Colin's shared items

If you haven't noticed, creating and executing mobile platform plays is really hard. Just ask HP, RIM, Nokia and Microsoft.

Even Google's Android, which made it look easy to grab dominant market share in the smartphone market, is finding it much harder to secure a footprint in the tablet market, where, let's face it, there's iPad ... and iPad.

Enter Amazon, whose forthcoming Kindle Tablet represents the clearest alternative to Apple's iPad.

Securing the design win

I once co-founded a device management platform company in the embedded systems space (Rapid Logic) where we came to define three core precepts for succeeding in a platform-oriented business:

1. Secure the design win.
2. Grow the dollars associated with the runtime (via royalties or new product add-ons).
3. Get the customer to want to embed themselves more deeply.

Flash forward to the present and we see a post-PC device market emerging that has revealed some interesting attributes.

For one, we see how the carrier-dependent mobile phone segment logically bifurcates between the Apple approach (vertical integration) and the Android approach (horizontal, loose coupling).

Why is this so? For the simple reason that for a large portion of the market, carrier "push" via phone pricing — plus a subsidy combined with a retail presence — dictates buying patterns every bit as much as product positioning and differentiation.

Most fundamentally, this is because regardless of whether the end phone is an iPhone or an Android phone, A) the buyer is already a mobile phone subscriber, and B) either phone represents a step up from traditional feature phones.

However, when we move into tablet-style devices, ebook and media device players, where the alternative is non-consumption (i.e., buying no device), it becomes clear that the breadth and depth of ecosystem orchestration that is required goes up materially.

This is why Android has not yet found a foothold in the tablet market (see also: Android's Missing Leg).

Cloud Street meets Main Street

Now, consider Amazon, the ecommerce company that many have officially anointed as this generation's Walmart (see chart below: Walmart, Amazon, Google and Apple head-to-head over the past 10 years).

A comparison of Walmart, Amazon, Google and Apple from October, 2001 to August, 2011. See a larger version and read related analysis.

Amazon, in fact, just experienced its fastest revenue growth quarter in over a decade (up 51% versus the same period in 2010). It is unquestionably on a roll.

To establish the scale and market presence that Amazon has on "Cloud Street" in about one-third of the time it took for Walmart to dominate "Main Street" is nothing short of amazing.

Simply put, it's emblematic of a company whose ability to marry a clear, disciplined strategy with a pragmatic focus on tactical execution knows few bounds.

Kindle as an entry point for a new tablet design

Amazon's Kindle reading device has catapulted the company into a position where it's now selling more digital books than print books, all at a time when the physical bookstore is on its last legs (Borders is gone, Barnes & Noble is for sale).

Now, having proven that it can execute a hardware-software-service play vis-à-vis the Kindle, Amazon is expected to announce its first iPad competitor in a matter of days.

Such a device will build upon several "unfair advantages" that Amazon has established in the marketplace:

• Ecommerce and marketplace logistics.
• Digital media content acquisition, publishing and distribution.
• Cloud computing platform know-how and a nascent ecosystem.

Just as Apple has leveraged its iTunes as the wedge upon which it established a billing relationship with 160 million users, Amazon has built a differentiated position of its own called Amazon Prime.

Amazon's "Prime Directive"

Returning to the start of the article, remember the success mantra that I told you about for my company? You can apply the same logic when looking at how Amazon matches up to Apple.

Apple's initial innovation with iTunes was that it afforded consumers the ability to purchase music à la carte — one single at a time — when up until that point it could only be purchased in record or CD form. Coupled with a $0.99 per song pricing model and the unparalleled convenience of click-buy-play, this was a recipe to change the way that customers bought and experienced music.

Similarly, Amazon's initial innovation with Amazon.com was that it enabled people to discover, purchase and transparently receive a seemingly bottomless wellspring of books, where formerly you pretty much only got what was on the shelves in the bookstore.

Like Apple, Amazon used a disruptive pricing and logistics model to entice customers to change their buying behavior.

That Apple has expanded iTunes into an App Store (and iBooks) and a family of devices bound by a common software platform, and Amazon has expanded its catalog to products and services of all stripes (analog and digital), makes perfect sense in this context.

From the initial "design win" of music buying and book buying, both companies have grown the categories and aggregate dollars of their bases in ways that have made consumers want to be more deeply embedded in their relationships with Apple and Amazon.

The Amazon Prime product has cultivated a base of an estimated five million subscribers (from the company's aggregate base of 120 million customers) that, in exchange for an annual $79 fee, provides expedited shipping on many products.

Why is this a big deal? The friction-free model is enticing some customers to use Amazon for product purchases (e.g., bulk goods, toiletries) that historically have been the parlance of the local Walgreens or Costco.

So, if MG Siegler of TechCrunch is correct in his excellent scoop on Amazon's Kindle Tablet, then Amazon will be bundling Amazon Prime with its forthcoming 7-inch tablet device and pricing the device at a disruptively low price point of $250 — about half the cost of an entry-level iPad.

If you create a superset between Kindle buyers and Prime subscribers, a logical early-adopter user base emerges for Amazon to target for its iPad alternative (in terms of price, footprint and aggregate value proposition).

Plus, from a strategic leverage perspective, it makes total sense. Amazon, after all, is first and foremost a great retailer.

Add on to this value proposition the fact that Amazon has surrounded its Prime offering with an ever-growing free library of bundled video content (i.e., a poor man's Netflix streaming service), and the Kindle Tablet starts to feel like a lifestyle device that can succeed over the long haul.

After all, media is a big differentiator on this type of device. And in terms of sheer economics, there are a lot of people these days for whom a bundled video service with a pay-as-you-go library of premium music, books, video and app offerings feels right at $250.

No less, if we know anything about Amazon, it is that it, like Apple, has the fortitude, focus and sense of purpose to see big ideas through to long-term success.

Amazon, after all, wants to be the only shopping cart you'll ever need, and this becomes another channel back to the consumer.

Plus, from an average revenue per user perspective (ARPU), you can probably subsidize the device a bit more with the Prime subscriber, knowing that Prime customers are already paying $79 a year and are faithful, dedicated, recurrent commerce customers.

Some final thoughts:

Just because Amazon has a logical path to finding a "wedge" in the tablet computing market doesn't mean that it will. There are hard strategic decisions about how to fork Android and how that ties in with Amazon's Appstore strategy, including approaches to competing services (e.g., will Amazon allow Nook or iBooks to be installed?).

Moreover, is Amazon prepared to develop and support a software developer's kit (SDK) and get sucked into a developer tools arms race with Apple?

Similarly, how does Amazon Web Services and Amazon's cloud platform fold into the equation?

Like I said at the start, mobile platforms are really hard to create and execute, but if anyone is in a position to do just that, it's Amazon.

Android Open, being held October 9-11 in San Francisco, is a big-tent meeting ground for app and game developers, carriers, chip manufacturers, content creators, OEMs, researchers, entrepreneurs, VCs, and business leaders.

Save 20% on registration with the code AN11RAD

Related:

• Apple's Segmentation Strategy (and the Folly of Conventional Wisdom)
• Five quickie thoughts on Amazon's tablet computer announcement
• Head-to-Head for Ten Years: Wal-Mart, Amazon, Google and Apple
• Amazon building its own Android App Market?

Corporate Social Media jobs are Surprisingly Frustrating
If you’re a corporate social strategist today, or aspiring to be on in the future, chances are you’ve read our report on the Career Path of the Corporate Social Strategist. While many are infatuated in this seemingly glorified and fun role, outsiders rarely know the internal challenges these Open Leaders struggle with on a daily basis. Recently, I was coaching another hopeful for a corporate social strategist position and gave her some key question that she must answer before she accepts the position.

Candidates Must Interview Their Future Employer –and Set Expectations Both Ways
In fact, having interviewed and interacted with many in the Corporate Social Strategistrole, I see a pattern of internal issues that stump growth, innovation and cause frustration. There’s nothing worse than starting a job, then realizing just months later that you’re frustrated and you have very little bandwidth to fulfill your vision. As a result, I’d like to provide 5 simple questions to ask in your interview of your future employer to gauge if this is a challenge that you’re willing to get into –and if they really know what they are buying by hiring you.

Interview Your Employer In a Savvy and Tactful Way
As a candidate, you should always be interviewing your future employer to ensure that you’ll be successful there –not just try to woo them with your greatness. In fact, a future employer may be impressed with your prowess to ask these mature questions, and that you’ve through through the ramifications of the program. In all cases, approach this with class and tact, and explain by having this sometimes tough conversations up front will help everyone to set expectations and increase chances of success.

I recommend you have this conversation with the hiring manager, and often their boss, as it’s unlikely the recruiter will know, or give you the straight answer as they are often on a closing commission. Timing wise, it’s appropriate to have this conversation mid discussions –not on the first date, but after they’ve gotten a chance to know you, don’t come in blazing with these abrasive conversations on first contact.

1) What level of executive support do we have?
Often, I hear of proposals that are stonewalled as it hits barriers in the C-suite. Ensure you know how far up the chain you’re getting a support, CMO, CEO, COO, and executives in Legal, HR, are key. In our research, we’ve found that most strategists report to Marketing or Corp Comm, it’s key that you have their buyin. If you’re not reporting to Corp Comm, but don’t have their support, there’s a great chance your projects will be squashed. Often, Corp Comm’s that don’t embrace this program, don’t realize the opportunities, and will either try to squash the program or acquire it.

• Score 1 point if the company’s executives are on board
• Score 1 point if the company’s corp comm team is on board

2) Is the company ready to span social beyond one department?
Often companies may be on product launch cycles, and push communications pre-product launch. You need to carefully understand the business model to understand if you’re expected to quickly shuffle together some Facebook sites and Twitter accounts before each launch for pre-buzz-marketing, or this is a mature ‘social business’ programs that spans multiple departments. Remember, like the internet, these are just tools, that should span the entire customer lifecycle beyond point of sale to: implementation, support, loyalty, and advocacy. Probe to find out.

• Score 1 point of the company is ready to take on social beyond one department

3) Is the company ready to engage in negative conversations in public?
This is a critical question to pose, and you must gauge the culture’s willingness to listen, respond, and then finally (most importantly) do something with the feedback that you’ll be receiving from customers. If the culture is not ready, you will quickly find that you’re wanting to make promises to prove the customer experience, but have no backing to actually make the changes –making you look gumpish to the market. Of course, here’s where you will savvilly point out how one of your first tasks is to establish a triage process to manage the ‘good bad and ugly’ with appropriate and clear responses and expectations set up in advance. While your job is ‘risk mitigation’ you need to first check and ensure the company is willing to take a risk.

• Score 1 point of the company is ready to take on negative conversations in public

4) What is your future vision of success look like?
This is a trick question really. The goal is to find out if there is a vision or if they are only playing catchup or are seeking a feather in the cap for ‘technology du jour’. Your goal is to find out what a 3 year vision is, and what expectations are of this program. The best way to phrase this is to ask “In your vision, in three years when we look back, you will say we were successful because we did X”. Can you help me define what X means? You want to listen for answers about how far the program will extend in the company (through how many business units) and if it’s a cultural chance –or just about generating leads (which is fine, but you need to understand expectations). Secondly, you want to carefully listen if the program is successful you may work yourself out of a job. In our research, we found that state of ‘working yourself out a job’ can be a sign of success. If they ask you, you should of course share your vision. I recommend you start with customers, discuss how the relationship with them has changed, and avoid talking about specific technologies.

• Score 1 point of the company has a clear 3 year vision on what success looks like.

5) What resources will I be provided?
This question deliberately follows the fourth question above. After they’ve defined what they see success is, you must conduct an on-the-spot Gap analysis to figure out the orginization is going to put their money where their mouth is. Ask them about headcount: be specific in dedicated resources to dotted line, as well as agency resources. Ask about budget for software, and future agency services. Ask about resources for training, program management, and executive championing. If you haven’t done so already, you must read our report on How to Budget for Social Business where we list out how the top corporations are spending (Altimeter clients can request data cuts for specific verticals or company sizes).

• Score 1 point of the company is promising appropriate headcount
• Score 1 point of the company is promising a dedicated budget for agency, vendors, and software
• Score 1 point of the company is promising internal education resources and change management support

Next: Tally up your responses here ___. There’s a total of 8 possible points.

• 8: What are you waiting for? Get in that desk!
• 6-7: You are well situated for a program of success, and less chance of frustration. Yet be sure to request a promise to get the items that are deficient solved, based on your proposals for action
• 4-5: While you likely have a solid foundations to stand on -expect significant challenges, which is why the organization needs you. Get a promise from executives that your proposals to solve each issue will be taken seriously, and you’ll receive your direct management support to solve them. Also set expectations that you cannot solve all these issues quickly, and without the culture moving forward.
• 2-3: You are setup for a long road of challenges and incredible frustrations. Many of these challenges will take months to quarters to solve, expect an incredible amount of evangelism, only approach if you have nerves of steel, patiences, and have a great way of wooing others in power based on sound business proposals.
• 1: You are set up for potential failure, I’d advise walking away from this opportunity unless you love immense challenges.

To learn most about this role the Corporate Social Strategist, be sure to read the report (also mentioned above) and see this list of these professionals, and read the On The Move of who was hired in this space. Update: I just learned Alan Belniak has previously published a similar post, nicely done.

Today, Jonathan Heiliger, VP of Operations at Facebook, and his team announced the Open Compute Project, releasing their data center hardware stack as open source. This is a revolutionary project, and I believe it's one of the most important in infrastructure history. Let me explain why.

The way we operate systems and datacenters at web scale is fundamentally different than the world most server vendors seem to design their products to run in.

Web-scale systems focus on the entire system as a whole. In our world, individual servers are not special, and treating them as special can be dangerous. We expect servers to fail and we increasingly rely on the software we write to manage those failures. In many cases, the most valuable thing we can do when hardware fails is to simply provision a new one as quickly as possible. That means having enough capacity to do that, a way of programmatically managing the infrastructure, and an easy way to replace the failed components.

The server vendors have been slow to make this transition because they have been focused on individual servers, rather than systems as a whole. What we want to buy is racks of machines, with power and networking preconfigured, which we can wheel in, bolt down, and plug in. For the most part we don't care about logos, faceplates, and paint jobs. We won't use complex integrated proprietary management interfaces, and we haven't cared about video cards in a long time ... although it is still very hard to buy a server without them.

This gap is what led Google to build their own machines optimized for their own applications in their own datacenters. When Google did this, they gained a significant competitive advantage. Nobody else could deploy as much compute power as quickly and efficiently. To complete with Google's developers you also must compete with their operations and data center teams. As Tim O'Reilly said: "Operations is the new secret sauce."

When Jonathan and his team set out to build Facebook's new datacenter in Oregon, they knew they would have to do something similar to achieve the needed efficiency. Jonathan says that the Prineville, Ore. data center uses 38% less energy to do the same work as Facebook's existing facilities, while costing 24% less.

Facebook then took the revolutionary step of releasing the designs for most of the hardware in the datacenter under the Creative Commons license. They released everything from the power supply and battery backup systems to the rack hardware, motherboards, chassis, battery cabinets, and even their electrical and mechanical construction specifications.

This is a gigantic step for open source hardware, for the evolution of the web and cloud computing, and for infrastructure and operations in general. This is the beginning of a shift that began with open source software, from vendors and consumers to a participatory and collaborative model. Jonathan explains:

"The ultimate goal of the Open Compute Project, however, is to spark a collaborative dialogue. We're already talking with our peers about how we can work together on Open Compute Project technology. We want to recruit others to be part of this collaboration — and we invite you to join us in this mission to collectively develop the most efficient computing infrastructure possible."

At the announcement this morning, Graham Weston of Rackspace announced that they would be participating in Open Compute, which is an ideal compliment to the OpenStack cloud computing projects. Representatives from Dell and HP spoke at the announcement and also said that they would participate in this new project. The conversation has already begun.

I’ve been watching the death spiral MySpace is in for a while. Back in December I interviewed CEO Mike Jones onstage at LeWeb. Back then I thought maybe MySpace could pull it out, but since then I’ve learned the MySpace “plane” that’s in a death spiral has increased its velocity — in the wrong direction.

Since talking with Mike in December I’ve been asking people involved what went wrong and two common themes have evolved:

1. Their bet on Microsoft technology doomed them for a variety of reasons.
2. Their bet on Los Angeles accentuated the problems with betting on Microsoft.

Let me explain.

The problem was, as Myspace started losing to Facebook, they knew they needed to make major changes. But they didn’t have the programming talent to really make huge changes and the infrastructure they bet on made it both tougher to change, because it isn’t set up to do the scale of 100 million users it needed to, and tougher to hire really great entrepreneurial programmers who could rebuild the site to do interesting stuff.

Here, let’s go back and watch the video with YFrog’s CEO, Jack Levin. He was one of Google’s first infrastructure employees. Now, consider that Silicon Valley has lots of talent like him. Think about the technology he knows. Hint, it isn’t Microsoft. Microsoft’s technology just isn’t used by many serious web companies that I know. Stack Exchange and PlentyOfFish are two notable exceptions and neither is located in Silicon Valley and they hardly are companies with the scale of MySpace used to have (more than 50 million users).

Workers inside MySpace tell me that this infrastructure, which they say has “hundreds of hacks to make it scale that no one wants to touch” is hamstringing their ability to really compete.

For instance, I asked why MySpace didn’t really do anything great with all the Facebook likes I’ve put into that system (that’s a new feature MySpace added late last year, but it doesn’t seem to work very well). Or, when I asked Mike about how he was going to do something like Aweditorium did, he didn’t have a good answer. They answered with the cameras off: they can’t change their technology to really make new features work or make dramatically new experiences like the one that Aweditorium brought to the iPad. And now that they have laid off a lot of people morale is down and hiring is very tough for them, they tell me.

Which gets me to the Los Angeles issue. There just aren’t “web scale” companies down in Los Angeles, and because Los Angeles is such a large place — it can take hours to drive across the city — there isn’t a single neighborhood that has built up a good talent base, the way Palo Alto or South of Market in San Francisco has.

This bet on Los Angeles doomed MySpace when Facebook came along. Facebook has hired tons of talent from Google and other companies. This expertise helped Facebook not only keep up with scale, but add new features. Just today the QA team at Facebook shipped a cool new feature.

In Silicon Valley company managers, investors, and others have noticed these two things and are actively betting against both. This will make it tough for Microsoft to get its cloud computing strategy to work and will be tough for tech companies (and money) to locate in Los Angeles. It wasn’t lost on me that yesterday when I was at Y Combinator several of the folks involved there bragged that Ashton Kutcher visited the headquarters a few weeks ago.

I remember back when I worked at Microsoft that folks in the evangelism department bragged that they got MySpace to switch to Microsoft technologies like ASP.NET (MySpace used to be on ColdFusion which was an even worse technology bet and was creaking all over the place). Facebook, meanwhile, had made bets on LAMP (Linux, Apache, MySQL, PHP) and that let them hire quicker and find people who knew how to scale that stuff up big time.

Interesting lessons to watch. What decisions has your company made to accelerate innovation or doom it?

I must apologize to Dave Winer. He warned me about supporting services that aren’t the open web and I wasn’t willing to listen to him a month ago, because I was infatuated with a cool new service that lots of insiders were supporting.

I’ve seen a LOT of discussion about Quora in the past few weeks since I wrote it could be the biggest blogging innovation in the past decade. GigaOm even wrote a post asking whether it was worth the more than $80 million the investors are hoping it’s worth.

Turns out I was totally wrong. It’s a horrid service for blogging, where you want to put some personality into answers. It’s just fine for a QA site, but we already have lots of those and, in fact, the competitors in this space are starting to react. Mahalo just released a new version that has been getting lots of praise and at DLD I met the CEO of Answers.com and he said to expect a major update from his service (which has 1000x more users). Stack Exchange is growing faster than Quora and has many many times more questions and answers, plus I’ve found the answers are broader in reach, and deeper in quality (especially for programmers).

Even worse, I’m getting dozens of emails from people pissed that their questions have been changed, their answers marked “not helpful,” or that they got kicked off the service altogether. Admittedly one of the things I really love about the service is there is very little, if any, spam and everyone is forced to use their real name, but lots of people want to talk about their business or not use their real names. Mashable, for instance, has the most followers on the service but they’ve been banned because brands aren’t allowed on Quora. Funny that some people with obviously fake names haven’t been deleted yet, though.

These are all things that are allowed on blogs, even welcomed, and no one can downvote my blogs here.

Why?

Because if you gather a group that doesn’t like you, or your writings, for some reason, you can get voted down, which effectively makes your answer disappear. See this post, for instance. As of right now my answer is voted down, even though it got 33 upvotes and lots of “great post” comments on Twitter and under the post itself. In fact, no one explained why the post got downvoted in the comments — which means that people who leave answers are left scratching their heads wondering “what did I do wrong?” Most just leave the system, not to return.

So, does this matter to the long term relevance of the system? Yes.

I’m watching hundreds of topics and not seeing the influx of new users and new questions that this service needs to become worth $100 million so that investors will make out.

It is a fun place to see answers by Steve Case and other technology insiders, but it just isn’t an interesting place to participate and until Quora fixes this moderation problem, and puts very clear answers onto why something was downvoted, it just isn’t the kind of place that I can recommend supporting.

Sorry, Dave, you were right and I was wrong.

UPDATE: How would I fix this? Turns out the question could have been collapsed by a reviewer (who isn’t paid by Quora, but given “special powers”). To fix this problem the reviewer’s name should be included on the collapsed answer, along with the reason why it was collapsed. There also should be a way to contest/appeal the downvote. Either way, whenever a question gets collapsed it should be very clear why, who did it, and what process the answerer can go through to change the answer to respond to the criticism, and get it upvoted again.

In 2000, the Privacy Commissioner in Canada passed the Personal Information Protection & Electronic Documents Act (PIPEDA). It sets out the legal rules for collecting and storing (read: protecting) personal information on Canadians.

Separately, in its Department of Homeland Security response to the terrorist attacks of 9/11, the US government expanded its power to subpoena data with the “Patriot Act”. The US government can subpoena data from companies and gag them from even notifying account holders. The public doesn’t know how often this happens, but we do have a high profile example in the news right now: Twitter Shines a Spotlight on Secret F.B.I. Subpoenas.

Since these two legal frameworks were established, cloud computing has became broadly accepted, thanks in part to excellent platforms like Amazon Web Services. None of the major cloud platforms have data centers in Canada, which means there is a potential collision between PIPEDA and US law that would complicate cloud usage for services that collect and store Canadian consumer data.

Should Canadian companies be nervous about storing data in cloud providers in the US? I turned up no definitive answer, but here’s some interesting tidbits from the Canadian government.

• “PIPEDA does not prohibit organizations in Canada from transferring personal information to an organization in another jurisdiction for processing.”
  “In an investigation into a complaint involving outsourcing to a U.S. firm by CIBC Visa, the OPC found CIBC to be in compliance with PIPEDA.”–Guidelines for Processing Personal Data Across Borders
• “PIPEDA does not hinder our global economy. In fact, the legislation itself states that it is intended to support and promote electronic commerce by protecting personal information.”
  “The organization needs to use contractual or other means to provide a level of protection comparable to PIPEDA while the information is being processed by a third party.”–Canadian Federal Privacy Legislation: The First Ten Years (Sept 2010)

Sounds like some wiggle room to me. Executives need to weigh the risk of being sued in Canada (as CIBC Visa was sued in 2004) against the significant reward of moving their systems into the cloud.

CentriLogic, a cloud/hosting company, is trying to capitalize on the situation. Their marketing pitch, writ large in all-caps on their homepage: Do you know where your cloud servers are?

Unfortunately, the CentriLogic platform is nowhere near competitive with Amazon’s, which continues to impress me with frequent and significant upgrades. (AWS is this CTO’s dream come true!)

How can Canada-focused companies deliver consumer products and services on a par with their US counterparts if they can’t leverage modern cloud platforms?