While driving home tonight on 101, I thought about the very first app that changed the way I view the “Internet” - PointCast. It was the first application that made me say “wow, I want that too.” Ofcourse, there are much cooler apps now but I still miss PointCast.

I dont see why PointCast wouldnt be a nice utility today given the abundance of bandwidth in home or corporate networks. AND I dont see why PointCast would not be a nice little business today given the openess of advertising networks (adsense) and affiliate networks (ValueClick). I would make a few changes though. . .

1. Instead of taking “feeds” from a central server, I want it to be RSS enabled and take feeds from multiple sources.

2. I also want to be able to create categories and place feeds under those categories. Furthermore, I want to be able to specify how each category of feeds show up on my PointCast screensaver - scroll w/ headlines, fade in/out with title + first paragrath, w and w/o pictures

3. A loop bar at the top of my desktop that alert me to newly written posts, bookmarks, events. . . anything that can be RSS’ed, kinda like the CNBC tape

5. I would also build a web based feed reader (or partner) to let people read the posts once they click on the OpenCast screensaver or tape

4. Hell, it could play Podcasts too if you want (maybe kinda annoying though) or even take a RRS feed of flickr pictures based on tags (how about posts based on delicious tags?)

How do I make money?

1. Interject adsense & graphical ads based on the content of my blogroll into both the screen saver and the tape. Make money on per click (adesense) and % transaction basis (affiliate network). Post on latest Nike shoe? Nike ad! Post on iTunes? Rhapsody Ad! etc etc

2. Place ads next to my feedreader ala Gmail

hmm, seems simple enough, maybe I’ll find a buddy to help me hack it out. . .

(wait a minute, this sounds kinda like MSFT Active Desktops. . . hmm. . . whatevers. . . as long as someone likes it on a utility level. . ME!)

EDIT: Just found out Mac OS Tiger comes with a RSS screensaver. . . cool. . . I need to get myself a ibook or something

Ross says that Podcasting is the New Napster. Although the point of his posts kinda got buried in his confusion between AAC & DRM (and the subsequent flame session), I think he had the same thought I had a few weeks ago about Podcasting’s opportunity to create a direct to end user distribution channel for musicians. Here is the old post which I called Podcasting a Trojan Horse.

Here is a question that has been troubling me for a bit.

If open source projects can be successful without product management support, does that mean product managers in general are really not adding that much value?

Product managers usually has two broad job requirements 1. outbound 2. inbound. Outbound product management responsibilities are focused on getting adoption and usage. In the case of open source project, there is no need fo PM’s because adoption is “voluntary” and marketing done by word of mouth leveraging sheer size of contributing coder base. Since private enterprises do not have this level of word of mouth critical mass, outbound PM’s still add value through traditional marketing activities. In this case, we are not going anywhere as long as some software remain “closed”

Inbound, on the other hand, is causing me some headaches. Inbound marketing is the process of working with users/customers to solicit feedback and prioritize feature improvements. In the open source world, certainly no one actually goes out, visits users, and proactively solicits feedback. For infrastructure software (Tomcat for example), the open source engineers themselves are “users” as well, so the feedback naturally comes from the community and a mostly consensus system prioritizes work schedules to prevent forking. Can this proces work in a commercial environment? Can a lead engineer simply solicit feedback online from paying customers and prioritize product roadmap through a open, transparent dialog with customers? Are the 2-3 PM’s on a particular product non-value add overhead?

Another wierd twist for me is open source enterprise applications. I used to think that the role of PM is way too important in the application world for open source to make head ways into the industry. The open source engineers simply do not have enough experience in . . . say supply chain. . . nor the time/motivation/access to end users to learn about it to successfully create open source supply chain management applications. While I’m not neccessarily proven wrong yet, but the rise of SugarCRM has me worried. SugarCRM is a private company too so they do bury some of the PM work in a for-profit organization. Thus, more worrisome are true open source enterprise applications without commercial support. If some of them are able to build a sustainable userbase, what does it mean for PM’s value add, can engineers just take over PM’s responsibilities?

I had a conversation with a Microsoft PM of an infrasture software once regarding the fact that his open source competitor has faster development cycles and better functionality. Not only was the open source project a “fast follower” (copy MSFT, just code faster) but it is now beating him in releasing next generation functionalities. Are the 4 product managers, 2 program managers, and 1 product planners on the team not only being out executed but out “planned” and out “strategized” by a bunch of hackers through a community system? Are all the market research, experience, and man hours dedicated by the PM team a waste?

This brings me back to Markowitz portfolio theory on the stock market. No one person can predict the future. The collective wisdom of the masses is usually right. The market is efficient. Buy index funds. Can open source out compete commercial software simply because it has more “brains” working and contributing to the direction of a project?

I dont know. The battle is far from over, so no conclusion can be drawn, but sure wish I know.

For many people (esp non-engineers) looking to pursue their passion for the tech industry, being a product manager seems like a natural career path. However, the profession is often misunderstood as there is really no standardized definition of the role. Software Engineers can take classes to learn to become programmers. There are few if any classes that anyone can take in most undergraduate institution to learn to become a “product manager.” Some of the tactical skills (such as modeling and design) are often buried in CS departments while higher level skills like marketing & strategy are part of business discipline. Successful product managers comes from all walks of life: ex-engineers, MBA’s, history majors, econ minors etc. There just doesnt seem like there is a template for what kind of people can be successful PM’s since the job definition is so fluid. I will simply attempt to shed some light on the job based on my experiences and hopefully help those that are considering taking on these roles some more data points.

Product Management, Product Marketing, or Program Management is a profession that dates back to less than 20 years ago. Asking around, most people seem to credit Microsoft and Bill Gates for creating the modern role of a product/program manager. Every company seem to have a different model and title scheme. Microsoft uses the Program Management-Product Management paradigm while most companies in the Valley (Yahoo, eBay, Google) uses the Product Management-Product Marketing model. Essentially the former works closer with engineering while the latter works closer with customers. Both shares in the responsibility of defining the functionalities of the product but the former (Program Manager @ Microsoft or Product Manager @ Yahoo) is mainly responsible modeling workflow and screenflow. The customer facing person is responsible for prioritizing new feature requests by quantifying customer needs, market sizes, and the competitive environment. They are also in charge of promoting adoption and increasing revenue of newly released as well as old products. To add more confusion, some companies have Product Planners (Microsoft) or Product Strategists that looks 2 generations ahead of the current product to discover new opportunities for major design changes or product categories.

Steve Shu led me to this blog that has a good overview of the softer skills (more MBA like) of product management. However I would like to add to the requirements/design part of the job description as its increasingly becoming more of a learned skilled. (Looking forward to increasing the # of PM type blogs!)

For the non-technical types, the tactical skills needed to be product managers are getting more and more rigorous. In order to reduce misunderstanding, “languages” which standardizes the way product management and engineering communicate on product functionalities are becoming very popular. The days of a MBA waxing poetically about a portal or a whiz kid engineer coding on the fly are gone for the sake of product quality and efficiency. SSADM & UML are the two most popular languages (there is wide variations within real world implementation though). Structured Systems Analysis and Design Methodology is an older more popular methodology which I prefer because its easier for a lay-man to understand. UML, Universal Modeling Language, on the other hand, is catching up quickly as its an object oriented methodology that matches closes with Java, C++, and other OO language frameworks. UML models can be used to generate code outlines for engineers to “fill in” thus often prefered for highly complex applications. I’ve attached a link that I used from time to time to brush up on the intricacies of these languages and other “skills” for being a product manager. Its a good overview of the “hard” aspects of the job (as oppose to soft people, leadership, marketing, and strategy aspects) The book list is acutaly really good for the advanced PM’s too.

Wharton’s OPIM 661: “Systems Analysis, Design, and Implementation” Home Page

So there you go, a quick view of the product management roles based on my experiences and conversation with employers and colleagues. By no means a guide on how to “become” one, just a window into the world of the “unsung” heroes of the valley.

Just got back from eBay live. Couple of interesting observations regarding Alibaba. While not part of the official conference, Alibaba was everywhere. It was not allowed in the convention hall but staked itself in the neighboring Hilton and Marriott. It attracted conference goers by giving away tote bags on the street and MP3 players to anyone that went to their presentations. The MP3 player was a hit. The presentation and booth itself needed some work on professionalism. In the end, Alibaba certainly created a stir and cemented the fact that it will be formidable and scrappy competitor to the more polished and better organized eBay. Quite a constract in style.

BTW, the word on the street is that Alibaba is in the middle of drafting their s1 and will be filling end of summer when asset managers come back from the Hamptons.

Last week I wrote that

- Web applications will begin to rival and exceed the functionality of their client/server or desktop cousins. Expect the next webmail version of Outlook to have more functionality, richer experience, more dynamic, and maybe easier to use than the Windows version. I wouldnt be surprised if MSFT tried to charge more for it.

Full post

I guess its just got here in the form of Microsoft Communicator.

Communicator Web Access will parallel the firm’s Outlook Web Access e-mail offering in terms of giving workers expanded opportunities for using the company’s communications tools, particularly when they are out of the office, he said. In addition, companies that haven’t upgraded their desktop software to the latest Windows operating system will still be able to access the tools.

Simnett said that technical details of the client software are still being worked out, but he indicated that the interface for Communicator Web Access will closely mimic the controls the company has built into the desktop version of the messaging tools.

Lots of companies have made a living taking MSFT’s intra-enterprise applications and creating an open interface + extranet web enabled version for public consumption. Trumba has some of the functionality of outllook’s calendering invitation functionality. Evite was almost an exact copy. I think there is an opportunity here to do the same. The article mentioned that

For instance, out-of-office messages will pop up automatically in Communicator, as will a user’s IM presence information. If companies integrate the software with their traditional or Internet telephony gear, workers can also start phone calls through their PC and redirect incoming calls when they are going to be away from their desk.

With some clever API integration to either Skype or AIM, API integration into Outlook or Plaxo, and a landline & phone connected to a PC with a modem, some one can probably write an application that replicated these functionalities. For example, the PC would know if someone is at their PC (ie presence) through the IM client, if not there, reroute calls to a mobile phone # stored locally; OR IM “not at the desk messages” to that person using caller ID and matching that # to the IM handle in the address book. . . . even better, use SKYPE to reroute POTS calls to VOIP… tons of cool functionalities that can be implemented around creating a consistent/integrated communication channels amongst all the various apps and gadgets we gathered the last few years. I’m waiting eagerly for the app. . .

According to a completely unreliable (and unsubstantiated) source , Google is giving out over 600K in stock grants (Not options, stock grants!) to PHD graduates of top CS programs in the nation . . . vested over 4 years ofcourse. Essentially guaranteeing that they will become millionaires in 4 years, adding in salary.

Another example of Google’s focus on innovation as a strategy. Also an HR practice that is consistent with its culture. I wonder if its possible for a company to monopolize human capital as a source of competitive advantage. Only if its stock price is over valued I guess

For e-tailers, Google is like a drug. It makes you feel real good about yourself (cause its profitable and helps your business grow), but you have a sneaking suspicion that it is really the one in control and one day you might need it more than it needs you.

Well, that day has come with the introduction of Google Wallet & Google Marketplace. Remember buyer acquisition cost? It is usually magnitudes cheaper to get an existing customer to purchase again than to acquire a brand new customer. Thus, for e-tailers’ (often with tiny margins) the key to profitability is how to convert new buyers into repeat buyers. They often do this through brand marketing techniques such as merchandizing, cross/up selling, personalization, and branding. Search engines plays to the double edge sword of this critical e-tail strategy. Because buyers have shown that they are willing to go through an intermediary in the shopping experience, search engines has become an important source of new customer for e-tailers. In return, E-tailers hope to convert these new customers into repeat customers who visit their site exclusively or atleast repeatedly. The problem is that shopping engine often becomes de-facto first destination for any e-commerce sojourn (a series of click/web destinations/pages which an internet user go through for a particular session). When buyers essentially land on the product specific page to buy a specific item, it reduces the e-tailers’opportunity to create lock in through brand marketing techniques (buyers spend significantly less “clicks” on the website). Instead, the industry is reduced to direct marketers selling one item at a time tilting the balance of power to either side of the value chain: search engines and branded manufacturers.

As an aside, the largest switching cost for buyers in the online world is shipping fees while in the offline world its gasoline & time. Amazon strategy of free shipping and $75 annual fee for “platinum” expedited shipping is a direct effort to increase switching cost of their buyers, increase loyalty, increase product bundling (user NEEDS to stay on the site longer to buy more item thus more opportunity for marketing), and thus reducing the effect of search/shopping engines in commoditizing the e-tail industry into a series of product landing pages.

Now that Google has launched a marketplace & a payment solution, e-tailers are relegated to an even smaller role of a webmaster: trying to create product landing pages with the optimal look and feel.

For Google it makes a lot of sense.

1. It owns the buyer relationship

2. It owns seller relationship via adwords/adsense

3. It lowers switching cost of de-bundling a search engine initiated shopping experience. I.e. buying product x and product y from Amazon and J.Crew requires 2 checkout processes usually for the end user. This creates a big hassel for the end buyer which helps Amazon retain the buyer who entered through Foogle looking for product X to also stay longer and buy product Y. However if both Amazon & J.Crew uses Google Wallet, its one checkout process reducing end user hassel. As a result, e-tailers are further commoditized and switching cost lowered. By introducing Google Wallet, Google will increase the use of froogle and its seach engine as a shopping destination, creating a virtuous cycle of increased usage between Wallet and Froogle/Google Search.

4. Even more importantly, it owns a billing relationship with sellers who can use the same adwords deposit account as a “checking account” for their payment solution. Google probably pays ~ 150M (~5B revenue *3% cc fee) in credit card transaction fees. By giving sellers a credit & debit relationship with Google, they can potentially save a huge amount of that COGS even if they offer the service at a free or below industry cost price point.

I used some publicly available traffic data to get a sense of Google’s positioning in the B2C e-commerce world. The analysis is based on data from Netratings’ Jan 2005 web traffic log. (Branded e-tailers are non-platform (non-distributed) based e-commerce companies) Due to limitation of the data, I’m not sure which e-tailers Netratings tracks. As a result, the data might be significantly under-reporting the share of total e-commerce market by smaller mom & pop e-tailers.

Buyer Analysis:

As you can see, Amazon is the company most threatened by Google’s expansion into the entire value chain of the e-tailing industry. Branded E-tailers are less dependent than the more sophisticated Amazon. Search engines and shopping engines could potential siphon away 37% of Amazon’s revenue. I don’t know what % is Google, but a conservative guess is that 15% of Amazon’s traffic comes from Google, and 15% of Amazon’s customers & revenue is now in play for Google to steal.

In general it seems like Google total addressable volume for Google Wallet & Marketplace from the buyer perspective is atleast 10% of the total e-commerce spend of $120B (source: Jupiter 2005) – $12B (wow) without even expanding its share of the overall e-commerce sojourns.

Seller Analysis:

Ofcourse, since this is a platform play, this analysis would not be complete w/o looking at it from the seller’s perspective. Furthermore, in a “AND” type of analysis, it’s the smaller number that defines the market opportunity and not the larger number.

With this, comes the Achilles’ heel of Google’s b2c transaction strategy. From the sellers’s perspective they can reach about 75% of the buyer sojourns without ever needing to use Google or a search engine. By selling on eBay, Amazon, plus having their own website they would have access to about 75% of the total market. (remember that eBay & Amazon is essentially acting like an SEO company by buying keywords for sellers, so yes Google had a role in the transaction for the buyer but eBay/Amazon owns the seller relationship). Google only offers them UNIQUE customers in 2-4% of the cases. Under such a scenario, Google will have to under cut Amazon/eBay/CGI Commerce-like site builder’s fees to get seller’s to switch. (Currently with the growth of adwords/adsense, I would have to guess that in certain circumstance it must be cheaper than other marketing methods for sellers) Not that offering something cheaper is a bad strategy, just that it not as good as offering something unique!

History repeats itself. IBM made MSFT and MSFT turned around and kicked it ass. Google did the same thing to Yahoo! (not kicking ass, more like formidable competition). Now, Google is trying to do the same to its e-tail advertisers betting that they would not be able to detox themselves from their PPC addiction. Many e-tailers are caught between a rock and a hard place; the winning strategy against Google’s encroachment is not clear at least publicly. Things are about to get real interesting. I would be interested to see which major e-tailers begin to cut their ppc spending on Google and increase spends in other channels to ween themselves off Google - even if it costs more.

Here are some stories referencing the Paypal Google wars.

NYT via News.com
Searchblog
Safa of Piper Jaffray via Silicon Beat
Search Views
Gary Price via Search Engine Watch
EDIT: Forrester’s Charlene Li

Disclaimer! All opinion stated here are mine and no one else. All information presented here is sourced from the internet via search engines and not from proprietary sources. I currently do not have access or understanding of any company’s respective proprietary strategy, analysis or thought on Google Wallet.

This latest post in searchblog on Google’s stock price has me wondering the same old question “Does Google have a strategy?” and more importantly “If so, is it sustainable?” (And the much more important corollary of “Do I Buy or Sell?”)

It seems like any respectable blogger have already chimmed in on Google and its (lack of a) strategy. As a result, in order to secure my eternal place in the blogosphere, I will need to attempt to provide my 2 cents. Before I jump in here are some of the web chatter on Google and its strategy:

On Google, Bubbles, and Market Madness

“MY”GOOGLE

The Starbucks of the Internet

Even Google itself is exceedingly self-aware of the chatter to post this blog when “mygoogle” was launched.

A Method to Our Madness

Why is it so hard to answer this question?

1. Tech industry in general and search and advertising in particular is very dynamic thus hard to gain context from which to formulate and/or discern a strategy
2. Google has gotten so big so fast (# of employees) it has its hands in almost anything web related
3. Google has a culture that encourages individualism (20% your time is YOUR time) which atleast gives the semblance of chaos and lack of consistent thought (and maybe strategy)
4. The last reason I think is the most important. No one knows what exactly is “strategy.” The word is so overused that the mere mention in this blog will drop my blog’s page rank by 4 magnitudes.

I’m starting first with a definition of “strategy” as defined by the man who re-invented the concept: Michael Porter. Unlike other gurus that went “Hollywood” or were simply pop-novel writers, Porter still has street cred from both academic and business circles. For those familiar with Porter, feel free to skip it, otherwise the post is here: Strategy 101.

Porter’s concept of the tradeoff efficiency frontier is key. Implied in the curve is that by choosing an X,Y point on the curve, a company is explicitly choosing a segment of the total customers base (based on its willingness to pay) then creating a system of operational activities that is consistent (in creating value while minimizing cost) with that chosen segment.

Thus strategy connotes segmentation and focus. To create sustainable businesses, companies must create barriers to entry by doing a lot of important little things right. Think of Walmart or Dell, there isn’t any specific thing that we can point to that prevents competitors from copying their business model. It is a multitude of re-enforcing little things which leads to customer value creation and brand.

Under such detailed analysis, Google does not stand up to the smell test. While impressive in everything that it is doing, Google has yet to find a strategy.

Its positioning is scattered throughout the curve, serving different customers and their needs with different products. Having a coherent linkage between products, as Marissa Mayer claims with myGoogle is NOT strategy. It is hard to argue Google and its competitors are serving different sets of customers. The industry is so big and growing so fast that they are trying to be all things to all people.

Furthermore, it is even more disconcerting that Google is further sacrificing its operational efficiency (via its hyper growth and creative HR policies) for innovation. Essentially, Google is trying to outrun its competitors by continuously pushing the efficiency frontier outward while lagging behind the curve itself. Community Powered Search is a good example.

Using innovation as the primary source of competitive advantage is an age old addiction of the technology industry as a whole.

Google has essentially turned it into an art form via its culture, size, HR & hiring practice. By creating an activity system to serve a tactical activity such as INNOVATION rather than creating an activity system to serve a strategic direction such as a serving certain type of web users and advertisers, Google is chasing up the wrong tree. Someone, maybe another 2 kids in a lab at Stanford WILL one day out innovate Google.

It is not to say that Google will not continue to dominate its competition. Innovation does enable a company to win. It is a good thing. But is it not a sustainable practice. It took the German and the US automobile industry over 10 years to “catch up” to the Japanese auto industries in process & quality innovation. If Google is as good as Honda or Toyota were in innovating processes as it is in innovating products, it might also take its competitors or some other yet unknown startup 10 years to catch up.

As such, Google will have 10 years to find itself a strategy, but I would not bet against a bunch of little startups coming up with better mouse traps and serving the needs of different segments of Google’s customer base better than Google. . . one little chink of Google’s armor at a time.

Justed wanted to share a cool (read free) website run by Stanford Technology Venture Program. Has an archive of videos of speakers of various hi-tech related conferences and events (mostly stanford related). Great for

1. Find a VC you are pitching to and positioning your start-up according “his view of the world”
2. Gather competitive information. In order to look smart, lots of executive are willing to share their secret sauce in these types of presentations
3. Get a glimps of what Vinod Khosla actually looks like

Educator’s Corner of Stanford Technology Venture Program