Category Archives: Mobile

wsj mobile

Mobile : Big Wheels Keep Turning

It seemed just a few months ago that many in the Valley were griping that the mobile app ecosystem was dying.  Looks like that might have been overblown.  Today’s WSJ online has right at the tippy-top two interesting articles on the continuing growth of mobile generally, and mobile apps in particular.  There was a lot to digest.

First, revenue from mobile apps continues to surge–according to Gartner, app store revenue is expected “to rise 62% this year to $25 billion.”  At the same time, the battle to attract and retain new users is definitely getting more challenging, with the WSJ citing “double digit year-over-year” growth in the cost of acquiring users through advertising.  Big growing market, and an increasingly maturing and sophisticated ecosystem of marketing and promotion services gaining hold.

My view: this market is nowhere near saturated and new entrants have opportunities.  The data support this, as only 63% of apps used daily now differ from those used a year ago.  Beyond this quantitative signal, the WSJ provided I thought an interesting qualitative look-see at what a dozen or so business leaders, athletes and entertainers saw as their key go-to apps.  What struck me here is how relatively homogenized the choices were: a few users of Notes (the iPhone bundled note-taking app), Evernote, Uber, a few different news readers.  (Interestingly, Angry Birds was cited by several as being so addictive that these users had to delete the app from their phones.)  This to me speaks to the increasing opportunity for developers to continue to build and deliver valuable services via mobile smartphones and tablets.  Of course, with 700,000+ apps on the Apple and Google stores, discovery will remain a challenge.  But given the continuing growth and the fact that so many daily use apps weren’t used a year ago, the opportunity environment has upside.  Big risk, big potential reward.

The second theme in these articles in the WS was what it called the “evolving economics” of apps. The basic thrust was that app developers are experimenting with different price points and monetization schemes across different app ecosystems, Android, IOS, Windows Phone, etc.  This trend is one I absolutely see.  It’s also one that I think has a lot of room left to run.  The WSJ discussed mainly purchasing price points from an app store.  That’s kind of basic, obvious.  What’s coming is, I think, price testing and discrimination based on different usage in the app.  Power packs, premium features, etc, will get tested and offered at different price points for different user types.  Also, expect new developer infrastructure, offering real-time testing and debugging, A/B routing and others to evolve to improve the flexibility in offerings that developers have on this front.  Early stage startups like Appurify and Leanplum are examples to watch in this space.  Others in the continuing integration (CI) and the platform as a service (PAAS) will help here too.

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Thoughts on Apple’s Tim Cook’s Apology on Maps

Today, Apple CEO Tim Cook posted an apology letter to its customers over the release of its mapping product in iOS6.  It is direct and sincere.  It also recommends partner (or potentially competitor) products to users.  A link to the letter is here, and it is a clear sign of Cook’s leadership style and how this style differs from Jobs’ style.

One of BlueRun Ventures‘ portfolio companies, Waze, is specifically recommended to users.  This is quite a turn of events, as just a few months ago, Apple’s announcement that it was launching its own mapping product had led many in the technorati sphere to pronounce Waze roadkill.  What a difference solving a hard technical problem makes.

This is not a post that is negative to Apple at all.  It is still the most amazing and most valuable company in the tech world, and rightly so.  I am a big time Apple fanboy.  At the same time, today’s development is actually great news for startups as a whole for several reasons.

There are no sure things.  First, today’s note is evidence that just being the 800# Gorilla isn’t enough to guarantee winning a market.  With some markets, even if you are the most valuable company on the planet and you can literally devote limitless resources to a technology, you are not guaranteed a win, at least straight out of the gate.  In some market segments, like Maps, people depend on them and care about them greatly.  And it turns out the technology solution is difficult and takes more than just money to solve–it’s going to take, in the estimation of some analysts “two or three years,” to for Apple to build  a competitive offering.

Competition is good.  The second observation that’s good for startups is that this is evidence of a healthy and competitive marketplace.  Imagine that this happened in the PC ecosystem at the height of Microsoft’s dominance with Windows…  Users would have complained and raised a fuss, and Microsoft would have stuck with the message that ‘as more users use our [crappy] maps, the maps will get better,’ but there wouldn’t have been the same ecosystem support and robustness.  There’d also not have really been an alternative.

Today, not only is Apple recommending products like Waze, but analysts are wondering whether this will drive more users to Google’s Android platform, where Google Maps are happily distributed.  This is the wonder of competition–the invisible hand is clearly at work.  More competition at the platform level is good for startups and good for users, as it drives more diversity, more desire for offerings that each ecosystem can build upon.

Mobile is about local and real-time–maps here are key. The third observation that is that #MapGate and the customer uproar over it highlights things I’ve written about before.  Namely,  the Mobile Web 3.0 is upon us, and it offers the opportunity for real time commerce right here right now at the hyper local level.  When you  think about computing as being very local and real time, you realize that the map is the central locus point, that the map is extremely strategic in this world.  This is great news, not just for Waze, but for the coming future of the Mobile Web 3.0.

 

http://techcrunch.com/2012/08/11/analysis-web-3-0-the-mobile-era/

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Mobile Brand Connect Dinner

Last night in San Francisco, BlueRun Ventures co-hosted the Brand Connect Dinner.  We work with Mark Evans at Social Local to put these events together, and we were thrilled to have speakers from Facebook, Proctor and Gamble, and Topsy speaking.  Also, it was a great audience of brands and entrepreneurs, seeking to build relationships and trade information.

There are a few takeaways I had from the event.

We are in early innings of what’s possible for brand advertising through Facebook, Twitter, and other social media platforms.  These social platforms are offering a new way for brands to communicate and connect with users.  Currently, most brands are merely repurposing content and media from existing campaigns (TV ads, magazine content, etc.) and just pushing it onto the Facebook wall, where they attempt to drive views and likes, etc.  What we saw though were several very interesting examples of new types of campaigns and engagements that leveraged some of the unique elements of Facebook to enable users to engage in more personal, more deep connections with the brands.  This was exciting.

There will need to be a continuing evolution here.  But this is to be expected if you study the history of media.  When TV first came out, for example, the first ads were basically radio ads just read on TV.  It took a while for everyone to figure out how to leverage TV.  But leverage it they did.  Same thing will happen in Facebook.

Big brands need massive scale from a startup to really engage.  On the one hand, many of the big brands–P&G for example–are getting much more serious about engaging with innovative young startup companies.  We saw this at the Big Brand Hackathon earlier this summer, where Home Depot, Toblerone, Ritz Cracker, and Kraft Mac & Cheese, all joined us and a bunch of hackers to build mobile-oriented demo projects that met their specific brand objectives.  Big companies and brands recognize that these new media types and these new innovations are areas they need to build musclature around, and it is great to see them engaging and working to stretch themselves to strengthen themselves here.

At the same time, its important for a reality check.  Concretely, big brands are driving massive scale and massive P&Ls.  This means that for a startup to really matter to a brand, there is a very high hurdle that the startup has to cross to become meaningful.  As Sonny Jandial, P&G’s Head of Innovation pointed out, the Brand Manager for Dawn Dish Soap is selling $1B worth of soap per year at around $4 a unit.  That Brand Manager has to move *a lot* of soap.  By definition, for the brand to engage beyond a little pilot or experiment with a startup, then, the startup has to be able to deliver meaningful numbers.  It’s a tall order, and as Sonny pointed out, his role is to be more of an experimenter on P&Gs behalf and help startups get nurtured to a level where they can grow to a point where they’d have an appopriate amount of scale to engage.

Budgets seem to be coming.  Without holding the brands to any fixed numbers, it did sound as though there was real understanding and thinking around th e need to spend here.  Engaging with Silicon Valley is not a hobby effort–it’s real and it’s serious.  The bar is of course high, but it did seem as though the budget is there.

All in all, over the last 6 months, I have seen a tremendous amount of interaction between large brands and with our portfolio and with the startup ecosystem more broadly.  This is an exciting trend.  At BlueRun, we will definitely continue to drive further into helping engage and connect brands into the ecosystem, and I’ll look forward to the next opportunities to get together.  See you at the next Brand Connect dinner!

 

 

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iPhone 5

Apple’s recent iPhone 5 announcement and upcoming launch has been a fascinating testament to the power of brand and to the very strong emotional connection that mobile devices have created with users. The mobile wave just keeps on surging!

For an iPhone version announcement, Apple’s news and showcasing of the device was a massive dud.  The Economic Times declared “iPhone 5 bigger, faster but lacks ‘wow’ factor.”  Others weighed in on the more incremental approach that Apple had taken with this release.

And then a fascinating thing happened: users started pre-ordering the iPhone 5.  In crazy numbers.  It’s clearly the fastest selling iPhone ever, selling more than 2 millino pre-orders in the first 24 hours. I’ve never pre-ordered an iPhone and I got one pre-ordered iwthin the first 48 hours.

So on the one hand, the iPhone doesn’t have much new to justify the upgrade.  On the other hand, users are snapping them up faster than any iPhone ever.  What gives?

A big part of this is Apple and its terrific marketing.  But the larger story is that Mobile is just different.  Smartphones, barely 5 years old, are devices we depend on–80% of respondents in a recent survey would not leave home without their smartphone.  And our usage of them in terms of time per day is surging–one recent survey I saw showed a >30% year over year growth average time per day on the device.  Given how central these devices our to our digital lifestyle, any advances and improvements in the leading devices will be ones that users pay close attention to.  In the case of the iPhone 5, clearly, millions of them were convinced that it was time to upgrade.

In addition to the core dependency we have on mobile, Apple again is masterful at driving its brand.

 

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Facebook’s Biggest Mistake

Yesterday, Mark Zuckerberg took the stage at TC Disrupt to make his first extended public comments since Facebook‘s troubled IPO earlier this year.  During his comments, “Zuckerberg revealed that Facebook’s mobile strategy relied too much on HTML5, rather than native applications.”

This perspective and openness showed a founder/CEO who was dialed in to the challenges the company has faced on mobile.  It also enabled him to contrast nicely the big improvement $FB has made in shifting to a heavier reliance on ‘going native’ as it pertains mobile platforms.  Shareholders were positive, pushing the stock up 3%–I’d expect both because they realize that Facebook has a mobile strategy and is executing on it, and because they are seeing evidence that Facebook’s leader is a serious, serious guy.  This is goodness–it’s great for Facebook, of course, because as I’ve expressed elsewhere, Facebook needs a great mobile strategy.  More broadly though, it’s good for the whole ecosystem–we should want Facebook to thrive and grow, as it’s continuing momentum has a gravitational pull that helps fuel and balance the broader tech ecosystem.

From a Facebook standpoint, this was really a no-brainer.  Mobile is the future, and  with mobile, the future is arriving a whole lot faster than anyone really thought.  As a result, Facebook really needed its mobile product to be a first class citizen.  That meant it had to, had to, go native.  Not even a choice.

The unfortunate thing, though, is that it probably exposes the lack of robustness in HTML5 and mobile web.  People will now predict that HTML5 was before its time, companies shouldn’t bet on it, etc., etc.

To an extent this is true.  For great mobile-first and mobile-centric experiences, HTML5 involves compromises.  As a developer, you get broad multi-platform distribution, with the cost of a degraded user experience.  This degraded user experience is a big big deal on mobile though.  The iOS and Android platforms in particular have trained users to expect responsive, highly functional apps.  They’ve gotten us used to instant gratification, smooth transitions between screens, etc., and when HTML5 can’t deliver that, the app suffers.  And given how intimate a smartphone app experience is, and given how many apps are competing for a user’s attention, delivering a weak user experience is an unacceptable risk for a developer to take.  Indeed, Facebook’s mobile HTML5 app showed clearly the challenge–users were held hostage to it, and they hated it.  With its new native app, Facebook is seeing better user retention, engagement and usage.  A better app, a better user.

Does this forecast the death of HTML5?  Absolutely not.  HTML5 is coming and its a big wave.  It is also a lot of work.  The  HTML5 evangelists predicting the  death of native apps, were I think over-optimistic.  Not because of their wrong on the technology.  Instead, its more about user training–users will continue to have high demands on mobile experiences, and this will force the transition to take time.

I think this will continue to provide opportunity for a wave of companies working to build the infrastructure, tools, and services that enable the HTML5 wave to become a first-class development platform.  In the gaming space for example, companies such as Game Closure, Artillery, and Spinpunch, are all focused on helping enable the next generation of games and game distribution via the mobile web.

So exciting times for the industry here.  Great to see Facebook getting on track for mobile.  While I’d love to see HTML5 delivering the goods now as a dev platform, I’m not at all surprised that it’s not yet there.  While a big mistake for FB, a recoverable one.  And not a death knell to the power and impact that HTML5 is going to have in the longer term.

 

 

 

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Why Tablets Won’t Be NetBooks 2.0

From TechCrunch today, “Tablets Join the Long Race to the Bottom,” writer John Biggs decries his fear that the tablet market is basically the NetBook 2.0 market.

In a way I share Biggs’ fears: it would be shameful if the bottom of the tablet market fall out, if tablets get renamed ‘craplets,’ But for the most part, I disagree with the thinking.  I’m more bullish on the Tablet market overall, for several reasons.

First, I think the dynamics of the tablet industry and market are completely different than the netbook/PC business.  In the PC business, basically the entire profit pool on the hardware side is with Apple and on the software OS side is with Microsoft.  The net book phenomenon was spawned by low-cost manufacturers trying to use their unit volume capacity with ever cheaper componentry to try and gain share in low-income, emerging markets, or as supplemental PCs in middle-income households.  OEMs like ASUS bet that they could build and hit ever cheaper price points, and that this would create demand.

For these low cost netbook manufacturers, there was always hope that there’d be cheap web-based services that the manufacturers could resell that would then help make additional margin.  This was generally an epic fail, as low-cost hardware manufacturers generally lack the skills needed to build a high-quality and well done ecommerce solution.

While netbooks do continue to ship, particularly in emerging markets, they certainly haven’t made a massive dent in the profitability of the industry, nor have they shifted the powerful holds that Microsoft holds on the OS, Apple on the hardware, Intel on the chipset.   (Though ARM has undeniably had some impact, particularly in the tablet space.)

In the current tablet industry, by contrast, several key factors are different.  First, two of the leading hardware manufacturers are Apple and Amazon.  Neither has a strategy of being the low cost leader in hardware manufacturing–that’s not their strategy at all.  Instead, both have very substantial and well-delivered services (books, movies, etc.) they distribute through the tablets to users.  So unlike the netbook that wanted to try and sell you an upgrade crapplets from their crappy netbook desktops, Amazon Kindle Fire users are buying and reading books, magazines, and movies.  So the total value proposition for these tablet makers is totally different.  PC makers are all about lower BOM cost, win the lowest ERP on the store shelf.  Amazon and Apple has a different approach, one that’s  about winning share of one’s digital basket: hardware device, software, services, media, etc.

Given these core differences between the Netbook and Tablet markets, I’m more optimistic that the Tablets will evolve in a different direction.  Now don’t get me wrong: I do agree with Biggs that we will see tons of crumby tablets.  It is the hardware industry after all, and we still have too many hardware suppliers that will look to deploy resources into a new hardware market.  Expect everyone in mobile computing–Samsung, ASUS of course, but also the Japanese OEMs, Toshiba, Sony, Fujitsu, etc–to enter the market.  Prices will drop at retail and for users.

And I think that in general this will be fine for the market, though again, you’ll have to wade through a fair amount of junky hardware.  The reason it will be fine is because the price point pressure that the low-cost netbook centric tablet guys will drive will have some impact on guys like Apple and Amazon.  But at the end of the day, there will be equilibrium.  Equilibrium will be achieved when Apple and Amazon find a price point where they have a nice quality Tablet that is priced relatively competitively with lower quality machiens.  And Apple and Amazon can both subsidize in effect the price point of their SKUs knowing that users are likely going to use that to consume all sorts of digital media through their stores.  Razors and razor blades.

 

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More Thoughts on the Big Brand Hackathon

Back in June, over Fathers Day, we worked to help organize a hacker event called the Big Brand Hackathon.  This was a great event, built in partnership with big brands like Home Depot and Kraft Foods brands Ritz Cracker and Toblerone, as well as several API providers like Retailigence, TeleNav, and others.  Here is a brief video of the event.

 

The interesting thing about this event is what I think it is going to represent in terms of a larger trend around mobile and what it means for large brands that are working to learn how they can leverage mobile in their businesses, and specifically in their marketing to customers.

Here is what I am seeing, and what I think it is going to mean in the industry.

First, mobile is clearly a big, big thing, but it’s been unclear how brands can leverage them.  Large brands, ones commanding huge marketing budgets, all know about mobile.  The challenge that they are still wrestling through is what should they do about it.  How does Home Depot or Toblerone leverage mobile it increase brand awareness, drive user engagement, increase customer satisfaction, etc., i.e., stuff that marketing executives at these companies actually care about?

The answer to this question hasn’t been clear for the brands.  For example, this past winter at the annual Mobile World Congress in Barcelona, Spain, we helped organize a 1-day conference track SoLoMo, which got several large brands together with mobile focused startups to talk about what was going on around the trend of Social, Local, and Mobile.  This 1-day conference track was great, and we heard from several big brands–Disney, ESPN, Comcast, and others.  The interesting takeaway that we took from last winter: the brands all got that Mobile was important, but none had a deep and well thought through approach to how they might leverage it.  Everyone was struggling for a paradigm.

Fast forward to the Big Brand Hackathon.  What changed here was that the brands were, if anything, way more open-minded about solving this problem the new-fashioned way–just hacking sh*t together and see wht happened.

And hack the teams did.  To set the foundation, the brands from Home Depot, Kraft Foods presented their business briefs, covering their business and marketing goals, and the API tech teams provided overviews of how their services worked.  Over the course of the next 48 hours, hackers put together over 40 projects–>$20K in prize money, free beer and food will have that kind of impact–that resulted in demos showing all sorts of ways these brands could leverage mobile apps and technologies to achieve their business goals.  Where 6 months ago the brands were lacking an approach, they left this weekend with dozens of starts to useful projects.

This was a big step forward for a few reasons.  First, its really cool to see brands getting influenced by the SIlicon Valley ethos, and see an example of openness to trying a new way of solving a challenge.  Rather than depend entirely on a top down planning process at corporate, it was cool to see these companies open themselves up to a new approach.

Second, I think we will see more brands pushing this type of hacker approach into leveraging technology in their business.  This only makes sense: as new technology waves create more and more disruption to traditional media, brands will get increasingly hungry to take advantage of this sooner.

Third, if you agree with the above trend, then I think agencies may start facing competition from more hacked together projects, and they will need to respond.  If a brand can host a hackathon for a few tens of thousands of dollars and get projects in a weekend that rival what they get for hundreds of thousands of dollars and months of time, then brands will do more of that.

I think there is a reasonably good chance that change is coming to the marketing of a big brand near you, and I think that’s a great thing.

 

 

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Yep. 100%. Mobile is where the growth is.

I’ve not had time to scrub through all the announcements at Google IO.  I’m  looking forward to, as sounds like there’s a lot of interesting stuff that came out of there, and I’m especially keen to gauge the steps Goog is taking to make the Android ecosystem healthier.

But before I get to that, VentureBeat covered uber-VC (uber meaning, superb/bigtime, not a transit service), Fred Wilson’s post, Mobile is Where the Growth Is.

As usual from Fred, it’s a great post.  Our portfolio has focused for some time on mobile-first investments, and we’re watching the same kind of surge that he describes.  Web flat-ish, and mobile growing like crazy.   Expect that to continue.

Here are some additional things I’d add and shade.

First, totally agree with this statement:

Mobile does not reward feature richness. It rewards small, application specific, feature light services. I have said this before but I will say it again. The phone is the equivalent of the web application and the mobile apps you have on your home screen(s) are the features.

I take this further. Specifically, mobile creates a new opportunity to disrupt incumbents due to the very small screen size that Wilson mentions.  Because there’s limited screen size and input mechanics, a fully-fledged service built for the web can’t replicate the entire thing to mobile.  And while they can’t replicate their full web- or PC-based service, I can’t think of any PC- or Web-First app that’s really taken a shot at re-envisioning its delivery on mobile.

For example, think about Adobe AcrobatMicrosoft Excel, or even Yelp.  Any of those work in some capacity on mobile.  But they were all conceived in a time when the PC was the portal to the web.  And it shows in their mobile execution.

In this context, a company like Foodspotting, conceived as a mobile first and mobile centric approach that focused on pictures of food rather than entire text based reviews and rants on local, has an opportunity to carve a (fast-growing) niche in a market that most thought was going to be entirely owned by Yelp. Having the limited screen size opens up an opportunity for new entrants and new brands to displace the incumbents, because mobile users have different usage patterns and more focused requirements relative to the PC web. (Disclosure: BlueRun is an investor in Foodspotting.)

Second, I think the opportunity and the disruption around mobile is only at the very beginning stages.  I think this is because the device is always with you, and users are using it in so many contexts that are near and dear to their lives and work.  Sitting a a computer is great and all, you’ve got a keyboard, a screensize, etc., but there’s no question that having a fully functional computer in your pocket that you can use to do basically anything at any time gets more engagement — in terms of time and emotion.  Think about it: it was only about 2 years ago, that you still saw quotes from Blackberry users saying that you would pull a Blackberry out of their dead hands.  Did anyone *ever* say that about using a computer, even a Mac?  They did, but it’s been like 20 years, since people have felt that way about computers.

Because a mobile device is always with you, I think that in addition to the opportunity to create new mobile-centric brands that can disrupt existing incumbents, there’s an opportunity to build a brand around the emotion and connection that a mobile-centric service provides you.  With Foodspotting, the team there focuses heavily on creating a community and service that’s very positive.  You won’t find trolls or flame wars on whether your local Thai place is good or not.  With Foodspotting, if you like the dish, take a photo and submit.  If you don’t, no worries, don’t submit a photo.  At one level, this is a small tweak.  But at another it’s profound.  As a mobile experience—again, tightly controlled due to screen size–makes a difference as the tone and manner on Foodspotting is really positive and affirming, a fun place to go and explore.

Another portfolio company of ours, Thumb, sees a similar benefits. Thumb offers a very simple approach to asking questions and getting responses–think Quora but really simplified for mobile.  Ask any question on Thumb and within a few seconds you’ll start getting responses and comments.  On ANYTHING.  I got 70 responses in a few minutes asking whether I should see The Dark Knight Rises in IMAX or in the Cinema (70% voted IMAX).  I got 50 who affirmed my love of Triscuits. It’s awesome to get these responses immediately, as it feels like what it’d be like to be a Twitter Celebrity for a Day, but for every post you make.  It’s great.

Here’s why I think it works.  Thumb is mobile-centric and its simple.  The simplicity drives crazy engagement: when you post a question, you’ll get crazy numbers of responses.  Because I never go *anywhere* without my iPhone in my pocket, anytime I ask Thumb a question, I come away with a great affirming experience that my question is getting answered and people are engaging.

I think these two examples are only a few of many, many others that are thriving on all sorts of dimension with this transition to mobile.  It’s a new platform, and it’s got new dynamics.

And with iOS and Android duking it out and with Windows still on the horizon as a potentially credible alternative, there’s fragmentation, a great thing to drive more innovation across the industry.  In my mind, we’re in the early innings here.

Whether its ad networks or adtech, social local, gaming, developer tools or enterprise, there’s a lot ahead in mobile.

 

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Breaking stuff at the Big Brand Hackathon

Another weekend, another hackathon in San Francisco.  I enjoy hackathons.  You see teams go from nothing to demo in two days.  You see hackers at their most creative.  You usually see the usual suspects on the developer-focused PaaS or backend API businesses (Urban Airship, Twilio, Retailigence, and others), which provides great intel on what’s going on in the developer market, a good leading indicator in the space.  And increasingly, you’re seeing high school and junior high kids showing up and getting projects done along with the grown ups.

I’m always amazed at what a little beer, pizza or tacos, some schwag, and a few thousand dollars in prizes can do in terms of fueling hackers getting together and getting stuff built.  It’s not the money, of course, that gets hackers together for hackathons, it’s more about just having the opportunity to build stuff quickly.

This weekend, the Big Brand Hackathon was held at Madrone Studios in San Francisco.  What was new and different about this hackathon relative to others I’ve attended is that you had Big Brands (makes sense huh?) Kraft and Home Depot engaging and participating.  Kraft and Home Depot both provided briefs to the hackers on what business problems they were trying to solve for over the weekend.  Examples of business problems included:

  • How can Kraft drive more brand engagement with Ritz Crackers?
  • How does Toblerone become more of an everyday product in the minds of users?
  • Drive more user acquisition of Home Depot’s Garden Club.

With these briefs and some incentives from the brands, and with participation from the API companies, YP.com, Mashery, OpenShift, Telenav, etc., the developers got hacking.

2 days later, there were over 40 demos that got shown off.  To my mind, about a dozen of those projects were basically ready to get picked up by the brands, polished a bit and released to users.

This was eye opening, to me and the brands.  The brands, I think, left the Hackathon wondering why they spend hundreds of thousands of dollars with agencies to wait for months for stuff to roll out in an orderly fashion to users.  The hackathon model turned this on its head.  Instead, brands could basically post prizes of a few thousand bucks and have hackers just go to town.  There will be some garbage that gets out to users, but the net is that the brands will get better connected with users, and they’ll figure out how to distribute this stuff consistently and on message.

It’s very interesting: Facebook in a sense pioneered the hackathon and the “don’t be afraid to break stuff,” ethos.  Its apparent to me, from this weekend, that this ethos is going to start bleeding beyond Silicon Valley high fliers and big brands are going to evolve.

 

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A Giant Awakes: Microsoft Surface

LOS ANGELES, CA - JUNE 18:  The Microsoft tabl...

Microsoft yesterday announced its new Windows Surface tablet.  Though prices and release dates are not yet confirmed, this won’t stop the prognosticators from calling Surface DOA or a Kick Ass Return.

I’m bullish.  I’m excited.  For a bunch of reasons…  Here they are:

We need competition on Tablets.  Right now, iPad is totally kicking ass in Tablets–it’s not even close right now.  Android Tablets are the Bump of the Tablet world–lots of press that there’s tons of users, but no one has seen a user in the wild. Having MSFT enter with a credible device is good for the tech industry and for the world.

I want a keyboard!  I love my iPad: it is totally and completely awesome for reading and deleting email, and for reading news.  It is total crap when it comes to composing or dealing with emails that are not deletes.  Why?  No keyboard–you can’t type.  I appreciate Siri as an alternative–in the phone form factor in particular–but having a keyboard for a tablet is definitely something I’ll check out.  Would be great to have an easy way to power through more email via keyboard than trying to speak to an iPad.  Nice!

Office + Surface <> MSFT Zune.  If you believe MSFT’s earning calls, which I do, many of us are still using Microsoft Office products.   I still use MS Excel and PPT a fair amount.  (Goog Docs is fine for most docs.)  Blending Microsoft Office and Surface is something I’m super excited about.  Can’t wait.

To me, this is the big kahuna as to why I’m bullish on this effort where I was more skeptical on Zune.  Zune was trying to battle against Apple’s iPod and iTunes service–a value proposition that Apple had all the strength and leverage.  Surface is different.  Surface leveraging Microsoft Office is a big deal, as Office is still a huge franchise.  This makes this play totally different.  (BTW, for Microsoft watchers, don’t forget: Windows President, Steven Sinofsky is the former head of Office, so this integration will be slick #justsayin’.)

Hardware Channel Conflicts will get worked out.  MSFT haters are pointing out how much pushback Windows OEM partners will have on Microsoft’s entry into the Tablet and the Hardware space with tablets.

Do you know what my response would be if I were at Microsoft talking to these OEM partners?

I’d probably ask these questions:

How long have we known about the iPad?  (3-4 years.)

How many SKUs have we produced that are reasonable alternatives? (0)

How important do you view the Tablet business over next 5 years? (Very.)

Given that, would you rather be part of an ecosystem that has at least 1 credible alternative or would you rather continue getting your ass kicked by Apple?

The answer is clera.  In 2012, there are effectively zero competitors to the Apple iPad.  We’ve all seen the device in market for years, and the best offerings so far– the Samsung Galaxy Tab IMHO–have gained little share.

So my view is the Microsoft ecosystem has got to  take it to them and raise the water line on Apple a little bit.  Let’s make them sweat at least a little bit .  Ultimately: let’s get on the field.  Then let’s get the ecosystem moving forward.  Let’s build a next generation as the WinTel / WinARM consortium of the 90’s and get after it.  But let’s get on the field.  Otherwise, we’re all just going to continue to get screwed.

 

So to me, a Giant is now very much awake.  And the Giant of MSFT should be: Tablets are about as core a threat as Microsoft can face.  All hands are on deck, and while yes its late, and yes its not got the apps, the Surface and the Microsoft effort here will be one to watch.  Certainly not to be trifled with or discounted.

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