Products and the Realization of the Attitudes of a Company

I won't get too philosphical in this post, but, while reading Dare's blog, it suddenly struck me how much a product is the implementation of the culture of the company. He quotes:

So not only does Google Desktop flood websites with feed requests in a manner bordering on the behavior of a malicious application, it also does this automatically without the end user explicitly subscribing to the feed.

That's messed up.

Translation: We're Google, and we are the only ones who matter, so we're going to do whatever we want cause we have your best interests at heart.

You can say this the same thing about MS, of course, in a slightly different way. Look at Office. Translation: We only care about people who pay us LOTS of money, and so we're going to completely optimize this product for a very specific set of people who pay us a lot, and ignore everybody else.

Sun's Announcement?

Sun announced two things the other day, but I'm not sure why I would care. Specifically:

SANTA CLARA, Calif. - November 1, 2005 - Today, Sun Microsystems, Inc., (Nasdaq:SUNW) announced its intent to deliver on demand network services to convert documents from native proprietary formats such as Microsoft Office into the Open Document Format (ODF), the industry standard file format. In addition, Sun plans to deliver a service to convert text files to podcasts or audio files for playback at a later date. These introductions add more services to the growing catalog of grid services available via Sun's Grid Utility, and amplify Sun's commitment to deliver on its 24 year vision of "The Network Is The Computer". intent to deliver on demand network services to convert documents from native proprietary formats such as Microsoft Office into the Open Document Format (ODF), the industry standard file format. In addition, Sun plans to deliver a service to convert text files to podcasts or audio files for playback at a later date.

Doesn't it seem like Google or MS or Yahoo will provide these things for free shortly? Why would I pay Sun for this when I can get it for free elsewhere?

Imparting "Face" to a Culture

In the July 4, 2004 NYTimes Magazine, there was a great article on the rise of China. There was one quote that particularly caught my eye:

"There is a reason why the world is so impressed by Chinese workers," Weingrod says. "Culturally, the Chinese put a very high premium on not losing face. In manufacturing, that translates into not making mistakes on the production line. Their self-discipline and their ability to adapt are key factors driving Chinese competitiveness." And for every work disinclined or unable to apply himself with energy and concentration, there is always another poor Chinese worker waiting to escape the farm or adrift in the so-called floating population of the underemployed, willing to take his place.

I found this to be quite interesting, and a marked contrast with the US workforce. While we surely still have a work ethic, I'm not sure that "face" translates to people's work. I've always wondered, is it possible to import this mentality into a culture? Maybe you don't do it universally throughout the culture but, instead, start small and build up from there? I guess that's a little bit of what WalMart has done.

One could argue that the reason we have this situation is because every worker in the US DOESN'T have someone else breathing down their neck. The fact that we have as many jobs as we do means that you can kind of slack off and still be better for your employer than the alternative (namely a empty office). But it seems clear that that is NOT what is motiving the Chinese worker. Instead, it's a sense of honor about the work they do. I wonder if that's portable.

Sucked In Again

Shit... I got sucked in again by the "journalists/analysts" who post on the blogs on ZDNet. Turns out Mr. Waineright is one of those anti-MS agenda guys and is just using ZDnet as a mechanism to push his thoughts. He posted again today about how, by buying a LAMP based product (Foldershare), MS "fatally undermine[s] any pretension that it offers a superior platform for on-demand services."

How art thee wrong? Let me count the ways:

  1. A good idea is a good idea... acquisitions are about getting good ideas, good people and good technology. Having something implemented in .NET is pretty far down the list.

  2. I use Foldershare all the time, and it appears to be a rich client implemented right on top of the Windows APIs. Who knows why they chose the platform they did for the website, the real hard work goes on on the client. If LAMP was so good for that, why did they implement a rich client at all? Or why isn't the rich client based on PHP?

  3. The number one web service in the world is ... wait for it ... AIM. What's that built on? I actually don't know. But behind that is MSN Messenger or Hotmail certainly rank up there. And despite the urban legends, Hotmail runs Windows. In fact, many of these web services are now running on 64-bit Windows giving them a 10x performance gain. Does that sound fatally undermined?

Yes, I know that Google runs on Linux and is certainly among the top web services in the world, but the point wasn't that you couldn't run a web service at scale with Linux, Mr. Waineright's point was that you couldn't do it on Windows. I know I say this every time I find one of these extremists, but this will be the last time I dignify these views with a response. It's just not worth it.

The New Business Model

Good God. Here I've been struggling trying to think of other business models that are going to take off in the new world, but I've been all wrong. THE business model for the new century? Filling out forms. I've been looking to refinance my home using this interesting new type of mortgage (I'll go into that in a later post). As part of what is required, my homeowners association needs to provide some basic information: how many units, current budget, etc. For this they charged me $75. $75! In addition to registering my complaints verbally with the firm, I decided to write a little letter.

----------------------

From: [Me]
Sent: Thursday, November 03, 2005 2:28 PM
To: [Them]
Subject: Certification for the home owners association

Dear [Him]

I have to register my extreme displeasure with being charged $75 for the certification of the home owners association. The amount of money for the little amount of work done seems disproportionate with the cost. On the phone, your associate said that three people needed to be brought together in order to fill out the form, and it normally takes about 20 minutes. By this logic, those three people could make $150,000 a year doing nothing more than filling out those forms ($75 per form * 3 forms per hour * 2000 work hours in the year / 3 people). From my perspective, it seems to be the most extreme form of gouging.

After receiving the report, I browsed through the website you use to collect the forms. According to this site: http://associationis.com/AIS/servlet/AISP2NewWindow?camId=6 the total cost for your forms are $30. Where does the additional $45 charge come from? Are you really charging $45 for an action which must take your "team" less than 5 minutes to print out?

[Additional complaints here]

Sincerely,
[Me]

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If I could do one thing before I die, it'd be to put all these people who do nothing more than charge for entering, storing and printing out information out of business. There's just no reason these people need to exist in the digital age.

The World Runs on Ads

Sorry Phil - http://blogs.zdnet.com/SAAS/index.php?p=56... close, but you're way off.

What Mr. Wainewright doesn't get is that ads are changing... more than they ever have before. In the old days, ads were on TV and billboards and newspapers. Ads would encourage people to remember them and, when they were in the purchasing mood, they translated into sales.

But there are basically two people in the world of the future: those that produce content and those that produce goods. Those that produce content will be funded by those that produce goods. Yet ads in this new world will be those that produce content driving sales of those that produce goods. There will still be things like brand loyalty and brand recognition, but the space between realizing you need something and having a link presented to you where you should go to buy it will get very very small. Whomever makes that transition the most frictionless for the consumer and the most efficient for the business will win the goods producers. Whomever can make transition the most profitable to the displayer and most relevant to the reader will win the content producers. And the key brands for this new world will be the places where you can show the most ads and make the most money (either through ad displays or transactions) doing it.

Mr. Waineright is concerned that ads will be displayed in applications. That's completely unnecessary. All the applications need to do is drive more ad displays somewhere ELSE where it's more relevant. For example, let's say I download a Google branded word processor. In the word processor there's a search box. There are no ads. I sit there for a hundred hours working on my word processor and then I realize I need a fact for something I'm writing. If that is a net positive queries per year, that's a huge win for Google. Because when I click through that search box, I'm being presented with an ad by Google that could have gone to anybody. All you need is incremental ad displays to offset the cost of building the software. Here's the equation: If developing an application produces x incremental queries per Y user per year, then do it, where X * (average revenue per ad) * Y > cost of investing. So if it costs me $5 million to develop an app, and I make $0.05 per ad, I need to have 100,000 people download it, and have them do ~3 extra queries per day. A million people need to do +1 extra query every 3 days. If the revenue per ad goes up, the numbers of people i need to have come on board goes down... FAST.

Second, Mr. Waineright says that the money is made on the transaction, not the advertising. But he fails to notice that every transaction has a cost of customer acquisition. Imagine the following: I have revenues of selling a book for $20. My margins are 10% so I made $2. But I also had to run a holiday campaign to get customers to come into my store to buy the book, which cost $1.50. Net profits = $0.50. If my campaign could be reduced in price, so that it only cost me $0.75, the rest of that money is pure profit. And that's what Google Adsense is doing. It's not taking a cut of the transaction cost, it's taking a cut of the customer acquisition cost. It's both more tolerable to the consumers and to the companies, because it actually benefits them both. And there's absolutely no reason this can't be extended to just about any application out there on the market. You want to check the weather? A link appears that tells you about Hawai'in vacations or umbrellas. As long as it's done in the context of letting you do what you want to do and is unobtrusive, it's a win for everyone.

I'm telling you... ads are going to be the new oxygen.

"I dont want to sell anything, buy anything or process anything as a career. I dont want to sell anything bought or processed, or buy anything sold or processed, or...process anything sold, bought... or processed, or repair anything sold, bought or processed, you know, as a career. I dont want to do that." -- Lloyd Dobler (John Cusak in Say Anything)