Thoughts on the iPad

A few weeks ago, I made some predictions on what might be announced with the Apple tablet device. I tried to include a mix of new technologies, new usage models, and new business opportunities for both Apple and consumers. To a decent extent, I was in the ballpark on most of my predictions, with some of them still being possibilities at a later date.

Like many people, I read the comments from journalists and "experts" after the launch party. I made a mental checklist of items that appeared to be "missing", and features that appeared to be unique. The technologist in me was driving my evaluation. But then I went and watched the keynote by Steve Jobs. As he sat in the chair, surfing the web, it dawned on me that this would actually be the "Internet & media consumption" model of the future. While it was obviously staged, the experience of watching Jobs lose himself while he experienced the world offered a glimpse of the future. The experience appears to be a preview (or 1st generation) of the experience where the activity and the computing device begin to blur, and the computer no longer gets in the way. Marc Cuban seems to agree.

It doesn't do everything that previous devices do, but it does appear to do certain things uniquely well. The definition of a disruptive technology. It will get significantly better over time, just as the iPhone did between the 2G and 3GS models.

Sitting on my couch, typing this blog on my MacBook laptop, I wish I was using an iPad instead. My legs are too warm from the laptop, and the power cord keeps getting in my way. Yes in deed, it's time for a new device and a new paradigm.

Sign #1 that you work for a Big Company

We haven't gotten to the formal "How to Manage like a Big Company" course in the program yet, but we've analyzed plenty of case studies that highlight how to quickly identify that a company is in protection mode and no longer intends to add value to their market or for their customers.

Here's a perfect example from the PC / Netbook market, which we analyzed back in ITMgmt last semester. The model for unnovation goes something like this:

• New competitor comes out with a new product/concept/service, which initially seems radical or crazy (to your way of thinking).
• Big company immediately dismisses the product in public forums.
• Big company talks about how that model is bad for everyone in the industry. Essentially creating a negative-sum game.
• Big company internally creates a taskforce of people to explore if they could do it. They usually take existing people from their semi-competitive product line to evaluate it, biasing the results from Day 1.
• Internal taskforce can't figure out how to make something better, since they are using the new product as a template (to copy).
• Internal taskforce decides that it would be better to dumb down an existing product and claim market-share in the existing market.
• Company publicly announces that the new market is viable, and one of their growth areas.
• VP from a previously failing group gets internally promoted to SVP/GM of the "new" division, because he has experience in new markets. This is sort of like when losing head coaches get recycled in the NFL or NBA.

Hence the unnovation cycle begins and becomes the new strategy for the company. Ignore the fact that their cost structures, market analysis, distribution channels all probably need to change in this new market. Those can all be "fixed" later.

Disruption vs. Shareholder Maximization

[With our Global Strategy course this semester, I'm going to highlight a bunch of interesting business models and strategies]

I don't think I made too many friends in our Strategy class this weekend when I called the b.s. on two of the foundational principles of MBA programs: Accept all positive NPV projects and Shareholder Maximization Theory. I understand the concepts, and I understand the techniques. I'm just not convinced that it's the right guiding culture to build long-term companies. As Dr.Baliga stated this weekend, "too many times, those projects start with budget and then get wedged into strategy after the fact". I couldn't agree more.

Here is a good example from a recent article about Netflix, and how they are once again innovating to change and disrupt the market.But this time, they are not only disrupting the market with streaming video, they are potentially disrupting their current business model. I suspect that Netflix probably has positive NPV projects (today) that have values greater than their streaming projects, but are they aligned to help Netflix avoid the inevitability that all media will move online? The streaming project would eventually get funded using traditional approaches, but they would probably get started two years late and Netflix would be watching a streaming-only company pass them by.

Great Discussion about Disruptive Technologies

This one is coincidental, as we're just now getting around to discussing Disruptive Technologies in our ITmgmt course. I personally think the entire course could (or should) have been focused on that, but I don't make the syllabus. Oh well...

A few weeks back I talked about a B.S.Report podcast between Bill Simmons and Chuck Klosterman where they discussed the downfall of the newspaper industry and some of the reasons this was happening.

As a follow-up to that discussion, Bill interviewed (right side of page) John A. Walsh, one of the Sr.Execs at ESPN behind ESPN.com and SportsCenter. Not only did Walsh provide additional reasons why the newspaper (and traditional news) industries are struggling, but he provided excellent insight into the mindset that is needed to truly create disruption within an existing marketplace. His passion for creating change and thinking differently comes through in ways that make you wish that you were working on one his projects right now!!

If you get a chance, take a listen for the first 30 minutes (or more) and then determine which end of disruption your business is on today. And keep in mind that ESPN began during the middle of the 18% interest rates and recession of the early 1980's. There may be no better time than now to be disruptive.