Fabian Schonholz’s Blog

Just kidding!!

Startups are interesting “beasts”. I should know, I have a few under my belt. I worked on my own startups, for which I had a hard time funding thus they never really went anywhere, and since I was the only source of investment, not only did they not go anywhere, but I was taken along with them - 100% my choice and I learn a great deal. In a way, I paid for an education.

I have also participated in other peoples’ startups as well. One thrived but never found its execution groove and finally collapsed. One never got off the ground. One I helped sell. The other is a work in progress (a good opportunity that now needs to execute from a business point of view since the technology is in a good and stable place). I also have big company experience as well: Prudential Group Insurance, Xylan, Disney, NASA. And I have also helped other startups as a consultant, as one of my own companies did technology strategy consulting.

One of the things I have noticed is that usually proper and true estimations are either not done or not respected. Estimations are paramount as they help provide a clear picture of the road ahead in more than the conventional ways.

One of the cornerstones of my home grown development methodology is estimations. I wrote a post, Software Development Methodologies, that describes the methodology in some detail. However, I purposely left estimation out of the post. On one hand, I implied and assumed estimations as another step. On the other, estimation is such an important part of managing projects and technologies, that it deserves its own post. And here it is.

These are some reasons why estimating a project is of paramount importance:

•  Managing expectations
•  Managing cost
•  Planning technical resources
•  Planning marketing calendars
•  Planning sales channels

Overall, these reasons point to the fact that nothing in a company is an isolated component. Each part of the company has a direct dependance on all of the others. In  technology companies, companies that provide technology services, or companies who’s core product rely heavily on technology, their dependence on technology is obviously greater. Thus, estimations of technology projects are core and dictate how these company behave.

In contrast, companies who just use technology - in other words, their dependance on technology is based on the fact that technology is a means to create efficiencies, but hardly core to the business -  estimation remains important as a budget control factor. It remains important and critical from a project point of view, but its influence on the business is marginal. However, budget control factor influence is not at all marginal.

But why are estimations so important on a startup?

Startups, by their nature, struggle to survive, and it is not a matter of funding. Even the best funded startups go through this struggle. The question of survivability wears heavily on management and to some extent, the rest of the employees. Nobody joins a startup to fail, as a matter of fact, they join for the upside. The big upside comes from the risk factor that the opportunity represents. Furthermore, there are no assurances that the company will make it but everybody to a large or even larger degree believe in the opportunity. The flip side of this is that startups are in sell mode from the get go. Everybody is aching to have the product finished, on the market and generating some form of revenue. Even the most steady handed startups expose the same sell mentality. And it is perfect, it drives the company to early survivability. Or at least it tries.

One of the problems that startups have is creating a “perfect roadmap”. The roadmap to success. This roadmap includes defining the product and features, developing the product, marketing and selling the product and providing follow on services to the product; by either providing support, additional features or additional products. A factor of the roadmap is the people needed that will get all of these done. Who and when should discreet employees be hired is an important element of the “perfect roadmap”. If you hire too early, you are wasting cash and if too late, then there is the potential to overburden the organization to the risk point of missing the market opportunity.

Estimations have a direct impact on the “perfect roadmap”. If you understand estimations as only providing a ballpark or precise timeframe of when something will be done, then you are missing the point of providing a good and thorough estimation. A good estimation showcases how the project will evolved. It will provide you with hints as to when different parts will be done and become available. A good estimation will tell you when you can start marketing and selling your product before it is even completed (if that is what you choose to do). In particular, in startups, a good estimation will also provide you a timeframe for hiring.

Good estimations reduce the risk of startups and elevate the survivability factor. They provide the framework for growth and expansion. Estimations help manage cash flow. And finally, estimations help manage anxiety so we can all focus on what is important, building success stories.

I am a lucky man. There are many reasons I am a lucky man: my wife, my kids and my friends. I do not have (or want) many friends, but the ones I have are the best. One of them I have known for 30 years (he will argue that it is 29 years, but who is really counting). Another one, Dan, I have only known for 4 and in spite of not having enough time to hang out with him, I still consider him a close friend. He is a real estate agent and a darn good one. What makes Dan such a good agent is his honesty and dedication. He really made the process easy for us. He is great. But this post is not about Dan, but on how traditional industries can benefit from the Internet and interactive media and marketing.

As I read different blog posts and surf the web I have found web sites whose intent is to replace the real estate professional. I am not going to argue the pros and cons of those sites, or whether overall it is a good idea. I will state that, in my opinion, it is a fantastic idea. Yes, it does take business away from my dear friend, and in all honesty, I am concerned for him; but it is a good idea nonetheless and I think that he will not be as affected as others that are not as good as he is. Nevertheless, as I find these sites I send them to him. I want to raise his awareness to the new economy and since he is very entrepreneurial, it might spark an idea, or two.

Sometime ago he asked me if I thought that going through a house with a video camera showcasing the property and then posting it in YouTube was a good idea. He wanted to do it in the format of a TV show. I thought it was a great idea, but it needed a platform to showcase the videos - it has been done before to some level of success but before YouTube. In other words, do not expect people to go to YouTube to find houses for sale. My advice was to start a blog, or some other interactive avenue, and with it, start doing some interactive marketing. He sends a newsletter once a month, he should do an electronic newsletter as well, driving traffic to his blog. I explained to him about the advantages of interactive marketing through  a blog and what content he needed and how it needed to be shown. I am not sure what Dan did with the information I passed along to him, but he knows I am here to help should he need it.

Regarding the sites, in the end, you need to make a choice. Should you use an agent or should you use these websites? My choice is to work with Dan. I am indeed lucky.

But real estate in not the only industry that can benefit from interactive marketing. One day I was helping Andy,  the owner of the wine shop I am more than just fond of, set up a blog and a new interactive marketing strategy. Since the shop has a wine bar, every so often I go to hang out there and write on my blog (my goodness, which one of the posts are wine induced?) while I have some wine and cheese and the best panninis in the world. That day, as I was furiously typing my post, Andy approached me and asked me what was I doing. I have been sending Andy my weekly “Sunday Emails” that some of you get as well; so it was easy to explain to him what I was doing. He, from time to time, visits my photo galleries.

As I was explaining to Andy about blogging and the potential benefits, business models and ancillary revenue that a blog can bring, it occurred to me - well … it had occurred to me several times before - that he can do something similar to what I was proposing to Dan, just different content. I ended up setting up a blog for the shop and showed Andy how to edit and add content.

I know that this post sounds like I am trying to sell blogging as a business platform. Well … it absolutely is a business platform, or it could be if used in such way. For me, it is a way to share my ideas, but as it turns out, it is also a self marketing and self promoting platform. But that is not the focus of this post. The focus is on the value of the Internet for traditional industries. For traditional I mostly mean “mom & pop” shops. “In the Internet you can be a dog and nobody will know.”

The Internet and the Web, in particular, have hardly realized their potential. Viva capitalism!! It is amazing how you can have Google, Microsoft, Yahoo!, even Facebook next to TechCrunch or this blog or a site that provides style sheets for MySpace -  which by the way, is run by a 16 year old and generates over $7M in annual revenues with little cost behind it. Yes, monetarily speaking, completely different orders of magnitude; but because of the differences in magnitude, the contrast is so amazing. “On the Internet you can be a dog and nobody will know.” Indeed. The Internet has democratized capitalism even further.

One of the tenets of capitalism is mobility. People will move up the ladder while others move down. And some are stuck somewhere in the middle. The Internet has added more fluidity to this mobility by creating a new and additional economy and with it, new  opportunities and new wealth. In this new economy “you can be a dog and nobody will know.” You can be anywhere, you do not need sophisticated equipment and you can make a more than handsome living.

What makes the new economy interesting is the fact that it is new. It can be contended that it is not new at all, and just an evolution of the standard economic development of a society. I would not disagree with statements hinting to that; however, I like to think in terms of turning a page in a book. The book it is still there, and so is the story, but as you turn the page, the anticipation and the discovery of a new fork in the story becomes very exiting. The new economy is about discovering new economic avenues, new ventures, new ideas, new markets. We are boldly going where no man has gone before and we are blazing new trails. Innovation fuels the new economy.

Back to Dan and Andy. They can both benefit beyond their current opportunities from an interactive marketing and content strategy. Dan’s video idea is really good, but needs to be hosted and presented well and some effort needs to go not only into traffic but into content. For example, Dan can give the hot tip of the day, week or month. He can document and communicate best practices for selecting a home, for buying it, for selling it; maybe some business tips for aspiring real estate entrepreneurs; funding a loan or getting a mortgage. The sky is the limit.

And Andy has the same opportunity. He can do a product catalog with a description of each item. How it drinks; when it is best to drink; tips on preserving wine; on how to taste wine; how to select wines. The content can be around new arrivals or good deals.  He can have a once a week video talking about the upcoming wine tasting. He can even add a shopping cart and allow people to order from their homes. Again, the sky is the limit. And what makes it all possible is a simple turning of a page in the development of the human system.

So … the Internet is changing real estate, is changing how we drink wine and … the  Internet will make it so dogs will run the economy.

And … I am definitely a lucky man!!

Recently there was a post in TechCrunch regarding Facebook’s hype. One comment to the post was that Facebook was already passe and “the new hype was being already developed by three guys in somebody’s garage”.

I recently wrote an post regarding Innovation In Technology and the process of creating new technologies; from the need to solve a problem, through making existing technology better, and creating new markets by “discovering” new ideas. I also wrote about companies generating fresh ideas and implementing them, and how these new ideas improve the bottom line. The problem of innovation affects us all, at all levels. From technology through education, stopping along the way in government and politics, healthcare and medicine, and economics.

“Three guys” in a garage can do some very powerful and life changing things. Think Steve Jobs and Steven Wozniak, Bill Gates and Paul Allen. Yahoo!, Google, Hewlett Packard and countless other companies started in an actual or figurate garages. These people took everything they had, had the charisma to raise funds and attempted to execute on their dream and would not relent, are to be applauded. Even the ones that did not succeed; because on the shoulders and ashes of every failed company, a new idea is born with the potential to change our lives.

But is hype life changing? I mean, does a company like Facebook have the potential to change the way we live? Yahoo! and then Google did change our lives. So did Microsoft, Apple, Amazon, Dell, etc. Even Friendster and MySpace have had an effect on how we communicate with the ones close to us. Linkedin and Facebook made this communication innovation their own and improved on it. But are they themselves life changing or disrupting enough? Both companies have the potential to be life changing or provides a change in a commerce paradigm the way eBay or Amazon have, for example. And there is no need to go into how Yahoo!, Google, Apple, Microsoft, etc., have indeed change our lives. But potential is not enough. There has to be value for ALL users for that change to happen.

I am going to come clean: I like LinkedIn and extract some value from it, and I do not like Facebook because I do not extract “any” value from it. But strategically speaking, I think that Facebook has had some brilliant ideas and has executed well on them. So, I tip my hat to them. Their technology AND business innovation, as far as I know, has been converting their product into a platform where people can develop application for it; thus, extending the feature base at little cost and by that, perpetuating their freshness. However, and again, in my opinion, unless there are some true productivity applications developed for it, to me there is no value to Facebook.

Let’s be clear. What does it mean “to me there is no value to Facebook”? As a user, there is not much in the product and additional deployed applications that entice me to go back with any regularity. The only draw that the site has on me is when somebody posts a note on my wall or sends me a message or IM and the sites lets me know. I am curious to read it so I go back to the site. Otherwise, there is nothing yet that I have found of any interest to me.

On the other hand, If I was analyzing the company as an investor, there is ton of value (but $15B worth?):

First of all, because I may not find value as a user, it does not mean that others will not as well. The fact remains that hype or not, Facebook is drawing a lot of traffic and keeps on increasing. Then why would Google buy YouTube when they had Google Video? The answer is traffic and with it, the ability to experiment in different ways to monetize that traffic, within the context of the property. Facebook faces the same ability to experiment on different models of traffic monetization; especially with the Microsoft investment and the rumored additional funding.

Second, the Facebook platform is another traffic draw, perpetuating the point above, but beyond that, it provides the potential of added value; the potential to draw me back as a user; the potential to leverage not only the data in the so called social graph, but the social graph and the connections. Whether it is apparent to people or not, it is clear to me that we are in the midst of a paradigm change in computing and computing services, services in general and how all these are combined. Apple with the iPhone and iPod Touch is good evidence of this. As stated above, Facebook has the potential to be a contributing party to this change. I will go more into this last point in another post already named “Social Networks and Cloud Computing”.

In the end, as fun as it is to think of three guys working on their parents garage on producing the next hype, I would rather think of three guys creating the tools and means to usher the new way to interact with technology and once again, change the world.

A few months ago I started to blog. This is my second go at it and it is going far better. The first time around the focus was on personal thoughts and, in a way, documenting some of the things that were going on in my life, good and bad. I have to admit that my first attempt lacked form. It had plenty of substance, but that substance was expressed in the words of an angry person, because I was angry. And to make it more fun, I was also going through some fundamental changes in my personal life and belief system. The fundamental changes are still VERY ongoing, but the results can be seen already: I am not as angry as I used to be. That is good. Maybe I am just getting old. Regardless, A LOT LESS ANGRY IS VERY GOOD.

There are a few things that I learned from the first experience blogging and I keep on learning as part of the current incantation of my blogging experience. The first one is: Don’t be so serious. The second one is: Remember … somebody, anybody, everybody will read your blog.

Blogging exposes your ideas, thus yourself. Anything you write becomes permanent and lasting. Even if you turn your blog off, your content is possibly cached somewhere. I advocate that you are honest and open with your ideas, in other words, say what you think and mean it. But there are effective ways to do that, even in the case of the worse and most evil content.

I recently had a conversation about leadership. The agreement was that a leader is a doer and an action taker that deeply influences others, especially in the case such person needs to do something that might go against his or her innermost beliefs. Leaders are not necessarily selfless, but do have a vision that transcends his/her immediate scope of influence.

We normally consider leaders in the context of good. Some may look at Churchill or JFK, or Mother Teresa. My favorite leader is Genghis Kahn, a little beastly, but seemed to understand his limitations, and through well crafted plans, overcame them and in  doing so, China under his domain, experienced great advances in many areas. But there are other more infamous leaders: Stalin, Hitler, Fidel Castro, Che Guevara and many more. You might hate their guts, but whether you like it or not, they were powerful leaders and people would lay down and die for them

If you are going to blog, be a leader. Your ideas do not need to be novel or altruistic, but convey them in a powerful way; your words represent you and have the power to influence. Even when all you are writing may be just gossip.

Since I started to write again, I have been contacted by people from all over. Some to just exchange ideas, some to discuss a blog post - specially when the post deals with something interesting and I manage to write something that measures up - some to just network. A few months ago a got a call at around 7PM. It was the CIO of a company that had just gone public and was looking for management talent to expand their operations. He had found my resume on a job site. I decided to go to the interview just for grins. Why not!! The interview went well and I sort of got a job offer that was somewhat interesting. Since I was not exactly looking for a job I decided to experiment and told the CIO, who had not read my blog, to go read my blog and then he could decide if I was the right guy for the job. A few days later I called him and he quickly informed me that he was rescinding the somewhat interesting offer and had gone with somebody else. I was not surprised.

But the experience left me puzzled. So, what if you have a blog and you are looking for a job? I discussed it with a friend of mine over dinner and wine - the best way to discussed deep technical and philosophical questions such as this one. The conclusion was that even though a blog - such as mine - is indeed a personal marketing tool in addition to a vehicle for expression, it is also an effective filter. If prospective employers read your blog and still pursue you as a candidate, then even if they do not agree with you, they respect your opinions and are not frightened by thinking people. And that is a great way to start a new job. My wife agrees.

I am an entrepreneur and I am not ashamed to a admit it - Hello, my name is Fabian; I am an entrepreneur!!

And as an entrepreneur I have put together business plans for my ideas and gone after funding. I also have to admit that I have not been very successful in the fund raising department. But most of my ideas have eventually been validated and proven to be successes. Somebody else, later rather then sooner, also had some of the same ideas and implement them, eventually making loads of money. Some of my old ideas still have validity today.

So, how does having a blog affect you in this case? I do not know, but I will tell you when I confront the situation
I imagine that is similar to the job situation. The blog, if you exhibit leadership, can only help you.

I hardly ever run out of ideas to discuss. Let me restate that: I hardly shy away from a discussion on any topic, including “The Importance Of Tomato In The Discovery Of America”. Undoubtedly, there come some times that I have nothing to write about. I have a folder full of started posts; some of them include just the title. Having them started does not mean that I have something to write about. Maybe I had something to write about when I thought of the idea and documented it. Maybe it was just a cool idea that I will write about in the future. There is no point in either pacing or forcing yourself to write. You write when the words come to you.

But writing is not the problem, even when I stare into the abyss that my laptop screen sometime represents. The problem is when you have found an interesting topic to write about and you have done an equally interesting job with your writing. And then … you are under pressure to follow it up with an equally interesting new piece!! Oh my!! That is the problem. How do you meet your readers’ expectations? Most importantly, and with all due respect to my  very few readers, forget you, what about my own expectations?

There is one post I wrote a while back that I have not posted yet. It is “About Marketing And Technology”. My intention was to write an understanding post by listing the views from both side of the fence. Marketing and Technology are integral parts of any company and together with Operations and Finance, make the company. But more often than not, these two areas do not see eye to eye and problems arise. The intention of the post, again, was to show the problem from the eyes of the other group. The topic is of great interest to me, but the writing was not very powerful. I was not able to convey the information I have on the topic the way I intended it. Besides the fact that I spent a great deal of time and did not post my work, there is an emotional factor that goes hand in hand with the quality of the writing. In my case, I have to be at least content with the post before I will showcase it.

A while back a coworker of mine told me “if you live in a glass house, do not throw stones”. Unless you can deal constructively with comments, however people decide to behave, you should not allow comments on your blogs. Hey, worse comes to worse, you can always delete the comment I love it when I get comments. But I do not get enough of them; for some reason people do not  leave comments.

Sticks and stones may break my bones, but words can never hurt me. Isn’t that the truth.

Over the years I have either participated and/or was the main person in architecting large scalable web based solutions. In many cases I also built them, but in the last few years, I have directed the implementation and execution. There has always been a common thread to all of these build-outs:

”If you are talking about technology, you are missing the point of building a scalable system”

So, what should you be talking about? Three items:

•  Real Estate - Room to rack the servers
•  Power - Enough power and outlets to power the servers
•  Temperature - Right operating conditions to operate the servers

Truly, these should be the focus of the conversations and soon enough, these conversations would be only of any importance to just Cloud service providers. There is , however, an assumption in the above statement: The architecture accounts for lateral scalability. Indeed, this assumption is of a tall order. But not hard to obtained.

The trick to building laterally scalable systems is to architect around the concept of independent components that can be clustered. In other words, each functional block of a system should be a component operating independently from a different functional block (or component.) And given multiple instances of a component in a cluster, it should not matter which instance answers requests at any given time. Moreover, the instances should be load balanced; Furthermore, given multiple geographically distributed clusters, there should be load balancing and fault-tolerance between these clusters as well. In this case, if a server in the cluster goes down, another will take the requests. Similarly, if an entire cluster disappears, a different cluster should take over.

The implication is that components that need to cooperate can find each other regardless of their location. Obviously, the components know about the clusters through DNS, thus, the name space needs to be tightly configured. The other part of being able to mix, match and integrate geographically distributed functionality is to be able to deal with network latencies. This is easily masqueraded - performance drop will be hardly noticeable - by always connecting to the nearest neighboring cluster providing the needed functionality. In automating the switch over algorithm, we see that by thinking of the local cluster as the nearest neighbor, it follows that the entire switch over strategy becomes very dynamic but easy to manage as new clusters are incorporated.

More often that not, data bases (DBs) are needed as part of the web application. I consider DBs as just another component, thus, the DB architecture and implementation must support clusterization and geographical distribution just like any  other component in the system. I favor federated database systems, where only partial data sets are housed on each DB cluster, with the caveat that the set must be optimal. I will explain:

If you have multiple geographical instances running on multiple data centers, then you will route traffic based on network closeness to a data center. So, if the application is running on Los Angeles and Colorado based data centers, and I am in NYC, then most likely Colorado is closest to me from a network topology point of view and that is where I should be routed. Thus, and optimal data set in Colorado would be such that most or all of the data for users from NYC would be housed in Colorado. An optimal set does not imply that the data only lives in one place. Using this same example, if somebody in Los Angeles wants to access the same data as somebody in NYC, then the user in Los Angeles should not be routed to Colorado, but a copy of that data should be copied to the DB instance in the Los Angeles data center.

Another tool that I have found useful in building scalable web system is AFS (Andrew File System). If you are not familiar with AFS, a good way to understand it is “NFS on cacheing steroids”.  I have used AFS for many parts of the implementation, but in the end, AFS, as an infrastructure component, has helped me with helping, not only synchronize builds across data centers, by releasing to a volume and then “pushing” the volume to all data centers, including configurations; but also, in the management of all the releases.

Component Architecture

We all agree that separation of concerns is a good way to architect systems. By extension, it is a good way to architect components. The concerns in this case are the protocol, presentation, API, logic and data layers:

The data layer is the data bindings to the database. We already described above the DB as a separate component; this concern is the connection and abstraction to the DB.

The logic layer implements the business logic, and ultimately the functionality that users experience.

The API layer serves two purposes:

1 - It converts all HTTP requests to elements that the logic layer can easily interpret and on the way back, converts what comes back from the logic layer to XML.

2 - It isolates the layers below by creating APIs for the components they belong to. In this way, the entire components becomes part of a whole and by calling specific action, certain functionality is exposed.

The presentation layer renders the information (not data) coming back from the API layer - already expressed in XML - based on given and specific XSL style sheets. Effectively, this layer is an XSLT that provides, by choosing a discreet XSL, rendering flexibility.

The protocol layer makes the entire system device agnostic. In other words, it should not matter what device the application is being accessed from; whether it is accessed from a web browser or a cell phone or some new device, the protocol layer brokers access and selects the rendering methodology based on the device.

Conclusion

What I exposed above is a way to architect systems that scale horizontally based on three principles:

•  Real Estate
•  Power
•  Temperature

These principles reduce the problem of scalability to a simple budgeting exercise. And again, if you are talking about anything else, then you missed the point of scalability.

How does innovation happen? Not just in technology, but in general. I think that the question can be answered easily with the next three statements:

• Necessity is the mother of all inventions. We create it because there is a need.
• Build a better mouse trap. Paraphrasing Einstein: “I stand on the shoulders of giants”
• This is such a great idea! Somebody comes up with a completely novel idea, and as such, with a complete new problem to solve.

These statements however, deal with concepts in the abstract, and while some form of these happen in real life — we see them all the time: the internet, flip cap toothpaste tops and velcro — they do not directly deal with how to grow market share and revenue through innovation.

At some point in their life, companies experience a plateau in innovation. The idea mill dries up and nothing new comes out. This is not readily apparent as companies may be putting out new products, most of which will be leveraging existing ones, but not “creating” new ones. While I think this is not only a smart approach to “new” product development, but a MUST, regardless of the innovation problem, this approach has a limited life. You can not repurpose existing products forever without the introduction of new ones. It is similar to inbreeding. The reason I support repurposing existing products by morphing them, or combining a few of them together, is because this not only extends the shelf life of each product with the positive financial ramifications that the extension mean, but also, because it extends an ecosystem which users are familiar with and provides a launching board for new products that either extend the existing products, further complements them or completely changes them.

If the idea mill is dry, it needs to be wetted again. There are different ways to “wet” the idea mill and all include getting new blood. Probably the fastest is to acquire new companies, start-ups in particular, as they present either brand new technologies or better mouse traps. And yes, in some cases even new ideas altogether. The advantage of acquiring another company is that the “new” idea and the “new” product are developed, have some level of market traction and by it, an apparent lower barrier to entry. What remains is integrating into the existing product suite. This is easier said than done.

In some cases, a company is acquired not for the product, but for the people. The idea in general may not have much weight in the market, but the employees bring a tremendous potential and this is also a smart move, a possible good investment.

Another way to bring new blood is to hire new people. Yes, companies hire as a matter of course, but it is to increase throughput in existing projects or to alleviate resource constraints. The regular hiring process is not intended to rock the boat, but rather to steady the boat. This practice, in a way, contributes to the idea mill drying up. So, in the case of hiring new blood, some hand-picked hires MUST be chartered with rocking the boat and shaking things up. However, if you hire somebody in that capacity too soon, you risk tearing the organization apart. I have seen it happened and it is not pretty.

There are two cases I would like to explore: Google and Yahoo! (we could also look at Amazon, Microsoft, Apple and others, but for the sake of clarity let’s just look at these two.) Both companies have had a similar start and in a way, have had the same corporate development path. Before I go into it, I just want to also say that the following words are based on my observations as an outsider to both companies and as such are just my opinion (I wanted to say something else, but I am hardly self defacing )

It is not clear to me if Google is in a situation where the idea mill has dried up. On the one hand the indicators are there: acquiring companies and (based on rumors) copying other companies. On the other, acquiring these companies may be just part of expanding market share and protecting itself - the YouTube acquisition comes to mind - and for all we know, the gPhone and opening up the API set were part of the plan all along. More specifically about opening up the API set: Although the timing makes it seem as a response to Facebook, I have more faith in Google than that. I suspect the plan might have been accelerated due to Facebook. Furthermore, other rumors point to the fact that Google’s strategy is wider than we think, creating a great deal of fuel to power the idea mill. Now the question rests in execution and wheather Google is over extending itself.

In the case of Yahoo! I think the idea mill has been dried up for a while. Like Google, Yahoo! has been buying companies but has not been able to catch up to Google and the perception is that it is loosing ground to Facebook. It even seems to be falling behind new comers such as Facebook and MySpace. It is not that Yahoo! executives are not smart or intelligent, they are, but it may be that the culture of innovation might be dried as well and not just the idea mill. In this case, all the acquisitions will not be positively leveraged and/or integrated and instead of breathing new life, the new blood is creating more drag.

The following is an image I found on the web. It showcases the current M&A landscape which, in a way, also showcases how in the last few years companies not only have transformed themselves but also have gone about getting new blood and keeping the idea mill fresh:

A few weeks ago I was playing with Facebook and I did not get it. I wrote the template for this post and called it “I Do Not Get Facebook”, because I truly did not get it and was not impressed with what they have done … what was the hoopla all about? But now I get it. It is very clever and they have a shot a beating Google at their own game, or at least giving them a run for their money: Online Operating Systems.

When I first read Facebook had opened up to external application development, I was not too impressed. After all Google had had APIs for a long time. And even before Google, I built for Pictage a system that allowed functionality to be exported to other websites, as well as for Hoodiny Entertainment Group. Actually for Hoodiny I designed and architected a system where other people could build entire applications and websites based on published functionality. So … again, what’s the big deal?

The big deal is not at the technical level but at the strategic level. Google’s entire strategy, it seems, is to provide an off-site application operating environment. Vis-a-vis an Operating System. Google does not just provide search, but provides spread-sheets, word processing, an ad network, email, video, social media, different content, maps, hybrid apps that require web connectivity and live half in the web and much much more. They are also bidding for the 700Mhz frequency for cellular communication and are in the process of laying cable to Australia. Moreover, there are rumors that Google wants to take over Sirius, the satellite radio provider - I do not think it is just an experimental platform for Google’s radio ad network, but there is more there than meets the eye.

Over all, Google is providing all the underpinnings and tools needed to have thinner clients. In other words, if Google provided you with all the business applications you will need as an individual and/or enterprise; if Google had all your data; if Google provided you with connectivity everywhere; if Google provided you with other public domain data or pay-for-access data (online books, reports, etc.), and everything else you needed, then … why would you need a full blown desktop? And why wouldn’t you have a more mobile platform for your personal and business use? The answer to that is simple: you absolutely would. Google is presenting to users the ultimate in SaaS (software as a service.)

There are other companies that are on the same track. Amazon being one of them, Microsoft too with Live, Yahoo! and definitely Facebook. But not all are at the same level of development and market penetration or even strategically looking toward the same goal.

As opposed to Google, Facebook took a different approach: “We are not going to build it but our partners will. We will just provide the platform, the traffic and the way to monetize it.” Or at least it seems that way. Google recently decided, based on some postings on the web, to take a similar approach. But by not being there first, they open up to risk. Let’s face it, Google is not a startup anymore and it will have a lag in responding to market needs or changes. Facebook remains more nimble and thus, can respond to market “demands” faster, but not necessarily better. Additionally, not being first to market does mean a lot, but, what is does not mean is that you are dealt out of it.

So … who will win?

I am not sure. I definitely get Facebook now. I get it A LOT. I still do not find much usability for the site myself, but the fact remains, they are doing the right things in my eyes, at least strategically. It is lacking an even basic office productivity suite like a word processor - at least that I can find - or a spread-sheet or presentation, but they have a solid foundation. Google on the other hand, if the rumors are true, is about to open up. The real question is: Facebook has had a great deal of adoption and with the fbFund they will be able to get some of the missing pieces … so … who is playing catch up? Google or Facebook?

In the last few years, Virtual Worlds (VW) have become more common place. It all started with Massive Online Multi-Player Games (MOMPG) and to a large extent, the virtual worlds are extensions of them. Second Life, Club Penguin, Toon Town, to name just a few, are gathering a following. But the questions really revolve around the business model and usability of these tools. And of course, how these environments can be used in the future.

There were a few posts on TechCrunch referring to this very topic and my comments to the posts were that I very strongly feel that VW will constitute a very strong eCommerce force and platform in the future. But also my comments alluded to the fact that the interfaces to these tools must change. It is not just about making them more fun or interactive, but more intuitive and efficient.

A while back I signed-up at Second Life and spent a couple of days - on and off - trying to figure out the system. Now, I am a very savvy computer user and normally do not need to read a manual to figure out how to use software or electronic equipment in expert mode or close to it. But Second Life presented a problem and I was just not interested enough to solve it. It was kind of cool, but the usability barriers got in the way of my interest.

A few weeks later the iPhone was released to the market, and of course I bought one. I had an epiphany and realized that it was a revolution. You do not have to agree or see it, but there is a revolution underway. Maybe not overt and maybe not conscious, but there is one. The revolution is about user interfaces. How humans interact with computers. I actually wrote a post about it (click here for the post) where I began, very superficially, to explore why the iPhone and now iPod Touch are ushering a new era in UIs.

As user friendly and intuitive as the iPhone interface is, it still has a keyboard. It should not and I think that is what Apple and other companies are trying to figure out. How to write without a keyboard. Yes, you can say “voice recognition”, but it is not the most efficient interface either. In other words, how would I write this blog if there was no keyboard. Besides writing, on the other hand, there are other activities we conduct on a computer, so, even if we could not find a way to express the written word without a keyboard, there are plenty of things we can do that do not require a keyboard.

So, very much like hardware manufacturers are trying to crack the keyboard-less computer nut, software producers should focus some attention on the problem too — specially when it comes to VWs. Yes yes yes yes … the hardware guys are doing it through software but since they also control the hardware they have a slightly different tool and problem set.

During 1996 and 1997 I worked for Disney Online. I was responsible for the registration and security system for a very ambitious project, a distributed desktop environment for kids. The idea was to create a sort of virtual world where kids could interact with each other to create communities where they could help each other with homework, for example, through avatars. The project never really reached any momentum and was abandoned, but the idea remained with me. This was just too early an idea for the time, but was the beginning of VWs.

What can you do in VWs? The answer is simple, anything you want. For real, anything. Yes, that too!! If you look at the MOMPGs and how users behave you will have the proof to my answer and my assertions of eCommerce. These games also present alternative economies that transfer to the real world. Some of us have heard or read stories about a virtual property in some game being bought for 1000’s of Dollars. Stories about offline transactions for online goods abound. Why could it not be the other way?

One thing is true, eCommerce keeps on growing, and the challenge is presentation. How do you present the good so you entice the user to buy. VWs can resolve that problem easily; say that you are selling cloths, why not have a virtual store in Second Life where you have 3D representations of your wears. If I had a true 3D representation of myself, then I could try online a particular item and pay with a virtual credit card, connected to my bank or real work credit card, and the item could be shipped to me. Similarly, since the 3D representation of myself is accurate, if the item needs to be tailored, the measurements can be taken also online; the modifications executed and then shipped to me.

The scenario above is doable and probably the low hanging fruit in a series of ideas. A silly example to illustrate how it could work.

There was a movie a while back, Disclosure, with Michael Douglas and Demi Moore. In the movie the interface to the VW was a visor, a globe and sort of multidirectional treadmill. The system showcased a virtual storage system where it was easy to find stored documents. In 1994, when the movie premiered, Yahoo!! and Google did not exist!! But the idea of search did. And why not a virtual search?

There are other applications beyond entertainment for VWs. The movie, or the online virtual store, or even doing homework, are short term ideas. But why not education, or medicine, or conferences, or even war? The sky is the limit, the real problem remains: What is the best interface?

My wife, for her birthday, wanted a video camera and since I am such a good husband I bought her one. I am into photography and never really thought about getting a video camera; moreover, most of the digital cameras we own have video capabilities that we never use. The rational for buying yet another camera was: (1) the wife wanted it and (2) I figured it would be fun to play with another media medium. So … I bought her a camera for her birthday.

Yesterday I videoed Jared’s soccer match and using iMovie HD put together a little movie. I had already done a short and quick clip of one of my fishing trips, but this time I was undertaking a much bigger task. I shot a bunch of short clips during the match and last night I imported them and put together the short video enclosed at the end of this post. I am now a filmmaker, albeit not a good one, but for my first time around, really, I would think not a bad effort. Ed Wood would be proud.

Movie making aside, technology has always caught me off guard and surprised me. Mind you that I make my living with technology and on a regular basis I am exposed to really advanced and new technologies. One of my trademarks is being an innovator, always staying as current as possible with bleeding edge technology and using those technologies to solve business problems. But iMovie HD is an application that comes bundled with every Mac; in other words, it is consumer grade software that works superbly on a stock computer. Anybody can now be a filmmaker and produce videos with some level of quality. Technology to some extent is being demystified.

What keeps on surprising me is the contrast that I have experienced in my career. For the last 25 years, actually a little more, I have seen a tremendous change. When I first started with computers I had an HP 41C programmable calculator. To this day I think that it was the greatest. I also had a Commodore 64 and access to an Apple II and then an Apple IIc. I also had access to ORT’s data center, which, the first year I had access to it, still used punch cards. The second year punch cards had gotten replaced. Nonetheless, the machinery used at that data center occupied half a floor and did not have that much computational power.

Fast forward 25+ years and I am writing this Blog entry on a MacBook Pro that has a gizillion more times computational power that the first data center I set foot in. Not only that, my kids, both have MacBooks and individually they have more computational power than those first data centers as well. Computing machines have evolved so much in the last 50 years. From computers that would occupy entire buildings used to perform ballistic calculations, to laptops solving problems way more complex problems than ballistic equations. You can always quote Moore’s law to me, but Moore’s law does not take into consideration the direction of the innovation.

On TechCrunch, last night, there was an article about the future of commerce. On the post it was reported that ICANN CEO Paul Twomey stated at a conference that virtual worlds are the future of global commerce. Virtual Worlds?? Amazing. I agree. Not only I agree, I am certain. But the problem is the interface semantics. The current interface semantics is wrong. Going back to Apple for a moment, what they are doing with the iPhone and iPod Touch is remarkable. They are not only introducing a new interface to the market, but I can guaranty you that they are coming up with a way to write this blog without a keyboard. Call it dictation or some other form. With their current devices they are experimenting with a change if semantics and paradigms. Eventually, somebody will fully figure it out and not only devices like the iPhone, but also Virtual Worlds will be more life changing than imagined before.

From computers taking entire buildings to house them, to iPhones, to Virtual Worlds. What an extraordinary trip. I wonder what the next 25 to 50 years will bring us.