Google's Sneaky New Map Trick

Google maps stopped showing you addresses. Huh?

iPad vs the Rest: It's the Marketing, Stupid

James Kendrick of ZDNet wrote a nice article today on why no one can challenge the iPad.  His thesis is not that the iPad has an unassailable first-mover advantage, that consumers automatically associate "tablet" with "iPad," that the iPad has the superior ecosystem, or any of the other arguments that are usually made.  Rather, according to Kendrick, it is the end-to-end pre-purchase experience that Apple presents the consumer.  While I am sure the other factors play a role as well, I think that Kendrick is on to something.

Essentially, Kendrick's thesis is that no one cares about the technical features of their tablet. Unlike a computer, the majority of buyers don't think of a tablet as something they need, but rather something they want.  They want the "magical" experience that Steve Jobs offers them, from his initial unveiling of the iPad at a frenzied press conference down to the last detail of his gleaming white Apple stores.  

By comparison, other tablets are aimed at the tech-savvy crowd, and come from companies whose DNA - and marketing message - is computing rather than consumer electronics.  Even if a competitor could come up with a marketing message that appeals to the masses, Apple's "coup de grace" is "carrying the magical marketing experience right to the cash register." Other tablet makers simply lack the infrastructure to even compete on the retail front.  Not only do other tablet makers lack their own retail channels, but the shopping experience that is offered is abysmal, writes Kendrick:

Go in any Best Buy or other big box retailer that carries tablets and there’s no telling what you’ll find. Maybe there will be a counter with tablets scattered all over. Maybe some of them will actually work. The only consistent part of the retail buying experience for tablets is that the sales reps don’t know much about any of the products, much less help you decide which one is right for you. They don’t care, frankly, and that message gets through loud and clear.

In the online channel, where design is more fluid, cheaper, and under the manufacturer's control, the other tablet makers should in theory be able to compete on the shopping experience.  However, writes Kendrick, this is not the case:

If you don’t believe that, simply visit hp.com and try to buy a TouchPad. It’s in the Home & Home Office section, and the first thing you see is not magical marketing, it’s a small sales page that compares the two models of the TouchPad. No pizazz, no marketing, just click to buy.

The same holds true for all online retailers selling tablets. They are designed for selling computers [emphasis mine], and expect the customer to have some idea what they want coming in. Their sites aim to help you decide between competing products, which assumes some prior knowledge. There is no sales technique at play, simple point and click to buy. Or to leave, which is apparently what most customers are doing if sales numbers are accurate.

So what can tablet makers do to compete with the Apple juggernaut, besides having better marketing campaigns?  A couple of off-the-cuff ideas:

• Control the retail channel: either do a better job partnering with existing retailers, or set up more stores like the Samsung Experience.
• Find alternative distribution channels to the traditional consumer electronics retailers, where they can be the exclusive tablet offered in the store.
• Create a more compelling brand story around their products.  Apple realized long ago that computing is personal, and that people would identify with their computing devices like they identify with their fashion choices.

Ultimately however it will depend on tablet makers getting outside of their computer-seller box and getting into technology-as-fashion.

How iPhone, Android, and BlackBerry users stack up. Plus, 33% of Americans would rather go without sex than their smartphones.

This is a fascinating infographic on how addicted Americans are to their smartphones, as well as the differences b/w iPhone, Android, and BlackBerry users.  My favorite stats:

• In favor of the appeal of Android's hardware diversity: 50% of Android users think their phone reflects their personal sense of style, versus only 35% of iPhone users and 43% of BB users.
• In favor of the appeal of the iPhone to developers: Only 38% and 37% of Android and BlackBerry users have ever paid more than $1 for an app, vs 55% for iPhone users.  The dig on Android that users don't pay for apps might have some truth to it.
• In favor of BlackBerry: nothing really.  Sorry RIM.

Posted via email from SYSTEMS ANALYSIS

Why Facebook May Really Be Worth $100Bn

I wrote my last post about how Facebook was a bubble, so now I am going to eat my words and explain why I think Facebook might be worth its price after all.  

I have long been a FB-apostate when it came to seeing the platform’s monetization potential: big, yes, but $100Bn big?  Now however I’m starting to see the light.  And it's not because of advertising.

I believe that Facebook has won the online identity war, and the spoils will be enormous.

Companies like MSFT and GOOG have forever been trying to create a single identity for users to use across the web, from MSN Passport cum Windows Live, to the simply titled Google Account (or is it Google Profile?) cum Google+.  Other, parallel efforts have focused on being a one-stop destination for all things online, from the Yahoo! Portal to iGoogle. But FB has actually done it, and not as a bolt-on afterthought but as their core competency (granted the portal was Yahoo's core competency, they just weren't very competent at it).  Because identity is a natural monopoly, this makes FB’s dominance of this space difficult to challenge.  

Wael Ghonim, Google, and the Greatest Social Media Campaign in History

The recent revelation that Wael Ghonim - the Google exec who was detained by the Mubarak regime and was missing from January 27 until today - was the administrator of the We Are All Khalid Said website and facebook page that declared Jan 25 to be the Egyptian day of protest makes for a plot worthy of Hollywood, or perhaps a novel by Naguib Mahfouz were he still alive:

Following the fatal and unpunished beating of a small-time businessman in Alexandria at the hands of the police after he "posted a video on the Internet of officers sharing the spoils from a drug bust among themselves" (scroll down in this link for the full story), an anonymous hacker decides to seek revenge.  Known only as El Shaheed - the martyr - he creates a page that galvanizes an entire nation against a ruthless dictator who has held power and destroyed opposition for nearly 30 years.  In a country threatened by sectarian violence and a populace so disenfranchised the trash in the street becomes a symbol of its decay, a day of protest is declared that hardly dares to hope (dream?) that perhaps it will be the one to finally bring this despot down when so many have failed before.  Using the latest in communications technology and the simplest handmade signs, a fierce unity is created between Christians and Muslims, Secularists and Religious, Rich and Poor, all rising up to take the revolution to the streets - even sweeping them in their wake(!) - while the world waits with baited breath to learn the outcome of the standoff between the people and their universally despised autocratic leader.  Men on horse and camel back, riot police, and fighter jets attempt to intimidate the people, but they will not back down.  Finally, the government cuts off the internet - but too late. El Shaheed goes quiet, but his role is done.  Older forms of social media - also known as word of mouth - take over.  Unable to ascertain his identity, a Newseek reporter writes:

"Fires still burned on the streets of the capital; in their flickering light, people huddled together to talk openly about revolution for the first time in many years. ... Perhaps somewhere in the crowds was El Shaheeed."

But alas our hero was nowhere to be found, and the drama builds.  

Groupon's International Acquisition Strategy and Its Long Term Future

When it comes to acquisitions, Groupon has been most widely questioned for its rejection of Google's $6Bn offer (Facebook, which is five years older, has 2-3x the revenue, and is, well, Facebook, is probably the only VC-backed company to reject a larger offer, in absolute terms, since the dot-com bubble).

Tuesday they announced a trifecta of acquisitions enabling their entrance into India, South Africa, and Israel.  Clearly they wasted no time putting their $950M round to use (of which the firm probably only pocketed ~ $525M - but what's $425M among friends?).  What surprised me most though as someone who apparently was not following the fastest growing company in history closely enough, is that this was not even close to Groupon's first international acquisition and that in fact they've been on an international acquisition tear since last May, just after the last round of gargantuan fundraising.  In fact I'm not sure if Groupon has entered any international markets organically.

To me this raises some questions:

Google Beats Spell-Check for Figuring Out How a Word is Spelled

I was writing an email to my friend and entrepreneurial colleague Mike Horn over at CraftCoffee trying to help him articulate his company's vision in a way that will help potential investors see the opportunity as clearly as he does.  Somewhere along the line it became clear that the word connoisseur was going to have be used.  In writing.  Except that I had no idea how to spell it.  


Not only did I not know how to spell it, I couldn't even get close enough for the spell-checker to figure out what I was talking about.  I tried out "conneseiur" and "connesiour", but MS Word (and ironically Chrome as well, which must be using the same spell-check engine), just wanted to suggest words that started with the word "connect" (connections, Connecticut, connectible, etc.).  Quickly calculating that the ratio of vowel combinations to my knowledge of French approached infinity, I realized that this was not going to get anywhere.  So, I turned to that modern oracle of all knowledge, Google.


In the address bar of my Chrome browser (not even on the Google site!), I started typing: c-o-n-n-e-s.  The first suggestion Google gave me was "connestee falls."  But the second?  You guessed it.  Google 1, spell-check 0.  And as Google Instant likes to point out, I didn't even have to press enter.

How Google Helped Israel Put Out the Fire

Is there anything Google doesn't touch today?  According to the Hebrew version of Ha'aretz, when Bibi Netanyahu decided to seek foreign aid in putting out the largest and deadliest fire in Israel's history, his military attaché "used Google" to find Evergreen, the private company which operates the Supertanker.

The English version of the same article omitted this detail.

On a personal note, the tragedy of this fire which claimed 42 lives and destroyed over 7% of Israel's forested land in mere days, weighed heavily on me during this Hanukah.  This year, instead of the holiday being about celebrating the light of the eternal flame that our ancestors lit after vanquishing the Greeks from our lands, it was about cheering as Greek - and other - fire-fighting planes helped us extinguish flames that had gone out of control.  It was hard to miss this tragic and bittersweet irony.

Facebook Messaging: Do You Really Want to Use a Messaging System Based on a Focus Group of Teenagers?

Seems everybody is predicting that Facebook Messaging is going to revolutionize communication (http://nyti.ms/dz3qtF, http://tcrn.ch/9STaBp, http://wapo.st/cwD3OJ, etc.). So I figured I'd throw my predicting hat into the ring and say, "Meh." There are three reasons for this: Facebook's choice of focus group for developing the new product; Facebook's prior design failures in building messaging systems; and the inherent conflict b/w Facebook's "social," sharing communication model and email's private, recipient-only model. And finally, for anyone who would underestimate the difficulties of making grand change to people's methods of communication, I have two words for you: Google Wave.

The product may be revolutionary if you are a modern teenager, Zuckerberg's apparent focus group for the project (if I read another article quoting Zuckerberg as saying that the idea for Messaging "came out of talking to current teenagers" ...). But for the rest of us? Do folks in the real world really want to use a product designed with the communication styles of high schoolers in mind? (and I'm not going to try to mock those communication styles since I'll probably just get it wrong, but we all went to high school once and how many of us want that experience rehashed in our inboxes every day? The occasional Breakfast Club or Ferris Bueller screening should be enough to remind us that *those are not days we want to go back to*)

At the same time, every one of Facebook's attempts at a communications fool so far has been to my taste unbelievably kludgy (think about the existing Facebook Messaging and IM systems compared to their competitors, or Michael Arrington's comment that the previous iteration of Facebook Messaging was "completely unusable as a personal or business productivity tool"). Even the demos of the new Messaging demos I've seen continue much of this kludgy-ness, and my predictions of adoption by the post-high school crowd are extremely low. Do I really want all of my communication to be sorted exclusively by who it's with? And subject lines may be an unnecessary formality in rare cases, but generally they serve to let me know what the rest of the message - and the entire conversation thread - is about, and to separate conversations accordingly.

Finally, there is an inherent conflict of interest b/w the use of private messaging systems like email, in which conversations are designed to be seen only by their recipients, and the kind of public conversations that Twitter and Facebook (through wall posts) encourage. Facebook wants all your conversations to be out there in the open, wants as much public sharing as possible, and email fundamentally represents the opposite of that. Therefore it's hard to see a company like Facebook seriously committing to the development of a private messaging system of any kind, over the long term.

But then again maybe at 31 I'm just an old fogey who doesn't "get it" when it comes to "modern messaging" (as Zuckerberg puts it). I just requested my Messaging invite and may end up eating my words if it promises to be the biggest revolution in modern communication since Twitter. But somehow I doubt it. Communication paradigm shifts happen organically, not by declaration from on high. Just think back to last year when to buzz was all about Wave, another promised revolution in social communication. We all know how that went ...

We've Already Created an Israeli Nokia

A couple of years ago Daniel Cohen at Gemini wrote a great piece in VentureBeat called "The quest to create an Israeli Nokia" in which he argued that the black-eye to Israel's high tech scene was that "there are no examples of great Israeli break out companies – no Israeli equivalent of Google, Microsoft or Nokia."  He went on to give a very insightful commentary into the reasons behind this, all of which are based on what I would call "micro" factors - impatience of investors, impatience of entrepreneurs, a think-small mentality, and lack of $1bn experience - which could be overcome by the right people.


In doing some research for a piece that I am planning on writing about what I believe are the structural reasons that Israel has not created a Nokia or a Microsoft, I discovered something very interesting: we have already created a Nokia.  Teva Pharceuticals, despite having sales of around 20% of Nokia, actually has a slightly higher  market cap as of the time of this writing.  Nokia has a slightly higher EV, but even being close is an accomplishment.


Sure, you could say that Teva is not high-tech in the sense of IT, but life sciences/biotech is a pretty big VC sector, and pretty high-tech in its own way.  You could also say that Teva is "Old" (as Danny puts it in his piece), tracing its history all the way back to 1901, but let's not forget that Nokia was founded in 1865!


I am still planning on writing my post about the structural challenges to Israeli entrepreneurs, but first I've got to brush up on my Michael Porter ...