Monthly Archives: September 2013

Horace Dediu: Asymco, Apple and Future of Computing

Editor’s Note: Horace Dediu, one of the most well respected watchers of the mobile industry, and Apple in particular, is the founder and author of the market intelligence site Asymco.com. He is also an independent analyst and adviser to telecom incumbents and entrants on mobile platform strategy. Fortune Magazine declared him as the “King of Apple Analysts“.

Horace has eight years of experience as an industry analyst and business development manager at Nokia, preceded by six years of software development and management in a startup environment, two years of IT management and five years of computer science research in an industrial laboratory. As a business analyst he has a proven track record of achieving/exceeding predictive goals and objectives. He has been a resource for Bloomberg, The Financial Times, The Economist, Forbes and has been cited over 350,000 times.

Dediu also writes for the Harvard Business Review Blog. Recently he was interviewed by Forbes. He is often interviewed by other news sources as an Apple expert.

Horace has an MBA from Harvard Business School and MS Engineering from Tufts University. To learn more about his work please visit Asymco.com. You can also find him on Twitter, LinkedIn and Wikipedia.

eTalk’s Niaz Uddin has interviewed Horace Dediu recently to gain insights about Asymco, Apple and Future of Computing which is given below.

Niaz: Dear Horace, thank you so much for joining us in the midst of your busy schedule. We are very honored and thrilled to have you at eTalks. At the beginning of our interview, can you please tell us more about Asymco?

Horace: Asymco is a web site where I write what I think and where people respond through comments. The idea is very simple and I find it useful because I received over 40,000 comments, something which would be hard to obtain through any other way of writing. Of course what matters is to have good comments, but good comments come if you have interesting things to say and you say them in a way that encourage discussion.  The other aspect of Asymco is that the audience is mostly self-selected. They have not been enticed to visit via any incentives other than their interest in the material. That makes the audience more valuable to me than one which comes by way of being herded from another place.

Niaz: What do you do as an independent consultant and analyst? What is your future plan? And where will be position of Asymco after 10 years?

Horace: I read a lot and write a little. I have no future plans and could not presume to guess what Asymco will be in 10 years. I could not have predicted where it is now so my ability to make predictions on this topic is zero.

Niaz: You’ve declared as the “King of Apple Analysts” by Fortune Magazine.  What does make you very passionate about Apple?

Horace: Apple is an interesting company to study because its success comes from being a serial disruptor. This is a very rare type of success formula. I am trying to “reverse engineer” its operating model and I hope that such a model is one which others might learn from if they were to emulate it. The trouble is that very few others seem to want to emulate Apple. Why that is also an interesting question.

Niaz:  You’ve been resource for Bloomberg, The Financial Times, The Economist, Forbes and have been cited over 350,000 times. You’ve been analyzing Apple’s business strategy and predicting their financials for long time.   So many people in the industry now believe that Apple has lost its image. Fundamentally, Apple is a company that was built to innovate and to make great products. What do you think about the current performance of the company? Do you think apple has lost its image that it has created over the years as a center of innovation and building excellent products?

Horace: I cannot comment on how Apple’s image is measured by people in the industry. I have been listening to commentary on Apple for about a decade and I have never seen any change in pattern. The company has always been perceived as a failure by a majority of observers. With respect to its products, I also do not see a change in the pattern established over the last decade.

Niaz: What’s your evaluation on the performance of Apple CEO Tim Cook? Do you think he is a visionary leader? Will he be able to keep running Apple as the way it should be run?

Horace: I think Tim Cook is the best CEO Apple ever had. During the period of Steve Jobs as CEO, Tim Cook was doing the work which might be considered CEO and Jobs was head of product, culture and many other details. The Jobsian approach of micromanagement is the antithesis of sustainable organizational management. The only reason Apple survived was that Jobs outsourced operations to Cook. Regarding Vision: Vision is not a function that needs to reside in one person and it depends greatly on the process for decision making and the organizational structure. Apple’s functional structure means that vision is developed through a coordinated weekly process. It’s a constant refinement of many ideas rather than a single target that’s set once.

Niaz: As you know, the biggest change in the history of iOS is iOS7. Apple has also launched iPhone 5C and 5S on Sept 10th event. As far as I believe iPhone 5S is the next big thing that will be the door of opportunities for the future of mobile computing, gaming, personal cloud and so on and on. What is your take on iOS 7, iPhone 5C and iPhone 5S?

Horace: The iPhone is maturing nicely and it seems to be entering a new phase of later adoption. It’s now clear to me that after 7 iterations, the iPhone business model is a part of a larger transition in how Apple is building a multi-modal platform with iOS. iOS has turned out to be a very flexible idea which is being adapted to many usage contexts. It is however only one piece of a far larger puzzle where services, devices, and ecosystems are inter-dependent.

Niaz: Over the last 12 months, Google Android devices have outsold iOS by about 3 to 1. There are now perhaps 775m-800m ‘official’ Android devices in use, versus perhaps 415m iOS devices. This is without counting sales of the Amazon Kindle Fire or the (very) many Android devices sold in China that are not connected to Google services – these may be a further 150-200m active devices now (or more). So, the Android install base is more than double the size of iOS. If you look just at phones, there are may be 250m iPhones in use and perhaps 700m ‘official’ Android phones alone.  How do you see iOS vs. Android war? Is android is a threat for iOS (directly or indirectly)? Who is actually winning?

Horace: Those numbers are not exact. The numbers I use are: Google has reported 1 billion activations and Apple cited 700 million iOS devices will be sold by October with iTunes accounts (as a proxy of usage) totaling about 650 million. I consider both of these to be great performances especially since they happened in less than 7 years–a type of growth that is unprecedented even when considering many products which were free to use like Facebook. 700 million unit volume of sales, often under supply constraints, with an exceptionally high margins of near 40% is nothing short of amazing.  That does not detract from Android however. Android has turned out to be a force which destroyed many businesses: Nokia, RIM, HTC, Microsoft. However, iOS has been contributing to this disruption as well. Android is a low-end approach and iOS is a high-end/new market approach. Both have squeezed almost all other platforms out of the industry. Android is a threat to iOS but it’s one of many. A few years ago the threat to Apple was Windows, or some iPod killer or many others long forgotten. Apple does not win by eliminating competition. It wins by creating new markets or re-defining the basis of competition where, at least initially, there is no competition.

Niaz: Are you optimist about the future success of Apple? Like after 10 years and then 20 years?

Horace: Let me put it this way: if there were no Apple then somebody will have to invent an Apple to do the same thing Apple does. In that sense I’m optimistic that there will be an Apple in some way in perpetuity.

Niaz: This is an interesting month. We have already seen so many things and we are also going to see so many things in this month. The company valuation from 2007 to today: Microsoft is down -1.5%; Nokia is down -82%; RIMM is down -78%; Apple is up +507%. In this situation what do you think about Microsoft-Nokia deal? And how should tech industry look at this deal?

Horace: The deal says more about Microsoft than about Nokia. Microsoft decided that they need to become an integrated hardware/software/services company and to organize itself functionally. This is an abdication of its role as the supplier of software modules to a complex value chain. To make such a huge concession says that we are really far into a new era. The problem for Microsoft is that it’s not clear that it can function as a completely new organism, especially one without any leader on the horizon.

Niaz: Can you please tell us about wearable technologies? How big is the market of wearable technology? What are the challenges for Apple to be the best player in the field of wearable technology?

Horace: The market for wearable technologies is very small, almost immeasurably small which is why it’s such an exciting area. It’s like a vast new continent with nobody living on it. There are challenges but they can be solved by having a development process that is guided by an understanding of what users need and how to deliver a workable solution. These were the same challenges in developing smartphones which were easy to use and making them affordable to many people. The answer is in an integrated approach to development.

Niaz: What will be the next big innovation from Apple?

Horace: I have no idea but it’s likely to involve refining new user interaction methods. Similar to the breakthroughs that came from the use of a mouse, a scroll wheel and a touch screen. It means making computers better at gleaning our intentions without our getting involved in explaining them.

Niaz: What do you think about the future of computing? What will be the most exciting and big thing in tech?

Horace: See above, new interaction methods.

Niaz: Will Apple, Google and Samsung be the major player for the future of computing? Or we can hope to see some new faces?

Horace: I am fairly sure Samsung will not be because they have not yet grafted software and services to their operating structure. I would give Amazon a higher probability in being a successful platform alternative.

Niaz: In 2011 you’ve written a blog post ‘Steve Jobs’ Ultimate Lesson for Companies’ on Harvard Business Review Blog and you have cited ‘A leader should aspire to do more. A leader should claim to have left a legacy not just on their company but on all companies.’ As you know Google, Amazon, Samsung, Facebook … all have learnt lifetime lessons from Steve Jobs. What do you think about the impact that Steve Jobs have created?

Horace: He led by example and like all great leaders sacrificed much as a way to inspire others to follow him. He also spent time in the wilderness and chose asceticism. This gave him authority. Many historical figures had the same quality. The problem is that few business leaders have it but I don’t see why they shouldn’t.

Niaz: Do you think it is possible to disrupt Google? How?

Horace: That’s easy. Google relies on keeping too many secrets. Giving away all that it holds dear will cause its business model to change. Let me put it this way: Google beat Microsoft because it developed and gave away that which Microsoft kept dear: source code to operating systems. (Microsoft finds it impossible to react unless it sells hardware–not easily done in volume and at a high premium.) Now turn the discussion around and ask what Google holds dear. The answer is the data which every consumer has to give. It’s now given freely in exchange for a service. But if that data were brokered by the user directly to the advertiser then Google has nothing to sell. For this to happen there must be a revolution in both the perception of what users give up when they use online services and in the ability of advertisers to act on their own to understand the mind of the consumer. If a consumer can become a free agent and an advertiser can do analytics then the economics of the internet (i.e. global information systems) will pivot yet again. Maybe Google will be flexible enough to pivot along but it will be a different company.

Niaz: Dear Horace, thank you once again for giving us time and sharing us your invaluable ideas, insights as well as knowledge. We are wishing you very good luck for all of your upcoming endeavors.

Horace: Thank you for having me.

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Further Reading:

1. James Allworth on Disruptive Innovation

2. Viktor Mayer-Schönberger on Big Data Revolution

3. Gerd Leonhard on Big Data and the Future of Media, Marketing and Technology

4. Brian Keegan on Big Data

5. Irving Wladawsky-Berger on Evolution of Technology and Innovation

6. Ely Kahn on Big Data, Startup and Entrepreneurship

7. danah boyd on Future of Technology and Social Media

Derek Sivers: Entrepreneurship, CD Baby and Wood Egg

Editor’s Note: After making a living as a professional musician, Derek Sivers went looking for ways to sell his own CD online and ended up creating CD Baby, once the largest seller of independent music on the web with over $100M in sales for over 150,000 musician clients. In 2008, Derek sold CD Baby for $22M, giving the proceeds to a charitable trust for music education. Since 2008, Derek has traveled the world and stayed busy creating and nurturing creative endeavors, like Muckwork, where teams of efficient assistants help musicians do their “uncreative dirty work.” He is a frequent speaker at the TED Conference, with over 6 million views of his talks.

Sivers is also the author of ‘Anything You Want, which shot to #1 on all of its Amazon categories. His new company, Wood Egg, is publishing annual startup guides to 16 countries in Asia.

Derek writes regularly on creativity, entrepreneurship, and music on his blog: Sivers.org

To learn more about him, please read his amazing book ‘Anything you want, visit his official blog, read his Wikipedia Bio, watch his amazing TED Talks Weird, or just different?, How to start a movement, and Keep your goals to yourself.

You can also follow him on Twitter, Facebook and LinkedIn.

eTalk’s Niaz Uddin has interviewed Derek Sivers recently to gain insights about Entrepreneurship, CD Baby and Wood Egg which is given below.

Niaz: Dear Derek, thank you so much for joining us in the midst of your busy schedule. We are very thrilled and honored to have you at eTalks.

Derek: Thank you Niaz.

Niaz: You are a musician, programmer, writer and entrepreneur. You have founded CD Baby and MuckWork. You are also the author of an amazing book ‘Anything You Want’ which shot to #1 on all of its Amazon categories. In 2011, you have moved to Singapore and started your new company Wood Egg. At the beginning of our interview, can you please tell us about Wood Egg?

Derek: Starting five years ago, I got deeply curious about the differences between countries and cultures, fascinated with understanding the different perspectives. Two years ago, I moved to Singapore, and started visiting all the countries in Asia, asking dumb questions, making good friends.  But my learning felt too unstructured. So while walking around Yogyakarta, Indonesia, remembering “the best way to learn something is to teach it”, I came up with an ambitious plan. I decided to produce and publish 16 books per year on 16 countries in Asia: Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Mongolia, Myanmar, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. Knowing they wouldn’t be great at first, I committed to improving them every year for many years. After a few years of doing this, they should be pretty awesome.

Niaz: Can you please tell us why have you moved to Singapore? 

Derek: Really it’s just understanding a different point of view.  And not just visiting, but really living somewhere long enough so that it really feels like home.  We’re so surrounded by people who think like us that it’s impossible to see that what we think are universal truths are just our local culture.  We can’t see it until we get outside of it.

Niaz: What have you learned about the entrepreneurial environment of Asia? How is it different from other cultures?

Derek: I was born in California and grew up with what I felt was a normal upbringing with normal values.  I was speaking to a business school class here in Singapore. I asked, “How many people would like to start their own company some day?” In a room of 50 people, only one hand (reluctantly) went up. If I would have asked this question to a room of 50 business school students in California, 51 hands would have gone up!  Thinking maybe they were just shy, I asked, “Really!? Why not?” – and asked individuals. Their answers:  1. “Why take the risk? I just want security.” 2. “I spent all this money on school, and need to make it back.” 3. “If I fail, it would be a huge embarrassment to my family.”  Then I realized my local American culture. The land of entrepreneurs and over-confidence. I had heard this before, but I hadn’t really felt it until I could see it from a distance.

Niaz: What are the cultural challenges to build, operate and sustain next big organization like Apple, Google, Amazon, Facebook or Twitter from Asia?

Derek: The sense of possibility.  When you live in New York City or Los Angeles, you see famous people around you all the time.  If you want to be famous, seeing those people next to you gives you the feeling that you’re very close to your dreams – you’re in the place where it can happen.  But if you’re living in Urugay or Estonia, you feel that you’re a world away from that kind of fame.  So once a few super-ambitious people have a big international success with a company out of Indonesia, for example, it will give huge encouragement to other people from Indonesia – to give them the feeling that they are so close – that they can do it.

Niaz: What are the necessary steps should be taken to overcome those challenges for making a welcoming, sustainable and supportive environment for entrepreneurs?

Derek: Just do what Singapore and Hong Kong are doing.  They’re doing everything right.  Mix in a little of India’s “jugaad” rule-breaking culture, for a real winning combination.

Niaz: We love to say about breaking the rules though it happens in reality very rarely. You are one of those few remarkable people who have broken so many rules for making things happen, specifically while working with CD Baby. You had a moment you describe in the book when all the MBAs and VCs were asking you “What’s your plan, what’s your growth rate, what are your projections?” And you basically said, “My focus is on helping the customers, and as long as we’re doing that, I don’t care about the projections.” Business Students invest Hundreds of Thousands of Dollars in Top Business School to learn planning, strategy, growth, leadership and setting goals. And you have build CD Baby and sold it for $22 Million where you have not literally cared about planning, forecasting, strategy, and even growth. Can you please tell us about the evolution and success story of CD Baby?

Derek: Ah, it would take about 88 pages to properly tell that story, but that’s why I wrote “Anything You Want”.

Niaz: Can you please briefly tell us about ‘Anything You Want’?

Derek: It’s only 88 pages, a $4 purchase on Amazon, can be read in under an hour, and really tells the tale from beginning to end of starting CD Baby, growing it beyond my wildest dreams, the mistakes I made along the way, then selling it for $22 million, as you said.  It’s distilled down to “40 Lessons for a New Kind of Entrepreneur”, as the publisher put it.  I’m not just telling my story, but looking back, found some important and usable lessons that you can apply to your own business.

Niaz: Now StartUp means finding an idea, taking seed funding, inviting angel investors and ending up taking fund from Venture Capital. It’s really a very complex cycle. I know it has two sides like a coin. In one side it’s tough to get funding. In other side, it’s tough to get right funding and advisers. Vinod Khosla, one of the co-founders of Sun Microsystems who later went on to create Khosla Ventures, cited in Techcrunch Disrupt SF 2013, ‘95 percent of VCs add zero value. 70-80 percent add negative value to a startup in their advising’. As it’s the scenario, you have had a great and different story. You have done great job with CD Baby and made it a multi million dollars company without taking help from VC. How can an entrepreneur build multi million Dollars Company without taking help of VCs? Is it possible now? Can you please explain it for us?

Derek: I know less-than-nothing about investors, VCs, or any of that.  Never dealt with them.  Asking me how to make a company without them is like asking an Argentinian farmer how he grows his crops without the Empire State Building.  It’s just not a part of my world, so I don’t even know how to compare my approach to another.

Niaz: What are your secrets of taking initiatives and how do you stay confident on taking those risky and challenging initiatives?

Derek: I’ve never done anything that felt risky or even challenging.  When you’re on to something good, and you’re the right person to do it, it just feels like common sense, and quite obvious.  If it feels too risky, too challenging, maybe it’s an unwise venture or maybe you’re the wrong person to do it.

Niaz: Many people now believe that we have already solved all of our interesting problems. New StartUps and companies are also working on almost similar basis. By any chance, if someone is coming with a great idea, rest of the others are getting into it and ending up creating mess. Can you please tell us about how to find really big and interesting problems, working on it in the long run to solve those problems and ending up building next big organization?

Derek: You don’t need big problems or big organizations like you don’t need big passion.  A few times, I’ve been asked a question like, “But what if I haven’t found my true passion?” It’s dangerous to think in terms of “passion” and “purpose” because they sound like such huge overwhelming things.  If you think love needs to look like “Romeo and Juliet”, you’ll overlook a great relationship that grows slowly.  If you think you haven’t found your passion yet, you’re probably expecting it to be overwhelming.  Instead, just notice what excites you on a small moment-to-moment level.  If you find yourself diving into a book about Photoshop and playing around with the program for hours, go for it! Dive in deeper. Maybe that’s your new calling.  For me, CD Baby was just a curiosity: that little hobby that kept me up until 2am every night, programming and experimenting. It just grew from there.

Niaz: Based on your exciting entrepreneurial career and the lessons you have learned over the years, can you please list 10 advices for Startup Company to survive, to grow and to go global?

Derek: I can’t, because it’s different for everyone.  When someone shows me their business plan and asks what they should do, I say, “Well – who are you? What kind of life do you want? Easy? Challenging? Why are you doing this? Money? Impact? Love? To prove something to the high school bully?”  Businesses are not the same.  Business paths are not the same.  Motivations are not the same.  No list of 10 advices apply to everyone.  And I can’t separate business and people.  What you should be doing with your business depends on who you are as a person, not on the business itself.

Niaz: What excites me mostly about you is your Humanistic Perspective of Entrepreneurship. Can you please tell us about the humanistic perspective of entrepreneurship?

Derek: I don’t understand how the two are different or separated in any way.  It’s like asking about the humanistic perspective on marriage.  It’s 100% completely and thoroughly human.  What’s good for business?  What’s good for people!  What’s good for each customer?  What’s good for each person working there?  What’s good for the owner?  These are inseparable questions.

Niaz: Do you think humanistic perspective of entrepreneurship is seriously big thing that will help entrepreneurs to be more human to solve real big problems of this mother earth to make it a better place to live in?

Derek: No.  I don’t think that big.  But I’m glad you do.

Niaz: What’s the one last thing you want to tell us?

Derek: Don’t make your business like someone else’s business.  Don’t make your life like someone else’s life.  Ignore people who tell you what you should be doing because someone else did.  Your life, joys, and motivations are different than theirs.

Derek: Thank you so much for sharing us your invaluable ideas, knowledge and experience. We are wishing you very good luck for all of your upcoming endeavors.

Derek: Thanks Niaz.  I really appreciate it.  Sorry I don’t have very many answers.

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Five Inspiring Quotes By Derek Sivers:

#1

You grow (and thrive!) by doing what excites you and what scares you everyday, not by trying to find your passion.”

#2

Success comes from persistently improving and inventing, not from persistently pushing what’s not working”

#3

You can’t please everyone, so proudly exclude people”

#4

Anything you hate to do, someone else loves. So find that person and let him do it”

#5

If you really care about starting a movement, have the courage to follow and show others how to follow. And when you find a lone nut doing something great, have the guts to be the first one to stand up and join in”

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Further Reading:

1. Jeff Haden on Pursuing Excellence

2. Daniel Pink on To Sell is Human

3. Barry Schwartz on Wisdom and Happiness

4. Hugh Mac­Leod on Creativity and Art

5. Shaka Senghor on Writing My Wrongs