Ged Carroll

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  • Carol Bartz + Microsoft Excel

    Carol Bartz

    I started thinking about this post when I was reading Bob Cringely’s excellent analysis of Carol Bartz tenure at Yahoo!. I am not going to add my full analysis here but instead pull on a strand that highlights problems that exist at a number of internet companies and certainly existed at Yahoo! when I was there.
    Yahoo! star
    Part of the thought process that got me on the trail of this post was that it reminded me of the introduction to Cringely’s Accidental Empires book written in the 1991:

    … PCs killed the office typewriter, made most secretaries obsolete, and made it possible for a 27-year-old M.B.A. with a PC, a spreadsheet program, and three pieces of questionable data to talk his bosses into looting the company pension plan and doing a leveraged buy-out.

    Spreadsheets and the business models inside them can be extremely powerful business tools and also weapons of mass destruction.

    Powerful Business Tools

    Firstly about the power of spreadsheets and their models in an internet business. Whilst at Yahoo!, my former colleague Salim used to be able to take the first few months traffic figures for the search business and provide a pretty accurate forecast of what the rest of the year looked like. That could be further extrapolated into reasonable revenue projections based on average conversion rates and cost-per-click values. Pretty handy for a business that relied on the fickle general public.

    Weapons of Mass Destruction

    Efficiency and innovation

    Accounting models are often used to make cuts in terms of manpower. What they fail to do however is ensure that the cuts are sufficiently surgical. This is less of an issue in a conventional manufacturing setting where there is likely to be a degree of redundancy in skills due to process design. Business management theory and analytical tools came out of this industrial age. Software and web services follow much more of an artisan model – great coders like mathematicians can find elegant solutions to problems through intuitive leaps forward.

    Although there is a large amount of outsourcing to cheaper countries, many successful breakout products or features are developed by small teams or even individuals for example:

    • Andy Hertzfield – the MacOS QuickDraw 2D graphics library that has been used for over 25 years and is only now being phased out in the latest versions of OSX
    • Cal Henderson and Stewart Butterfield – Flickr and Glitch
    • Joshua Schachter – Delicious
    • Linus Torvalds – Linux kernel

    However spreadsheet models often don’t recognise who these rock-stars are.

    What this means is that in a time of cuts the very people who could drive the innovation that would fuel future growth are let go or choose to leave because their area has been hacked to pieces. A classic example of this under Carol Bartz was the Flickr team: George Oates was let go and others like Paul Hammond, Seth Fitzsimmons, and Matthew Rothenberg departed.

    Carol Bartz quite rightly once said that ‘you can’t cut yourself to growth‘, but you can’t outsource it in the longer term, you also need the tinkerers and the thinkers in the organisation creating the innovation seed corn to drive that future growth. There doesn’t seem to be a spreadsheet model that takes adequate account of this.

    Niches versus the mainstream

    Back when I worked at Yahoo! there was an inordinate amount of attention paid to the number of unique users that properties got. This is important for a service like search that is universal in its appeal, but a general purpose metric like unique users falls down flat for many other properties that have a specific context around it.

    Let’s look at three examples:

    • In the West, Yahoo! Answers has a substantial user base of unique users, but a quick look at Google Adplanner shows that this user base is skewed to lower socioeconomic groups who are time-rich, but cash poor. This means that it could be hard to sell advertising inventory to many brands and the corresponding cost of inventory is likely to be cheaper
    • Yahoo! image service Flickr, has far less pictures than Facebook; but it is a highly engaged community of people passionate about photography and the creative classes. Facebook is like the digital equivalent of Prontaprint – who used to publish their film envelopes in local newspapers and develop the general public’s holiday snaps. This means you could charge more for the service, which is why Flickr has a freemium offering and come up with creative marketing packages for advertisers
    • Social bookmarking pioneer Delicious was a slow growing property beloved of geeks and the creative classes. Attractive both because  of its audience’s demographics but also the level of insight available from the data that these people provide voluntarily. A creative marketing vehicle similar in nature to Twitter’s promoted tweets has the potential to be a premium-priced product for advertisers

    However using spreadsheet models with metrics that lack distinction Yahoo! Answers looks like a great product whilst Delicious and Flickr look marginal at best. It is no coincidence that Flickr had an outflow of talent under Carol Bartz and Delicious was sold after a protracted period of uncertainty about the service’s future.

    Ultimately tools that can create a flawed understanding can be more damaging than no tools at all. Carol Bartz was brought into cut a business that she didn’t understand that well (it wasn’t anything like her previous roles) and had analytical tools at her disposal that weren’t sufficiently finessed for a modern information economy-based company. You add this to Bartz dogged personality and you can see at least part of the reason by she was not able to turn the company around. More related content can be found here.

    More links

    How not to run Yahoo! – I, Cringely
    Yahoo! Announces Leadership Reorganization – Yahoo!’s official statement

  • Beyond The Crash by Gordon Brown

    On leaving office, Gordon Brown immediately spent a lot of time hammering out a book Beyond The Crash. Unlike Peter Mandelson this wasn’t the Westminster equivalent of a sordid kiss-and-tell exposé or a Tony Blair-esque sales brochure to secure speaking engagements. Instead Brown set out to do what he does best, putting on page deep thought and analysis about the knotty problem of global finances. He did an excellent job of marshaling ideas and sources in the book. His grasp on Asian economics and China in particular is very good. There is a whole section on the Asian crisis of 1998 which is well worth reading on its own.

    In this respect, the Beyond The Crash is a solid piece of work, Brown isn’t as compelling a writer as other economic thinkers that the Labour party has looked to like Will Hutton; but he does a good job at making his ideas and concepts understandable to the average reader.

    Where things go wrong with the book is where Brown tries to humanise his writing. His comments of praise for colleagues and other politicians feels wooden, as if it was written into his book as a postscript. And it is because of this that we see a glimpse of Brown the politician; the polar opposite of his predecessor Tony Blair. Someone who thought at great depth and knew what to do but didn’t have the surface finish.

    If you are prepared to persevere with the book, it is a good read, and is currently for sale in Amazon Marketplace at a massive discount to the cover price. More book reviews here.

  • Palm | HP portable devices

    I decided to jot down some thoughts on the demise of the Palm | HP portable devices business. I am not going to say whether it was the right or wrong thing to do mainly because other people have been doing that already.

    HP and the mobile device

    HP was arguably the original modern mobile computing device manufacturer, coming out with the HP-35 scientific calculator back in 1972. The company had a long history of being a pioneer in mobile computing; so the move away from mobile devices is actually putting an ending to a long line of devices.

    Compaq had a set of handheld computers in the mid-1990s called Aero. These ran DOS and Windows 3.1, being the predecessors of devices like the ASUS eeePC netbook.

    HP developed a number of PDA devices in the early and mid-1990s including the 95LX, 200LX, 100LX and the OmniGo 700LX which allowed a Nokia 2110 to piggyback on the PDA with a specially molded section on the back of the case.

    The Jornada series of devices was a range of Microsoft Windows-powered PDAs were launched in 1998 and had a number of achievements including the first Windows Pocket PC colour touchscreen device and a UK-only GSM smartphone. The Jornada brand was phased out following the merger with Compaq.

    The iPAQ succeeded Compaq’s Aero line in 2000 and the HP Jornada line after Compaq had been acquired. The last iteration of the iPAQ range was in 2010.

    The Palm range of devices were first launched in 1996, the operating system was tweaked and prodded over the next decade to power various different devices including the iconic Palm III, V and Treo range of smartphones. Ultimately it eventually came up with the webOS after repeatedly fumbling its future.

    This is a long and rich history of engineering innovation for which the Touchpad and Pre don’t stake up as worthy successors.

    Things I never got when the Palm acquisition was first announced

    I wrote up some bullet points of things that I didn’t fully understand when HP originally announced the Palm acquisition:

    • Is HP overpaying for the company? There isn’t that many people interested in Palm and analysts had set a target share price of zero. Is this price as much about emotion as assets?
    • Why is the Palm WebOS going to live up to HP’s faith in it?
    • Much was made of Palm’s cloud services technology in the webcast, but how many extra servers or services will it actually sell for HP?
    • SKUs. I was alarmed at the amount of proposed device variants HP was envisaging in the future on the call with possible support in differing form-factors for Microsoft Windows, Windows Phone, Android and WebOS in personal devices

    With the benefit of hindsight:

    • Unless HP manages to parlay Palm’s intellectual property assets into a patent war chest either through an auction or successful legal action, it is unlikely to make its money back on the Palm acquisition and its Palm | HP portable devices. There isn’t likely to be licensing revenues from other manufacturers that would make up Palm acquisition. Whilst, the current uncertainty around Android may make manufacturers open to looking at an alternative operating system; but why take on webOS when both Palm and HP couldn’t make it work properly? It’s not like both these brands didn’t have a good reputation and heritage in building mobile computing devices, also in order to license the operating system HP would have to maintain and continue to develop it. What would that road-map look like and why would HP continue to develop consumer-facing software given its renewed focus on the enterprise
    • I never did find out how webOS was going to live up to HP’s leap of faith in the operating system because it evidently didn’t pan out, hence HP withdrawing it’s Touchpad and Pre devices

    The value of the Touchpad and its implications for the webOS

    Many of the eulogies for the Touchpad and the Pre point out that webOS was good software held back by Palm | HP portable devices hardware chops. This was the same criticism leveled at the original Palm Pre; so it begs the question why didn’t new owner HP try and deal with the performance issues second time around? I suspect that the leadership of Palm knew that the original Pre sucked, which why it was kept out of journalist hands for so much of the launch period.

    Given the resources of a large company like HP, I would have thought that the former Palm engineering team and their new HP would not have wanted to continue making poor performing products; and instead would have looked to draw a line under everything with a superior device.

    Yet when you look at the price that the remaining Touchpad devices are flying off the shelves in the US: 99 USD, this tells you a lot about the perceived value of the product.

    The 99 USD price point is some 220 USD below the tear-down price of the HP Touchpad. The tear-down price is a conservative estimate of the total cost of a Touchpad to HP. Now you can allow for the fact that the product has some discount priced in because HP was withdrawing from the market, but even Nokia isn’t taking that kind of bath with its Symbian handsets.

    So a fair amount of this discount must be due to the device experience provided by the webOS software. The risk versus rewards offered to users by this operating system far outweigh the intrinsic value of the hardware on which it runs. I would have to question why anyone would want to license webOS? You can find more more related content here.

    More Links

    HP | Palm deal thoughts

    HP: What Léo Apotheker’s Decisions Mean | Monday Note

    HP gave up on cool webOS devices but promises webOS PCs and printers | VentureBeat

    HP TouchPad Carries $318 Bill of Materials – Teardowns at iSuppli

  • Irish Post goes into liquidation

    As a youngster growing up in Liverpool, The Irish Post was one of three papers that my Mum and Dad brought into the house on a Sunday. These were The Irish Press (with it’s epic typographic errors) or The Irish Independent (depending on what was available), the Connacht Tribune to find out about fluctuations in the price of land back home and who my parents knew that had died and The Irish Post which made them feel connected to a wider diaspora in the UK.

    They still purchase the paper on a regular basis, but that won’t be for much longer as what looks like the last issue is now on the shop shelves. I picked up my copy this morning which I usually skim to have something to talk about with my parents, alongside the Irish Times. According to the Irish Times, the paper went into liquidation on Friday, with administrators look to find a buyer or sell off the assets. The 10 editorial staff were let go with redundancy.
    Last edition of the Irish Post
    It is interesting that both online and offline staff were let go and that the web page did not carry the news of the paper’s demise.

    If the paper was in your media buying mix or a PR target then it is worth noting that many of the readership will have moved on to The Irish World, The Irish Emigrant and Irish mainstream media. The bigger issue however for the ‘forgotten Irish‘ like peers of my parents who moved here in the 1950s and 1960s, the lack of a paper copy of the ‘Post leaves a gap that the web won’t fill. The ‘Post gave a sense of community and connection that Irish state broadcaster RTÉ had already eroded when it turned off it’s medium wave service.

    More information

    Another blow for TCH as ‘Irish Post’ closes with loss of 10 jobs – Irish Independent

    Irish Post newspaper to close – Irish Examiner

    ‘The Irish Post’ goes into liquidation – Irish Times

  • The futility of QRcodes on tube

    Traveling on the London Underground ‘tube’ recently I have noticed that more and more adverts have a QRcode. But the trips also highlighted the futility of using a QRcode, particularly on many of the deep lines.

    I am not too sure if tube QRcode is a recent phenomena or that I have been paying more attention as a number of the projects that I’ve been recently looking at are about the ‘web of no web‘: the interface between the web and the real world. I am a big fan of progressive approaches to marketing, however, the more I thought about the phenomena, the greater the waste of time that it seemed to be:

    • Londoners often joke about the tube being like cattle trucks; in reality European Union regulations wouldn’t allow livestock to travel on a train with the conditions of the tube on a hot summers day. A combination of overcrowding together with the lack of air conditioning  means that some of the lines can be as hot as a walk in the desert. The over-crowding also means that would be hard to take a picture of a QR code. So whilst the advert may have a large reach, the realistic reach of the QR code call to action is a lot smaller
    • So you happen to be lucky in terms of where the crush places you and try to snap the QR code with your phone. You probably won’t be successful, tube lines aren’t known for the smooth ride of say the Paris Métro, so you will be trying to hold your camera still whilst the train carriage rocks and sways in front of your smartphone. Your phone won’t be able to focus and take a clear image of the QR code. That’s one of the reason’s why there isn’t a tube advert shown here to illustrate this post, despite at least three attempts over the past week to snap a picture of an appropriate advert
    • Unlike other mass transit systems in the likes of Singapore and Hong Kong, huge high-traffic sections of the lines are underground or in such a deep cutting that they are inaccessible to mobile phone networks so QR code won’t take the audience through to an appropriate web page, but instead prompt a ‘network unavailable’ message

    The futility of QRcodes on the tube shows that the media buyers, marketers and or designers don’t pay much attention to the context of their advertisement art work, which could artificially skew campaign objectives and measurement adversely. In order to combat ‘the futility’, we need to go beyond TGI data and media packs. We can start this process by keeping our eyes open to the world around us.