Tuesday, February 28, 2012

Ghost town

The Wall Street Journal reports that Google+ is essentially dying, with users spending on average three minutes a month there, while they're spending seven hours per month on Facebook. If those numbers are even close to accurate, they're brutal.

The WSJ spins this as Google's failure to differentiate Google+ from Facebook, but it's a mistake to think this is about features. Google+ has failed to date because of network effects. I've signed up for Google+, but I never go there, because no one I know goes there, either. My friends and family are on Facebook, and so that's where I go, too. It's quite simple. If you want to beat Facebook, steal its members. Features are largely irrelevant; what you need is people.

Sooner or later someone will disrupt Facebook -- it's inevitable -- and that company will do it by being cooler than Facebook. The initial community will be high school and college students, who will like it in part because their mothers and grandmothers aren't already there; only later will the numbers grow so great as to attract the less cool elements. It's like real estate: at first the artists move into a neighborhood that no one else likes, and it works for them because it's cheap and filled with other artists. Then the yuppies and the wanna-be's follow the artists into the neighborhood, and the whole thing gets so gentrified that the artists move out and look for the next cool spot.

My guess is that Google made a fundamental mistake when rolling out Google+, in that its initial community (and, by consequence, its initial appeal) was among the tech-savvy crowd. Techies only appear cool to other techies.

Wednesday, February 22, 2012

The enemy of my enemy, take two

This week there's been a back-and-forth over screenshots that may or may not show Microsoft Office running on an iPad. Microsoft has denied it, but in carefully-couched words that to some eyes read more like a non-denial denial.

M.J. Siegler thinks that Microsoft is putting Office on the iPad as the ultimate screw-you to Google: the iPad is already far more popular than any Android tablet out there (even the quasi-Android tablet known as the Kindle Fire), and with Office it would also be far more useful for business users. Android in the tablet space would be left with very few selling points -- and remember, this is a platform that's already struggling to find a strong connection to customers. Android on a smartphone benefits by the sales muscle of carriers and device manufacturers; Android on a tablet has to sell on its own merits, and so far it's mostly failing that test. If Office is exclusive to the iPad (and Win 8 tablets, when they come out) that might just about do it for Android in the tablet market.

FastCompany has a piece on why this move, as satisfying as it might be, would put Microsoft in a very difficult situation. Briefly stated, Microsoft has three primary options, none of which is appealing:

  • They could bring Office to the iPad and price it at competitive levels to comparable apps on the platform. Apple's own productivity suite costs about $10/app, so the Big Three of Office (Word, Excel, and PowerPoint) could logically be priced at a collective $30. This poses a serious problem, though: Microsoft Office for the desktop will run you $149.99 retail (or $123.49 if you buy it through Amazon). 
  • Alternatively, they could protect the price structure of Office in one of two ways: either by offering a full-featured tablet version at $50/app (absurd on its face) or by presenting the tablet version as a stripped-down, "Lite" version of Office optimized for touch input but missing some core features. That, though, causes them problems down the line when Windows 8 comes out on tablets. If the tablet version of Office that comes pre-installed is not a true version of Office, why would you buy that tablet? 
  • The third option is no option at all: argue that Office requires a keyboard and mouse, and limit any tablet app to the sort of "view and annotate" versions we've seen on handheld devices before. This would almost certainly have the effect of convincing more and more consumers that they don't really need Office, as they try out tablet-based Office alternatives and find that they can actually get their work done that way, too.
This is a real problem for the company. Microsoft cannot hope to sit out the tablet revolution and still prosper going forward, but by the same token they can't sharply cut prices on the tablet version of the software with which they've printed money for decades now and hope that customers won't expect price cuts on the desktop side as well. A lower-priced desktop version of Office might sell like hotcakes, but it's very possible that even so Microsoft's bottom line would suffer.

In the end, this dilemma could prove to be Ballmer's true legacy. He's managed the company through a long profitable period, but he also mocked the iPhone and iPad when they came out. Clear vision would have recognized strong competition when he saw it; strong leadership would have had the company already building for new markets, rather than focusing on wringing every last cent out of the markets they already occupied. If Ballmer can find a way out of the mess he's at least partly created, I'll owe him an apology; in the meantime this will be a very interesting drama as it unfolds.

Monday, February 20, 2012

Who is your customer?

Amid reports of Google's latest ethical lapse, I found myself reflecting on an adjacent point: Google would never have thought to engineer ways to bypass users' browser security settings if those users were still their customers.

Way back when, in the days when Google was young, you and I were their customers: we were the people using their cool, new search engine and (I'm sure) they delighted in delighting us with the power of their tools. Subsequently, though, Google stumbled upon the fact that you can make a huge amount of money connecting advertising results with search, and that occasioned a shift of outlook and intent. No longer were Google search users the customers; now they were the product, and advertisers were the new customers.

Any business that wants to be around for a while seeks to delight its customers. But the product? That's just the product, to be packaged and marketed in the most effective manner. Google has had more than its share of ethical stumbles this year, but in the end what some people are angry about is that Google has stopped treating ordinary people like you and me as their customers. That has been the case for years, but it's only now that we're seeing the full implications of that switch.

It's a critical question: who are your customers? I've found that this can vary widely even within an organization. Since I was hired to manage an intranet, I've always taken it for granted that my customers are the company's employees. Five feet away from me, however, sits a woman whose primary client is the company CEO. Next to her sits a woman whose clients are certain divisions within the organization, and beside her sits a woman whose customer is the department head. We have many different customers whose interests do not always perfectly align, and yet this is a fact that we never seem to speak about.

Do you know who your customers are? Do the people you work with know that, too? If not, ask yourself what might happen if they stumble on that information themselves.

Friday, February 17, 2012

Tell me what I think I already know

There's a very useful concept in economics and behavioral research that you're hopefully already aware of: confirmation bias. In a nutshell, confirmation bias is your tendency (and mine, I'm not pointing fingers here) to selectively accept information that confirms opinions that you already hold. Confirmation bias is why global warming seems so obvious to Democrats and so obviously wrong to Republicans. When new evidence comes out confirming global warming trends, those who already accept that global warming is a fact will nod in agreement, while those who think it is a fraud will think that this is just the latest deception. Confirmation bias is one of the primary reasons why we're not as rational and objective as we think we are, because we have a strong tendency only to listen to what we want to hear.

Enter this morning's big story: Google (and others), the WSJ reports, has been using a hack to trick mobile Safari into circumventing the iPhone's default security settings, so that they can track user info in ways that the user has not authorized. When the WSJ contacted Google about this practice, Google abruptly stopped tracking this information, and it's no wonder. What Google was doing was (probably) not illegal, but it was certainly sneaky, underhanded, and borderline unethical.

Except if you're John Battelle, in which case it's all Apple's fault.

The Apple-Google rivalry is one of the most polarizing issues in technology today. Pretty much everyone who's paying attention has already picked a side. In short, this is a situation ripe for confirmation bias, and you couldn't ask for a better example than Battelle's take on the situation. It's all Apple's fault, he says, because the privacy settings on the iPhone are so extreme as to break web standards, it's arrogant of Apple to assume that users want that level of privacy (Battelle even goes to the point of arguing, somehow, that assuming you want your information private is the opposite of privacy), and Google is the victim because it's been forced to trick users into handing over information to which Google -- and others -- should be entitled.

This article, in a nutshell, is why tech journalism is in the toilet today: everyone has picked sides within the world's largest pissing match, and they're all preaching the gospel from their various pulpits. We readers selectively listen by subscribing to certain feeds, and the confirmation bias just gets deeper and deeper, until we arrive at the point of absurdity where someone will argue in a public forum that strict privacy settings are a violation of privacy.

Reporters were never as objective as they claimed to be, but if this is where journalism is headed, we're all screwed.

Monday, February 13, 2012

Meet the strawman

The Globe and Mail has an interview with Roger Martin, a Canadian business professor who is on RIM's board of directors. Martin angrily dismisses criticisms of the company and the way it's been handled, and offers this rebuttal to the idea that RIM should seek to be more like Apple:
“They ask ‘Why can’t you be more like Apple?’ So we should go bankrupt and fire our founders and bring in a moron? That’s what we should do?” Mr. Martin says.
Perhaps from his business school days, Martin appears to be familiar with the strawman argument. This is the style of argument in which you confront your opponents by pretending that they are arguing a ludicrous point, and then debunk it.

In this example, those who point to Apple as a model for RIM are probably suggesting that RIM should have paid more attention to the consumer market, and that they should probably not have released a tablet so unpolished that it lacked a native email client. In the smartphone space, Apple has developed a clear and focused strategy -- develop the best, most user-friendly smartphone in the world -- and pursued it aggressively, while RIM has alternately looked arrogant, complacent, and half-assed. There are Apple characteristics that RIM would do well to emulate.

Martin, however, doesn't respond to that argument. Instead he pretends that critics are arguing the absurd point that RIM should emulate the worst period in Apple history, rather than the best. The fact that Martin offers a strawman argument in a public forum speaks poorly of him; the fact that the Globe and Mail reporter  apparently didn't challenge him on the point speaks poorly of his publication, as well.

Strawman arguments accomplish nothing; they don't move the conversation forward, they don't assert the strength of your position, and only morons would think you can win an argument that way. This is one more example of what happened to RIM: they respond to outside challenges with scorn and contempt, and meanwhile the market passes them by.

Friday, February 10, 2012

Arbeit macht frei

There's a nice post on the 37 Signals blog on the distressing -- and damaging -- perception that you must work punishing hours if you work for a startup. I haven't worked for a startup in several years, but you can't follow tech culture without seeing this ideology on a daily basis.

I've never been a long-hours guy, though I work today in an org where the always-in-the-office people are celebrated and people look at me a little funny when I mention that I usually go home before 5:30. Personally, I've never seen much of a benefit to working impossible hours. In college, when I tried to pull all-nighters, I realized that I was essentially useless after midnight; I was so tired, and my mind became so clumsy and slow, that I would have been better going to bed and hitting the books fresh the next morning. Since then I've never had a job that I couldn't excel in within the confines of 40 hours per week.

Could I have done a little better if I had forgotten about my wife and my life and lived in the office? Maybe I could have found another 10% or so at the bottom of the barrel, but the cost would have been very high, and sooner or later I would have burned out and quit. On the other side of the coin, the people I've known who work evenings and weekends also call in sick a lot more often than I do, they disappear for long lunches, and some of them take cigarette breaks that last for hours. When I'm here, I'm here.

Overtime is overrated. It's too easy to show your commitment by staying late or coming in on Saturdays. You don't need to be talented to work long hours, you just need to be willing. The more significant achievement is to do excellent work during business hours, go home at the end of the day, and come back the next day ready to go.

Thursday, February 9, 2012

Silence is golden

As I type this, the internet is abuzz (well, moderately so) over two announcements that Apple may or may not soon be making: the iPad 3 (a pretty good bet for March) and the long-rumored Apple television (which might never be more than vaporware).

It's often been remarked how Apple's strategy differs from Microsoft's in this area. Microsoft announces technical roadmaps well in advance; their commitment to enterprise IT departments require them (or so they believe) to announce their intentions far enough in advance for IT admins to run security tests and develop their upgrade roadmaps. As a result, Microsoft frequently talks about the features of a product before it is fully developed, and the product that ultimately ships is often missing one or more core features included in the original vision.

Apple, on the other hand, don't say nothin' to nobody. Depending on the source, this has been interpreted as either symptomatic of Steve Jobs' maniacal paranoia and control-freakishness, or as part of a masterful advertising strategy. I fall into the latter camp: here we are weeks in advance of an Apple event that hasn't even been announced yet, and we're already seeing articles every day in the technical press talking about what they might or might not talk about. Apple's ads are masterful, but they receive untold benefit from the advertising that is handed to them by reporters and bloggers who can't help but talk about what might be coming next.

All well and good, but I believe there is more to it than that. Researchers have long known that humans experience gains and loss differently. You will be pleased if I come to your house and give you $10 for no reason, but you will be much more displeased if, instead, I steal $10 from your wallet. Even more, if I give you $10 and then suddenly take $5 back, you may well experience the loss of those $5 more acutely than you experienced the $10 gain. That's why investors hold onto stocks that are in the toilet and why it's so hard to accept that the used car you bought is a lemon: because dumping that stock, or giving up on the car, would require you to accept a loss, and we humans really, really hate to experience a loss.

So with that in mind, consider Microsoft's strategy. They come out in a tech event and announce an amazing new product, with 10 exciting features. One year later the product that ships contains five of those features, and two don't work nearly as well as you hoped. Are you going to be happy about the three good features that you got? Maybe, but not nearly enough to compensate for the seven features that you "lost."

Meanwhile, Apple says nothing until they have a polished product, where all three features work like a dream. There's no loss, because they never promised us anything in the first place; all we experience is gain. If you ever find yourself wondering why Apple products are so well-received by the marketplace, consider human psychology, and how Apple has managed to erase loss from the equation.

Friday, February 3, 2012

If in doubt, start with honesty

One of the biggest stories this week has been the absolute train wreck that ensued when the Komen Foundation announced that it would cease funding of Planned Parenthood, which uses Komen funds to offer breast exams to lower-income women.

This is not a political blog, and I won't weigh in on either side of the abortion debate. Instead we're going to talk about messaging, particularly how Komen could not have made a worse mess of their communications if they tried. Komen is a private foundation, and they can fund whoever they want. But when they draft a new policy with the specific intent of targeting Planned Parenthood, and then go on record saying that they are not bowing to pressure from anti-abortion groups but merely responding to a Congressional investigation ... that was instigated by anti-abortion groups, their cause was lost. When their clumsy, disingenuous explanation of the change resulted in public outcry, Komen crucially had no response.

Communications are different today. Controlling the message involves active engagement across a variety of media from day one, and doing so requires that you have your messaging down, tightly written, and are prepared to respond to skepticism and criticism. Komen did none of these things, but those were secondary mistakes. Their first and fatal mistake was to build the initial message on a lie: that they were not doing what they were quite obviously doing. After that first, transparent falsehood, everything else that came out of their offices was viewed with suspicion -- and rightly so.

If in doubt, start with honesty. Respect your audience well enough to level with them. If Komen had come out and said, "Planned Parenthood is a valued partner, and we respect the work that they do, but unfortunately the time has come when our support of their efforts is costing us too much and distracting us from our other operations," things might have been very different. There still would have been some damage control, but it would have been a lot less than what we've seen develop.

The Komen brand was severely damaged this week, and it all started with the failure to respect the audience.

The last 16%

The official Yammer blog has an interesting post asking "how much adoption is enough" for enterprise social networks. The nifty charts define the last 16% of the workforce as "laggards"/"naysayers" who might never adopt a social network, and so pouring resources into getting them into the network is likely a futile task that drags down the ROI for your strategy as a whole.

The most valuable insight comes about halfway down the page: "Keep focusing on the people who drive value out of the solution and the others will eventually catch on." Indeed, it is crucial to focus on value when trying to convert users. They won't sign up -- and come to habitually use -- something like Yammer because of the features or potential that the tool has. Many of them will sign up if an executive urges them to do so, but they won't become steady users of the service for that reason alone. If they see value in using Yammer -- value that exceeds the potential value of the time spent doing so -- they'll use it. If they don't, they won't.

That being said, be careful not to focus too tightly on one particular form of value. Value varies across users. Innovators find value in the new, latest thing because it's new and cool. Highly social users find value in social media because it allows them to socialize without leaving their desks. Utility-focused users find value in Yammer because it's a quick and effective way of asking questions and getting answers. Others will find value in the ability to keep better informed than they would be otherwise, or tune into certain people and topics (and tune out of others).

Others will see no value at all, and they may be right. Even if they're wrong, it's too much trouble trying to convince them to change their mind. Better to focus on supporting and enhancing the value that regular users do find in the service; their success is ultimately the best argument that you can make.

Thursday, February 2, 2012

Think outside yourself

AAPL Orchard makes the point that "not everyone copies Apple" by highlighting the keywords in two recent statements by the CEO's of Apple and Sony: Tim Cook's statement featured the words "best," "world," "delight," and "proud," while Sony's emphasized "growth," "businesses," "accelerate," and "domains."

In part this is a communications problem: Cook has the advantage of working for a company that -- largely due to the influence of Steve Jobs -- has its messaging down cold. Whatever Apple employees may say internally, when they address the public they know the script: "We're about making the best products in the world and delighting our customers." Kazuo Hirai doesn't have that advantage at Sony.

Partly, though, this is a challenging problem for any business: how to get outside your own head to the extent that you can see beyond your own wants and needs and understand things from the viewpoint of your customers. The need is clear, because your customers don't care what you want. They don't care about what your shareholders require, they don't care about your profit margins, they don't care about your market share, unless that share gets so low that it starts to affect their experience of your product. The businesses that succeed magnificently, the ones that inspire brand loyalty, are the ones that understand what their customers (current and future) want and need, and put those wants and needs at the top of their priority list.

Apple gets it. Sony does not get it, and never has -- a company that puts its customers first would never force as many proprietary, second-rate technologies on those customers as Sony has. Kaz Hirai might prove to be a brilliant CEO, and he's certainly done well with the PlayStation, but it's a troubling sign that one of his very first public statements as CEO was to define what Sony wants and Sony needs, and expect anyone other than the company's most ardent fanboys to care.