So tonight I'm announcing my new blog site. I've gone to wordpress running on a slicehost virtual machine (which should make the bandwidth to it much better too). I played with the look and feel quite a bit to get an appearance that I think is better than here, and more functional. I hope you will visit it.
I'll keep this site up for a few months in case there's something here that someone wants to look at. This server hosts a few other sites anyway, so it's no big deal.
Let me know how you like the new blog!
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( 2.9 / 480 )The iPhone has taken the world by storm. Even my friend John - a senior executive at a high tech manufacturing company - ditched his Blackberry and got an iPhone (we'll see if that lasts). Millions of the cute little gizmos have been snapped up by an excited consumer market. That kind of sudden user base has created a rush among software developers to try to tap into that market. Apple says there are more than 65,000 applications available in the App Store and there are over 100,000 developers registered to develop iPhone applications.
Wow. That's an insane number of programs available for any platform. Many are free, many cost a few dollars. Clearly a pile of companies and individuals think of this as a whole new market place, a new ecosystem here good tools can be made available to a willing consumer-base. There have been press stories of the cash made by some of these applications. Riches! A whole new market! Let's all write iPhone applications and get rich!
I disagree with that assessment. The Apple AppStore is not an ecosystem and it's not a new market where companies can participate freely. It's a trap baited with fools gold - and a lot of folks fell into it.
I know many of you think I'm a heretic for saying these kinds of things. After all, Apple is the nice underdog and boy, they make such nice things that are so easy to use. So why do I think Apple has created the modern equivalent of the La Brea Tar Pits?
First of all, to be an ecosystem there has to be an open marketplace. The only place you can buy iPhone apps is through Apple - unless you jailbreak your phone (voiding the warranty) and use unofficial sites like Cydia. Few users will do that - they will go with the flow. So Apple controls the gateway to even offer an application to the market. Imagine the reaction by the market if Microsoft tried that! What if the only place to buy applications for your PC running Windows(tm) was through an online application store run by Microsoft. Ha! That would have been laughed out of town. But for some reason when Apple does it, the consumers think it's OK.
So suppose an enterprising developer looks past the fact that it's a closed market controlled by a single vendor. 100,000 such developers already have. The aspiring developer takes the time to develop an application - several months of work at least for anything non-trivial. They submit the application to Apple for approval. That will take a few weeks to a few months to grind through the process. If approved, Apple adds the application to the App Store. Party time! The market can now buy the app! Money should start pouring in! Of course Apple takes 30% as their cut. Ouch. You have to price your application at the consumer level and Apple still takes the middleman hunk out of it. What did Apple do to add value? Nothing. They built a wall around their pretty new 'market' and charge a toll for every sale that happens in the market. Oh, and the application may not even be approved! If it's not approved, the developer wasted months of time and will see no financial return.
Closed, controlled marketplace. No assurance that goods produced can be offered for sale in the market. Implicit cap on the price you can charge based on what others are charging. Apple takes 30%. These facts alone should make a businessman think twice about the viability of a business selling iPhone applications.
But it gets worse! Even after being approved Apple can reverse their decision and remove the application from the App Store. The developer has no recourse. The developers customers are stranded.
Apple's stated policy is that they will reject any application that is too similar to something they provide. They apparently will also reject anything that violates some provision of a deal they have with a partner - like AT&T for example. Google Talk came to the iPhone, allowing free SMS text messages and voice calls over the Internet. Bang, Bang! Apple rejected the app.
And this gets to the core of the problem: Apple is also a seller in this marketplace that they control. If an application does not compete with them or their partners, it's fine. But what about downstream, as they add their own functionality. Will third-party Twitter apps be banned when Apple offers their own? No one knows, and frankly, it's just too much risk to take for a company that wants to make a viable business selling iPhone software.
And I'm not alone in this thinking. The brain drain has already started. Other blogs are making the same points. Michael Fern analyzed the potential market for iPhone applications and determined that the potential revenue is not there - certainly not with the risk of revenue loss if Apple unilaterally decides to ban your app.
The crazy thing is that Apple could fix this easily. Just open the iPhone for third-party developers and allow other application stores. You know, like the Blackberry and Android phone markets. Allow a free market. Encourage competition. I bet most Apple users will still buy Apple software - probably because it usually is better. Apple will still make more than enough money - maybe more, since there's ample evidence that open platforms do generate more revenue in the long term.
But, as my colleague and friend Alan Stein says, "Apple is the new Microsoft." I don't hold out much hope that Apple can wake up and steer clear of their greedy ways.
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( 3 / 478 )I recently saw Transformers - Revenge of the Fallen. It was a terrible move for a lot of reasons. But this isn't a review of the movie (directly). I want to talk a bit about the pathetically stupid decision of Hasbro to support this movie with so little oversight as to it's target market.
Before I say anything more let me qualify myself a bit. I'm a pretty liberal guy. I'm open minded. I live in San Francisco for goodness sakes! My family is Catholic but I keep my views very low key. No one accuses me of being a prude - let alone of being Conservative! I'm a parent. I have an 8 year old boy who is Transformer crazy. He has all the toys from the first movie. He has both the DS Lite games. My 6 year old daughter likes the games too. They've both seen the original movie. They both love the old animated series. My son was incredibly anxious for the movie to come out and for me to see it. He knew it was PG13 so I had to screen it to see if I would let him see it.
Neither of them will see the new movie if I have anything to say about it.
Why? Because for reasons that have nothing to do with story, plot, or artistic values the director (Michael Bay) needed to express. The movie is laced with really stupid and immature sexual innuendo. It started with the opening scene of Mikaela who poses quite sexually while painting a motorcycle. That scene was obviously intended for all the guys who thought she was a babe. The humanoid 'babe' in the college dorm who practically sexually assaults Sam served no purpose in the story but clearly was out of someone's college fantasy. The little robot that Mikaela 'turns' to the Autobot side humps her leg while making sexually suggestive noises. Mikaela's character morphed from the tough street wise beauty in the first movie into a frightened sex object in the second. All of this was certainly too much for my kids to see.
Why? What purpose could any of this have served?
Oh, that's right. I forgot. They basically tailored the movie to the male 18-30 year old crowd. The guys who played with Transformer toys 10-15 years ago (we hope it was that long ago). I guess the idea was to aim for that demographic and pull in all that money.
But you see, there's a problem with that. Those guys are not going to buy more Transformer toys (we hope). They probably won't see the movie again. They might buy it on DVD someday, but the value to *Hasbro* is gone.
Had they toned it down sexually and made this a cleaner PG movie they'd have pulled in a whole new crowd: the kids. I can tell you that movies that my kids love they talk me into seeing again before it leaves the theatres. Ka ching. My son just had a birthday and would love the transformer toys. Ka ching. Christmas - more toys. Ka ching. DVD release and a certain buy. Ka ching. Repeat cycle. Ka ching. Cash for Hasbro as well as for the movie studio.
But that's not how they played it.
Back to my son. I had to him that he couldn't see the movie - that it wasn't appropriate for kids. And I had to hug him and hold him as he cried and cried with bitter disappointment. He asked a great question: "but Dad, why did they have to make it inappropriate for kids?"
So, Hasbro, I hope you are happy with your profits this year from royalties on this movie. You'll not get another dime from me. My kids won't get the toys... I'll go out of my way to get them other things, to say "well, you know you didn't see that movie... why don't we get this other toy?" And I won't get them the games from it either.
Sometimes companies can be stupid, pathetic and completely short-sighted. Hasbro clearly is. And the movie was even worse.
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( 2.9 / 382 )A while back I blogged about Why Twitter is Important. Essentially, my point was that Twitter is the first application going mainstream that exemplifies the new 'real time stream' type of service.
Clearly I'm not alone in my analysis. On Friday I'll be attending the Real-Time Stream Crunchup. Speakers and panelists from Facebook, FriendFeed, Microsoft, Salesforce, Seesmic, and Tweetmeme will all participate, and there's going to be some new services demonstrated too I hear.
What's important to me about this is that it's a chance to hear from the cutting edge what they are doing and why. I'll get to meet a bunch of other folks who - like me - think that real time streams of data will be the next wave. I cannot wait.
Will you be there? If so, tweet me @gherlein.
UPDATE: Unfortunately I won't be there, but one of my staff will be. I'm disappointed I'll miss it but I look forward to the report, and I'll catch part of it via the live web stream.
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( 3 / 401 )I've been digging into Facebook development the past few weeks, as well as Twitter and a few other even newer things. I may or may not be all that interested in actually developing a Facebook application - but I'm extremely interested in the concepts and foundations behind the so-called 'real time web' intersected with the social networking that's surging into the mainstream. As I read different Terms of Service (ToS) and play with various APIs I'm solidifying my opinion that it's all about the data.
Of course, folks will talk about the relationships and the real-time and the social graph. But that's all data. It's all data yet it's only data, and yet it's the most important part of the puzzle. Control the data, or the access to the data, and you have an advantage - if and only if the data is useful. If someone can create value with the data then you have isolated a new natural resource that you can monetize. It may take some time to figure out how to efficiently monetize it, but it will happen. It always happens - only often it's not the first mover that taps the money well.
Most of the work going on feverishly about Facebook application development is purely to get access to your data. Whoops, I meant [ul]Facebook's[/ul]data! For all the protections they provide for your data (and if you don't know them well I recommend you read this blog entry. ) That will at least protect your data from others, but Facebook can do whatever it wants with your data. It can, and is, cross-referencing it, sifting it, looking for connections and useful things. So far they don't seem to be finding ways to convert this natural resource into money (at least that we can see).
But given that they control the data, they could be poised to be a huge provider of '4th party' services.
What's a 4th party service?
A 4th party service is a means of connecting customers to suitable vendors who can meet their needs. This kind of connection is what was always existed in human commerce, but in the age of mass advertising modern culture lost much of it. We came to have conversations about 'brands' and such - like a brand really matters. Brands mean nothing more than 'reputation.' And reputations amongproducts are earned - you cannot really bamboozle your way into it and expect it to last. Funny, reputations among people work the same way. But back to the 4th party concept. I read a very good blog entry about it that defines it as:
" A fourth party logistics provider is primarily coordinator of
other supply chain partners through the ownership and maintenance
of information systems. This is differentiated from third party
logistics providers that provide physical handling and or
transportation of goods."
The definitive book about this revolution is now almost 10 years old. Here's a link:
If you have not read it, buy it now. Of course, I'd love it if you bought it through my link so it would help defray the costs of operating this blog.
So how does this matter with the data? The data holds the reputation. The APIs to access the data are about accessing the reputation. Who do you trust and what do they trust? You will trust that by association. Once you start down that path you won't care about 'branding' messaging any more - unless that brand is one that has built trust through your own trust network!
There are folks who envision a future where the data is not centralized in only a few companies. They say:
" Tomorrow, as everything becomes social, you will be able
to shop Amazon directly from within your iGoogle page without
ever having to visit the site. What's more, Amazon will
show you what your Gmail address book friends have publicly
said about a product and/or its category in any one of
thousands of online communities. Finally, to help you
further Amazon will offer an aggregated view of your
friends' friends opinions in a way that protects their
identity."
That's a great vision. But it will be awhile before we all can own and share our own data as we choose. Today there's data in Facebook that's as valuable as oil sitting under a Middle-East desert. Tapping that well is there for the taking. If they think in the old way and focus on traditional advertising they will miss the boat. That's the past, and I'm of the opinion that the age of advertising is seriously in decline (though most ad folks don't know it yet). However, if Facebook can grasp the revolution happening in the way customers seek data - and try to connect with reputation - then they will have that billion barrel well they can tap for near-endless money. But, and this is the important part: do they have the vision to grasp this? Or will they fall into the trap of the past and just sell demographic targeted advertising?
And perhaps the more important question: who's in a garage startup right now working on the technology for the customer driven real time web - and when do they launch? And who will recognize it?
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