Omakase

Monday, January 22, 2007

Short, worthwhile political reads.....

Cato on Hillary Clinton's '08 candidacy announcement. She's a skilled politician to have made it this far, so I suspect that if her '92 healthcare machination didn't stop her then, they won't stop her now, though I wish they would.


Slow advance of the Nanny state
: As put forward here, "one of the reasons that liberty is always on the defensive is because people fail to notice the small ways in which it is being chipped away at, little by little, day by day, sometimes even for reasons that seem to make sense." Hard to believe that no one gives common sense tests to laws against spanking, smoking in your car with a child present, or dating a nurse at your doctor's office, as have all been proposed (and mentioned in the article.) This bring to mind Gandhi's great quote: "Freedom is not worth having if it does not include the freedom to make mistakes"

US active in Somalia?

There's a lot of similarities between the activity in Afghanistan that resulted in the fall of the Taliban, and the current activity in Somalia, where another Islamic fundamentalist regime is being disposed by (more or less) native fighters.

There's almost certainly US help in Somalia that is being unreported. This might be simple logistics or intelligence assistance, or, like in Afghanistan, US special forces military advisors on the ground.

To date, there's been no statement of activity coming from the US, and with the exception of the article linked in the title, no press reports. However, I'd guess that we (the US) is active there, but wonder why there's been no public reports or confirmations, as the presumably US-backed Ethiopians have recorded fast and dramatic success, which naturally would be good "keeping America safe from Islamist terror" press for the Bush team. The only explanations that I can come up with are:

1) the Bush adminstration doesn't want to be viewed as opening a 3rd war zone in addtion to Iraq and Afghanistan. (Or, so much attention is focused on Iraq that no one has the energy/attention to expand to Somalia.)
2) the US 'spooks' operating in Somalia have managed to keep operations largely quiet so far.
3) bi-partisan support has been built in the US to keep the debate centered on Iraq, with both Dems and Reps OK with pre-Taliban Afghanistan-type US assistance.
4) US activities in this part of the world are being kept quiet to minimize potential conflicts with the Chinese, who are apparently trying to gain influence in Eastern Africa.
5) Somalia is such a distant, bass-akwards place that the general public, nor major news agencies don't have the attention or manpower to cover this. (Or, if you're a real cynic, the news agenda is no longer really influenced by large, costly news bureaus, which have been shrunken by corporate cost-cutting at Disney, CBS, etc., and therefore covering events in eastern Africa aren't cost effective versus covering, say, the Jon Benet Ramsay case.

My guess is that the US is active in Somalia, and that we'll hear more about this in the coming days. I don't have a strong feeling about Somalia, but I think the US activity there could help in other parts of the world, as the "bad guys" realize that the quagmire in Iraq is not completely constraining the US foreign policy agenda.

(Speaking of US foreign policy + press, this past week's news from Iran (Ahmadinejad's nuclear stance being tempered - or even rebuked - by other Iranian leaders) indicates that US efforts may be working, at least slightly.)

Monday, January 15, 2007

Whither iPhone?

Well, I was pretty wrong on the iPhone.....for now, as it's clearly marketed as a cell phone solution. I'm amazed, though, at how the mass media hasn't yet honed in on the iPhone's wi-fi capability. I don't know when it will happen - either an enterprising hacker will figure out how to put OS X apps on the phone, or Apple will lower their guard, or Apple will take bids from GOOG, Skype, and others to be the exclusive IP calling solution, but you can be sure that people will be using the iPhone for free/inexpensive calls over wifi internet.

All in all, the iPhone looks impressive, and will surely be a success, but I don't see it as revolutionary. As far as I can tell, there are no brand new functions - just evolutions of current functions. Visual voice mail is an evolution, and tv shows and movies on a cell phone are evolutions, but maps on a cell phone? click to call from a webpage? music on a cell phone? pictures on a cell phone? wifi on a cell phone? All of these are already available (though not all in one unit (yet), with the possible exception of the Nokia N95.)

(The auto-shifting screen (vert to horiz) might be revolutionary - anybody else ever have one of those?)

Surprisingly, while initially gushing, the press has started to point out some of the non-revolutionary-ness of the iPhone, like in the title link and these:

Does the iPhone sow seeds of Apple's downfall?

Apple iPhone Will Fail in a Late, Defensive Move

The real verdict on this Apple initiative will become apparent when we see what else Apple does with this market entry. Will the iPhone be one-size fits all or will 'Lite' versions of the iPhone be introduced to hit different price points and market segments? Will non-cellular versions of the iPhone be offered (either no-radio, or wifi-only?) Will iPhone-like functionality be integrated in laptops and desktops?

If Apple's past is any guide, the answers will be "no," and Apple will be a niche player in high-end smart-phones. Right now, Apple makes basically 3 flavors of desktop computers, and 2 barely-differentiated flavors of laptops (though 3 flavors of iPods isn't so bad). The Steve has frequently compared Apple to BMW- both make premium products in a commoditized market, and both very profitably survive with only 5% of the market. I don't see any reason why the iPhone will be any different, unless Steve has a new vision for the company that he's not divulging. (Yes, dropping "Computer" from the name represents the fact that Apple is broadening in terms of markets, but not necessarily changing their approach.

About a billion handsets were sold last year, and according to one article, only a million of them were smartphones. The iPhone market is really anybody with a phone and an iPod, so that million figure is low, but as great as the iPhone is, there's plenty of reasons for a user to NOT want to combine these features. (Would you rather go jogging with an iPhone or an iPod shuffle?) The iPhone sales goal is 10 million units in the first year, equating to ~5 billion dollars in revenue, which would be a HUGE success. Unlike the articles linked above, I think Apple can achieve that so this critique shouldn't be considered a criticism, but this techno-geek won't be in line for a 20th century iPhone (yes, I mean 20th), instead waiting for perhaps more innovation from v2.0 of the iPhone. (Or preferably, a video iPod with a 3.5", rotating screen.

btw: I WAS right about one thing: no iLife '07 until Leopard is released.

Monday, January 08, 2007

Some Guy Kawasaki advice that I want to remember

10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. While I’m in the venture capital business, this rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal. (The only difference between you and venture capitalist is that he is getting paid to gamble with someone else’s money). If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

  1. Problem
  2. Your solution
  3. Business model
  4. Underlying magic/technology
  5. Marketing and sales
  6. Competition
  7. Team
  8. Projections and milestones
  9. Status and timeline
  10. Summary and call to action

Friday, January 05, 2007

Overdue Saab trip wrap-up (Germany)



I ordered a new Saab car thru their European Delivery Program, whereby at a tremendous discount, I was able to pick-up the car in Sweden, and along with my friend Kevin, explore parts of Sweden and Germany, especially the autobahn. As you can see from this and previous posts, it was an amazing experience.

Previous episodes:
The Ultimate Souvenir: pick your car up in Europe
Sweden
Ferry from Sweden to Germany
Greetings from Hannover
Hannover to Wurzburg

From Wurzburg, we made a day trip to Rothenburg ob der Tauber, a walled city that hasn't changed much since the medieval period . It's existence today is based on tourism, so it is a bit of a tourist trap, but still memorable, especially via the Nightwatchman Tour - an hour tour of the city led by a person in the character of a watchman who guarded the city overnight. Also in Rothenburg, I enjoyed a schneeballen (local pastry in the shape of a softball) and Franconian wine.

The trip wrapped with a night in Schloss Colmberg (a castle hotel) and a frenetic trip up to Frankfurt to fly out. Bad traffic and imprecise Mapquest directions left me finishing the drop-off of the car at noon, while my flight was 1:20pm. I thought I had no chance to make it, but the efficiency of Lufthansa and the Frankfurt airport allowed me to make the flight with enough time to grab one last pretzel.

USAir managed to make my connection in Philadelphia back to Charlottesville a 22 hour endeavour (and for a while my car was beating me and my luggage home), but in spite of that, the trip was awesome. The car was (and is) excellent, the Saab experience was absolutely first class, and the touring was excellent, especially seeing the local Christmas festivities. I highly, highly recommend the car (Saab 9-3 convertible) and the European delivery experience even without the significant financial incentive. (The only negative was handing over my car for shipment!)

We put a total of 920 miles on the car over 5 days of driving, so you can imagine that the drives were enjoyable and the autobahn is FAST! I found out that my car is electronically limited to just above 135 miles per hour, as I tried to keep up with a VW Passat wagon doing at least 150.

I'm now 3 weeks and 2 days post-trip. Delivery is estimated at 5-7 weeks, and I can't wait. In the meantime, check out my car pictures here, and even more trip pictures here.

Quick hits

Candid thoughts from Oprah Winfrey on US inner city schools with good following points from Cato. This bring up 2 questions: 1) how could school choice possibly not be an improvement, and 2) who'd have thought I'd be mentioning Oprah here?

Marginal Revolution on college sports
. If it were up to me, I'd demand that the athletic department contribute to the university's general fund a percentage of revenues (20%?) prior to expenses. This would effectively serve as a "license" payment for use of the University name in the unofficial minor leagues. This might also serve as compensation for diluting the University's brand (imagine what, for example the Rhett Bomar debacle did for Oklahoma (stop laughing!)), and the fact that athletics probably siphons some donors from the university, as the donors pursue better seats in a stadium instead of a better endowed English department. (Though athletics probably make the whol fundraising pie bigger.)

I'd also agree that if the accounting of athletic departments is likely to show little to no profit - why would any AD ever return more profit than necessary, if the excess instead could be spent on better coaches, facilities, or the like, adding one more reason to why the Universities should take something off the top of the athletic department.

Thursday, January 04, 2007

"What Jobs told me on the iPhone"

More fuel for the fire: Apple is "more interested in defining markets than trying to catch other companies that were busy trying to create a market for questionable products."

While this doesn't directly relate to the cell phone market ("questionable products?"), I think the essence is important: Apple wants to define markets - which it could do in the wifi-phone market - rather than follow in established markets (cell phones.)

Whether you agree or not, the linked Guardian article is well worth a read for insight into how Apple and Steve operate

Wednesday, January 03, 2007

Not a bad idea: chuck it all and move to an exotic metropolis

Ever been traveling in a 2nd or 3rd world country and realize that you could live like a king in that country for $20 a day? Ever also think about doing it permanently?

The article above tells this story, and really piqued my interest in following a similar path.

Whenever I think about leaving the 'Rat Race' I always run into the little problem of not having enough $$$, even with modest tastes. Instead, I and plenty others are most likely to forcefully plow ahead in our jobs and lives hoping against actuarial certainty, to retire in a condition to support a robust, youthful, adventurous life (as opposed to playing bingo down at the Seniors Center.)

I, and I suppose others, would even make some sort of sacrifice to experience the no or light working high life earlier. As portrayed in this article, the sacrifice is put simply: live a few thousand miles from home (and friends) and speak a foreign language, which doesn't seem so tough, but my initial reaction is that it's daunting.

A larger point unintentionally made by the article is just how day to day life keeps us from seeing other opportunities in greener fields. Prior to reading the article, I thought most folks' idea of a big change in life is a move from say NYC to LA, but in this day and age, there's really nothing keeping us from moving to Argentina or Thailand. So maybe I'll be posting from Varna or Montevideo soon.

(Personally, though, I couldn't imagine moving someplace where baseball isn't played.)

Apple wifiphone thoughts #2

Got some great comments on the idea of the wifi phone coming from Apple shortly. Here's a few more thoughts and points:

It really helps to not think that the "wifiphone" is a direct competitor to existing cell solutions, much the same way that you would have said a few years ago that an iPod isn't just a cassette-less Walkman. Sure, a cell phone and wifi phone facilitate talking (and iPods and Walkmen both facilitate listening to music), but getting a layer deeper reveals greater differences than commonalities.

A likely wifiphone from Apple probably wouldn't aim to provide SMS capabilities, or perhaps even web access (at least for the first year or so), much like the early iPods didn't play videos. Apple products tend to be initially born to do one thing spectacularly well, rather than what you see from many other efforts suffering from complexity issues, 'feature bloat,' and the like. (Credit here goes to the Apple marketing team. Only superlative marketers can say to engineers "stop right there - we don't need to add that feature." (Weak marketers say "sure, put it in, I guess that the extra feature will grow the market potential in excess of the cost of integrating the extra feature."))

I believe an Apple wifiphone would be identified not as a "go everywhere, communicate every way device" (as a cell phone is today) but rather "an iPod that can make calls when I'm in a wireless zone."

(Or, perhaps any of several other identifications "a phone for home usage (assuming a wifi house)," or "another way to keep in touch when I'm at Starbucks," etc.....) I think beyond these there's some cool potential uses (ultimately a streaming video player, etc.), but I can't see Apple (or anyone else) trying to do all of this from the start.

(But when you think about it, when you have a wireless enabled handheld video screen, speakers, keypad and microphone, what can't you ultimately do? For years there's been an assumption that phones would subsume PDA functions (=smartphones), but why can't PDAs subsume phone functions?
)

In other words, the Applephone would facilitate multimedia access thru wifi networks versus cellphones that primarily facilitate voice and some data access thru prorietary networks. There some commonality between the two, but more differences. Cell phones will provide more reliable voice access (for the next 5-10 years at least, given small issues with VOIP), but won't be able to provide broadband media for the next 5-10 years. (Verizon and Sprint might argue otherwise, but I highly doubt they'll reach 802.11N's 200M speed in the next 5-10 years.)

btw: in order to believe this, you have to ultimately believe a sea of high-bandwidth public* wifi will provide more and better access than any of the current cell carriers.

* I don't mean to suggest that these nodes be held by a public utility - perhaps wifi bandwidth will be so cheap and plentiful that we'll provide the nodes in an open source fashion. The irony here, is that this would enable Apple - which fundamentally believes in controlling the Mac computing environment - would be making a business of usurping the carriers controlled environment.

In other words, long term thinking by Apple believes that in the end wifi beats CDMA, GSM, and the like. This might be corroborated by Sprint's intent to build a nationwide wimax network.

(As a non-techie, I could be mixing networks or worse, mixing metaphors. Please point out inconsistencies, if you see them.)

Another reason for the Apple wifiphone is that this plays much more closely to Apple's experience and competencies. Apple knows wifi (hard to remember that Airport was early), knows consumer software design (see iTunes, etc.), and making something already possible much, much simpler.

In contrast, an Apple cellphone would lean much more heavily on hardware knowledge, systems integration, unfamiliar telephony protocols (GSM? CDMA?). I think it would also be a detour from Apple's mission to be the hub of a digital lifestyle, as other than syncing iTunes music (and perhaps contacts), there's no strong connection for a cell phone to Apple's core products.


Some objections to the iPhone that need to be examined are network access and business model. Specifically, who wants to run the network, and how - after interoperability fees - could anyone make money?

This is sort of like saying that the iTunes Music Store would never work without Apple owning an integrated broadband network, and that iPods would only make money for the record labels.

There's already broad non-Apple wifi access, from coffee shops to hotels, with increasing penetration nationwide. Add in the fact that 802.11N vs the current 'G' standard will multiply data thruput by 8X and wifi range by 67%, and we're going to reach the wifi network 'tipping point'.

As for the business model, the problem (or probably the opportunity) will be someone else's issue.

Finally, a couple of spare thoughts that make me sound like a conspiracy theorist, but like the Loch Ness monster, exist until disproved:

-Google Talk has been around a LONG time without it being loudly touted or otherwise connected. It's prime to be hooked to an iPhone. (Imagine if GOOG could simultaneously serve adds to a handset while facilitating P2P conversation?)

(Google Talk is built on an open standard, so Apple could just 'borrow' the standard without the need to tie up, but I think in this case Apple would be better off trading sole ownership of the upside for a wider net.)

-How come Skype offered free calls to US land and cell phone lines for half a year, ending January 1? This could be for other reasons, but could a large trial have been in the best interest of an EBay-Apple partnership? Along the same lines, why is Skype announcing a new pricing plan one week after MacWorld? Hmmm.....

-why is there such a paucity of Mac OS X cordless phones? Sure, Apple's <5% market share is the big reason, but could it be that Apple has already locked in the manufacturing capacity of the contract manufacturers who make the majority of cordless VOIP phones?

Maybe I'm making too much of the wifi opportunity - Apple could certainly introduce BOTH a cell phone (perhaps as a defensive manuever) and a wifi phone, and the wifiphone could be little more than an Apple-branded accessory

-another player of interest who has been relatively quiet recently: Intel. This partnership is expected to expose Intel to new markets by embedding Intel chips into more Apple devices. I wonder if Apple's new best buddies at Intel would like to provide Steve lower-power wireless chips and chipsets to increase demand for Intel's wimax chips?

Thanks everybody for your comments - please keep 'em coming, even if they're "Hey, you couldn't be more wrong."

(btw: the Loch Ness monster, or at least images thereof have been admitted to be a hoax.)

Tuesday, January 02, 2007

It's gonna be a wi-fiphone (Apple Wi-Fi iPhone)

There's loads of speculation about the upcoming MacWorld and new Apple product releases. Some of the better speculation is compiled here and here. (And don't miss the Cult of Mac article linked in the title.)

I'll chip in my $.02 on a few of the smaller things, but save the best and biggest for last. (Caveat: I'm not a techie, unless you consider biotech tech-y, just a Mac fan, as I'm the proud owner of a G5 iMac and 2 iPods (among other things)). Oh, and Steve, if you'd like me to remove any of these thoughts in advance of MWSF because they're too close to home, just give me a call (or Skype!))

iLife: I'm guessing this won't be updated until Leopard is released (late March?). Everyone seems locked on the MacWorld update schedule, but it's only happened twice, and there's no real reason why a January release does anything special. Won't iLife sell more if it fully leverages all of Leopard? This also makes sense if you believe that the iTV - probably released in late 1Q07 - also warrants updated iApps.

12" laptop: a must-do to trim out the product line. Aren't the lower-power and less hot chips a justification for the change to Intel? I can't imagine the engineering here is very expensive after already building 15"ers and previously offering a 12" versus the possible market returns.

iTV and others: the real story here is the progression to the 'N' wireless standard from 'G.' 'N' will enable better, high bandwidth, multiple streams, and appears fundamental to the iTV. 'N' gear is already showing up for sale (from Netgear and others) even though (I think) the standard hasn't yet been finalized. Still, Apple's adoption of 'N' at this stage is just like their adoption of 'G' (about 3 years ago?)

Robust reliable bandwidth will enable Mac to iTV broadcast, but also probably multiple rich streams of IP traffic, which begs the question: what could you do with more wireless bandwidth (and greater range)?


The immediate answer is: a wifi iPhone.

Apple has been rumored to be working on a mobile phone for years. I can't appreciate the technical challenges, but it seems that any Apple cell phone would face several abrupt strategic challenges:

-ferocious competition from big, established competition (Motorola, Nokia, etc.)

-market power (and control of the end-user) concentrated in the carriers (Cingular, etc.), each with entrenched business models.

-fairly well-established performance (i.e. regardless of how we're all still looking for the 'perfect' phone, you can easily and cheaply find one that satisfies 80% of your needs.)

-fairly tight margins in a fashion-like business.

For all of it's good graces, Apple has not been really great at deep partnerships with large entities (like carriers, or see also the Moto ROCKR). Apple is best when independent, so I can't see them tieing up with a single carrier, nor can I even see them tieing to one communications standard (CDMA or GSM in the US.) It's possible that Apple could innovate by making a phone dual standard (GSM + CDMA) which would be distinctive, or that Apple could go the MVNO route, but both are complex efforts prone to Apple fielding problems from other market players ("I'm not getting reception here - darn iPhone!") Each of these approaches also disintermediates Apple from the end consumer.

For years, the driver for creating an iPhone is to reduce the number of devices carried (and pre-empt cell phones from becoming the device of choice for mobile audio fans), but I think while a noble goal (and one that I'd enjoy), this doesn't seem too important to most. I'm pretty sure that condensing my iPod shuffle and Blackberry wouldn't change my life, like Apple likes to do.

And that's the crux of the issue, or more accurately, opportunity: one reason we love Apple is that among other values (such as design, simplicity, and integration), Apple is an innovator. Because of this, I just can't see Apple following into the cell phone market.

But, I can see a huge opportunity for Apple to innovate and reach a new, growing market: peer-to-peer internet telephony.

As of last April, Skype (the leader in PTP telephony, but by no means the only choice) broke the 100,000,000 user mark. I'm guessing that growth since then puts Skype plus Google Talk (and others) in a market addressing north of 150 million users.

(Please forgive me if this non-techie mixes varying 'net telephony standards - focus on the bigger issue.)

To date, there's a few decent attempts at providing phone hardware (i.e. non-plugged headsets), but you'll notice that there's only one available for Macs (which I ordered a few days ago - d'oh!)

There's also a few neat looking computer-independent wireless phones (Netgear, Linksys, and Belkin). I haven't had one in my hands yet, but they appear to be good first efforts, but something the team at Apple could really improve upon. This echoes the stage the MP3 player market was at when Apple jumped in with the iPod.

Big, new, growing market (think Apple would be happy to sell iPhones to 1% of the world market (=1.5M TODAY) and competitors to be leapfrogged. You've got all the ingredients for an Apple innovation, and that's not even including innovations such as Google city wifi access (only in SF right now, I think) and possible corporate connections between Apple & Google (remember Gooogle Talk?) or just up the road at eBay (owners of Skype).

So, I think the stage is set for an Apple wireless computer-independent net phone (let's continue to call it an iPhone for now). Apple could easily offer a superior product at an iPod like price point ($299?) that would transform how we communicate - and that's not even including possible connections to existing Apple assets. (In other words, even without music, the iPhone could be huge).

It boggles the mind, though, to think what an 'N' enabled iPhone could do today or in the future when combined with other Apple assets. With robust wireless bandwidth, why bother with storing much music on the phone? What if you could stream via your home iTunes hard drive? What if you could convert the phone (when not used as a phone) into a Front Row-type wireless media controller? What if - provided the screen is large enough - you could watch movies on your phone? How about an iSight enabled iPhone for PTP video conferencing?

(I'm drooling right now, so I have to take a short break.)

I don't know about the timing wrt an iPhone and iTV, but there's an amazing combination to be made here, all enhanced by the 'N' bandwidth.

I'll reiterate that I have no connection with Apple, nor any inside information, but I'd bet on the wifi-phone coming from Apple soon. The next question (besides "How can I get one?") is "how can I bet on this (or otherwise make money?)"

If you really believe in the wifiphone, T-Mobile looks good (T-Zones Wifi becomes even more valuable, and Starbucks probably becomes even more popular (well-established T-Zone spots)). Sprint becomes a good investment as they're looking to build a nationwide wifi network. Handset manufacturers like Motorola and Nokia don't look as good. Perhaps a PTP telephony partner (GOOG? eBAY?) gains thru a partnership, or perhaps even a VOIP company like Vonage. Also, don't forget infrastructure plays like Cisco or Juniper.

In short, hang in for a life-changing and VERY profitable innovation from Apple in 9 days (Jan 11). I can't wait!

With my new friends on the Great Wall of China

With my new friends on the Great Wall of China
Click to go to my online photography

World sun clock

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Uncommon Man's Creed

"I do not choose to be a common man. It is my right to be uncommon -- if I can. I seek opportunity -- not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I wish to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole, I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia. I will not trade freedom for beneficence, nor my dignity for a handout. I will never cower before any master, nor bend to any threat. It is my heritage to stand erect, proud, and unafraid, to think and act for myself, to enjoy the benefit of my creations, and to face the world boldly and say, "this I have done." All this is what it means to be an American." -- Anonymous