The Network Garden - Mark Sigal's Blog

Curse of the Business Units: One Reason the 'Apple Way' Eludes the Competition

Last week, in a piece for O'Reilly Radar, I contemplated the legacy of Steve Jobs.

In it, I concluded that Jobs' greatest technology innovation may actually be bringing humanity "back into the center of the ring," in terms of putting users and user experiences at the core of product ideation and realization.

This ethos, which is so fundamental to the "Apple Way," is a by-product of a corporate culture that embraces a unity of technology and liberal arts, seemingly orthogonal constructs, that Apple nonetheless finds a way to harmoniously, "magically" institute together.

Of course, there is more to it than that, which Jean-Louis Gassée' beautifully written, 'Steve: Who’s Going to Protect Us From Cheap and Mediocre Now?' brought to the fore.

Here is an excerpt, where Gassée envisions Jobs' evolution from visionary-mad man to industry god:

For a long time, I’ve seen him as having an animal inside him, the one with the desires, the instinct, the drive. In 1985, that animal threw Steve to the ground. He picked himself up at Pixar — you’d be a captain of industry for doing no more — and NeXT. Then, in 1997, armed with Pixar’s success and Next’s technical prowess, he came back to run Apple and make it really his. He had learned to ride the animal. 

Great stuff, but what struck me from the piece was looking at this Apple org chart (from Fortune), and thinking about how different it is from most of the org charts that I am used to seeing.

 

The Power of Organization Alchemy

Have you ever wondered why, despite quarter after quarter of hard data and eyeballs full of proof, there just aren't more (any??) tech vendors that embrace the Apple ethos of delivering an end-to-end integrated experience?

Why can't anyone but Apple seem to deliver a complete product that surprises and delights, that is a reflection of an OBSESSION on the user and his/her aspirations?

The hard truth is that corporate politics plays a huge part in this equation.

Let me explain. Most companies are organized into "business units," and these organizational structures effectively threshold the who, what and why of a product built by that company.

Why? Because business units formalize operational "silos" within a company, which is a sure-fire recipe for delivering products that are, instituitionally-speaking, less than the sum of the parts creations.

(SIDEBAR 1: Microsoft has five business units:  Windows & Windows Live; Server and Tools; Online Services; Microsoft Business; Entertainment and Devices. Talk amongst yourselves.)  

(SIDEBAR 2: This silo logic is one reason that Yahoo, despite its typical user using 4-7 Yahoo services, could never actually get their own products to talk to each other.)

That's why even when you see the occasional re-org of one of these companies along the lines of "logical" buckets, like Consumer, Enterprise and Carrier, it still misses the elemental truth that users are defined by their aspirational jobs, outcomes & constraints, and not by artificial thresholds, like attributes.

It's the difference between delivering "The One" and delivering a bunch of derivative instances that are never quite as good or as complete as The One.

In other words, changing the tenor within the tech business requires more than just a different product creation process, but rather, it requires an organizational re-think.

The challenge there, of course, is that the last thing that management in 99% of the companies EVER wants to give up is organizational power, budget and direct reports.

And therein lies the challenge. To a hammer, everything looks like a nail, and even when a screwdriver is what is needed, the hammer can still convince itself that it's "just like a screwdriver." Such is the persusasive powers of self-interest's will to survive and persist.

Related Posts:

1. Ruminations on the legacy of Steve Jobs
2. Apple's segmentation strategy, and the folly of conventional wisdom
3. Five reasons iPhone vs Android isn't Mac vs Windows

LEGACY: Ruminations on the Brilliance and Spirit of Steve Jobs (O'Reilly Radar Piece)

"It's better to die on your feet than to live on your knees." — Neil Young

"That day has come." Four simple words that signaled that Steve Jobs felt compelled to step down as CEO of Apple, the company he founded, then lost, then saw ridiculed and written off, only to lead its rebirth and rise to new heights.

It's an incredible story of prevailing (read: dominating) over seemingly insurmountable odds. A story that has no peer in technology, or any other industry, for that matter.

That is why even though this moment was long anticipated, and while I know that Steve isn't gone (and hopefully won't be anytime soon), yesterday's announcement nonetheless feels like a "Kennedy" or "Lennon" moment, where you'll remember "where you were when ..."

I say this having seen first-hand the genuine, profound sadness of multitudes of people, both online and on the street, most who (obviously) have never met the man.

Why is this? I think that we all recognize greatness, and appreciate the focus, care, creativity, and original vision that it takes to achieve it.

The realization that one man sits at the junction point of cataclysmic disruptions in personal computing (Apple II/Mac), music (iPod + iTunes), mobile computing (iPhone + iOS), movies (Pixar) and post-PC computing (iPad) is breath taking in its majesty. A legacy with no equal.

Read the full post HERE.

Related Posts:

• Apple's segmentation strategy, and the folly of conventional wisdom
• Check Mate: Understanding Apple's iPad
• Apple just became IBM of the Post-PC Era

 

The Garage is Closed: Thoughts on HP's Divestiture of webOS and PC Business

Four quickie thoughts on today's news that HP is getting out of the PC business AND dumping webOS, which was a $1B+ acquisition just a year ago:

1. "I Support You 100%, UNTIL I Support You 0%": I will never forget these words, uttered by a VC friend of mine, whose point was that I could count on his full, unconditional support until the very moment when he decided to replace me, the decision of which would be both swift and absolute. Needless to say, this axiom comes to mind with today's announcement. How else to make sense of HP's stated strategy just a few months ago that they were committed to putting webOS Everywhere? Now, of course, it's webOS Nowhere. 
2. Platform Plays are Hard, Folks: Any way that you slice it, I feel really bad for the WebOS team. They built a credible platform, decent hardware, and if anything, are to be faulted for failing to execute on a cogent SDK and supporting Ecosystem. I've said it at least 100 times; namely, that third-party developers make or break a platform play, and clearly the webOS team couldn't thread the needle there (in the amount of time that they had). That stated, having watched RIM, Nokia and Microsoft repeatedly 'crap the bed' in mobile platform execution, we should tip our hats to what the Palm/webOS team built. The bottom line is that successfully executing a platform play is HARD (as I noted over two years ago), and lies in orchestrating lots of seemingly disaparate moving parts. That Apple has made it look so easy is an optical illusion, borne of true excellence. It is NOT easy.
3. Post-PC is NOW: While I am sure that there is some measure of schadenfreude for Walter Hewlett to see the last vestiges of the disastrous Compaq merger put out to pasture (the real moment was when Carly Fiorina got booted from HP), the bottom line truth is that the PC hardware business is now officially a legacy business that no company with R&D dollars has any right to be in. The last heartbeat on that front will be when Dell pulls out of the PC business (a schadenfreude moment for Steve Jobs when that happens). Tick-tock.
4. The Garage is Closed: The garage that HP founders, Bill Hewlett and Dave Packard, so famously launched the company in that it cast a metaphor for startups, which has lasted 75 years, must be considered closed. What other conclusion can one make when a company basically abandons a credible platform position in the single largest growth area of the next decade, especially knowing how hard such a position to establish is, and how few compelling alternatives there are? Perhaps there is a large, unnanounced check written by Microsoft driving this one. Maybe, it's as basic as people (read: HP CEO Leo Apotheker) will convince themselves of anything, no matter how stupid, when their job survival is on the line, and they need to feed some chum to the shark-infested waters known as the quarterly-focused stock market, to get safely to dry land. Or, perhaps it's as basic as HP sees a niche in emulating IBM, Apotheker is ex-SAP (an enterprise and services focused company), and to a hammer, everything looks like a nail. 

The bottom line truth is that at HP, the garage is closed, and sadly, has been for some time.

UPDATE 1: HP has apparently told the webOS team, "We are not walking away from webOS," while providing no details on what that means. Yeah, RUNNING seems more like a better metaphor than walking, anyway. 

UPDATE 2: Quirky logic by HP's CEO ("the tablet effect is real...consumers changing how they use PCs.") So tell me, why again, are they ABANDONING the Post-PC biz? 

Related Posts:

1. iPhones, App Stores and Ecosystems: Why Platform Plays are Hard
2. Is the Enterprise Dead as a Tablet Strategy (O'Reilly Radar)
3. Apple's Segmentation Strategy (and the Folly of Conventional Wisdom)

On BATNAs and the Law of Unintended Consequences: Thoughts on Google’s Acquisition of Motorola Mobility

 

As I stated in my post last month on Google’s earnings call, I am a big-time fan Larry Page, and the way that he is running Google as CEO. The guy is simultaneously a chess player and a coherent communicator about WHAT Google is doing and WHY.

Towards that end, today’s move to acquire Motorola Mobility is fundamentally a recognition that if Google doesn’t establish a serious defensive position with respect to its patent portfolio 'surround' on Android, it risks the proverbial 'death by a thousand cuts.'

In other words, the writing is already on the wall (and in lots of court documents) that between Oracle, Microsoft and Apple, the 'fig leaf' of plausible hope that Android's handset OEMs can embrace the mobile/post-pc software ecosystem funded by Google, and freely reap the rewards, must now be seen as nakedly untrue.

Henry Blodget of Business Insider puts it best when he says about the deal that, “It seems safe to say that, six months ago, investors and partners did not realize that Google was going to have to shell out $13 billion to ‘defend’ Android, let alone start competing with its hardware partners.”

Simply put, the best lipstick that you can put on this pig of a deal (more on that in a bit), and the reason that HTC, Samsung, LG, et al are giving their boilerplate support is that it answers a core question of any ecosystem play; namely, how clean is the intellectual property provided by the ecosystem operator, and how committed is that operator to protecting its licensees.

Is HTC happy about today’s deal, knowing that Google now has 'first cousins' whose sole reason for being is to sell hardware devices that directly compete with them?

Hell no, but they are immediately less happy about having their nuts squeezed by Microsoft, the specter of Apple stepping on their wind pipes, and Oracle pouring hot oil on them.

Compromised survival is better than risk of death almost any day, and that risk was long past the point of being merely 'theoretical.'

The Best Alternative to No Agreement (BATNA)

Thus, Google’s acquisition of Motorola should be seen as the best alternative to no agreements (BATNA) being made by Google to strengthen its IP portfolio.

It should also being seen as a formal acknowledgement that the question of IP purity is no longer a mere border conflict in the pursuit of Android-everywhere, but rather, a prolonged war out in the open.

Plus, to be clear, in the chess scheme game of things, it’s not like HTC, Samsung or LG have anywhere else to go. They have played that card by addicting themselves to Android, and as such, are effectively part of Google’s concubine.

Moreover, let’s be brutally honest. If Google really wanted to get into the hardware business, does anyone consider Motorola state-of-the-art? On any level? No.

Sure, in the abstract, you can connect the dots to mobile phones, tablet devices and set-top boxes, and conclude that there are other synergies in this deal, but to get them, you need to assume a second-order of corporate integration that Google is wise (and likely) to avoid.

After all, merging Motorola’s 19K employees with Google’s 29K employees is a soupy broth that, for cultural reasons, I am highly doubtful that Google wants to make.

The Law of Unintended Consequences

Netting all of this out, I can take Google at their word that this acquisition was a defensive move – although a note aside, that obviously doesn’t say a whole heck of a lot about the tenure of Sanjay Jha (Google Mobility's CEO) in terms of creating great products and sustainable value at Motorola. Would-be hardware OEMS counting on Android to save your hide, you might take note of that fact.

Moreover, I can see why HTC, Samsung and LG will hold their noses and support this deal, as this is the price you pay when you give up software-differentiation. The 'high' is great, but the hangover kinda sucks.

Similarly, today’s deal signals yet another reality check in the sanctimonious positioning of Google as operating according to some higher moral code. They are as ruthless as any profit-bound company, and all such commentaries about open-ness should be seen as marketing spin going forward. 

I will grant you that Google is better than most, but never forget that Google only seeks to fully open what they desire to commoditize, NOT what they aspire to monetize. Pontifications on open-ness are like those on beauty. It is in the eye of the beholder.

Similarly, this is one of those moves that feels like a big-company action, which is as it should be. Google is a big company.

But then again, in positioning itself with the best and brightest as the place to work, this move again signals an end of innocence, something that both recruits AND growth investors will take note of moving forward.

Now, while you might counter that peers like Apple or Facebook are hardly innocents in terms of their own ethos, note that this has never the positioning of these companies.

You go to Apple to build the insanely great, not to be warm and fuzzy, and sanctimonious. You go to Facebook to build the ubiquitous social utility, and join an hyper-aggressive culture.

For Apple, this deal opens the door for them to further assert that they were 'right' about the endemic goodness of deeply integrating hardware, software, service, marketplace and tools into a complete solution, and that Google 'blinked.'

Don't get me wrong. I don't believe that Google blinked (except on patents), but truth is the first victim of wars, and this will offer yet another salvo in the mobile/post-pc wars.

Today also opens the door to Microsoft potentially coming up with a new calculus (economics, positioning) to establishing a foothold with Windows Mobile 7, not to mention HP with WebOS. Will they? I am dubious, but they should (try).

Finally, it’s easy to see how this deal distracts Google ever so slightly in finding some mojo and momentum on the tablet front.

In a segment where there is no obvious catalyst to buy an Android-based tablet (e.g., the carrier push factor in mobile), and where Apple is running away from the competition, the time that Andy Rubin and team will be spending assuaging partners in the coming months, is time lost co-creating with them.

Bottom Line: Google needed to do this deal, I guess, and good for them for being decisive about it, but this was no rope-a-dope, as Dan Lyons dorkily suggests. It was simply better than doing nothing, and waking up one morning to find Motorola’s patent portfolio in the hands of Microsoft.

UPDATE: John Gruber of Daring Fireball has a delicious rant that is one part call out on Dan Lyons, and one part compilation of the various write-ups from the course of the day. As always, a fun read. 

UPDATE 2: Well that didn't take long. Bloomberg is reporting that Google is replacing Motorola Mobility CEO, Sanjay Jha, with Dennis Woodside, who led Google’s ad sales in the Americas before overseeing the merger from the Google side. As noted in my original piece, Google's dismissal of the strategic value of Motorola's hardware business (at the time of the deal announcement) spoke volumes about Jha's tenure. At the same time, the move to replace him with a Google insider versus an MMI member suggests that the combined companies will hardly be arms-length from one another. More fodder for the wake-up call aspect of this for Google's third-party hardware OEMs, not to mention the increased probability of "unintended consequences" alluded to in the piece.

Related Posts:

1. Quick Take on Google Earnings Call: Put me in the bucket of being a Larry Page 'fan' 
2. Apple's segmentation strategy, and the folly of conventional wisdom
3. Apple just became IBM of the Post-PC Era: Thoughts on Apple’s 'Q3 Earnings Call
   
   

Predator, Parasite or Protected Class: The NEW Theory of Relativity

So we completetely borked the budget ceiling negotiation last week, leading to the S&P downgrade of America (read, 'What Happened to Obama' for a brilliant analysis on Obama's utter failure to establish a coherent narrative as president).

And if that wasn't enough, last week also underscored how completely the patent laws are screwed up to the point that they're officially a drag on innovation - the exact opposite of what patents were designed to do (read the transcript from the NPR program, 'When Patents Attack' to see what I mean).

Somehow, we can no longer figure this stuff out, yet recent history suggests that we can figure out how the universe works, can figure out how to thwart Hitler and rebuild Europe after World War II, can put a man on the moon, can create the Internet, etc.

Given this seeming asymmetry between the two realms, let me submit the following:

1. While everything is more complex than you give it credit for; and 
2. The weight of self-interest meaningfully incentivizes people who **should** know better to nonetheless screw the pooch for everyone else;
3. We don't have to be dumb and blind about it.

Much of this starts with changing the old memes (i.e., ideas that virally propagate), and replacing them with new memes.

Simply put, while form logically follows function, there is a larger truth that our thoughts on the "definition of the situation," including both specifically desired outcomes and tangible constraints, fundamentally instructs function.

In other words, our thoughts codify function, which give a mandate for form to manifest in a particular way.

In fact, there is a specific term that defines how we process congruities and incongruities called Cognitive Dissonance.

It basically suggests that if your actions and perceptions are out of whack, either you need to change your actions OR you need to change your perception of the situation as it exists. To NOT do so is physically and mentally uncomfortable.

A simple example is that if you think that you are fat and need to change your diet, one of two things is going to happen the next time that you are chowing down on a deliciously greasy pizza.

One, you will feel that eating that pizza is incongruent with your new aspirational image for yourself, and stop eating pizza so much.

Or, two, you will decide that being thin is over-rated, all relative, and more to the point, life is too short not to eat pizza, which is so delicious.

So, what does this have to do with the mess in our economy, our governance mechanisms, and the rot festering within society in general?

Most fundamentally, it's that changing the narrative and the actual words that we use to establish that narrative is a first, integral step to manifesting real change.

Putting it to the Test

Therefore, next time you encounter a story about Wall Street, Insurance Companies, Congress or Special Interest Groups (like Unions, Patent Lawyers, Environmentalists, etc.) start training your mind to be on the look out for:

1. Predatorial Behaviors: Ask yourself if the behavior being discussed is a case where one individual or group is taking advantage of another group by virtue of power, influence, wealth or knowledge.
2. Parasitic Entities: In order to maintain its existence or position in the economic, societal or organizational system that it participates within, does the entity leech off of the lifeforce, blood, energy or money of others? Does it remove more from the system than it puts in?
3. Protected Classes: Does the indvidual, industry group or company have undue influence on the rules that define its governance, and the methods and consequences by which those rules are enforced?

Now, recognize that most stories will be presented according to False Dichotomies, such as being "pro" this (e.g., business, big government, unions or jobs) or "anti" that.

It's far easier to tell a story, and sell a desired outcome, such as passing a bill or changing a rule, when the conclusions are presented in black and white terms.

Don't get fooled by this anymore. When you hear the facts presented in a way that frame the topic as an either/or scenario, be willing to question if the scenario presented is indeed a false dichotomy, and be rigorous about: A) consistently calling it such; and B) codifying what a reasonable "and" scenario looks like.

Understanding "Relative Yields: Everything is Relative

Similarly, the efficacy, or goodness, of specific outcomes are defined by the qualitative and quantitive content of what they yield.

Most yields are relativistic to multiple variables. Ask yourself what the yield is locally in your own backyard, for the larger region or nation as a whole, and/or globally.

Think about the actual impact both in the short term, measured in days, weeks, and months, and in the long term, over many years.  

Also, ask yourself if there are collateral impacts that further shape yield. For example, a program that results in less expensive clothes for consumers, but that also has the collateral impact of jobs moving overseas can be good or bad, but the collateral impact is real, and needs to be factored into relative yields.

Finally, when all else fails, simplify the topic and be surgical about the words that you use to codify it. If an individual did this same type of action to another individual, would that action being considered reasonable or lawful?

If not, then ask yourself, why it's reasonable at the governmental or corporate level. There may be valid reasons, but learn to articulate and understand the "What" so as to ask "Why," and be willing to challenge conventional wisdom by saying, "So What."

UPDATE: Mark Cuban has written an excellent post arguing that we should get rid of software and process patents completely. Worth a read.

Related Posts:

1. The Great Reset: Why tomorrow may not be better than today (O'Reilly Radar)
2. Why the Malaise in our Economy (and Society) is a case of The Innovator's Dilemma
3. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage
4. Assertion-based Reasoning: What, Why and So What

Jolly & Roger's Misguided Adventures: An iPad eBook Adventure Like No Other

Produced by Unicorn Labs (Spot the Dot, Rabbit and Turtle's Amazing Race, Unicorn Disco), and created by Stephen Silver (Kim Possible, Danny Phantom) and Frank Rocco (Fairly Odd Parents, Wow Wow Wubbzy), Jolly & Roger's Misguided Adventures is an interactive ebook that is built from the ground up for the iPad.

It features beautiful, hand-drawn art, classic keyframe animations, and a treasure chest full of surprises, including quirky touch interactions, and wondrous, ambient sounds.

Jolly & Roger's is the first chapter in a continuing saga - a story of dueling pirates, a curse, and the quest for redemption. It is also a story about youth and innocence, of a little boy, and his dream to become a pirate.

The book is in late production, and due to ship later this month.

What follows is a short video trailer on the book, and below that, a sneak peek into the world of Jolly & Roger.

eBook Video Trailer

"Sneak Peek" Video

Related Posts:

1. Rebooting the Book: One iPad at a Time (O'Reilly Radar)
2. The Five Keys to a Successful eBook Production: The Story of Spot the Dot
3. Kirkus Reviews gives Spot the Dot a Kirkus Star as a Book of Remarkable Merit

Why the Malaise in our Economy (and Society) is a case of The Innovator's Dilemma

 

So the Republicans play chicken with not only the US economy, but the global economy as well, and the President, always wanting to be seen as the "most reasonable guy in the room," once again lets smart tactics, lead to poor strategy and an even worse outcome. 

What's going on? Is the President just clueless? Are the Republicans just evil? 

Meanwhile, our economy sits in a 'dirty diaper,' with literally no catalysts for significant job creation, and yet, the story being conveyed by the media is focused on the false narrative of "compromise" narrowly averting disaster (a pyrrhic victory, if there ever was one).

And count on this: when the next set of bleak economic numbers come in, they will again be presented as "surprising," as opposed to predictable from a mile (and many quarters of data) away.

It's a case of Spin, Cycle and Repeat.

What's the Definition of the Situation?

In 'Why This Crisis Isn't Going Anywhere--And What To Do About It,' Umair Haque frames the problem as being just as much a case of a failure to properly diagnose what ails the patient, the US Economy, as a case of malpractice:

What's going on here? Why continued stagnation, and perhaps more interestingly, why is the status quo always "shocked" by it, every dismal quarter? Here's what it suggests, in no uncertain terms: they're struggling to discern what this crisis is yet.

As noted in my earlier piece, 'The Great Reset,' he's right. There is a disconnect.  This is no ordinary cycle that just needs to bide its time until the sun magically rises again. 

Rather, we are in the midst of a systemic disruption that is, at a minimum, as significant as the stifling days of Stagflation in the 70s, and on the cusp of the true horror that was The Great Depression.

The Innovator's Dilemma and the US Economy

I won't recite the Whats and Whys of my analysis -- read the piece if you'd like -- but I will say this.

As a student of disruptive innovations, I would argue that the pattern that we are seeing is a textbook example of the principles espoused in Clayton's Christensen's, The Innovator's Dilemma.'

Let me explain. In 'Dilemma,' Christensen shows how smart enterprises can make catastrophically bad decisions by using the following, seemingly sound, logic:

1. Does the innovative approach have a compelling return on investment?
2. Does our core constituency want this innovation?
3. Does this innovation leverage our core competencies?

In the PC era, we see how Microsoft outflanked much bigger companies, IBM and DEC, specifically because the PC was disruptive to the mainframe and minimcomputer.

IBM's best and brightest using the above litmus test, could "easily" evaluate the logic of trading in historically-proven product sales that were measured in the millions of dollars per sale for speculative ones that would be measured in the thousands of dollars per sale, and conclude that there was no "there" there economically speaking.

Moreover, their best customers could tell them plainly that the last thing that they wanted was an undepowered machine that couldn't be centrally managed.

Finally, back then, all of IBM's bones, muscles and sinew were designed for selling vertically integrated, proprietary solutions, something that a more horizontally oriented PC harnessing commercial-off-the-shelf components was to be an anathema to.

The moral of the story then, as now, is that disruptive technologies often serve a different audience, start off as small opportunities, and bit-by-bit, work their way up the stack until they destroy the incumbent's position.

Upstarts often win these battles because they have no base to protect, and thus, can think and act outside the box.

Flash forward to the present. We are in an economy absolutely gasping for new jobs and, at the very least, a "fig leaf" of hope.

What are your priorities, Mr. President, Mr. and Ms. Congress? Do you disrupt big business by taking away favorable taxation? Do you tighten governance so squishy lines of business go away? Do you play chicken with the companies that make up the Fortune 2000, risking jobs and the stock market?

After all, YOU are the incumbent, and the ultimate return on investment is getting re-elected, right? Your best customer tells you repeatedly via lobby and specific interest group that he/she absolutely does not favor any new products (taxes, legislation) that promise short-term pain, even at the cost of long-term gain.

The market doesn't reward it, the electorate doesn't reward it and the media only tells stories with binary narratives.

Plus, your core competency is taking pork and making it into sausage.

Such is the Innovator's Dilemma. That, and the hard truth that one should never under-estimate the ability of people to convince themselves of anything when their livelihood depends upon it.

Related Posts:

1. The Great Reset: Why tomorrow may not be better than today
2. A Contract to Fuck America: Ruminations on Good Governance and Corporate Irresponsibility
3. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage
4. Assessing the Internet: Great Creator or Better Destroyer?