The Fallacy of the First-Mover Advantage

In a recent article in strategy + business entitled “the Value of Being Second,” Oded Shenkar, author of “Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge,” introduces an excerpt on the wisdom of entering markets after first movers from “The Art of Being Unreasonable: Lessons in Unconventional Thinking,” by Eli Broad. The myth of…

An Apple Effect Worth Watching

Most technology companies are cognizant of how network effects influence adoption, but fail to adequately stimulate these network effects.  However, a few recent service launches by Apple recognize the influence network effects can have on the uptake of Apple devices.  AirPlay and AirPrint both illustrate Apple's understanding that the greater the sphere of influence iOS devices can have, the stronger the network effects and therefore the…

When eReaders grow-up to be Tablets

What happens when eReaders grow up to be tablets? This morphing is already well underway. Barnes & Noble has always referred to the Color Nook as a tablet eReader - with tablet being the operative word. At their event this week. B&N claimed the Color Nook is the top selling android tablet in the market. Amazon – the current king in e-ink eReaders – is getting set to launch potentially two new tablet-oriented devices.  E-ink is actively working to bring to market color e-ink screens and other eReader players are treading towards tablet-like devices.  But this evolution has important implications.

First, network economics for text are very different than they are for video and more data-intensive applications. One of Kindle’s opening hallmark features was the ability of the user to download books via the cellular connection without having to independently contract with the service provider.  In fact, at one point Amazon switched Kindle cellular service from Sprint to ATT and users never took notice.

This won’t be the case as users gain access to more data-intensive offerings. These services are more bandwidth intensive (and therefore costly) than delivering text over the network.  Even though our research has constantly shown most tablet users primarily connect via Wi-Fi, the existing service contracts can’t work when devices are more than books. This will be a key element in the new tablets being launched by Amazon.

App usage on apps-enabled devices will crowd out book usage.  This has ramifications for device pricing.  In the early days of Kindle, Amazon subsidized the content instead of the hardware. This changed as Apple moved into the book business and subsequently eReader OEMs began selling ebooks at the publisher price and subsidized the hardware prices (or atleast began selling them at very low margin).  If the margin is made on the ebooks and their are less ebooks sold as a result of changing use-case scenarios - OEMs will be in search of a new business model to driven margin.  …

Yes, believe the hype about the National Debt

Sally Kohn's recent prose in USA Today was right in spirit, but nowhere else.  Yes, we should worry about innovation.  Yes, the future of the US economy is innovation.  And yes, we should be making strategic investments into innovation.   But it is ludicrous to suggest the national debt discussion is some "ideological attack."

Kohn inaccurately compares a company's income to the US economy's GDP. The analogy fails on the surface. GDP measures national production, not the US government's revenues - which are the ultimate source of repayment for debts issued. The US government collects net receipts of $2.16T - giving the US government a ratio of over 6-to-1.…

On Privacy

I’ve written about Xobni for Outlook in the past, but a recent experience illustrated the role data will play in the future and ultimate implications for privacy.  When it first launched I tried freecycle and several months ago I signed-up again to see how the service had evolved and was progressing.  Because I knew this…

Long-run implications of the Death of Kin: Why Blockbusters must be Blockbusters Quicker

Much has been written about the “death” of Microsoft’s Kin (see: here, here, and here). The focus of these analyses has centered on what might have gone wrong. I'd like to focus on something slightly different. In the death of the Kin phone I think we see something that has greater implications for technology innovation.…