I saw this article in the WSJ, talking about HP‘s bet on touchscreen technology to review PC sales. They are apparently getting these things solds in to things like airports and luxury boxes, etc., and that’s great. We will need this technology to be mainstream and everywhere, so I’m thrilled that HP’s doing this work. We will all want this stuff someday– I want my bathroom mirror or my desk surface to someday be a touchscreen PC that can let me scroll through email, tracking key news or whatever. Seems a reasonable and easy thing to foresee.
The thing that this article didn’t have and what I think is limiting this technology today is this: a scenario that a user would care about. This was a miss in the article, from a PR point, or whatever, it’s notable that there’s not a single mention of what a customer might actually care about using the technology for. Lesson for any marketer here–make sure taht you are pitching very hard this statement whenever you’re gettin gan article written: “here’s why a customer will care…”
It’s an interesting contrast to look at the side project that TechCrunch has been putting together on their little touchscreen web appliance thingy. They ooze passion about the user scenario they care about–I’m sitting on a sofa and I want to surf the web with a screen. Easy to grok, clear why customers would want it. I’d argue strongly that this is a more approporiate use of the opportunity for press than the HP WSJ article.
TechCrunch and Lightspeed Venture Partners this week worked on estimating Apple’s revenue gained from the iPhone App Store.
The discussion struck an odd note with me for several reasons. A far more useful analysis would be what percent of mobile (and other) application developers are building for Iphones, to the exclusion of others. Understanding this will say a lot about APple’s continuing momentum in this space. I am willing to bet that Apple likely has a huge number of mobile developers building for the Iphone, and where they need to make a choice, I expect they’ll likely fall in with Apple. This is a way more important discussion than Apples’s revenue of the App Store for a few key reasons.
First off, I’d view the strategic importance of the iPhone App platform as far higher priority to Apple than the revenue. Don’t get me wrong, the revenue is great, but its way way way more important that Apple gets the share of the smart phone market (or whatever we’re calling it these days). Having app developers building for your platform, because (1) lots of users use your device and (2) the developers themselves can make money will help ensure the Iphone stays competitive. So far, Apple is basically crushing this, leaving all other mobile “app stores” in the dust.
Second, the Lightspeed Venture post and TC’s reporting on it took an admittedly shallow view of revenue. Lookingat pay versus free apps only on the Iphone App Store is a good proxy for now of where revenue is. I expect it misses however the virtual currency buys that are able to be sold downstream (e.g., Zynga NLHE). Point here is that the revenue and profit pool in the ecosystem as a whole is likely quite a bit higher than jsut the free/paid app numbers that Liew estimates.
Third, if you buy into the first two arguments I’m making, then I think the interesting discussion here is how many developers are targeting Iphones versus other platforms? My suspicion is that as the Iphone apps are presenting a clear route to revenue and profits for small teams of great developers, that this is ramping up quickly. If this fact brought *zero* revenue through an app store to Apple, it would be worth it to Apple—to quote SteveB “developers, developers, developers.” That Apple is making high margin revenue off of these Apps is of course awesome for Apple, kudos too them.
The iPhone App numbers whatever they are, are awesome. I’m hopeful though that we’ll soon receive good data indicating the mindshare and actions that great developers are taking in terms of which device/platforms they’re spending time writing for, as that’s the discussion that to me is most interesing
Yesterday saw Microsoft making a historic first time bond offering. While a first for the company, the $3.75B issue is relatively small. Indeed, it’s not like they’ll buy Yahoo or SAP with that money.
My own take is that there’s not much to see here—rational, low-risk, imminently sensible. (Which no matter what else anyone might say about Microsoft, it has *always* managed its finances extremely well.) From Microsoft’s point of view, it’s cheap money, about as cheap as they can get (aside of course from continuing to pull in free cashflow at $1B/month). With the equity markets still poor, MSFT is under $20 currently, its blue chip stock doesn’t have the same power it did. Might as well take their long-term debt: equity ratio to roughly 0.1, roughly a quarter of ORCLs.
I’d not be at all surprised to see MSFT announce a non-trivial buyback of stock, particularly post Office 2010 beta, and as W7 launch nears. The message will likely be to the market and to enterprise customers that a new wave of the desktop / netbook is upon us with high quality, on time releases from Microsoft.
I’m going to try something new this Friday–a mini-blog post where I time bound to 15 minutes observations, etc. on the week in tech. Feedback welcome on whether useful.
What a week, just to cover a few of the high points that I thought were interesting in 15 minutes:
- Amazon launched a new Kindle. Here’s what I find so amazing, having been in software platforms for 10 years—basically everyone had declared hardware to be dead. Now if you look at two of the 800# gorillas of technology, Apple and Amazon, the wind is at their back precisely because they built dedicated, innovative hardware. Lesson for entrepreneurs—ignore people who pronounce stuff dead, unless their an MD. Awesome.
- Twitter rumors hit pretty strong peak, now looks like no sale. I admire Twitter’s approach and have come to really enjoy their product. I love that they’re in no hurry to sell, and I’d say rightly so. The wind is at their back and will continue to be so.
- Speaking of which, I heard someone today talk about Twitter’s 40% account drop off cliff after a month. My answer: who cares! ?! The glass is more than half-full—60% of their accounts stay on for more than a month. That’s goodness! In all seriousness, the increasingly powerful thing that Twitter does is it creates a real-time web. Just like YouTube with user videos or with blog platforms, whatever, you have some number of creators and some number of consumers. In Twitters case, they’ll quickly have the biggest number of creators worldwide, for a scenarios that’s useful—real-time information. I predict that in short order we will use Twitter as a search front-end for real-time events—this applies whether I”m a Twitter account holder or not. In this future, you don’t need everyone sticking around with their accounts. And of course,once ore and more people use the network the draw will get increasingly strong to draw people back.
- Microsoft Windows 7 RC release, and it looks like its going to be a hit. I predict MSFT gets a strong step forward in its momentum with the release of Windows 7. There is enough hardware innovation in the ecosystem and the power of the software is looking great. The public download experience was clean and simple—note there was no real outcry about this. The buzz from even MS haters is that W7 is looking pretty good—here me now and believe me later, W7 is going to be a hit. This will provide good wind at the back of MSFT as they take next steps on Silverlight, Azure, etc.
- Wolfram Alpha ran the gauntlet in the press. Geesh, you’d think that Google wasn’t just destroying the news, but that they actually at this point owned it all too. WA did a public talk-through of their product, which got lambasted for not first showing screenshots. Then folks reviewed it in comparison with Google a product that’s been in market for 10 years. I’m glad RWW at least was willing to admit that WA looked like it had some benefit to real academics and so on. This is a completely legitimate starting place, which I recall was how Google got started. Of course, that was before they owned the news….
- The Founder’s Institute closes applications for summer session and gets a bumper crop of Mentors (present company excluded) :). Caveat: I’m involved with this, and I’m super excited about the opportunity to work with the great bunch of new founders and existing mentors to create great companies and great entrepreneurs.
- Seesmic releases new update. I’m running out of time. I’d still review Tweetdeck ahead, given that I like its white text on black background more. but I do think Seesmic does a nice job with search. I have no idea how either plans to make any money but hey, I”m glad I got them.
- Final thought/ Post of the week: be sure to read Seth Godin’s thoughtful post Too Much Free. It takes 30 seconds, and its useful to any entrepreneur. My quick input—don’t be too lazy on thinking about business model and say ‘free and we’ll figure it out later.’ I can count on 2 hands the number of companies that have succeeded in building a great company built around charging no money to anyone. If you’re clear on two things when building a business, be clear on what problem you’re solving and be clear on how you’ll pay the bills.
I’m out. 15 minutes.
In the second of Bernard Lunn’s very useful posts Are You Really an Entrepreneur? – ReadWriteStart, Lunn goes through 10 things to think through to assess whether you’re *really* an entrepreneur. Its useful and good, recommended reading.
In considering these questions, I’d suggest an image—that of Arnold as the the Terminator in Terminator 2. In a way, he’s the ultimate in what you’d want to have as an entrepreneur. Here’s what I mean:
- The Terminator has been sent from the future to present day for the purpose of changing the course of history. That sense of purpose is exactly as focused and driven as you want to be as an entrepreneur.
- The Terminator stops at nothing to pursue his goals. Ditto that for any budding entrepreneur.
- The Terminator takes in as much data as he can, adapts, and learns. Throughout the movie, the Terminator in T2 shapeshifts and does generally whatever he needs to in order to stay in pursuit of his goal.
- And finally, and most importantly, the Terminator really can’t be killed. Of course, he’s in a movie, but this is emblematic. This refusal to quit, the mental toughness, this is probably at core one of the biggest and most important single elements to long-term opportunities at success. Setbacks will appear and they will hit you in the gut when you least expect it. How you regroup and continue forward is key. Arnold’s Terminator is an image worth remembering.
Making a decision to head into the world of startups is a big one—Mr. Lunn’s ideas and writing is useful and efficient. I’m hopeful that this adds a useful, vivid metaphor for some of the elements and important questions anyone needs ot ask.