Archive for April, 2008
Apr 28, 2008, post by Randall
In saying:
“believe me, you have to get up early if you want to get out of bed”
it’s not entirely clear that Groucho Marx was referring the much-vaunted early adopter of a previous post. Therein, I illuminated how important early adopters are and the hazards of miscuing when serving them in newly minted markets. Because of this, I thought I’d share a few personal experiences of what motivates me to adopt early. Of course, I’m a technophile, yet I’m hardly indiscriminate in my acquisition of new technologies.
How do I decide where to focus my energies? Let’s start by looking at a few of the new technologies I didn’t adopt and why not, and discern some lessons from that.
As an audiophile in the 1970’s, I spent lots of time researching and purchasing hi-fi audio systems with a primarily primarily British lineage, including: high end turntable (Linn Sondek or Rega), cartridge (Supex), pre-pre-amp, pre-amp (Meridian, Naim or Tangent), amplifier, speakers (Harbeth), etc. I read the quirky “Hi Fi Answers”, patronized audiophile shrines like Ring Audio and CC Audio and even had equipment (from Tangent) for which total production volume was about 100.
The 1982 introduction of the Compact Disc (CD) was a major market disruption. Unfortunately, although the CD overcame the clicks and pops inherent in the analogue vinyl LP , the format had a disappointingly low sample rate limited by the state of technology at the time. As a good friend and audiophile engineer, who worked on the Synclavier synthesizer, said: “you can’t simulate a sine wave with a square wave”. Well, doubly so at too low a sample rate. Forced to create a standard that was at best a compromise, high end audio has suffered ever since. And, we won’t even mention that audiophile travesty known as MP3’s.
I can remember being at the Spring CES in 1984 and hearing a CD demoed against a Linn Sondekand Meridian bi-amped system. After the blindfolds were removed, it was clear that i had been the LP which produced bright and vibrant sounds, while the CD sounded comparatively lifeless. As a result, I probably delayed my conversion from LPs to CDs for about 5 years, if only because the CD was good enough for the average audio listener. It’s interesting that the lowly vinyl LP continues in the turntable art and mashup set today, while I continue to remain unexcited by the sound quality of the CD, a standard launched more than 26 years ago. Of course, 99% of the market, apart from the long tail like me, think the CD was a vast improvement over the compact cassette and a low end turntable.
Way back in 1996 when some of my early adopter buddies hoisted their trendy stylus to enter text in a new language called Graffiti, the Palm Pilot was all the rage. Nonetheless I stuck stubbornly to my paper and leather Economist personal diary. My paper-based calendar and address book was simply good enough for me on a pragmatic level and it was also portable, fitting nicely into my jacket pocket.
What I seemed to know intuitively, way back then, was that the technology disuprtion that would change my thinking was the addition of the (mobile) internet connectivity into the mix. So, for me, the late 1999 birth of the original Blackberry 950 was a quite different story than the first PDAs. Essentially a two-way pager, which primitively fused email connectivity with the calendar and address book of the PDA, the early Blackberry was much less sleek than the device I now carry (pictured on the right).
By solving a new problem, doing email and keeping almost all my information at my fingertips, it became an indispensable arrow in the quiver of a nascent mobile nomad.
The Next Wave
Building on the lessons of the Blackberry, for me, the next wave of applications will clearly be in the web-enabled, mobile applications category. As an inadvertent mobile nomad, the value in being an early adopter may well be more apparent to me, and allow me to put up with more glitches than the next person. Of course, at least in North America, the entire mobile data infrastructure is still one big “beta test” when scrutinized for coverage, reliability and cost factors.
The big gap I see for the coming few years will be to both transition existing applications off my desktop and/or notebook computer and also to build new applications that benefit from the fusion of internet and mobile standars with things like GPS, Bluetooth, camera, secure payments, etc. Ironically, as we see convergence of more and more features in a single mobile device, we will also witness a new specialization as well. For example, a high-end GPS navigation device or a Mobile Internet Device (MID) may well have roles that the basic smartphone will never fulfill.
Recently, I’ve been testing a very simple MID computer called the Asus EeePC. With 7″ screen, full (but small keyboard), 8 GB solid state flash disc, 2 GB RAM and the ability to add 32GB of SDHC or USB disc, and running Ubuntu it does almost everything a legacy Windows notebook does. However, this is small, light, solid state so it can be used in more places and more flexibly. Not without some rough edges, the device shows promise and at least will help me evaluate a more mobile web-enabled application set of the future.
Lessons
Here are some lessons I’ve learned that have applicability both to those who like to live on the “bleeding edge” and to companies trying to serve the early adopter market:
- most early adopters are quite selective in the technologies they will invest time in as pioneering users. Most either explicitly or intuitively identify gaps in their personal or business application environment.
- in fact, perhaps each adapts a particular form of the “Ten X Rule” - ie. a new technology has to be at least 10 times better than what exists in the marketplace, simply to justify the switching costs. Some people may remember the Digital Audio Tape which, among other failings, didn’t need the 10X Rule compared to existing technologies.
- early adopters in one product category may well be early majority or mainstream users of other technologies.
- Next generation products, while better in many aspects, may well be a step backward in other ways.
Being a technology pioneer is both fun and time confusing. With appropriate focus, it does have its rewards. Please feel free to share your early adopter war stories and, to comment on the trends identified here.
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Apr 19, 2008, post by Randall
The Office Goes Home
Over a short span of years, I’ve witnessed work migrate from a highly structured office setting, to home offices via telecommuting and now into the “Third Place”, a term coined by Ray Oldenberg in his 1989 book The Great Good Place.
Back in the early 1980’s, I was a pioneer of telecommuting, between Waterloo and Chicago via a state of the art 1200 baud modem, pictured above, no less. There was intense interest in this at the time, because as an extremely early adopter (too early some might say) of the telecommuting paradigm, I felt a bit like a guinea pig. In retrospect this workstyle enabled extreme concentration and productivity. At the same time, the primitiveness of the communications technologies, from network speed to the software then available, necessitated a lot of travel for in-person meetings. And, tellingly, the home office can ultimately be a lonely workplace, leading to a decrease in social interaction and overall motivation.
In that early revolution over the last 25 years, telecommuting saw work slowly migrate, or more typically intermingle, between the second place (the office) and the first place (your home). Telecommuting has changed traffic patterns, social life and, on the whole, provided an improved work experience by increasing knowledge worker flexibility.
Enter the “Third Place”
As an early adopter, not to mention beta tester, of many cutting edge mobile technologies and as a long time road warrior working on a number of geographically dispersed projects, I’ve often explored a work style that the Economist has labelled “mobile nomadism”, in their richly insightful 12 April 2008 special section on “The New Nomadism”. Always a great read, the particular Economist feature stands out, especially for those interested in mobility for social, technological, political, artistic or economics reasons. Last week, Alec Saunders ran a great SquawkBox conference call on iotum, with the podcast available on his blog here.
In The Great Good Place, Ray Oldenburg characterizes the Third Place as:
“the place which is neither home nor work, where you spend comfortable time in easy association with friends and a few strangers.”
He celebrates the magic of the English Coffeehouse tradition and the seductive and widespread Viennese Cafe Culture as social gathering places that have often been scenes of political intrigue and even major business enterprise. Likely few are aware that in 1698, Jonathan’s Coffee-house in London started trading stocks and commodities, and eventually evolved into today’s London Stock Exchange. Ironically, Oldenburg was lamenting the decline of such third places.
Today’s revolution of being always connected, spawned by wiresless technologies, has dramatically reversed that decline. Version one of “on-demand” spaces is, of course, the humble WiFi enabled cafe. Locally in the Waterloo area, many establishments, beyond the ubiquitous Starbucks, have innovated in this genre, including:
- A Matter of Taste which is an amazing fusion of art, coffee and WiFi hotspot,
- Exhibit Cafe another melange of art and local, organic food right in the Children’s Museum,
- Williams Coffee Pubs, a local chain with food and long hours, popular with students doing late night assignments, hackers and even those working on offering memoranda, and
- C’est Bon Cafe, with its international flair and sinfully good Chocolate Fiesta Fire, and Refuge for village cocooning are great examples in bucolic Elora.
Initially, these cafes served as venues for meetings that were more informal, more conducive to creativity, and powered by wonderful Latte macchiato creations (pictured above). Eventually, I started to do small amounts of work there to increase productivity in the dead time between offsite meetings, including planning and brainstorming, reading briefing documents and eventually emails and, truth be told, writing this blog post. The environment is pleasant, a vibrant mix of people from a wide array of social backgrounds. It is worth noting that I always have the choice how much I wish to tune in or tune out those around me, just as I choose to go there to relax, work or both.
All new technology breakthroughs require adjustment. In this case, the major downside of nomadism is that the mix of real and virtual channels can lead to socially awkward situations. One is the issue of alienation, where people are more attuned to those they are in their virtual universe than those in the real world around them. While I may return to this topic at a later time, I would expect that society will eventually evolve a hybrid, multi-tasking communications style, learning to strike a reasonable balance between isolation and the global reach afforded by such virtual, always-on communications.
Instead I will focus on the opportunities. Beyond the obvious environmental benefits of reduced commuting, I strongly believe that the next generation of third places could serve to enrich our life as we build communities of the future. In Waterloo Region, there are signs that many are thinking about this challenge and building better third places that encompass peoples’ needs from business to the arts to entertainment and fun. In short, the building of vibrant, social spaces will create healthy cities of the future.
One aspect that is immediately apparent in the best of these first generation, third places listed above is the role of the arts in their mix. The simple coffee house is just the beginning. The impact of the arts is much more than art on the walls — it is a certain style and ambience you feel when you enter. Arts is an enormously creative endeavour, and I firmly believe, has a great affinity for the natural creativity inherent in the most innovative, knowledge-based companies of the 21st century. People like Alf Bogusky, Director General of KW Art Gallery have been developing a vision to reshape our urban spaces on a collaborative model based around the notion of third place. Historically, the arts institutions like art galleries, public libraries, theatres and concerts halls have been enclaves, walled off from the rest of the city. Alf and a group of leading thinkers have been mapping out a very different future, which exploits the natural synergies between all these stakeholders. Stay tuned …
In summary, we’ve witnessed a huge transaction through several generations of societal change from fixed offices to telecommuting and now rampant nomadism which is creating new spaces called the third place. I challenge all those who are beta testing the new mobile nomadism and who interact in these new third places, to please comment and share your experiences - we truly are building the city of the future in the context of the global village.
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Apr 12, 2008, post by Randall
In an attempt to de-mystify seeming abstract business theory, from time to time, we will discuss “real world” examples of business models in action.
Both theory and practice underscore the importance of keeping early adopters engaged with a new product or service, a key enabler for creating a hit in the mainstream market. Of course, such trend setters love to play and revel in all things new. More importantly, they are also disproportionately connectors and influence makers, who can make or break eventual success in any marketplace. The new science of social networks merely provides proof of our intuitive sense that these people are the number one key to success in new markets.
To provide some historical context, a lack of serious engagement with application developers (a very specialized form of early adopter), penalized early Apple Macintosh market share, a failing which took nearly 20 years to put right! Thus, do people running both startups and major corporations, having learned this lesson, live and breathe attention to early adopter crowd?
Hardly. Below are two glaring examples, sadly (or perhaps tellingly), both involve the same major Canadian wireless carrier. Both involve a very simple lapse in appreciating of long term impact of short term decisions. Can you provide additional examples?
Electronic Bill Presentment and Payment:
In the late 1990’s, Electronic Bill Presentment and Payment (EBPP), in which consumer bills that had been printed and mailed via the postal service, are instead processed automatically as a web service, was an exciting emerging market. I can remember the palpable frustration of Ray Simonson when I told him of my early adopter experiences EBPP. Ray, currently CEO of Software Innovation (Coreworx) and my partner at Verdexus , was co-founder and CEO of Bluegill Technologies (now Checkfree Software), which was the run away success and market leader in EBPP.
What was my involvement in this? Around 1998, I jumped at the option of “on-line” billing for my Rogers Wireless service (using a different platform than Bluegill by the way). As a committed early adopter, of course I signed up. Imagine my dismay when, at tax time, I found that the system had stored only the previous 6 months of bills! Because I no longer received paper bills in the mail, and this being early April, I had to scramble to find 9 of the preceding 12 months of billings to complete my return. And, this one year requirement doesn’t even take into account the tax authority’s rule of 7 years of record retention.
Did this early service meet my basic needs? No, it fell short, and spectacularly so. But, even worse, until very recently that negative early experience put a “chill” on my migration away from any form of paper bills, although I did pay online through my bank. Once burned, twice shy.
Wireless Data Pricing: Many people have commented on the issue of high data rates, and even higher charges for data roaming on wireless networks. The problem is endemic in the US and even more spectacularly in Canada, and is arguably a product of a flawed regulatory framework and inadequate competition.
The roots of this problem have been discussed many times, including in this blog and by Alec Saunders. For example, Toronto entrepreneur and futurist, Thomas Purves, in his analytical (if not constructively inflammatory) posting “Canada Worse than 3rd World Countries When it Comes to Mobile Data Access” shows just how egregious data rates really are(see graph). My personal initiation into this problem occurred in 2006 when my normally $300/month Rogers bill came in about $1000 higher than I expected! The cause - the overage was split pretty equally between going over the meagre 25 MB of data (for which I already pay $60/month) and data roaming outside Canada. At the time, both were billed at a charge rate of $0.05/K or an unbelievable $50/MB! And, at least on my Blackberry or Nokia N80 there is absolutely no mechanism to monitor or meter consumption. Therefore, unlike voice with its call timers, there is no effective way to predict and high charges simply show up as unwelcome surprises on the next monthly bill.
Of course, who is going to argue with a company (again Rogers Wireless) exploiting its natural monopoly profits? This problem is more than my personal griping, or that of any individual business. The strategic significance is that if Canada (and to a less extent the US) continues to keep these barriers to adoption of wireless data applications, the innovation and economic benefits will migrate elsewhere. It’s very hard for Canadian mobile startups to compete globally with such a flawed home market. And, for Rogers, my strong belief is that any short term gain will be far outweighed by the loss of signficant data revenues as they become the driver of future wireless business models.
Two very sad stories indeed. I’d love to hear your take on this early adopter issue. Do you have stories of your own? Do you have a different take? Feel free to comment.
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Apr 09, 2008, post by Randall
Last week, my son Devin Howard (a Grade 12 student, pictured above) won a Gold Medal at Waterloo-Wellington Science and Engineering Fair, enabling him to go on to the Canada-Wide Science Fair, run by Youth Science Foundation, in May at the University of Ottawa.
His topic, for which he developed a computer model written in multi-agent, graphical modelling and simulation language called NetLogo, was to study the propagation of ideas such as fads or partisan political persuasion using some of the latest social graph theories. Last summer, at the acclaimed Shad Valley program at University of Calgary, he became interested in the topic of emergence. For those who are not familiar with this fascinating field, emergence can be defined as as “… the way complex systems and patterns arise out of a multiplicity of relatively simple interactions.”
From that springboard, he became interested in the way fads and other changes propagate through society, especially illustrated by recent books like Malcolm Gladwell’s The Tipping Point. (An interesting footnote is that Gladwell, now based in New York City, grew up right around the corner in the small community of Elmira). Gladwell, a journalist by trade with a similar modus operandi to Don Tapscott, has done much to popularize a whole new area of science.
Devin’s project aimed to show how fads, political influence, religions and even diseases spread through society. Au courant terms such as tipping, connectors and mavens all arise from this new science which shows how a few key people can take a simple, and seemingly inconsequential idea or trend and turn it into a mass movement. As story-telling narrative it’s intoxicating, as a science it may well be one of the most exciting subject areas of this new century. And, beyond being a very proud father, I was struck by how much the area Devin chose to study sits right in the epicentre of our investment thesis at Verdexus.
Now, let’s drill a bit deeper to understand why this is so important. Malcolm Gladwell is a (very persuasive) popularizer of complicated and transformational ideas. By contrast, Duncan Watts, associate professor of Sociology at Columbia University and author of the 2003 book Six Degrees, is one of the academic pioneers who managed to fuse existing work in graph theory, psychology, sociology and physics into a new science of connectedness.
This new Science of Networks (covering social, biological and technological networks) is truly a post-millennial creation. In an age when we’ve moved beyond mere specialization, whole new research disciplines are synthesized from a set of discrete subject areas. Such fusion of formerly disparate knowlecdge areas is a key example of the Knowledge Integration referred to in Thomas Friedman’s The World is Flat.
I can’t do justice to this field here, but to give a flavour, some key recent breakthroughs are:
- Duncan Watts shows that the connectedness of most social networks isn’t a Nomal Distribution as might be intuitively supposed, but instead is a Scale-Free Network exhibiting a Power-Law Distribution. The significance of this is that a few key Connectors can make (or break) the ability of the network to take over. Watts points to the Matthew Effect in which “well-connected nodes are more likely to attract new links, while poorly connected nodes are disproportionately likely to remain poor.”
- Furthermore, Watts describes Affiliation Networks, or “networks of overlapping cliques”. They are the new social networking version of clubs, but in scientific terms are Bipartite Networks, which are really fused version of networks of Actors and Groups.
- lastly, the concept of Social Currency has really re-defined the notion of brand in this new science.
As I mentioned, I’m just skimming the surface, but the net takeaway that really excites me, is how new some of this fundamental science is. Although the origins of the field may go back 50 or 100 years, many key findings are still a mere 6 or 8 years old. Furthermore, my sense is that this field is just beginning.
To put this into context, I started working with one of the first peer-to-peer, social networked contact systems with Ottawa-based GoodContacts (now acquired by Reunion) back in 2001 and a full 18 months before Plaxo was launched. When later social networks like LinkedIn came along, I remember asking why we hadn’t taken that approach. But, the truth was, that much of the enabling science hadn’t yet been formalized.
With that in mind, in this day of Facebook, Social Branding, Twitter, and the new social conferencing from iotum, I suspect that we are just in an early generation (Beta test?) of the Social Networking Revolution. Therefore, for human interactions with friends, sales, politics, and entertainment, stay tuned for Social 2.0 and beyond. Remember, social networking is not just a fad of college students and teenagers, but a fundamentally different way to optimizing human and social interactions.
Compact Disc 
