Posts Tagged: Apple

Inspiring a new generation of entrepreneurs – RIP Steve Jobs

Image representing Steve Jobs as depicted in C...

Image via CrunchBase

We have not truly celebrated entrepreneurs since the generation of Henry Ford and Thomas Edison – entrepreneurs got respect, awards, sometimes biographies but never the attention of top athletes or celebrities. Steve Jobs has changed this – he became a mass media phenomenon with a deep impact beyond the technology circles. I hope that many thousands of kids and teenagers from around the world now have a new role model and got inspired to become entrepreneurs trying to change the world.

This might be Steve Jobs’ greatest legacy. RIP.

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What are your predictions for 2011? Here are my top 4.

I didn’t do too badly predicting what would happen in the consumer Internet space in 2010 so I am giving it another try for 2011:

  • Android will become the most important mobile platform to develop for – the iPhone platform will be number 2, the rest (RIM, Windows Phone) will only play a marginal role. While Android has clearly been gaining market share on the iPhone in the past months, most developers still consider iOS the most important platform – this perception will change in 2011.
  • Mobile apps will start impacting offline purchasing decision in a significant way. 2010 has seen the launch of many mobile shopping app like Shopkick or Barcode Hero (a W Media portfolio company) but 2011 will be the break-through year for “local, mobile commerce”.
  • Early-stage financing will continue to be close to a bubble as there is simply too much money chasing too few deals. So if you run a start-up, think about raising that next round of financing rather earlier than later. (On a side note: the Canadian market is clearly not as hot as the US market).
  • IPO and M&A markets will finally open up. It has been long time since we have seen a major IPO in the web space and a hot M&A market – I thought that this would already happen in 2010 but hey, 2011 is good enough!

I originally wanted to come up with 5 predictions but had a hard time finding as many without either completely speculating or stating the obvious – so what do you think will happen in 2011?

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How to react to product problems (hint: not like Apple)

Image representing iPhone as depicted in Crunc...
Image via CrunchBase

As the iPhone 4 antenna problem is slowly spiraling out of control (some people even start discussing a recall) I thought it would be a good time to review a few key points how to react to (serious) product problems as a company. I learned my share back in the AbeBooks days when we had a period of frequent down times that we didn’t manage that well. From my experience, there are 3 simple rules for dealing with serious product problems:

  • Be honest and open: denying the problem usually doesn’t work and only destroys your credibility as a brand. Corporate speak also isn’t effective. Just be completely honest with your customers and share as much information as you can: what happened, why it happened and what you are doing to fix it
  • Over-communicate with your customers: a disgruntled customer gets even angrier when he does not get timely updates about the problem so start communicating with your customers right away and provide frequent updates. If you don’t know yet what the problem is and when it will be fixed (e.g. in the case of a downtime where you still looking for the root cause), say so which is still better that not informing your customers at all.
  • Take the short-term financial hit: a recall of a product or crediting customers for service interruptions can cost a lot of money but if you are interested in building a great brand for the long-term, you must take the short-term financial hit. Your customers will reward you many times over with increased loyalty and positive word of mouth.

I don’t know if this antenna problem is serious enough for a recall of the iPhone 4 but I do know that Apple is currently destroying quite a bit of its incredible brand equity by being the (negative) headline story of many newspapers and blogs.

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Is the “Third Wave” here or is this just another step in the Internet’s evolution?

Michael Arrington has argued at the occasion of the launch of his new Techcrunch Disrupt conference that a “third wave” in the evolution of technology is here. With personal computing being the first wave and the Internet the second, he claims that the growing importance of social, mobile and new forms of commerce is revolutionary enough to be called a “third wave”.

I generally agree with his assessment of those major trends driving the future development of the Internet but I would like to add a few thoughts:

  • I think that it is rather an evolution than a revolution – social and mobile have been part of the development of the ecosystem since quite some time but have now both reached enough scale to be large underlying growth drivers
  • I would add “open data” as an underlying driver of the development we are currently seeing – as more and more data is made accessible to the public, new and interesting applications will be built on top of this data.
  • The biggest risk will be that social could end up being fully controlled by Facebook and mobile by Apple and I hope for the development of the overall ecosystem that we will see strong competitors and platforms to both emerging (which is more likely in mobile with Google’s Android than it is in social)

Even though the current development feels more like “Web 2.5″ instead of a”Third Wave”, these are extremely exciting times for Consumer Internet entrepreneurs and investors alike with social, mobile, new commerce and open data driving a lot of innovation in the upcoming years.

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Building a company on top of an existing platform – yes, no, maybe?

There has been a lot of chatter about platforms as of late and their moves have mostly been to the detriment of platform developers (Facebook forcing Zynga to use their credit system; Twitter banning third-party apps from inserting in-stream ads or Apple changing their developer agreement to ban use of third-party analytics and services). As the life of a platform developer has become less interesting / profitable and more risky, should you still consider building a company / product on top of an existing platform?

First of all, every platform that is run by a for-profit company will ultimately try to maximize their economic rent and will leave just enough on the table for application developers to keep them motivated to continue to innovate on the platform. To assume that platforms would think differently about this is naive in my opinion (hence I am still surprised why people are still so upset about Twitter’s moves as of late). Given this assumption, there are only 2 strategies for app developers to mitigate risk and build businesses on top of other platforms:

  • Focus on applications that are (most likely) non-core to the platform in order to minimize the risk of being completely taken out by the platform (as happened to some Twitter iPhone apps when Twitter bought Tweetie)
  • Diversify as quickly as possible onto other platforms in order to limit your dependency (e.g. in hindsight Zynga should have probably focused earlier on the iPhone platform and building up their own web properties)

The risk of developing for a platform must be weighted against some of the amazing distribution (and monetization) opportunities that all of the large platforms offer so the decision will never be black or white. Personally, I would invest in a company that intends to build products on top of an existing platform like Facebook or Twitter as long as they have a clear strategy to mitigate risks as mentioned above.

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