Next Steps for Apple

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If you have been reading the tech news there is much speculation about Apple’s next product steps -

  • iPhone 6 or iPhone 5S with features like larger pixel count camera, maybe NFC comms for iWallet functions, faster, lower power
  • iPad 5 with many of the same questions
  • iWatch – something akin in people’s mind to Google Glass but more fashion? (here I think it will be more for health and fitness
  • iTV – some 50+ inch flat panel TV with appleTV built in and probably voice commands to replace the remote

All of that is probably coming and some of it may make a real impact on their top line (how can the bottom line get much better anyway).

But if you are Apple and want to still do the next big thing, what could it be?

The answer is to make an iPhone “for the rest of us” … the other 6 billion people on planet Earth.  But this bottom of the pyramid has not traditionally been a play ground for Apple.  They like higher end products and the high gross margins that accompany.

An iPhone for the rest of us would have to probably sell for below $100 or maybe $150. And at that price it would need serious subsidy from any carriers as well.

But I think this is possible and if under consideration is a game changer!

What would be the features -

  • smaller DRAM (500M), smaller Flash (8G)
  • 3 MPxl camera
  • only GSM radio no connecting to CDMA (won’t be missed in these markets)
  • non-Retinal display but still color
  • maybe no GPS so that battery drain is minimalized (get position from cell tower or WiFi location only)
  • limited WiFi (b/g only?)

This will be a phone that looks like the iPhone 4 or 5 in screen size but in every other way trimmed down.  To do this they might have to integrate everything except flash and DRAM into one chip; very possible.

And what would be the outcome?  A powerful affordable computer in everybody’s hands.  Features could come onto this platform that would spawn revolutions in education, politics, commerce … practically everywhere.  Still all anchored in iTunes store and through Apple’s commerce engine.

Heck, Amazon practically does this today with the Paper White Kindle …

If Apple can think out of the box … and now they are led by a manufacturing genius – Tim Cook – who can really focus a sharp pencil on costs and function list – and he is just the guy to think this way – then they could be the first company to produce a product family with truly world wide appeal.

time to think differently Apple.

 

Music and Stayin’ Young

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I turned 60 this past weekend and it was a series of celebrations with friends and family.  I have never celebrated better and with even some ease.  Birthday’s have not been my thing in the past.  I am reminded of one of the 25 Great Questions … “How old would you be if you didn’t know?” … Yeah …

One of the things that I find keeps me feeling younger is to keep engaged with young people and not as some sage or wisdom dispenser but as someone who gives them freedom to lead and who tries to appreciate new things.

And one way I do this is to keep open to new music.  I so love music generally and am always delighted when I find some new musician or song that I did not know before.

There is been so much over the past year that I want to share some of it with you all and then make some observations -

  • Foster the People played the 2012 Bridge concert and they clearly blew away all the other groups playing there.  Wow!  And FTP are clearly is a band that I would not have encountered without going to that annual event.  They played it acoustic which was different for them.  Mark Foster played 6+ different instruments (guitar, marimba, piano, pump organ, drums, some middle east string instrument).  If you want a feel for their acoustic side watch this.
  • Sons of Bill have a terrific Christmas concert that I have attended the past 2 years and in the spirit of full disclosure, my newest son-in-law is their lead guitarist.  Still they now play to sold out mid-sized venues pretty frequently so I am not alone in my admiration.  Really like “Radio Can’t Rewind” among others, you can see Sam play it here.
  • Gillian Welch is one that I added from a suggestion by my daughter Alana.  I especially like “Look at Miss Ohio” but the Revelator is more well known.  You can watch her play in the same tiny venue as Foster the People above here.
  • Susie Stevens was sent to me by a friend from the mountains in Southern California.  You can listen to some clips of her music on iTunes or here.  I especially like “Anywhere” and “Silk and Steel”.
  • Last but way up there is Kristin Erickson.  I like so many of her songs – but for starters I recommend “Take a Breath”.  She is a person who has traveled so far in life and experienced so much and it clearly shines through her music.

There are more but this list can make the points needed for this essay.

First is that except for Foster the People, much of this music you have likely never heard before … and it is all great, unique, inspiring.  We get spoon fed so much of what we listen to, that becomes overplayed by radio and hyped by labels and media that we forget that there is an amazingly rich culture out there for us to experience.

Second is that I find that many people my age keep listening to music that is from some past time and they forget that creativity is happening by so many people around them right now.  As we all stay engaged and recognize this wonderful fact, we will be more open to new ideas and especially those coming from young people.

(I know I probably should be using Spotify or something like that to do this sharing better … still learning new things but often takes longer for this old dog.

BTW, we are updating the SWG website to something much better so stay tuned …. and then I promise to post more frequently!)

Oh, and while I just turned 60 about 1 month ago, I choose 45.

 

Photo Fun and Insights

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Iraq Power System - Click to Enlarge

Iraq Power System – Click to Enlarge

I recently traveled to the Kurdish portion of Iraq and was able to see many interesting things.  I was in the town of Sulaymaniyah which is about 1M people.  they are all VERY nice and want to bootstrap themselves into a collaborating part of the rest of the modern world.  I visited the American University there which is independent but similar to the ones in Cairo and Beirut.

The Kurds are the largest distinct ethnic group in the world without their own country.  There are Kurds in Turkey, Syria, Iraq and Iran.  I learned that the Kurdish language was for a long time primarily used as a way to transcribe Kurdish poetry.  These are an art-filled people with the ability to express themselves beautifully.  While there I attended a poetry reading by one of the most prominent living Kurdish poets.  Fun.

On the last day I was there, I walked around the town with a knowledgable guide who walked me into the oldest part of town where the buildings were constructed using older techniques – mud and straw as building materials.  And there I was able to see a unique electrical power system that is pictured in the photo above.  This post is about that photo.

I took the photo with my iPhone using its new “panorama” feature.  So the photo spans probably more than a 180 degree view of where I stood.  First notice all of the wires.  They are all headed back to the back upper right hand corner of the photo where you can just see an orange fuel tank, probably diesel.  At that location is a internal combustion generator for the local electricity.  All of the individual users of this generator have separate power lines that lead from the generator to their homes!  I believe this is the case because the power meters on the homes may be compromised or even power vampired before the meter so … each individual line is billed based on a meter back at the generator that cannot be compromised. And the people using the power must pay what the meter there says so they police their own power lines for cheating.  Ha.

Now look at all of the power lines, there are hundreds in this photo alone.

Also this photo has 2 artifacts of the panorama software.  A person with a ladder walked through the photo as I was taking it and you can see the ladder but in pieces towards the left side of this photo.  Also a young person dressed like in the USA in jeans and sort of a hoodie walked through and he is at the far right but only his shoes and lower legs and his hoodie.  Ha.

Hope you enjoy all that you can see in this photo.

Write me if you have questions or ideas you want to see discussed.

Natural Gas and Carbon

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Rupert Murdock, that scion of conservative publishing actually types his own Twitter feed.  Here was a recent one -

LNG halves carbon emissions. So stop wasting billions on windmills now! On climate change, China is the whole game.

(note – LNG = liquified natural gas)

Its true that burning natural gas saves substantial CO2 emissions over burning coal.  And its true that China is the whole game … to a point.  But let’s dig a bit deeper.

Gas is burned in turbines to transform that energy into electricity; these turbines resemble jet engines so it is not chance that GE is one of the biggest natural gas turbine suppliers in the world.  GE is just releasing new turbines and their key new feature is that they start up and reach full power in 6.5 minutes.

How are these facts related?

Murdock and others around the world are going to push that we now have discovered so much new natural gas that we don’t need to invest in renewables.  You will see that on the USA political agenda too.  For example, we have begun using more natural gas ourselves BUT shipping our coal to Europe to burn.  So that our CO2 numbers improve while Europe’s efforts including all their renewable efforts are diminished due to the burning of our coal.

Markets value materials based on supply and demand but this economic equation has little way to value things in the somewhat distant future.  Natural gas may be plentiful for a few decades even.  And we can burn it in turbines for electricity and in buses for transportation and so forth.

But if we do that we will only postpone the challenges we have today with regards to sustainability.

Natural gas is a VERY good fuel to help manage peak loads and that is a big problem longer term.  Renewable energy will always be unstable in terms of its supply.  The sun shines or does not depending on time of day, weather.  Wind blows with high variability as well.  And we will build storage devices (Small World Group has substantial investments in this ares) that can help balance the grid but standing behind all of this technology, probably for more than 100 years, will need to be natural gas fired turbines.

We will need natural gas to be the final smoother of our power infrastructure until we develop base load power that meets all of the political tests for safety in terms of environment and fuel availability.  The only technology today that is an alternative to natural gas is nuclear – probably thorium fuel and not uranium – and for the moment that is unacceptable.  This will change but it may take many years where we will need to use natural gas carefully.

So in my opinion, Robert Murdock is wrong about mass burning of natural gas today.  We should supply energy from wind and solar on a steadily and strongly increasing basis and let natural gas fill in the differences.  China should do the same.  We all should because there is no other practical way forward.

World View

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On my flight back to Singapore a few days ago, the plane ride from San Francisco to Hong Kong took me pretty directly over earth’s northern polar region. It is a very empty and cold region, of course, but one of enormous beauty as well. So this post is just a simple photo I took from the 747′s window at the right time. The photo was taken when the sun never rises much above the horizon so the lighting is good to show contrasts on what would otherwise be a very white and contrast-less landscape.

click to enlarge

click to enlarge

Enjoy!

Best Practices Even MBAs Might Overlook When Founding a Startup

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In this essay, business education writer Juliana Davies explores many of the common mistakes entrepreneurs make when getting their startups off the ground–and how these pitfalls can be avoided. Small World Group has written about various aspects of a successful business model before, and Davies’ insights contribute to this conversation. More of her work can be found on http://www.mbaonline.com, a website dedicated to business scholars, prospective students, and recent graduates.

Small World Group’s Blog welcomes other authors to contribute to our discussion.

 

The current economic climate has spelled doom and gloom for nearly all industry sectors, with one notable exception—small businesses and start-up ventures. Barriers to entry are lower today than they have been in decades, which is likely part of it. The flexibility entrepreneurs have to nimbly work around problems, roll with the market’s punches, and innovate new strategies is also key. Many economic scholars have recommended that, if the country is serious about economic recovery, more federal dollars should be allocated to small business training and stimulation. Financial incentives and tax breaks can go a long way when it comes to helping a business get off the ground. In order for a venture to remain successful, though, its leaders must be strategic—they must avoid common pitfalls and be efficient and adaptable enough to pull through rough times.

One of the first mistakes many entrepreneurs make is failing to follow a coherent plan. Having an idea or basic concept is usually enough to get a company off the ground—but going further usually requires concrete direction. This most often comes in the form of a written business plan, but any hard and fast goals or vision statements can serve a similar purpose.

At the same time, though, entrepreneurs cannot be so married to their initial vision that they end up unable to adjust to a changing market or clientele shifts. “Just as lack of planning can be a problem, adhering blindly to your plan is a surefire way to steer your company off a cliff,” British business magnate Richard Branson said in an Entrepreneur magazine article exploring common startup mistakes.  “A successful entrepreneur will constantly adjust course without losing sight of the final destination.”

Fixating on competition is another early misstep. “Much better than fighting for scraps in existing markets is to create and own new ones. Sometimes you have to fight. When you do, you should win. But conflict tends to be romanticized, and people tend to get sucked in,” Forbes said in a 2012 article outlining tips for new start-ups. “It is worthwhile to think about how to run away from the fighting and build a monopoly business instead,” the article said.

Setting the right foundations is essential for success. Once off the ground, though, entrepreneurs often struggle with keeping processes efficient, and staying the course without distraction. Following best practices for start-up efficiency are often just as important as avoiding early mistakes. Expert recommendations typically include the following:

  • Appropriate leveraging of technology. Many young entrepreneurs treat e-mail, tweets, and instant messages as something of a given, but creating a plan or policy for how messages will be answered and when can save a lot of stress later on down the line.

  • Participate in social networks and online communities. This is obvious for most web-based businesses, but is something that other companies can have a tendency to undervalue. Web interactions drive traffic both on or offline, and many consumers expect at least an informative website.

  • Commit to an in-person networking plan. Just as eschewing the online space can spell trouble, so can relying on it exclusively. Many small businesses grow through word of mouth and personal connections. Reaching out to industry leaders, attending conferences, or speaking on panels can all come within this category if pursued for purposes of making new connections and forging professional relationships.

Many scholars believe that a resurgence of small business strength is a country’s best path towards any economic turnaround. Over the last few years, start-ups have created more jobs than big industry in nearly every sector. Investing in entrepreneurships will doubtless help spur innovation, but cannot alone fix the situation—long-term stabilization is in the hands of owners and executive officers who must manage what they have and turn it into something with long-term sustainability. 

 

–  Juliana Davies

Singapore Update

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A new Blog was launched this week by an early partner in Small World Group’s efforts in Singapore.  It’s author is Chris Vargas and he has moved his entire family to Helsinki, Finland to engage with the start up scene there for a year.  You can read his first post here.

In the post, he argues that Silicon Valley is less a “place” and more a state of mind.  I resonate with that.  See what  you think.  Welcome Chris!

After reading Chris’ first post, I was motivated to generate one of my own.  So today’s post is a summary of where we have come in the 3 years since I returned to Singapore and began working to start an Incubator here.

First a simple summary -

  • we have started 12 companies in Singapore plus 1 in the USA
  • we closed 2 of the companies (or are in the process of closing, more on that in a bit)
  • we raised more money for 3 of the companies in follow on fundings; all were increased valuations
  • 8 of the companies have strong clean tech focus
  • 1 company has a unique sports gadget
  • 3 companies have internet/web roots
  • 1 company brings a unique value proposition to emerging markets for computing and connectivity

Of the remaining 11 companies, 2 are currently seeking funding and have reasonable prospects.

One of the surprising results has been how long some of the companies have been able to stretch the money we invested.  Each of the companies knows that they must finish their initial product, sell it to some early customers and have those initial sales transact at reasonable gross margins for their industries.  We see that now happening for most of the remaining companies.

Our key investment thesis was that we wanted our “saplings” to be frugal with the money, learn how to be a full company with sales and customers and not think like a development group.  We funded our first company 24 months ago in October 2010 and now we see this transformation happening in each of the groups.  Hurray!

In Singapore, so many plans we saw initial had voluminous discussions about “markets” and how the new company would meet market needs.  We have worked consistently to tell them not to focus on markets … little companies have to focus on customers.  And now this is working.  HP and Apple can address markets, little startups must focus on initial customers.

We also have worked to create a “culture” in the Incubator.  Our culture is customer centric technology and business development.  My partner in Finisar, Jerry Rawls, was fond of saying that culture eats strategy for breakfast (lunch) (Peter Drucker is the root origin for this, I think).  And by this he meant, that Finisar’s culture – again one of fanatical customer satisfaction – would always trump us being clever, smarter, first to market.  And it is this same approach which we now work daily to maintain at the incubator.

And it is working!

This week on Wednesday, Sept 26, we will hold our 3rd open house where each of our companies present and tell their evolving stories to potential investors.  Most don’t need money so this session is about investors getting to know them BEFORE they engage.  They can hear plans, talk about customers and sales and then watch the companies for another 4-8 months before any money transacts.  It is a different model that has its origin in our culture.  We sell results not futures, teams and their accomplishments, not so much patents and promise.

 

What We Pass On

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Lately I have been reading books on climate change.

Here is a short list of books that are VERY readable and whose points are well made -

  • Storms of My Grandchildren by James Hansen – Book by one of the leading USA climate scientists.  Starts with the known facts and then extrapolates to consequences
  • Sustainable Energy without the Hot Air by David MacKay – a dissection of UK energy uses and sources today, then projects efficiency savings and new technology for generation; takes all of this and then shows what it will take to make things be in balance
  • Whole Earth Discipline by Stewart Brand – a thoughtful telling of how we must adopt modern technologies by a person who has deep street cred in fighting some of what he now advocates
  • Abundance by Peter Diamandis and Steven Kotler – why humans tend to be pessimistic and like bad news; how to see the world in more balanced ways
  • Keeping Our Cool by Andrew Weaver – long time Canada member of IPCC, thoughtful telling of science behind climate change told for all including non-scientists
This list should keep you busy and provide some thoughts for your vacation reading.
In reading these, I am repeatedly struck by the immensity of the challenges we are building for ourselves in the future.
Modern new agencies present climate change as a scientific inquiry where there is considerable differences of opinion and where the outcomes are uncertain.  It is clear from all my reading that this simply is not so.  Weaver makes the case most explicitly.  Science is clear as it can be that we are now in the early to middle stages of human driven climate change because we are mining all of the carbon the earth has stored away over millions of years and putting it back into our atmosphere in the form of CO2 in a matter of a couple hundred years.  The impact of this will be global warming, the melting of polar ice and all glaciers, the acidification of the ocean waters.  Any one of these will have dramatic consequences for all life (including human) on planet earth.  There are no peer reviewed journals where there are published articles that challenge these statements in any credible way.
Now the point of this essay is not to go further into climate, but to ask a different question.
Don’t we always seem to pass onto our children and grandchildren the solutions to past problems and the dilemmas of future problems?
In the founding of the USA more than 225 years ago, the constitution allowed for slavery.  It was part of the balance or deal struck in order to create the Union.  But 80 years later we had to fight a civil war that was massively damaging to our still new nation just to over turn that legacy.
In the ending of WWI, the winning nations demanded reparations that broke the German and other losing countries economies and gave rise to WW2.
Even further back we can see that the industrial revolution was the turn of technologies that now gives rise to climate change … it is when we started massive extraction and combustion of fossile fuels.  The industrial revolution is also the moment in time when much more of humanity was able to share in the common riches and simple life enhancing articles that were only traditionally available to the super rich.  Clean water, underwear, dishes and silverware – you get the idea – were once only available to kings and their households.  All developed nations have this as a baseline for all their citizens and this is rapidly spreading to all humanity.
So we are consuming ground based carbon and putting CO2 into the atmosphere in return we are getting a more universally educated, healthy and basic living standards for every person on earth.
My question in this essay is: Are we creating a problem that cannot be solved in fulfilling and providing fairness to all or are we once again not having enough confidence in our children and their children to take care of the future?
The contention by some very thoughtful people is that this time we are running up against absolute limits of the earth’s resources – fully depleted fossil fuels, drained aquifers, too much CO2 in the atmosphere.  And they are marshaling very convincing scientific arguments.
History suggest another outcome.  We have consistently underestimated human kind’s ability to invent and mitigate the perceived risks of the future through greater innovation both in terms of scientific advances as well as social advances.  We are not the same people we were 200 years ago when the industrial revolution started us on the road of climate change.   We have mastered technology and vast landscapes of science.  But we have also built new institutions in terms of governing structures, businesses, philanthropy and such.
When I consider the only the scientific evidence I find very little in the way of comfort.  But when I consider the entire human record then there is hope.

10 Year Perspectives … And A Future Prediction

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When Finisar went public in November 1999 our IPO was one of the hottest of all time.  We opened at $19/share but traded upwards above $100/share very quickly in the first few days.  It was a heady ride up for a while and a frightening ride down when the bubble burst in 2001.

During the .com bubble people spoke of the 4 horsemen of the Internet.  Here is the list as I recall it -

  • Cisco – the routing and networking leader who stock had doubled nearly every year for the previous 10 years and who had beat the street estimate for their quarterly earnings by $0.01 for 40 straight quarters
  • Sun MicroSystrems – the server and unix leader whose engines served up the web pages we were so eager to consume
  • EMC – the storage champion whose Symmetrix(TM) storage units held the evolving content
  • Yahoo  - the leading portal and search engine of that time
Each of these were undisputed leaders of that time and in people’s thinking there were so strong that being replaced did not seem possible.
If you ask that same question today – Who are the high tech/web leaders, the surprise is that all of these have been replaced.  In some cases because they have failed to live up to their legacy and in some cases because their importance has simply diminished or their products have become commoditized.
Here is today’s list -
  • Apple – the leader in mobile platforms, content distribution and the “gold standard” for computing
  • Google – the leader in search, web ad based revenue, and so much more including their own mobile platforms
  • Amazon – the leader in eCommerce and in cloud services via AWS
  • Facebook – the leader in social networking
Each of these companies is larger than the previous 4 in so many dimensions.  Facebook has nearly 1 billion users!  Google has deep knowledge of so much of the web and its total user base.  Amazon delivers nearly every product from diapers to eBooks to lawn equipment.  Their product base is larger and the number of customers may make them the largest retailer in the world by some metrics.  And then there is Apple, the largest market cap company in the world AND it was proclaimed dead and not attractive as even a dirt cheap acquisition just a bit before 2000.  Such changes.
Let me add one more data point.  What did this list look like in 1988-1990?  Then the list was -
  • DEC (Digital Equipment Corp) for the compute/server leader
  • AOL/CompuServe for the portal
  • Seagate or IBM for storage
  • ATT/Lucent for networking gear
Here is a table that summarizes this.
Best Tech Companies Over Time - Click to Enlarge

Best Tech Companies Over Time – Click to Enlarge

There are several things that are remarkable about this table.
First all of these companies are from the USA.  I have been asked whether I  expect any Chinese companies to be on the list for 2024.  The straightforward answer is I am not sure.  The demographics and “Asian Century” tsunamis would seem to make the answer yes.  But the corruption and Asian ways work against it because creative destruction is not practiced there.  It is just that creative destruction that we permit our very best companies to not exist in 10 years in the USA that makes the new comers to this list possible.  Even ones that go from failure to largest market cap company in the world in that time frame!  For example, in Singapore, Singtel is still the largest networking company and it was so in 2000 and in 1988 as well and the largest engineering company in Singapore is Singapore Technologies.  Creative destruction is not practiced very well in Asian cultures.  Evolution is more common.
Next, every 12 years or so the list entirely changes.  But the words “creative destruction” are not broad enough to describe what really happens.  Entire fields are redefined.  Storage at the hard disk level was important in 1988 and so Seagate was dominate, storage as a platform was important in 2000 so EMC led, but by 2012 cloud computing and virtualization has rendered storage a commodity and something that you pick up and drop as needed as a part of the cloud so Amazon dominates.  Base technology and the system architecture both change and that is best done in a very free and open platform like the USA provides.
Finally we come to the question that should have an obvious answer by now.
Who is on the list in 2024?
Simple.  None of those on the list today!!!
I can already see some of you rubbing your eyes in disbelief.
But you must think it so … the real question is who should we be betting on today that is small or down and out but who sees the future more clearly than these giants today?

A Small Prediction

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I am reading the Steve Jobs biography.

In it, when he returns to Apple and takes over for Gil Amelio, he wants to kill the Newton basically because it is inelegant.  The author quotes – He disdained the idea of having a stylus or pen for writing on the screen.  “God gave us ten styluses”, he would say, waving around his fingers.  “Let’s not invent another.”

He reused this same argument at the introduction of the original iPhone … see it here … “Nobody wants a stylus” … he proclaimed some 10 years later … same sentiment.

So what will be one feature of the upcoming Apple TV that is a full screen real device (not the small box)?

Clearly I can hear the question – “Nobody wants a remote … all they do is get lost, broken, discharged” … “lets use our God given remote … our voice”

The metaphor is just as accurate.  Our voice is our version of remote communications and it is infinitely more exact and able to communicate than a pad full of buttons.

Clearly it will be one key feature.