Competition works.
Here is a great example. In response to the spread of retail health clinics (Walgreens/CVS) and urgent care centers which provide basic services, the American Academy of Family Physicians is advising their doctors to expand their hours to see patients on weeknights and weekends.
Our pedetrician takes our cell phone calls. Just around the corner is seeing us via FaceTime. If not, someone else is going to come and do it.
I have written before — on this site and elsewhere — about the sorry state of mobile broadband and how it threatens our entire innovation ecosystem.
The FCC has the typical bureaucratic blindness to this, not even understanding there is an issue.
So we’re lucky that we have two of the most unreasonable entrepreneurs alive who are going to make a run at disrupting the industry’s coziness.
The WSJ today has a story about the unconventional Masayoshi Son and his desire to revitalize Sprint:
When Mr. Son announced the deal last month in Tokyo, he didn’t mince words about his ambitions: “I’m a man, and I think every man wants to be No. 1.”
That is easier said than done. Sprint is struggling with an expensive network upgrade, a $15.5 billion commitment to subsidize iPhones for customers and a heavy debt load. Sprint also is well behind the market leaders in its so-called spectrum holdings—its right to use chunks of the airwaves to transmit phone calls, Internet traffic and other data. AT&T and Verizon Wireless—a joint venture between Verizon Communications Inc. Vodafone—have the most valuable spectrum holdings in the U.S., with more than 100 megahertz each. Sprint holds 56 megahertz, a deficit that isn’t as bad as it looks given Sprint’s lower subscriber count. The company is using funds injected by Softbank to acquire more, including a deal this month with U.S. Cellular.
Softbank’s acquisition would inject $8 billion directly into Sprint and give the carrier more flexibility to buy spectrum or acquire smaller rivals. The money also could help Sprint to continue offering plans that let subscribers use as much data as they desire for a flat rate—the kind of appealing deal for customers that AT&T and Verizon have all but dropped.
At the same time, one of this blogger’s favorites, Charlie Ergen, the satellite tv gladiator, is looking to use his spectrum to create a terrestrial wireless competitor.
At the crossroads of American discovery and foreign language documents sits a vault of money:
Common Sense Advisory, a research firm, estimates that thworldwide language-services business is worth $34 billion and it is growing fast, at about 12% a year. No firm is big enough to dominate and most are privately held. The biggest, Mission Essential Personnel, boasted revenues of $725m in 2011; TransPerfect raked in $300m. Fees from legal work can be juicy.
TransPerfect worked for both sides in the case involving Apple and Samsung. When Panasonic, a struggling Japanese electronics-maker, bought Sanyo, another one, in 2009, America’s antitrust authorities required so much documentation before approving the merger that TransPerfect hauled in $25m in fees for translating around 100m words.
Marc Andreessen last week, as reported by the WSJ:
“Now that we’ve wired up the world so thoroughly, we think that technology – the Internet and mobile technology – has a chance to impact a lot more fields of activity and industries than has ever been the case.”
Financial services, health care, education, certain aspects of government and law are especially “ripe for disruption”
From the WSJ Innovators of the Year feature, a curious analogy for Jack Dorsey, but the “efficiency of motion” theme is a helpful way to think about untangling complex systems:
He’s considering Charlie Chaplin’s Modern Times as his next cinematic lesson. “Every little move Chaplin does, every tic,” says Dorsey, “is either to further the story or for comedic effect. There’s no wasted motion. It’s so stark and so clear. And when you focus on the details and on efficiency of motion, something really magical happens.”
…
With both Twitter and Square, Dorsey’s flashes of insight are by-products of a lifelong quest for simplicity and order. Dorsey yearns to create streamlined beauty out of giant ungainly systems that at first glance appear to be irredeemably chaotic. He is the Charlie Chaplin of technologists: He makes the impossible happen through efficiency of motion.
On Thursday, GSK announced an effort to release to open up its clinical trial data sets to outside researchers, perhaps leading the pharma industry to join the Kaggle trend, in freeing data to get the larger community of smart people to mine innovative truths from the data.
GSK announced:
GSK is fully committed to sharing information about its clinical trials. It posts summary information about each trial it begins and shares the summary results of all of its clinical trials – whether positive or negative – on a website accessible to all. Today this website includes almost 4,500 clinical trial result summaries and receives an average of almost 10,000 visitors each month. The company has also committed to seek publication of the results of all of its clinical trials that evaluate its medicines – regardless of what the results say – to peer-reviewed scientific journals.
Expanding further on its commitments to openness and transparency, GSK also announced today that the company will create a system that will enable researchers to access the detailed anonymised patient-level data that sit behind the results of clinical trials of its approved medicines and discontinued investigational medicines. To ensure that this information will be used for valid scientific endeavour, researchers will submit requests which will be reviewed for scientific merit by an independent panel of experts and, where approved, access will be granted via a secure web site. This will enable researchers to examine the data more closely or to combine data from different studies in order to conduct further research, to learn more about how medicines work in different patient populations and to help optimise the use of medicines with the aim of improving patient care.
This initiative is a step towards the ultimate aim of the clinical research community developing a broader system where researchers will be able to access data from clinical trials conducted by different sponsors. GSK hopes the experience gained through this initiative will be of value in developing and catalysing this wider approach.
From my first computer, a TI99/4A to the PC clones we upgraded to every couple of years, the PC has tracked my life; getting more and more powerful, useful, and desired as I have gotten older.
This year, worldwide PC sales will dip significantly on a year over year basis.
In the last 3 decades, to the extent that this dip has happened before, it has been due to a weak economy. This time, it’s more fundamental — people are ready and comfortable in giving up their personal computers due to smartphones and tablets. And as happened with wired telephony, many poorer citizens of the world will simply leapfrog over the personal computer going straight from no computing power to a portable device. The industry cannot count on growth, and it is a big reason why Dell, HP, and other big PC makers have hit a pothole.
This is a significant turning point, obviously. The PC is losing its space on our desks and in our briefcases.
Often, opportunities lie in the gap between one part of the market and another complementary part. One of these opportunities lies in the gorge that has opened between the hardware and some common software functions. Specifically, despite the power and convenience of portable devices for email and the Internet, there is a big gap between changes in people’s preference and their ability to competently and confidently execute certain basic functions of the PC on portable devices, in particular, the typical office suite of word processing, spreadsheets, and presentations. To put some meat on it, I come up with my best ideas while waltzing around town on my phone, but if I have to turn it into a formal presentation, I still frustratingly need to sit and wait for my computer to boot up.
That is just one example of the gap between the preferred hardware and the lagging user experience, but it’s a big one. As I have blogged before, I am still surprised that so little effort and progress is being made on this problem, when history (Microsoft, for example) illustrates how much durable market power is available to the companies that work and solve this problem even half-way competently.
Once upon a time, banks paid customers to hold their money.
That was a long time ago. Today, banks pay little interest and charge high monthly fees relative to the balances held by account holders. This change-in-tack corresponds to a time when having a bank account is increasingly more important as we move toward a cashless society.
Enter Wal-Mart and Amex’s introduction of the BlueBird service. There is probably more than some overlap between the unbanked and WalMart customers. It’s a natural business opportunity for Wal-Mart, and potentially immensely disruptive to banks.
Here is a short description of the service:
Using the retailer’s stores to promote and support the card, American Express is seeking to reach low-income customers with the service, which allows for cheque deposits and payments by smartphone and has no minimum balance or monthly fees.
The service, called Bluebird, is Walmart’s latest foray into financial services. As the retailer competes against encroaching
online rivals, the move could also help ensure customers keep visiting its stores, which will serve as Bluebird branches.Dan Schulman, an American Express executive, said: “In an era where it is increasingly ‘expensive to be poor’, we have worked with Walmart to create a . . . product that rights many of the wrongs that plague the market today.” He said it was aimed at the “wide swath of consumers who are either unbanked, underbanked or unhappily banked”.
In terms of getting an insight into “Tony Stark’s” head, the last 5-ish minutes of Kevin’s Rose’s Foundation interview of Elon Musk is a gem:
I think its important to reason from first principles rather than by analogy…The normal way we conduct our lives is we reason by analogy…
We are doing this because it’s like something else that was done..or it is like what other people are doing…slight iterations on a theme…
“First principles” is a physics way of looking at the world…what that really means is that you boil things down to the most fundamental truths…and then reason up from there…that takes a lot more mental energy…
Someone could –and people do — say battery packs are really expensive and that’s just the way they will always be because that’s the way they have been in the past…
They would say it’s going to cost, historically it cost $600 KW/hour. It’s not going to be much better that in the future…
So first principles..we say what are the material constituents of the batteries. What is the spot market value of the material constituents? It has carbon, nickel, aluminum, and some polymers for separation, and a steel can..break that down on a material basis, if we bought that on a London Metal Exchange, what would each of these things cost. oh geez…It’s $80 KW/hour. Clearly, you need to think of clever ways to take those materials and combine them into the shape of a battery cell, and you can have batteries that are much cheaper than anyone realizes.
The contrast that Elon makes is between reasoning by analogy and reasoning from first principles, i.e., finding fundamental principles and reasoning up from there. The assertion he makes is that the method of being truly creative is reasoning from first principles.
This assertion is surprising in a sense. We tend to intuitively think that reasoning by analogy is superior. In fact, it is important in some cases, such as when you use an analogy that is distinct — bringing ideas from completely disparate fields to spark a new way of thinking of your problem. Think of Da Vinci and Darwin.
I think it’s better to think of Musk as criticizing close analogy. This is dangerous in at least two ways.
First, you can become an incremental thinker, chasing and seduced by ideas like:
This type of thinking is seductive in Tech World, in parts, because it is also very amenable to venture pitches, easy communication, and Tweets.
Second, and I think perhaps more dangerous from Elon’s perspective is that analogical thinking squashes creative ideas. The example he uses above — the cost of batteries — is illustrative. Using reasoning by analogy, conventional wisdom drawn from past electric battery efforts was that cost could not be reduced past a certain point.
As explained by Musk, from a first principle perspective, this was not true if you thought of the battery problem in terms of the cost of the components.
Another example from Elon’s world is with rockets. Analogizing to the experience and costs of government space programs hampered almost everyone’s thinking as to the viability of private space ventures. SpaceX’s efforts, so far, have shattered this conventional wisdom, and manned space exploration is next on its radar.
A place where this comes up in personal efforts at entrepreneurship is thinking about the way certain markets are today. You have a choice:
If you see a problem in the relation of a market structure and the results that flow from that structure, you can analogize to past or current status quo thinking, and can be deterred in moving forward, thinking that there is a good reason that past efforts have failed or there is an inevitable reason that the market structure is the way it is.
Or, you can examine rigorously from a first principles perspective. If after exhaustive exploration of the first principles, and the reasoning built on that, you can remain convinced that you are correct about the problem in market structure. Then the question is do you have the courage to move forward and tackle it to change it and create customer value.
I found yesterday’s discussion on AVC relating to building your own network invaluable and pulled out some nuggets to structure one of the questions that occupies my thinking:
How do you bridge marketplace with community so that a robust network on both the talent and customer side develops.
Some conceptual models from the comments in the discussion jumped out for me. They all suggest, as an answer, dual-use curation, where the user action has some standalone value to the user, but it also sparks some sort of community engagement, as people react, borrow, mix and match, etc. There is a benefit to both the individual and the community, and the community engagement builds out the network.
These are the conceptualizations that popped out to me:
I am specifically thinking of talent marketplaces. In the talent world, suppliers naturally curate, bookmark, or have single-player mode actions that they rely on. For example, I have a number of models and examples that I have as a go-to file when a new matter comes up. Lawyers, bankers, doctors, engineers, etc. all have analogous actions.
Now to move it online to create a network. The key may be providing a service that allows me to do something useful with this in stand-alone mode , but then also multiplies the value many times by allowing a community to grow up around the standalone action. One does this by allowing both sides of the marketplace to react, remix, or just use the standalone use as a resource. This multi-player mode us can create the community around the marketplace, resulting in greater sign up, stickiness, and participation on both the demand and supply side, increasing the reach and ultimately the power, utility, and efficiency of the marketplace network.
Moreover, where the single-player mode, is also a signal of quality in the marketplace, it can also serve as a signal to customers about the value of the supplier’s ability, while further incenting the supplier to participate actively on the network.
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