April 2009 Entries

Microsoft's Walk vs Microsoft's Talk

Not so many columns ago, I urged Microsoft to do something amazing in search. Last week, they did. But it wasn't in a good way. I was on the road last week, and I saw three different things land in my inbox about Microsoft and its search efforts. With each email, my frustration mounted. Finally, Friday as I was sitting in Seattle airport, I couldn't contain myself anymore. I sent an email to the most senior person I knew at Microsoft Search. The gist of the email was "don't do it," Yesterday, I got an email back thanking me for my "honest" feedback. Yet somehow, I don't think it will make a difference.

Here were the articles I saw:

One - Google can't innovate but Microsoft can, according to Bloomberg.com:

"Being the underdog in the Internet- search market has one advantage for Microsoft Corp. Chief Executive Officer Steve Ballmer: He says his company can experiment, while rival Google Inc. plays it safe. 'Google does have to be all things to all people,' Ballmer said... Our search does not need to be all things to all people.'"

I believe Ballmer is right here, in theory. What's happening in reality is something very different. But let's hold that thought for a moment.

Two - Search isn't solved, according to Arstechnica.com:

"We're not at where we'd like to be," Weitz [Stefan Weitz, Microsoft Web Search Team] began, and then dove in to explain that people are generally happy with how their search engine is working, until the data shows that they are not."

Nobody is arguing that the 10 blue links is the pinnacle of search, especially Google. So it's hard to disagree here. We judge relative to what we know, but we're on the brink of blowing that away.

So far, Microsoft is saying all the right things.

Three - Microsoft to spend $100 Million in advertising new search engine, according to Adage.com
"Industry executives expect JWT, part of WPP, to unveil an estimated $80 million to $100 million push for the new search engine in June, with online, TV, print and radio executions."

What? This was the email that drove me over the edge. $100 million? On Kumo..or Kiev or whatever they call this? This is wrong on so many levels, I hardly know where to start.

I'm not going to pass judgment on a search interface I haven't got my hands on. I don't think it's fair to make a call on a few leaked screenshots. But I will say that I've seen nothing revolutionary about this. And that's the point. As I've said over and over and over, Google is a habit. You don't break a habit with $100 million in advertising. You don't break it with promises of search usage kickbacks. And you certainly don't break it with a marginal and incremental change in the search experience. Microsoft is right to introduce categorized search. They're right to explore changing the search interface. No arguments there. But this is not the time to draw $100 million in attention to it. Best case scenario: no improvement to market share. Worst case, the biggest drop yet, if the usability aspects haven't been fully thought out.

If you accept the message in the first two emails, Microsoft needs to be a search start-up: bold, nimble, visionary, passionate and rebellious. And there's no way in hell that will happen on the Redmond campus. Bold, nimble, visionary, passionate rebels are nowhere to be seen.

The First Step is Admitting the Problem

So accept what you are, and more importantly, accept what you're not. Tweak your search product to improve experience, catch up and try to stem the market share bleeding. There's nothing wrong with that. And stop with the rebranding. Every time you do that, you're breaking the established habits of your own users and giving them the chance to go elsewhere. This strategy will blow up in your face.

At the same time, stop worrying about winning the 10 blue link search war and start planning for the next battle. That's when the Google habit will be broken and where you have a chance to change the game. Here are the things Microsoft needs to start thinking about:

Stop worrying about relevance and start worrying about usefulness.
Understand that search patterns represent a complex system and look at ways to discover emergent behavior from that system. Use your findings to improve everyone's search experience (this is an element in Stephen Wolfram's Alpha project)
Use every signal at your disposal to interpret user intent in an implicit way. Embrace personalization, behavioral patterns, the social graph, task context and anything else that helps uncover what's in a person's mind.
Reinvent the interface. Embrace how humans follow information scent. Use more intuitive interface tools to allow us to choose, filter and drill into promising paths. And make it workable in much less real estate.
Make a better search experience personal and portable, seamlessly transferring from the desktop to the mobile device.
Hold Google's feet to the fire. Follow your own advice and innovate faster and better than they do. Because you're right, it's difficult for them to innovate and risk alienating their user base. But here's the flipside to that. It's easier for them to take that risk when there's no strong alternative to go to.

Before You Say No, Just Listen...

If Microsoft really wants to spend $100 million on search, here's my suggested plan. Take $20 million and fund 10 start-ups for $2 million each. Give them a one-year mandate to reinvent search. Take the remaining $80 million and use it to develop a TV reality show. Call it "Google Killer." Get Steve Ballmer to host. He can throw chairs, do the Monkey Dance and lead the audience in a chant of "Developers, Developers, Developers." I guarantee you'll get a better return on your investment.

And if someone at Microsoft is listening, I'm free to discuss the development deal for the show. Hell, I'll even be one of the contestants. Call me anytime.

posted @ Friday, April 10, 2009 8:42 AM | Feedback (29)

More On The Confluence Of Spring Break

And the third "Spring Break" column, with a little history lesson thrown in! This was published last Thursday in MediaPost.

Starting in the 1400s, an explosion of exploration came from Europe called the Age of Discovery. Prior to that, the world was a much smaller place. In fact, the end of the world was reckoned to be somewhere past Cape Bojador in West Africa. But during this time of exploration, the boundaries of the world were pushed back dramatically. By the end of the 15^th century, Bartolomeu Dias rounded the Cape of Good Hope, Vasco da Gama sailed by this route to India and Christopher Columbus had sailed to the new world. Just 20 years later, Ferdinand Magellan would become the first to circumnavigate the globe. In just over 100 years, the world as we know it was discovered. And it was all due to one person: Prince Henry the Navigator.

Meet Prince Henry

Prince Henry was born in 1394, the third son of King John I of Portugal. At the age of 27, his father made him governor of the province of Algarve, in the south of Portugal (coincidentally, where I spent my spring break family vacation). Although he became known as Prince Henry the Navigator or Seafarer, neither is very close to the truth. Prince Henry spent little time on a boat. Henry was really more a very capable administrator. He built the foundations that would propel Portuguese explorers to explore the world, expand the empire and bring untold wealth back to Portuguese shores. Henry set in motion a chain of events that changed history.

Henry accomplished this in four ways:

He convinced Portuguese patrons, primarily the very wealthy Order of Christ, to provide a consistent source of funding for discovery, allowing for ongoing exploration.
He ordered the development of the much lighter and faster caravel, which allowed for more precise coastal navigation and faster crossings. It became the preferred vessel for Portuguese exploration.
He created a center for navigational education and cartography at Sagres, where the Portuguese developed the techniques to allow them to sail much further away from land, something that almost certainly would have resulted in disaster before this.
He created a "revenue model" for exploration, convincing his family of the benefits of opening up the spice and incredibly lucrative slave trade (moral judgments aside), all flowing into the nearby port of Lagos (where we stayed during our vacation).

In short, Henry created the conditions for success that lead to the explosion of discovery. The desire to break the Portuguese stranglehold was why Spain financed Columbus's journey (rumor has it that Columbus spent time at Sagres). And the later period of English discovery was also precipitated through competition with Portugal and Spain. And it all began with an effective administrator.

Taking a Lesson from History

Now, let me draw together my three disparate ideas that I started last week, (although I'm sure you're already well ahead of me):

In "Outliers," Malcolm Gladwell argues that success isn't pure chance. It's a combination of conditions that can be planned and set in place. Certainly, Vasco da Gama didn't luck into his discovery of the route to India.
Ray Kurzweil (whether or not you agree with his vision of the future) shows that technology can release us from the constraints that threaten our world, including disease, poverty, environmental damage and even death.
And Henry the Navigator provides historical proof of the value of a visionary and capable administration.

We who are fortunate enough to find ourselves in rich, developed countries have enjoyed a disproportionate share of success. Even during the current financial turmoil, we are still, by far, the wealthiest and most advantaged people on the face of the earth. But we cannot move forward with a misbegotten sense of entitlement or by taking our success for granted. We have to put the foundations in place that will lead to success in a new and dramatically different world. We have to follow in Henry's footsteps, building the foundations that will lead to discovery and expansion of our world. If we don't, someone else surely will. In fact, they already are. To the East, exactly those foundations are currently being put in place.

We need an administration that is capable of building this foundation. And here, we can learn a lesson from history. This administration must:

Realize that discovery is an incremental and imperfect process. For every success, there will be many more failures. But success is impossible without those failures.
Be bold and consistent in guaranteeing funding for technological discovery.
Be wise in balancing the moral dilemmas presented by technology. The good of the many must prevail against the knee-jerk reactions of the few.
Be prepared to completely reinvent our concept of education, because we are being quickly left behind.

We have been blessed with huge advantages and the future is ours to lose, but there is nothing guaranteed here. In the 1300s, Portugal was a small and relatively insignificant player on the European landscape. But, because of one man's vision, they ruled the world just one hundred years later. It was an era of discovery and opportunity that was unequaled in history. But it pales in comparison to what awaits us.

Let's not blow it.

posted @ Saturday, April 04, 2009 8:50 AM | Feedback (4)

The Confluences Of Spring Break

This was the second "Spring Break column", originally published in MediaPost on March 26, 2009

It's funny. Given three disparate ideas and enough time out of the office, I can somehow manage to tie it all together into a Search Insider theme. The ingredients for this column? The two books I chose to pack to read on my Spring Break vacation, and a bit of history from Southern Portugal, where I've spent the past week.

Odd Man Out

The first book was Malcolm Gladwell's latest, "Outliers" (chosen primarily because reading Gladwell doesn't seem like work at all, a key criteria for vacation reading). In typical Gladwellian fashion, he takes a central idea -- the outliers that fall beyond the bell curve aren't there solely because they're on the thin edge of pure statistical probability -- and explores it with a mix of story telling, research and undeniably compelling writing. If one can excuse Gladwell for his "Just So" tendencies, putting his ideas across from his single perspective, with a rather fast and loose selection of supporting arguments, it made for a painless and fascinating read.

In "Outliers," Gladwell looked at statistical oddballs as diverse as Bill Gates (in terms of success), The Beatles (again, success), Chris Langan (a genius with an IQ of 195 who never made it through university), Korean Airlines (for the frequency of crashes in the '80s and early '90s), a small town called Roseto in Pennsylvania (where everybody lives longer than they're supposed to, statistically speaking) and the hockey players that make it to the WHL (Western Hockey League) and eventually, the NHL (like me, Gladwell also grew up in Canada).

Luck is What You Make It

Gladwell's point, which he makes persuasively, is that these things are not simply a matter of odds or blind luck. There are distinct patterns of influence that tend to create outliers. They include your socioeconomic status, your culture, your upbringing and even your birthday. Here is a smattering of Gladwell's reasonings:

NHL hockey players make the big leagues because they're born early in the year, physically dominating their age groupings in minor hockey, advancing to rep teams, thereby getting more coaching and ice time.
Bill Gates, through a series of lucky occurrences, managed to amass 10,000 hours of programming experience as a child and teen at a time where access to computers was very hard to come by.
The Beatles jumped ahead of their contemporary competition because the 8-hours-a-day, 7-days-a-week performing schedule in Hamburg ground down their rough edges and smoothed out their act.
Korean Airlines had an abysmal safety record because Korean culture made it taboo to question the wisdom of the pilot, even if he had the plane heading directly into a mountain
Chris Langan was born with one of the highest measured IQs in America, but was also born poor and disadvantaged, leaving him without the social skills required to successfully navigate through university and on to adult success.

Gladwell's conclusion Luck, either good or bad, isn't simply left to chance. And even inherent gifts, like Langan's IQ, aren't a guarantee of success. Luck can be manufactured. The conditions for success can be consciously put in place in a system where the desired outcomes are known. So, what are those outcomes? That brings me to the second book I brought on vacation.

Welcome to Kurzweil's Singularity

Ray Kurzweil is definitely out there. This is a man who takes 250 nutritional supplements every day and gets seven blood transfusions every week so he can re-engineer his body to live longer. He believes humans and computers will merge in the next few decades, vastly pushing back the known limits of human intelligence, an event he calls the Singularity.

My other book was Kurzweil's "The Singularity is Near" -- a book chosen primarily for its heft of over 600 pages. I knew it would keep my busy through to the end of my two- week vacation. A quick summary of Kurzweil's predictions from the book might lead one to question his mental stability:

Physical bodies will become essentially meaningless in the next century, as we will live in a virtual world with physical representations of our own design.
Table top "nanofactories" will create everything we'll need, atom by atom, from a lump of raw materials.
We will upload our personalities to a computer, thereby living forever.
Technological evolution has taken over from biological evolution, giving humans the freedom to design our future.
Aging and disease are a few decades away from being conquered forever.
Nanobots will allow us to control every element of our environment, eliminating pollution.

Kurzweil is manically optimistic about our future, and that future is not hundreds of years away. Most of Kurzweil's seminal events happen before 2050. As the title of the book says, the merging of biology and technology is near (starting in 2030).

Just Crazy Enough to be Right

But Kurzweil is far from a quack. The reason for the imminent horizon is the rapid, exponential increase in the rate of technological advancement. Kurzweil is meticulous in pulling together the current state of affairs in areas including nanotechnology, robotics, artificial intelligence, genetic engineering and neuroscience to build a rock-solid foundation for his predictions.

Kurzweil's view of the future is positively blinding in its enthusiastic brilliance. He is adamant that there is no problem that can't be overcome with enough intelligence, a resource that will explode in abundance thanks to the Singularity. And his track record is sound. Kurzweil's predictions have been remarkably accurate in the past. It's hard not to get caught up in his optimism. Even if it all doesn't come to pass, Kurzweil paints a picture of a future worth striving for.

So, those are the first two ideas that converged over my Spring Break. Luck doesn't just happen. We're not held prisoner by some probabilistic crapshoot. And for the first time in memory, I saw a vision of the future that wasn't predominantly pessimistic. I'll leave it there for now. Next week, I'll tell you the story of Portugal's Henry the Navigator.

posted @ Saturday, April 04, 2009 8:44 AM | Feedback (3)

Looking For The Future? Look For Chaos, Not Stability

I recently had the opportunity to go to Portugal and London with my family for Spring Break. Three Search Insider columns came out of different impressions, books I read or other thoughts I had while away. This was the first one, originally published on MediaPost on March 19th.

This week, someone asked me about sustainable business models in the Internet. Earlier the same day, another person asked me about defensible models. Both questions left me perplexed. I wasn't trying to avoid them. I just didn't know how to answer. So, some 48 hours later, I offer this column as a somewhat belated response. It isn't an answer, as I'm still just as perplexed. But now at least I know why.

So why are people asking about defensible and sustainable business models on the Internet? Well, if there's one thing the Internet has done, it's brought sky-high valuations back to earth. So, investors doing what investors do, they're suddenly looking for "bargain" companies that have mature business models and trial-tested management. Hence the quest for sustainability and defensibility. Reasonable, right? It certainly makes sense if you're going shopping for a private equity fund. But in the last two days, I've decided it's almost exactly the wrong question to ask. It's like looking for dry ground in a tsunami: it may give you some temporary peace of mind, but don't count on it to last long.

The Quarter Century Electric Switch

Nicholas Carr's book, "The Big Switch," ties the development of the Internet to a previous discontinuous innovation, the electrification of America. In it, he provides a fascinating recount of the unsung visionary who laid the foundations of the power grid we take for granted today, Samuel Insull. Insull started as Thomas Edison's clerk, but soon split with his mentor in his vision of the future of electricity. Edison, for all his brilliance, was thinking too small. He was concentrated on building individual DC generators for industrial applications. Insull saw the promise of a ubiquitous power supply, centrally generated and then distributed. It is Insull, not Edison, who is responsible for the power receptacle that probably sits no more than 10 feet away from you right now.

In the very earliest days of electricity, one would have been a fool not to choose Edison as the forerunner, the candidate most likely to carve a business out of the new frontier. His innovations harnessed electricity and made it usable.

But if you had bet on Edison to provide a sustainable model, you would have lost. It was Tesla's AC standard, not Edison's DC, that proved to be the one adopted. And it was Insull's vision of electricity as a utility that changed our world.

The idea was simply too big for one man. And it was bringing all the implications of that idea together that proved to be the true agent of change. It launched a shift in American (and global) lifestyles that Edison never envisioned. But from the initial stages in the final years of the 19^th century, that shift took three decades to be fully realized. It took the building of new infrastructure, the development of new industries and the adoption of certain ways of doing things. It took thousands of visionaries, not one, to realize the significance of harnessing electricity. Imagine then the impossible task of finding a defensible, sustainable business model for electricity in 1895. In hindsight, it's clearly laughable to even attempt such a thing. But today, we're trying to do exactly that with the Internet.

Fragmented Functionality

There is one big difference between the Internet and electricity. An electrical appliance is an electrical appliance. Its functionality is usually independent. A blender doesn't become more useful if you also plug in a toaster. But the Internet lives on mashups and APIs. Apps can become exponentially more powerful if they plug into other apps.

Today, the Internet is a fragmented place. Functionality lies across the grid in a million different shards and chunks. Some of these are larger than others. Search is a particularly large one. And today, we're just beginning to explore how all this functionality can come together. The infrastructure has been laid. The grid has been built. Now it's time to start plugging in apps and see how they can work together. If you think the last decade brought discontinuous change, wait til you see what the next decade has in store. We're just getting ready to take the Net for a spin and see what it can do.

I've come to realize that there's no such thing as revolutionary change. It only appears so when you look at it in a historical perspective. Instead, there are tipping points of incremental change. Every supposedly revolutionary development was built on the back of hundreds of other developments. Cumulatively, they indeed change everything, but each development could never have happened without its supporting cast. It wasn't Edison's development of the incandescent light bulb that lit up America. It was a thousand developments, by Faraday, Golvani, Ohm, Volta and many others. Each one pushed us closer to the tipping point. When we reach it, we step forward, never to look back.

Back to the Original Question

To return to the beginning: What is a sustainable, defensible business strategy online? I have no idea. I don't think such a thing exists. For all the excitement, for all the promise, there are no sure bets. The two concepts are incompatible. You'll have to pay your money and take your chances. To cause investors even more discomfort, almost all innovation comes from small start-ups. They far outpace the level of innovation coming out of corporate America. So if you're looking to capitalize on the growth of the Internet, don't look for stability. It's the wrong place to look.

posted @ Saturday, April 04, 2009 8:39 AM | Feedback (2)