Thursday 31 October 2002

AlienAid - Guy Fawkes and Halloween - London, UK to Bay Area, CA, US

In the UK around this time, small boys' thoughts turn to explosives. Guy Fawkes Night, or Bonfire Night, on November 5th, is a ritual of burning in effigy Guido Fawkes, the leader of a terrorist gang who were foiled in their attempt to blow up the Houses of Parliament in 1604. Fires are lit, potatoes roasted, and fireworks let off with abandon. Preceding this, boys sit by their effigies and ask for 'penny for the guy', to get the funds to buy the fireworks in the first place.
Or do they still? The American Halloween, or autumn confectionery begging festival, was making inroads when we left the UK 5 years ago.
Here, we carve pumpkins, we dress up for Jerry's annual Halloween party, and tonight we'll dress up again and walk the leafy lanes of Willow Glen with the boys collecting sweets and chocolate from strangers dressed as monsters, then hide it from them the next day so they don't spend the day riding blood sugar rushes and crashes.
It was a lot of fun walking the neighbourhood - top tips:
Go out between 6 and 8pm;
The rule is, if the porch light is on, they have sweets ready and welcome visitors, otherwise, move on;
Kerb crawling in an SUV alongside your children running up and down the driveways is gauche.

Wednesday 30 October 2002

AlienAid - Telephone Numbers - London, UK to Bay Area, CA, US

In the UK, telephone numbers were originally handed out by the Post Office. Local numbers of varying length will connect you to nearby people. For long distance, you dial an area code starting with zero. There were short codes to connect you to nearby exchanges without going long distance, and in the early days of computer BBS's people would dial these in sequence to connect across the country for the price of a local call, ending up with a ridiculously long number.
Historically, areas with lots of numbers got a shorter area code. London was 01, Edinburgh Birmingham 021,(thanks Simon)and so on down the pecking order (Sandown, Isle of Wight, was 09834, but the numbers were only 4 digits). When mobile phones and faxes came in, they needed more numbers, so they went through a convoluted transformation scheme. May parents' area code went from 01 to 081 to 0181 to 0208, changing every couple of years. Non-London area codes had a 1 inserted before them. Mobile phones now get distinct numbers starting with 07 or 09, and the cost of calling them is paid by the caller.

In the US, things are different. You have a seven-digit phone number, and a 3-digit area code. The pecking order here is the number of clicks for a rotary phone (and hence dialling time) - add up the digits of the area code, counting 0 as 10 to see how important your area was when they handed them out. Guess where has 212.
This scheme has its own logic, but it is not well-coupled with billing. Cellphones have numbers in the area code of the billing address, and calling them costs you more. Local calls are included in your monthly fee.
Long distance is by default charged at ridiculously inflated prices. Unless you buy a long distance service plan, you'll be billed a dollar a minute or more. There is no good way of telling what a call will cost you from the number you dial, and you won't find out for a month until you get the bill.

There is one particular trap for the unwary that I fell into recently. Because of the historic size of area codes, some calls to the same area code are not counted as local, but are 'local toll' calls. Unwittingly, I had entered just such a number from the list supplied by my ISP into my computer to dial them when I updated the OS. As any kind of broadband is unobtainable in our area of the 'Capital of Silicon Valley', and as the only people who call after 8 pm are tele-marketers (our family being in a different time zone), I tend to dial into the net and leave the computer connected until I go to bed hours later.

I got the next Phone bill and saw a charge for $77 for local toll calls, to a number in Gilroy. I realised what had happened, changed the number and used the online billing service to complain to AT&T about this bill. No response.
I got the next bill. This time there was a charge of $493 for local toll. I called AT&T, escalated my way through customer service for 3 hours, faxed the details to the Disputes department, and now, a few weeks later, they still want nearly $600.

Tuesday 29 October 2002

Has Google stopped spidering?

With my new AlienAid meme champing at the bit, I've been searching Google for it every so often for the last few days, and seen nothing.

I then tried searching for other people's sites, and found Google has nothing cached newer then midnight on Saturday (search for CNN).

Normally it is only a few hours behind on frequently-updated sites like boingboing, Doc, slashdot, Scripting news or Instapundit, but today they're all frozen in the cache as of Friday.

Google News is still updating, but it is only a subset of mass media sites - the fresh blog news is just not there.

AlienAid - Bacon - London, UK to Bay Area, CA, US

In England, there are several kinds of bacon. broadly though, there are two - streaky bacon, and back bacon. Streaky is fatty and shrivels, Back has big crcles of meatiness in it. There are different ways of curing it which make a difference, and if you want great bacon in the UK, go to The Meat Like It Used To Be Co, 50 Cannon Lane, Pinner, HA5 1HW Tel: 020 88664611

In the US, they butcher the pigs differently, and you never get Back bacon, just very fatty streaky bacon that is halfway to being crackling. However, if you go to Cosentinos, you can sometimes find Irish Bacon (imported from Ireland, no less). Or you can buy it online by mail order, so you can make proper Bacon Butties (HP sauce is available in many supermarkets).
There is also something called 'Canadian Bacon' which seems to be a kind of circular ham, but is not a bad subsitute for back bacon.

But what happens to the missing meaty bits in the US?
They get sold as Pork Loin, which is a splendid thing to marinate and barbeque or roast, and usually good value.

Monday 28 October 2002

AlienAid - Tea - London, UK to Bay Area, CA, US

Tea is a core part of British culture. It is almost impossible to visit a household in the UK without being offered a cup of tea, and very impolite to decline one. There are in fact two schools of tea-drinking - the strong cuppa brigade, and the tea aesthetes, or teasthetes. These are best delineated by a splendid vignette (which I am reconstructing from memory) in the otherwise forgettable film 'Mona Lisa', in which Bob Hoskins, playing a rough cockney, is seated in a plush West End hotel. A waiter approaches:
'Would sir care for something to drink?'
'I'll 'ave a cuppa tea'
'Earl Grey or Lapsang Souchong?'
'Nah mate, TEA!'

George Orwell explains the 'nice cuppa' better than anyone, while Douglas Adams explains the allure of Earl Grey (note that they differ on the crucial question of milk first or second - I'm with George on this one).

In America, if you are offered tea, what you will get is a cold, sweet drink made from teabags, cooled with ice and with sugar and lemon added. Getting an English-style cup of tea is quite difficult. Most restaurants will provide a teabag and lukewarm water on demand, which doesn't really work. In this part of California green tea is widely available, and this is generally supposed to be made with water that is off the boil. The ubiquity of coffee shops extends some hope, but Starbucks make poor tea, selling a range of teabags called 'Tazo' that trigger the 'Nah mate, TEA!' response in me, which is odd as I generally incline to the teasthete end of the spectrum. However, most supermarkets will sell you Twinings teabags, or even Tetley ones, for you to brew in the privacy of your own home. Trader Joes have a reasonably priced own-brand range.
The real answer for the teasthete is Peets Coffee and Tea who sell wonderful leaf tea at reasonable prices. There are several branches in the Bay area, and if you can't find one they'll deliver it.

Making your own is made more difficult by the problem of obtaining a decent electric kettle, as the US's 110 volt system means boiling water takes about twice as long as with the Uk's robust 240 volts, so boiling the kettle on the stove top may be quicker.

AlienAid

Reading Cory's English Standard Tribe and about Gary Turner's homesickness for Glasgow reminded me of an idea I had ages ago (pre-blog) but never got round to doing anything about. The idea is to provide helpful mappings between cultures for displaced aliens such as myself.
When you move to another country, timezone or even a different area within a country, a lot of your cultural referents are misplaced or disconnected. The obvious ones - your sudden lack of any sense of the geography of the place, or where to go to shop for anything, or what the currency is worth - are usually overcome quickly, but the more subtle ones can lurk for months or years before they bite and give that sudden moment of anomie, alienation or perhaps external prespective.
I am great believer in learning from others' experiences, and conversely sharing mine.

Here's the germ of the idea. I'm going to write about some of these cultural disconnects, and put the tag word 'alienaid' along with the topic, and the places I'm translating between in. See above for an example. As 'alienaid' is currently a null search on Google, if I do this and other people join in, searching for alienaid in additon to the terms or locations will give the cultural translation needed. If I get enough repsonses, I'll register alienaided.org and collect them there.

Sunday 27 October 2002

Oops - Daylight saved

Just noticed it's an hour later than I thought it was. My mac automatically put the clock back, so it's really 3am, or rather it's 2am again. I should go to bed.

Sunday 20 October 2002

Congestion control for RSS

Dave Winer, Joel Spolsky and Phil Ringnalda are discussing the problem of RSS aggregators that check for updates by polling becoming an effective Distributed Denial of Service attack.

As others have said, adopting HTTP's "If-modified-since" timestamp fetch can help here, by only doing a full-page fetch when the RSS has changed. In addition, adopting RFC 3299's way of only sending changes will help reduce the bandwidth of the RSS fetches (I mentioned this back in January when it first came out).

However, this doesn't reduce the number of HTTP setup/teardowns. To do this, the aggregators need to get smarter. They can do this by estimating an update frequency for each feed - something modelled on TCP's congestion control (exponential back-off, with 'no change' treated as congestion) would probably suit well.
If the aggregator polls the feed, and finds no changes, it doubles the polling interval. If it polls and finds changes, it decrements the polling interval by the number of changes found multiplied by the overall polling frequency. The lower bound is the maximum polling frequency set by the user (once an hour is common). You could set an upper bound, or let it establish itself which blogs are moribund.

Wednesday 16 October 2002

The Fallacy of the Almost-General-Purpose Computer

Ed Felten reports:
I was at a conference in Washington, DC on Friday and Saturday. Participants included some people who are reasonably plugged in to the Washington political process. I was stunned to hear one of these folks sum up the Washington conventional wisdom like this:

"The political dialog today is that the general purpose computer is a threat, not only to copyright but to our entire future."

(It's worth noting that he was repeating the views of others rather than offering his own opinion -- and that he had a general-purpose computer open on the table in front of him as he said this!)

If I could take just one concept from computer science and magically implant it into the heads of everybody in Washington -- I mean really implant it, so that they understood the idea and its importance in the same way that computer scientists do -- it would be the role of the general-purpose computer. I would want them to understand, most of all, why there is no such thing as an almost-general-purpose computer.


This is downright scary. I know I talked about Hollings outlawing Turing machines, but to hear that this is received wisdom is chilling.

Saturday 12 October 2002

Neal Stephenson: Jipi and the Paranoid Chip

Neal Stephenson: Jipi and the Paranoid Chip

A nice coda to all that Digital identity stuff this week. The Turing test writ large, tkaing place in the Cryptonomicon universe.

Wednesday 9 October 2002

Sorry Eric!

I just added this blog to the DIDW feed so it would pick up my last comment, and it hoovered in all my entries for the last 2 weeks. Sorry about that. The stuff about Harrahs, Dan'l Lewin etc are from a completely different conference.

Digital Identity through tone of voice

The Digital ID World RSS feed doesn't contain any way of identifying who wrote each item. You have to identify them by context and tone of voice.
Surprisingly, this isn't that hard - I can certainly tell Denise from Akma and Doc from. Can you?

Tuesday 8 October 2002

Trust people, not computers!

The Economist has an interesting backwards twist on the SPLJ thesis. With DigitalID World opening tomorrow, I wish I could be going. Still, I can read the blogs and heckle via email...

If you like surfing the web, it is probably because you believe people are basically good

WHEN economists try to explain why the Internet is more popular in one country than another, they usually point to factors such as the number of PCs, telephone lines or average years of schooling. But something less quantifiable may be more important: trust. This, at least, is the result of a recent study by Jonathan Leland and his colleagues at IBM, which compared 17 countries.

The Internet's anonymity and vastness encourage misrepresentation and fraud. Thus, people who are normally suspicious tend to shun the medium, while more trusting souls embrace it. To test this proposition, the team correlated OECD data on Internet adoption with results from the World Values Survey. One question the latter asks is: �Generally speaking, would you say that most people can be trusted, or that you can't be too careful in dealing with people?�

The statistical link between trust and Internet adoption turns out to be surprisingly strong. The degree of trust in a society, as measured by the percentage of respondents who answered �yes� to the first part of the question above, explains almost two-thirds of national differences in the percentage of households that have Internet access. Even when controlled for other variables, such as the number of computers, trust remains an important factor.

Thursday 3 October 2002

Gary Loveman Harrahs COO

Growth and turbulence. Largest casino company in the world. Brought in becasue company was not growing - came up with a strategy based on retail.
Simplicity is the answer to turbulence.
In 1998 Harrahs had built casinos in newly legal states. No new states, so no growth; competitors moving in with newer stuff.
Harrahs had built a great transactional database of customers. Loyalty card rewards customers for spying on their bets, correlating with restaurants.
It had been collected, but not used.
They had casinos over the whole country, so they wanted to build a national retail brand.
Competitors strategy was 'build it and they'll come' - Bellagio $1.8bn - the casino God would build if he had the money.

They pursued a switching strategy instead of a buidl new one - grow what they had, as they couldn't afford to compete on flashness.
1. Create a national brand.
2. Envelop customers with reasons to be loyal - provide excellent service
3. Use decision science to optimise customer profitability

Turning customer promiscuity into customer monogamy.
They build Pavlovian systems - driving reactions they want from customers.
Made a Marketing manager COO to focus on marketing. Company, not business units, owned the customer.
The Casino Owns the customer. (Sound like hacker-speak to me).
They have rooms so gamblers can sleep, restaurants so gamblers can eat.

They had 36% of market, but if they could increase by 1% the share price would go up $1.10. By 2001 they moved yp to 42%

People go to casinos to take risks. Their ads show the insides of casinos, not resorts. Found very strong correlation between service quality and return visits, so made sure managers knew this and invested in service.

They really take good care of the chips - count them, track them watch them - tell staff thta the chips are the means, the customers are the ends. Incentive program pays bonus if measured service goes up by 3%, irrespective of financial performance. Staff watch each other, and businesses compete as scores are published.

Need to distinguish between potentially good customers and observed behaviour. They would do epxerimental demographic filtering, send offers to see if they can bring people in. Targetting offers - carefully matching the offers they send to the people based on interest.

Treat all customers differently - good customers get treated better. 3 lines at the buffet - short platinum line, long normal line.

26 million American adults in database.

They have patent protection on doing this because they have mixed up the marketing with technology, and don't expect the patent to stand, but are using it to disrupt competitors.

Seen no impact from internet gambling - doesn't match the experience.

80% of business is slot machines. Slot advantage is 6%; Blackjack is about 1% if you are good, and it is service intensive. Table bets of $25 or less lose money. Harder to collect table game information as not automated.

The Strategy that Works - Larry Downes

Met an incubator - Build a company in 90 days, take it public in 180 days. IPOs made day traders into VCs

Moore's law was faster than companies could adopt - he wanted them to speed up; he found they had overshot technology and tried to keep up with market.

Business cycle does not match the technology cyle - never. Value shows up eventulaly, but not where expected. Moores law is still running. Information revolution is still going, and other ones are too. Next generation growth is happening now, and what you do now will be part of it.

Currently fuzzy subjects like marketing and CRM will become scientific as more data is available.

When the going gets tough, short the future - all speculative stuff gets cut first, whereas the opposite needs to happen.

3 crazy ideas:

1. Zero out your IT budget
Or rather, merge it with the R&D budget - no difference between them. As information flow gets richer will be enveloped in information. develop IT wiht the products and services.

2. Manage your business like a portfolio manager
Tie yourself to the mast like Ulysses so you can't cheat yourself out of the future in bad times. Weight your investments in short term, mid term and long term. Cut carefully. Buy low and sell high - at least buy low.

3. Invest in next generation of technology infrastructure especially if you are broke.
BP invested in a new IT platform, then bought their competitors and put them on the same more efficient system.
Make sure you have:
Open Standards - don't choose too soon, but make sure all choices are open.
Component based architecture - OO techniques are a key part.
Separation of process, interface and data. Dont slap everything into HTML.

Getting big ideas is the easy part. The hard part is execution.
The new ideas never get through.

Dan'l Lewin on .NET

I've been trying to have someone explain this to me for about 2 years now, and this is a little clearer.

He describes it as bringing the edge of the network to where you are. Connecting everything - no doors, barriers walls. The revoltion is integration. Not wildly compelling for consumers - weaving together necessary information. The important question is who controls and owns data and authorises its use. (I thought that might be coming).

He said P&G within 12 months will be putting RFID's on every product so they can track inventory. Less than a penny per chip.

His user examples were the usal weirdness about intelligent agents knowing who was allowed to interrupt you in a meeting depending on who was with you in the meeting becasu they knwo your calendar.

These strange corporate control models are imbued through .NET - maybe thats why I don't get it; I'm already on the edge of the network blogging in the back, with interruptions under my control via iChat, and calenders shared with others here via the net. I don't want to spend time setting policies for it or having them derived from an org chart.

Another take from Denise

Panel Andy Grove and Clayton Christensen

Andy Grove Clayton Christensen

CC is very tall, AG is small - for a magazine they had a photo of CC leaning on his shoulder - he took a photo the other way round.

Valley of Death

Grove: Business growth was fuelled by structural transformation - mainframes to PCs - defined it for the whole industry.

that framework lasted 15 years, but it is changing with the Internet redefining software and hardware.

The horrible misjudgments about growth rates, this is due to a lack of understanding of the new framework - we still don't understand it.

It is going to be dominated by intellectual property created in digital form and transmitted in digital form.

We move from a computing world to a connected world where computing is subservient to this connected world, business changes.

Digital pipelines. Copying used to lose quality - attempts to ward of digital copying will fail this is a disruptive technology for everything - publishing, music.

This is immature, and we all have desires fro the other side of the valley.

Moderator: Strategic dissonance and accountability - how do you lead through this kind of transitions?

AG: He was watching the Sopranos while exercising - expecting a book on the management secrets of Tony Soprano. Beset by management challenges all the time, asks his uncle fro help 'you take your bumps, make your mistakes - half the time you are right, half the time you are wrong - enjoy the journey' None of us have an understanding of where we are heading. I don't. Take a shot and clean up the bad ones later and bump off the mangers you should. Try not to get too depressed. Keep your own spirits up even though you don't understand what you are doing.

Mod: How do you keep up?

AG: Partly self discipline, partly deception. The deception becomes reality - if you act confident you become more confident. Do two things. Act on your temporary conviction as if it was real. When you realise you were wrong correct course quickly.

AG: Notes that CC dodges question like politician.

CC: Watching execs launch new businesses. If you look back at companies that have launched successful new disruptive business, it has been by the founder. MBAs from Harvard never do this. Is there something about being the founder that gives you the self-confidence to make an irrational decision that changes direction. A pro manager has to make an evidence-based case, and if you wait for that evidence the game is over.

AG: Agrees 100%. Build your confidence. If you believe you have support of organisation above and below, you can make it happen. It is more likely to happen if you' re a founder and your life is interwoven with the company.

Secondarily, if you funded it you understand implicitly - it is in your skin. If you are an outside manager you are less likely to have confidence in your intuition. It ahs to be intuition as the numbers aren't there. Name examples otherwise?

CC: Multi-divisional companies eg HP LaserJet then InkJet. Dick Hapborn(?) of printer business - he J & J have 183 companies and have launched 4. Only two exceptions.

AG: Hapborn had been

CC: Uncomfortable with the teaching model in the HBS - 2 years from now a 2 year MBA will be regarded as a expensive mainframe, displaced by crummy on the job learning. On the job learning is getting better and more convenient. He did a case study - how could Harvard MBA program be disrupted? The patterns match the already case studies 99 said no 3 said yes. What data would convince you? Harvard's market share amongst CEOs of global 1000 - game over by then. All convincing data are trailing indicators. They crucify students who don't use data, but the teaching model makes managers act after the game is over. Can you teach intuition?

AG: Promote a sense of organisational commotion. Recognise people's aptitude to grasp what cannot be spelled out by data. You have to assume the persona making promotions can grasp this too - hard. What about Brand?

CC: Brand is exclusive - can't go down market.

AG: a degree from Harvard whether you learn anything or not the NPV of earnings is higher.

Mod: networked learning is next gen education.

CC: Spate of horrible accounting practices - Principal Agent theory from conferences. The agents (managers) can't be trusted to carry out the wishes fo the Principals who own the stock. Weight compensation to stock options to align incentives. The shenanigans to inflate stock prices have their root in this theory. Their behaviour is more complex. No hint of scandal at Intel

AG: Stock options are means to salve agency problem for top level managers. When people who own 20% of it give themselves 20 million options to get him over his motivational hurdle? Horrendous distortions of motivation of handful of people. It works with a broad distribution of stock to manangement and employees. Stock owners keep it closer to the company. Look at distribution fo stock options between top 5 officers and general staff. Stock options are not guilty- who you give them to is important.

Boards are moving in the right direction, under duress, but they started from being an advisory body to the CEO, selected by the CEO, rubber stamping his actions, like government scientific advisors. The CEO is supposed to be selected by the board - the other way round. Real world and theory are other way round.

Look at percentage where the Chairman and CEO are separate people. 85% it is the same person.

Mod: disruptive tech for governance?

CC: Not seen anything - feel the problem. resource allocation - senior managers only know what layer below divulges - managers have to struggle to get the info. A professional board is even more filtered; only know what they choose to divulge. More outsiders put even more uninformed people.

AG: Could ask for more subjects to be presented - exposure to more individuals. You can do a lot if you speak up. Board participation should be encouraged by chairman. I smell a disruptive technology coming that will make corporate life a nightmare - governance by shareholder propositions. Business-related propositions on the ballot for votes - eg get Intel out of Flash memory business - now board can make it invalid - proposal will eliminate these obstacles. I can see detailed propositions like this happening - governance is based on shareholders as individuals - institutions hold a large proportion and they will put propositions on strategic direction businesses will be run by shareholders.

Mod: Plebiscitary democracy.

Audience:Intel as brand? Ingredient brand - how was it created, and where is it going Intel Inside?

AG: 12 years ago prod mktg director didn't sell processors directly, so had to brand it indirectly. No matter what, there will always be an intel inside - it may mean things in addition to the microprocessor - communication too. He had to insist on keeping money for it, and argue with customers to put it in - diluting their brand. Now taken for granted. Needs refreshing.

Is the science of management getting in the way of the art of leadership?

CC: People reacting to data from bubble rather than intuition on what is right in the future. A lot of bad intuition from the past few years - how do we foster this.

AG: Business strategy has a problem between the science and the intuition. There is more to running a business than strategy The revolutions in QC and manufacturing techniques were all data driven and statistically driven. the economies have benefited incredibly from embracing the science of manufacturing & QC. Figuring out what to do is important, doing it well is equally important.
Denise's version

Clayton Christenson - The Innovators Solution

Clayton Christenson summarizes The Innovators Solution - the non-sequel to The Innovator's Dilemma.

Managers are big users of Theory, but not always consciously. Predicting success for new ventures needs a new theory.
Epistemology now - how theory is built - read Kuhn and others to see how theory is made. Initially observation and description. Second phase is categorization - simplifying by clustering. Then you have a Theory of causation. Use the theory to predict, and feed forward - Popperian.
Observe, then eliminat anomalies. The big challenge is getting the categories right.
IBM used to be a hailed as a success for vertical integration; then when it stumbled the non-integrated companies were hailed - too broad categorizatiion.

A lot of management books are inductive - observe a few cases, state a theory, then look for supporting cases and summarize as a fad. Management reserach is impatient for a one size fits all theory and ignore categorization.

Case study - the big Idea group toy company - hold a big idea hunt in a hired high school in the midwest, and gather any ideas they hear from 30 minute pitch from anyone who comes. If they like the idea by intuition, they'll license it, make a plan and sell it - very successful. A quote from toy CEO 'Toys is a dead category - no new ideas in 15 years'. How can this be? Is the CEO not creative, or does he employ fools? No - it is a process problem. The lack of great ideas is not the constraint.

Ideas bubble up, but get shaped to fit the rules that middle mangers know about - they only want to propose successful ideas - they don't want rejection form senior management - they don't want their judgment questioned.

Sustaining innovations get through, but disruptive ones don't. Pattern recognition is needed for disruptive ideas - you need a theory for recognising this. You need 2 processes - one for sustaining ideas; one for disruptive ones. This way you can be a serial disruptive.

You need to recognise disruptive situations - there is an asymmetry of motivation, which is easier in a new business. Steel example from ID. Minimills started out making bad quality steel, which could only be used for rebar., and the big mills moved up to the more profitable high quality stuff. Minimills had a 20% cost advantage, so they drove the big mills out, then their prices collapsed. This repeated through angle iron, structural steel, and sheet steel. In each case, driving the integrated mills out led to a price collapse - they had to keep moving upmarket to chase the profits, and the big mills moved ahead of them.

When you enter a market, the established competitors are motivated to leave if there is an asymmetry of motivation - if they have a place to move to that is higher margin they will. With a sustaining tech the incumbent will win about 100%. You need to harness the asymmetry.

Current customers are no good for a new opportunity. A type 1 disruption is finding the new, low cost market that the established busines doesn't want. eg personal computer vs minis/mainframe.

Type 2 disruption is compete against non-consumption - find a new plane of competition. Cisco packet switch not good enough from telephony to start with, so market was open.

non consumers are the ideal initial target. Established companies try to improve the disruptive tech to fit their existing markets - vacuum tube manufacturers trying to raise power switching, while Sony found that low power could be used in battery powered radio. A low technical hurdle - it just has to be better than nothing. The existing companies didn't see this happening.

Voice recognition is similar - IBM invested in ViaVoice - someone speaking instead of word processing - target person is someone who already at 80 WPM - needs patience; competing against consumption, and this is a high hurdle.

Simple command-based speech works - phone calls, speech recog for IM chat. Maybe blackberries are next - typing with thumbs is about as good as speech recog. Why did IBM aim at the wrong place? To get funded in IBM they needed big financial projections they needed to justify millions of AAs typing for hours a day to invent a value proposition for the business plan.

Never compete against customers manifest priorities - facilitate them.If it says 'if we can just get the customers to...' that is a red flag.
Digital cameras - people used to order double prints, keep a few 98% of photos only get looked at once -we're not virtuous enough to put them in albums. If you just learnt he etch you can get red-eye out of all those image you look at once.
Sending images over the net is what people want to do - photos to grandma, but quicker.

College textbooks have overshot the market - 100s of millions spent on online augmentation. What are students trying to get done? They're trying to not have to read the book, so making it easier to take shortcuts - cram.com. Summarize the problems with the textbook they know about. Cram later with less effort.

Market segmentation obscures the targets for innovation - segment by goal, not by demographic.

Categorising of capital is wrong - you want impatience for profit but patience for growth in a disruptive business. Not much in venture funds - they like growth. Some in corporations.

Choosing a team - standard way is to use adjectives like visionary etc. Skills are developed by the problems they have previously wrestled with. In a successful business, the problems they have wrestled with aren't the right kind for new growth companies. Look for experiences needed to be successful in a new business. Need to provide these experiences.

Big co's successfully disrupting - Sony did it 12 times up to 1979 with Walkman - haven't done it since - now all innovations are sustaining. When Morita left in 1980, they stopped. He had a policy of not doing market research. In1982 they hired their first MBA, and then never found new markets afterwards.

Johnson & Johnson acquire early stage device companies that enable new facilities.

How do you compensate a disruptive team in a large organisation? Hasn't seen correlation with stock options - offer excitement of building something big and new.

interactive conference?

We've been asked to think of questions and submit them to the presenters. I want to hear what Clayton Christensen thinks about disruptive technology in the music business.

[later] I asked him, and it is not an industry he has analysed. I've emailed him some studies on the market, so maybe in future.

Digital Choice and Freedom

The Digital Choice and Freedom Act looks like a Good Thing, - detailed analysis over at lawmeme . Some of its clauses are a little odd:
It is now necessary to restore the traditional balance between copyright holders and society, as intended by the 105th Congress. Copyright laws in the digital age must prevent and punish digital pirates without treating every consumer as one.

They don't define the term 'digital pirate', though as this is in the rhetorical preamble that is I suppose understandable. I'd be a lot happier if the loaded terms 'pirate' and 'consumer' weren't in this bit. How about 'It is now necessary to restore the traditional balance between copyright holders and society, as intended by the 105th Congress. Copyright laws in the digital age must prevent and punish unfair republication without treating every customer as a thief.

A "digital work" is any literary work (except a computer program), sound recording or musical work, or a dramatic work, motion picture, or other audiovisual work, in whole or in part in a digital or other nonanalog format.

Why does this definition explicitly exclude computer programs from it's ambit, and what is another nonanalog format?

(a) USE OF LAWFULLY OBTAINED DIGITAL WORKS. Notwithstanding the provisions of section 106, it is not an infringement of copyright for a person who lawfully obtains a copy or phonorecord of a digital work, or who lawfully receives a transmission of a digital work, to reproduce, store, adapt, or access the digital work
(1) for archival purposes, if all such archival copies are destroyed or rendered permanently inaccessible in the event that continued possession of the work should cease to be rightful; and
(2) in order to perform or display the work, or an adaptation of the work, on a digital media device, if such performance or display is not public.


This is good, but it is not clear that 'adapting' includes editing or incorporating it in another work. What I'd really like to see is an explicit statement that would allow derivative works that require a full lawfully obtained copy of the original work to be purchased to be distributed. This would legitimise a great deal of creative work already being produced, such as additional commentary tracks for DVDs to 'mash-up' mixes and other kinds of media collage that currently are in a grey area

Conferring today

Today I'm at Halley Suitt's Next Generation Growth conference, which was evidently planned on Boston time, as it starts at 7.30am PDT. There should be a lot of blogging going on, with Dan Gillmor Dave Winer, Denise Howell, RageBoy and Robert Scoble all here.

Quote of the day

It is amazing what you can accomplish if you do not care who gets the credit.

Variously attributed to Indira Gandhi, Ronald Reagan, Harry Truman, Sandra Swinney, Barry Switzer.

I wonder who deserves the credit for it...