• First, the iPad launches.  The media embargo lifts.  Favorable reviews (would you really expect anything less from Walt Mossberg?) pour in, but some negative reviews surface as well.  Turns out, Apple sells 450,000 units in the first week.  Success?  Too early to tell, but those sales numbers a bit north of where I thought they would be.
• iPhone OS 4.0 is unveiled on Thursday.  Lots and lots of good stuff in here.  Apple seems to have done a great job thinking thru the multitasking issue.  Background GPS + local (local as in local to the phone..not notification system) notifications is going to be huge.  And it’s just plain hard not to be giddy about  background voip and music.  As many of my Android friends have reminded me, yes Android has supported this since ‘09, but that’s not going to kill the glee that thousands of iPhone devs and tens of millions of iPhone (err make that iPhone 3GS +) users will feel come the official launch.
• The launch event also confirmed iAds, that is Apple’s very own ad network for iPhone apps.  We all knew this was going to happen once Apple bought Quattro.  Some of my friends in the mobile ad world are calling anti-trust on this.  One of Steve’s key points about iAds is that the in-app ads will actually expand into an HTML5 window that floats above the app and allows the user to interact with the ad without leaving the app.  Now, if this functionality is not made available via the SDK, then yes I do believe this is anti-competitive.  If they don’t then there’s really nothing that stops any other ad network (Google/AdMob, etc..) from implementing the same.  However, Steve claims that iAds will strive to make mobile ads more engaging than current mobile ads.  I think this goal + the official Apple association + the non-disruptive-to-the-app user experience will be very appealing to big brands.  Steve estimates that Apple could be pushing 1B ads daily given current iPhone app usage.  Obviously that number is sort of like a TAM measurement at this point.  But with this announcement Apple is arguably the new #1 player in mobile advertising…for now.
• Finally, the terms for iPhone 4.0 SDK imply that developing an app using a non-Apple approved languages is prohibited.  What this means is that Adobe’s Flash-based iPhone developer tools are banned.  In his (personal) rant today, Lee Brimelow, evangelist for Adobe, makes it clear that this has nothing to do with Flash player support for the iPhone (which I think it’s pretty fair to assert now is not going to happen anytime soon if ever because this effectively would allow apps to be delivered to the iPhone without going through the iTunes App Store).  But, banning developer tools?  Just doesn’t make any sense to me.  Why is Steve so anti-Adobe?  I guess he forgot the 1990s when Adobe was arguably a key reason for the survival of the Macintosh (and hence Apple itself).

Finally though, one can’t help but wonder if this closed-off approach to the iPhone is going to eventually do Apple in once again.  I tell a lot of friends that Steve Jobs is a visionary and innovator for the ages..one of the greatest ever.  However, he also has a huge ego.  I argue that Steve represents both Apple’s ability to create new paradigms and Apple’s inability to capture, in the long-term, dominant share of the market that paradigm shift creates.  Of course, the clearest example of that is the Mac and the PC market.  Will this be repeated again in mobile?  Well, Apple once again is alienating hardware vendors (by not opening the iPhone OS), alienating developers (limiting funtion and distribution of apps), alienating many users (for some of the above reasons as well as pricing and carrier limitations), and is now potentially alienating the ad/monetization world.  We’re already seeing numbers that suggest Android’s smartphone market share is catching up real fast on the iPhone.  My guess is by the end of 2011, we’ll start to know the answer to this question.

To end this post on a positive and inspiring note, if you haven’t watched this video of a 2 year old girl’s first experience with the iPad, you must watch this video.  The iPad may not change the world but man you can’t help but watch this and believe Steve when he said the iPad is “the most important thing I’ve ever done”.

The key takeaways that I like to focus on are:

• Data sets have gotten MUCH bigger.  It used to be that data was human-scale.  In other words, data was created by  human-driven activities.  Things like credit card transactions, bank accounts, static html pages, and e-mail.  This type of data consumed GB’s maybe even  some TB’s of data.  Now we live in a world of machine-scale data.  Machines with code that are producing new data every  millisecond.  We’re talking about things like sensors and data-driven web sites that generate, repurpose or syndicate data.  The Web is described today in PBs (petabytes = 1,000 TB).  Many large-scale services deal with datasets in the 10s-100s of TB or larger and process TBs of data daily.
• Physical I/O throughput is the bottleneck – The amount of data we can store on a disk is on the order of  1,000x what we can store in RAM as a working set.  Commodity hardware can handle 10’s of TB of hard disk storage but only 10’s of GB of RAM.  So what does that mean?  Well, in order to process any arbitrary subset of data within a massive dataset, this data needs to be loaded into RAM.  Even fast HDs today can only read at a theoretical maximum of not even 100MB/sec.  And even at this rate, reading just 1TB of data into RAM will take nearly 3 hours.  100TB would take more than a week.  When I worked at Ariba from 2001-2004, we basically told our clients to go out and buy the biggest Sun box they could afford and throw Oracle on it.  Whatever the maximum througput of the resulting DB server was essentially set an upper limit of overall application throughput.  This was in a 1TB world.  That’s just not good enough today for many applications.  The Hadoop/MapReduce concept breaks this paradigm by saying instead of having 1 uber expensive DB box, let’s put small chunks of data into large clusters of cheap, commodity hardware.  Hadoop achieves massive parallellization and thus fights orders of magnitude larger datasets with orders of magnitude higher I/O.
• Finally, Hadoop is not the “replacement” for the RDBMS.   solves new kinds of data problems that SQL databases were never designed for.  For financial systems, transactional data needs to have perfect integrity.  If data is updated then the very next query that references that data must see the updated data.  On the other hand, if you add a friend on Facebook, it’s not the end of the world if a split-second later your # of friends stat still shows 467 versus 468.  Further, data like webpages, profiles, and tweets are not highly structured.  Such data should be stored differently because it is accessed and processed differently.  Furthermore, such data tends to be read orders of magnitude more often than it is written.  (Think about a typical webpage and heck a tweet for example can never be updated).  So instead of making reads expensive, let’s make writes expensive for such applications.

If this kinds of stuff sounds interesting, take a few minutes and watch the video:

After watching this, if you’re ready to dive deeper, watch Clouder’s Hadoop training video series starting with this video on Thinking at Scale

I thought about it for a minute, but couldn’t at the time come up with an answer that I was satisfied with.  Since that conversation, I have continued to think about this question and have arrived at a definition that I actually like quite a bit:

A great company is a company that not only makes a great product, but innovates on the business model to make the company’s product accessible.

Google web search is obviously a great product.  But what if you had to pay for each search?  Amazon’s mission has always been to offer the best possible customer experience.  But what if Amazon’s prices were higher than those of other retailers?  Thankfully, we don’t have to answer such questions because both Google and Amazon innovated on the business side of their respective companies.  Advertising allows Google to offer free search and superior business operations enables Amazon to offer extremely competitive prices.

Intuitively, this definition makes a lot of sense.  “Great” companies tend to be those that change the world in some way.  Well, the way you change the world is generally not by delighting only a small segment of customers.  Instead, it is by putting your products/services into the hands of a large many customers that real impact is made.  From Ford to Walmart to Intel, these companies are considered “great” because they led paradigm shifts in their respective product/service categories.

But, what then, about a company like Ferrari?  Is Ferrari not a great company?  Since the company’s start it has sold essentially hand-built exotic sports cars that are far out of reach for the vast majority of the population.  They could have gone the direction of the Corvette and tried to innovate in terms of design, production methods, etc. to build a more affordable, high-volume, yet still potent sports car.  But they never have.  Yet Ferrari’s contribution to motorsports is staggering and undeniable.

Taking a step back, does this then mean that a company that chooses to stay focused on a niche will never be eligible for “great” status?  I guess it depends on what one really implies by the word “great”… Hmm, I guess I need to do some more thinking about this.

I really like how Mike dives into topics such as RTB from the various stakeholder’s perspectives and goes deep enough on the tech details to add color to his points.  For example, when talking about the cookie-matching challenge between bidder and exchange, he first explains at a high-level why it all matters for RTB and then draws the following diagram to explain exactly how this issue is being addressed:

Some of his recent gems are his series on Real Time Bidding, this post that does a great job of disambiguating ad-exchange/network lingo into functional meaning, and posts like this on industry trends.  So many other great posts on ad exchange vs. network, behavioral ad, cookies, etc.

Mike On Ads is an exciting addition to my blogroll and will now be the site I recommend to others who are looking for a primer on online advertising!

OnLive fundamentally transforms the way users experience games and interact with each other, and in time, will transform the way games are developed and marketed. By distilling specialized game hardware out of the equation, OnLive will allow games to be played as a pure media experience on virtually any device, with the same flexibility and instant-play experience that we’ve come to expect from online video and music.

You might be thinking that any company description which has the word “transform” twice in the first sentence is likely BS. So, for a more in-depth, tangible description and demo of OnLIve, I would HIGHLY recommend you watch this presentation by CEO Steve Perlman (Quicktime, WebTV) from the 2010 Dice Summit:

Even if you aren’t interested in the video gaming industry nor OnLIve, the first few minutes of Steve’s talk is very interesting. He basically runs through the evolution of media consumption. One interesting stat that’s really stuck in my head is that torrent traffic, while still representing a huge (think 50%) chunk of total internet bandwidth worldwide, actually peaked last year and is now on the decline! Steve says it’s largely because people are growing impatient. They want their media now and thus are preferring streaming/on-demand experiences.

Since their first emergence out of stealth mode at GDC ‘09, the chatter about OnLive seems to be slowly shifting past “wait, does this thing actually work?” to “great, so how much will this cost?”. And it is indeed the pricing issue that is one of the most intriguing aspects about OnLive. Well, as of last week’s announcement at GDC ‘10, we have the answer..at least part of it.

OnLive will charge a monthly fee of $14.95 for access to the service. This does include access to game demos and other media bits (think PSN or XBox Live), however, this does not include any actual games. Access to games will be available for rent or for sale on an a la carte basis.

So, let’s run some quick numbers:

OnLive costs 14.95/month x 12 months/year – 10% multi-month discount = $160/year

Gamefly costs $16/mo (1 game at a time) x 12 months/year = $200/year

A PS3 costs $300 and let’s say at this point has a 4 year lifetime so amortized is $75/year

So how much will games be on OnLive?  If you take a look at about the 34:30 minute mark in the above video, Perlman shows a graph of which players in the value chain get what margin of a $60 video game. In that graph, the publisher gets around $27. Perlman contrasts this with the OnLive model where his graph appears to show that OnLive is offering about a 70% publisher /30% OnLive split to developers. At that split, OnLive needs to charge about $40 per game for publishers to make at least $27/game sold. (It’s probably also worth noting that publishers also win because that game, because it’s digitally delivered, cannot be resold on the used game market nor can be pirated.)

So, let’s see..

Scenario A: Consumer owns PS3 and rents 1 game/month. Using PS3 + Gamefly that will cost 75+200=275/year. Using OnLive that would be 160+rentalpricex12. Do some simple math and rentalprice needs to be about $10 to equal the PS3+Gamefly scenario.

Scenario B: Consumer owns PS3 and buys 4 games/year (assume $60/ea). Cost of that is 75+60×4= $315. Using OnLive that in my estimate would be 160+45×4 = $340. To make the prices comparable the game purchase price on OnLive would need to be under $40.

Of course I haven’t discussed other advantages to the consumer such as being able to play any game regardless of platform. On the other hand, for gamers that already own a current-gen console, the cost of the console is a sunk cost and thus the argument for OnLive becomes more difficult. A pricing scheme that is interesting to think about is usage-based. In other words, gamers are charged per hour that they play any given game. However, I can imagine that might be a tough sell to publishers because, let’s face it, they are capturing a lot of consumer surplus from gamers who buy a game and never end up playing it much or at all.

Finally, though, OnLive does more than just enable streaming gaming. It adds a social dimension to gameplay that PSN/XboxLive haven’t fully been able to do. One example is brag clips (highlighted in the video above). I look forward to checking out the OnLive SDK to see what types of functionality game developers may be able to leverage.

To signup for a free 3-month launch membership to OnLive, signup here.  Whether OnLive is a success or not, the OnLive service represents a major milestone for all media.  OnLive proves that even the most complex media experiences (HD online multiplayer video gaming) can be delivered via a stream.  We all knew that the the disc was dead.  Well now it looks like the download is also dead.

Okay that pic doesn’t look like much so let me explain.  Last night had some friends over and for living room music, instead of clumsily trying to connect my iPhone or streaming music from my laptop, I thought hmm let’s try Pandora on the PS3’s web browser.  Turns it out works flawlessly.  Quick tip though, in the browser menu, under the View option, turn the Resolution setting down to -2.  That will essentially zoom in on the Pandora flash UI to make it much more legible on your TV.

As usual Pandora served up some awesome music and it was fun to glance over and look at the track info.  Pandora would do well to make a PS3 specific UI.  Maybe even distribute it in the form of a cheap PSN download game?  That would enable Pandora to build a UI tailored to the PS3 controller.  Now that would be sweet…

However, what is most intriguing to me is if and when Facebook will be launching a likes and interests Suggest tool similar to that of Google’s Keyword Suggest Tool.  Assuming Facebook is tracking the necessary ad click data+metadata (which I’m all but sure they are given that they seem to track everything), such a tool would be a boon to all advertisers, but especially those (majority) advertisers who are unfamiliar with social advertising.

I argue that ideas, even the best of them (assuming the greatness of an idea is actually measurable), are worth essentially nothing.  Ideas may in fact lead to invention or innovation, but the idea in and of itself is simply a starting point.  The value is in the execution that comes after that starting point.  And the reality is that startups — whether a high-tech venture or a restaurant — fail because they fail to execute in one way or another.  Furthermore, startups that are successful are very often, at best, tangentially related to the original t=0 idea.  All this is not to say that there aren’t ideas that are better than others, but smart execution is easily an order of magnitude more important.

What is interesting is that empirical research shows that there is definitely an idea premium when startup founders allocate founder equity amongst themselves.  In other words, the person with the idea often receives a bit more equity than the other founding team members.  Moreover, that idea person is the CEO of the startup 56% of the time, but CTO only 12% of the time.  One might quickly conclude from this that the market does value ideas.  My hunch, however, is that because the idea person was, by definition, the first to start developing the idea and building the team, he has often put in the most sweat equity and the extra equity is not compensation for the idea itself.

So am I arguing then that that one great idea you have each year should just be quickly dismissed as having no value?  No, absolutely not!  The ideas that I have actually pursued are those that keep nagging me.  But the thing to remember is that even if you vet the idea and it still has you excited, remember again though that it is the execution that will actually make your idea worth even $1.  If execution is all that matters, the important question then is: what does the right team look like to execute on the idea and would you belong on that team?

I turned 30 this week.  It feels weird.  My milestone birthday forced me to reflect on my life a bit, especially my 20s.  I am fortunate to hold within me countless great memories spent with friends and family.  I would be lying if I said I truly have no regrets, but one thing I have learned over the recent years is that the only purpose that regret serves is to distract us from the present.  That’s not to say that I love every decision that I have made, however, I try to reflect once on such decisions, figure out why I made the choice I did, why it was sub-optimal, and how I should change my decision framework next time to choose better.  I still catch myself sometimes in regret mode.  Old habits die slowly I guess.

One decision that I am very happy about is this blog.  I started this blog in 2005 with no real purpose than to put some of my thoughts on various topics into some sort of written form.  Sort of like a journal.  Over time, I gained a small audience, including many friends or acquaintances, some of whom I actually met because of this blog.  Unfortunately, my blogging velocity has been very poor for the past 3 years or so.  Startups and then business school have gotten in the way I suppose.  Not a great excuse, but it’ll have to do. =)

As a 30th birthday gift to myself, I moved the blog onto a new host and started fresh with the latest WP and a totally new theme.  I decided not to hit the reset button on the old content because I decided that I really am proud of many of my archived posts and, since, the topic of this blog isn’t changing, I figured no harm in keeping it.  Moreover, a few of my posts get some decent SEO traffic.

Anyway, blogging has led me to meet many great people, learn a lot, and mold my personal brand.  Hence, reviving this blog is a top priority for me.  Wish me luck!

Enter Boxee. The first time I heard about Boxee, I was excited. Over the past five years or so, there has been an increasing demand by consumers to watch digital video content on their TV. A few years ago, Microsoft proclaimed the future to be a PC hooked up to your HDTV powered by Windows Media Center. I think it’s safe to say that vision didn’t quite pan out. However, we can thank Microsoft for creating the XBox because from that XBMC was born. XBMC was the first powerful glimpse of what a media center should be. It allowed streaming of video content over the network and, being open source, many interesting features, such as web browsing and music players, were integrated into it. The problem with XBMC was that you had to find and hack an XBox to get it. Not mainstream. Apple TV could have been a breakthrough product but, in true Apple fashion, the closed nature of the product and DRM restrictions limited its potential it. XBox360 and PS3 make major leaps by allowing users to stream unlicensed video content, but stop short of really embracing the media center concept. Finally in June of 2008, Boxee releases an Alpha of what eventually could be the first mainstream media center software product.

I’ll let you visit Boxee’s web site and discover all the useful features of the product and how you can obtain it. One of the killer features the Boxee team added was Hulu streaming.

Hulu on Boxee (courtesy of Fred Wilson)

Last week alone, Boxee claims to have streamed over 100k Hulu streams. That’s a huge number considering Boxee’s installed base is still pretty small. At a glance, this would all seem like a win-win-win. Big media companies control content delivery via Hulu and Boxee enables Hulu users to enjoy the flexibility of using the service on their TV. Unfortunately, good things don’t last forever. Somebody was going to get hurt. It turns out, it’s Boxee.

Apparently, the big media guys didn’t like that consumers could watch shows like Lost and 24 on their TV via Hulu. After all, big media makes its money by selling TV ads. If Boxee users could enjoy their favorite shows on their TV via Hulu, then big media sells less ads and earns less from cable providers for channels like FX and USA.

The problem in this logic is that it seems to me that Fox/NBC hasn’t really thought this through. What will these Boxee users do instead of watching on Hulu? My guesses are:

1) Tivo/DVR the shows. Result: Ads are skipped altogether. No cable viewing.
2) BitTorrent. Result: Ads are non-existant. No cable viewing.
3) Doesn’t watch the show. Result: This hurts the media companies in several ways. Ads are not seen and no cable love because the show is not seen. The show ultimately becomes less popular, ad space is less valuable, less DVD box sets are sold, less syndication monies, etc., etc.

See a pattern? =) By blocking Hulu on Boxee, Fox/NBC are simply creeping back into their old-school mentality that is slowly bleeding their ad money dry. My hunch, like many others who have blogged about this story, is that this decision will be overturned. Unfortunately, I wouldn’t be surprised though if there are some restrictions placed on Boxee to encourage Hulu users to watch on their PC. Such restrictions could be no HD content or more annoying ads. We’ll see…

One of the items I put on my to-do list is to do some research on what the ad rates are for Hulu (and others like MTV’s Overdrive) and how that compares to TV on a per impression basis. My hunch is Hulu is way higher…I’ve found myself actually intently watching the 30-second ad spots! That rarely happens on TV. Plus the other side benefits of delivering the ads online like opportunities to interact with the ad. I’ll report my findings in a later post!