Monthly Archives: February 2011

the annals of creative destruction

No other company seems as dedicated to creative destruction as Apple. Their latest effort to relegate the optical disk to the past is turning out to be harder than expected.

Pundits and analysts like to refer to these transitions as though they singular moments of corporate bravado. Even in this telling TechCrunch would like you to think of the delay as being a bug, in the code. When in fact it involves a pretty complex dance that has more to do with making structural adjustments than just a detail or two. 


If there was any doubt in peoples’ minds that Apple intends to kill off the optical disc, it was put to rest today. This morning’s unveiling of the OS X Lion Developer Preview came with the news that it would only be available one way: through the Mac App Store. And while Apple wouldn’t say if they intended to release the final version of Lion to consumers this summer in the same way, it’s pretty clear that they’re going to do just that.

But this important push into the post-optical disc era hasn’t exactly been smooth sailing for all so far.

Since the beta was first put up for download this morning, angry developers have flooded Apple’s forums. Why? Because many can’t install the software. But it’s not a bug in the OS itself that’s preventing them from doing it, it’s a bug in the distribution method — the Mac App Store…

via The Post-Optical Disc Era Gets Off To A Rocky Start With The OS X Lion Beta.

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perceiving new sources of value

…While the largest drug companies have been buying each other to replace the revenue they will lose as products come off patent, their smaller competitors have been snapping up venture-backed biotechs to stock their pipelines. Since their own patent expirations are further off, they’re willing to buy companies, like Calistoga, whose drugs are in early to mid-stage clinical studies.

“Big biotech [is] as much of a player as pharma these days,” said Ed Hurwitz, a director with Alta Partners, which backed Alba, Calistoga and Taligen. “There is more large-biotech interest on the acquisition [front] than we’ve seen historically, it’s not just a pharma game anymore.”

via Big Pharma, Meet Big Biotech – Venture Capital Dispatch – WSJ.

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counter intuitive

Why do people think good ideas will be self evident? Why do we think that representatives of orthodox thinking will be the first to recognize – different ways to create value? And why don’t corporations develop methods for overcoming such foreseeable blindness?

…Google’s history backs up [the claim] that people did not believe [they possessed a] good idea to start with, no matter what we think of it today. I couldn’t resist looking up Google’s history after yesterday’s post.

The overwhelming evidence that people didn’t think their idea was good is, as this page puts it,

Reluctant to leave their studies, Page and Brin offered to sell their search engine for $1 million to AltaVista. To their disappointment, AltaVista passed, as did Yahoo!, Excite, and other search engines.

All the experts in the field passed.

More to the point, they themselves had little concept of the value of their idea. Google’s founders didn’t even want to start their business!

You could say the other companies were bound to their business models and inertia prevented them from changing. But the individuals at those companies also passed on those opportunities. Anyone who saw Google’s value today would easily have waited out a non-compete, but they didn’t.

This page confirms

In 1998, Google was launched. Sergey tried to shop their PageRank technology, but nobody was interested in buying or licensing their search technology at that time.

This page gives many more accounts of Google’s travails getting traction. The most relevant

Also in September [1999], BusinessWeek published a piece that praised Google but was also careful to adopt a skeptical approach about the notion that you could make a lot of money by focusing on search and selling ads: “But at a time when other popular search sites such as Yahoo!, Excite, and Lycos have all morphed into diversified entertainment portals, is there really a future for a pure, advertising-supported search tool?”

Now, you can say today that their product turned out to be great, but no one could decide then based on knowledge we have today.

They had a technology they believed in, not a product you could at the time say was good…

via » Four counterproductive myths about entrepreneurship, part Ia Joshua Spodek.

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unity not just as principle but as practice

When Rebekah Cox first described the product design process at Quora, one of the biggest surprises was the absence of Photoshop. She said that every part of was designed in code from Day 1. I asked a few incredulous questions, nodded politely, and figured that once I started work I would surely continue my love affair with the Creative Suite.

6 months later, I’m a convert. Almost every feature I’ve worked on at Quora has been designed exclusively in code, from concept to iteration to launch. As my copy of Photoshop accumulates dust, I’ve come to see the myriad benefits of this system…

via (/1) Life Without Photoshop by Joel Lewenstein – Quora.

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when platforms leak

…When you make something digital and connect it to the web, it becomes available everywhere, it becomes available immediately. That is the essence of the abundance that the web represents. Instant. Everywhere. An extreme nonrival good.

This was not the way business was done in the past: for analog goods, territorial rights and licences were normal and natural; exclusive rights were less common, but nevertheless could be found, acquired, exercised.

As we’ve moved from the physical world to the digital world, incumbents in many industries have sought to preserve the historical structures and ways of doing business. Which, in effect, were attempts to create and exploit artificial scarcities.  When it comes to digital assets, there are four primary ways to try and create artificial scarcity:

1. Sell the rights to digital things on a territorial basis, and then sue those who seek to overcome those territorial barriers. The Karen Murphy case is just the example of the day…. the Bosman ruling in football was a similar case in point; every attempt to enforce gardening leave may also be seen as an attempt to restrict the freedom of the individual.

2. Encrypt the assets regionally, as done with DVDs and some classes of video games. [As I’ve stated so many times before, region coding on a DVD is the best example I know of a technological invention adding zero value to the customer or her experience].

3. Slice releases of digital assets not just over geographies but over time as well, drip-feed the releases into the world, again to protect a historical business model. I reviewed a Hugh Macleod book a couple of days ago, and a UK reader pointed out that the book will not be available here for a few months.  Hugh, the author, saw the comment and confessed that the publishing world seemed to insist on working that way.

4. “Lock” the assets to a particular device, provider, connection type. If you want to watch Premiership football, you must buy from Sky Sports. Or for that matter iTunes and iPod. That kind of thing. Walled gardens.

All these have been attempted. All these have failed, and will continue to fail. You cannot make something that is essentially abundant artificially scarce.

via Why Platforms Leak: The Impact of Artificial Scarcity – confused of calcutta.

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on innovation of enabling processes

…My graduate career began at the same time that biologists and policymakers had kicked off a public debate about whether to sequence the entire human genome. The project would be an enormous undertaking in terms of funding, resources, and personnel, one that might pull federal funding from individual labs.

It was also a bit of a departure for biology, which hadn’t known the big-budget science projects that were common in fields like astronomy and physics. Needless to say, allocating this much money to one idea made many researchers uneasy.

And it wasn’t clear that such a project was even necessary. Over time, bits of the human genome were being filled in piecemeal without any grand, overarching project. Researchers studying human genes had walked slowly and painfully along chromosomes, filling in sequences as they went. Others cloned the human versions of genes found in other organisms. Some groups just randomly sequenced every piece of DNA that was made into messenger RNA.

Bit by bit, the most important parts of the human genome were being uncovered—I was certainly among those wondering if we really needed a huge and expensive project to sequence the whole thing.

Faith in the piecemeal approach turned out to be naive. Most of the human genome doesn’t seem “important” by the criteria we normally use to judge these things, but there are key pieces of regulatory DNA, including some that’s distinct to humans, scattered amidst all the noise. Without getting the whole genome, we would not have identified many of the sequences that help make us uniquely human. And we’d certainly have missed many things we didn’t even know about back then, like the micro-RNAs that regulate genes.

via Ten years on: why a complete human genome mattered.

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missing the key ingredient

The FT notes a lack of developers in attendance at the MWC. Considering the dialog regarding ‘system ecology’ the lack of interest from application developers can’t be a good sign.

…absent from MWC were the developers themselves. In fact developers and analysts remain highly sceptical that WAC is anything more than a talking shop for telecom operators angry that they are not getting a slice of the revenues from a fast-expanding apps community that is dominated by Apple, maker of the iPhone, and Google, whose open source Android operating system is used by 28 handset makers and has its own app store.

Gartner, the research group, estimates that 17.7bn apps will be downloaded in 2011, a 117 per cent increase on last year. Revenue from mobile apps is expected to surpass $15.1bn this year, up from $5.2bn in 2010.

Yet while many handset operators have their own apps stores, two dominate. Apple’s store, which accompanied the launch of its 3G iPhone in 2008, houses 350,000 apps, while Google says there are 150,000 apps in its Android store.

While some argue having a large app store is irrelevant, analysts say it is what helps tie consumers to one handset market over another, particularly if you have paid for the app.

via / Technology – Developers sceptical of app alliance.

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