May 24, 2008

Apple Computer - Repositioning The Mac vs PC - Through Interactive TV Ads

I recently started to develop an interest in the Apple vs. Microsoft saga, after watching a series of cleverly created Apple ads. (see below). Apple has probably featured over 20 of these TV ads -in strong rotation, over the past year and frankly, I've rarely seen a more effective campaign - from a positioning standpoint.

First, Apple manages to drive start contrasts between it's offering and that of Microsoft - by comparing Macs to PCs, which everyone knows run Windows Software Applications. The Subtle message here is that Apple brings you all the cool stuff, it's safe, secure, youthful and cool. Windows is uptight, Susceptible to viruses, older and doesn't provide nearly the same value proposition for it's users. Generation Xers will get this ad and may be influenced to at least go to an Apple store. Teenagers and Young adults are even more likely to be receptive to this sort of messaging - especially because they already associate the Apple brand with a cool, youthful lifestyle - think iPods, iTunes & iPhone.

Take a moment to watch a few of the ads embedded in the player below - you'll note that each ad attacks drives home the perception that Apples are far superior to PCs - for everyday folks, who want to have fun with their computers. Apple also drives home the message that Macs can run key Windows Software applications - such as Microsoft Office, so users can have the "best of both worlds".

Last quarter, Mac sales blew away all forecasts, grew 51% YoY, more than 3 times the rate for PCs, although Apples base is admittedly much smaller. Clearly, the Macs resurgence is as much about Consumers rejection of PCs as it is about the value proposition which Apple presents. Whether or not all that cool software really merits the premium which each Mac commands, over PCs of comparable functionality - is probably debatable. Over the next few weeks, I will examine the various factors at play between these competitors - and hopefully offer more insight.

Enjoy the ads.......

Competence, Excellence, Mastery

Like just about everyone else in N/America - I've been swept up in Obama Mania and his whole concept of "Change we can believe in". However, the focus of this piece is inspired by a speech which Barack delivered in his Senior Year @ Harvard. The theme of the speech was Competence, Excellence & Mastery - referenced here - by Artur Davis.

"He said we faced three challenges. First: competence, which was expected. Second: excellence, which only some seek. Third: mastery, which very few ever tried for. It was a level of proficiency and skill so high it allowed you to do something better than anyone else. He urged us to seek that."

I spent some time thinking out these words in the context of my life and my career - I've formulated a view point which I hope will be useful to some World Changers out there.

My first real job was with a large Law Firm. I worked in the mail room, as a clerk - sorting and delivering mail to over 100 lawyers each day. Before then, I'd had part time jobs here and there but never really felt any sense of responsibility. Now, I was on someone's payroll and eager to do a good job. So - I sought to achieve competence. Years ago, it used to be that in order to do well and possibly get a promotion or a raise, one needed to exhibit a high level of competence - doesn't matter what job you're doing. If you're competent - people will notice and you may catch a break.

In the World we live in today, Competence barely gets you in the game. In fact, a lack of strong competence will often mean your job could be in jeopardy, especially in Corporate America. There are so many smart, hungry people out there, looking to take your spot - that you need to reach a high level of Competence as quickly as possible (imho within 90 - 120 days of starting a new job, you need to start dislaying Competence).
When you begin a new job, your boss will outline your key responsibilities and let you know what's expected of you. She may even proactively tell you what you need to do in order to be successful in role - if she doesn't, please ask. In my view, competence means - you're hitting all your goals, meeting all your deadlines and exceeding all expectations of your boss and the team as a whole. (That's your starting point, in today's ultra competitive environment)

Barack's speech seemed to indicate that only some seek excellence. Actually I suspect that at least 50% of reasonably driven individuals seek excellence - most simply don't know what it is or what it looks like. Others think they've hit it- because they show up when it counts or clinch the occasional mega deal - perhaps nail a key presentation, or execute a complicated strategy. Many of us think we're in the "Excellent" category - but are we really?

I have learn't that - "Excellence" can be subjective. If you're competing in individual sports - the criteria for excellence is pretty well defined, it's a win or lose scenario. In team sports - you could do really well, and your team could still lose. Could you claim to have been excellent - under such circumstances? So, Excellence can be defined in many different ways.

In the workforce however - "Excellence" is often defined by what your boss feels is important and more importantly - what your bosses, boss - feels is important. In my field of interest, it's extremely important to work on initiatives which have strong "Business Impact". That often means Sales, Revenue, Profit/Loss, Business Strategy and whatever else your orgs Senior Execs see as being crucial to the financial well being of the Organization. You could be working really hard, but if you're not paying attention to what's important to your Managers - you're not in the excellent category and you may very quickly find yourself outside the Competence field as well.

So, in striving for Excellence -make sure you understand what's important to your Managers - and always be at least 2 steps ahead of your Manager, in terms of what he's priorities are and how he thinks about success for your team. I'm not saying, agree with everything your boss says and spend all your time schmoozing up. Have periodic synch sessions with your manager, and quarterly sessions with your Managers, Manager. Make sure you understand their priorities and seek their feedback on what you're doing. Once you're clear on key priorities, you align your work items accordingly and strive to excel in your deliverables and find ways to add value - above and beyond your core responsibilities.

The difference between Strong Competence and Excellence is not as vast as one may think. My position is that each org may have a slightly different opinion of what excellence in a specific role, looks like. Your Manager may know, your Managers, Manager certainly will. That's why you have to strive to stay two steps ahead of your Manager's thought process at all times. Every now and again, it's important to reflect on the Orgs position from 50,000 ft. Don't be too wrapped up in the everyday grind -that you don't see the big picture. Use your insights to create value for your organization -In my opinion, that's what excellence - in role, looks like. In striving for excellence, it is important to have role models or Mentors - for inspiration and counsel. I'll delve into the subject of Mentorship and Professional development, sometime in future.

Now, here's a category that most people definitely don't strive for - for two reasons. I'd say 80% of individuals out there have no idea what the concept of mastery is about. 20% of us, have a good idea of what Mastery looks like - in our careers, or various fields of interest. But, only a very small percentage of that 20% actually aspire to that level - and fewer still get there. There are a few very good reasons for this trend.

Most successful individuals reside in the Excellence category - CEOs, Corporate Leaders, Presidents, Academics & and the vast majority of very successful individuals - get there by exhibiting Excellence at crucial periods of their Personal/Professional Development.

The majority of us understand that to be excellent at something, requires plenty of hard work, dedication and self-sacrifice - we intuitively feel that Mastery is out of reach, because it requires a special gift in addition to all the other stuff which excellent people do. Most of us know that we can be very successful in life and accomplish great things without ever coming close to becoming Masters in our fields of interest or our Career Paths.

Mastery - is defined as the superior command, grasp or control of a subject of study. It depicts thoughts of one who possesses consummate skills and power to dominate others. I believe that it takes someone who is extremely driven, focused and accomplished to even identify an individual who has a shot at Mastery, in a particular subject or field of endeavor.

Those who strive for Mastery need an extra something - which goes beyond talent, hard work and drive. It takes a self-belief and restlessness which defies logic to most of regular folks. So, I disagree with Barack - when he says we should all strive for Mastery. I think we should all strive for Excellence - and in doing so, we should make sure that we (and those we hold dear), are well aware of the personal sacrifices which must be made. We also need to be very clear about what we as individuals want to accomplish. On a personal note, I'd add that we must constantly remind ourselves that one’s happiness & Peace of mind is more important than any earthly endeavor.

Many have developed themselves to the point where they have achieved Mastery - if only for a brief period of time. I'm sure we can all reel off the names of great Masters in Business, Law, Medicine, Sports, the Arts, Biological Sciences, Politics and many more fields. All are World Changers and all have paid some significant price for their pursuit of Mastery. So, if you're reading this and you've resolved to seek Mastery in your field - by all means go for it, just be sure to begin with the end in mind.

World Changers - Rock On !!

May 17, 2008

Yahoo vs. MSFT - Icahn Steps In

Just when I thought things couldn't get any more complicated - in steps Carl Icahn, to muddy the waters even further. Carl Icahn has bought 50 million Yahoo shares since Microsoft withdrew its bid, which perhaps helps to explain why Yahoo shares haven’t fallen back to pre-proposal levels since the bid got yanked. If history is any guide, we should soon hear Icahn’s views on Yahoo’s situation and the failings of its top officials in great detail.

Icahn is known to be a very tenacious and determined person. He gets in at a low and gets out at a high. (Anyone remember Icahn /Motorola or more recently, the Icahn/Time Warner debacle?). Truth be told, Yahoo should probably have sold out at $33 - but it got very personal, very fast. It appears that the Yahoo Board did not look at the deal from a Business Perspective - it was personal. Jerry Yang did NOT want to sell out to Microsoft. That much is clear - but if you want to stay independent - don't go public. When you start taking money from Wall Street, you have to deliver strong value to your shareholders. I don't think anyone out there believes that Yahoo can get to $33 on it's own - so how do you justify this decision? By retiring the monetization platform that you said would save your search business, and partnering with your strongest adversary?

Eventually, Yahoo will be sold off - either as one entity (Display + Search), or broken up into little bits and pieces. The sad thing about this is that the board members who scuttled the deal with MSFT will still walk away with millions, but the everyday shareholders who hung with Yahoo during the rough times, may not be so lucky. Icahn won’t be able to sack Yahoo’s board before the next board meeting in July’08. By then, Yahoo’s June results would’ve been released. If the Company can’t deliver strong earnings – then the original MSFT bid may start to look pretty exorbitant.

Either way, Yahoo would be wise to prepare for a bumpy ride - Icahn is the real deal. He won't stop and he won't quit - until he's made he's killing. Now, Microsoft can simply play the waiting game and let Carl carry the battle forward on their behalf...

May 4, 2008

Fight The Good Fight

So what is my VC friend talking about? The larger the Web grows, the more important search becomes, right? That’s probably so, and as a note of clarification, he changed his statement slightly to say, “Search, as we know it, is dead.” What he means is that, with the rise of social networking sites such as Facebook, MySpace, Twitter, Second Life, LinkedIn and even Google’s own Orkut, the next generation of Web users may find what they want by using their social network rather than a search algorithm. After all, the people in your online social network should know you better than a mathematical equation, right? Actually, the issue is even larger than searches and social networks. The Web is, in a sense, maturing into a different medium than the one that search engines were originally designed to tackle. Allow me, for a moment, to oversimplify the issue in the interest of making a point: Until now, the Web has largely been a resource for information organization and consumption, with the user functioning as a consumer. In this scenario, a search engine is an ideal tool—you need some information (a restaurant address, the name of a song stuck in your head), but you don’t know where to find it, so a search engine is the natural first stop in your online journey. But in the past few years, a bunch of sites have begun to pop up based on the philosophy of user-generated content—a phenomenon often referred to as “Web 2.0” (a term, which, if I had my way, would be violently abolished from the lexicon). Flickr, for instance, is predicated on the notion that people don’t want just to look for photos but to share them. Same goes for YouTube, more or less. This, in turn, led to an explosion of online communities—once you’ve amassed a bunch of content to share, the natural next instinct is to create social bonds around it. This, of course, is the online equivalent of what people have been doing for centuries: finding other people with similar interests and forming social cliques, or vice versa. This is not a totally new phenomenon. The Web has, since its inception, been used as a social tool, with community discussion boards for tech heads, bird-watchers and so on. But what is new is that the interfaces have changed to allow each member of a community to have their own microsite—an identity on the Web that is unique and centralized. And this focus on online identity is what could turn search upside down. Udi Manber, Google’s vice president of engineering in charge of search quality, spoke with me about this phenomenon—and his thoughts on Google’s goals as the reach of mobile devices, advertising and more expand—in a rare interview this past week (click here for more of the Q&A). He suggested that Google’s search could quite naturally evolve to embrace the data produced from social networking. “Search has always been about people,” Manber said. “It’s about getting people what they need. The art of ranking is one of taking lots of signals and putting them together. Signals from your friends are better, stronger signals.” But what may turn out to be the strongest signal of all is the footprint you make with your online identity. Consider how much information you voluntarily provide on your Facebook profile. Now imagine if you could combine that with your Netflix renting and Amazon buying habits. Then throw in the suggestions of your friends and the pages you visit the most often. All those various sources of information about you are currently stored in different locations—on your computer’s browser history, on your Facebook page, on the servers for Netflix and Amazon—but just imagine how accurate a search could be if every time you had a query, the mass of data about you that exists on the Internet could inform the results. (Google and Yahoo already do this to a limited extent by tracking your search history to refine results, and surely startups will try.) In fact, as we each carve out our individual niche on the Web, the logic of search may well flip inside out. Since we are essentially meta-tagging ourselves through our social networking memberships, shopping habits and surfing addictions, it’s conceivable that the information could attempt to find us—the old concept of push media, but in a far more refined way. As new content enters the Web, it could tumble through the various filters that you set up around your identity and then show up on your home-page news feed, or in your in box, or pop up on a ticker that follows you around as you browse from page to page. The point is that even though Google, Yahoo, Facebook, Amazon and others all have elements of this new relationship with users, nobody owns this space the way Google “owns” search. And as it evolves, there will be an unholy mess of privacy and security issues to work out. So in the future, the way we are guided around the Web may look very different from search as we know it. In the meantime, search is not, in fact, dead … yet.
QnA With Udi Manber:

Microsoft Walks!

So, I'm sure there will be much written about the Microsoft-Yahoo Saga, by folks who are much more knowledgeable than I am. Here's my two cents though... Microsoft clearly expected that the deal would get done one way or another - evidently, everyone underestimated the resolve of Yahoo's core Investors. (By core investors, I mean those who have a personal connection with the company and its brand, and not the fat cats on the board who've been along for the ride. In previous commentary, I maintained that Yahoo seemed ready to do almost anything to stave off Microsoft - even considering partnerships which were clearly not in its best interest, or those of its Investors. I'll admit though, even I was surprised by the Yahoo-Google pact.
It wasn't so long ago that Yahoo was touting the breakthrough capabilities of Panama - and the value it would bring to its network of advertisers. The deal with Google will most certainly result in incremental Search Revenue - but at what cost? In his letter to Jerry Yang, Steve Ballmer rightly commented on the impact of the deal on Yahoo's Engineering Team and its position vs. Google. The Winner!The net-net is that Google is the winner here. It remains the strongest player in the online space and its two main competitors are left weakened by an incident which will cast doubt in the minds of their customers about the quality of their Search Platforms. If Yahoo does go ahead with the pact and actually start monetizing some or all of its traffic volume through Google, that could signal the end of the Overture Platform. In effect, over 80% of the queries driven by Major Search Engines could be monetized through the adwords platform. I expect regulators won’t let that happen though, so we’ll have to see how that plays out.

Both Yahoo and Microsoft have lost out here. Microsoft because, this entire fiasco has been a distraction for the Management Team and probably has sown some doubts in the minds of many investors, about our entire Online Strategy. More impotantly - Microsoft monetizes it's Search Engine through Overture - in key markets across Europe and Asia. If Yahoo can't or won't actively invest in winning new clients for Panama, both companies will continue to loose ground to Google Globally.

The Biggest Loser
Yahoo - is the biggest loser, because it's handling of this issue casts doubt on its strategy and its ability to survive as an independent entity. The prospect of incremental revenue by monetizing with Google's adwords and even adSense won't be sufficient to stem the freefall of its stock - come Monday (05/05).
I’d said before that Google had much to gain in the short term, even if the deal went through, because the way in which Yahoo reacted to MSFT’s proposal was so negative that the Integration process would have been pretty challenging.

As things stand today, it’s hard to think of a way to spin this – that looks good for either Microsoft or Yahoo. Certainly, Microsoft can solider on and will benefit from its size and scale – and from market place that is growing increasingly uncomfortable with Google’s Monopoly of Online advertising Revenue.

I’d be interested to see how the Financial Markets react to Yahoo’s stock – come Monday Morning. The Stock reached $29.70 on Friday 05/02 and was at 26.82 in after hours trading.