Ahhh.. the iPhone Debacle

Heh.. I just knew this would happen with the iPhone.

The reality is Apple's history and inclination means it just can't help itself. Here's a short blurb from today's New York Times :

It was not unexpected that Apple would try to stop people from unlocking the phones, as this threatened to cause problems for AT&T, Apple’s exclusive United States partner for the iPhone.

“I don’t blame them for fighting the unlocks,” said Brian Lam, editor of Gizmodo, a blog devoted to gadgets. “They are trying to make money, as a business. I get that.”

Still, he said, that disabling someone’s phone, “instead of just relocking it and to wipe out the apps, it seems like Apple is going way too far; I’d call it uncharacteristically evil.”

There you have that 'evil' word, again, being applied to Apple. I do think 'uncharacteristically' isn't exactly right. I also think evil isn't exactly right either. It's a bit more complicated than that.

As some of you know, I worked for Apple in Cupertino from the mid 80's to the mid 90's and got a very up close and personal view of the company, how it worked and how it tended to think. I was one of the converted when I joined them and, by the time I left, I had very mixed feelings about the company.

I still do.

On one hand, this is a company that makes truly wonderful products. It's basic DNA is all about making technology useful for the average person. And it knows how to infuse beauty and elegance into products like no one else on the planet.

But the dark side of this equation is it's control freakness. This is largely a result of Steve Job's personality, but I was at Apple during the time that Jobs was not part of the company and that control freak nature was alive and well without any one person egging it on.

I could name dozens of examples but one that sticks out is when Gasse' (then president of the R&D organization) found a group secretly porting the MaxOS to the Intel platform. This was the second half of the 80's. And, they'd done it. Gasse' (I'm told) saw it for the first time and immediately fired them all and shut it down. Same thing happened again a few years later when John Sculley was CEO and David Nagel was in Gasse's shoes. I was told Sculley sanctioned it, it got to the point of being real and Nagel convinced Sculley to shut it down (they didn't fire everyone this time though).

Why be so weird about not having Apple hardware running Apple software?

Copy protection of Apple's software.

Seriously.

What do you think a Macintosh is? It's hardware copy protection, Apple's own take on DRM, if you will, for what Apple considers is crown jewel: The MacOS.

This is one of the main business reasons you can't buy a the MacOS without a a Mac. Oh, sure, it also has to do with controlling that experience (there's that control word again) but in the end, it comes down to the dollars involved.

Going from a (when I was there) an $11B hardware/software company to a $2B software (only) company was something that couldn't even be contemplated. Still can't.

Same thing is happening here with the iPhone. That hardware (and it's locked down services) are a form of copy protection for the real value: The software that makes the phone so easy to use. And that revenue number for hardware AND software just looks a hell of lot better on the balance sheets. It certainly makes the stock price easier to justify.

So....Control Freakness for sure, but also a way of doing business that Apple hasn't really moved off of since the Macintosh was first shipped in 1984.

What complicates things are how the MacOS is now built on top of BSD. Many many Open Source, what's fair, what should you share kind of questions here.

Apple's built a great set of products on top of the work of others now. It's not all Apple's sweat anymore.

You'd think, with that in mind, they'd be a little more open. I can see locking down the cellphone service. There's a lot of investment and business contracts circling that particular relationship.

But locking out all third party applications? That's not only a little bit evil, it's just plain dumb.

And I will bet you an unlocked working iPhone that it's all Steve Jobs doing.

King of the control freaks; back in the saddle again.

Games: Bigger than the Movies

Anyone wonder why creative types spend time on making movies anymore?

Halo 3 Breaks Records, Pulls $170 Million First-Day Sales

Microsoft grabbed first-day sales of $170 million on Halo 3, the latest edition of its ultra-popular Xbox series. The tally easily eclipses any first-day album sales total, though it also bests record-setters within film and other forms of media.

The comparable, record-setting total in Hollywood comes from Spiderman 3, which grabbed estimated worldwide debut-day revenues of $117 million - and $151 million over the course of its opening weekend. Halo 3 also trumped the recently-released Harry Potter and the Deathly Hallows, which shifted 8.3 million copies on its opening day.

Microsoft quickly trumpeted its newfound record for the highest-grossing launch day in entertainment history. But the biggest rewards could come from ramped sales of Xbox consoles, especially ahead of the critical holiday sales season. The result further reinforces the ultra-powerful role that gaming now plays in the entertainment world, and that stronghold is attracting more promotional energy from labels and artists.

Man o man.. not me. It's REALLY clear where creative people who are also interested in getting the biggest return for their time and the invested buck should be focusing their energy.

Skip Hollywood. Game On!

Power of The Blog... or...Getting Comcast to actually do it's job

Here's a first.

I've been using Planetfeedback.com for years to complain to companies about their service. If you don't use it, you should. It actually works about 30-50% of the time to get a response from a company when nothing else works.

Some companies respond (like Qwest, our local RBOC.. but only if you use 'magic' words like PUC- Public Utility Commission and FTC- Federal Trade Commission in your cc: list).

Some don't. Circuit City, Best Buy and CompUSA, for instance, could care less if I write them to complain. At least in the past.

But... I do believe I just learned a new Magic Word that get's companies to do what they should do without resorting to public humiliation. That word is:

Blog.

Here's why I think so:

After Comcast turned off my internet access at home for reasons I have yet to determine, going through the usual 5 calls to the support number and getting put on hold for hours, hung up on and transfered to weird nooks within Comcast that couldn't help me... I just gave up and put up a planet feedback posting (www.planetfeedback.com).

I put in the usual (here's what happened, here's why you suck, I'm telling all my friends family you suck, blah blah..) but then, I put in something new that I haven't done before, on it's own line:

And I will be posting about this in my Blog.

What Planetfeedback does is it emails your complaint to the Company CEO (and posts it on there semi-social networking site where others can read it and comment on it). Pretty simple thing really but it's nicely packaged and works well.

Now, I do not have a popular/powerful blog presence. But, I suspect they don't know that and what they DO know is BLOGS out people and companies when they do bad things. Ton's of press on it.. so it's gotta be true.

Within the day, "Special Assistant to the CEO" had emailed AND called me back. He referred it to an 'executive support' person who had my internet access back on within a few minutes of getting my email with what I wanted fixed.

I've complained to Comcast with no response in the past. The only difference between then and now is that BLOG comment.

BLOG is the new Magic "use this if you want a response" Word!

Whodathunkit

Context and Editorial Perspective

Kfir Pravda has a great post on content titled "Can Someone Please Create the HBO of Online Video"

Our CEO, Tom Keller, and I go back and forth on UGC vs. more professionally produced pro and semi pro content. I tend to lean toward UGC, he leans toward the pro stuff.

The more I use online video, the more I'm thinking Tom's right.

You could even say I'm doing a full circle in becoming a believer. Peter Gabriel just lead a $5M round for a music site called 'The Filter". His view is that there is so much stuff out there that people need editorial context to guide them.

This is something that swings back and forth. Back in the late 80s, I was saying the same thing when we did eWorld at Apple. I recruited Knight Ridder and The Washington Post newspapers (among many others) to create cache and draw people to our service. I spent a day at the post watching the paper 'being made' and decided it was a daily miracle that it actually got out each day (sooo much labor).

One thing the managing editor said to me sticks with me even now: "Scott, people don't pay us for what we print, they pay us for what we don't print...it's all about filtering out the noise and presenting, with a discerning eye, things that matter to our readers".

There's a balancing act in here somewhere that's the sweet spot of online video content. There's some really great UGC out there. And there's obviously some great pro and semi pro content. The real added value here is figuring out how to filter the UGC and procure the pro and semi pro content in a way that doesn't require a thousand people like the old media systems of The Washington Post, or in our case the old video stalwarts like TV networks and movie studios.

Do that, and find ways to make the process as automated and painless as possible, and you've hit a home run.

No one's really hit it dead on. Yet.

Don’t die with your music still in you

I don't generally link to a blog entry as a blog post, but this post, in my book, is a must read for anyone, really, but especially entrepreneurs. There's a good chance you've already read it in which case, it's worth revisiting. If not, it's a potential life changer.

It's from Steve Pavlina and you can find it here.

It clarifies why guys like me leave behind the Big Job at the Big Company and forgo the Lofty Titles and Cushy Perks to work our asses off and, if we're lucky, get a 1 in 5 chance of succeeding at creating a company from scratch.

I read it whenever I'm having one of those inevitable down days on the roller coaster ride.

It's especially relevant if you're thinking about taking the plunge and doing your own thing, but haven't figured out how to do it yet.

Medical Patents and Software Patents...Close Relatives?

You may not be aware of it, but you can patent a surgery or other medical method. As noted in this article from law.com:

A surge in patents that protect surgeries and other medical methods has triggered numerous lawsuits in recent years, with inventors fighting more vigorously than ever to protect their intellectual property rights.

Patent lawyers say doctors and scientists are suing to protect everything from laser eye surgery techniques to stent procedures to methods for declawing a cat.

This is no small time trend. It's a big deal. From the same article:

"Many physicians are constantly coming up with new techniques and devices. They have started to see some of their colleagues strike it big with patents, so they have tried to do the same," said Dragseth of the Minneapolis office of Fish & Richardson.

Dragseth cited the recent case of Dr. Gary Michelson, who in 2005 received a $1.35 billion settlement after suing a medical device company over his patented spinal surgical technique that speeds recovery. Medtronic v. Michelson, No. 01cv2373 (W.D. Tenn.).

Most of these patents are 'method patents'. Similar in many way to a process patent in the business world.

Think about this. If a particular doctor, clinic, hospital or HMO decided that, since it held the patent on a particular stent procedure, they wanted to keep it secret, proprietary and specific to only their business dealings (i.e. their patients). In their view, it would create a competitive advantage.

Now let's say that method had a 2 or 3X better chance of saving a persons life or extending it by years, but you lived where they didn't 'practice' the application of this method (and did not allow it to be used anywhere else or by anyone else they considered competitive).

Compared to the person who has access, you're pretty much screwed.

The same thing applies to business process patents and a to a degree, software patents (isn't copyright law already at work here?). Yes yes, I know.. this isn't life and death stuff, but it, structurally and intellectually, is very similar. It's also a very good way, by comparison, of showing how patents, although good, can also be very bad if used in ways that stifle innovation, human knowledge transference and rapid absorption of ideas into a particular community be it the medical profession or software development.

The patent system is being abused in ways that don't improve the day to day environment we live and work in and it's now actively blocking our ability to move quickly, innovate fast, implement, learn and go to the next level.

And now, it seems, it's potentially keeping people from the medical care they need.

The Patent Reform Act of 2007 is in the works. It moves us from a first to invent to a first to file system (like the rest of the world) and it streamlines the process for challenging patents. I'm not sure first to file is good for startups (it's easier for a big company to file boatloads of patents than it is for a cash strapped startup) but the process for challenges is a good thing.

We're still missing the important part though. A change to what can be patented. Software patents, process patents, method patents, etc. are all (usually) damaging to innovation.

And in the end, a patent is like a really big cannon. Powerful and to be feared by those who would infringe on it. But, with our current system, the shells for the cannon cost millions of dollars (lawyer bills) to enforce and that makes it a friend of big business and not as valuable for startups (other than one's who're looking to bought for their patents).

I know it's a bit of a stretch comparing the impact of medical method patents to software and business process patents. The differences in impact are vast. But the application is very similar. Both make it hard for others to build on the knowledge of those that came before them.

When a system hurts innovation and stifles startups, that's bad. But when the system starts literally killing people, it's most definitely time for a major change.

The End of the Wireless Gatekeepers?

The New York Times has a thought provoking article on what Google announcing they'll bid on the 700mhz spectrum and it's proposed rules for use of that spectrum recently submitted to the FCC means.

Effectively, they want to decouple the cellphone (or any similar device that can do a lot more, like, say, an iPhone?) from the network.

Isn't Google's CEO on Apple's board of directors? hmmmm...

Their point is a simple one. You don't have to choose a cable or sat. provider when you buy a TV, or an ISP when you buy a computer. Why require your phone/device be tied to a specific cellular carrier?

I recently signed up for Google's GrandCentral. It assigns you a phone number and gives you excellent control of who can reach you and how they reach you; for detail see my post here. What it does is put Google between the customer and the phone companies knocking them out as gatekeepers. Of course, it has the effect of making Google the gatekeeper instead (they supply and operate the systems supporting your phone number). However, you can bet several other companies will pop up with GrandCentral like services to compete with Google. Getting a phone number will become like buying software or a SAAS (Software As A Service) application.

If they succeed in buying much of this spectrum (or get the new FCC rules they want in place), combined with GrandCentral or similar type services, man, they've done what no one else has ever done before.

They'll level the playing field for the voice and wireless data industries in the U.S.

No more 2 year contracts. No more limits on devices you can use with a specific cellular network. You can use any device, made by anyone, to use any service. Real competition based on service, price, quality and (dare I say it) support. And maybe, just maybe, I can even get all my existing services like Gmail, Googledocs, Gtalk, etc. integrated in there as part of the bargain.

The thought of an open competitive robust series of service providers with open platforms and unlimited application choices that run on my device competing for my business here in the U.S. today? Inconceivable.

Tomorrow? If they pull it off, very conceivable indeed.