- Google is (mainly/only) in the advertising business (something most telco operators can not say of themselves)
- Google will create a lot of very cool applications that the users will like
- Google expects infrastructure providers (fixed and mobile) to work on sufficient bandwidth so users can enjoy these applications
- any well run infrastructure provider should be able to earn money on the increased bandwidth demand and by offering different bandwidths for different prices (and a few other things like security, payments/banking)
Just came across this outstanding analysis of Clay Shirky. It covers many interesting aspects of how the Internet effects traditional, complex business models. He compares business models with old cultures (e.g. Mayas, Romans) and uses the theories of Joseph Tainter about the fall of complex societies as a model for complex business models.
An interesting reading in this context is also Jared Diamond’s “Collapse“, who also looks at the reasons why societies collapse and especially addressed environmental aspects.
Clay Shirky takes the 2 key reasons Joseph Tainter identifies for the collapse of societies: a complex, (overly) sophisticated organisation and environmental change and maps this to the impact of the Internet (environmental change) to the complex business models (organisation) of old industries like media/movie, telecommunications.
A brilliant analysis with a lot of take-aways.
Considering how many cool augmented reality apps we have seen and discussed at he MobileMonday Germany National Summit in December, it seems clear that this will be one of the next big things. (Or see on iPhoneNess here for a list of augmented reality iPhone apps). However, current handling by holding your smartphone up and shifting around in front of you is probably not a sustainable mode of operation.
So head-mounted devices (not even considering 3D for the moment) would be the next thing to provide an easy user-experience for augmented reality. Whether the proposal outlined in the patent filing is the best approach is to be seen.
Would Apple really take this up ? In the past their approach has been to use an existing category, e.g. MP3-player, smartphone and create a device, iPod, iPhone with superior customer experience and end-to-end integration. The iPad is the first where they have really driven a new category and not taken the existing netbook category and evolved it further. Although admittedly there have been tablet PCs and eBook readers available before, but not to a significant market presence. So a head-mounted device would clearly be pushing this new category approach even further.
On the other hand the patent filing outlines more an accessory to an iPod or (smaller) iPhone than a new device category. Wearing classes myself for the largest part of my life I think that the accessory approach would probably be not very comfortable and too heavy to wear over a longer period of time. Some kind of head-up display projected into glasses would probably be more suitable for long-term usage in augmented reality applications. So taking the accessory approach I would rather see a small, bluetooth connected projector that can be attached to glasses.
But definitely pushing this with a convincing user experience is a fascinating next step to watch.
[Update:] Well, I played around with my iPod nano a bit and the challenge is that the eyes have difficulties, i.e. it is impossible, to focus at the close distance of classes on the picture on the screen. I don’t think that this is a resolution issue, so some more research is probably necessary to make this work.
Cleaning up my desk I came across a flyer from the Bachler-Team, a training and consulting company from Austria. The flyer lists “99 Reasons to decide for the Bachler-Team”. Picking up the flyer when we had an off-site session at their beautiful location in Abtenau a few years ago, my boss asked me to have something similar for our products.
So I started collecting ideas and reasons, but only managed to get to roughly 35.
Now picking it up again I started thinking: Is it better to have 99 reasons, which is quite a lot, or rather have 2 or 3 very compelling reasons? While the flyer obviously is intended to be a little fun and not meant to be too serious, in the meantime I strongly believe that the few compelling reasons are the key for successful business.
Many reasons are intended to match the expectations of as many potential customers as possible, but it is almost impossible to fulfill 99 promises.
Oracle just released a study on challenges for utility companies when moving to smart grids, i.e. implementing some intelligence in monitoring customer energy consumption and providing consumption based differentiated tariff options.
There is a general hype about the possibilities of utilities smart-grids in the Internet industry. So the summary of the study triggered some thoughts with a perspective of the telecommunications industry.
Looking at the responses this is (1) almost completely about technology and (2) about saving or reducing costs. The technology is about installing smart meters at the consumer to give the more and flexible tariff options in order better control energy consumption.
What is almost completely missing from the discussion is the question of the underlying business model for smart grids beyond pure cost savings. This surprisingly is similar to the rise of IP technology and the Internet for the Telecommunications industry. So how could there be a business model:
- The Google approach: open the smart meter information with an API so that other could mesh-up and build applications on top of it. How could the information about the usage be used to create value for others?
- The Apple approach: create a convincing, end-to-end application around the smart meter that every consumer would want to have.
The second point that is interesting is the proposal of the executives of how to move forward: sharing best practices, developing an information architecture and developing standards. Compared to Internet companies like Google, Amazon, Twitter, etc. who take the opportunity and run, established companies, in the telecommunication industry and here in the utility industry ask for standardization. The basic approach here is to reassure one another what the right way forward is, but other just take the action and eat the lunch.
So it will be interesting to see who will take up the ball and come up with a clever business around smart-grids and utilities.
Last night I saw an interview with Miriam Meckel, professor for Corporate Communication, on TV. It was mainly about her new book reflecting her experiences with burnout.
The interesting part for me, however, were her comments on the effects of algorithm-based match-making in many areas of the Internet. Not only do we get hints at Amazon about books I might like based on what I recently ordered, also on Facebook I might get suggestions on people I might like. Just to mention 2 cases.
Miriam Meckel’s point was that we might miss interesting conversations, if we only get to know people that are like ourselves – based on the evaluation of some computer algorithm. In real life the most surprising ideas might arise from talking to people we originally might have considered boring and disliked.
So, does this lead to communities of people who are all alike ? And what if the initial proposals are somewhat off in a certain direction and this will enforce a specific direction.
This brings me to something that came up when reading Jeff Jarvis’ “What would Google do?”. Jeff Jarvis explores the Google business model of openness for other industry. One example he explores is restaurants. He suggests that restaurants should give the customers the option to influence the menu or the specific recipes or ingredients. Now what if the first 3 customers like spicy food and comment on this. Would this make or drive the restaurant into becoming the center for spicy food in town, although the chef might prefer something else? Would this make the result a matter of luck.
Putting these 2 points together. Do algorithm-based approaches to communities and preferences as they are common in Internet applications drive towards clusters of average people around a random core, depending on the first initial people joining or commenting ?
I spent the weekend going back and forth through Germany by train and this triggered the question above.
The journey started with issues and ended with issues. Germany’s Deutsche Bahn has some problems at the moment with their high-speed trains so eventually they don’t have enough coaches from the trains. But somehow the can not manage this in their reservation system and customer service, so people who have made a seat reservation – and paid extra for that – are left with their seat not available.
On the first part this caused our train to be delayed, so we missed our connecting train. So we had to take a later train, which itself had some technical problems and was again delayed.
On our way back we were ourselves victim to a “disappearing coach” so our reserved seat was just not there. And while I have to admit that the conductor managed the situation very professionally and we were lucky to get some alternative seat, it nevertheless left me with the question about simple service improvements.
I had ordered the tickets via the Internet so they could have known my reservation and email address and I assume that the decision that 6 coaches are not available is not something decided on the spot, but known some time in advance.
So why not send an email with a new reservation, so I would not even have to go through the hassle of trying to find a non-existent seat? Why not create new reservations and give printouts with the mapping to the conductors and service people on the platform with some announcement that people could get their new seats from them?
I assume that this is not a logistics “super-problem” as airlines manage seat assignments and changes everyday. They can even send me a SMS when my flight is delayed.
Another issue that struck me was, when our connecting train had technical problems and the conductor made an announcement. Apparently he thought if he would speak as quietly as possible no one would notice the delay. But exactly the opposite happened. Everybody in the train was even more annoyed, because on top of the delay we could not understand the announcement and therefore didn’t know what was going on.
So again I would think a simple thing to improve customer service. Just be as transparent and audible as possible on what the status is. Any delay will be annoying to travelers, but having to guess about the status will make it even worse or to the opposite – also reflecting Jeff Jarvis’ experience here – openess will improve the situation.
What happens to your business model if limitations are removed or flexibility added ?
Listening to the now freely available audio version of Chris Andersons book “Free” I realized that this is not about whether you charge for your product or not, but has a far more fundamental implication for all owners of a business model.
As Chris has outlined in his book there are many different ways to make money based on “Free”. The challenge for any business however is to pick one and before that start thinking about the business model.
This reminds me of the time when the legislation of shop opening hours was changed in Germany from a very limited model (Monday through Friday, 7.00 to 18.30, Saturdays, 7.00 to 14.00) to an extended one (Monday to Saturday 6.00 to 20.00). With the previous hours it was possible to open the shop almost all the available time or at least there were the standard hours of 9.00 to 18.30. Now, suddenly shop owner were forced to make decisions. Should we open later so that it would be easier to close later? Does it make sense to open until the last possible time? When is actually the best time for our business? How to organize shifts in line with customer demand? Especially owners of small or mid-sized shops had to make decisions here and you could clearly see that they were not used to this kind of business (model) thinking.
Now with “Free” as an option or competitive threat, the same kind of considerations are suddenly necessary, where previously the model was simple: you sell a product and the customer pays for it.