miles in the saddle, it can be kind of funny watching the marketing circus that celebrates Tour time.

Here in Silicon Valley, we're always looking for the latest technology, for that new new thing that disrupts everything that has been done traditionally. With cycling, selling technology improvements, or the snake oil of technology improvements, is a time-honored practice. And the tour often fuels a hungry market of consumers, anxious to find that edge that will make them feel faster on the bike paths and beyond -- if they make it that far.

When you've logged a lot of miles on the bike, it's easy to get annoyed by the technology fashionista world of recreational sports. To quote from the Fred page on Wikipedia:

More recently, particularly in the US, a Fred is more often somebody with higher quality and more expensive cycling equipment than his or her talent and commitment would warrant. For example, a stereotypical Fred by this definition would be an individual with little cycling experience who watches the highlights of a few Tour de France stages, then goes to a bike store and purchases a Trek carbon fiber Madone in Team Discovery colors, along with Team Discovery shorts and jersey. Thus outfitted with equipment virtually identical to that which Lance Armstrong used, far more expensive than that used by many high-standard racing cyclists, and more costly than many automobiles, the "Fred" then uses his bicycle merely to ride on a cycling path at 15 mph (24 km/h), something which even the most casual untrained cyclist can manage on an inexpensive hybrid bicycle. Some use "Fred" in a somewhat similar matter, but more synonymous with a roadie poseur. However, a Fred isn't necessarily someone who intentionally tries to put forth an image of being better or more knowledgeable than they are. Rather, a Fred is an inexperienced or unskilled cyclist who gets some top high-end or copy-cat racing gear for any reason. Unlike most poseurs, a Fred may still ride lacking some fundamental piece of competitive roadie equipment or style.

Why did the "Fred" buy that stuff? He has been sold on it through the power of the Tour marketing engine and the cycling industry's symbiotic ecosystem.

On Cycling and Innovation
What most Freds forget -- and what most cycling industry marketing tried to hide -- is that the bicycle has been around in it's modern form for about a hundred years. If you wanted to get picky and just talk about the racing bikes being used, look at races from fifty years ago. While you can pinpoint a lot of small differences in materials and configurations, recognize that basic frame geometry, brakes, and drive train are essentially the same basic design as what was being used this year.

Sure, the gearshifts are on the brake levers, the gears index, there are 22 gear options instead of 10, and the frames are made of carbon fiber instead of steel, but the basic design is essentially the same.

Now don't get me wrong, there have been some significant improvements in the past fifty years, things that make it much easier for the average rider to log lots of miles, go faster, or simply enjoy aspects of their ride, but these transformations are not a yearly Moore's Law kinds of innovation. Here are a few of the innovations that I would call noteworthy over the past fifty years:

• Spandex and advanced textiles - wool is great for some things, but nobody really wants to ride in wool cycling shorts.
• Index shifting and brake-lever shifters - there are a lot of awesome aspects to the old friction-based shifters (much less wear and tear, interchangable components, silent shifting), but who can deny the benefits of being able to change gears without having to let go of the handlebars. 
• Material advances using aluminum, titanium, carbon fiber, ceramic - modern bicycles benefit from 30 years of advances in material science enabling optimization across a range of requirements. Sadly though, these days that often translates into a rather generic set of carbon fiber pieces and a regression to the mean in frame design.

Many 'innovations' aren't really designed with the consumer or rider in mind. Instead, they represent new approaches to manufacturing that let the bike manufacturers build things more cheaply and more generically. Here are a couple of examples:

• Threadless headsets - sold as having a number of advantages, the biggest advantage was that a manufacturer could build fewer forks. Instead of fitting each fork to each bike, one fork could be used on many bikes.
• Compact frames - sold as stiffer, lighter frames, this design moved a lot of sizing and frame fit to the seat post.

Perhaps the best example comes from classic frame builder Dave Moulton. Check out this post, Selling The Benefit, from his blog. It's a great example with 1960's Cinelli frames.

Finding Peace with Innovation Marketing
If your thinking about cycling and getting excited, it's also natural to get excited about some of the amazing hardware that you can take advantage of. I remember watching the battles between Bernard Hinault and Greg Lemond and wishing that I could afford one of those first generation Vitus carbon frames. Hell, a couple of years ago I had dreams about adding a 28-tooth gear, imaging myself effortlessly pedaling up Old La Honda. Eventually though, you'll find that the miles you ride and your wallet will let you in on that deeper truth -- it's your legs, your heart, and your lungs that will carry you down that road, not that carbon-titanium-synthetic-oval-power-meter.

If you're getting ready to purchase a bike this year, then you're probably going to need to do some research to find what's available and what's right for you. The excitement that you feel when you look down at your machine, that sense of confidence you feel as you turn the pedals, will give you a boost up a few hills. But remember, this isn't like your iPhone or your iPad. They aren't rolling out new apps everyday, and you don't need to keep looking for the new new thing. The odds are that that new new thing is just an illusion, a marketing wrapper around something you don't really need or want.

Gamification: Check-ins and Updated Foursquare

With E3 going on, gamification seems like an good topic. Over at Pando Daily, Erin Griffith has a post on Foursquare's newly updated app and their changing relationship with the check-in.

Perhaps you remember 2011 — it was the year the check-in died. That sentiment wasn’t lost on New York’s resident Lord of the Check-ins, Foursquare.

The company witnessed slowing user growth and a backlash brewing. But rather than ignore it and continue to congratulate themselves on achieving darling status and a crazy-rich valuation, Foursquare did the right thing:

They disassembled the entire app and put it back together again.

As someone who has been using Foursquare for a couple of years, I've personally seen some interesting dynamics associated with the app -- call it anecdotal analysis of behavior patterns and use case. While you might call Foursquare a deals site or focus on the social aspects, gamification is an important part of the app and plays a key role in many of use patterns that I've seen. Here are some lessons that I've taken from Foursquare's gamification.

Badges and Mayorships
Badges and 'Mayorships' can help drive early adopters or provide a small reward for some exclusive social circles (possibly location-based), but they become somewhat irrelevant with long term use or when the number of users exceeds an early adopter threshold. Sure it might be cool to be the mayor of the local Starbucks, but with hundreds of people checking in every day, do I really care about bragging rights over the guy behind me in line? And what do I get for it? Maybe something like a free cup of coffee, but more likely nothing.

The Point System
Foursquare's point system is a great driver for competitive behavior, but their point scoring model also has issues. Foursquare's scoring system points to one of the great challenges of gamification -- the differing interests between new users and experienced users. Foursquare scores new check-in locations with higher point values that repeated check-ins. This means that if you go somewhere for the first time or you are a new user, you get more points that if you go to your usual restaurant.

This model is great for drawing in new users with a sense of competitive behavior. Over the past couple of years, I've seen several people use Foursquare with the goal of beating me on the scoreboard. And when they are new users, this gives them a bump of excitement as they outscore the veteran user. But as they become a more regular user, their scores fall off and they fall into the veteran scoring system. Depending on the user, I've also seen this result in a fall-off of engagement with the app.

In that same way, a good game needs to provide a good entry point for new users, but deliver an increasing level of challenge based on use and experience. At the same time, if there isn't a correspondingly increasing reward system, regular users will fall off. A simple way to restate that would be put in context of the structure of Diablo 2:

• As you play the game more, you get more experience. 
• The battles you fight are against tougher creatures, but the treasure and the items that you get are also increasingly greater.
• Later in the game, you could go back to the areas that you went through earlier, but the battles offer little challenges, the rewards are usually too small, and there just isn't any real challenge, so most players don't go back.

The Foursquare point system doesn't really provide any substantial growth path or increasing level of return. Instead, it's almost like it was designed to serve as nicotine hook -- to get you habituated to a behavior of checking in. Unfortunately, from what I've seen, there isn't the same addiction and new users get bored with the application as their point-rewards start to drop.

Location-based Flash Deals
While this initially held some promise, I've yet to see more than one or two deals that got me to log my check-in with a business. While this could be a result of the challenge of selling local, I also think that there's a difference between the kind of people who seek out deals (and use something like Groupon) versus those that happen to be at a location, check-in, and then are surprised by some added reward for that behavior.

Will You Survive The Extinction of the Creative Class?

So here's some rather lengthy Sunday reading for you. It starts with this collection of articles posted on Salon last week, kicked off by this post, No Sympathy for the Creative Class - Art in Crisis, by Scott Timberg. It's a great exploration of how the 'Creative Class' struggles these days, fueled by the economic downturn, American anti-intellectualism, and to some extent, technology and the Internet. It's a long read, but well worth your effort.

While I think that the piece leans a little heavily on the struggles within the traditional arts, he also touches on the creative class in business -- graphic design, writers, and architects. One aspect that I think that he kind of glances over is that, within this sector and the idea of commercial creative, you once had a much larger 'working class' creative. These aren't necessarily people dancing, painting and sculpting, they are people in the corporate world participating in the same kinds of 9-to-5 tasks as... fill-in-the-blank because if you follow that logic, then you've also already hopped on board part of the anti-elitist rhetoric that the piece references.

Anyway, totally worth a read and probably something that I'll write more about going forward.

Steve Jobs as a Template? Who does that?

A while back, I came across this, Bio as Bible: Managers Imitate Steve Jobs from the Wall Street Journal. You don't have to go very far into the piece to get the idea -- it's an anecdotal tale of managers across the country who read the Steve Jobs bio and, subsequently, began to approach the ideas as dogma. The article leaves you with the impression that you're watching an episode of The Office and the boss has suddenly decided to start wearing black turtle necks.

Caveat emptor, I haven't read the Jobs biography, so I can't say whether I'll go finish the book and go straight to shopping for my own turtle necks wardrobe, but I don't expect that to be the result. I could be wrong. But my real focus here is on underlying essence of this imitation, on understanding good design, what makes art good, and why.

Let's take wine tasting as an example. Most of us are familiar with the vocabulary and ceremony associated with wine tasting. And while the vocabulary may seem artificial and pretentious to some, within the wine tasting culture it has meaning and purpose. Now, if you were to segment the wine community, you might start with some big chunks:

• Let's start with people who don't drink much wine or who aren't familiar with many varieties. For them, Two-buck Chuck is good enough -- they probably wouldn't be sensitive to subtleties and they certainly wouldn't pay a lot for them. They probably don't use wine tasting descriptions and the probably don't worry much about "rating systems". 
• I would probably put myself into a second group. I've tasted a lot of wine and used that as a basis for my preferences. I'm willing to spend some money on more expensive wines on occasion, but tend to make selections and second purchases based on how a wine matches my preferences. I don't use wine tasting vocabulary and I don't pay attention to ratings.
• At the upper end of the spectrum and people who spend a lot of money on wine and taste a lot of varieties. These people use the wine tasting vocabulary and they pay attention to rating systems. They make selections based on their tastes and preferences, but also understand how that vocabulary correlates to their preferences. They are probably collectors.
• Finally, you have the last set that I really want to talk about -- those people who use wine tasting vocabulary, who buy based on rating systems, price criteria, varietal and other characteristics, but who don't really understand or correlate those factors to an actual taste preference. These are the pretentious people who buy the most expensive wines or ones with the highest rating -- or maybe they only buy Pinot Noir because they watched Sideways. These are the people who would probably blindly drink Two-buck Chuck and describe it with flowery wine tasting vocabulary. 

It's this last group that we both love and hate. As marketers, we love them because they are so easily influenced by our efforts. As sales guys we love them, because in many ways that have sucker buyer stamped on their forehead. These are the people who deliver high margins because at the root of it, they don't have meaningful expectations.

Why don't they have meaningful expectations? Because they don't understand quality. Because the only qualities that they value are not related to form and function. They don't look at the world in that way.

Remember when, in the early days of the iPhone, RIM introduced it's own touchscreen phone? Part of the reason why these things come to market is because somebody somewhere said, "Hey, it does the same thing that ours does but it has a music player app store touch screen. We need a touch screen." It's not like the only difference was the touch screen, but how do you explain an entire, integrated landscape in a meeting?

Why is it that most copies are poor versions of the original? Well, going back to the Steve Jobs imitators, imagine if you could follow a Steve Jobs pattern, step for step, note for note. The best you could hope to achieve would still be an echo of the original. What you would miss are those moments of originality, of creative birth that produced many of the things that we look back on historically as unique. Why? Because your path to following the Steve Jobs recipe would be driven by "what would Steve do" instead of "what do I think is right". Hal Holbrook does a great Mark Twain, but he's not Samuel Clemens.

Imitation can be a great tool for learning. By repeating the steps in a recipe, you develop an understanding of the mechanics of cooking a dish. But until you understand the how and why of the recipe, you don't really own it. You don't make new, you just make. In the end, what did you learn from the recipe -- about the ingredients, about the process, about why the pieces fit together? This underlying learning process is the heart of what makes you good at something.

In business there is this idea that it's all simply recipe and process. If you can just make a smart phone with a touch screen, an app store and the apps that people like, you'll have an equivalent to the iPhone. Then, if you add a few more features that people like, maybe a memory slot, a faster processor or a removable battery, you'll have more features and you will sell more units than the iPhone. Maybe you understand the parts. Maybe you understand what the parts add up to. But if you can't see the bigger picture, the underlying connection for why those parts -- and those specific parts -- go together, you still don't understand.

To quote Frank Zappa from a 1984 issue of Guitar Player magazine:

What do you think happened in this country?
Well, two important things, and each one of them has only three letters: One was LSD, a chemical which is capable of turning a hippie into a yuppie, one of the most dangerous chemicals known to mankind. And the other is MBA. When people started taking MBA seriously, that was the beginning of the ruination of the American industrial society. When all decisions are based on an MBA's concept of numerical reality, you're in deep shit, because the only thing that can be judged as real is that which can be proved by a column of figures. And when all aesthetic decisions are turned over to these kinds of people, who use these criteria to make steering decisions for a company with no regard for people and no regard for what the product really is, and the only thing that matters is maximizing your profit, you have a problem. Because you can't have quality then; you cannot have excellence. Quality's expensive. I think most of these people that come from business schools have the desire to make sure everything is cheesy. That's what happens when you do things that way.

Of course, it's worth noting that in a lot of modern marketing, creativity and original content matter less than numerical performance. Consider web advertising. While copy and content may be a hook, the real measure (and the thing that you have to optimize on) is click-through and conversion. Not to say that there aren't more complex issues at work, simply that the issue isn't black and white. But hopefully, as people read the biography and begin to study the what and why of Steve Jobs, they find themselves drawn into the world of creativity and art. Hopefully, they find a deeper appreciation of aesthetic aspects and a greater tolerance for the differences that creative thinking brings. But mostly, let's just hope that it doesn't spawn a whole new generation of pretentious wine/design snobs who claim to know so much but who really understand so little.

Creativity and Design Stuff on My Mind

Recently, I've run into a number of blog posts and other items that have had me thinking a lot about creativity. Rather than apply too much structure to them, I'm just going to send them out your way for you to use as you see fit.

Here's a link to a post I came across on PandoDaily the other day. The Illusion of Imagination (And How It Drives Silicon Valley) by Francisco Dao is a great example of how one nugget, one kernel of thought, can change your perspective on things. Here's a sample:

Instead of actually considering odds, we tend to calculate probability based on the ease with which we can imagine something. And whether or not we can imagine something is often determined by specific details that create subsets, thereby lowering the actual probability of it occurring. I know that’s a bit confusing so let me give you an example.

When people were asked how likely they were to die in a plane crash caused by a terrorist attack, compared to people who were asked how likely they were to die in an unspecified plane crash, significantly more people believed the odds were higher in the terrorist attack scenario. This, despite the fact that an airplane crash caused by terrorism is a small subset of all total crashes.

This is truly an interesting read and totally in line with some of the other creativity things I've been seeing recently.


Here are a couple of posts by Hamish McKenzie for PandoDaily. These are interview segments from his conversation with Jonah Lehrer on his book, Imagine: How Creativity Works. There’s No Such Thing as Individual Genius in Silicon Valley and Steve Jobs Was Right to ‘Steal,’ and Beer is Inspiring give you a nice window into the ideas in the book.

Here's another one that we came across recently. How to hire a product manager by Ken Norton is an interesting look into one guy's idea of what makes a good product manager. There are some amusing elements here (like big company specialization versus start-up flexibility), but there are also a few points that he makes that seem internally contradictory. This piece is yet another reminder of the philosophical battle between "need to be technical and have an engineering background" versus "need to have a broader, more creative background with an ability to comprehend complex technology".  For me, I find the default to an engineering background to be a mindset that is hamstrung by conventional wisdom that forms an funny contrast to the idolization of Steve Jobs -- not that Norton covers that here, but it's another topic that I've seen a lot about since Jobs' biography was published.

Is Politics Driving Idiotic Self-Checkout Laws?

As I have posted before over on the SV Foodies blog, I like self checkout. I'm one of those customers who really doesn't want to chat in line. I find the self checkout UI interesting. And most of the time, I can get in and through the line faster in self checkout. But as of January 1, some new laws took effect that have handicapped the convenience of self checkout, made me question the logic of the law's sponsors, and also sparked this post.

Perhaps, like me, you only learned about the law banning the sale of alcohol at self-checkouts right before it went into effect around the beginning of the year. At the time, I remember thinking to myself that this is one of the dumbest laws that I've seen. Mind you, back in the Bible-belt South, it's not unusual for the 'morally minded' to use stupid laws to drive their cultural agenda, but few California residents can probably image a state with 'dry counties' or limiting alcoholic beverage sales on Sunday. So when I was signs announcing that this new restriction was taking effect, I assumed that it was legislation crafted by some misdirected, morally minded, overprotective technophobe. It turns out I was wrong.

Unexpected Item In Bagging Area
Anyone who has struggled with a self checkout system knows that the experience has the potential to be extremely frustrating. Self checkout systems freak out all of the time. Anyone who has used one of the systems is probably familiar with the "unexpected item" siren. Self checkout systems don't allow you to ignore store rules; instead, they get caught up on more exceptions than any human checker. If a price doesn't scan, human staff often simply key the item in as a generic grocery item and move forward. Self check out triggers the alert sirens and leaves you standing around waiting for a clerk to reset the system while you fidget about with people thinking that you were trying to steal from the store. Or that you just suck at using simple electronics.

This is why most of us who have used self checkout know that "the purpose of this law is to block an access point for underage drinkers to alcohol" is complete and utter bullshit.

I have three rules which I followed (prior to this law):

1. Avoid purchasing alcohol unless there is a clerk nearby and I am don't mind waiting
2. Avoid purchasing fresh fruits and vegetables and particularly things that might require the clerk
3. Avoid using self checkout on the weekends when families with kids or inexperienced users decide to 'try the system out'

The Engine Behind This BS
As I noted earlier, this legislation went complete under the radar for me as I imagine that it did for most of us. In the past, you might have expected this type of law to be the result of a real life incident -- people dying from taking an over-the-counter 'weight loss substance' or something -- so when I did some research and turned over the rock on the self checkout law, I was surprised when I didn't find something like that. Instead, this one seems like another example of lobbying interests driving legislation for special interests with little regard for the society at large.

First a couple of links so that you can see the history:

• California bill banning alcohol sales at self-checkout stands advances from the LA Times
• Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol is an interesting one from the Fresh & Easy Buzz blog which claims to be unaffiliated with the Fresh & Easy stores.

Some noteworthy aspects that I learned from these pieces:

• This wasn't the first attempt to push this legislation through. There were also attempts in 2008 and 2010.
• It appears that the bill was driven largely by the United Food and Commercial Workers.
• Fresh and Easy is all self checkout and often targets food deserts -- I may have to check one out
• As governor, Schwarzenegger shot this bill down saying, "It is unclear what problem this bill seeks to address." That means that Brown signed off on this, and I really would have expected better from him. While I don't think that this would be a deal breaker in terms of me voting for him, given the opportunity to confront him on the issue, I would ask for an explanation. 
• California Assemblywoman Fiona Ma, the Democrats in the Assembly that voted for this law, and Governor Brown all get nominated for my anti-innovation award for the year. What next? Do I need to card everyone that I charge on Square because it might be an alcohol purchase? Do I need to have a UFCW cashier ring up the transaction?

While the anti-innovation forces want to stifle self-checkout, What they overlook is that consumers like using these systems. Sure, sometimes it's slower, but it eliminates other potential frustrations in the transaction process, frustrations often created by poor customer service models. When a checker at Safeway asks about my day, am I really supposed to believe that they have any more interest in my day than the other ten people in line behind me? And if I'm number eight in line, do I really benefit from the "personalized" service that that person is receiving? For that matter, at Walmart or Target where they collect a ton of personal data and probably could access all of your personal transaction records in order to change your 'checkout' experience, would 'personalizing' it make you feel more connected to the big box store -- or just creeped out?

Piling On: How San Jose's Bag Ordinance Is Impacting Self Checkout
While San Jose probably was more focused on the environmental impact of plastic bags, the no bag ordinance is a blow to self checkout systems. Similar to the system's inability to correctly handle paper bags, the delicate scales on these systems aren't designed to calibrate to a customer-supplied bag. This means stacking and bagging after the transaction and, in most cases, an overall slow-down in processing a self checkout transaction. It will be interesting to see how stores handle no bags and the self checkout systems going forward as San Jose is probably not the last city to push a no bags ordinance through.

Forget About Santa: Target Uses Big Data to Know if You're Naughty or Nice

Here's an interesting couple of items that I came across on Linked In. They are some great insights into the power and pitfalls of big data analytics and it's impact on marketing.

How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did by Kashmir Hill with Forbes.

And the original New York Times Magazine article that her post is based upon:
How Companies Learn Your Secrets by Charles Duhigg

SOPA, Super PACs, and Tech: Envisioning Media and Politics 2.0

So it's been a busy week in the world of technology and politics. As a big chunk of the tech industry got behind the day of SOPA/PIPA protest on the Internet, constituent forces were energized and some members of Congress actually shifted their public position. Across the Internet, there was a sense of victory. The tides had turned. Momentum on our side. But this was not the war. This was not even The Battles of Lexington and Concord.

Barely a day after the SOPA protests, the Justice Department and law enforcement officials in eight other countries shut down file sharing site MegaUpload, arrested a handful of MU employees, and seized "over $50 Million in assets." It was as if the pro-SOPA/PIPA message machine demanded a head, something that would enable the media to say, "See how much these guys make? See how bad this problem is?" Of course, the irony of the entire MU thing is that any legal action that results from the whole thing is taking place in an pre-SOPA/PIPA environment.

But let's look down the road. Here are a couple of links -- dots to help paint the picture taking shape in my thoughts:

Here's a link to a post, RFS 9: Kill Hollywood by Paul Graham at Y Combinator. Here's a snippet:

Hollywood appears to have peaked. If it were an ordinary industry (film cameras, say, or typewriters), it could look forward to a couple decades of peaceful decline. But this is not an ordinary industry. The people who run it are so mean and so politically connected that they could do a lot of damage to civil liberties and the world economy on the way down. It would therefore be a good thing if competitors hastened their demise.

Sarah Lacy at PandoDaily has some thoughtful insight into entrepreneurs taking down the Hollywood industry.

Also noteworthy is Michael Arrington's thoughts on the SOPA/PIPA fight. While I don't completely agree with him that the problem is "big government", I do think that he is spot on regarding the influence of lobbying money being the real underlying factor shaping this battle.

And finally, just to add a note of flavor, here is a post from Nicolle Belle at Crooks and Liars. This is just a nice reminder about how the media and the industry of politics all profit from this. This isn't just politicians, lobbying and Super PACs, it's ad revenue and it's content generation -- it's multi-threaded reality TV that dwarfs the Kardashian enterprise. 

Questions that I Keep Asking
Why is it that money and incumbent interests tend to drive the political winds with little regard to constituent interests or long-term value?

Why is it that, instead of faster Internet and universal broadband, we get laws proposing The Great Firewall of America?


Why is it that I have only found a handful of television programs in the past two or three years that I consider worth watching? Why is it that, with over 700 options being piped through the cable box, most of the programs that I watch aren't available there?

I sometimes wonder how come, with 12-15 channels devoted to "24 hour news" and another 30 channels that feature news programs, I find so little useful news or analysis on television.

Why is it that, somewhere in Hollywood, somebody seems to think that if they just delay giving Netflix and Redbox new release content, you and I will suddenly run out and buy that content on Blueray?

Do we really want -- or trust -- anyone sitting at the switch, deciding what content can come down our pipe, controlling what we can say, see, read or hear?

Moneyball, Big Data, Analytics, Correlation, and the Evolving World of Marketing

Recently, one theme that's been running through much of my thoughts is wrapped up in the ideas presented in Moneyball, the book and, more recently, movie starring Brad Pitt. And while I have not seen the movie or read the book (other than a short excerpt), I've listened to several extended interviews with Michael Lewis.

Moneyball is sort of about baseball, but what makes it interesting for marketing is the analytics theme. You're probably already familiar with the basic story -- A's general manager Billy Beane takes over and is forced into an extremely low payroll. In order to be competitive in a league where the New York Yankees can afford to spend more than three times his budget, Beane turns to analytics and statisics to look for undervalued players and player characteristics that can help win games on a budget.

There are a lot of interesting posts on Moneyball and business. Here's a good one, Moneyball – Lessons from Baseball for Voice of the Customer, that I thought pulled together a good summary. If you had to put it all together, you could boil it down into a core recipe:

• Measure as much as possible
• Log your data
• Look for correlations (or non-correlations) -- find the numbers that matter
• Question conventional wisdom
• Learn to play by the numbers

Keeping stats isn't new. Baseball tracked batting average for years, and players were often listed by batting average. But the team with the best batting averages didn't always win. In the early days of the web, the big measure was clicks. If someone convinced you to post an ad on their site, they would then tell you how many clicks the ad had -- and that was considered the measure for success. Like tradeshow badge scanning leads, these numbers could easily be padded with tricks like cool give-aways. Clicks don't equal quality.

Modern marketing runs on web scale. With today's web, we interact constantly with the data engine, supplying test results that dwarf some of the some of the most sophisticated focus-group programs of the past. With tools like Google's Website Optimizer and A/B or Multivariate testing, even small businesses with modest marketing budgets have access to sophisticated experiment engines. But, just in case you're one of those old-school marketers and you missed the memo, a revolution has taken place and everything has changed.

Analytics versus Design
In the web world, we've been working with analytics for quite some time. One of my favorite stories about the power of analytics comes from a time when I was visiting Google a couple of years ago. There, they were showing off their Web Site Optimizer tool and talking about how they had looked at redesigning the page to look more like their Google Analytics page. However, when they ran the A/B and multivariate tests, they found that the new design didn't perform as well as the existing design.

Contrast that with this quote from a post about Fab on PandoDaily:

The difference was pronounced in a recent meeting Goldberg had with a Valley-based recruit for a technical position. Within in ten minutes of the interview the two were fighting. Goldberg asked what he’d do with the Fab homepage, and the recruit gave the usual spiel about A/B testing the layout to see which products made people click more, and how the data said they should be laid out on the page. He called the product placements on the front page “ads,” and Goldberg balked. They aren’t ads, he said, they’re editorial. “We aren’t trying to make people buy certain things, we want to guide them through a story,” he says.

So which is more important, Design or Analytics? Style or Stats? Perhaps, more importantly, can you find the right balance between the two?

Real World Gamification

I came across this interesting story of gamification yesterday. It's an interesting read.

AIDS Puzzle Solved By Computer Gamers

Dreamforce 2011 Social Enterprise Theme: Can There Be An Arab Spring In Business?

I attended Dreamforce 2011 this last week. It's an amazing, crowded event packed full of more people than you could imagine in event focused on enterprise software. They were saying 45,000 attendees this year.

One of the great things about Dreamforce is the new Salesforce features and hear the messaging that surrounds them. One theme for this year was 'Social', Chatter, and the idea of 'the Social Enterprise'. Forget about how they've been pushing Chatter for three Dreamforce events now (and probably still wrestle with a significant chunk of their customer base questioning the value or how it all fits), this year's keynote drew upon the events of the Arab Spring to remind everyone about the role of social media in the transformation. Here's a description from SF Gate:

Showing images from this year's wave of protests and revolutions throughout the Arab world, some of which were fueled by protesters' interactions on social networks, Benioff said a version of the Arab Spring could soon be coming to the corporate world.

CEOs who aren't listening to customers or employees online risk losing their jobs, he said.

"It's not so long from now we'll start to hear about Corporate Spring and Enterprise Spring," Benioff said. "We've seen Mubarak fall. We've seen Khadafy fall. When will the first CEO fall for the same reason?"

Arab Spring. Revolution. It's powerful imagery and it evokes a strong emotional response. Clearly, I'm not the only one who was struck by it (check out this post, The Tragic Triumph of the MBAs on Techcrunch). But while it makes for an interesting premise and it underscores social media, does simply connecting these two concepts using a like analogy really make sense?

Imagine If The Arab Spring Analogy Made Sense
Imagine if the greatest challenge that enterprise employees faced was a dictatorial CEO who stiffled them, prevented them from participating in business processes, corruptly siphoned off all of the company's resources to himself and his cronies, and generally kept the company from being great. If these repressed employees only had a platform to find one another, to communicate, to plan protests...

Of course, the simple truth is that these are not the great challenges facing most enterprise employees. Even if they were, would a corporate-supplied, enterprise communication tool provide the platform for their communication? Imagine if Twitter was a platform developed by the Egyptian government.

It's true that Social Media can be a transformational thing. Within the enterprise, the ability to expose conversations and flatten communication channels can be change-making. More importantly, it's difficult to grasp the importance of being able to shape your own content through the follow architecture. In terms of Salesforce.com, the easy ability to integrate and build an application that Chatters, then publish that stream is an amazing feature that dramatically expands the doorway to the Internet of Things. But that not the same as Arab Spring.

Sorry Marc, The Social Enterprise is not The Arab Spring Enterprise. But you get points for trying.

Emerging Tech Trends: The Internet of Things

This last weekend, I was listening to music while cleaning my apartment. The music, a digital audio file, was playing in iTunes, stored on the laptop in my bedroom. The music was routed across my local network to two Apple Airport Express wireless units connected to separate stereo systems, one in the bedroom and one in the living room, enabling me to play music simultaneously in both rooms. I also use the Apple Remote application, enabling me to manage what's playing on iTunes remotely with my iPhone. Multiple rooms, multiple devices, and many packets of data flowing back and forth, harmoniously working together to create an enhanced user experience. Sadly, my stereo receivers are old and dumb, so I have to manage them using traditional IR remotes.

The Smart Home Evolved
Years ago, when I worked in the DSL industry and we were watching the emergence of broadband, people talked a lot about the Smart Home. Refrigerators and ovens connected to the Internet, your television as a conduit to the Information Superhighway -- you remember the buzz. We've come a long way since that time: home networks are as common as cordless phones and many of our media devices are Internet enabled. And with Apple's iPhone and the success of the iOS platform, component vendors have been freed from competing on the central management unit -- now, they can build a management app for iOS or Android and reach a large, established user base.

Still, you don't see a lot of smart refrigerators or other appliances. Part of the reason behind this has been the challenges involved in adding this kind of intelligence. Several years ago, while I was working with a team on an industrial control device, I repeatedly suggested adding a web-based management interface option for the device. At the time, the project engineer's response was that it was too complicated. In addition to the physical interface, we would have needed an additional processor to handle the network management and another layer of software for the entire process -- it wasn't simply an additional PHY.

On the product side of things, anyone that was considering developing or adding a Smart Home interface needed to take into account many factors:

• What network would it connect to (protocol, interface, etc)?
• How sophisticated did you need to make your on-board network/management unit?
• What would you want to do to the product through that network interface?

As technologies have evolved, it's easy to overlook how technological evolutions have changed these factors. Imagine trying to connect all your smart appliances using Ethernet cords. Think back ten years ago and reflect on the smallest Internet-enabled device -- imagine if every smart appliance needed to have a hard drive and run a version of Microsoft Windows. And when you get down to the question of what would you want to do, remember that many traditional analog systems don't have intelligence -- there's no log file for your stove or your microwave oven.

The IR Remote Control: Yesterday's iPhone
For many years now, device manufacturers have enabled us to manage systems using IR remotes. These devices offered many advantages for manufacturers, but probably the biggest was simply knowing that it would work from a technology standpoint. The network wasn't a limitation and if you wanted additional functionality, you could just add a button or a menu-driven interface. The remote and the appliance didn't really need to worry about anything else on the network, there was no need to worry about communication standards or APIs, it just worked. And that's part of the reason why we wind up with so many remote controls, all with different buttons and different keyboard layouts.

Now, you're seeing more and more entertainment system manufacturers offering management interfaces for the iPhone or iOS devices. Some AV Receivers offer iPhone adapters or applications that enable you to use your phone like a remote. The dedicated IR remote may not be dead, but it's days are numbered.

The Internet of Things: Moving Beyond the Media Center
Adding Internet to your media center is an easy sell: you already have cables running to it, you interact with it, it probably has a display that you can use. What happens when you move outside of that world and into your other appliances? As noted, three of the big challenges are network access and utilization, system sophistication, and application layer functionality, but many of these issues are being addressed through the evolution of the market, advances in technology, and increasingly sophisticated SoCs and IC functionality.

With the widespread use of WIFI, appliance manufacturers can now make some positive assumptions as to the available network access. Bluetooth is also available as a potential protocol for a management interface. Recently, I've also seen announcements about an Android-powered mesh network for LED lightbulbs. In short, these LED bulbs can talk to one another in order, enabling monitoring, management, and potential savings in power and operational costs.

The junction between increasingly sophisticated processing capabilities like you find in smart phones and tablets, and the streamlined functionality of open-source and embedded software is making network functionality more accessible than ever before. As many of these approaches bring common Unix/Linux architectures to embedded software development, many of the common network and application-level programming aspects become more universal and web-ready.

What's more, at a recent Embedded Systems Conference, one company rolled out a series of products for embedded cloud services. Now, instead of having to develop build some application-layer functionality on the device, you can build those applications in the cloud. While the ICs handle the network connectivity, application functionality is provided through remote servers in the cloud. As more and more ICs integrate this kind of functionality, you can expect to see increasingly sophisticated functionality moving into the embedded world.

From firewalls and security to a cloud-enabled application stack, as more and more network intelligence gets integrated on chip and into the embedded world, the more our world -- and our relationships with our devices -- will evolve. The Internet of Things is coming online.

How Amazon Controls E-Commerce

There's a nice piece over on Techcrunch -- with slides on Slideshare -- about Amazon.com and how they dominate e-commerce. Take the time and go through the presentation -- you'll probably find several tidbits of information that surprise you, impress you or otherwise inspire you.

How Amazon Controls E-Commerce

Why Are People Shocked About Flip?

Earlier this week, Cisco announced a restructuring that basically eliminated the Flip camera group, a company that they bought for $590 million a few years ago. Following that announcement, I've seen a number of posts that reflect a sense of shock surrounding the death of the product. Me, I'm more surprised that people seem surprised.

When the iPhone 3GS was launched and included video capabilities, there were numerous articles and posts about how iPhone video would be the death of the Flip. Since that time, there's been a lot of innovation in mobile video on the smartphone platform -- Apple even added iMovie and basic video editing to the platform with the iPhone 4. Meanwhile, the Flip platform hasn't evolved. This leads to several questions:

• Was the acquisition simply a strategic blunder on Cisco's part?
• Was this a technology or other resource acquisition?
• Was this the result of a large organization being unable to provide the fertile environment needed by a start-up to prosper?
• Would a start-up version of Flip been able to innovate enough to remain competitive?

In the end though, this shift in the market has been going on for two years. I'm not really sure how that constitutes a surprise.