The online field has been one of the mainstays since I started writing online in 2003. My act of writing online was partly to understand online as a medium.
Online has changed in nature. It was first a destination and plane of travel. Early netizens saw it as virgin frontier territory, rather like the early American pioneers viewed the open vistas of the western United States. Or later travellers moving west into the newly developing cities and towns from San Francisco to Los Angeles.
America might now be fenced in and the land claimed, but there was a new boundless electronic frontier out there. As the frontier grew more people dialled up to log into it. Then there was the metaphor of web surfing. Surfing the internet as a phrase was popularised by computer programmer Mark McCahill. He saw it as a clear analogue to ‘channel surfing’ changing from station to station on a television set because nothing grabs your attention.
Web surfing tapped into the line of travel and 1990s cool. Surfing like all extreme sport at the time was cool. And the internet grabbed your attention.
Broadband access, wi-fi and mobile data changed the nature of things. It altered what was consumed and where it was consumed. The sitting room TV was connected to the internet to receive content from download and streaming services. Online radio, podcasts and playlists supplanted the transistor radio in the kitchen.
Multi-screening became a thing, tweeting along real time opinions to reality TV and live current affairs programmes. Online became a wrapper that at its worst envelopes us in a media miasma of shrill voices, vacuous content and disinformation.
I started posts on the Facebook acquisition of Instagram a number of times but got nowhere, so I thought I would collect up some of them thoughts and put them here. So here are some of those random thoughts:
Instagram and Facebook are very different types of social network. Instagram seems to tape into a latent passion for us to be creators, it came up with an application that flatters us into thinking that we may have a good eye for photography. Facebook is much more about gathering and sharing humint with their loose network, a poorly designed address book and an event organisation platform
Instagram and Facebook have very different design philosophies. Instagram is much more of a traditional web 2.0 firm. It’s product does one thing very well and makes the complex simpler for the consumer. Facebook’s user experience is well shit. This is probably for a number of reasons:
Facebook has a culture were engineering trumps design rather than the two disciplines been seen as equal partners like say Apple
Competition – Facebook has evolved from its original mission adding additional features as it was threatened by different platforms: notably Twitter. But the user experience hasn’t scaled as well
Monetisation – Facebook has been working hard to monetise its business with its advertising units, but you need content to advertise against. Much of the design is about wringing content out of consumers (and then having the opportunity to sell inventory against it)
Privacy – In order to get the humint to share with audiences, Facebook needs to strike a balance keeping the law and privacy advocates at bay whilst making it sufficiently difficult that consumers don’t lock down their data and consequently constrict advertising opportunities
An extension of the design difference between Instagram and Facebook makes me wonder about how long the Instagram talent will actually stay at Facebook beyond any lock-in period? I am making assumption that the deal was at least partly motivated by the Instagram’s team expertise in mobile service development and that would be dependent on retaining the talent.
Talent retention is also critical if Facebook acquired Instagram as a defensive play like it did with Octazen. In this case Facebook would be looking to lock up talent for as long as they could.
1 billion dollars in shares isn’t as expensive as 1 billion dollars in cash; consequently the cost is probably relatively cheap for Zuckerberg. Think of it this way – how real is the money that you make when the value of your house goes up or down until you actually come to sell the house? Cisco was a past master at large share-only purchases when it was a hot stock. This hasn’t impacted Facebook’s cash-flow, but it has shaken the institutional investors looking at Facebook’s IPO. Again this doesn’t really matter to Zuckerberg because Facebook shares will sell anyway because of the heat around the company. Zuckerberg has less to lose than the Cisco team did because of the way that Facebook’s voting stock is structured allowing its CEO to retain power
It used to be that there were a number of start-ups whose business model was to sell themselves on to a large dominant industry player. Over time the industry player changed: Cisco, Microsoft, Google but the business model remained constant. I expect the new target acquirer to be Facebook as entrepreneurs and venture capitalists dream of a quick buck rather than building something great
10 years from now, I still don’t know whether we will be looking back on the Instagram acquisition as being a similar folly to Yahoo!’s purchase of Broadcast.com now looks in hindsight. On one hand I feel confident because of the deal structure being in Facebook shares, and the price being small in comparison to the current notional value of the Facebook business. But for the reasons I have outlined above I am less convinced in terms of long-term fit with the business and relative importance of Instagram
Instagram were right to say yes. The timing couldn’t have been better, on the one hand in the short term Instagram is growing fast; its move on to the Android platform previously being an iOS-only application. In retrospect, this looks like Instagram moving from early adopter usage to early majority service users. At the same time a number of services are now integrating Instagram-type filters into their mobile applications, one of the examples I use is Tencent’s Weixin (WeChat) application, so it could be rapidly becoming a feature rather than a reason for purchase
Bob Barker is a client that I worked with on nascent digital work for RFI Studios. Bob worked as the CMO of Alterian. Alterian started off in customer experience management, they did a series of acquisitions when I worked with them including Mediasurface the CMS company. The company was acquired by SDL and some part of it was sold on to private investors.
Flip video camera
Bob decided to delve into social media and understand it as a marketer. The Flip Video camera which includes basic software inspired him to do video content. Bob had a ‘Gorilla tripod‘ for the Flip and the lighting was just done with daylight. I did an interview with Bob Barker for his blog last week, you can read his take on things on his blog.
I realise that we talk through a number of social platforms, so here is a list of what I use:
iMessage – though I have found it to be flaky
Skype
Fastladder.com for RSS feeds. I am currently experimenting with FavShare as a Fastladder client on my iPad and iPhone which started after my interview with Bob
Pinboard.in for social bookmarking
IFTTT to syndicate content
Microblogging: I use the Twitter client on my Macs at home, and m.twitter.com on my iPhone. I use Weibo’s iPhone client and WeiLark for the Mac to post on my Sina.com Weibo account, rather than Sina’s sluggish web interface
I use Kakao Talk and Tencent Weixin (WeChat) social messaging clients on my iPhone. The international versions of these tools don’t have all the features the local ones.
I use a mix of technology:
MacBook Pro
Dell 22 inch widescreen display
MacBook Air
iPhone
iPad
Samsung feature phone with dual SIMs
The video is on YouTube so may not be available to all readers. You can find Bob’s video channel here.
Ferdinand A. Porsche, 76, Dies – Designed Celebrated 911 – NYTimes.com – Butzi Porsche dead. Butzi Porsche came from a family of engineers. His grandfather led the original team behind the Volkswagen Beetle. His father had been part of that engineering team and went on to found what we now know as Porsche. However, Butzi Porsche wasn’t engineer but a designer with technical chops. After an infamous meeting of the Porsche family, no members were allowed to work at Porsche. Butzi Porsche didn’t get to do more after he designed the 911. Instead Butzi Porsche started Porsche Design. Butzi Porsche did product design for other companies. Porsche Design also came out with its own products with Butzi Porsche designing watches, glasses and more. Butzi Porsche resigned from Porsche Design in 2005 due to ill health.
Why Are So Many Americans Single? : The New Yorker – single living was not a social aberration but an inevitable outgrowth of mainstream liberal values. Supported by modern communications platforms and urban living infrastructure: coffee shops, laundrettes
Kraft break-up yields marketing shift: Warc.com – the break-up is ironic when you look at the trouble they went to, in order to buy Cadburys and then break their business down broadly into Cadburys + Jacobs Suchard vs Kraft US.
HK’s rich hesitate to have babies | SCMP.com – interesting takeaways: didn’t want the emotional commitment, time poverty, financial stability / too small a living space and concerned about the local environment not being suitable for children. It was interesting that the education system was given such a hard time, given that it’s better than the UK system (paywall)
agnès b. | VICE – great interview with French fashion designer agnés b
Marketing
Fueling the hunger for The Hunger Games – The New York Times – really interesting comment: …during the 1980s you bought the poster and once a year went to a convention and met your people for something like Star Trek (and Star Wars). It misses out the fact that you are likely to have had real-world friends that you would have talked about it with as well – marketers now seem blindsided to the real-world
I had delayed writing about this as I had a busy run-up to Easter and just about everyone of note in the Bay Area seems to have weighed in on the Facebook Yahoo legal case over patents. Fred Wilson (aka A VC) channeled the concern that the start-up community in general over wide-ranging patents being a tax on innovation.
The new, new thing
There is a certain amount of prejudice inbuilt against incumbents going on; Silicon Valley doesn’t make big money from existing large businesses but the new, new thing – for example:
IBM vs. Apple, VisiCalc, Oracle and countless Boston corridor enterprise technology brands before them
Beckman Instruments vs.the traitorous eight who went on to found just about every other semiconductor company from the late 1950s through to the early 1970s: Fairchild Semiconductor, Intel, Intersil, AMD, National Semiconductor, LSI Logic and venture capital firm Kleiner Perkins
Microsoft vs. Apple, Oracle, Sun Microsystems, the open source community
Google vs. Facebook and just about anybody else looking to make money from online advertising
Monomyth archetypes
I don’t necessarily hold this against them, it is the classic tale of David and Goliath that resonates at a deep level in the human psyche. It probably helped us move beyond being slightly smarter than the average ape and turn our use of tools into a decisive advantage with humans becoming the apex predator throughout the world.
What a lot of these arguments are failing to do is look at the underlying form in the Facebook Yahoo patent case:
Yes, the patent system is broken
Yes, Yahoo! has multiple business issues which would merit a series of posts in it’s own right
Yes, Yahoo! is unlikely to survive at least in its present form. Though for reasons that I have gone into previously I don’t think that Microsoft is a suitable suitor (just look at what has happened to its continued inability to match Yahoo!’s previous returns on search with Microsoft AdCenter) and more controversially I didn’t think that it was serious about its takeover bid first time around
Yes, Yahoo! is likely to be outmaneuvered by Facebook and be on a hiding to nothing
But for me, the story isn’t about Yahoo! or the inequitable nature of patent laws, but about Facebook and its business practices in relation to data.
Facebook Yahoo case similar to 1990s Microsoft practices
In the 1990s file formats: .doc, .xls, .ppt and others were used by Microsoft to leverage a competitive advantage. Competitor applications couldn’t open them; so your information was locked into using Microsoft Office software. This was one of the reasons why the web was so transformational; HTML opened up publishing of documents that had been previously locked into Microsoft Office – electronic versions of scientific papers, price lists etc.
Data portability is the document format of web 2.0 (or social web). During my time at Yahoo! we introduced the requirement to sign into Flickr using a Yahoo! ID, Stewart Butterfield and the team at Flickr worked hard to ensure that existing Flickr customers who didn’t want to have a Yahoo! ID could move their pictures off the service.
The idea was that the customer’s data was their property and allowing them to freely move was as American as apple pie, capitalism and the free market. Allowing customer’s data to be portable fitted in with the web being free as in speech ethic that had predominated up until then. Portable customer data kept you honest and encouraged you to innovate as losing a customer was only one export click away.
In the case of Facebook; the data that really matters is your address book. Whilst Facebook eventually allowed consumers to download their profile information (after it had gained hegemony in the US social network sector), it holds on fast to your address book. Om Malk over at GigaOM wrote a really good post on how Facebook leeched off Yahoo! user’s address book to build its business, but didn’t allow Yahoo! users to transfer data back the other way.
This had a detrimental effect Yahoo!’s already weakened business. It wasn’t only Yahoo!, Facebook did the same on Plaxo and has been in conflict with Google over the same issue. In the Yahoo! patent case; Yahoo! is in the position of shooter and patsy – but like the dreams of conspiracy theorists looking for a dark hand moving the pieces around the board – Facebook is responsible.
So consumers and some companies got screwed on their address book; but what the great and good of the start-up community who criticised Yahoo! forget is where Yahoo!, Plaxo and Google have gone before their start-ups could be tomorrow. The problem is the over-reliance on Facebook Connect as a federated ID and as a marketing tool using consumer news feeds in their word-of-mouth marketing campaign strategies.
Federated identities
Federated IDs are not a new concept, Microsoft tried to have their Passport technology adopted in a similar way some ten years ago and it was stymied because of early adopter and technology sector mistrust.
Like Facebook, the businesses adopting Facebook Connect usually rely on some sort of advertising-related business model, either for their revenue, or for garnering customers; yet with Facebook Connect – Facebook holds all the cards on targeting information that means:
Your advertising platform will always be worse than Facebook’s because they have a better customer view – as we’ve seen in search this is likely to turn into a zero-sum game
For more e-commerce-based businesses, Facebook data could be used by rivals to directly target your customers – because Facebook already has your customer list. By using Facebook Connect you already gave it to them and they could even infer a good estimate of customer engagement were by how often and how long they logged in
It has the potential to be digital equivalent of the way Standard Oil used its dominant position as a buyer of railroad transportation to screw over rivals. By supporting Facebook in the Yahoo! patents case; I believe that leading players within the start-up community inadvertently darkened their own futures.
What Microsoft was like back in the day
It is hard to imagine now, but in the mid-1990s Silicon Valley was genuinely afraid of Microsoft:
Another big factor was the fear of Microsoft. If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.
It’s hard for anyone much younger than me to understand the fear Microsoft still inspired in 1995. Imagine a company with several times the power Google has now, but way meaner. It was perfectly reasonable to be afraid of them. Yahoo watched them crush the first hot Internet company, Netscape. It was reasonable to worry that if they tried to be the next Netscape, they’d suffer the same fate. How were they to know that Netscape would turn out to be Microsoft’s last victim?
That was Y Combinator’s Paul Graham on Microsoft back in the day and how fear of it partly sewed the seeds of failure at Yahoo! Great ideas couldn’t get funded if they where considered to fall anywhere near the purview of Microsoft – and Microsoft wanted everything, at that time the company mission statement was:
A computer on every desk and in every home running Microsoft software
Now the vision uses softer language that also takes into account technological change with Steve Ballmer describing it as:
…enabling people and businesses to realize their full potential
Microsoft still isn’t a cuddly business by any means. Let me show you: Some six years ago I spent a weekend in San Francisco on the dime of the agency I worked with at the time. The reason why I had a free weekend was that I was originally going out there to pitch an international brief for an enterprise technology company – and the weekend should have been very busy and productive in preparation fo the pitch early the following week.
The US folks had checked the substantial non-compete list that we had been provided with by Redmond and senior clients had been checked in with and they were ok with it.
Happy days, I was put on a Thursday flight from Heathrow to San Francisco with British Airways. I deplaned, got through immigration and got a taxi into town. I went to the hotel first; dropped by bags off and washed my face and then got a taxi to our San Francisco office down near the ball park.
As I walked in the door, I could see of the office general manager getting off the phone. Apparently my trip was a waste of time; someone at head office had a call with someone at Microsoft who asked us to withdraw at the last minute as the company operated in a space that Microsoft would like to enter in the next five years.
I ended up spending the Martin Luther King day weekend at the Hotel Monaco close to Union Square and spent much of the Saturday exploring the Asian Art Museum, the then Sony Metreon centre and shopping off Haight.
The point I am trying to make is that fear is relative, Microsoft is a changed but still fiercely ambitious and competitive business.
Facebook power
Facebook is much more than Microsoft. If we look at address books as an example; Facebook bought and closed down Malaysian start-up Octazen to close the door on others using their technology to import contact lists in February 2010.
Facebook is keenly competitive in the way that Microsoft has been, but it has learned from Microsoft’s mistakes; it has lawyered and lobbied-up much earlier in its development, so with Facebook there will be no humiliating Judge Jackson trial which gifted the start-up culture of Silicon Valley a second chance.
I believe that in the medium-to-long-term Facebook will have a neutron bomb effect on the Bay Area start-up finance community and at the moment they only have themselves to blame.
Although it may seem counter-intuitive to the start-up community at the moment, fueling Yahoo!’s patent duel with Facebook may make more sense in the long run.
Gore-Tex Under Siege from Waterproof Fabric Newcomers | OutsideOnline.com – interesting how Goretex waterproof fabric stranglehold mirrors Microsoft’s position in the technology sector. Goretex was historically under threat from a number of systems that had varying degrees of impact. Hipora is a silicon coating structure invented by Korean firm Kolon, Schoeller’s C change which has temperature dependent venting, SympaTex commonly used when you see ‘no brand’ 3-layer laminate, usually lower price products that would lose margin paying for Goretex licensing. Lowe Alpine’s ceramic coated triple point fabric, but managed Goretex to survive and Lowe Alpine didn’t. There are other competitor products including I suspect that the other fabrics will become niche pieces unless they sort their marketing out. Goretex is primarily a branding exercise, that sets minimum standards such as taped seals. Much of Goretex intellectual property has been voided or circumvented.
Marketing is where the Goretex difference lies now, but it is known for a confrontational relationship with partners.
Kwok brothers arrested by HK watchdog – FT.com – Sun Hung Kai is Hong Kong’s largest property company. Surprising that they are involved as the big firms there generally keep their noses clean (paywall)
