2006 July

The Bell Curve and Long Tail of Value Propositions

July 11, 2006 By Steve Borsch 2 Comments

Been thinking about The Long Tail (and I’ve ordered Chris Anderson’s book) and the bell curve and how they relate to what seems like an ever accelerating array of value propositions.

The premise of The Long Tail is that where the opportunity cost of inventory storage and distribution is high, only the most popular
products are sold. When the Long Tail works, minority tastes are
catered to, and individuals are offered greater choice. The bell curve dictates that there is a tail on either side of the bell curve — one for early adopters that are pre-peak and one for laggards that are post-peak.

So how do these two distributions map to one another? If you identify trends or fads, do you focus on the front part of the tail where the most volume will be sold in the near term…or do that *and* figure out how to keep products around in perpetuity to satisfy those buyers in The Long Tail? Also, how does a Web 2.0 offering (or any product or service) compete and stick around when they’re mainly servicing a small number of customers in The Long Tail?

Since I’m deeply involved in collaboration, social software, community and communications, I’ve invested some time in looking at as many value propositions as I can to see who is doing what and what is being offered. If you just take the web conferencing space alone, there are literally dozens of vendors out there with a handful well known (WebEx, Go-to-Meeting, etc.). But there are literally dozens of others that essentially do the same thing with few points of differentiation.

Couple that with the explosion in Web 2.0 offerings (check out my friend Christopher Mengel’s great compilation of Web 2.0 lists here) and you can see that The Long Tail of possible users is going to have real difficulty supporting all of these Web 2.0 offerings!

Everywhere I turn people are pitching the free model. "Join us now…it’s free!" they scream on their home page in the hope of building a critical mass of users that can somehow, someday be leveraged into a paying business model (which is usually a step-up that is just a hair better than the free version in the hope that the free users will upsell themselves).

I’m involved in a startup right now (and with several firms in a second collaboration) where this free-to-paid-building-a-critical-mass stepup model is key to the future success of both organizations. With all the competition and others trying to build critical mass for their offerings that are only a mouse click away, what are the points of differentiation? How will people discern if "X" offering will meet their needs and be able to self-sustain financially and be around for awhile?

When you look at how big-box retailers have forced out smaller ones (e.g., Best Buy, Walmart, etc.) you can see the drive toward efficiency and lower costs…but at the expense of choice. For example, I often walk into Best Buy and find that they only stock the middle of the bell curve (or mass part of The Tail) and don’t carry either the products I, as an early adopter, want to buy or I, as a Long Tail purchaser of older and sometimes esoteric items, would buy if they were only available at retail.

So I buy on the ‘net again-n-again.

Big questions and they may only be answered as we all figure out more efficient ways of storing and shipping goods and services that have a minimal cost structure or one that can scale without significant increases in cost.

Filed Under: Innovation

Where are the checks-n-balances?

July 10, 2006 By Steve Borsch Leave a Comment

Been mulling over the CNet article from July 7th on how the FBI plans a new Net tapping push. On the one hand, it’d be pretty damn tough to be in law enforcement in an age of virtually uncrackable cryptography available to anyone and an internet communications infrastructure that relays stuff in an instant.

At the same time it’s even tougher to be a dissenter, an opposing viewpoint holder, or a curious seeker when your internet tracks are all over the place. Every site you visit, search you make, VoIP call you engage in and communication you make is
susceptible to tracking.

Then you have the sheninigans at the National Security Agency coupled with the Bush Administration petitioning the court to disallow cases in open court in the interest of national security. Isn’t everything in the interest of national security? Or germane to the war on terror?

I’m finding it’s growing increasingly difficult to know what is and is not secure. What to advise clients to do that ensure their communications are not susceptible to eavesdropping for industrial espionage purposes (more are clamping down on IM, insecure versions of VoIP, off-site project management hosted applications, etc.).

Where are the checks-n-balances? There are so many things happening on so many fronts (just look at this cases page at the Electronic Frontier Foundation to illustrate my point) that it’s extremely difficult to stay on top of all the battles…let alone think about what appropriate policy and laws should be if I were a lawmaker. I suspect, though, that that is the point and the strategy of our present Administration: introduce so many things on so many fronts all at once that no one could keep up and activists can’t rally to any singular cause fast enough to make a difference.

Filed Under: Current Affairs

Her Majesty’s Bloggers

July 8, 2006 By Steve Borsch 1 Comment

Been home from London for three hours and am too tired to do much reflection, but thought I had to crank out a post. It was a great trip, the kids had fun, and Michelle and I are already planning our next trip to the United Kingdom.

Yesterday we toured the magnificent Windsor Castle. The history, pageantry and opulence was staggering. To be in a place walking the same paths trod by the Kings, Queens and people of noble lineage I’ve only read about in history books was at times both humbling and intellectually stimulating while also making me even more aware.

I was humbled to be aware of how distant I am from power and intellectually aroused as to how power is rapidly shifting away from those who’ve historically held it into the hands of the people — and how the powerful will find a way to ensure threats are kept at bay.

One great example is what happened with Charles I, king of England, Scotland and Ireland. While I always thought a King’s power was absolute in times of old, political factions, civil war, and the people’s concern with his meddling in the religious underpinnings in the kingdom eventually caused him (and the monarchy) to be overthrown and Charles tried, convicted for high treason and beheaded.

I was in awe at the Castle. But that is the point of this display. Seeing the bullet that killed Lord Nelson at the Battle of Trafalgar, the art, weapons, furniture and other historic items boggled the mind. While we toured, I wondered why the Queen would allow the common folk such free run of Windsor Castle. Then it struck me: what better way to show the peasants how far removed they are from the aristocracy? Or could the motivation be to simply share the depth and texture of the shared history of the British people with all comers? Or to allow the unwashed masses a glimpse into the buildings they’re funding to the tune of tens of millions of pounds per year?

So what does this have to do with my post title, “Her Majesty’s Bloggers?” There don’t seem to be any pro or con bloggers discussing the British aristocracy. The UK has some of the deepest thinking bloggers, penetrating journalism and analytical thinkers in the world. But the phrase “bounded by tradition” seems to aptly portray how the country seems tied up tightly and not “in the game” with blogging, podcasting and other grassroots journalistic endeavors when it comes to the British monarchy and aristocracy.

After days of poking around the ‘net looking for people from the UK outwardly discussing and critically thinking aloud about the “constitutional monarchy” in the UK (a euphemism for nicely decorated figureheads hanging around opulent palaces keeping history alive) and what it costs the citizenry in money, diverted resources and attention, I’ve come up empty. Let me know if you know of any worth reading.

Filed Under: Current Affairs

Remembering the Past in London

July 5, 2006 By Steve Borsch 2 Comments

Went to several museums today including the incredibly well done Imperial War Museum. Though balanced and still relatively UK-centric, I couldn’t help but imagine what it must’ve been like to live in England and experience the peril of a totalitarian regime like the Nazi’s but a stone’s throw off our shores bombarding our biggest city every night.

As I meandered through the rooms in the museum, other thoughts kept streaming in to my consciousness:

How close the Nazi’s came to deploying jet aircraft (a V-1 "buzz bomb" is pictured above) which — coupled with fuel had they been able to get it or ramp up synthetic fuels — would’ve changed the nature of the war

Little Boy (the A-bomb) pictured above dropped on Hiroshima. Hitler also was supposedly somewhat close to A-bomb development as well. Talk about changing the nature of the war! At one point walking around London and seeing the lack of trash cans and the graffiti, I was suddenly struck by the thought, "Oh geez…what if Nazi Germany had won and London was controlled by them? What would this look like? Would people be beaten or killed for strewing trash around the streets?"

The sacrifices by soldiers, people at home, innocent civilians, the Jews, downtrodden…hell, everybody was in some fashion impacted. The museum had a recreation of sitting in bomb shelter during the Nazi bombardment of London in 1940. Great subwoofers made you feel the boom of the bombs dropping overhead and then we walked through a faux bombed out street. It was a bit cheesey, but my wife and I discovered later that we both had thoughts while sitting in the shelter what it must’ve been like to have zero safety every night!

How Winston Churchill’s leadership (which we experienced yesterday at the Cabinet War Room & Churchill Museum) inspired a nation to hold off Nazi Germany until others (i.e., US and Soviet Union) were compelled to enter (and the inevitable thought led to my own American leadership — or lack thereof — that is doing little-or-nothing to inspire the world during this so-called time of war).

My final thoughts were gratitude: to Churchill; to Britain; to America and the Allies; and everyone who fought, died, struggled and provided a world for me to grow up in and my children to inherit.

Filed Under: Life, Liberty & the Pursuit of Happiness

London Thoughts…

July 4, 2006 By Steve Borsch 5 Comments

History feels both intriguing and heavy here. Intriguing for a guy from a place (Minnesota) where the recorded history goes back to the early-1800′s…and heavy since it sometimes feels like the burden of homage to what’s past outweighs the imperatives of today and tomorrow.

While the world is doing less homage to tradition and more forging for the future, I’m somewhat stymied by observing mobile behaviors in London. In other cities I’ve been in worldwide, voice and data use were common and people were really using their mobile devices. Here…it’s all voice. I’ve observed absolutely zero pecking away at a phone keyboard for SMS or any larger smartphone devices performing much interaction. It seems odd to me.

The internet cafes are lightly used. I had lots of issues with the broadband in the hotel — turns out the router was bad in the hotel — but the unusual aspect was that the technical support folks were pretty clueless about it vs. what I experience when contacting tech support in the States. Tech support can usually ping the router and pretty quickly determine if it’s my machine connection in the room or elsewhere.

The cafes are heavily used for typical human interaction. Though online use feels sparse, people seem to have a life here vs. rushing around glued to their devices. The photo above was a fun street near our hotel and all the street cafes were full. No one talked on their cell phone while talking with others. Even during the day there was little phone use for either voice or data.

The only other observation was how filthy this city is and how bad the pollution has become. Though in the days of coal burning in fireplaces and the thick, pea soup fog of Jack the Ripper and Sherlock Holmes it was certainly worse. Speaking of Jack the Ripper, my wife, kids and I went on an East End London walking tour tonight. It was enlightening and was very interesting to see the East End being regentrified to the point that 55k pound houses just 10 years ago are going for 500k-1M pounds or more as the area explodes.

Filed Under: Life, Liberty & the Pursuit of Happiness

Wifi in London

July 1, 2006 By Steve Borsch Leave a Comment

As we’ve planned our trip to London, one key aspect is our need to have high speed access to the internet. We Skype-call home, check voicemail and email, upload photos so family members can see what we’re doing, and look up info on day-trips or make modifications to what we’re doing on-the-fly.

Our American chain hotel has Wifi in the rooms for 15 pounds per 24 hour period (about $28) which is laughingly expensive for our needs. There is free Wifi in the lobby which isn’t optimal…but we can use it. There’s also an Apple store less than a mile away so free Wifi is an option there too.

British Telecom has something called BT Openzone. I could buy a month’s access (we’ll be there for 8 days) and it’d run roughly $74 but would provide us access just about everywhere (including our hotel). What was interesting to us is that we use TMobile here in the States and their TMobile Hotspots (which include Starbucks all over the world) could be used there BUT we’d incur an $.18 per minute surcharge (roughly $10 an hour) plus, of course, the $20 per month cost of TMobile Hotspot.

Gotta admit that I smile over how expectations have changed. My son and daughter have talked about the movies on the plane, she’s taking her video iPod populated with TV shows she’s purchased, and my son has his Nintendo DS and is delighted he’ll have laptop internet access when we get there so he can manage his online life.

Me? I was tickled to take my first plane ride at 17 years old and being in a position to afford to buy a couple of magazines and comic books for the trip. I didn’t even take my second plane trip until I was 24 years old and my kids have been to Japan, Peru, all over the US (including Alaska and Hawaii) and simply embrace, expect and are delighted to be connected and have access to the world.

Filed Under: Web 2.0