John Akerson's Thoughts

Business, technology and life

Kindle is Your Paradise

Killer gadgets today are killer because they let us do everything. Is your newest latest Droid/Blackberry/iPhone a killer gadget? Maybe it is, but maybe not. What about the Kindle that only does one thing? Maybe a better question is, do you want more “killer gadgets?” Or do people need one device that does one thing?

From my perspective, the Kindle is better than a killer gadget. It is a paradise device and a paradise business model. The Kindle does only one thing, really well. That is the point. It is killer BECAUSE it does only one thing. It is paradise because it does only one thing. It can give YOU paradise if you have one, and it is paradise for Amazon. The proof is in this delightful, engaging, brilliant Kindle Ad. Please watch it because it explains everything: http://www.youtube.com/watch?v=HGmRKSds9OY

On the surface, if you have $140 sunglasses and love sitting poolside reading your Kindle, it is an easy sell that your Kindle will work better than other multifunction book-type devices. (iPad) Depending on what statistic you pay the most attention to, Amazon is selling either 143 or 180 digital books for every 100 hardcovers sold.   Amazon’s CEO Jeff Bezos says it is “astonishing when you consider that we’ve been selling hardcover books for 15 years, and Kindle books for 33 months.”  That is a tipping point!

Back to the Kindle Ad!  The great irony is that Amazon’s Kindle mirrors the most successful single purpose device in the last decade, in every meaningful way – the iPod. The iPod is a singular-purpose device created a billion-dollar digital download store for Apple. (Perhaps $15 billion) Amazon’s Kindle is another killer gadget, but it is better because it is a single purpose killer gadget. The single-price digital music pricing model has simultaneously destroyed and reformed the music industry and it might yet do the same thing to the motion picture industry. Meanwhile, the publishing industry is being pushed and perhaps dismantled by Amazon’s amazing digital sales… driving per-copy prices down way past where publishers want.

So – coming full circle, here is the situation: iTunes drives Apple revenues with a product to be used on Apple’s iPods. Amazon’s delightful advertisement with their Paradise Device is thoroughly brilliant. It takes Apple out of the black turtleneck cool and plops it down. Where? in a the gut of a man wearing a semi-yellowed white-ish t-shirt over wrinkly khakis (1) at a pool with an iPad (2), sitting side by side with a kindled-up bikini girl. Mr. Apple-man is without sunglasses and looking kind of uptight and stressed, but she finds every relaxed way to look simultaneously hot… and very cool. People might not notice in the commercial, but there is a subtle plate of apples in the background (3)   Back to the stress… in this commercial, this alternate vacation reality – it is the iPad that is stressing him. His iPad is not relaxing and is not helping his vacation one bit! It is not helping him find paradise and it sure didn’t help him select his poolside wardrobe.

When you look at these two people, you can tell neither is married. (4) You can tell that she is enjoying her vacation in paradise. She has the shades, the attitude, the smile, the perfect hair, the perfect black bikini, and the perfect device with which to download digital content… and reading. Why is it so great that she has a single purpose device?  Everyone wants the paradise that comes with no deadlines, no meetings, no emails, no texts, no web to browse, no pdf’s, no buzzers, no noise, no distractions, and nothing at all beyond reading. It is only one simple pure function. Yet, nothing is getting between her and her Kindle. It is almost an intimate connection. A bargain that cost less to her than her sunglasses.

In a cluttered world filled with multifunctional device Swiss army knives, the Kindle is a Katana – sharp, purposeful, effective and to enemies, it must seem splendidly frightening in its potential and its execution. In the advertisement, everything in the girl’s vacation is elegant, relaxing and perfect. She is lost in the Kindle, lost in her reading. She has reached that intimate Kindle-paradise and left the stresses of her life behind. It is exactly the moment in exactly the vacation that everyone could use – everyone with lives that are torn by a never ending assortment of multifunction devices that sing like canaries in a mine full of hyper stimulated under-satisfied stress.  Matt Richtel wrote a great piece in the New York Times about how “Digital devices deprive the brain of needed downtime.
So – she is cool… she is hot… she is on vacation… and she can read her Kindle in direct sunlight, with her high-end fashionable sunglasses on. Why didn’t he bring sunglasses? Was he too busy in is iPad world with stimuli hitting him everywhere? Was he really TRYING to read or was he hitting on her? Does he not know how to adjust the brightness and contrast on his iPad? It doesn’t matter at ALL to her. She doesn’t have a care in the world. She is on vacation in paradise. She can relax perfectly with her kindle on her vacation reading her book in her world without interruption. That is exactly what she wanted. She didn’t want the sunlight to blind her. She wanted to be fashionable. She wanted to relax, cool by the pool, and her Kindle is exactly what she needed. Suddenly the Kindle is black bikini cool in a world of drab white t-shirts. It is a single word, a single device with a single purpose, and it is simultaneously cool, hot, functional and inexpensive. Does he need a pair of $150 sunglasses to read his iPad? No, he needs to ditch the iPad for a Kindle. The Kindle is EVERYTHING he needs. The Kindle is singular in purpose and effect. It is the paradise that he seeks, even on a perfect day when he is actually IN paradise.
The Kindle is exactly what Amazon needed. It isn’t perfect, multifunctional, or multitasking. It doesn’t read all the formats. It doesn’t try to make nice with the Nook or other devices. It is a single-purpose device in a world of multipurpose devices that gives people a way to escape all those other intrusions on their lives. The Kindle is the device that wraps an ADHD world into a single stimulus that can draw you in and encompass you the way that an afternoon with a good book could in a world that has gone by, long ago, far away. And for every Kindle Amazon sells to turn your life into a paradise, it will sell, based on current averages, 24 digital books.

Narasu Rebbapragada writes about people who pursue “any machine that does as many things as possible, that’s what I want”  but also talks how  the Kindle “retains the fundamental characteristics of the printed page, (and) encourages deep attention to story.”   Deep attention to a paradise where one device does one thing and doesn’t interrupt itself and you.

Books are to the Kindle as music was to the iPod, and anything more is unnecessary and detracts. You might say that with Amazon’s paradise device, Apple just got Kindled.

September 21st, 2010 Posted by | Competitive Advantage, Environment, Life, Marketing, People, Technology | one comment

The Larger Impact of Outsourcing

Eweek has an interesting article titled “How Offshoring May Be Hurting US Technology Employees.”

Eweek’s article mainly talks about the offshoring pain in a single context. Their claim is that, although offshoring is sold as a process that moves lower paid positions overseas, in fact higher paid positions are also moving. They discuss IBM’s offshoring of personnel increase, from 6000 in 2003 to 90,000 in 2009. They also briefly mention HP’s offshoring of perhaps 12,000 former EDS jobs after their acquisition of that company. The bulk of Eweek’s article is taken from an article in the Rochester Democrat and Chronicle.  That comes from Ron Hira, Assistant Professor of Public Policy at Rochester Institute of Technology Professor Hira’s point is that the interests that drive offshoring have nowhere else to go and no other rational course of action. He points out that CEO’s must ultimately be concerned with profits, costs, delivering value to customers and maximizing shareholder returns. He points out that politicians are responsive to lobbyists, but that “There’s no group that represents the national interest in any way in Washington to counterbalance this. Which is why you see no action in Washington to address these issues. Who represents American workers in this debate? Who represents accountants? Who represents engineers? No one.”

So – the Eweek article leads to another and experts quote each other while none seem to any real ideas. The main point, and it is fairly obvious – is that the drain to the US comes because of outsourcing, and outsourcing moves jobs elsewhere. This is not a new concept. The idea that outsourcing moves high-paying jobs elsewhere is also not a new concept.

Here are two new ideas.

Outsourcing also hurts technology nationally because it eliminates career paths within US technology. Until a very recent merger, my company had a brilliant CIO who was once an IT director, formerly an IT manager, formerly a project manager, and started more than 20 years earler as a software/code developer. Given offshoring patterns, there is not a current new-hire developer who can likely follow that path. At some point, the US will pay in terms of seasoned and experienced technology leaders. That is very bad, but unlikely to sway anyone in Washington DC.

The federal government is essentially money-driven.  The fastest and most significant impact comes from refining a monetary reason to limit offshoring. Money can drive changes in government.

Here’s a suggested framework, based on the information presented in the article. IBM has 90,000 employees in India, up from 6,000 in 2003. Conservatively speaking, that perhaps represents an offshoring of 58,000 positions. It might be seen as an increase of 84,000 positions, but that would discount the possibility of offshore growth in the form of new-job creation. HP, via EDS offshored 12,000 positions. Together, two firms offshored at least 70,000 positions. If you assume the average technical worker in the US averages $60,000 annual income – and based on any standard, that is also a very conservative estimate – we have an offshoring of $4,200,000,000.00 in annual income. At a 28% rate, which again is conservative, that is an offshoring of $1,176,000,000.00 in income taxes that Washington DC is losing out on. 2 companies efforts have removed $1.1b from the tax stream. They have also removed more than $3b from churning through the monetary and economic system as spending, savings, and other consumption. Those numbers come from very conservative estimates of people, wages and taxes. To go the other direction, there may have been 96,000 positions offshored – with an average US income of $75,000, which would remove $7,200,000,000.00 from the US economy. Assuming an income tax rate of 34% suggests more than $2.44 billion dollars of tax revenue was lost. In Washington DC terms, changing the behavior of 2 companies (albeit large companies) would have funded more than half of the recent ‘cash for clunkers’ initiave.calculator

The interesting questions – that MUST to be quantified and acted on by politicians in Washington DC are: What if that standard was applied to the top 1000 companies that offshore? Here’s my follow up question: What could the US government do to make it economically advantageous to companies to “inshore”? When can we start? In an economy where unemployment is currently 9.7%, our nation is in debt, and deficit spending increases our debt every day, these are the sorts of important questions that should be asked in Washington, DC.

September 9th, 2009 Posted by | Business, Environment, Life, People | no comments

Lessons from Harvard Biz tip could help end the recession.

For August 27, 2009, The Harvard Biz Management Tip of the day is: Think Green to Fight the Next Recession ( http://bit.ly/3bBoPm ).  The tip’s premise and points are admirable. Harvard Biz is right to highlight Honda Insight and Toyota Prius sales as delightful during our challenging economic times. Harvard Biz is also correct that “many companies are launching environmentally friendly products, and being innovative in ways to creatively shrink resource usage.” I think they should at least briefly explain WHY it is important to think green to fight the next recession and I think it is important to consider how thinking green could help end the current recession. Explanations of the business benefits that come from environmental motivations originate in business lessons that from 1849 and 1973.  Harvard Biz should have emphasized both the corporate and consumer benefits of energy conservation. Harvard Biz was right in suggesting that businesses “use a green lens in selecting products for the future” but they could and should have emphasized the enormous “why.” Selling hybrid cars doesn’t produce such fantastic sales simply because the product appeals to consumers’ altruistic nature – although that is an important component. It produces sales because it helps the consumer lower their costs. Trading a gas guzzler for a car that can get 40 or 50 miles per gallon enables consumers; it gives them a significant tool to help conserve money that would have otherwise poured out of their possession – through their tank to oil companies and foreign oil producers. Selling hybrids helps consumers save their hard earned gold. The business side of the green lens shows a company selling hybrids as the 21st century version of the 1849 mining supply company. The miners demand for pans, supplies, and ways to get their gold may have exceeded the gold they found. Selling efficient products benefits the consumers who want to pan for the gold to be found in environmental responsibility. Lowering costs is such a powerful incentive for consumers – and companies gain advantages by offering those products. Beyond selling environmentally friendly products (that help customers lower their costs) the simple practice of lowering costs is powerful for companies too. The Harvard Biz green tip would have been a great business management tip in the 1970’s because of the 1973 oil crisis and the 1979 energy crisis. Energy costs have certainly been soaring for a long time. Focus on energy savings could have helped companies survive and thrive through the recession of the early 1980s. (regardless of the Fed’s contractionary monetary policy.) The focus on those energy savings would have been important then – and is more important than ever now – because energy savings equate to cost reduction.

Internal corporate energy savings help simultaneously increase productivity and return on investment in the same ways that producing energy efficiency for customers can help them reduce costs. Increasing efficiency is a win-win for everyone involved. That is a more important business tip that Harvard Biz missed. Here’s an important corollary: Energy savings enable cost reduction without any related headcount reduction. Hiring will be critical in ending the current recession. A company might look at energy efficiency and savings as a method for lowering costs – but if hundreds or thousands of companies start reducing energy consumption while retaining or increasing employment. Harvard Biz suggests that could help companies during the next recession.  Those lessons could have a significant impact – and contribute significantly to ending current recession.

August 27th, 2009 Posted by | Business, Environment, Life, Technology | no comments

Performance matters when managment fails.

When management fails, your work matters more – for you and for others!

So there is a good question posted – and some thoughts on the topic here.  http://cuberules.com/?p=3327

 If management sucks, does your work still matter?  The point of the article was that your work matters in some ways because even if your managers and executives are terrible, your work serves as a resume going forward. The point of the article is that stellar work during difficult times serves as evidence that you perform well regardless of obstacles.  That can lead to future performance. The example given was Motorola’s CEO who held that philosophy. The article did not specify which of Motorola’s current Co-CEO’s, but it isn’t so relevant. There are countless other examples. Let me offer this one - a star professional athlete on an underperforming team is working for his or her team. The athlete puts in practice time, cares for teammates, and performs on the field or court. Every game, every event is in-effect an audition for another team that can bid for his or her services. In some sports, there is a “contract year bounce” in performance in the year before an athlete becomes a free agent.  So – from a selfish me-first perspective, performance matters regardless of management quality.

Is that the only reason? Is that the best reason?  No. It is not the only reason, and it is absolutely not the best reason. 

There is another more important reason why your work does matter and in my opinion, matters even more during times of management weakness and failure. I think that work during those times matters more because good people can produce good performance that can overcome leadership failures.

You can call that managing up. You can call it overcoming obstacles or you can call it whatever you want. A captain can fly a dying plane into a river but every employee on that plane is responsible for getting the passengers out safely.  A captain can make sure a ship is in a good shipping lane, but every officer and sailor on the ship matters. It is the sailor on lookout who has to see the icebergs, who has to decide that they pose risk, and who has to communicate that in a way that results in a new direction for the ship to sail.  The best reason is that management failures do not necessarily mean organizational failures.

Management failure has more impact and particularly important in smaller organizations, and in top-down hierarchies. Performance is important, beyond the self-first perspective, because it matters to everyone. In a corporate environment, everyone’s performance makes a difference in increasing value. That value is delivered to customers, shareholders, owners, and fellow employees.

Consider the financial services meltdown during 2008.  Bear Stearn’s CEO may have known about the asset based securities that the company was involved in, but the CEO at Bear Stearns did not compute the risk of the asset backed securities. Those securities were probably at the root of the destruction of value. That value destruction hurt the shareholders, customers and employees of Bear Stearns, and it was a significant event in the meltdown of the entire financial sector.  How bad was it?

“on March 16, 2008, Bear Stearns signed a merger agreement with JP Morgan Chase in a stock swap worth $2 a share … (the) sale price represented a staggering loss as its stock had traded at $172 a share as late as January 2007, and $93 a share as late as February 2008.” http://en.wikipedia.org/wiki/Bear_Stearns

 Employees should have understood the risk of those asset backed securities. They should have communicated that risk. They should have taken a part in redirecting the course that their ship was taking.  Someone had to make a knowing decision that those risks were an iceberg that they were going to sail into. In titanic terms, sailing that direction promised good returns, and increased risks. Ultimately, the financial ruins caused by that iceberg were devastating to customers, leaders, employees, shareholders, and everyone.  Should the CEO have picked a different course for his corporate ship? Absolutely.   That’s a simple call.  Did the employees see the potential risk? Evidence suggests they did. So what mattered?

Employee performance matters!

 It matters to the employee who performs because of all those intangible me-first things like salary, bonuses, and accolades – and employee performance matters more to everyone else. In a corporate environment, employee performance matters more when leadership fails because employees can help a poorly managed organization avoid the risks that could damage or destroy the organization, the shareholders, the employees and the customers.

August 23rd, 2009 Posted by | Business, Environment, Technology | one comment

Green Online Banking

Dreamhost has been my webhost since I sold my webhosting company in 2000. Last year they inspired me to *try* to lead a green initiave at my company when they went carbon neutral.   I have great respect for what they did.  It was significant because they did it in an all-encompassing way. They analyzed everything from the servers and power used for the meat of their hosting business to the coffee cups and commuting transportation. After they They purchased renewable energy credits and emission reduction credits.

Green Hosting at Dreamhost.com

I think that effort is beneficial in two ways. It is obviously responsible corporate behavior, and it also gives them competitive advantage. If you want a green web presence, but you’re not interested in doing the heavy lifing to make your own infrastructure green – host with them. That is simple added value that makes everyone a winner.

Considering the size of the bank I work at, I believe it would be impractical to do that across the business. But I’m not just another banker, I work in online banking and I wanted to make a change in online banking. I thought it would be possible to green our web presence, and by doing so, create a competitive advantage at a fairly reasonable cost. No other large bank has done anything like this.

The strategy would be to analyze servers, buildings, energy use, water use, and waste for the entire online effort, the space, the servers and the people in the online group. Of course this strategy also avoids the thousands of other servers and mainframes, and the many thousands of employees, branches and ATMs.  Despite the omissions, it would be an important step, and well worth the effort.
I thought it would provide significant competitive advantage to be the only major bank to provide green online banking.

It is a challenge to do the heavy lifting, and more of a challenge to do the organizational prodding. Every journey begins with a step and wherever my journey ends, I’m taking the steps.

Are you?

July 1st, 2009 Posted by | Environment | no comments

Greening – Part 2

The strategy would be to analyze servers, buildings, energy use, water use, and waste for the entire online effort, the space, the servers and the people in the online group. How did I go about that?

I started by contacting the manager of our corporate responsibility office. I let him know that I had a significant effort, but didn’t outline specifics.

I itemized all of the servers involved in online banking. I got the models, listed the power supplies in each, and documented average operating loads for those power supplies.

I itemized people – developers, project managers, web managers, online security, administrators, and application engineers. I got a fairly comprehensive overview of the business, and I contacted The Green Office to get an estimate of cost. They don’t really have any templates that account for geographically distributed efforts, but I still tried to compute a combination of emission reduction credits and renewable energy credits (green tags) that would neutralize our online banking carbon footprint.

It was important to account for buildings, technology, furniture, janitorial, commuting, electricity, water, and waste.

The aggregate was surprising, and extremely significant. It was also economically difficult to justify in a period of expense management. (expense reduction)

June 25th, 2009 Posted by | Environment | no comments

Greening

Harvard business, like everyone else, is trying to find value, to find competitive advantage in all things green. They have an online section that covers enough topics to make it very very worthwhile.

Dreamhost already has competitive advantage in its hosting. If nothing else, they get it from the “trust and confidence” accorded to companies that find the “relationship between eco-orientation and company performance.”  They also get it from customers and potential customers.  Customers find the eco-orientation as a point for retention. Potential customers see it as a simple way to make a difference.

These two principles, building better retention with current customers and providing potential customers reasons to choose a company – these principles drive economic decisions. They are worthy goals and admirable accomplishments.

Replicating that would require various focus areas:

1) Committment – is there sufficient executive and leadership committment to do it properly?
2) Segmentation – what pieces of the business can be greened in a cost-effective manner?
3) Timing – when can it be done, when should it be done.
4) Benefits – how can benefits be smart? (i.e. specific, measurable attainable, relevant, timely)
5) A stream of continuous improvement, a philosophy of continuous involvement.

How can a company do that?
The key is finding money and environmental syngergy.  Find ways in which business objectives and environmental objectives align, and ways in which they can be encouraged or forced to align.

The key is the same as any other accomplishment – it is simply in deciding to do it, planning to do it, doing it, and monitoring how it is done.

June 24th, 2009 Posted by | Environment, Technology | no comments