Yesterday it was announced that Skype was being bought from eBay and would once more become an independent company. For Skype fans such as myself, this could be good news. Although the desktop client has been improving steadily over the past few years, the business model hasn’t.
Skype has more than 400 million registered users. It has a de-facto monopoly on VOIP. So why aren’t there donzens of desktop and web applications being built on top of the Skype technology? Why hasn’t Skype become a platform?
As a platform, Skype could solidify its hold on the market and it could make more money on SkypeIn, i.e. charging Skype users for calls to landlines. If it’s technically feasible, it seems obvious.
One answer might be that when eBay bought Skype, the underlying technology wasn’t included (which makes you wonder what eBay was smoking when they signed the $4 billion deal). Is that why the desktop client has been moving forward without any sign of development on the underlying technology?
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In a meeting Microsoft held for Wall Street analysts, Steve Ballmer noticed that a lot of them had Apple laptops. “Don’t bother to hide them. I’ve already counted them. And it’s okay—feel free [to use the Macs], so long as you’re running Office.”
Office doesn’t get much attention from commentators but it is one of Microsoft’s most important products. A few weeks ago, Business Week published an interesting article called “Microsoft Defends its Empire” where they discuss this importance and outline some changes that are being made for Office 2010.
The core problem with Office is that it has completely dominated its market for more than 10 years. Back when MS was launching Internet Explorer 7, I was at a conference where the lead developer was speaking. When he was asked where MS had been for the past 5 years the jist of his reply was, “it’s hard to innovate when you have 95% market share”. That’s why Internet Explorer was innovation free until Firefox started round two of the browser wars.
When you dominate:
- It’s hard to justify a big budget
- Innovation slows down because the development team doesn’t have “the fear”
- The innovator’s dilemma means that existing fat-margin markets get all the attention at the expense of emerging technologies
So now, in a classic case of innovator’s dilemma, Google docs might slowly be getting “good enough” to undermine MS’s dominance in the word processor and spreadsheet market.
With each new episode of the browser wars, the blogosphere becomes very excited. And for a good reason: Each iteration means the technology moves forwards.
I’m not sure bloggers will become as excited about innovation in the word processor market, but innovation – and competition – certainly is due.
Here come the barbarians.
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Posted July 17, 2009, under
Design
In episode 60 of Stackoverflow, Jeff and Joel discussed three logo contests they held for various sites they’ve built and when having users vote on a logo works and when not.
This reminded me when Doug Bowman left Google for Twitter and blogged about why:
[Google reduces] each decision to a simple logic problem. Remove all subjectivity and just look at the data. Data in your favor? Ok, launch it. Data shows negative effects? Back to the drawing board.
…
a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see which one performs better. I had a recent debate over whether a border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that.
Honestly, I love Google’s approach. But then, I’m not a designer.
Markus Frind had a similar take on design in a Inc Magazine interview when he talked about aspects of his site that didn’t seem very user friendly:
Fixing the [site's] wonky images, for instance, might actually hurt Plenty of Fish. Right now, users are compelled to click on people’s profiles in order to get to the next screen and view proper headshots. That causes people to view more profiles and allows Frind, who gets paid by the page view, to serve more ads. “The site works,” he says. “Why should I change what works?”
The counter argument of course, was made by Gerald Ford: “If I’d asked my customers what they wanted, they’d have said a faster horse.” If we ask the audience on every design decision made, we might end up with a fairly ugly looking web. Just ask MySpace.
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Peter Day has been spending some time in Iceland and has produced two excellent episodes of his In Business radio show from “the island that went bust” as he puts it. The first episode was Iceland feels the chill and the second one was Iceland: Women.
Strangely, both episodes somehow sound optimistic. There’s light at the end of the tunnel.
In the first episode Halldór Eyjólfsson, former fisherman and CEO of 66 Degrees North, says that his company’s ads, shown above, explain the Icelandic character: “Some people say they are sad, but they’re not sad. They are fighting. They are survivors. They are living on the edge of where it’s feasible to live and they are surviving.” In fact, I know that facial expression very well. It’s how you look when the wind chill is -20° celcius.
The second episode is about the investment fund Auður Capital. It was founded by two female heavy-weights from the Icelandic investment community, Halla Tómasdóttir and Kristín Jónsdóttir, and it has feminine oriented approach to investing. “We’re prepared to use our logical intelligence as well as our emotional intelligence when it comes to investing,” they say. Their main point is that any business that is either too male or female dominated loses out on the benifits of diversity.
The situation may be bleak at the moment, but there is optimism in the entrepreneurial circles. Various Icelandic start-ups are using the sudden availability of a vast talent pool to do some very interesting things. The country will without a doubt rise from the ashes stronger than it was before, with a more diverse source of income than previously when it relied so heavily on one sector, be it aluminum, banking or cod.
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I’ve put together a list of the best “big picture” business books I’ve read in the past years to demonstrate Wajapi tags and to illustrate a nifty feature I call javascript widgets (for more on js widgets, see below).
The Cathedral and the Bazaar by Eric Raymond: The best analysis I’ve read on the impact of open source on business models and software, written by uber geek, open source promoter and gun enthusiast(!) E. Raymond.
The World is Flat by Thomas Friedman or as I call it “globalization happened, get over it”. Another interesting read for those interested in open source and how it affects business.
The Pirate’s Dilemma by Matt Mason: Why are you reading Lawrence Lessig when you could be reading Matt Mason? Mason was a pirate radio and club DJ in London, and later became founding Editor-in-Chief of the magazine RWD. Who cares if he thinks Linux is a corporation? Read this book!
The Black Swan by Nassim Nicholas Taleb – the core message of this book is “shit happens, wear a helmet” and it explains why financial risk models don’t work, why you should go to networking events and how the movie business is similar to the VC industry.
The Innovator’s Dilemma by Clayton M. Christensen: Of all the five books this is the most academic and best researched. Clayton’s insight into disruptive technologies has far reaching implications for any business.
Wajapi tip: Every user’s profile page and every tag on Wajapi has a javascript widget attached to it. The list above is created by pasting the following code into the blog post:
<script src="http://www.wajapi.com/geir/tags/top_business.widget"> </script>
If I go back to Wajapi and update the list, the list on this page changes. Yay.
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We’ve updated Wajapi so that registered users can change the Amazon locale Wajapi uses to search. All Amazon supported locales have been added. These are:
- Amazon.com
- Amazon.co.uk
- Amazon.fr (new)
- Amazon.de (new)
- Amazon.ca (new)
- Amazon.co.jp (new)
We don’t have any users coming in from as far east as Japan yet, but at least now they can! Click on the screenshot above to see search results for “Harry Potter” in Japanese.
To get search results in Japanese, register on the site and pick amazon.co.jp as your “amazon region”.
I’ve also added the German version of Harry’s book 7, Harry Potter und die Heiligtümer des Todes to my own booklist on Wajapi, as you can see on the sidebar to the right.
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Posted February 26, 2009, under
Iceland
I visited friends in Copenhagen the other day and in order to afford a taxi I exchanged my British pounds for some Danish kronas. While waiting in line I noticed that Copenhagen is apparently one of the few places on earth where the exchange rate for the local currency against the Icelandic krona is publicly displayed (click on the image for a larger version). Good old Danes.
Of course, given the financial meltdown, the ISK isn’t good for much these days and on the display, it had actually flatlined.
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Posted February 3, 2009, under
Geek
In the good old days of the credit boom, back in July 2007, Cheltenham & Gloucester offered borrowers a tracker mortgage which would charge borrowers 1.01% less than the Bank of England’s base rate.
The Times Online now reports that on the 5th of February, the base rate might go from its current level of 1.5% to as low as 1%. This means that the tracker mortgage mentioned above would hit rock bottom, or zero percent.
However, Lloyds Banking Group, the owner of C&G say that:
because its computer systems could not cope with zero, it would be temporarily charging 0.001 per cent if base rate is cut to 1per cent.
Computer says no. Beautiful.
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Posted January 27, 2009, under
Geek
On Hacker news, I recently came across this quote from Dennis Chao on the pitfalls of using Doom as a system administration tool:
[One] of the problems of using Doom as a tool for system administration: Certain processes are vital to the computer’s operation and should not be killed. For example, after I took the screenshot of myself being attacked by csh, csh was shot by friendly fire from behind, possibly by tcsh or xv, and my session was abruptly terminated.
Attacked by csh and killed by friendly fire from tcsh? What’s not to like?
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I just came across an excellent post from Joel Spolsky on anecdotes disguised as scientific facts:
Whether it’s Thomas Friedman, who, it seems, cannot go a whole week without inventing a new fruit-based metaphor explaining everything about the entire modern world, all based on some random jibberish he misunderstood from a taxi driver in Kuala Lumpur, or Malcolm Gladwell with his weak theories on tipping points, crazy incorrect theories on first impressions, or utterly lunatic theories on experts, it all becomes insanely popular simply because the stories are fun and interesting and everybody wants to hear a good story. Spare me.
“Fruit-based metaphor.” I like that.
While we’re on the subject of pseudo-science, we might as well cover the “pedagogic graph”. The pedagogic graph is used to illustrate an idea, rather than display any actual data. A great example is the Laffer curve, used to illustrate how lowering taxes actually increases tax revenue. It doesn’t illustrate any empirical evidence of course, it’s just a great curve.
A close relative to the pedagogic, non-empirical graph is the Pointless Diagram. I’ll leave that to the excellent Indexed blog:
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