As Ryan tweeted, this really is “condensed years of blog posts and project experiences into a 30-minute talk.”
So. Good.
Mr. Ben Thompson at his best. The article is so good. Important piece to my business theory puzzle.
You’ve read that software is eating the world, but this goes deeper.
I suspect that nearly every industry will belatedly discover it has a critical function that can be digitized and commodified, precipitating this shift. The profound changes caused by the Internet are only just beginning; aggregation theory is the means.
Ben Thompson writes about Google and what could eclipse it:
I think Google is quite safe when it comes to search, and that they will be a very profitable company for the foreseeable future. I just suspect we will all think differently about that dominance when it’s a small percentage of total digital advertising, just as we thought differently about IBM’s dominance of mainframes in the age of the PC, or Microsoft’s dominance of PCs in the age of the smartphone.
Great commentary by Ben Thompson on the Apple Watch introduction:
The Apple Watch section began with the iconic “One more thing…” at 55:44,1 and these were the extent of Tim Cook’s words before we got our first glimpse of the Apple Watch:We love to make great products that really enrich people’s lives. We love to integrate hardware, software, and services seamlessly. We love to make technology more personal and allow our users to do things that they could have never imagined. We’ve been working incredibly hard for a long time on an entirely new product. And we believe this product will redefine what people expect from its category. I am so excited and I am so proud to share it with you this morning. It is the next chapter in Apple’s story. And here it is.
Then came the introductory video, and we never got an explanation of why the Apple Watch existed, or what need it is supposed to fill. What is the market? Why does Apple believe it can succeed there? What makes the Apple Watch unique?
For even more Ben’s insight listen to this episode of his podcast.
Ben Thompson says it:
Utimately, though, Samsung’s fundamental problem is that they have no software-based differentiation, which means in the long run all they can do is compete on price. Perhaps they should ask HP or Dell how that goes.In fact, it turns out that smartphones really are just like PCs: it’s the hardware maker with its own operating system that is dominating profits, while everyone else eats themselves alive to the benefit of their software master.
Ben Thompson writing for stratēchery:
Think about commerce in the same time periods and contexts I recounted above: in the time of addresses and telephones, most commerce involved driving to the store. It was a purposeful and burdensome activity, rather like a scheduled phone call. In the era of the web, ecommerce became a word, but it still entailed going to a computer, a journey that seems simple, but in reality is often far removed from the motivation to buy, which may arise from an ad seen on TV, or a dress in a windows, or the recommendation of a friend. With mobile though, and particularly with messaging, the omnipresence of both a communications channel as well as a purchasing channel means the separation between the thought of buying and actually making a purchase is very small indeed.
Marco Arment writing:
They did everything that the press, analysts, and prevailing wisdom at the time were telling them to do. Everyone was pressuring them to be more like Apple, so they tried.The problem isn’t that they botched it (although they did, in some ways). The problem is that Microsoft isn’t Apple, and Microsoft’s customers aren’t Apple’s customers. They tried selling a more Apple-like attitude to their customers, most of whom don’t want and won’t tolerate an Apple-like attitude. That’s why they’re not Apple customers.
Another great one by Mr. Asymco:
My contention is that app time will impact many of these incumbent media and that both the effect and the consequences will be hard to measure in advance or even ex post facto. These new media objects are not measured easily and therefore are flying under the radar of traditional metrics used by the industry. Such absence of reliable measurement is one of the hallmarks of a disruptive shift in industry: You can’t perceive what you can’t measure and you certainly can’t manage it.
In summary I’d say that the C signals the beginning of the “good enough” phase which was also evidenced by the increasing mix of the older models during the last year. Financially it shows up as lower ASP, which, as the graph above implies, I expect to drop to $600 and lower during the next year. Margins may not be affected much as the C is still very highly priced relative to its cost of production.Finally, if the good enough alternative is being “pinned” by Apple as the mid-range it also begs the question of why there isn’t a specific “low end” version. It took six years for Apple to fork the product into two variants. Maybe it will take another year for it to stretch to a third.
Writing on his stratechery blog:
As I wrote last week, strategy is about making choices, and Apple has decided to not even pretend to pursue market share, but instead embrace their up-market status. As long as they retain their app advantage, this will obviously be a profitable choice.More importantly, it’s Apple doubling-down on what they are best at. I have railed against Blackberry and Nokia for trying to compete in areas they weren’t great at (OSs), instead of focusing on their strengths. Apple is doing just the opposite. They are avoiding a market share fight, which is ultimately about price and compromise, and are instead focusing on the experience of using their products and the advantages accrued by being fully integrated from the chipset to iTunes.
Another great post by Ben Thompson over at stratēchery:
Steve Ballmer restructured Microsoft yesterday as a functional organization. The immensity of this change can not be understated, nor can the risks. Ultimately, I believe the reorganization will paralyze the company and hasten its decline.
Read it.
If you are in the business of building anything for users, you must watch this. For those of you who know her “Creating the passionate users” talk, this is an updated version of the theme.
Via @paveldolezal & @davegreiner
Benedict Evans has an interesting view of Google’s strategy:
In other words, Android, like Plus, allows Google to tie searches and advertising to individual people and places. In the long term, the data that Google gets from Android users is probably just as important as Pagerank in understanding intent and relevance in search.Hence, the real structural benefit to Google from Android now comes from the understanding it gives of actual users, and the threat comes from devices that do not provide this data – even if, like the iPhone, they do provide plenty of search traffic.
Via Daring Fireball
John Moran on strategy (P&L is Profit&Loss):
For a coherent strategy to work, then, the organization executing it must be measured as a whole, rather than as parts. In other words, if a company is to have a single strategy, it must be driven by a single P&L.
Via Daring Fireball
Horace Dediu brilliant as usual:
Microsoft’s problem is not that it has difficulty offering an operating system for tablets. The problem is that the economics of both systems and application software on tablets is destructive to its margins.
I was fortunate enough to get to talk at Future of Web Apps + Future of Web Design double conference in Prague. First, I would like to thank to Future Insights (previously Carsonified) and personally to Cat Clark for the trust in me to give me the speakers wild card.
Bellow are my slides and complete text of my 30 minutes speech. I spoke from memory so I have probably digressed on a few places. Also, please, forgive any typos or grammatical errors I’m basically posting my notes and I had no time to do thorough proofreading.
Good write-up of the thinking behind the basics of SaaS pricing models by Ray Grieselhuber.
As a startup, if you want to survive, you have to pick a model. Everybody starts off by thinking they are low on the complexity scale (“our product is simple!”) so they believe self-service is an efficient model for them. But complexity, in this discussion, has nothing to do with simplicity in the user experience (elusive in its own right) but the complexity of your user acquisition and total cost of service.
Via @jasonfried and @newsycombinator
Stefan Klocek writing a good one for the Smashing Magazine:
In this article, we’ll introduce you to a strategy for fixing the broken experience that starts with surface improvements, goes progressively deeper into structural issues and ends with a big organizational shift.
Easy could mean faster. Easier could mean more obvious. Easy could mean a lot of things. But the part of easy I like is when you take an existing problem, study it until it becomes clear, toss out everything that makes it blurry, and carefully polish what’s left over.
I’ve been thinking a lot about this lately because we’re finishing up a brand new product. In some ways it’s entirely new territory for us, but in other ways it’s familiar.
— Jason Fried, Signal vs. Noise
I agree with his point and am looking forward to the new product. I bet I will learn something from 37signals again.
Horace Dediu is killing it again, this time with James Allworth.
Just one of the many thoughts: The cycle of disruption – When product is not good enough (in disruption theory kind of sense) the market tends to be better for integrated player (e.g. Apple). If a product is good enough it tends to favor modularization. Modularization in turn leads to being open for disruption (not just) from your suppliers that integrate in some new way. And we are at the beggining of a new cycle with new integrated player.