It's Rishi

The goal of any news delivery medium is to provide maximum signal-to-noise ratio to its target audience. “Signal” is the set of news items that is of interest to a person. “Noise” is everything else. The reality is that an infinitesimally small percentage of news is interesting to any given person. And that percentage is shrinking every day because more news is being created on a daily basis: more frequently are more people documenting more people who are doing more newsworthy stuff every day.

In order to keep SNR high, news mediums need to focus on the news interests of their audiences more intensely than ever before. However, trying to create a single focus for a group of individuals, each of whose interests differ somewhat, is not a long-term solution. Sites like PerezHilton.com, a leading Hollywood gossip blog, and TechMeme, a leading (especially here in the SV) tech news aggregator, provide a certain segment of the news to an audience specifically interested in that segment. However, over time, the amount of news created in the news segment grows and the the segment bulges. The news publisher either must choose to further narrow their segment, which will alienate some of their existing audience, or publish a higher volume of news, which ultimately lowers the SNR to any given audience member. Either of these options is not a good choice.

Long-term, the only news deliver medium which is viable is the roll-your-own news concept. Geeks here this and start throwing out terms like RSS and OPML but the bottom line is that you don’t have to know technology in order to determine whether a piece of news is interesting to you. Over the past months, I’ve found myself going to news sites, including TechMeme, less and instead refreshing Google Reader more. I’ve added many feeds and the news that arrives is astonishingly interesting to me. Most importantly, my Reader is astonishingly uninteresting to most other people. This kind of relevance is ultimately impossible to achieve by any news publisher that tries to appeal to more than a handful of people.

I don’t want you to conclude from this that I think the penultimate solution is the RSS Reader. The concept of explicitly adding feeds to a reader is just not going to fly with mainstream folks. So what is the perfect news medium that allows you to roll your own news but doesn’t require any tech savvy? Attempts have been made (NewsVine, etc..) but I think we have yet to see the killer news app.

One of the hot news bits of the day was that the mega popular rock band Radiohead shocked the music world by announcing that not only will they not distribute their upcoming album, “In Rainbow”, via a record label (this fact had been known for some time), but also they will make the album available only on their own website for the shockingly low price of….free! Well, “free” doesn’t really capture the spirit of what Radiohead is trying to do. Instead of assigning a fixed price to the music download, they tell the customer that the price is “up to you”. The customer decides the price, no strings attached.

This marketing & distribution strategy that Radiohead can best be described with two words: brilliant and revolutionary.

Some points to consider:

1) The majority of consumers who were planning on getting a pirated copy of the album were never going to buy the album. Piraters are going to pirate…that’s just a fact. You can take measures to curb it but they’re generally ineffective. So, instead of trying to damn these people, people who want to listen to your music, instead why not embrace them. Give these people access to a free, high-quality download and hope that they will become concert-going, album-buying fans in the future.

2) Radiohead creates an incredible amount of good karma with their fans and, really, the music community as a whole. They’re basically saying to the world: “we create music for the sake of creating music and we want it to be enjoyed by as many people as possible.” There are people who truly can’t afford to spend the money for an album and others – each one a potential Radiohead fan – who may never become familiar with Radiohead’s music because they were not compelled to spend money to acquire it. By removing the cost barrier, these people can now listen to the album. Some will hate it, others will love it. Some will eventually pay full market price, others won’t pay a cent. Either way, the net effect for Radiohead is their music will capture some ears and some wallets from a new segment of music listeners.

2) Radiohead is essentially saying that they’re so confident that their album is great, their confident that music listeners will hear the music and feel compelled to compensate the band for the great product.

3) Radiohead will receive a tremendous amount of free PR for their new album from news organizations around the world. Again, the PR isn’t going to affect those people who were already awaiting the new album. Instead, the PR will pique the curiosity of millions of non-Radiohead-listeners.

The upshot of the prior 3 points is that more listeners = more fans = more concert ticket and memorabilia sales = more $ for Radiohead.

4) No record label = no revenue split. No iTunes = no revenue split. By making the album available only via their website, 100% of album revenue will go to Radiohead. (Actually that’s not entirely true..Radiohead will be selling a standard CD in record stores next year but you can almost bet that the vast majorify of people who buy the CD will be those people who had already downloaded – and loved – the digital version). For each CD sale, even a top name like Radiohead will only earn a small fraction of the selling price after everyone else in the supply chain has reaped their cut.

If Radiohead is successful with this expirement, what does this mean for the future of music?

1) This could be the final nail in the coffin for the record label industry. The Time article mentions the following:

“This feels like yet another death knell,” emailed an A&R executive at a major European label. “If the best band in the world doesn’t want a part of us, I’m not sure what’s left for this business.”

Couldn’t have said it better myself. What is left? It’s becoming increasingly clear that artists can promote themselves and their music independently from labels and, if this experiment proves successful, can even distribute and sell their music independently. Even iTunes will need to re-think their strategy. The role of the radio station music dj/director and the corner record store as marketing vehicles is dying rapidly as every iPod is sold and digital music track downloaded.

One question that has has been mentioned in many news articles is that if Radiohead, a top band, is allowing consumers to get their music for free, then how can lesser known, or more specifically the upstart, band compete? I would argue that it’s not as . Most fans who seek out new bands do so not because they can’t access (don’t want to pay for) music from more popular groups. Fans generally do so because they have already exhausted music from popular bands and are in search of something fresh and different. In this likely scenario, the upstart band will not be directly competing with well-known bands for consumer dolllars.

I’ll be eagerly following this story. Hopefully Radiohead will make an effort to be transparent about the various sales/revenue numbers for the new album. No matter what happens though, it is a real possibility that in a decade we will look back on this move by Radiohead as the crack that broke the dam in the record industry.

Oh how mainstream media has changed over the past decades. Back in the 1960’s, during JFK’s presidency, news outlets wouldn’t publish any stories about the president’s infidelities. News editors had a sense of responsibility towards upholding the values and code of our society. There was no need to blemish the president’s name for little good would have come from it. Back then, news was controlled by a handful of agencies. Not only did these agencies have control over what news was received by citizens across the nation, but also when they received news. There were no 24-hour cable news channels and of course there was no Internet.

The landscape of news exchange/delivery today could not be more different. Major news outlets source and publish news around the clock and around the world. Americans are able to receive news wherever and whenever. News is no longer thought of as a single collection of headlines that you consume at once. Instead, news is a continuous flow of stories and headlines that is streaming whether you’re there to catch it or not. The consumption of news went from being a 30-minute event each morning or evening to being a virtually constant activity. How did this happen? Where is all this news coming from?? From two places:

The world shrank – Digital information networks enables news to efficiently travel across the globe in an instant. Now only can data travel at the speed of light, but there is a connected path from the news source to the news consumer. Often, very little human intervention is involved.

Citizen journalism – Digital cameras/videocams, camera phones, laptops, and wireless connectivity allow every one of us to capture the events of the world. I would venture a guess that the majority of Americans under the age of 30 now have atleast one device capable of digital capture with them at all times. We then take this digital information and disseminate it to the world via social-networking sites, blogs, online photo albums/streams, YouTube, message boards, etc.. An average citizen doesn’t have the reach of NBC or CNN, but as is seen every day on the Web, viral citizen media can spread like wildfire and ultimately achieve the same or greater reach as a mainstream media broadcast.

With so much news being created and so many new ways by which news can be spread, there is tremendous competition for people’s attention. I’m not suggesting that the big media companies are going to be extinct any time soon, but I am suggesting that their role in society is. Let’s face it, NBC was thrilled when Cho’s package arrived in their mailroom. NBC said they spent hours deciding whether to air footage from Cho’s videos on the air. There’s little doubt in my mind that they were going to broadcast it. How could they not? The fact that Cho chose to send the package to NBC affirms NBC’s stature as a dominant media outlet. The only issue that they may have been wrestling with was whether to air it and get a backlash from the public, politicians, or special interest groups who might denounce NBC for sensationalizing the Va Tech shooter. However, if NBC didn’t air the footage, they would have no doubt posted it on their news website, MSNBC.com. I’m sure the NBC execs realized that if they didn’t release it, eventually the material would at some point get leaked and in this case, NBC wouldn’t get the limelight for having the scoop.

If Cho would have simply posted all his videos to a MySpace page or YouTube, he would have demonstrated that the big media companies are simply becoming irrelevant. But, whether he knew it or not, what he did was smart. He knew that NBC would whore out the video footage as much as it possibly could since they would have the exclusive and others would inevitably do the job for him of ensuring that the video got on MySpace, YouTube, etc… The reach of his videos was maximized as a result.

Unlike 40 years ago during JFK’s presidency, the media companies a) can’t afford to ignore stories which will garner them attention and b) simply have little to no control over what stories make it to the public. If they don’t cover a story, someone else will. AOL Time Warner realized this a couple years ago and launched TMZ.com. TMZ.com is a hollywood news/gossip site that basically runs stories that AOL Time Warner couldn’t on their mainstream sites. TMZ.com stories often lack the journalistic integrity that a mainstream news organization would want to uphold. AOL Time Warner knew that this segment of news was too much in demand and too lucrative to ignore. And they were right: TMZ.com has been enormously successful and one of the fastest growing blogs on the Web. Moreover, TMZ.com relies heavily on citizen- captured stories, photos and videos and not a dedicated news team. TMZ.com is an example of an old media giant embracing the fact they are losing control of the news rather than trying to combat this fact. There can be little doubt that other media giants will follow suit with sites of their own which embrace citizen media.

A big part of being a trusted news source is providing comprehensive information. Increasingly, this means relying on sources beyond a dedicated news team. Dedicated news teams simply will not be able to scale to meet the volume of news consumption in the future. News sites like TMZ.com, which rely on citizen journalism, can scale and will be a crucial strategy for the big media companies to maintain their significance.

Hmm I know I’ve got some more thoughts on this but enough for now… =)

Last week I was channel surfing while eating dinner in front of the TV. After failing to find anything interesting, I gave up and settled on Jeopardy. I used to watch Jeopardy sometimes as a kid and I recall being amazed at how smart the better contestants were. Not only did they have vast amounts of knowledge, but more importantly could recall it in just one or two seconds. While watching the show last week, I found myself equally amazed as before. One particular contestant fired off answers to 15th century European history questions (or more correctly “questions for answers”) so quickly I thought he must have just finished authoring a book on the subject.

By the time the Final Jeopardy round came, I was done with dinner and in front of my laptop. The question (err answer, whatever..) was given and (of course) I had not the faintest clue. For the heck of it, I typed some relevant keywords into Google and bingo! I solved Final Jeopardy. It turned out that two of the three contestants solved it correctly also. Sure, they couldn’t use Google to find the answer, but at the end of the day, in the real world, I would be equally as effective as these two contestants. This realization sparked me to think about the value of knowledge.

What’s the purpose of knowledge? My answer would be that knowledge allows one to perform a task more efficiently. Any task. The task could be conquering the latest shoot-em-up video game, cooking dinner, or solving a complex mathematics proof. Each of these tasks can be performed faster if the individual performing that task has relevant knowledge in the respective domain. The problem though is that for knowledge to be useful, it’s not sufficient that you had once gained that knowledge. Instead, for it to be useful, you not only need to have once gained it, you also must be able to recall it both accurately and in a timely manner. Without speed and accuracy in recollection, having knowledge is useless.

How useless? The test is this: Your brain or an electronic/digital means, which is faster? Which will give me the info I need faster, more accurately, and more consistently? Nine times out of ten, my answer to this question is the latter. Honestly, I wonder why I even bother remembering anything. Phone numbers? Got my cell. Favorite restaurants? Got Yelp. CS stuff? Google works just fine. Forgot who my friends are? Got my AIM buddy list, MySpace and Facebook. How to get home from work? Got a navigation system. How to spell my name? Outlook auto-corrects it. Ok, I think you get my point…

The thing you need to remember is that all the electronic information sources I just mentioned came very recently. You think finding this information is easy now? Trust me, it’ll get easier. I’m just waiting for Google to announce a search plugin for your brain. Sounds ridiculous but is it really that crazy to imagine such a device might be available in my lifetime?

Now, you might argue that humans are capable creatures because of our intelligence, not simply our knowledge. Intelligence implies not just semantic knowledge but the ability to combine building-blocks of knowledge into composite forms of knowledge and, ultimately, to innovate. Innovation, after all, is a hallmark of human civilization. Innovation implies a certain higher level of thought which only a human can perform. You could say that freeing our minds of the burden of knowledge management will allow our mind to focus on innovation and other forms of higher-level thought.

But this implies that computers cannot perform high-level thought. Computers can be given “intelligence”. It is very common today to program computers to make sophisticated decisions based on input data. Due to complexity, or other limitations, many of such decisions were once thought impossible for a computer to make. A classic example is chess. A couple hundred years ago, the thought of a chess-playing machine was just a big joke. Ten years ago, IBM’s Deep Blue computer beat the greatest chess player of our time.

But can computers innovate? If you look up the word “innovation”, the word “new” is mentioned repeatedly: new ideas, new dimensions, something new, etc. Convention has it that computers cannot think “outside of the box”. While computers can perform sophisticated logic and are able to “learn” patterns, they can’t really form new thought . A recent example of this is an article I was reading about Monitor110. They have developed some proprietary technology that allows their software to scour niche information sources on the Web (blogs, message boards etc.) and pick out potentially market-moving news before it hits the mainstream. So, their software can pick out the bits of signal from the noise, but it cannot determine if and how to act on information to bring financial reward and, moreover, outperform the rest of the market (the common term is “generate alpha” in the alternative-investment world). The formation of a unique investing strategy can only be performed by the human investor staring at the computer screen. The investor may utilize computer-based modeling tools to aid in development of the strategy, but the high-level strategy still is up to him to devise.

Will computers one day be able to innovate? Maybe. If and when scientists are better able to model the human brain, it may turn out that deep-down, it is, in fact, a deterministic system. If that is the case, it may be possible to model the human brain electronically.

Until this day, though, I do think, on the basis of the test I put forth earlier, that much of the knowledge in people’s brains is truly useless. Instead of just giving students knowledge, it is more important to teach them how to efficiently find knowledge when the situation demands it.
“Give a man a piece of knowledge and you feed him for a day. Teach a man to locate knowledge and you feed him for a lifetime.” Yeah I know..I’m a dork.

Ok, it’s way past my bedtime again. Maybe I’ll continue this thought in a later post…

While browsing around tonight I stumbled upon a discusson thread about imeem. The thread starter was “addicted” to the site even though he was never into other social networks like MySpace. Seeing the imeem name caught my surprise. It’s been atleast 18 months since I’d last heard heard anything new from the company. Apparently they have completely re-strategized and launched a new site with a new focus:

IMEEM is an online community where people and groups can upload, share, tag, and playlist the media they care about.

The new imeem is a very nicely done site. The site design, flash widgets, and profile customization tools are beautifully done. As the quote above suggests, the core of the site is that users can upload music and video (and photos of course) and directly share them on their profile. With imeem’s embedded flash players, you can stream music and video directly through your browser. You can also create your own playlist containing any songs and video you find on the site. As you would expect, there is an imeem flash widget which is embeddable into any other webpage (MySpace pages are the obvious one but I have a hunch this will get blocked by MySpace since this directly competes with MySpace’s own music and video widgets).

The first click I made on imeem was to view the most played songs of this week. As you might expect, songs from hot artists like Nelly Furtado and Justin Timberlake were in the top 10. Not too surprising right? Well I wasn’t surprised that those artists were amongst the most viewed, but then I looked at who uploaded those songs. As you might have suspected, it wasn’t the artist or label. It was just random users who uploaded the mp3’s of those songs. My first thought was “holy crap! if this is legal it’s pure genius!”. After all, imeem already has a impressively large library of popular songs that has been uploaded by users. In addition, unlike iTunes and other music services, you get to listen to the full song, not 30-second previews. All of this for free.

I dug a little deeper on the site and sure enough on the upload page, I saw this message: “Only upload your own music and video, or stuff you have permission to share. Uploading media that you do not own can be a violation of the artist’s copyrights and against the law if you do not have legal permission from the copyright owner. Your account may be shut down if you don’t follow the imeem terms of service.”

In the site’s Terms of Service, a statement to the same effect is found including this: “Uploading copyrighted media or content without the explicit consent of the copyright owner will result in cancellation in any and all of your accounts.” Judging by the countless number of users that have uploaded commercial music and whose accounts remain active, it’s clear imeem is not enforcing this.

And, really, why should they? As YouTube’s story proves, it’s best to just give your users what they want – free access to commercial content – and place the burden on copyright holders to enforce their rights over the content that’s uploaded to the site. As is now well-known, according to the DMCA Title II: OCILLA, as long as online services promptly remove infringing material upon notification by the copyright holder, the service has a safe harbor against copyright liability. As you can see from the Alexa graph above (both Quantcast and Compete.com show a similar pattern), this strategy is working great. imeem’s traffic stats have blown up in just the past four months.

What I find most strange is the company’s VP Marketing is a guy by the name of Steve Jang who, prior to joining imeem, was Director of Digital Business Development at EMI Music. So I think it’s safe to assume imeem’s management is well versed in digital rights. Which leads me to wonder what the heck is going on then? I was hoping to find some recent news articles about imeem but found none. With imeem’s tremendous growth of late, there is bound to be some buzz soon. Hopefully, along with the buzz there will be a conversation about the copyright issues concerning imeem. Until then, I’m confused…

NOTE: I should point out that just like YouTube, imeem does have plenty of legitimate content as well. In fact, the #1 played song in the past month, with over 1.6m plays, is Body Rock by Mike Relm. In this case, Mike Relm himself uploaded the song onto his own imeem profile page. There are other songs by independent artists which have made the most played chart. So clearly imeem, like MySpace, is a proven venue for artists to promote their music.

If you haven’t heard of Meebo by now, you’re behind the curve. I’m not suggesting that Meebo is right for everyone, everytime (I use the AIM client on my laptop and Meebo only when on the go), but Meebo is one of the admittedly few “Web 2.0″ companies that has built and refined a product that truly fulfills a need for a lot of people.

Just like the telephone is about talking with people, IM is about chatting with people. The telephone “just works”, IM should too. Yet the major players like AOL and Yahoo! are clouding the IM experience by bloating their clients with whizbang features and add-ons. Meebo, instead, has been committed to ensuring that IM is simple and universally accessible.

A friend of mine, having just discovered Meebo himself, asked me about how the company makes money. He noticed that they do not charge for the service nor serve any ads. I responded to him that as far as I knew they have not made a dime. They have, however, raised plenty of money from top-tier VC’s so they surely will have time to explore various revenue streams. In Meebo’s most recent message to its users, CEO Seth Sternberg, states that:

We’re looking forward to exploring three ways to generate revenue from meebo: advertising (no “punch the monkey” banners), allowing our user community to personalize meebo (similar to Cyworld’s approach in Korea or QQ’s in China), and distributing other services that directly monetize (like sending IMs over the SMS networks).

Let’s review each of these three ideas that Seth states:

Advertising – Contextual advertising is not going to work. Determining what ads are relevant to a conversation is pretty hopeless. Moreover, I think users will find it very creepy if Big Brother is monitoring their conversations and serving up ads in response to the topic. Run a CPM campaign? Sure, but be prepared for abysmal, MySpace-like ad rates. Content is unpredictable, targeting is low, and Meebo often lives in the background of a user’s session. Serve an ad and there’s a good chance the user’s eyeballs never see it. I suppose a solution to this problem would be to serve new ad impressions only when there is a new incoming or outgoing message. Still though, some money can be made through traditional advertising, but not a lot and what’s worse is that it has a negative impact on the user experience.

Allowing users to customize Meebo…for a price – Seth cites CyWorld as an example of where users in a community pay to customize/personalize their profile. CyWorld has been wildly successful in getting its users to pay for all sorts of additions – from clothing to decorations to background music – for their own virtual world (think “The Sims”) called their “minihompy”. Customizing profiles is nothing new. On MySpace, if you haven’t customized your profile, you’re an uncool newbie. Our profile in a social community like CyWorld and MySpace is a direct expression of ourselves. Every one of us wants to express our own uniqueness, and customizations allow us that ability. Just as in real life, plenty of people are happy to open up their wallets in the name of self-expression. On the flip side, all IM clients allow customization to some degree. Few users take advantage of it. Furthermore, even if Meebo allows fancy customizations, they will likely only be viewable by other Meebo users, not users of other IM clients. I can see maybe 5% of users (Meebo addicts) spending on average $10/year to customize their Meebo experience, but, unlike in social networking communities, I just don’t see a big market here.

Distributing other services that directly monetize – I’m not sure exactly what Seth has in mind for this one. He says “like sending IM’s over the SMS network”? Yes, most carriers offer SMS-based IM functionality on their networks. And, yes, the carriers are making lots of money from all the SMS fees incurred by users as a result of their IM usage. So how will Meebo fit into this? I’m not sure. Meebo will not make any money from user’s sending IM’s to mobile users. For example, Teleflip allows you to conveniently send messages to SMS uses for free. Teleflip does not make any money (they receive no kickback from the carrier nor have they chosen to insert ads into messages). I could be wrong here, but I don’t see how Meebo can make money from SMS. What might be interesting is enabling VOIP telephony over Meebo, but while I can think of some use cases for this I think the demand for this would generally be questionable.

To me, the right strategy for Meebo is pretty clear: the desktop. Meebo, and IM clients in general, are very unique in that the user is “stuck” to it for their entire online session. Personally, whenever I’m online, I’m logged into my IM accounts. E-mail clients are probably the only rival in terms of session stickiness. Let’s look at the stats from their recent press release: average session is 70 minutes, users spend a collective total of 165 years on Meebo every single day. Because Meebo is so sticky and because Meebo is one of the cornerstones of a Meebo user’s online experience, Meebo can take control of a user’s online interaction – acting as a gateway to other information and services. In other words, it can become an excellent online desktop (the popular term is “ajax desktop”).

To expand Meebo’s reach, the company has partnered with other companies that have ajax desktop products such as Netvibes and Microsoft Windows Live. While this is certainly a good strategy for Meebo to get more users, I have got to believe that Meebo’s long-term intent is to compete directly with these companies. I expect Meebo to come out with add-on widgets as you would see on any typical ajax desktop product: RSS reader, PIM functions, search, etc. With increased content comes increased advertising opportunities. Not only can Meebo run traditional ads, they will also be able to establish affiliate marketing agreements (e.g. eBay/Shopping.com for shopping).

Beyond simply advertising opportunities, owning the desktop gives immense leveraging power. As Microsoft proved many times over with Windows, companies will pay big bucks to be available by default on new desktops. Netvibes already charges companies to include their widgets in Netvibes.

So where is the billion dollar business in all of this? To be honest, I can’t define it right now. Clearly, though, right now and into the future, companies will increasingly be fighting for eyeballs. Meebo will be able to provide that to other services in spades. More importantly, Meebo has the attention of it’s user’s eyeballs not seconds or even minutes in a session. We’re talking hours. That’s extraordinarily valuable. More valuable than we can even appreciate today.

Labor costs money. The price of a product always factors in the labor costs associated with designing and manufacturing that product. The price of a service includes the labor costs associated with delivering that service. The higher the labor cost, the higher the price of the product or service. That’s pretty much a universal truth.

As markets become saturated and differentiation becomes increasingly difficult, companies are forced to compete on price. The cost of raw materials used to produce a product can only be controlled so much. Thus, companies concentrate on reducing the amount of manual labor required to produce their products. The trend towards automation has become so dominant that “handmade” products are now rare and often prohibitively expensive.

Well, what about services? Better service generally involves either more labor or higher-skilled labor (or both). Because the cost of labor has only been increasing over time, service is becoming increasingly expensive. Once again, businesses are forced to compete on price and, as a result, services are either reduced or eliminated altogether. The key thing to remember is that businesses are able to reduce the service they offer only because consumers are willing to sacrifice service for reduced cost. Given the option to pump their own gas or pay a bit extra, most people chose to pump their own gas so full-service gasoline pumps are all but extinct.

Let’s say you need to buy a new oven for your kitchen. You could go to the local mom & pop appliance store and receive a personalized shopping experience OR you could goto your local electronics mega-retailer like BestBuy, get minimal service but save a few bucks. Most people opt for BestBuy. Of course, the ultimate form of sacrificing service for price is on the Web. Web merchants can generally offer rock-bottom pricing because no physical presence means no inventory cost and no labor costs. Continuing the trend of preferring self-service and lower prices, consumers are increasingly hopping on the Web to shop.

When you pay for a service, you are paying someone to do something that you either lack the necessary skill or knowledge to do or simply don’t want to do. With the advent of the Internet, the barrier to acquire knowledge and skill has been shattered. Accordingly, the demand for services is diminishing. Why pay a plumber to fix my faucet when I can follow one of many DIY guides on the Web? Why pay a few hundred bucks to an auto broker to buy a car for me when I can now find model information, reviews, dealer invoices and submit quote requests to several dealers for free on the Web?

I think it’s time to analyze what the terms ’self-service’ and ‘full-service’ really mean. Self-service means that your request will only be fulfilled with further input of your time and energy. Full-service means that you make a request and it is fulfilled without any further input of time or energy by you. Nowhere in the definition of full-service does it say that your request is to be fulfilled by a human. Traditionally, people think that if you’re going on the Web to do something, it’s self-service. After all, it takes your time and energy. However, because there is often not much in the way of price differentiation between Web-based companies, these companies are forced to provide a higher level of service. Since employing humans to provide this service would kill their business models, technology is used to deliver higher levels of service.

One example is search engines. The search engine is technology’s replacement for the human librarian. Imagine that you’re planning a vacation to Australia. You could walk into your local library, tell the librarian “Hi, I’m planning a trip to Australia. Can you help me find some information on that”, and for a few minutes you’ll have your own personal research assistant. Unfortunately, having a personal research assistant at our disposal full-time is too expensive. Search engines like Google attempt to do the same thing. Instead of randomly poking around on the Web trying to find Australia travel information, we can use these technology-based services to help us locate the information we seek.

Dontbuyjunk was created to, in a sense, be a full-service shopping experience. You state what you want e.g. “I want a digital camera with good battery life and low-light shooting” and the system told you what to buy and where to buy it. To accomplish that, we developed a technology called TotalRank which essentially replaces a knowledgable salesman that you might find at a store.

Everyone likes good service. We all want the best experience with the least effort. Traditionally, good service meant extra cost and as a result good service is hard to find. But through technology, companies are once again able to differentiate themselves by offering better service. Long-term, I think we’ll see the return of full-service experiences. The difference will be that instead of people providing service, technology will. The result will be great service with minimal additional cost. Finally, consumers will get to have their cake and eat it too.

Last week, a good friend of mine that works for one of the Big 3 Automakers told me that as part of a company-wide innovation initiative, employees are being asked to submit ideas on what new technologies they would like to see in upcoming vehicles. When he pinged me for any ideas that I might have, after a few seconds of thought, I said I wanted a computer with Internet access.

Technically speaking, this is really not that much of a stretch. In fact, custom solutions are already available in the aftermarket. Take the same ~6″ lcd screens that you’d find in a typical navi-equipped car and instead of hooking it up to a dedicated navigation unit, hook it up to a PC in a compact enclosure. Input can be via touch-screen, joystick and/or voice. Internet access method would be EV-DO cellular which can already be found in vehicles, such as the Google commuter shuttles for employees.

Of course, a computer would offer navigation functionality that current systems offer except that it would be orders of magnitude more sophisticated. Instead of calculating routes based on static map data like current systems do, given network access the vehicle’s navigation client could utilize a central server to more intelligently calculate routes, incorporating dynamic information such as real-time traffic, road changes, weather, etc. According to this news item yesterday, Honda will be joining Volvo in integrating Google Earth satellite-imagery into future navigation systems. Uh, who wants that? Do you have the desire, much less the opportunity, to browse satellite imagery while your driving? I doubt it. And if we’re talking about satellite imagery as an aid for navigation, why can’t I just look out the window? Sure, having Google Earth would be nifty, but I would drop this in the innovation-because-we-can-do-it-not-because-anyone-wants-it bucket.

What the driver wants is access to information that is of value to him or her at the moment. And the real benefit to having a computer with Internet access lies, of course, in precisely this access to software and data that a computer provides. Don’t just blindly find any local gas station to fill up at. Find the cheapest Chevron or Unocal76. Not just any Italian restaurant to eat at. Find a highly-recommended one that’s open right now. The computer opens doors for in-cra communication as well. For example, voice-input-driven IM conversations would be a lot safer than chatting on a cell phone while driving because of the asynchronous nature of IM conversations. Music possiblities are limitless. Who needs an iPod adaptor when they can access their own personal music collections or subscription-based services. (Who needs satellite radio either?) A whole new genre of social applications based on route context will emerge. Stuck in a traffic jam? Rant about it with other drivers. See a hottie in the car next to you? Send her a message. And, for passengers, the Internet obviously gives new meaning to in-car entertainment.

The goal here is to have a computer which runs an industry standard OS such that anyone can develop software for it. That idea is probably a difficult thing for an automaker to swallow, and justifiably so. The last thing automakers want is a customer bringing their car in for warranty service because the computer crashed due to a mis-behaved third-party software package. However, I think it is possible to build a system that’s open to third-party developers yet retains an appliance like level of simplicity and reliability.

The last point to make which gets back to the title of this post is, do people actually want this? It seems like everytime automakers try to add computing-like devices, it is received negatively from consumers. iDrive from BMW is probably the most prominent example of this. iDrive allows the driver to customize a variety of settings across many components of the vehicle. The level of personalization that systems like iDrive offer to the driver is unprecedented yet many buyers would rather not have it. I don’t have scientific evidence on this, but from what I can piece together, it does seem that older buyers are much more likely to hate such systems than younger buyers. It makes sense and I expect the trend to continue until one day, not too many years in the distance, computing will be an integral part of modern motoring life.

I didn’t get the laptop of my dreams for my birthday a couple weeks ago. Why you ask? The answer is simple. It doesn’t exist yet. In fact, what I want – if it is to ever be produced – may not even really be called a “laptop”. I think I’ll call it a “lifetop”, short for lifestyle laptop. The purpose of the lifetop is to be a device for performing the simple, everyday computing tasks that you and I do in our daily lives. Tasks such as browsing the web, e-mail, RSS reading, text/voice/video messaging, and light desktop publishing. It does rely on the constant availability of a broadband connection. The lifetop is also not designed for intensive tasks like gaming, searching for extra-terrestial life, nor for mission critical work. However, I will emphasize again that this is a serious computing device. (Note that this is starkly different than, say, Microsoft’s recent unveiling of their Ultra Mobile PC, code-named Origami, which might be best described as the big brother to a Windows Mobile PDA)

Okay. So now that I have described what the lifetop can and cannot be used for, let me jump into an overview of exactly I envision it to be.

First and foremost, the purpose of the lifetop stems from its utter simplicity. After all, every day our digital lives are becoming more and more complicated. As fast access to information is becoming all but ubiquitous, our brains are being bombarded with constant streams of data. The last thing we want or need is our computing devices dictating our digital lives. The role of computers is only to provide us humans with effective, reliable, and secure means to access and manipulate the information in our lives. Nothing more. And this is where the typical PC fails. Why should you have to wait even a minute for your laptop to “wake up” so you can check your e-mail? Why should you have to waste time troubleshooting why there’s no sound coming out of your speakers? Why should you have to worry about whether you’re going to be a victim to the latest nasty virus? The answer is you shouldn’t. But, right now, you are.

Highlights:

Physical Design: Thin. Since there’s no hard disk or optical drive and not much requirement for air flow, the device can be absurdly thin. Combine that with the latest-generation LED-backlit LCD panels which are substantially thinner and I can’t see why a ¼” to ½” thickness wouldn’t be possible without trying very hard. Light. Less than 2lb. The only main source of weight is the case and the battery. The case can be made out of a carbon composite and the battery can be small because the power consumption of the device is very low. Durable. Because there are no moving parts and its light-weight, the lifteop can be handled roughly without worry.

OS: This is what really makes the lifetop. What I envision is a browser-centric UI. It’s not so much that the browser is the only application. Instead, it’s more like the browser is the OS. You press the power button and within a second or two you see a browser. Since the browser is the focal point of the UI, many of the UI elements that normally clutter up one’s screen are nonexistent. No taskbars and browser buttons (such as back, forward, stop) are conveniently located on the keyboard. So why a web browser?

The direction of software is towards being Web-based. Actually I don’t really want to say Web-based. What does Web-based really mean anyways? I mean yes a sophisticated AJAX application which provides a near-native feel is still a Web-based application in the sense that the UI is still delivered via HTML and currently that means you access it via a Web browser. But I like to think of it as rich terminal computing. If that makes sense.

The reality is that more and more of our computing tasks happen online. Think back 10 years. All computing tasks were done via local software installed on your PC. Nowdays, that’s changing very fast. The first big example was webmail. Already, in the latter half of this year we’ve seen the launch of several bonafide Web-based applications: Writely (word processing), NumSum (spreadsheet), Meebo (IM), I have to believe that we’re really just scraping the surface of what’s possible (ok uh that sounded eerily like Bill Gates in that Nasdaq commercial a few years back…I digress). Some people talk like the future is online Office. I’m not sure that’s necessarily the direction. Again, the lifetop, and the web-based applications that it will be used for, are meant for light-computing tasks. Writely has maybe 10% of the functionality in Word. It’s sufficient for 80+% of the users out there, and probably 99% of home users. However, it’s intent is not send Word into oblivion. Anyways, it seems like just about any software you want, there is a web-based equivalent that is under development whether it’s word processing, photo editing, or project management. So why deal with software license fees, install/uninstall hassles, crashes, etc?

The entire OS resides on the only permanent storage mechanism that the lifetop would have, which is a 1GB Flash ROM. A compact Linux kernel would be a good choice. There are standard releases of the OS which are automatically delivered like a 1-click firmware update. There are fixed revisions and the files in the OS are 100% read-only. At no point can any user operation make any modifications. No configuration files stored locally. And certainly no registry. Because the OS is small and stored on fast flash memory, loading is lightning quick.

Storage: There is none. Well, let’s say you have an SD card slot. The point though is that no user software nor user files are stored on the lifetop itself. Instead, they are stored on online file systems like Amazon’s recently announced S3 or Openomy. Storing files locally on your PC is inconvenient and really almost irresponsible. There’s so many ways you can incur data loss. It’s almost absurd that the average user needs to worry about whether his files are going to be intact the next time he needs them. Furthermore, online storage means access from anywhere. With the advent of online storage systems with full API’s, Web-based apps will surely be offering users the ability to store the files using them.

Multimedia: Since there is no local storage, the lifetop relies exclusively on streamed media. Which is fine because the lifetop essentially relies on a broadband connection. Streaming music has been around for what seems like ages now and video has arrived as well. Right now, streaming video generally means YouTube which is lo-def 320×240 400kbps. Soon, we’ll have DVD-quality 1500kbps XVid or maybe H.264 streams. Moreover, with software like Orb, you can easily stream media from any PC. So, if you’ve got massive music and movie collections from torrents you downloaded over the years, you can easily stream it, even over the web.

Ports/Interfaces: Ethernet to connect to LAN. 802.11 for WLAN. Bluetooth for communicating/sync’ing with your other lifestyle devices such as your phone, PDA, PC, and in some cases your car! Also it would support a Bluetooth remote. A remote for what you ask? Well, there’s a DVI out and typical audio in/out for hooking up to an a/v system for the purpose of home theater or presentations. Maybe even offer a nice little dock for this purpose. Another possibility is EVDO for broadband cellular access. There are no USB2.0 or FireWire ports since the lifetop will not support any third-party peripherals. Remember, we’re keeping things simple so no excess drivers or software to screw things up.

Price: Because the lifetop is light on hardware and doesn’t need expensive software licenses, it can and must be priced cheaply. I’m thinking $300-400 is the target. In the beginning, it would be marketed as a luxury device because for various reasons it would not be ready to be a primary computing device for low-cost users. However, as time passes, I could definitely see it taking large chunks of the home computing market.

So who’s going to build this lifetop? Well, remarkably, on the software side, I don’t think building at least a first iteration would be too difficult. Assuming you stick with a very low speed Pentium M processor, you could grab your basic x86 Linux kernel. Build some custom drivers and updating tools, add a customized version of Firefox and you should be ready to go. You would then need a nice AJAX desktop application (one can likely be acquired for relatively cheap since there’s about 10 companies which have relatively similar offerings). On the hardware side, the components are generally off-the-shelf stuff. You would need some snazzy designers to cook up a slick design for the device.

The real question is who has the marketing muscle to push such a revolutionary device. What the lifetop aims to do is nothing less than change the face of personal computing. Even if it is a great idea, you got to convince consumers to ditch their current PC’s, laptops, software, etc. that they paid good money for. Not only that, you’re asking users to leave their computing comfort zone. The one computing company that always seems to understand what people want and make it cool is Apple. However, Apple would be cannibalizing their own home-PC business (both hardware and software) so it wouldn’t be a realistic move for them. Sun is a big proponent of thin-client computing but they don’t know much about the consumer market. Motorola…hmmm…maybe. Nah. I think the best candidates would be the consumer electronics giants like Sony and Samsung. They have the money to influence markets, they understand the simplicity that people expect from their expertise in consumer electronics, they already know how to build portable computers and they have the brand image.

With the advent of Internet-based computing, The lifetop will be an amazingly simple, flexible and powerful device which will meet the needs of just about everyone. For light-computing consumers, the lifetop will be an absolute godsend and will be their primary computing device. For heavy-computing users, it’s the perfect device for when you’re not working on your primary computing rig. Best of all, though, it will be the cheapest, most reliable, serious computing device I will have ever used.

Blogs to Riches: The Haves and Have-Nots of the Blogging Boom. Oh, and just for reference while reading the article, I’m not an A, B, or C-list blogger. I’m probably a Z-lister. =(

The author, Clive Thompson, referencing Clay Shirky, an instructor at New York University specializing in the social dynamics of the Internet, has this scientific explanation of the grossly disproportionate traffic flow in the blogging world:

Economists and network scientists have a name for Shirky’s curve: a “power-law distribution.” Power laws are not limited to the Web; in fact, they’re common to many social systems. If you chart the world’s wealth, it forms a power-law curve: A tiny number of rich people possess most of the world’s capital, while almost everyone else has little or none. The employment of movie actors follows the curve, too, because a small group appears in dozens of films while the rest are chronically underemployed. The pattern even emerges in studies of sexual activity in urban areas: A small minority bed-hop, while the rest of us are mostly monogamous.

The power law is dominant because of a quirk of human behavior: When we are asked to decide among a dizzying array of options, we do not act like dispassionate decision-makers, weighing each option on its own merits. Movie producers pick stars who have already been employed by other producers. Investors give money to entrepreneurs who are already loaded with cash. Popularity breeds popularity.

Anyways, the article is a bit longish but well worth the read. It offers some great insight into the blogging community.

UPDATE: Clay Shirky’s original article Power Laws, Weblogs, and Inequality published back in 2003.