Let's not confuse wounded and dead: the Personal Computer

New data is in: PC sales are down for the fifth straight quarter.

Observers jumping onto the "PC is dead" bandwagon is in full swing, needless to say.

There is no doubt that the desktop PC (and maybe even moreso the laptop) is wounded. Perhaps critically so, because there's a powerful self-fulfilling prophecy effect going on in an ecosystem like this. Hardware, application, and platform developers all need to fundamentally believe in a profitable future or they will stop investing.

My point is it doesn't have to be that way.

Granted - tablets and smartphones are already better for a whole bunch of situations where a user is primarily in media consumption mode. And consuming content on-the-move? Absolutely no contest.

But what about the other use case? What will give me the best possible user experience when I'm actually focused on on doing something with my device? As in, the anti- "I'm at Starbucks, sipping a latte, browsing the latest fashion on Instagram" use case?

Like playing a AAA video game. Or crunching on a 500-row Excel sheet. Or writing a book.

Crazy as it sounds, people still actually create stuff, make things, and entertain themselves without an insatiable appetite to be multitasking "on-the-go". We're OK just sitting on our ass, sometimes, and want that to be a really great experience.

Who should win the battle over that second use case?

1. Mobile/tablet/embedded computing developers who need to worry about battery life, tiny form-factors, high costs, closed ecosystems, and fidgety input schemas for these uses?

2. Or, the desktop/living room developers who have access to basically infinite processing power, high-rez big-format displays, and comfortable mouse/keyboard/controller inputs?

There should be two huge markets here solving two obviously distinct use cases. But instead we've got one going full-steam and the other gravely wounded.

Please, someone innovate and making sitting here at my desk a great experience again...

You're only as good as your last film.

So the Hollywood adage goes.

In the news today in the gaming world, Don Mattrick, who was in charge of the Xbox division is moving to Zynga to take over from Mark Pincus as CEO.

Not surprisingly, online commentary has been brutal. One of my favorites was Christopher Bowen, Editor in Chief of Gaming Bus, posting on gamesindustry.biz: "those two deserve each other". Ouch!

Both Mattrick and Zynga have struggled lately. Zynga has seen an exodus of executives, a plummeting share price, and doesn't seem to have clear strategy laid out to repeat their early success on Facebook. Mattrick failed pretty miserably at the Xbox One product launch & PR.

That said...

Here's a guy who helped build, very arguably, the single biggest gaming brand of the past decade.

And here's a company that as a start-up created a completely new category of gaming, introduced tens, if not hundreds, of millions of humans to video games, and set the gold standard for a variety of topics including data analytics and cross-platform promotion for the whole industry.

That's not too shabby. And I haven't seen either come up once in commentary about this move.

But, then again, we're back to that old Hollywood adage...

Sometimes prioritizing is not the key to being efficient.

Recently, I've mapped out my own time allocated each week to various important priorities. These might be marketing, operations, product development, and strategy. Or Project A, Project B, Project C. Or whatever occupies your world.

What I discovered when I really mapped it all out is that my pie chart looks a lot more like the one on the right than the one on the left:

The Grey Ring of Death is all inevitable "overhead" of working in a large team, especially in a large company.

I think this is true for most people:

There's a lot more to be efficiency to be gained from increasing the size of the pie (by cutting the crap) than there is from fine-tuning the correct allocation of time, resources, and energy within the pie you have.

This is important for your teams too. Could you get more out of them by micromanaging their priorities or by reducing overhead wastage through removing the bullshit from their day to day work?

Lack of Opportunities for Truly Incremental Income

You have an hour. You've got a set of skills that are in demand (you know this, because someone’s paying you a salary to put them to work). And you've got an internet connection. Can you make money?

This is a problem I've been thinking about for more than five years. I've heard variations of this many times: “It’s only $5. You could just work at McDonald’s for an hour to own it.”

The problem with that statement is that it’s bullshit: it’s not possible to get hired at McDonald’s, work, and get paid all within the span of an hour.

I've experimented in many different ways. I aggregated content from pub quizzes I've run in Singapore and published that as an eBook. Also I created a Squidoo lens about the economic fundamentals of building a Singapore dividend investment portfolio. There’s been numerous other failed attempts.

Besides the fact both took me more than an hour, neither worked because they were half-baked and no effort went into polish, marketing, or anything like that.

The closest I've come to getting it to work was on Amazon’s Mechanical Turk service. Their idea is brilliant but suffers from several fatal problems:

1) It was clearly conceived by engineers. It’s hard to understand and even harder to explain to others.

2) There is a massive imbalance between demand (too much of this) relative to the supply of available tasks. So, while it does pass my “hour test” – you’re going to spend that hour being paid at best a quarter.

3) I want to use it on the supply-side, too. But the one time I did, I had to task an engineer for two weeks to build out a working prototype for me. It’s not accessible to people who need work done now, but can’t program or don’t have access to engineering resources.

I’m convinced this is a billion dollar or more market. But it’s a tough nut to crack: do you start horizontally building it as a generic platform like Mechanical Turk? Can this problem be solved in a scale-able way through verticals (e.g. like Stack Overflow is doing?) I want to figure this out.

Building infrastructure to accomodate peak usage.

Daily and weekly spikes in usage are a common problem in building out cost-effecive online infrastructure. I know of three basic approaches to dealing with spikes, which I'll outline below, but am wondering if there isn't a fourth, missing option: building for peak and leveraging the inevitable surplus capacity?

Imagine that the area below the wavy line is the daily usage of an online service. Let's say that it peaks for a few hours each day between 7-10PM. Let's assume that you have to pick between owning/leasing dedicated hardware or using a cloud-based option like EC2. My assumption is that, given full utilization, dedicated hardware would be cheaper.

Let's work on the assumption that not catering for peaks (e.g. by letting the service degrade) is really bad.

The options then:

1. Go completely on-demand (cloud). Your usage model would approximate the wavy line assuming your cloud option was perfectly granular. The cost would be high.
2. Own/lease dedicated infrastructure that covers your maximum usage (the top "Full" line). In this case, all the yellow shaded areas are "wasted" capacity. Whether or not this is better than being completely on-demand depends on the relative costs, and the amplitude and duration of the peaks versus the valleys.
3. Go with a "Hybrid" solution: buy enough infrastructure to cover your valleys (the green shaded area) and have some mechanism to send any usage above that to a cloud solution. In theory, this would be the most cost-effective of the three.

But what I'm wondering is this:

Is it possible to go with the "Full" (owned/leased) infrastructure level, and find solutions to leverage the yellow areas? To farm Bitcoins, maybe?

Is this already a solved problem? Are there efficient, scalable, and reliable ways to turn surplus capacity into cash besides BitCoin? Are there real-time brokers of unused processing power out there just like there's companies that aggregate left-over ad inventory?

What in a Company's Name?

I've recently watched a video about the re-branding of American Airlines. They presumably paid their agency a fortune to come up with the idea of painting a big American flag on the tail and re-positioning the brand as "American" to replace the old "AA". Pretty lame!

It made me wonder though: is there any kind of pattern among the names of the best companies? I took a look at the 40 biggest firms by market cap on the S&P 500 and classified them by the origins of their name:

• Random - a variety of trivial reasons
• Descriptive - The core business is described in the name. E.g. "Theo's Pencil Company"
• Suggestive - a word that suggests some quality about the company
• Founder - named after the original founder
• Product - related to its core product, or re-branded to the same name as the product.

Here's what I came up with:

1. Founder - 33.8%
2. Descriptive - 28.8%
3. Random - 20%
4. Suggestive - 15%
5. Product - 7.5%

I wonder: if I started a new company tomorrow, and paid AA American's brand agency a million bucks to come up with a name, would they tell me to call it "Sanders"?

The Power of Hyper-Local Network Effects

You're launching a new product or service. A genie comes along and tells you: "I'm going to give you 100 darts to throw at a map. Whoever lives where each dart lands will magically become a loyal customer. And the best thing is, you get to choose which map to throw them at!"

Should you:

1. Throw them at a map of the world? A map of the United States?
2. Throw them at a map Massachusetts? A map of Cambridge?
3. Or throw them at the campus map of Harvard University?

You're relying on these first customers, the early adopters, to be the community that gives feedback to improve your offer. Ultimately, you hope they'll also influence the next wave of customers when you've proven you can listen to them in a meaningful way.

Could Facebook have become what it is if it had gone from stealth mode, building out its minimum viable product, straight into a global launch? I don't think so.

Network effects are powerful things, and global networks  Facebook's scale even more so.

But networks thrive not just on the scale of users, but on the scale of the sub-networks they've aggregated. The attention of every student in Catherine-Monica Dormitory at Gonzaga University is much more valuable than ten times as many students spread across the Pacific Northwest in measured by viral potential.

The reasons are pretty simple:

1. It's hard to believe, but (most) humans still influence and are influenced by in-person interactions with other humans.
2. The opportunity cost rises for not participating in the service: you'll be left out of the "cool thing" that has everyone's attention.
3. The in-person interactions themselves add value/enjoyment to the experience.

Where is the customer Exit Door innovation?

There is a great deal of innovation happening around the "Entrance" in digital services:

• Acquisition funnel optimization,
• Data anaylsis, visualization, predictive tools,
• Plug & play affiliate programs,
• Search & discovery optimization,
• Viral, social, and your-customers-as-your-salesforce...
• ... the list goes on and on.

For Ghost Recon Online we use many of these tools, services, and technologies to identify who is most likely to engage with our service, how we can best tell them our story, and ultimately - how we can get them enjoying the game with minimal friction as they "enter".

But what about the exit?

There's a few business models, with subscriptions coming to mind first, that have a defined Exit Door for the consumer. You cancel recurring billing to your credit card. That moment is the best opportunity to ask that customer what you could've done better. To improve your service. To understand, maybe, how one day you could win them back. Or just to say "thanks" (or, "sorry").

But for the vast majority of goods and services, customers don't leave the building, they simply dissappear. The only ones you hear from are those who stuck around.

The Exit Door is more painful to talk and think about, but is almost as important.

But no company or service has every come to me with a great idea about how to make the most of the inevitable "farewells".

Where's the equivalent of printing a postage-paid feedback form on the last sheet of every roll of toilet paper you manufacture?