Rethinking Open Source security

By now you’ve been sufficiently terrorized by the Heartbleed bug in OpenSSL; a rotten bounds checking error in the C code for that security library that secured about 40% of the Internet. If you have not checked your servers, you should do so now here. I’m rocking mostly IIS in my private cloud so I’m mostly worry free.

The amazing thing about this bug is that even though it basically implies that there is a chance that almost everyone’s bank accounts, email accounts, and so on; are compromised (the bug is 2 years old; exploits have been in the wild since at least November 2013), the outcry has been pretty sedate. Not the media, nay that has been adequate. The outcry. You’ll understand this if you go back to say the outbreak of the Nimda worm (exploit in IIS). The hue and cry was just cacophonic.

It’s almost as if because it was an open source issue, the finger pointers are more restrained. Bruce Schneier, who I admire and respect was this astonishing mix of measure calm and alarm. I could imagine a much different posture if the exploit had been found in code in closed source software.

Part of this is tribal. By now it is received wisdom that open source is NOT bad for security. The latent ability to openly audit code, the reasoning goes, is good for rapidly fixing things as they emerge. And the ‘many eyes’ theory takes care of the velocity of emergence and subsequence fixing in the first place. There are reasoned arguments why this is not always true, but the feeling persists in the software engineering community. So imagine my surprise when I asked an ordinary citizen what they thought and they said, more or less “maybe open source is a bad way to do security.”

You have to understand, that this is near heretical at this stage in hacker culture. Open source is too big to be smeared so cavalierly. But I thought about it for a second: what if we’re exiting an age when depending on the many arguments for better open source security is no longer sufficient? Consider:

  • Reputation – anyone can join an open source software. A ditch digger in rural Idaho who taught himself programming or an agent of the NSA posing as a harmless student. There are no real checks on who contributes. This means that open source code bases are susceptible to social engineering if the contributor has malicious intent.
  • Device proliferation – open source is the go to foundation of the Internet of things – a trendy new word for what we used to call embedded software (it hardly matters that the things we’re embedding into are getting smaller). The problem with the IOT is that once it’s in the field, there are very diffuse responsibilities and incentives to update the software running on these devices. So there is an expanding risk of vulnerable and exploitable software even when security patches exist. Think your fridge, your router, your wristband, etc.
  • The Cloud – we live in very different times from 5 years ago. At that time, most consumer data lived on laptops, desktops and such. Yes, the security was shitty, but the pipes to get to their data could be tiny; the computer could be turned off – basically it sometimes wasn’t worth it. Well imagine if you got everyone to take all their gold bricks from under their mattresses and put it in a bank with just a rent a cop to watch it? Yes you could burgle a few homes expertly before, but now you just show up at the bank, know off the rent a cop and make off with an entire nation’s wealth in one smooth fell move. Well that is the potential security situation we are in with a bunch of consumer and corporate data moving into the cloud. Successful digital heists are that much more spectacular. See Target.
  • Human apathy and capability – the one thing I always thought was inane about the open source security trope was the “many eyes” theory. The fact is many FOSS projects can barely attract contributions when moderately popular. OpenSSL is very valuable piece of FOSS and yet the Heartbleed bug persisted for 2 years. How many of this kind of bugs are out there right now even when we fix Heartbleed? Suddenly “many eyes” doesn’t sound as comforting.
  • Human avarice – as FOSS underlies more and more of the economy, both state actors and gangsters have an incentive to mount an arms race on finding 0-day flaws. There are already million dollar companies who make it their mission to do this. Most flaws in a prior age were found by benign security researchers doing a public good with a certain kind of skill and toolset. Now all bets are off. I can bet there are people poring over key parts of internet software infrastructure in the public domain to find exploits. Why not?, they’re being paid handsomely for it. You can literally take all the FOSS in the world, rank it by criticality to internet safety and employ a team to go to town and read every line of code for exploits.

This is not to say that closed source is better security, although in this particular case I feel good about my decision to use IIS (had nothing to do with security at the time). It’s to say that open source security orthodoxy is bad. And every once in a while, the geek community has to look around at the world we live in, not the world we made our assumptions in; and adjust to that reality.

Bezos trolls 60 minutes

In an example of how the Tech press is essentially supine and uncritical, Jeff Bezos goes on 60 minutes and trolls about how drones will deliver Amazon packages in the future. Right in time for cyber Monday hype. Unbelievable. Confirms what I was saying here – masterful tech companies are pulling off impressive marketing ‘heists’ with the aid of news media. I guess they always have, but usually it’s been somehow enclosed in the tech world (terms like ‘vaporware’ and FUD, for example, are deeply geeky). Now they’re able to hoodwink the entire pop culture.

Marcus Wohlsen does the critical thinking 60 minutes should have done: http://www.wired.com/business/2013/12/amazon-drone/

Its gold! (Because we say so)

You have to love marketing in the Twitter age. It’s almost mind blowing in its capacity for mass hypnosis.

You might have heard about the new phone from Apple, the iPhone 5s. You might also have heard that there is a ‘gold’ version – the iPhone 5s Gold. Now a reasonable person hearing this would think that there is no way a company could sell an iPhone effectively if it had any amount of gold in or on it. And you would be right! In actual fact, the gold iPhone is just a finish color; it’s been also called ‘champagne’ color. In fact on Apple’s site, there is zero mention of the term ‘gold’ – no doubt as a result of effective lawyers doing their job to avoid any liability or false advertising claims. Even with that, the entire page color for the iPhone 5s is a gold hue; wink wink, nod, nod.

By both pre-announcing they would have a ‘gold’ color and making sure that finish was much scarcer than the space grey color alternative, Apple smartly created a surprise phenomenon; a phenomenon it continues to sustain without actually using any words to that effect. Customers now routinely refer to that variant of the iPhone as ‘gold’. Do a news search for iPhone 5s ‘gold’ and ‘champagne’ and see the results – no pickup on champagne and a ton on gold.

Competitors have started to offer the same color scheme for their own phones – both HTC and Samsung have jumped on the bandwagon. The irony for these follow on acts is that while Apple had a pretty deft and light touch in creating the marketing effect, both HTC and Samsung will have to be comparatively heavy handed in order to create the same effect – perhaps opening them up to a greater risk of litigation.

There are some morals to this story:

  • Apple is good at marketing. It’s not a fluke, it’s a competitive advantage they have sustained over multiple business cycles. Somewhere the product manager for the brown Zune is wincing. The corollary is that Microsoft is average to bad at marketing. Google is like a savant – when they care, they can be good. But most times they don’t care.
  • The Tech media and the media at large is lazy. How easy is it not to use the marketing speak from a company when it doesn’t make sense? How easy is it to be a counterbalancing force? How easy is it to be factual and ameliorate mass hypnosis? Bah.
  • The intangibles in a product can be as important as the tangibles. That’s saying a mouthful. Do with it what you will if you have a product that needs to find a market.
  • The world is smaller than it was 5 years ago. You can use marketing remarkably effectively if you really understand how the different mediums work best.

Musings on gaps and potential opportunities in Nigeria/Sub-Saharan Africa – Part I


I just came back from a trip to Nigeria and a good friend and mentor basically asked me to ‘mind the gaps’. What he was getting at was that the way to build businesses would to be insightful and purposeful about understanding where there is significant need for consumer goods or services that are not being satisfied by the existing market. So I talked to a bunch of people and thought about it some and here is a first set of thinking on the big gaps I see. Each of these areas could probably sustain a large business and is currently underserved.

Now some of this might be obvious or not. And there are specifics to work out (big picture can only get you so far). But I’ll tackle the nitty gritty in another post.

Caveat Emptor:

There is basically more that I don’t know that I know about this subject. So these observations are a combination of anecdotal observations, perceptive intuition and gut sense that comes from wide ranging reading and pattern matching. I will try to understand what I do not know and close the gaps more assiduously though in a section at the bottom called ‘what I don’t know’.

  1. The lack of patient capital for risky new ventures

    Everywhere I go, I meet neo digital or even service entrepreneurs that are champing at the bit to innovate. And they need access to ‘venture type’ capital that allows them the opportunity to innovate or to fail. And mostly gets out of their way or buckles down to help them increase their chances of success. This lack of capital is so pervasive that it is of itself a gap. There is a lot that can be done for risky ventures without traditional venture money, but paradoxically the infrastructure need is probably greater in Nigeria/Africa. There are many resources available with a fast Comcast connection and your local tech meetups than can be found imagined and almost none if it is as easily accessible in Nigeria.

    1. Open questions
      1. Are the business conditions good enough that this kind of capital will generate appropriate returns? I’ve personally observed that the pool of talent with the ability to build solid enduring firms may be small. However this is only with reference to the skills usually deployed in the West. Different skills may be in play in places like Nigeria and may already be plenteous but untapped.
      2. What are the totality of those favorable business conditions?
      3. Is the talent pool good enough to drive profitable innovation and sustainable firms?
        1. What dimension of talent is needed?
        2. How many talented people will create an inflection point?
      4. Who or what vehicle will be the ‘enabler’ of this kind of innovation? What shape will it take?
      5. What kinds of returns should be expected realistically?
      6. Is it even necessary to focus on the neo-digital sector? What is the generic TAM (The Addressable Market)?
  2. Reducing friction of money & increasing trust in new types of electronic payment

    There seems to be still opportunities around reducing the friction of money. And increasing the trust people have for all the different new instruments for money (these two things are the related but can be separate too). Mobile payments is part of it but not the whole story. Some examples of things that are not happening in the economy yet and are big opportunities: debit card payments for taxies, Square™ type applications for the long tail of retail in the country. There are probably things that are not immediately apparent, but reducing the coefficient of friction for money is a really fruitful area of investment.

    1. Open questions
      1. Is trust tightly correlated with the payment or app providers? I.e. is there an opportunity for a private horizontal trust provider? I don’t think I’ve seen a trust purveyor who is not either the government (Federal Reserve, etc.) or someone who provides an instrument of payment (Visa, MasterCard, PayPal, etc.)
  3. Distribution infrastructure and logistics

    It’s no secret that Nigerian/African infrastructure is terrible. (I guess you could generalize this more to the emerging market but that frankly seems unnecessary). With that reality is also the fact that getting products into end customer hands is expensive and time consuming. Firms often have to build their own distribution networks (mobile scratch cards, fleets of motorcycles for pizza delivery, etc.). There seems to be some value in carving out specific horizontals of distribution that other service providers can ride on top off and then charging them for the privilege of not running their own distribution or logistics infrastructure. The likes of the current incarnation of FEDEX and UPS as a logistics company seems like a viable long term goal especially if you focus on the added value of ‘within the metro’ services because that is a clear gap in the cities.

    1. Open questions
      1. Is there enough economic activity to sustain a horizontal infra and logistics company?
      2. What is the relationship between cost of service and scale for such an enterprise?
  4. Ecommerce (products and services)

    Related (and maybe subordinate?) to the two concepts above is the general sense that the country and region is on the cusp of being ready for ecommerce. This will likely involve not just products (retail sector mostly) but also services (hotels, airline, restaurant reservation, talent markets, etc.). The trick with products is highly related to friction of money/trust and distribution. The trick with services is correlated with how to get enough people to pay for them (it has to be something fundamental and exemplify a broad based need for a decent swath of society in order to make the TAM worthwhile. It is worth exploring the option of tuning business models towards segments that have deeper pockets like enterprises or government (enterprises strike the right balance as a hedge on pure consumer plays if the premise is to stay out of the public sector due to its inherent messiness and sometimes corruption).

    In terms of channels, SMS is still viable, although the shift to an app based mobile experience is happening very quickly. SMS and WAP interfaces to services will likely still be important over the next few years, depending on the market segment being targeted. Web of course is a given.

  5. Marketing channels

    The ability to target the right customer is going to be huge. Now and eventually. The monolithic ‘bottom of the pyramid’ is dead and was probably never alive in the first place. The BOP is individualized and segmented in a hundred ways. Sure there are commonalities like having cell phones, but that may not be the keys to quickly reaching the right customer with willingness to pay; you have to go beyond that. Someone need to build these channels online and offline and the interstitial places in between. And then own it and rent it out for a fee.

    1. Open questions
      1. Beyond Mobile, what other aggregation points are there?
      2. How much effort needs to be put into building additional aggregation choke points vs. monetizing what is already there?
  6. Market insights

    It seems that there should be a market for truth™ somewhere in the equation. The data needed to make really good decisions appears to be in short supply from cursory research. There are few companies routinely generating this kind of insight and trying to make a profit on that kind of focus, reputation and brand of helping companies refine their bets.

    The obvious difficulty is thinking hard about where this market is on a curve. Illustratively, the market opportunities in many new sectors are so obvious that deep insight might not be needed in order to make profit for a while (e.g. the mobile cell phone industry in the beginning) – the market equivalent of shooting fish in a barrel that is right in front of you. Marketing insight becomes valuable insofar as it can add high incremental value in its ability to steer capital and labor at the right targets in a world where that insight is rare or hard to find. If this is true then marketing insights may need to be steered initially to established and growth businesses and not to startups.

    1. Open questions
      1. Maybe marketing insights are superfluous for new ventures (and not their priority) at this point in the development curve.
      2. Is the market for insight fully dominated by consulting companies at this point or are there significant gaps?
  7. Healthcare

    The need here is just massive. But of course the minefield sown by regulation and horrible infrastructure is vast. I plan to explore this in the future. But I just don’t know enough right now.

What I don’t know (in addition to the open questions)

  • Who is being successful at what? And for the successful ones, what are they struggling with?
  • What is the variation in the economies of different African countries – Nigeria, Ghana, Kenya and SA as bellwethers?
  • What key metrics, indices and data points are relevant for each country in order to think about investing in new ventures?
  • What specifically in the environment should a smart entrepreneur pay attention to? For example, how many bank accounts exist, how many mobile wallets exist, how many debit card exist, how many PCs exist, how many tablets, how fast internet connections are etc.
  • How to track the transparency and cooperation of the public sector in order to understand when they can become a significant target for growth opportunities.

The last rubicon for digital content – ownership


A few months ago, I kind of enskied the whole digital music revolution in this blog post. I almost literally have access to the world’s music on my Windows Phone and Surface via Xbox Music. There is something pretty amazing about that and the rapidity with which it has happened; and I’m pretty unhappy that I don’t have the same experience for movies.

The problem though is that I don’t own any of this content. For the most part I am renting it. I rent Hulu, I rent Netflix, I rent Xbox Music, I rent Spotify. I rent Kindle books. Even as I write it, I feel a huge sense of being let down. You see one of the reasons I became a reader was because of a decent physical library that fueled the discovery of many kinds of literary genres, in my house. The fact that it was initially pre-selected for me by an authority figure (my dad mostly) helped ease me into it pretty well.

I have no idea given the current renting regime, how to bequeath the stuff I love to my offspring. How to annotate it, dog-ear it and then preserve it for such a time when their maturity and interests make them susceptible to a gentle nudge from me to “enjoy!”. But forget offspring for a second; it’s actually pretty disconcerting that the only way you can share some digital music or movie you love with a friend is to virtually force them to sign up for a service they might not even know about – and whether it’s free* or not is beside the point.

I’m a bit of a digital survivalist – I run my own web server, email server and have been known to scoff about ‘cloud services’. It’s not that I don’t think the cloud is useful, it’s that I think it’s far cooler to have your own cloud that you have complete control over than to trust in the goodwill of Amazon, Google and their ilk. Yes, I am the proud owner of the domain ‘mecloud.net’ as well :) This strategy is not foolproof in the age of NSA surveillance, but I feel a bit of comfort that to get access to my email, law enforcement would literally have to deliver the warrant to my front door.

The point being that my adoption of these content rental services is not full throated because of my inability to own outright. I’m cautious. Some would say tentative – as a cat trying to figure out if the white stuff in its saucer is cream or maybe just chalk water. Now I don’t know if I’m typical, but if I am in the remotest way, then this industry is being held back in some way by the lack of ‘ownership’ features. Or maybe the inverse; there may be more value to be unlocked by offering decent ownership and related features.

BTW, I’m not trying to be a Luddite. I am a digital progressive and I of all people understand the new world we live in and know the futility of unwinding the clock. To produce decent ownership features, one just needs to understand the lifecycle of ownership and what the main ‘verbs’ are and then innovate. Here is an example scheme that might work:

  1. Create an ecosystem that lets people give irrevocable rights to content to someone else – Bequeathing.
  2. This system should allow annotation of the content – Writing in the margins, dog-earing

Technologically, it could look like the following:

  1. Create an interoperable ownership standard that covers all content – music, video, books, and hybrid content types. This standard encodes metadata only – XML can probably express this pretty well. Interoperable because it needs to work across publishers as well as storefront purveyors like Amazon, Xbox Music, etc.
  2. Each content renting app should allow specific content to be saved in this format. Maybe for a fee or as part of a promotion or specific incentive.
  3. Apps can be made that will allow you to take this format and annotate it personally or collaboratively.
  4. The format will encode your rights into it for each piece of content.
  5. Anyone who you give a file that contains this format will now have the right to the content within it permanently.
  6. An escrow system can be used to make sure that you don’t have access to the content once you exchange or bequeath it. Or you need to pay for it again once it been activated by someone else. This escrow system could also be used to store a key a customer can use to protect their right to bequeath content.

What do you think? Do you care that you rent and not own digital content? Take this survey and tell me what you think!

*Nothing is free. Nothing. The cost might be hidden from you but still.

Media companies need to increase investment in technology R&D to win


Caveat – everything here (except the part about me) is low confidence – maybe 3/10. It’s based on some conversation and my voracious reading of lots of material around the cable, content and wireless industries. You should treat this more like an op-ed.

The media industry (from what I can gather) has traditionally innovated in the content space. But this traditional dimension of innovation is no longer sufficient to propel it profitably through the challenges it faces; a market which is delineated by more consumer power, changing customer behavior and transformative media technology and devices. To keep up and thrive, media companies need to keep pace and accelerate beyond the current technology, innovate with new business
models and find new revenue sources to diversify their reliance on traditional ad and cable revenues. The industry appears to be at an inflection point where a majority of the companies need to increase their investment in technology driven innovation, beyond what has traditionally been a normal level of investment. The simple reason is that technology is becoming a more significant gatekeeper to content than ever before and recent changes in the media and consumer landscape make it imperative to make sure innovation around that ‘gatekeeper’ is not only world class, but constantly at the cutting edge. In what follows I quickly summarize my own perception of the changing consumer landscape, key capability investments that are needed, and complimentary practical investments in terms of people and resources to realize those capabilities.

For the TL;DR crowd, here is a quick summary of the ideas in this scribble:

  • You need to increase investment in infrastructure to a) increase the speed of bringing ideas to market, b) improve consumer data analytics to improve the quality of the ideas, c) new thinking about content distribution, partnerships and building media platforms.
  • Above all you need new kinds of professionals to guide these transformations and drive change effectively within the existing organization.

The changing consumer landscape (D has been astounding)

Just 5+ years ago versus Now

5+ years ago the media industry was pretty sedate, even while the foundations for tremendous upheaval were quietly being built. Apple’s iTunes was wrecking the home that the music industry built and regional print had already been dying on the vine for decades due to the rise of the web. However for ‘heavy’ content (video mostly), the familiar structures of the cable monopolies (including satellite TV), theaters, DVD box sets and other accoutrements were still entrenched. People consumed most media in front of a TV, and mobile experiences were few and far between. Payment was pretty simple – through your cable provider, through ads or a combination of both.

But by 2007, a lot of what is causing seismic shifts were in place – a)the iPhone was launched, the App store would come pretty quickly soon after. At this point iTunes was already mature (lots of songs, very limited selection of video), b) Netflix launched its “Watch Instantly” video streaming product along with its existing recommendations engine c)Hulu was launched d) Bit torrent was emerging from niche status, nearing final version and being built into mainstream applications. This baseline of crucial new products quickly led to the Apple App Store and iPads. At the same time, major technology companies like Samsung, Google, Microsoft and Twitter, began to expand into content markets in significant ways; investing in protocols, technologies and devices that brought innovation and disruption into the marketplace that wasn’t previously there (sometime it wasn’t one product, it was a combination of them). The net effect of these new products has been to shift power more significantly towards the direction of the consumer.

Changing expectations of consumption

So today we have reshaped North American media consumers – who expect content to come to where they are, on every device they have (sometimes, synchronized between them) and expect pretty flexible prices and payment terms. The proliferation of media consumption on mobile devices alone has been astounding, centered around tablets. And it’s only set to grow. While the web is growing more leisurely, it is still hugely influential as a distribution point for customers. All this is very different from 5+ years ago and all indications are that this kind of innovation is set to increase.

In economic terms, this situation is creating winners and losers. And there is a clear trend: companies who have big expertise and R&D in technology are by and large on the winning side of things – whether it’s the technology companies (Microsoft, Google, Netflix, Twitter, Facebook) or media companies (Bloomberg, NYTimes) who have wisely invested in the capability to iterate quickly on media technologies and new business models.

World class capabilities needed

Assuming this basic premise is true, a baseline response from the media industry is increasing the investment in innovation along the technology dimension, likely beyond the current levels of investment. This means an investment in the right infrastructure and the right type of expertise (people). But what capabilities should be bought? What are the specifics of the areas of investment? It can be hard to say, but here are some guesses based on what I know so far and my own experiences:

Faster and smoother delivery

The infrastructure has to be there to more quickly and reliably translate ideas (hopefully, more good than bad) to the light of day, to be tested by the market. And then that feedback looped back to improve the product. The focus is on bringing more quality ideas to market faster as a matter of course, up to 2-5x what is traditionally possible. This means merging traditional application lifecycle management found in software technology companies with the more traditional content management driven workflows of media companies into a seamless whole. The point is that when you are effectively searching to refine your business model, speed itself is a strategic lever and short cycle times are incredibly critical.

Data-mining, Analytics and customer engagement

Sometimes the crucial clue is in the data. If you can find it. But a lot of media companies do not have sufficient capabilities to mine this data effectively. Up a level, there are no innovative way to engage customers and conduct experiments that yield information that can be ploughed back into business intelligence. As an example, Facebook runs hundreds of experiments before it launches a single global feature change. The ability to do this, generate the data, understand its significance, and respond to it; is a strategic advantage that media companies need to start emulating on some deeper level. Data mining additionally pays dividends when it helps content companies understand their customers in way that can be used to drive up the average cost of the ads served on the network through improved targeting.

Smarter distribution of content

Content distribution has to match the realities that the global customer is expecting. Media has to cover all significant outlets that customers are expecting and often anticipate, by skating to where the puck is going.

New & better partnerships

Key partnerships have a huge effect on the media business. For example, at the highest level, Apple iTunes and Newsstand redefined and are redefining the media business in incredible ways. Under these seismic shifts, media companies have to aggressively seek partnerships that complement their capabilities and enhance their brands in ways they cannot do alone.

Platform thinking

In software terms, a platform is something that encapsulates enough critical and low level functionality that it can be used by other people or businesses as their own engine of economic growth. Windows is a platform. Facebook is a platform. Twitter is a platform. CNBC is platform-ish. The point of a platform is network effects – if it works, a lot of players are invested in your success and you have multiple shots at the till of profit. There is enough in a few media properties to build a platform. Enough at least to give it a lot of thought and then actualize it if the value is there.

Practical investments to win the future

If these things are true (big IF at this point), what should a media company invest in? What should be in its shopping bag?

Here’s a partial list that will help bring what is needed to life:

The right leaders at the right level driving these transformational initiatives.

Anecdotally, the content side of the business still has the reins of power in old media companies. This does make some kind of sense and is a practical outcome of the evolution of the industry. However, now would be a time to consider bringing in new skills at the very top of the command chain. New leaders who understand how to meld the world of technology and media together and lead change in capabilities and culture needed to sustain the evolution of the industry. One pitfall I have observed is bringing in leaders at the wrong level and shackling them with old constraints that hamper their effectiveness. Technology is hard. Melding technology to media while evolving business models is even harder. The new leaders have to be empowered and also given some leeway in order to deliver. Or else failure will become a self-fulfilling prophesy.

Increase investment in high aptitude engineering talent. (Don’t worry about old media skills. Teach it instead).

You need new types of workers to carry the investment in technology. Problem solving engineers like those that new technology entrants (Google, Microsoft, etc.) have. People who think naturally about algorithms. People who love solving puzzles and hard technical challenges. People who are not afraid of mistakes and try to make the worst ones pretty quickly and improve on the state of the art. You obviously need to catch these people up on the ‘must knows’ in media, but consider teaching it to them instead so as not to suffocate the talent they bring to the table.

Automate and drive the delivery pipeline through great software integration platform – An Application lifecycle Management platform + digital Media Content System

In the same way that manufacturing firms have invested in automated technologies to streamline the pipeline of production, media companies must also invest in the ‘pipeline’ technologies to make their products faster and better. In software terms this is known as a collection of technologies called Application Lifecycle Management. Concepts like agile development, agile testing, continuous integration and continuous delivery, will have to become more normal in the media industry.   The additional wrinkle for media companies is the need to integrate these concepts from the software world into the pipeline of the media workflow. When successfully orchestrated, the organization should have the ability to execute on an idea an order of magnitude faster than previously capable.

Invest in user research capabilities and technologies

It’s imperative in a time of change to understand the core needs of your customers. Media companies need to increase their ability to engage, question and understand intent for their customers and any future set of customers they wish to serve. Investment in analytics, customer research, and ethnography need to be examined and increased where the capability is sparse.

Build data and business intelligence capabilities

It’s an entirely different muscle to analyze and understand the analytics data collected from millions of users and convert these into actionable business intelligence used to inform investment in new features, business models and investment. Data and analytics capabilities are hard to build, nevertheless to compete with the likes of Netflix and Amazon who hoover up amazing amounts of customer data and have technology platforms to pick out pins in the haystacks, one must compete in this new field. It’s the key to delivering more deeply on what your customers want and ensnaring new audiences.

Connect the last 2 in a smart analytics capability

User research and analytics has to close the loop to business decision makers in order to have an impact. Rolling up what is found to actionable tactics and strategy.

Addendum: a plug for me

There are many reasons I am one of the ‘new kind of professional’ and can help with leading some of this change in the media industry now that I live close to the media capital, New York City. If you’re a media industry exec, drop me a line.

The strategic threat of web documents

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I know I’m pretty late to the party, but I just had a transformative experience with binary formats – those things that are at the end of your documents. .doc, .xls, .pdf, etc. I sent someone a file in Word 2013 format. Ofcourse they did not have support for that (blasted Mac!). I sent it as an earlier Word format. Somehow, the recipient got stuck again. Finally I uploaded it to Skydrive and sent it as a web document. Because it would render in the browser, I wad more confident about this than the previous attempts.

And here’s what I realized. The 3 main verbs, i.e. things people do, with documents are ‘new’, ‘open’ and ‘share’. In the world pre Google docs, these key verbs were heavily dependent on the binary format – if you controlled that you had a pretty good competitive hedge on the market. And Microsoft controlled it and it ensured the hegemony of Microsoft Office. With the web, ‘share’ no longer depends on the binary format. And to the extent that people use web docs vs. share files over email, ‘open’ is also liberated from the specific binary format. This leaves ‘new’, which will also surely become more full featured on the web, even though its kind of iffy today.

And this is why Microsoft needs to fight to dominate the premier experience for web creation and sharing of documents. As far as winning the future of document productivity, the binary file is effectively dead. Whoever creates the best experience for those verbs online, while attracting the right audience has the potential* to win that market. As browsers become more capable, the opportunity for disruption will only increase.

*still won’t be easy, Microsoft Office has network effects that will take a lot of innovation to unwind. But there is probably no better time to try or think of trying.

What would make Facebook Home work? Apperating Systems hype take II

Doing a quick drive by on my previous blog post on Facebook Home™, heralded as the harbinger of vanguard of ‘apperating systems’ – never mind that there is likely nothing comparable from a major player (for example, Amazon is not apperating anything, it now has an OS team working on a fork of Android). Leaving aside the nonsensical ink spilled on this (Google should be worried, etc.). Like everything in the technology world, success of failure all depends on strategy. What will you do different from everyone else?

For example, what is the raison d’etre for Facebook home? One would assume it is to increase the share of people’s time spent in the Facebook UX even as eyeballs migrate more to mobile phones (smart phones). To do this well in the way that FB Home is constituted, one has to either meet or raise the bar of the OS – widgets, notifications, app launcher, etc. One could imagine a host of APIs that make this possible from FB home, although it would be a lot more work and expense to make it so. Talk less of evangelizing those APIs. Or be less intrusive all together (which might adversely affect the minutes spent). But minutes spent it not the only goal. Facebook is now a public company and needs to make money. How does it translate stickiness (if it succeeds) into money? Obvi there is no answer today for FB Home. But you would imagine that an answer has to come at some point. Ad integrated FB Home? Commercial/Brand feeds on FB home (an opt-in system?). The options are varied.

In short, for FB Home and other apperating systems to be viable, they have to (a) ironically, begin to mimic the OS, a la Flash™ or Adobe Air™. This is another way to say that the OS does a lot of valuable stuff, otherwise OS companies will not invest in them. To ‘replace’ them to a significant extent, one has to clone some of the best bits of them; and that’s not cheap. In fact after a while, what you create starts to look like an OS or a runtime. Amazon understands this and have gone a very different direction with its own investments, fully forking Android and making its own hardware; a path that many assume FB would take (a logical path except that FB might not have compelling content to make this interesting to a large market and differentiated hardware is very hard to do). (b) They have to find a way to be connect to the commercial strategy of the creator directly or indirectly.

FB Home does not do any of these things well yet. It has to evolve in this direction or it will likely stay pretty irrelevant.

Nolo Contendere; iPad wins (for me i.e.)

I needed a mobile computer for reading and note taking for the MBA at Berkeley and Columbia, so naturally I got the iPad. It was the only game in town really (I already had a laptop). But I worked for Microsoft and I believed in Windows 8; and had a patent or 2 in there somewhere. So when the Surface RT was announced, I pre-ordered one and landed it as soon as was humanly possible. For the first few weeks of dual ownership the iPad saw stars – I wad enamored with the new toy and scoured the app store for useful applications. But in the end, the truth will assert itself. Over the past year I have slowly settled on the iPad as my go to slate and the Surface for more Microsoft specific integrations: Skydrive photos merged into Office, into email, etc. It’s about 90/10 split in terms of time spent. This is pretty surprising because I use Windows Phone 8 exclusively and now have 3 different phones with the same software that I carry around pretty happily even while owning an iPhone 4S. That split is about 99/1 in favor of Windows Phone.

The answer actually is simple. The Surface hardware is underwhelming. It’s a tad too thick (and no I don’t mean Surface Pro, I shudder at using that one in the way I use tablets – it’s basically a very small laptop and I don’t need that) and its 11 inches and 6:9. Look folks Steve Jobs called it: the best form factor for a tablet is not 9:6 its 4:3. And for you video purists out there, you can go suck it. The fact is that video use is occasional, but app use and reading is constant and 4:3 just works better – vertically using a 9:6 tablet is just…. weird. And pretty soon I’ll be moving to a mini tablet. I don’t really need a 10 inch screen if I can get a 7 incher with enough screen resolution. It’s lighter, more pocketable and provides a clearer separation of duties between my phone, tablet and laptop….until I get onto the Phablet bandwagon.

The fact is that there are many things about the iPad that infuriate the hell out of me. The quirks of software, the clumsier multitasking even with IOS 7, the lack of side loading, the walled garden nature of it, the list goes on. But none of these are enough to make me take on an 11″ screen and a 9:6 form factor. I’m what you call an easy lay – can someone just make that? A thin 4:3 windows tablet at 10 or 7 inches? How hard can it be?

It’s gratifying that Nokia seems to be listening with its Sirius tablet. Disappointing that Microsoft is not with Surface 2.

It’s not that hard folks. Figure out what people want. Give it to them.

Phablets FTW?

One of the few pieces of evidence that I am getting smarter (in contrast with the much more believable idea that I am unfortunately past my dotage) is that I am more reticent to participate in any kind of romantic matchmaking or technology predictions. In both cases, it’s a crapshoot with too many variables involved that don’t resolve themselves except with the use of a time machine or just plain getting old. So instead, I try to focus on facts. So while I once scoffed at the ‘Phablet’ phenomenon, it’s an indisputable fact that the Asians are going for them
in a big way. Now since IDC released this study, cue the laziest journalistic class in the world (tech journalist!) predicting a worldwide sweep of phablet fever.

Not so fast. This seems to be an Asian phenomenon for now, starting from the mature markets like SK and HK and moving to India and China. Japan is pointedly excluded and I’ve heard the Nipponese love small exquisite things, which my visit there sorta confirms. So those are the facts. But what else do we know about this phenomenon? And how can we predict what direction it will take?

The first is that Apple seems to not really believe in it or at least its urgency. It’s stuck to a 4 inch diagonal screen with the release of the 5S and 5C. A decision it will have to live with for about at least a year, given its recent refresh cycle. BTW, this does seem like an error given that Apple needs wins in Asia. The second is that there is huge interest in phablets from all vendors. Samsung pioneered the segment and a flock of OEMs have followed. Even Nokia is set to release the Lumia 1520 and was recently caught asking customers how they refer to largish smartphones seeing as it doesn’t trust the term ‘phablet’ (Good on you Nokia, it does seem to leave a bad taste in the mouth). Microsoft has had to modify its software for larger screens in response to the demand as well.

On the customer insights front, there are slim pickings:

  • Phablets tend to compete with smaller tablets – this is a no brainer, they’re about the same size, why own an iPad mini and a Samsung Note III? Common sense gets in the way. So Phablets have a slightly bigger addressable market that traditional smartphones (no guarantee since a segment will always find them too big).

    • Phablets are generally connected to the internet while small tablets can be intermittent (the vast majority sold are wifi only). This means that all casual web browsing is uninterrupted and fairly capable. This is a step up from standard smartphones that compromise the full desktop web experience, responsive design notwithstanding.
    • Fair in multitasking
    • Pretty decent second screen
    • Better child minders than normal smartphones
  • Phablets don’t really support one handed use unless you’re Paul Bunyan. You generally need both mitts. The nub of it is that your thumb cannot go all the way from your grip on one side to the top of the opposite end of the screen. This means that in car use is limited (which is a good thing), among other things.
  • Pure guess but there is probably some higher correlation between use of headphones or wireless headphones and phablets. Just lifting that thing to your head has got to be tiring. More broadly, any technology that moves away from the pure physicality of phones will likely benefit the phablet (e.g. Bluetooth, wired headphones and standards, using phones as the embodiment of the next unit of computing, better in car integration technologies etc.)
  • Phablets are straining the limits of pocketability. This seems to be more of a problem for men – they rarely carry bags to aid with the portage of personal accessories. Either this will be a natural limit or fashion will change in response. Place your bets right here!

What does all this add up to? That aversion to BIG is not enough to slow down the march of phablets. It’s more complicated than that. That there are compelling reasons why consumers would want one, not least of which is an economic reason (consolidation). That the obstacles to adoption are surmountable.

I’m personally not a fan at this point but I can see why other rational actors would beg to differ.