The Network Garden - Mark Sigal's Blog

Progress Waits for No One, and Other Harsh Truths

There is a story that I like to share every time a news item pops up lamenting about the "good old days"...

The late Herb Caen (iconic San Francisco Chronicle columnist) once wrote an opinion piece about the worsening state of San Francisco and in particular, one of its main corridors, Market Street.

In it, he lamented about how this thoroughfare was always under construction, how the city’s charms and enduring traditions were getting swept aside by outsiders, and how the place was becoming less and less hospitable to locals and long-timers.

This harsh "truth" forced Caen to wonder if perhaps San Francisco’s best days were behind it.

But Caen was setting up the reader. In the next paragraph, he would reveal that, “Would it surprise you to know that I wrote this piece way back in 1954?”

Caen’s point was that then, as now, every generation sees their generation as the Real Generation and the Right Approach, when in truth, progress just moves Forward. It waits for no one.

Hence, the locals of San Francisco, circa 1954, saw a city losing its mojo when in truth, it was just moving forward with the times.

Thus, decades later it should be unsurprising that today’s locals would reach the exact same conclusions about the “good old days,” with the good old days being their particular generation's definition of good and normal.

Progress Just Moves Forward

I thought about this truth when the iPad came out, and the old guard railed against it as a "step backwards" for computing, which I wrote about here.

I think about this truth every time I hear someone lament about the loss of newspapers, bookstores and magazines (I feel your pain...though Joe Nocera's sermon against Twitter in the New York Times was a classic 'false dichotomy').

I think about this truth whenever I see another retail segment go from "darling" to deceased (retail NEEDS a reboot).

And, of course, I painfully think about this truth reading George Packer's 'The Unwinding,' beautifully written narrative that captures the convulsions and cardiac arrest occcuring in numerous cities across America.

Yes, progress isn't always pretty. Sometimes it brings beauty. Sometimes it brings change. Sometimes it is just brutal and downright ugly.

But, also know this. Progress doesn't care. It just moves forward. For gravity...just IS.

Related:

1. Grumpy old men, the "Inmates" and margins: iPad and the future of computing (O'Reilly)
2. Old Media, New Media and Where the Rubber Meets the Road (O'Reilly)
3. Retail Needs a Reboot to Survive (GigaOM)
4. The Jobs Engine: The Art of Reinventing an Industry (GigaOM)

NIKEiD and the Uber-ization of Global Logistics

"Any sufficiently advanced technology is indistinguishable from magic." - Arthur C. Clarke

"You mean, I simply push this button, and it just shows up?"

**It**, in this case, is the magical Uber Black Car; magical being relative to the pedestrian, unreliable yellow taxi.

What Uber did in re-thinking the gray space between taxis and private car services is instructive.

Logistically speaking, they rejiggered the following:

1. The Ordering Process (it's push-button simple via an app; no interminable waiting on hold for a dispatcher)
2. The Transparency of Availability (you can literally see how many cars are nearby, and how quickly your car will arrive)
3. The Nature of the Transaction (no money ever comes out of your pocket; you never have to think about the tip again)
4. The Reliability of Your Order (you are notified on your mobile when Uber arrives, the driver confirms that you are indeed the orderer; no more pickups that don't show up, or taxis 'stolen' by pedestrians on the street)
5. Your Relationship to the Driver (most drivers feel like entrepreneurs; Uber is a new revenue source for them; all drivers are identifiable, and subject to being rated and reviewed)

Part of the magic of Uber is that the company is able to create this transformative experience without owning any of the cars or hiring a fleet of drivers.

Given the above, is it any wonder then that "uber-ization" has become my go-to term for industry re-invention through new combinations of design, user experience, workflow and logistics -- as enabled by broadband, mobile and the cloud. 

NIKEiD: Re-Thinking What a Shoe Can Be

The power of great technological waves and re-invention in general is not merely that they change how things are made, or what they cost. 

Rather, it's that they change our concept of what is possible, and what a given medium can be.

In the realm of motion pictures, adding sound (and talking) to films, completely transormed the industry.

In the case of ecommerce, the boundarly-less and friction-free nature of Amazon, has completely disrupted retail.

In the realm of mobile, building a unifed platform around iPhones, iPads, iTunes and iOS, has catalyzed the post-PC era. 

I thought about this truth yesterday, as the pair of fully customized NIKEiD shoes showed up at my door.

Not only were they beautiful (okay, beauty is in the eye of the beholder), but what left me feeling awed was the fact that what had begun as a series of push-button simple clicks in San Francisco, had traveled across the globe, navigating an unimaginably intricate manufucturing and logistics process to find its way back to my front door.

The UPS route home alone (see above) shows stops in China, Hong Kong, Taiwan, Philippines, back to China, Alaska, Kentucky, Oakland, and finally, San Francisco. 

Simply magic, and I wonder how many other products, services and industries are ripe for such reinvention. 

If you are sitting in an industry where commoditization and/or disruption is your future (through de-localization, re-invention and digitization, you need to heed the words of Google CEO Larry Page.

His guidance? "I encourage more companies to do things that are outside their comfort zone. It gives you more scalability."

Food for thought.

Related:

1. Uber-ization: The art and science of reinventing an industry (GigaOM)
2. Retail needs a reboot to survive (GigaOM)
3. You say you want a revolution? It's called post-PC computing (O'Reilly)

Pattern Recognition: Mad as Hell; Playing by the Rules; Cyclical Markets

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. Mad as Hell: Henry Blodgett of Business Insider has written a fire and brimstone piece intoning that Americans should be 'mad as hell' at big business and the greed mongering 1% for squashing our sense of egalitarianism. But in digesting the piece, I was left with three thoughts. One, it's reminsicent of the story that I read about in junior high school of how totalitarian societies actually encourage symbolic protests by their citizenry. Why? That way, their beleaguered populaces let off some steam, making them less likely to actually rebel. In other words, Blodgett's "get angry" piece feels very similar, encouraging us all to go hit a pillow. Two, is that the most powerful incentive systems are ones that offer variable rewards, and so long as the stock market goes up more often than it goes down, the prevailing narrative will remain, "Keep trying. You still have a chance." (If that goes, look out.) Three, reading the comment thread of the piece frames our collective inability to have anything other than a one-track, linear discussion about what ails our society. It's as if our economy, industry, governance and way of life is just a big black box of inputs and outputs. The truth, however, is: 1) There are NO catalysts for net job creation; 2) Both parties are completely conflicted based upon the revolving door between government and private industry, and the role of big money lobbying and PACs in instituting policy behind closed doors; 3) Even if there was a spirit of adult compromise in Congress, 270 members of Congress and Mitt Romney have signed Grover Norquist's Pledge, stating that under NO circumstances will they approve any legislation that creates new taxes. A policy that costs $2, but cuts $8? Can't do it under The Pledge. Think about that one if you have ever been responsible for negotiating an operating budget with others; 4) Whether you appreciate the power of Creative Destruction or not, the reality is that it moves on its own timeline. It could be 5, 10 or even 20 years before a new job-creating catalyst arrives. Hence, simpletons that suggest that government should "do nothing but cut taxes and get out of the way," blissfully would have us play the societal version of Russian Roulette by ignoring this inconvenient truth that's playing out in countless pockets across the country; and 5) "Greed is good," as the only rationale that you need for any decision in business (or life) can't end well since it incents businesses and citizens to make decisions that provide short term rewards blind to long-term costs. Moral of the story: A wise person once said that the real challenge in life is learning to manage the paradoxes, for true quality and true sustenance comes from embracing the AND, not the OR. To be clear, though, being an AND means that there are a lot of things that you CAN'T do. Case in point, it's the reason that Apple can be hardware, software, service, tools, marketplace, ecosystem AND retailer, but fundamentally, has only one platform, and only one SKU per device type. In other words, rather than us being 'distracted' by being mad, we should focus instead on codifying a coherent mission statement for America in the 21st century, and the requisite plan of record, collective sacrifice, proper incentives, and checks & balances required to bring it about.
2. Playing By the Rules: There is an axiom that it is better to ask for forgiveness than to ask for permission. Sadly, playing by the stated rules is NOT a winning recipe. It's for chumps, and there's certainly no glory in being a martyr. Remember, Google didn't ask to link, YouTube didn't ask to encode, Facebook didn't ask to create the social graph. And, Wall Street? If there's an industry that more fully lives by the ethos "loophole," I don't know of one. By the same token, when you live by the sword, you should be prepared to die by it. A little moral hazard goes a long way. 
3. Cyclical Markets: Before I got into tech, my first career was in real estate as a retail shopping center asset manager. Having cut my teeth professionally in Los Angeles during the Savings and Loan Crisis of the late 1980s, I understood the dynamics of managing through markets where over-development and desperation created a death spiral of high vacancies, high rates of business failures and plummeting rental prices. As luck should have it, when my business partner and I expanded the operations to the San Francisco Bay Area, we found a market that was a picture of the 'calm before the storm.' In other words, all of the environment variables were similar to what had played out in LA; it was just that the Bay Area was ~12 months earlier in the cycle. Hence, while prospective client after client proudly told us how the Bay Area was 'different,' we knew better, and cautioned them accordingly. When the tide turned, we looked like visionaries, and cleaned up, building a business that would become one of the Top 20 Real Estate firms in the Bay Area. The moral of the story is that markets evolve cyclically, and if you can read the tea leaves of markets that are further in the cycle, and apply them to markets that are earlier in the cycle, you can make serious coin. Consider, that for the past 20+ years, the democratization of the PC, led by horizontally focused Microsoft and Intel, taught companies not only in the computer industy, but in orthogonal industries as well, that you couldn't win by building the whole enchilada. Being horizontal, so the conventional wisdom went, created bigger markets, more diverse ecosystems and more opportunities to create wealth. Flash forward, and now horizontal has played its course, resulting in too many hollowed out industries where the product has become a commodity and the customer won't pay a penny more than its worth. We've seen this trend play out in big box retail, personal computing, media and many other segments. Meanwhile, Apple has taught us that through vertical integration (based on a coherent differentiation plan), comes margins, profits, customer loyalty and thus, defensibility. In other words, if the last 20+ year cycle was all about riding the coattails of commodization through horizontal orientation, the next 20+ year growth cycle is all about building new differentiated growth vehicles that are powered by vertical integration. Thus, if you want to look and feel like a visionary, and make a mint in the process, focus on identifying segments where this type of disruption is available. Best of all, most of these segments will already be in a world of hurt. Buy low, and some day you will be able to sell high.

Pattern Recognition: Connectors; Winning; Facebook's Growth Team

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. Brands Should Target Connectors Aggressively: This week, I was in NYC on business. As it was raining, I asked the doorman at my hotel if he could hail a cab for me. While we were waiting, he pulled his new Samsung Galaxy Note out of his pocket, and starting checking the news. Having never actually seen someone using a Galaxy Note, I asked him if he liked the device. Almost apologetically, he told me how he's a long-time Apple gadget lover but had needed something a little bigger than an iPhone, as a lot of the time, guests of the hotel ask a question, need directions and what not. In fact, he was quite happy with the device. This got me thinking. A hotel doorman must find himself in dozens of (potential) like encounters every day, all the while in a mode that puts a device like the Galaxy Note in a favorable light. Given the natural position of such connectors to spread the good word about a product relevant to doing their job, this sure seems like an argument for brands aggressively targeting key connectors in relevant segments. They are the ultimate influencers when the context is right. To be clear, I am sure some brands are doing this; I just don't believe it's a standard part of many companies' market penetration strategies.
2. Staying in the Game: Being in the tech business, I constantly marvel at the number of companies who despite mediocre products and dubious customer adoption in the early stages of their life, somehow manage to 'hang around' until they achieve victory. By victory, I mean: A) outlasting the competition; B) finding a market; C) achieving product maturation; or D) realizing a successful M&A event. To me, this suggests that winning is as much a product of finding a way to 'stay in the game' as it is about pursuing greatness or building a dominant market position. Sometimes what separates the winners from the losers is the conviction that you simply won't be defeated, and the unyielding drive to keep moving towards the goal line in the face of doubters, defectors and hard data. Mark Suster delves into this topic in an effective post called 'What to do about that chip on your shoulder,' and I love how Facebook challenges its rank and file to ask themselves, "What would you do if you weren't afraid?" Sometimes, when we're feeling against the wall, we let fear and a sense of doom drive us into the crash position. Winners ignore such facts, as the KNOW their destiny is otherwise. Paradoxical, to be sure, but such is life.
3. Facebook's Growth Team: Probably the most impressive thing that I read this week was the response on Quora to the question, 'What are some decisions taken by the "Growth team" at Facebook that helped Facebook reach 500 million users?' Read the whole piece as it spotlights how a company goes about institutionalizing growth in the same way that Apple, under Steve Jobs, insitutionalized the process of creating insanely great products. It's indicative of how fundamentally different business CAN be in the age of the Internet Economy, and one gets the sense that Facebook is absolutely dogmatic in their approach. This truth is best framed by the following snippet from Andy Johns, who worked on the Growth Team at Facebook, "Growth was a horizontal layer across product like engineering/ops is a horizontal framework behind product. Not only would someone ask 'What's the performance impact on site speed or stability if we build and ship 'X'?' it became common for people to ask 'What's the impact on growth if we build and ship 'X'?'. The decision to make growth a canonical part of the product, engineering and operational discussion was a really important decision that the executives made." In the end, it all comes back to understanding your product and the value + outcomes that it delivers. This requires having both the rigor and framework to suss that truth out, then test it, and iterate tirelessly to the bullseye. This truth is underscored by the comment by Chamath Palihapitiya, who led the Growth Team, and stated, "At Facebook, one thing we were able to determine early on was a key link between the number of friends you had in a given time and likelihood to churn. Knowing this allowed us to do a lot to get new users to their 'a-ha' moment quickly.  Obviously, however, this required us to know what the 'a-ha' moment was with a fair amount of certainty in the first place." Needless to say, way too few companies know this answer with such certainty in their business, and even fewer build the systems required to optimize it, which explains Facebook's unique position in the market.

 

Tweets, Trends and Matrix Points: Why does Twitter's trending functions Suck so badly?

Watching Henry Blodget's excellent interview of Twitter's Chief Revenue Officer, Adam Bain, last week on how Twitter makes money via sponsored tweets, trends and promotional campaigns, and why they are so much better (from a click-through + engagement perspective) than display ads, I was struck with two conflicting thoughts.

One, Twitter really gets it, and is positively Apple-like in terms of focusing on very few problems and executing them very well. 

And two, given Twitter's execellence, I was left wondering, "Why does Twitter's trending functions suck so badly?"

Case in point, when I look at what's trending now, I am left with the following, which while not completely information-free, is hardly useful.

What I would like, and what I expect is that every time I take action (by tweeting, re-tweeting, replying and/or favoriting), I get information back.

What made me think about this was when I went to LinkedIn today to re-post a tweet I'd made earlier on my twitter account.

Immediately, I saw an in-line message that the link is trending in the Venture Capital & Private Equity Group on LinkedIn.

In terms of context, if I want to find others to "break bread" with on this topic, I now have a real-time place to do it. Similarly, if I wasn't a member of this group, I now see a "like minds" bucket to plug into.

Where can I go with this? The logical next steps are providing visbility to me about:

1. Posts related to this particular topic (think Techmeme without all of the favoritism curation);
2. Other people similarly interested in this topic and what they're reading right now.

Don't get me wrong, though. I am not suggesting that any of these elements are new concepts, or that different services don't exist that implement these features in some way.

What I am trying to frame is the evolution of the web from the linearity of links to the matrixing of multiple traversal paths based upon topicality and user type.

It's about context, and the desire that when I amplify my interest and intent by posting a tweet, that I get a set of traversal paths back for the effort.

It's the ultimate man-machine feedback loop.

Google+ (Wake me up when I should care)

Dave Winer puts in best in 'Google Yawn,' deconstructing how efforts such as Google's new social project, Google+, are born.

They are the bastard child of seeing every successful competitor as a new front on a war for global domination, youth and sexiness, but instead, only result in mediocrity and sloth.

I would (and will) certainly try the service before reaching the hard conclusion that Dave does, but we've seen this film enough times, haven't we? 

More to the point, as I noted when Google launched it's once-ballyhooed Buzz project ('Google Buzz: Is it Project, Product or Platform?'), Google's track record of shipping the idea, fixing it, and iterating to a winnable finish line is very un-Microsoft like.

You see, Microsoft's lethal-ness back in the day was knowing that 1.0 would lead to 1.1, 2.0 and finally something reasonably compelling by 3.0. Once they were in, they were ALL IN.

By contrast, Google tends to ship the idea, be fuzzy about their intent, and if it doesn't work, they kill it, and start over again.

It's harder to win in categories with serious, disciplined competitors if you keep launching 1.0 solutions (Buzz, Wave, Froogle, Latitude), and then killing them when they fail to achieve liftoff.

I think that that's the folly of their labs mentality, and why folks like me that actually have something better to do than beta test, ignore the latest Google frosting until it's clear that there's some cake beneath it.

So, Google, tell me when I should care.

Related:

1. Google Buzz: Is it Project, Product or Platform?
2. The Chess Masters: Apple versus Google
3. Open "ish": The meaning of open, according to Google

 

Four Thoughts on the WHAT, WHY and SO WHAT of Google App Inventor for Android

There is something enticing about a software toolkit for non-developers; the concept that if you can articulate a workflow or algorithmic outcome, you can "meta-program" it without writing a line of code. 

That's why I think that there is some warranted excitement around Google's App Inventor for Android. It represents a holy grail and a myth at the same time.

I have four thoughts that I would like to put forth for assessing the "WHAT" (what is it), "WHY" (why do we need it) and "SO WHAT" (how is it materially better than current practices) of Google App Inventor for Android:

1. App Builders like this face a classic 1.0/3.0 Conundrum: The question with such solutions is are they powerful enough to solve a REAL problem out of the box, versus merely facilitating a proof of concept. This is analogous to the distinction between a dog walking on its hind legs (impressive, but not compelling) and an organism that functionally walks upright to the point that it can reliably get between Point A and Point B, completing meaningful tasks along the way.  On this one, I hearken back to the Java Bean Box, another component-based model for non-technical users whereby you could pull objects into a runtime sandbox, define the hookup parameters between various methods, and build a finished app. The challenge was that while it was all impressive, in practice to solve a real problem, you needed to enter the bowels of the underlying code, which broke the connection to the Bean Box, meaning that the solution was neither compelling in 1.0, nor scaled to ANYWHERE useful in 3.0.  How does App Inventor for Android reconcile this one?
2. History Suggests the Real Opportunity lies with ISVs, not Laypersons: The success of Visual Basic for Applications (on the Windows platform, which spawned many an ISV, while creating tremendous lock-in advantages) and HyperCard (on the Mac) shows that there is a need for Rapid Application Development tools that find the balance between facilitating specificity for a desired outcome and simplicity of implementation and subsequent refinement, while reconciling the practicality that in most cases, these efforts are 1-5 person efforts.  Dale Dougherty of O'Reilly/Maker cogently argued this same point in 'The iPad Needs its Hypercard.' Given Apple's proximity to so many media/content providers, its failure to move quickly and visibly in this realm presents an opportunity for Google to outflank them.
3. Will Google 'Eat its own Dog Food' by Exposing Core Google Services to this Model? If Google really wants to prove out the efficacy of this model, the most compelling way to do so is by eating its own dog food; namely, but wiring core services such as News, YouTube, Search, Gmail and Maps to the Google App Inventor.  Why does this make sense?  One, the moral of the story from the PC era is that the potency of Visual Basic was not that you could create wholly new apps from scratch, but rather that you could harness and extend Microsoft Office.  Carrying this analogy to the present, extending Google Apps and Services is the most fundamental way to create a 1+1=3 relationship between Android, Google App Inventor for Android and core Google Services. Two, it forces the company to get better at usability and workflow around specific application use cases, as opposed to merely supporting generic workflows, a tendency that often pushes the company towards a fuzzy "NOT EXACTLY" bucket I railed on in 'Google Buzz: Is it Project, Product or Platform?' Three, such an approach pushes the company beyond its somewhat sanctimonious "Open-ish" position, where it pivots between being REALLY open in areas that it wants to commoditize (such as Mobile, Tablet and Desktop OSes) and quasi-open in areas that it sees as proprietary differentiators (Search and Advertising).
4. Why Limit App Inventor to Android? I get it that the primary battle that Google is fighting today is against Apple's iOS platform of 100M iPhones, iPod touches and iPads, not to mention the mindshare battle with developers. Moreover, the App Inventor toolset and runtime are built in Java and tuned to Android's runtime dynamics.  But, if the Google credo is that open always wins and that what's good for the Web is good for Google, shouldn't such an initiative be structured to work great on any mobile device that is HTML 5 ready (i.e. outflank iPhone by making universal apps more/as compelling as native apps), not to mention for web designers, bloggers, micro-bloggers, Facebookers and the like? To be clear, the choice of the naming scheme that Google chose -- App Inventor for Android -- is suggestive of just such a conclusion.

As always, God is in the details (back to my 'Project, Product or Platform' pushback), but kudos to Google for pushing the ball in this direction.

UPDATE 1: Jason Kincaid of TechCrunch does an early test drive of App Inventor, and his thoughts are pretty much what you'd expect at this stage of the game.  

UPDATE 2: Google is shutting down App Inventor, which was both entirely predictable, and smart to do sooner than later. One year of life then and "done" (it was announced mid-July last year).

Related Posts:

1. Google Buzz: Is it Project, Product or Platform?
2. Open "ish": The meaning of open, according to Google
3. Decomposing Google News and Making it Social

 

Phoenix Energy readies first Biomass-based Power Generation Site in California

 

This picture is what is known as a gasifier, which is where the biomass material is input in, then heated to the point of 'gasification' for the purposes of creating both heat and electricity.  

The solution, in terms of carbon footprint, is actually carbon-negative*, which is to say that it actually reduces the mass of carbon on the planet. 

Beyond green-friendliness, the system enables the deployment of decentralized power utility services, whereby the adjacent or on-site business can purchase electricity below the rates charged by the local utility provider (PG&E in Northern California), and excess electricity can be sold back to the utility on a guaranteed, long-term contract, making it an exceptional, annuity-producing investment.

After a long period of trials, followed by exhaustive permitting and entitlement processes across local, state and federal government bodies, our first site in California (the first of any such site in California) has broken ground, with an expectation of coming online in Q2 of this year.

(disclosure: I am a board member and advisor to Phoenix Energy).

* The reason biomass gasification gets counted as carbon negative from a lifecycle perspective is because it utilizes waste wood (orchard prunings and other ag residues) that is currently being landfilled. 

For instance, in the county where Phoenix is currently constructing its plant, over 14,000 tons per year of wood chips are buried in a landfill, where they decompose, releasing equal parts of carbon dioxide and methane (about 25x more potent than CO2). Even with a modern methane capture system, the release of greenhouse gases from landfilling is around 4x CO2 equivalent. So rather than release its CO2 anyhow without making energy, the company gets to make energy out of it.

Secondly, gasification is not combustion; it is a thermo chemical conversion process which leaves a bulk of potential CO2 in solid form as “biochar,” i.e. instead of sending 100% of the CO2 up the stack as in a combustion process. As such, a significant amount of the carbon is left in solid form, which when soil applied has a half life of around 1,000 years. 

Finally, the Phoenix approach adds two things to the equation that enhance its green-friendly proposition. One, for every KW produced with this waste product, we don’t need to produce it from anthropogenic sources (i.e. fossil fuels).  

Two, because the Phoenix system is distributed, there is no loss of electricity in transmission to the consumer.  By contrast, a centralized utility, like California's PG&E loses between 7% during off peak hours and 10% during peak hours (according to Cal ISO). An interesting corollary here is that that means every pollution stat you read about power plants is underestimated by up to 10% since not all of the power is productively used.

Sidebar: What is not even added to this calculation is the savings of CO2 from the transportation process, i.e. how much energy/emissions is spent hauling wood chips from their source to the landfill or how much energy is spent shipping coal from its source to the power plant. By keeping the fuel local and the use of the power local, the Phoenix approach avoids additional trucking emissions and the loss of power due to our inefficient transmission grid. 

Steve Jobs is the closest thing to Walt Disney since Walt Disney

I have written in the past about the the vision that drove Steve Jobs in pursuing his ambition for Apple.  Recently, I wrote about a visit to the Walt Disney Family Museum, and how it connected me to the spirit of Walt Disney, his sensibilities, and his personal journey. 

If you live by SF, the museum is worth seeing, if for no other reason than the company that Disney created is so larger than life that one could forget that behind it was a living, breathing person; a true visionary who realized his mammoth vision. 

That got me thinking. A cursory glance at the significant milestones in the careers of Disney and Jobs suggests an otherworldly ability to invent, re-invent and extend 'unfair advantages' across seemingly orthogonal domains. 

In racking my brain, I struggled to find anyone so boundary-less as these two guys.  Can you think of anyone?

Thus, my assertion is that Steve Jobs is the closest thing to Walt Disney since Walt Disney (I am certain this is an unoriginal thought) -- now forever bound by Pixar. 

If you believe in karma, how can you not think that it's pretty cool that Jobs ended up as the largest individual shareholder in Disney, an active board member who now is helping Disney re-boot its retail efforts!

Related Posts:

1. Walt Disney Family Museum in SF Presidio: Tourist and Local-worthy
2. Apple is a Great American Company Worth Celebrating 

O'Reilly Radar Guest Post - It's in the Bag! The Apple Tablet Computing Device

 

Summary: The core thesis of this article is that while Apple remains committed to cultivating its position in the legacy desktop /portable segment via the Mac, they understand that they will never be the leader of the PC market. That recognition, in tandem with their dominance in mobile computing platforms, will lead Apple to expand upon their iPhone strategy by attacking an "undefended hill" (an HP axiom) that's less hospitable to desktops/portables; namely, the 'Bag-Carrying Consumer' (think: purses, backpacks, briefcases, and the like).

Excerpt: In the past 25 years, the personal computing revolution has evolved from tethered (desktop) to luggable (portable) to joined-at-the-hip (mobile). 

Via the iPhone Platform (including iPod Touch), Apple has set the bar for mobile computing by seamlessly integrating computation, communications, and media across hardware, software, and service layers.

No less integral, Apple has significantly evolved ecosystem development models by cobbling together developer tools, media relationships, marketplace/e-wallet functions, one-click software distribution, explicit platform governance, and a simple, but compelling, approach to sharing revenue with developers.

Read the full article HERE.

UPDATE: In no small part aided by a friendly tweet by Tim O'Reilly (CEO of O'Reilly Media), this article has now been read over 7,100 times (according to Bit.ly) and re-tweeted over 110 times (according to Tweetmeme).

UPDATE #2: CNN Money has an article today touting the Apple Tablet as a killer of other device categories (e.g., standalone e-book readers).  One side note is that CNN Money has an obligatory analyst quote playing the skeptic, in this case Zeus Keravalla of the Yankee Group, citing a study they did showing that only 3% of the mobile device owners with a cell phone that has music playing capabilities uses the music functions as their primary media device.  This data is intended to support the premise that no device with multi-function capabilities is likely to have any one function be compelling (and thus, a category killer). But the use of industry composite data (i.e., an aggregate reflection of the entire market across all vendors) is a total pet peeve of mine, inasmuch as it's wholly disconnected from the specific strategy of the vendor being talked about (Apple). This is Apple, and they don't shovel useless functionality in for self-indulgence or feature checklists. Quite the contrary. If anything, I would hearken to guess that for iPhone users, the iPod functionality is core/primary in at least 70% of the cases. 

Related Posts:

1. Rebooting the Book: One Apple iPad Tablet at a Time
   
2. Apple, the 'Boomer' Tablet and the Matrix
   
3. Touch Traveler: London, Paris and only an iPod Touch

The Probability Tree: On Decision Matrixes, Outcome-Orientation and Venture Investing

One of the better tools for assessing risk/reward, and a corresponding probabilistic outcome “yield” is the Probability Tree.

The way that a Probability Tree works is that the top of the tree you break into branches the different decision forks that you are choosing between, the most likely outcome forks these choices will yield, and finally, the probability that a given outcome will occur for each particular fork. 

By multiplying the raw returns that a given path is worth by the probabilities of realizing the particular return, you get a picture of the expected yield for each decision path.

As outcome forks can themselves be further broken down into sub-fork outcomes (each with their own probabilistic outcomes), the probability tree is a relative sophisticated, but intuitive, way of modeling out decisions, outcomes and expected yields.

Should I Stay or Should I Go: Evaluating a Retention Bonus

Case in point, several years ago, I was working for a startup where a retention bonus had been presented to me that, on face value, seemed unacceptably weak. 

Contemplating my options pragmatically, I saw decisions like “accept offer,” “reject offer,” and “negotiate offer,” the collective of which yielded potential sub-outcomes (with weighted yields), like “receive full bonus,” “receive 50% of bonus,” “receive 150% of bonus,” “lose job – get no bonus” and “leave company – negotiate 125% of current comp at new company.”  On top of this, there was a whole set of sub-branches of what the money in hand might yield me under different investment scenarios.

Suffice it to say, this exercise not only helped me avoid making an emotional, potentially polarizing, decision, but it clued me into the fact that there was a high-risk, high reward option that I hadn’t fully considered, which happened to fit my risk profile (at the time).

Yossi Vardi: Properly 'Weighting' the Success Rate of Entrepreneurs

I was thinking about Probability Trees the other day when listening to a Q&A session with Yossi Vardi, one of the ‘godfathers’ of Israeli high-tech – as an investor, advisor and/or board member to more than 40 startups, including Mirablis (makers of IM pioneering software/service, ICQ, acquired by AOL in 1998).

When asked to assess the prospects of a given startup as an investment, Yossi first stated that, “I can never predict if products will succeed so I bet on people,” adding that the entrepreneur behind the specific company being discussed was exactly the kind of person he would like to invest in.

When pressed further about whether that meant that he would be a motivated investor in this particular deal, Yossi offered up some Probability Tree-like logic, noting that the hard data on entrepreneurial success and failure rates presents some interesting facts that mitigate his answer.

One, the data shows that the ‘Success Rate’ of an Inexperienced Entrepreneur is only 23%, while the Success Rate of a Failed Entrepreneur is 24%, only 1% better than the first-time entrepreneur. 

However, an Entrepreneur Who Has Succeeded Before (or multiple times) has a 34% probability of succeeding in their next venture; data which, at face value, suggests a staggering 50% better expected outcome than either the first-time entrepreneur or the failed entrepreneur who is trying again.

But, here’s where it gets more complex. As Yossi noted, since an experienced, successful entrepreneur can drive materially higher valuations, this dramatically offsets the expected yield in backing them (all things being equal) since you are typically paying a significant premium for the lower risk of backing a proven entrepreneur.  Hence, Yossi's answer was that it depends on the deal price.

Netting it out: even a gold standard entrepreneur’s value is relative to a projected, weighted outcome, something that I have seen many an investor forget in backing a proven winner, largely blind to price.

Related Posts:

1. Nine Essential Truths for Entrepreneurial Success 
   
2. Innovation, Inevitability and Why R&D is So Hard

Posterous: The Copy-and-Post Revolution in (Micro) Blogging

A friend of mine, who has achieved repeated success in high-tech startup land, said something profound that has stuck with me ever since.  

He said that if you want to be successful, focus on segments where <10% of the crowd currently adopts the solution, and by virtue of dramatically simplifying the approach, you can toggle adoption rates to closer to 90%.

The most basic example of this precept in action is Twitter, which has taken the otherwise (relatively) complex process of blogging, and made it as easy as typing 140 characters.

But, as Twitter proves, knowing HOW to post is not the same as knowing WHAT to post, which brings me to a second axes in the 'Changing Adoption Rates' axiom; namely, that if you can convert Infrequently Performed tasks into High Frequency ones, the utility you are delivering to your target user will go through the roof. 

Posterous: Copy-and-Post in Context

Enter Posterous, a micro-blogging tool (it's free) that does a few things really well:

Creating Posts is as Easy as Copy-and-Post:  What this means is that let's say that your are reading a great article at ESPN.com on Ron Artest's early play as a Laker.  You can simply scroll your mouse over a favorite picture or blurb from the article, and click the Posterous bookmarket which creates a Short Post that looks like this (click on graphic to see full size view).  From this window, you can change the title, add personal comments, refine what's included in the post, etc.  

The elegance of this model is that I now find myself effortlessly creating 4-7 posts a day on my Posterous blog, netgarden's posterous, versus the 2-3 posts a week that I create on my "serious blog," The Network Garden, which is more focused on long-form articles.

Creating Posts in Context is Intuitive and Simple: What this means is that creating a post from excerpted content, such as a comment, picture, video or blurb is done in a manner that retains a clean anchor to the contextual boundaries of the original article (click on graphic below to see full size view).  By that, I mean a link is automatically incorporated inline within the Posterous post to the original content, and any excerpted text is clearly offset from your personal text in the post (example HERE).  Plus, the post is date stamped, and tags and new comments are easily added to refine the context moving forward.  

Moreover, subsequent edits to the post are brain dead simple via a WYSIWYG web based post editing tool. One use case that I have found particularly compelling is turning comments that I have written in response to other people's posts into Posterous posts.  Here, I  simply scroll my mouse over my comment, click the Posterous bookmarklet, make my refinements, and I now have a Comment Post (example HERE).

Autoposting Connects the Dots to Twitter and Facebook: For those of us that have multiple social media accounts (think: Flickr, Twitter, personal blog, Facebook), there is always a dilemma of where to post what, and whether to replicate posts across multiple sites.  This dilemma is even more vexing since, whereas Twitter tweets are limited to 140 character text and links, Facebook posts can include pictures, text and video of variable lengths, and personal blogs are as custom as you want to get. Here, Posterous really shines, giving you the ability to autopost your posterous posts to one or more services, defaulting the title of the post as the Twitter tweet, and giving you a measure of granularity on a post by post basis to autopost or not (you can also autopost after posting if it was a post that you opted NOT to originally autopost, a method I use when I have queued up multiple posts that I don't want to blast my friends and followers with in rapid succession).  Two nits here, though, are that: 1) I would like to see Posterous add a character count in the Short Post title so I know how many characters I still have available so my tweet is not clipped; and 2) I would like to see better granularity of WHAT is autoposted to different services, since the handling methods between Facebook and Twitter, as an example, are so different.

Post by Email Intelligently: Ironically, one of the core differentiators of Posterous is one that I don't use, but the idea is that Posterous makes it easy for you to send an email with an attachment, such as a bunch of photos, and it will not only convert the email into a nicely formatted post, but it will take the attachment(s) (in this case pictures), and render them as a slide show, or other intelligent container, as appropriate (see below).

Simple Analytics/Management Dashboard: The analog that you can not improve what you don't measure was clearly not lost on the folks at Posterous, who not only give you a decent, simple dashboard for tracking which posts are popular, but also the product is exceedingly 'forgiving' in letting you tweak and refine your posts after the fact. My only wish list item here is that Posterous make it easier to view the traffic history of all of my posts on one page (versus limiting to tracking five posts on the main Manage screen).

 

Futures and Wish List: If you can't tell from my comments above, I REALLY like this product, but even excellent offerings can get better, so in no particular order:

1. Scheduling Posts: When you read as much as I do, and you read in blocks of time, you will often find that 5-6 articles may inspire you to post in a short time period.  Doing so, however, mucks with the signal-to-noise ratio of your audience, which a post scheduling option can remedy.
2. Better Handling Logic for Twitter and Facebook (plus LinkedIn support): As noted above, I would really like to see a character count(down) in the Short Post UI so that I know how many characters I have left to play with to refine what will be auto-posted into a tweet. Better granularity of output handling for Facebook and support for LinkedIn (which I understand is coming) is on the nice-to-have list.
3. Related Posts:  When you accumulate a library of many posts, you often find that a given post was inspired by one or more other prior posts.  In my main blog at The Network Garden I reconcile this by manually creating a Related Posts footer with title and links to 2-5 posts.  This has done wonders in terms of cross-pollinating my content, and certainly could be even more powerful if it was algorithmically generated (the latter is a nice to have, though).
4. Hot Pages/New/Popular/Recently Viewed/Related: Today, very little about Posterous feels like a community, other than it providing an automated conduit to your OTHER social services.  While the service features an Explore Posterous option for newbies, it would take very little work to create a top level auto-generated page with tabbed views that spotlights What's Hot (featured), New (recently posted), Popular (in terms of viewcounts and/or comments); or Recently Viewed (recently viewed posts).  Similarly, as Posterous supports tagging, it would be relatively straightforward to cloud up tagged data across Posterous sites to show visitors Related Content, as a way of deepening engagement for visitors and creating cross-pollination across Posterous sites. This could even be a reciprocity option for site builders, ala a linkshare program.
5. Bit.ly support: Posterous supports its own URL shortening domain, post.ly, but to the extent that bit.ly is more of the standard, has wider integration with Twitter/Facebook client apps, and deeper all-around analytics functions, this is pretty important. 
6. Deep Profile: Social media is all about finding like minds based upon shared interests, and the user profile is the jump point where a lot of the traversal happens.  Posterous is pretty one-dimensional in this area, and should get better over time. 
7. The Library of the Commons: I have put a lot of clock cycles into ruminating on the question of what happens when you catalog (in short post form) the universally shared index of photos, videos, business listings, wikipedia entries, product listings, etc. proliferating across the web. My thesis is that you end up needing some kind of rolodex, what I call an Infodex, to organize, manage and share these listings.  Needless to say, this is a bucket that Posterous could add a lot of value around, or as a platform play, could facilitate third-parties creating like apps around. A simple start might be a list building tool that allows users to flag favorite posterous posts and organize them into Top N Lists.
8. Mobile Applications: There is a lot more value than simply facilitating Picture Posts that Posterous could capture around Places and Products, to name two low-bar examples.   

Posterous is free, so do check it out and to get an idea of the delineation between "serious blog" and posterous blog, check out netgarden's posterous, in addition to The Network Garden.

Related Posts:

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2. Envisioning the Social Map-lication
   
3. The Mobile Broadband Era: It's About Messages, Mobility and The Cloud

Capitalism 2.0: Burning Cortez’ Boat

This is a post about Safety Nets, and Cutting the Cord.
 
It’s about what I call Capitalism 2.0, a schema for figuring out, documenting and executing the going-forward economic paths and corresponding public policy positions needed to get to the other side of our Economic Storm in direct, honest, rapid and (wherever possible) market-driven fashion.  
 
What follows is a true story to frame what’s going on.
 
A friend of mine is a member of the Top 100 Club in his Industry. A wheeler-dealer, his industry group had a conference to probe everyone’s outlook for the year ahead. Government and private sector economists also took part in the session.
 
The event yielded some interesting conclusions. One, there remains a lot of overhang within the system.  By overhang, I mean a few things:

1. Assets where a preponderance of artificially high valuations support a financial myth. This has lead to a market where banks sit on falsely valued assets interminably because they expect the government to step in and make them whole.  At the same time, they are reporting record profits, a disturbing asymmetry if you think about it.
2. Assets that have loans coming due for which there is no one else willing to re-finance, including the CURRENT lender. Logically, this suggests a wave of massive capital calls and foreclosures is coming.
3. Lenders have been playing a game called Extend and Pretend whereby they avoid foreclosing on underwater assets so as to avoid the day of reckoning.
4. The bubble that burst in Residential Real Estate is actually dwarfed by the one yet to burst in Commercial Real Estate.
   

And this does not even touch upon the consumer spending side of this equation, which I will get to in a bit. 

So with that framing, what was the outlook of the attendees, all Big Cos and Experts in their fields?

1. One third of the attendees think that the year ahead will be better than the last;  
2. The next third think that we are at bottom, but that we will continue to traipse along the bottom in the year ahead; 
3. The last third think that things are only to get worse in the year ahead.

In other words, there is no consensus viewpoint. 

The most telling read: an old timer saying that his view of the road ahead has never been so cloudy.

Ruminate on what that means in terms of National Agenda 'plan of record' thinking for a bit.  How do you solve a global problem when no one can agree on the cure and/or effectiveness of different treatment protocols?

 
The Come to Jesus Moment Awaits Us
The above is an explicit admonition that there is no obvious answer; no clear precedents; and in some cases, that what is broken cannot be fixed.
 
The fundamental reset is that Cheap and Easy Credit is being replaced by rigorous, transparent underwriting standards, and that this reset will change our economic footprint moving forward.
 
And to be clear, credit availability contraction will not be pain-free, as we have seen in the past year.  
 
Given that, we need to holistically re-think things like safety nets, universal services and cost-inflation containment mechanisms with a 20-year horizon in mind, as the 2-4 year horizon variety will not get the job done.  
 
Why? Because the alternative is a slow unwinding and de-leveraging, which history shows us from Japan's lost decade.
 
In parallel, we need to improve upon our policing, enforcement and punishment levers so as to: A) Ensure fair pricing levels; B) Protect against fraud; and C) Make 'service-level' expectations and results transparent to the market.  
 
Sidebar: To help you marinate on the complexity of the topic, watch this 60 Minutes segment on Medicare Fraud.  Just shocking.

 

 
Burning Cortez’ Boat
So many of our consumption patterns have been driven by a lifestyle enabled by cheap and easy credit. As that pattern unwinds, it will materially change the flow of funds through our economy.
 
At the macro level, this means that we must take write-downs aggressively, but factor in the appropriate safety nets.  

In parallel, maybe we also need to re-think the construct of Moral Hazard by holding people personally responsible for the ethics of their companies (versus perennially hiding behind the corporate shell); something we can only honestly do if we have tort reform.
 
This is the fundamental challenge of our time. To stand up as a society and say, “Let me pay the true price NOW so my kids and their kids don’t have to in the future.”
 
When you net that out, it’s akin to Cortez’ Boat; burning the boat so that there is no turning back.

Related Posts:

1. Engine Failure: When Financial Markets Fail
   
2. Capitalism 2.0: TED Spreads and Lessons from Japan’s Lost Decade
   
3. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage 

The Right Stuff: Apple’s Q4 Earnings Call

Stock Price (January 20): $78.20
Stock Price (July 20): $152.91
Stock Price (October 20): $199.57

Okay, so let me net it out for you.  Yesterday’s call was about two things.  One, the iPhone Platform, continues to deliver the goods.  

In fact, the high profile wins for Google Android notwithstanding – Motorola’s CLIQ and Verizon’s Droid (rumored to be built by Motorola at Google’s direction) – the Android Platform still feels a good 12-18 months behind where the iPhone is today. (Sidebar: Pre just isn’t yet in the game). 

And, let me assert that everything I know about devices and platform plays tells me that Android isn’t the straight line to inevitability that a lot of people think that it is. 

Why? Just as people fail to appreciate the importance of the App Store and the difficulty getting the surrounding application platform (SDK) right, they are forgetting about the 'unfair advantage' of having iTunes in your arsenal. 

In other words, Apple is playing a hot, and complete hand, and they remain very much on offense. 

The moral to the story is that there is a cosmic and global appeal to the iPhone and the iPod Touch, and the Tablet is on its way.  

By the way, did I mention that Apple is launching iPhone in China, the largest global market, in about a month (via China Unicom)?

Now, I did say that the call was about two things.  The other thing was the continued impressive growth of the Mac, especially MacBooks. 

Some backstory first.  About eighteen months ago, I had this Holy Shit moment (Read: Holy Shit! Apple’s Halo Effect) when I realized that Apple was executing a leverage play that was right out of the Microsoft Global Domination Handbook, circa the PC Wars.

What tipped it for me then was the fact that somehow, despite seemingly overwhelming odds, the Mac was once again relevant.  (Long-term Mac owners remember all too well the dark days when Mac OS obsolescence seemed inevitable.)

The numbers don’t lie sometimes, and in this case, the year-over year Mac sales data was showing a rate of growth that was (as of eighteen months ago) ever-solidly 3.5X better than the PC industry. 

So where are we sitting eighteen months later? In the words of Apple CFO Peter Oppenheimer, “The Mac is showing fantastic momentum,” outpacing the market’s rate of growth in 19 of the past 20 quarters, and in this quarter grew 17% versus 2% for the rest of the market – 8.5X better than the PC industry!  Do you see a trend here?

Apple generated 3.05M sales this quarter, which was their best quarter ever by 440K Macs, a fact that I could tell they were very proud of.  The $29 upgrade pricing on Snow Leopard appears to have realized really good uptake, too.

Oh, and as before, the company is experiencing GOOD GROWTH, not just growth for the sake of optics. The Fourth Quarter, 2009 that ended September 26, 2009 was their most profitable quarter ever (read the FULL RELEASE HERE). Gross margins got better in a difficult economy, growing to 36.6 percent, up from 34.7 percent in the year-ago quarter. Operating margin was its highest-ever at 22%.

International sales accounted for 46 percent of the quarter's revenue (with 42% growth in Asia-Pacific). The company’s products are unquestionably compelling globally, something that felt very evident when I was in Paris earlier this year.

The company also added something REALLY special this quarter.  Another $2.9 billion to top off the $31.1B pile of cash that now constitutes a $34 billion rainy day fund.

On the product front, Portable sales were up 35% and were 74% of Apple’s Mac mix (starting to understand why the Tablet is an imminent add to the product line?)

The Apple Stores have done a brilliant job of bringing first-time Mac and iPod buyers into the Apple family, and same store sales, which had dipped back in the March and June quarters, have rebounded back to their prior levels of a $7.1M average per store. 

At $199, the iPod Touch (20M units sold, runs same software as iPhone, 30M units sold) is the perfect gateway into iTunes, App Store, and a coveted consumer Billing Relationship, adding to the 100M credit card-activated accounts that Apple already has secured.

RBC’s Mike Abramsky asked Apple COO, Tim Cook about “wannabe” phones and how iPhones will maintain their lead, particularly with the looming holiday season.

I liked Cook's answer. “We have significant momentum,” Cook says, as well as apps, which it has “a country mile more than anyone else…we feel very good about suiting up and competing against anyone.” Rivals are still trying to catch up with the first iPhone, he adds, and Apple has moved beyond that. 

If you appreciate what it means to have achieved such a strong level of Platform Status, you know that this is no empty chest beating.  Apple has really delivered the goods.

When you talk to iPhone/iPod Touch owners, a simple truth bubbles to the top again and again; namely, that the iPhone is the first truly 'personal' computer; more personal to its owners than the PC ever was.

In terms of Outlook for the Quarter ahead, Apple as always, sandbagged (i.e., quoting extremely conservative financial guidance so they can handily beat the numbers in the coming quarter).

On deck, they have the Holiday Quarter, armed with a diverse Product Matrix to fit all stocking sizes, and multiple sales channels to reach their base.  Plus, they have been diligent in finding the balance between maximizing operating margins, and not leaving Pricing Overhang for competitors to inculcate.Yet to come: the good tidings of a Strong Product Pipeline in the year ahead.  

Could anyone seriously question the assertion, as backed by tangible results, that Apple has The Right Stuff?

Related Posts:

1. Rebooting the Book (One Apple iPad Tablet at a Time)
2. Analysis: Apple June Quarter Earnings Call - Keeping it Real
3. Holy Shit! Apple’s Halo Effect

Land and Expand: Why Apple Allowing In-App Purchases in Free Apps is a Big Deal

A friend of mine, who also happens to be a VC, once told me about what he calls the ‘Land and Expand’ strategy.

In Land and Expand, you so totally reduce the barriers to customers adopting your product, that it’s relatively easy to get them to at least try your product (or service).

Then, once you have secured this ‘landing,’ there are numerous ways that you can then expand your position to deeper engagement, more mindshare and, hopefully, a higher margin revenue path.

With Land and Expand as a strategic backdrop, I got a 'boo-yah' grin yesterday when Apple announced (via a developer mass-mail) that iPhone app developers can now use In-App Purchase within their FREE apps to sell content, subscriptions, and digital services.

What’s the big deal? Simply put, freemium is now the perfect gateway to Land and Expand on the iPhone, since developers can release one app that can be segmented by price and functionality, and in a consumer-convenient fashion, toggled from free to fee to premium (or recurring subscription), the click action of which will inure the app with new functionality and/or content (e.g., additional chapters of a story, levels of a game and virtual goods to supercharge a user experience).

Previously, Apple held to the credo that “free apps should remain free,” lest customers ever feel the dread of bait and switch.

While intuitive and logical, this binary forking between free and paid forced developers into performing unnatural acts, like releasing (and supporting) separate 'lite' free apps and full-featured paid apps, not exactly the best mechanism for converting free users into paying customers (side note: since the launch of iPhone OS 3.0, paid apps have supported an In-App Purchase mechanism).

For consumers, this meant performing another kind of unnatural act; namely, that you had to purchase and download a ‘new’ piece of software and then uninstall the lite version when you wanted to upgrade to the paid version of the software. Needless to say, hardly a friction-free experience for what is otherwise an ultra consumer-friendly mobile platform.

To be clear, the new approach is not perfect. For example, Apple’s policies still preclude releasing a full functionality, but time-limited, free trial version.

And supporting In-App Purchase is more complex for developers than with ordinary paid apps, inasmuch as it requires them to add payment-tracking code in the app and operate a web service to support the underlying workflow (or piggyback off of the third-party commercial hosting services that have popped up to address this use case).

Moreover, it will force Apple to rework their Top Paid and Top Free listings within App Store (but not Top Grossing) since distinctions between Paid and Free no longer will be pristine.

But the bottom line is that my assumption is that this new model will take hold, which means a couple things.

One, as Marco Arment (of Tumblr and Instapaper fame) notes in his excellent review of the revised In-App Purchasing Policy:

Average prices can go up. People are more willing to pay for (relatively) higher-priced apps if they have free versions. Customers who try the free version and decide to pay for an upgrade no longer need to delete the old app or re-enter their data in the new one. This significantly reduces the friction to upgrade from free versions, which should dramatically increase the proportion of people who do.

Two, this is another sign that Apple gets it, that they are not tone deaf to the reality that in the iPhone Economy, providing developers the tools that they need to build and execute a disciplined plan for engaging and monetizing their target user base is a win for developers, consumers and Apple alike.

Yet another reason that the iPhone Platform remains the gold standard for mobile computing.

Related Posts:

1. Should Apple Give a Rat's Ass that Developers Aren’t Getting Rich off of the iPhone Platform?
2. Is the iPhone Platform Destined to Disrupt the Packaged Software Industry?
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