Google's secret weapon discovered: Copy-Paste.

Here's the latest from the social networking battlefield.

In an attempt to find the difference between Google+ and Facebook, a consumer tracking study discovered that Google+ innovators did an excellent copy-paste job:

During their research, EyeTrackShop found that both social networking sites work almost exactly the same.

The pictures below show how user eyes scan the page. Looks like one of those "Find the difference" puzzles in children books.

Facebook

Google

Ripping off. Take 2.

Dan commented on my post "Ripping-off for fun and profit":

The original Mac was partly a rip off from Xerox Park and the iPod was definitely not the first digital music player. Then again, Apple made significant improvements to the product rather than just straight copying.

I think it's important to address Dan's point in a separate post because his is a very common attitude, stemming from the difficulty to see the difference between invention and innovation. And it's not only about making improvements.

The slide below is from my lectures at "Principles of Invention and Innovation". It shows a chart with dimensions Nobody - Everybody (horizontal) and Idea - "It works" (horizontal). Invention is marked by the blue dot in the left bottom corner. It occurs when one person or a small group of people comes up with an idea. Opposite to Invention, in the upper right corner, is Innovation, marked by the red dot. The path between Invention and Innovation involves turning ideas into working products/ services and having a lot of people use them in real life.

This simple chart allows us to map companies' entry points into a particular market. For example, when Google ripped off Facebook's design and entered social networking with Goolge+, it was way to the right. That is, not only the idea was not new, but it was already implemented by Facebook on a massive scale – hundreds of millions of users. The same can be said about Microsoft when it entered advanced GUI PC market with Windows 95, or its Office and XBox products. All markets with working products built according to the same Invention had already existed and had millions of users. The goal for the company was to take these users away from existing competing implementations, either by offering a price/feature advantage and/or simply applying the marketing muscle.

In contrast, Apple's entry into the GUI PC space happened much earlier. At the time Wozniak and Jobs debuted their machine, the market for such PCs simply did not exist. Xerox machine was basically a lab demo, with no market traction whatsoever. Apple's goal was to create a market, with software, additional hardware, distribution channels, and etc. The same was largely true for Apple's iPod I and iPod Touch introductions. Google had a similar entry into the text ads/search market. The risks in those two types of entry, one to the left and another to the right on the chart, are totally different.

Even Facebook, with all the hoopla about Mr. Z stealing somebody else's idea, entered the market closer to Apple's or Google circa 2000 path. If they, Facebook, were smart enough and filed for patents at the right time, Google would be in the same legal trouble their Android customers are right now with regard to Apple's patent suits. Different market entry strategy entail totally different business risks, that is why it's important to understand at least the basic difference between Invention and Innovation.

tags: invention, innovation, market, patent, synthesis, s-curve, system, business, competition, apple, google, microsoft

Invention vs Innovation, the patent dimension.

NYT reports on the largest patent-related transaction ever:

Nortel Networks, the defunct Canadian telecommunications equipment maker, says it has agreed to sell more than 6,000 patent assets to an alliance made up of Apple, Microsoft and other technology giants for $4.5 billion in cash.
The group of companies, which also includes Research in Motion, Sony, Ericsson and EMC, beat out Google and Intel for the patents and patent applications that Nortel had accumulated when it was still one of the largest telecommunications equipment makers in North America.

The decline of Nortel is quite remarkable. The company was one of the first firms to develop advanced wireless data and internet routing technologies, but couldn't capitalize on them in the marketplace, eventually going bankrupt. The breadth and depth of their patent portfolio relating to the fast-growing mobile networking industry is staggering, which explains the multi-billion dollar bids.
Google will probably end up paying significant royalties on these patents.

tags: invention, innovation, patents, business, mobile, competition, portfolio

iPhone vs Android

Cnet put together a brief history of Android, starting with T-Mobile G1 in October, 2008. Since Android is software, not a device, the graphic below, showing Android development milestones, makes more sense. Further, in a real word comparing Android and iPhone timelines is a lot more interesting than just looking at Android alone.
The reason I'm not considering Windows Mobile, Nokia, and Palm is that they belong to the old Document-Mouse-Keyboard information access interface. After iPhone, Android became the second major technology that supported the new Stream-Zoom-In/Out application paradigm.

tags: technology, system, tool, evolution, mobile, software,  infrastructure, competition,  information

Contrary to common beliefs about the picket-fence approach, a good patent portfolio doesn't really protect a technology. In business terms (see below), the technology doesn't matter. Instead, patents enable the portfolio holder to screw up create intolerable risks for the competition's business model.

What disrupts incumbent firms in Christensen's story is not their inability to conceive of the disruptive technology: like Amit and Zott, he identifies the root of the tension in disruptive innovation as the conflict between the business model already established for the existing technology, and that which may be required to exploit the emerging, disruptive technology. Typically, the gross margins for the emerging one are initially far below those of the established technology. The end customers may differ, as may the necessary distribution channels. As the firm allocates its capital to the most profitable uses, the established technology will be disproportionately favored and the disruptive technology starved of resources. Christensen quotes Andy Grove, former CEO of Intel, ‘Disruptive technologies is a misnomer. What it is, is trivial technology that screws up your business model’. The root of tension [is] the conflict between the business model established for the existing technology, and that required to exploit the emerging, disruptive technology.

Henry Chesbrough, Business Model Innovation: Opportunities and Barriers, Long Range Planning, Volume 43, Issues 2-3, Business Models, April-June 2010, Pages 354-363, ISSN 0024-6301, DOI: 10.1016/j.lrp.2009.07.010.
(http://www.sciencedirect.com/science/article/B6V6K-4X0MPJN-2/2/06b7077564ed4d7c6266cafac731df5d)

tags: technology, competition, system, business, model, control point, risk, quote, innovation,

Prisoner's Dilemma: PC vs mobile

Prisoner's Dilemma is a descriptive title for a strategy problem in game theory. It got its name from a hypothetical situation when two prisoners who stand accused of committing a major crime, e.g. an armed robbery, are interrogated separately by the police. The police have arrested them on a smaller charge and currently doesn't have any direct evidence that connects the prisoners to the armed robbery. If both prisoners stay silent they will receive a short sentence of several months in jail. If both of them confess they get 5 years in prison each. If one of them confesses, but the other stays silent, the first one goes free, while the second gets a 10 year sentence. It's a famous example - you can read an extensive description of how it works in Wikipedia and other sources.

Obviously, it would be better for the prisoners if both of them stayed silent and as the result got the lighter sentence. But game theory analysis shows that the most likely outcome of the game is when both of them confess and each gets 5 years in prison. The key to understanding this craziness is to appreciate the fact that the prisoners cannot communicate with each other and they don't trust each other. As a consequence, they choose to confess and get 5 years, rather than stay silent and have the other guy confess, which would cause him go free and you'd get 10 years in prison.

Now, let's turn to consider the world of mobile communications. It seems to me that Apple and Google are playing Prisoner's Dilemma in this space. Had they decided to cooperate in making iPhone a dominant destination device for media and cloud services, both companies would have benefited enormously: Apple on the hardware and media side; Google on the search and cloud computing side. But, Google seemes to choose the "confess" position. That is, rather than building apps and services exclusively for iPhone/iPad/iWhatever, they make an extensive effort to develop software and services for competing hardware. As a result, we can observe how Apple and Google are increasingly becoming marketplace adversaries. For example, recently Apple announced iAd, its own ad platform, which threatens Google's ad business on iPhone.

This situation stands in marked contrast with the 30-year old Intel-Microsoft relationship that made both companies dominant in their respective hardware and software PC business domains. Comparing the situations, I can't help but conclude that there's a lot more trust and communication between PC industry leaders than between Apple and Google.

tags: battle, technology, strategy, system, information, evolution, competition, mobile, cloud

No good deed goes unpunished. The URL shortening service pioneered by TinyURL is now being copied by Google and Facebook:

Google ventured into new territory on Monday with the launch of a new URL-shortening service it's calling Goo.gl.

Google's launch comes on the heels of Facebook having quietly launched its own URL-shortening service called FB.me.

Unless the inventors have patents for the idea, the big guys are going to walk over their business as soon as it proves to be popular.

tags: market, patent, control, competition, internet, information, packaging

Brad Fitzpatrick on the Social Graph problem:

There are an increasing number of new "social applications" as well as traditional application which either require the "social graph" or that could provide better value to users by utilizing information in the social graph. What I mean by "social graph" is a the global mapping of everybody and how they're related, as Wikipedia describes and I talk about in more detail later. Unfortunately, there doesn't exist a single social graph (or even multiple which interoperate) that's comprehensive and decentralized. Rather, there exists hundreds of disperse social graphs, most of dubious quality and many of them walled gardens.

Social graph is becoming an important infrastructure for content/ad/goods distribution. Facebook emerged as an early leader in this space, but, clearly, Google intends to wrestle this control point from them. Brad proposes an open framework that would benefit a major established player, which doesn't have access to the graph.