Market Models

I've been thinking about market models lately, and recalled an illustration I came up with about eight years ago which I used to describe the dynamics of how business software was sold differently to discrete categories of business size.

So, I redrew it below. The theory went along the lines of:

Small businesses have low complexity but high price sensitivity / low purchasing power, large businesses have very high complexity and comparatively low price sensitivity / high purchasing power. Mid-sized businesses are the problem children with high complexity and but still high price sensitivity. Business complexity is also a pretty good proxy for cost of sale.

Small and Large category customers tended to have direct relationships with software vendors (for different reasons) but mid-sized businesses were forced to deal with intermediaries like resellers, specialists or niche vendors / integrators. It also explains why small business software vendors never grow upstream, and vice versa - the cultural and go-to-market model differences are too profound. 

I've not yet re-worked this model for cloud apps, but it will be interesting to see what (if any) changes emerge.

Click for big.


Unplanned Pre-obsolescence 

It's interesting to see how the 12-24 month replacement cycles chosen by most iPhone users now sets the rythm of the business for Apple and forces it to work to releasing software against date driven deadlines rather than quality / completeness based ship cycles.

The iOS 6 Maps debacle and Forstall's resulting exit being a great case in point, and shows how much of a slave to its own success Apple has become. The iPhone business is a monster that insists on an annual refresh and whose scale in revenue terms makes it very risky to change too much for fear of hampering appeal and shortly thereafter a significant double digit percentage of Apple's annual revenues.


Love this video




As I sat on the train heading to the airport last Friday I read a few of the brief notes that friends of Michael O'Connor Clarke were leaving on Twitter. Michael had been quiet on Twitter for a good few days and those last tweets that he had left were markedly more touching, particularly those to his father. As the English countryside scrolled past the train window I could only read between the lines of messages that once carried hope and resolve but which were now darkened by a note of sorrowful resignation and I sensed that he might be slipping away from us.

And sure enough, Michael passed away last weekend from the cancer he had only been diagnosed with three months earlier.

On a number of occasions in the last couple of months I've been moved and, frankly, challenged by the profound public intimacy Michael was happy to practice with his closest family and friends on Twitter. I often found the exchanges uncomfortable reading not just because of the moving nature of the messages, but reading them sometimes made me feel like I was secretly listening in on a private telephone conversation.

I can well imagine that someone going through what Michael was going through might have easily chosen to clam up and maintained what we might instinctively think of as a dignified silence. 

Fortunately for us, dignity meant something else to Michael O'Connor Clarke. 



For Michael - dignity was living his ordeal in public in order to remind us that in the end, the love of those around us is all we have. 

Michael leaves behind Leona and their three children, and the world in a better state than when he found it. I'll miss him.


Robots Are Alive And Well And Living In My House


This is really a follow on thought from the previous post about how the businesses of tomorrow will look more like a collection of integrated software programs than the classic image one has of businesses as groups of people working inside office buildings.

Back in the 1950s, western societies began to imagine the nascent utility of robotics as being something that possessed so much promise and whose prevalence would quickly become so pronounced that if we were to travel back in time to the 1950's, a random chap on the street would react with incredulity if we told him that we still didn't have robots in every home attending to housework by 2012.

The rise of a robot workforce was a logical if wrong-headed prediction to make, at least aside from their successful deployment on factory floors and industrial production lines. And it's another great example of how we initially perceive the innate usefulness of innovations through a lens that's governed by history rather than in a futuristic, abstracted sense.

So, while the rise of the the microelectronics revolution required to make robots spark into life was certainly accurate, the humanoid form its application would take was not.

And predicting we'd build anthropological form factors into which we'd pour the emerging electronics wizardry speaks more of 1950's society than the actual practical sense of consumer robots. Post-war popular culture is remembered for many things, but not least for its blossoming admiration for science fiction borne of an optimism to build a brave new utopia, free from war but set amid the context of a broader society that still operated on rules and principles from the Victorian industrial engineering era.

In that particular cultural petri dish it was therefore entirely logical that we'd naturally propagate the notion of perfectly utopian robot beings attending to dirty work we no longer cared much to do. Plus, we mostly perceived our 1950's world through the eyes of a mechanical engineer; ergo we easily imagined perfectly polished and engineered, intelligent robots.

Roll on sixty-odd years and robots are as prevalent in our society today as they were in the 1950's. So, what happened?

There's an extent to which one might be forgiven for feeling disappointed that we're not waited on hand and foot by shiny slaves, as if we've underacheived. Though while the anthropological form factor prediction was clearly wrong, I think everything else was more or less right. We just didn't possess the faculties to imagine how we'd deploy our new found automated intelligence.

Today's robots are just invisible software processes that manifest themselves in mostly mundane ways. They organise the processes that result in the things we purchase from Amazon landing on doorsteps the following day and they can deliver a million emails at the click of a single Send button or just wash our clothes to perfection.

Our 1950's robot future is alive and well and thriving in 2012, only they don't walk among us as much as we walk among them. They don't shake your hand with a clumsy metallic grip but they're just as polite, "Welcome to [Service Name], we're so glad you selected us, please be assured we won't disappoint you…", and they don't gently tap you on the shoulder while you're reading your sunday supplement to remind you that your TV license is about to expire, but they let you know all the same.

So, while we certainly built the complex software required to automate our robot society, we just chose to embed it in mostly abstract ways. Prior generations simply couldn't envision a utopian future that didn't manifestly feature hard engineering as the most likely conduit for the coming technological revolution.

But it's still here all the same, only in disembodied spirit form.