The Network Garden - Mark Sigal's Blog

Pattern Recognition: Apple Vindicated; Retail Schadenfreude; Disruptive Paradox

My goal is to write one 'Pattern Recognition' a week. Just the top 3-4 stories that stayed under my skin. Here's what stuck this week:

1. Apple Vindicated: What protection does the industry's innovator merit against shameless knock-off artists? Does anyone really want to argue that what Apple has created is NOT uniquely proprietrary? That it merits less consideration than a Gucci bag or a new erection pill? Yes, I get it. Our patent laws suck, and there are ridiculous numbers of frivolous lawsuits, but Apple v. Samsung is not one of them. Feel free to pick apart this aspect or that of the IP that Apple is claiming, but know this. Apple has built proprietary differentiation, and by simple sniff test logic, they've earned the right to protection. It's not a god-given right that I can enter your house, eat from your refrigerator and not pay for it. To me, there is justice in this ruling; and vindication for The Legacy of Steve Jobs. No less, it's one year to the day from when he resigned as CEO of Apple. Talk about tributes!
2. Retail Schadenfreude: I love retail. My first career was in retail real estate. My brother is a shopping center developer. I can wax poetic about the magistry of Cheesecake Factory. But, I also love Amazon, and feel that they are a great retailer, and consistent innovator. Obviously, bricks and mortar has a place, wherever it can create differentiation. Otherwise, it will get Amazon'd on price. That's why I have little pity for Staples, just as I had little pity for Circuit City or CompUSA before that. These are businesses that either never had heart (CompUSA and Circuit City), or simply lost it (Staples); who killed the Mom and Pop just because they could. Now, Amazon is killing the Big Box. Karma's a bitch, isn't it? 
3. The Disruptive Paradox: In the movie 'Joe Strummer: The Future Is Unwritten,' a documentary about the life of the founder of The Clash, there is a great line uttered by Bono talking about the vibe in England and Dublin in the 70s. Bono says, "I was frightened...I was excited." That sentiment is applicable to our present time. Many, many industries in a deeply screwed mode. A completely unhealthy, ineffectual political system. Oh, and institutionalized conflicts of interests between Big Business and the government apparatus (I am intentionally distiguishing between Policy Creation and Policy Adminstration). Yet, something HAS to give. The patient will not simply get better with time. You can look at this pessimistically, and with cynicism. Or, you can be a little scared, but also be excited. Because we are at the end of a cycle, and approaching the beginning of a new one. It's post-global, post-digital, and post-commoditization. The new cycle is about making the inefficient more efficient, and creating differentiation where commodization exists. This is the 'stop the film and discuss' portion of the program. It stands to reason that some companies will figure this one out, providing the essential case studies for many others to get to the higher ground of re-invention. Be scared. But also be excited.

Pattern Recognition: Twitter's Betrayal; Apple's Set-Top Box; 30 Years of Bull

My goal is to write one 'Pattern Recognition' a week. Just the top 3-4 stories that stayed under my skin. Here's what stuck this week:

1. Twitter's Betrayal: There is no sugar-coated way to put what Twitter did to its developer ecosystem this week (see Marco Arment's write up here). Although in the company's defense, they sure tried to put lipstick on that pig of an announcement. It's a betrayal and an intellectually dishonest one at that. As John Gruber put so well, so much of what we think of as "Twitter" was created by third-party developers. A key selling point of the platform to developers was its simplicity, flexibility and win-win ethos. But, we get it. As Hunter Walk notes, when you raise hundreds of millions of dollars at an $8 billion valuation, investors want to you to focus on making money, and so that is what Twitter is going to do. But, I must say that in 20+ years in tech, I can not think of a more blatant case of a company pulling the carpet on its developers (okay, maybe Apple comes close - when Steve Jobs unceremoniously killed hardware clones upon his return to Apple), but as litmus tests go, consider this. If it was Apple who suddenly woke up and started co-opting its developer ecosystem, then created rules to ensure that none of them could compete with Apple or get large enough to be relevant, people would be clamoring for the Department of Justice. And that's the biggest bummer. Some of us thought that Twitter was like Apple, that it stood for something. That is the biggest bullshit sandwich about this announcement. One the other hand, if I was Microsoft, Google or Facebook, now would be golden time to reverse-engineer Twitter's API, and go on the attack with developer friendly rules. All's fair at this point.
2. Apple's Set-Top Box: The rumor mill is heating up with respect to Apple's ambition in the living room. In this latest go around, the banter is that Apple is focused on building a set-top box, and working through cable and satellite providers versus trying to route around them. My take, which I blogged on earlier this year, is that this path makes a heck of a lot more sense than Apple building a TV. For one thing, history suggests that Apple's greatest successes (in music and mobile) have come about by working through the incumbents, NOT by trying to dislodge them. Why would TV be any different? Whether through 'de-bundling' (individuals songs from complete albums), 'surrounding' (apps, web, communications) or 're-thinking' (touch), the Apple Way has been to embrace and extend. In mobile, this has lead to greater customer loyalty and higher ARPUs for the carriers, the antithesis of wholesale disruption. As such, the Comcasts and DirecTV's of the world would be wise to embrace what Apple has to offer. Their boxes aren't very good, anyway.
3. 30 Years of Bull Market: Our economy and our society is stuck in a stagnant place. Yet, Andy Kessler raises an excellent point in his piece on the durability of the stock market over the past three decades. He suggests that the reason for our impressive run is that in the past 30 years "the market and economy has transitioned from funding fixed assets (oil, gold, land) to funding ideas." When I think about it that way, it's hard not to be a believer in our future. Our society has no shortage of ideas, and I can construct scenarios where new "job creating" industry seeds take root. My thesis is this: Amazon and Google have commoditized that which can be commodatized, but what rises in response is companies born of the Apple ethos - integrated, differentiated and delightful. That's the wave that is going to drive industry for the next 30 years.

Pattern Recognition: User Interface Design; OEM Roadkill; Cheesecake Logic; Quotable

My goal is to write one 'Pattern Recognition' a week. Just the top 3-4 stories that stayed under my skin. Here's what stuck this week:

1. The Principles of User Interface Design: Many, if not most, products deliver a poor user experience (see the excellent book 'The Inmates Are Running the Asylum' for more fodder on this topic). While it's easy to throw out terms like 'keep it simple' or 'minimalism,' that still doesn't answer the larger question about what the guiding principles are for sound user interface and interaction design. Having built a ton of products across: A) Type (hardware, software, service, tools); B) Segment (consumer, enterprise, developers, carriers); and C) User Environment (PC, mobile, Web, network device), I thought that this article provides an excellent compass for newbies and leathered veterans alike. EXCERPT: "To design is much more than simply to assemble, to order, or even to edit; it is to add value and meaning, to illuminate, to simplify, to clarify, to modify, to dignify, to dramatize, to persuade, and perhaps even to amuse."
   
2. OEM Roadkill Ahead: In 'The end of the road for OEMs,' Sebastian Anthony puts forth a compelling argument that the days of the hardware OEM are numbered. But, in doing so, he misses a key reason why. The simple fact is that in the post-pc era, software is a greater differentiation point than hardware. Software, as Marc Andreessen correctly notes, is eating the world, and today's hardware OEM doesn't understand software as anything other than a layer to be abstracted away. As such, this isn't the end of OEM's per se; just the end of OEM's that lack true software competency (see Acer's feckless attack on Microsoft for their hardware end-run). Bubbling under the surface, however, are hardware OEMs that natively grok software. Look to Kickstarter and other Maker-friendly spots to see the seeds of such innovation germinating.
3. Cheesecake, Chains and the Health Care Industry: In this excellent New Yorker piece, Atul Gawande looks at the processes  and management culture by which a restaurant chain like Cheesecake Factory can serve its 80M customers a year a diverse menu of fresh, high quality food at a reasonable price, and do so consistently, year-after year, and location after location. It makes Gawande wonder what the health care industry can learn from Cheesecake Factory, a great entry point to some illuminating writing. EXCERPT: "In medicine, too, we are trying to deliver a range of services to millions of people at a reasonable cost and with a consistent level of quality. Unlike the Cheesecake Factory, we haven’t figured out how. Our costs are soaring, the service is typically mediocre, and the quality is unreliable. Every clinician has his or her own way of doing things, and the rates of failure and complication (not to mention the costs) for a given service routinely vary by a factor of two or three, even within the same hospital."
4. Can I get a Quote? If you have ten minutes or an hour, Fred Wilson's Fun Friday post is a group thread on favorite quotes. There are many gems, but this dandy by Teddy Roosevelt stood out for me: "It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

On co-creation, contests and crowdsourcing (O'Reilly Radar)

I had decided to update the branding at one of my companies, and that meant re-thinking my logo.

The creative exercise started with a logo design contest posting at 99designs, an online marketplace for crowdsourced graphic design.

When it was all done, I had been enveloped by an epic wave of 200 designs from 38 different designers.

It was a flash mob, a virtual meetup constructed for the express purpose of creating a new logo. The system itself was relatively lean, providing just enough “framing” to facilitate rapid iteration, where lots of derivative ideas could be presented, shaped and then re-shaped again.

The bottom line is that based on the primary goal of designing a new logo, I can say without hesitation that the model works.

Read the full post HERE.

Related

1. Makers, Marketplaces and the Library of the Commons
2. Ruminations on MacWorld and the Future of Trade Shows
3. Creating New Synapses in the Global Brain: Notes from Foo Camp

 

Pattern Recognition: Caveat Platform; Atomic Units; 'Too Big To Fail' Nation

My goal is to write one 'Pattern Recognition' a week. Just the top 3-4 stories that stayed under my skin. Here's what stuck this week:

1. Caveat Platform: Ok, I am mucking with Latin in places that I shouldn't, but the moral of the story this week is that trusting platform makers that you don't give any money to is a recipe for getting lathered up, and given the "special" treatment. There is no free lunch, as Dalton Caldwell lamented this week with respect to Facebook. There is no honor (or even recognition) for your contributions, as Howard Lindzon lamented this week about Twitter. Folks, when will we learn? Free is just too expensive when you are counting on building your business on top of it. Free can disappear tomorrow, change course, or in the case of Twitter, turn from idealist to carnivore in a snap. And why not? It's free. You got what you paid for, right? It's ironic that when I wrote my article, ''The Scorpion and the Frog,' about the then-nascent iOS, I actually wondered if Apple would fall back into its old ways of screwing over its developers. Yet, they have been practically saintly in contrast to everyone else. Then again, I could just as easily add "open' to this rant, but I've already done that in another piece, which you can read here, if you'd like.
2. The Atomic Unit of Your Product/Service: Man, I hate Fred Wilson. Rich, successful, reasoned, humble, inclusive...and a great writer and thinker. Fred, leave some morsels for the rest of us, will ya! Every week, it seems that there are two pieces he writes that cut through the cobwebs in my brain, giving me a wee bit more clarity. This week, it was Fred's piece on understanding the atomic unit of your product or service; namely the fundamental object at the root of your offering. Why is this important? Because it cuts away all of the bullshit that gets us to focus on the wrong stuff. In Twiter, it's the act of tweeting, or the tweet. In Instagram, it's the photo. Now, while all businesses need to understand their atomic unit of value, early stage REALLY needs to focus on this, as otherwise, your minimal viable product (MVP) will be a slathering bunch of ingredients, a discordant messs. What's interesting about Apple in this context is that their universe seems to built around the very concept of reducing complex systems to atomicity. They are the builders of russian nested dolls, executed across multiple dimensions. In any event, read Fred Wilson. Do it. Now.
3. When Even Sandy Weill knows TBTF is Unstainable: When a guy like Sandy Weill recognizes that Too Big Too Fail is unsustainable, isn't that akin to rats leaving a sinking ship? I mean, who else really needs convincing? After all, Weill's legacy is predicated on the ongoing viability of Citigroup, itself a by-product of his ability to stick a shiv in the back of the Glass-Steagall Act, the 'hit' that started it all. A big vainglorious ego doesn't abandon its life creation unless a great power dictates otherwise. As Matt Taibbi suggests, that greater power is money; namely the fact that Citigroup is worth a tiny fraction of what it was when Weill left the company, which, given the precipitous and dramatic nature of its collapse in 2008, he is probably still holding a lot of beaten down stock shares from. Break it up; value is unleashed, and Sandy gets to enjoy the mega-rich life again (ok, he is plenty rich), something his 2004 bio underscored his love of quite well. The bottom line is that when the folks at ground zero say, "enough," that should be good enough for the rest of us. Or, as Weill's former co-CEO John Reed says best, "I would compartmentalize the industry for the same reason you compartmentalize ships. "If you have a leak, the leak doesn’t spread and sink the whole vessel." Amen. Don't we know this already?