I was inspired by this radio story that was on NPR the other day that was all about Superpowers. Not U.S. and U.S.S.R. Superpowers, but superhero superpowers. This American Life is always broken up into acts, and act 1 was focused on whether you would want the power of flight or invisibility. The story delved into what psychological insights might be found by reading into the decisions and comments of the people interviewed, but what I really want to know is what every money obsessed MBA like us wants to know: Which one could you monetize best and how?
At an informal discussion over pizza late at night, several of the "staff writers" talked about this very topic. The best our slightly buzzed brains could come up with for invisibility was espionage, whether corporate or for some national security agency. Of course, your body, once it is dissected to determine what allows you to be invisible, would be worth quite a bit but you won't be able to spend the money on a new Aston Martin and that mansion you have had your eye on since you'll be dead and in several pieces of varying size.
For flight, we came up with delivery (like quick delivery of sensitive items) or, for those who still have a small shriveled black organ that looks like a heart, emergency rescue. Now there probably isn't a ton of money in emergency rescue, but I suppose we didn't want to feel like total jerks.
Now that I'm looking at these "solutions" in the cold hard light of day, and after the buzz has worn off, I have to admit I'm really not that impressed. Seriously, we came up with a James Bond wannabee who will likely spend more time in women's dressing rooms at Victoria's Secret and a glorified UPS delivery guy? Where is the big money? Where is the glory? Apparently not with either of our solutions. I wonder if an invisible marketer or flying consultant would get paid more than non-powered versions?
Can you do better? Probably, since the bar is pretty low. Would you please put me out of my misery and tell me what my poor overeducated MBA automaton brain overlooked? As with all brainstorms, we will accept any idea, even if it's only partially formulated, and will withhold criticism until you have left the room.
Wednesday, August 25, 2010
Friday, August 13, 2010
Quit your bitchin? AT&T's service isn't really that bad?
CNN has an interesting article (link at the bottom) today defending AT&T's network. It makes the same compelling point I have been making for some time: If the network is that bad, shouldn't people be leaving? "Churn" (the industry term for customers leaving the service) is very low at AT&T, pretty much a match for Verizon' supposedly better service and much better than Sprint or T-Mobile. So why all the noise? The article points out that dissatisfied customers tend to be in NYC and SF, both media and tech capitals in the US. So they are just more vocal, and have the soapbox to go with it, about their dissatisfaction.
A few counter and supporting points:
1. One reason churn may not be very high is contracts. AT&T boasts that a large number of subscribers are on contracts and Family Plans, both of which increase switching costs.
2. Another reason churn may be low: iPhone. AT&T is still the only guy that has it.
3. San Francisco is notoriously hard to install new cell towers in, but why isn't that fact affecting coverage for Verizon, T-Mo and Sprint? Is it because they don't have iPhone or other smartphones? AT&T does have the largest number of smartphone users, as a percentage of their total base, among the Big 4.
Wednesday, August 11, 2010
Does the iPhone on Verizon even matter anymore, or does Android = iPhone to consumers?
An interesting article on MSNBC today (see link below) makes an interesting case that it doesn't really matter when/if the iPhone ever makes it to Verizon, or, presumably, any other carrier. The basic argument is that Android has taken off and will continue it's climb, while iPhone will begin to stall and then repeat Apple's historical performance in personal computers, meaning a closed and controlled system will hurt adoption compared to an open one like Windows.
My first thought was that the author was relying too heavily on the assumption that an Android phone is equal to an iPhone in consumers' minds, and I think he may, but he also has some pretty compelling studies and arguments to back up his position. Anecdotally I have read that quite a few Android users still hold up the iPhone as the yardstick to compare their phone to, but that doesn't really answer whether consumers see them as substitutes.
It's an interesting read, check it out:
Thursday, July 29, 2010
Glimpses of an emerging economy..
Being Indian, writing something positive this country entails an inherent conflict of interest! But having just got back from my trip, I cannot seem to resist the urge to write about the rapid changes that I see every time I go there.
Consumers Everywhere..
With an economy that is very similar to the US, driven by 67 percent consumer spending, India has hundreds of millions of consumers still waiting on the sidelines. On my trip, I visited Chennai, Mumbai, two of India's largest cities and Vizag, a smaller industrial city. While all these cities had glitzy new malls for every locality, I was awestruck by the development in my hometown Vizag. Vizag is an industrial city dominated by socialist era India's public sector companies producing materials such as steel, zinc, aluminum, oil, and the country's largest state owned shipyard. Never in my wildest dreams did I imagine that here in this city, there will be half a dozen malls, world class multiplexes, a new IT park, and western style beach-side communities. In these cities and pretty much everywhere, all I could see were new cars, malls, real estate developments, new roads and infrastructure projects. Here, I witnessed the highest sense of consumerism in the general populace that I have ever seen in my country. Furthermore, there was a pervasive sense of optimism across everyone who was working. From the usher in the theater making about $100 a month to the investment banker, everyone is hopeful and dreaming of a bright future.
Entrepreneurs and Business Models..
In describing opportunities in emerging markets, CK Prahlad coined the phrase 'Fortune at the Bottom of the Pyramid'. This fortune is unmistakable being reaped by companies with very innovative business models. One industry that needs a special mention is telecom. With over 600 million subscribers, India is seeing stellar double digit growth in the wireless telecommunications space, which is expected to continue growing well into this decade . Extreme cost competition has led to outgoing call rates as low as Rs. 0.5 (about $0.001) per minute and data plans at $5.0 per month. With about $9.0 billion invested so far, India is expected to witness $40.0 billion of telecom related investments in this fiscal year. Several innovative business models are being built around the cellphone for users to obtain critical data, make payments or complete transactions etc. While there are completely new business models in several sectors, it almost seems as if taking a widely successful business model and tinkering it a bit to suit the 'not so pesky' Indian consumer could lead to guaranteed success. Reliance's foray into retail looks exactly like what Sears,Roebuck and Co. did in the US several decades ago. Add the WalMart 's supply chain efficiency and you have Reliance Trends, a Sears like mall with clothing, appliances, electronics and everything else. Although Indians are highly entrepreneurial, it seems as if the bureaucratic processes and legal systems limit the growth of smaller companies and enable only the large and resourceful entities to expand into several unrelated businesses. There are several stories that would prove me wrong but most likely, they are all limited to the IT sector.
Business - The Indian Way..
The Indian handshake, the Indian nod and that peculiar English accent, while these are some of the funnier elements of how Indians behave and do business, working and conducting business in India is definitely unique. No matter how fast we are growing, we still have our Indian ways. That one phone call can move files or turn around issues which have been stuck in a bureaucratic rut for months or even years. Some industries or sectors seem to be more prone to such bureaucracy than others. The traditional industries such as materials, manufacturing, energy, utilities, infrastructure, transportation, chemicals, etc. seem to be susceptible to the vagaries of government. In the new-age industries such as information technology, telecommunications, and financial services, the government seems to be less intrusive , thus enabling tremendous growth. To conduct business in India, one must however, get used to some aspects that are distinctly Indian: bureaucracy, redundancy, government intrusion or involvement, shaky infrastructure and overall chaos. In my point of view, the most fascinating thing is how things get done . Everything seems to finally work in India albeit at the last minute, just like that Bollywood movie where the hero rescues his family and the heroine and manages to kill the bad guys!
The Haves and the Have Nots..
As I walked around the bustling cities of Chennai and Mumbai, I could not help but resist the stark contrast between the rich elites and the poor and destitute. It is not uncommon to notice an S class Mercedes sedan parked on the side and in the next glance you will see someone digging through a nearby trash bin looking for food. India's surprising rise can be attributed primarily to the capabilities of an educated and knowledgeable English speaking middle and upper middle class populace. The problem lies in the fact that about 30 % of India's population is illiterate and a majority of them live below the $2 a day international poverty limit. It is likely that these people will never get to enjoy the fruits of the nation's rapid economic growth. Although the Congress government is taking the initiative to bring India's growth to second tier cities and villages, it will be several years before rural India sees any significant development. Knowing the Indian government and its efficiency, I wouldn't hesitate to state that rural India might be left out of this growth for a long period of time, unlike rural China, wherein the Chinese government's involvement seems to be producing results. This in my opinion will be the Achilles heel of India's rise to becoming an economic power. A nation with a stark dichotomy between the haves and the have nots.
Nevertheless, India's growth outlook seems to be highly optimistic. A very young, large, and resourceful nation that has an opportunity to reap the population dividend and ride the overall global growth. It took about 30 years for the Chinese to get to where they are, India which opened up its economy in 1991 is about a decade behind and the current decade, in my opinion, will definitely be a landmark one for this largest and most populous democracy.
Consumers Everywhere..
With an economy that is very similar to the US, driven by 67 percent consumer spending, India has hundreds of millions of consumers still waiting on the sidelines. On my trip, I visited Chennai, Mumbai, two of India's largest cities and Vizag, a smaller industrial city. While all these cities had glitzy new malls for every locality, I was awestruck by the development in my hometown Vizag. Vizag is an industrial city dominated by socialist era India's public sector companies producing materials such as steel, zinc, aluminum, oil, and the country's largest state owned shipyard. Never in my wildest dreams did I imagine that here in this city, there will be half a dozen malls, world class multiplexes, a new IT park, and western style beach-side communities. In these cities and pretty much everywhere, all I could see were new cars, malls, real estate developments, new roads and infrastructure projects. Here, I witnessed the highest sense of consumerism in the general populace that I have ever seen in my country. Furthermore, there was a pervasive sense of optimism across everyone who was working. From the usher in the theater making about $100 a month to the investment banker, everyone is hopeful and dreaming of a bright future.
Entrepreneurs and Business Models..
In describing opportunities in emerging markets, CK Prahlad coined the phrase 'Fortune at the Bottom of the Pyramid'. This fortune is unmistakable being reaped by companies with very innovative business models. One industry that needs a special mention is telecom. With over 600 million subscribers, India is seeing stellar double digit growth in the wireless telecommunications space, which is expected to continue growing well into this decade . Extreme cost competition has led to outgoing call rates as low as Rs. 0.5 (about $0.001) per minute and data plans at $5.0 per month. With about $9.0 billion invested so far, India is expected to witness $40.0 billion of telecom related investments in this fiscal year. Several innovative business models are being built around the cellphone for users to obtain critical data, make payments or complete transactions etc. While there are completely new business models in several sectors, it almost seems as if taking a widely successful business model and tinkering it a bit to suit the 'not so pesky' Indian consumer could lead to guaranteed success. Reliance's foray into retail looks exactly like what Sears,Roebuck and Co. did in the US several decades ago. Add the WalMart 's supply chain efficiency and you have Reliance Trends, a Sears like mall with clothing, appliances, electronics and everything else. Although Indians are highly entrepreneurial, it seems as if the bureaucratic processes and legal systems limit the growth of smaller companies and enable only the large and resourceful entities to expand into several unrelated businesses. There are several stories that would prove me wrong but most likely, they are all limited to the IT sector.
Business - The Indian Way..
The Indian handshake, the Indian nod and that peculiar English accent, while these are some of the funnier elements of how Indians behave and do business, working and conducting business in India is definitely unique. No matter how fast we are growing, we still have our Indian ways. That one phone call can move files or turn around issues which have been stuck in a bureaucratic rut for months or even years. Some industries or sectors seem to be more prone to such bureaucracy than others. The traditional industries such as materials, manufacturing, energy, utilities, infrastructure, transportation, chemicals, etc. seem to be susceptible to the vagaries of government. In the new-age industries such as information technology, telecommunications, and financial services, the government seems to be less intrusive , thus enabling tremendous growth. To conduct business in India, one must however, get used to some aspects that are distinctly Indian: bureaucracy, redundancy, government intrusion or involvement, shaky infrastructure and overall chaos. In my point of view, the most fascinating thing is how things get done . Everything seems to finally work in India albeit at the last minute, just like that Bollywood movie where the hero rescues his family and the heroine and manages to kill the bad guys!
The Haves and the Have Nots..
As I walked around the bustling cities of Chennai and Mumbai, I could not help but resist the stark contrast between the rich elites and the poor and destitute. It is not uncommon to notice an S class Mercedes sedan parked on the side and in the next glance you will see someone digging through a nearby trash bin looking for food. India's surprising rise can be attributed primarily to the capabilities of an educated and knowledgeable English speaking middle and upper middle class populace. The problem lies in the fact that about 30 % of India's population is illiterate and a majority of them live below the $2 a day international poverty limit. It is likely that these people will never get to enjoy the fruits of the nation's rapid economic growth. Although the Congress government is taking the initiative to bring India's growth to second tier cities and villages, it will be several years before rural India sees any significant development. Knowing the Indian government and its efficiency, I wouldn't hesitate to state that rural India might be left out of this growth for a long period of time, unlike rural China, wherein the Chinese government's involvement seems to be producing results. This in my opinion will be the Achilles heel of India's rise to becoming an economic power. A nation with a stark dichotomy between the haves and the have nots.
Nevertheless, India's growth outlook seems to be highly optimistic. A very young, large, and resourceful nation that has an opportunity to reap the population dividend and ride the overall global growth. It took about 30 years for the Chinese to get to where they are, India which opened up its economy in 1991 is about a decade behind and the current decade, in my opinion, will definitely be a landmark one for this largest and most populous democracy.
HC in HD
Seems like Netflix gives a lot of thought to Human Capital ("HC"). Techcrunch posted a leaked internal presentation from Netflix which talks about their corporate culture. Admittedly it is oversimplified and gives up on the advantages of variable comp as a motivator. But I like the simplicity, and I like that they are thinking about it.
Here's an example: their vacation policy is that there is no policy. If you don't track how many hours your employees are working (who are probably working more than 8 hours a day), why track how many hours of vacation they are taking?
That sounds great, until you realize that, as an employee, you don't "own" any vacation days and start worrying about how your manager is going to look at your long vacation in the Bahamas.
Culture
View more presentations from Reed Hastings.
Tesla, meet thy end
Full disclosure: I think the idea of electric, hybrid, diesel, etc. cars are great. Any new powertrains that make cars more versatile and less harmful to our environment I am all for.
If I had to put my money on it, I would bet that Tesla won't be around, as an independent company for much longer. If I had some extra money laying around, I would be willing to take even longer odds that it won't be around as a brand much longer either. Why? Here are a few reasons:
1. Nissan Leaf
2. Chevy Volt
3. Audi Etron
4. Mercedes Benz SLS Electric
5. several Porsches
Each of these cars highlight key areas where Tesla has serious issues to address.
Manufacturing
Tesla has not ever built and designed any vehicle entirely in house. I'm not saying that all other car manufacturers have, everyone uses components built by suppliers or designs from outside the company, but the Tesla roadster is built upon what is essentially a Lotus frame, one that is very thinly disguised at that. Tesla states they want to bring the design and production of the Model S sedan in house, which makes tons of sense, but wanting and doing are quite a ways apart (just ask the dozens of would be cottage carmakers in the UK). Tesla has also said they plan to use the former NUMMI plant in Fremont to build their cars. The same plant that was union before it was shut down. Tesla will have a lot to learn from dealing with the union, including negotiating and signing a labor contract from scratch. Add in that the costly development of the Model S isn't even completed yet and you have a steep hill to climb.
Marketing
How many Americans have heard of Tesla? I'll guess less than 10%. If you live on the coasts, are a greenie, are really into cars or very wealthy, then you probably have heard the name but in the rest of the country it has a long way to go. "No big deal" you say, "they are playing to a niche market." OK, how small a niche do you think a car company can play to and still survive? Admittedly, Morgan has lasted quite awhile, but they employ about 160 people and crank out about 600 cars a year. That doesn't sound like enough to really help save the planet, and it probably won't be enough to cover the costs of developing a car from scratch. Tesla seems intent on saving the planet and you won't accomplish that through low volumes. Additionally, Morgans haven't evolved much at all, but Tesla's competition definitely will, and has.
The biggest issue for Tesla is represented by the models I pointed out above. Lets look at pricing:
Leaf: $32,780 (excluding federal tax credit)
Volt: $41,000 (same as above)
Etrons: Will vary, probably from as low as $50K to $200K
SLS Electric: Too early to say
Porsche: Way too early to say, but it's coming
The Tesla Roadster starts at $101K and the Model S will start at $56,500. Both of these prices are before the tax credit.
Do you see the problem? I can buy an electric car from Nissan or Chevy, who have been around and building cars for a long time, for 32-41 grand, or I can buy a 56K Tesla. For the sports cars, I can buy a Lotus Elise with an electric drivetrain from Tesla, or I can buy a sportscar from Mercedes Benz or Audi. Which one are you really going to buy? Still on the fence? Let's take into account things like...
Dealership Network
For breakdowns, at least initially, I think Tesla is on par with the competition. Nissan and GM will need some time to handle the teething problems, and I'm sure we will all hear about someone taking their Leaf or Volt for service and someone at the dealership trying to gas it up, or wanting to replace the catalytic converter. With performance cars, there are always special considerations regardless of the manufacturer. But over time, how far will Nissan, GM, MB and Audi pull away in terms of service? One huge advantage they have is a dealer network. They can each provide you service and if needed, tow your car, to a nearby dealer. Tesla doesn't have that and has insisted on taking an Apple-like approach to their dealer network, owning each location. That will limit the number of dealerships that ultimately pop up.
At this point some of you are going, "OK so what? Do you think there are a ton of Spkyer, Lotus, Morgan, etc. dealerships out there?" There aren't a ton but then again, they aren't necessarily trying to revolutionize the industry, an industry that in the U.S. has more products on the road than people. Tesla is and this is no easy task.
Investment from Daimler and Toyota
Yes, Daimler and Toyota have both invested in Tesla. For Daimler, I believe it was an investment in the purest sense. They think there is a chance that Tesla will develop their tech enough that it can be used in Daimler products. So does the Mercedes Benz SLS Electric use Tesla technology? No. Kinda weird huh?
Toyota has a marketing angle that I believe is the main reason behind the investment. Toyota had shuttered the NUMMI plant, and Tesla wants to use it. Toyota was also embroiled in the biggest crisis it had ever faced and could have used some positive PR. $50 million later, they have some decent PR spin. But that's not all. Toyota's had been working on, and has prototypes of, plug in Priuses. So why do they need Tesla? Maybe they felt there might be something to gain from looking at their tech, maybe they aren't as far along as they would like, maybe it's a great way to buy a shortcut. I don't know.
Tesla's Impact is bigger than itself
So I've pretty much laid out my argument. All of this means I think Tesla is inconsequential and doesn't really matter, right? After all, Tesla didn't invent the electric car (not by a long shot) and they really haven't mattered much. Those last 4 words are where you and I might diverge since I think they have mattered quite a bit. I think the cars coming from more mainstream manufacturers might have never come, or come much later, if Tesla hadn't stepped in and shown that there is a possibility of producing, and selling, electric cars. Almost as important is that Tesla made an electric SPORTSCAR, not a bland mobile. By starting a fresh new company unconstrained by bureaucracy, Tesla was able to try something that other makers may have thought of and then decided against. There is no doubt that Tesla was seen as arrogant by many, possessing an attitude of "Those Midwesterners are doing it wrong, let's show em." (See here.) Sometimes you have to ignore arrogance and see the idea behind it, it's like being a fan of Kanye West. On the other hand, building, selling and supporting cars is not like doing the same with a website, iPod or computer (Musk says Tesla is more like Apple or Google than GM or Ford) and I really truly think Tesla is going to learn that the hard way.
As a cop out, when someone doesn't believe you, cite others who agree with you. Here are my "cop out" links:
http://www.focus.com/fyi/operations/tesla-next-delorean/
http://www.allcarselectric.com/blog/1020424_tesla-model-s-may-fail-to-deliver-on-its-hype
http://siliconcowboy.wordpress.com/2010/07/08/tesla-ipo-fail-why-marketing-shouldnt-be-left-to-engineers/
http://community.nasdaq.com/news/2010-07/the-truth-about-tesla-motors.aspx?storyid=29959
If I had to put my money on it, I would bet that Tesla won't be around, as an independent company for much longer. If I had some extra money laying around, I would be willing to take even longer odds that it won't be around as a brand much longer either. Why? Here are a few reasons:
1. Nissan Leaf
2. Chevy Volt
3. Audi Etron
4. Mercedes Benz SLS Electric
5. several Porsches
Each of these cars highlight key areas where Tesla has serious issues to address.
Manufacturing
Tesla has not ever built and designed any vehicle entirely in house. I'm not saying that all other car manufacturers have, everyone uses components built by suppliers or designs from outside the company, but the Tesla roadster is built upon what is essentially a Lotus frame, one that is very thinly disguised at that. Tesla states they want to bring the design and production of the Model S sedan in house, which makes tons of sense, but wanting and doing are quite a ways apart (just ask the dozens of would be cottage carmakers in the UK). Tesla has also said they plan to use the former NUMMI plant in Fremont to build their cars. The same plant that was union before it was shut down. Tesla will have a lot to learn from dealing with the union, including negotiating and signing a labor contract from scratch. Add in that the costly development of the Model S isn't even completed yet and you have a steep hill to climb.
Marketing
How many Americans have heard of Tesla? I'll guess less than 10%. If you live on the coasts, are a greenie, are really into cars or very wealthy, then you probably have heard the name but in the rest of the country it has a long way to go. "No big deal" you say, "they are playing to a niche market." OK, how small a niche do you think a car company can play to and still survive? Admittedly, Morgan has lasted quite awhile, but they employ about 160 people and crank out about 600 cars a year. That doesn't sound like enough to really help save the planet, and it probably won't be enough to cover the costs of developing a car from scratch. Tesla seems intent on saving the planet and you won't accomplish that through low volumes. Additionally, Morgans haven't evolved much at all, but Tesla's competition definitely will, and has.
The biggest issue for Tesla is represented by the models I pointed out above. Lets look at pricing:
Leaf: $32,780 (excluding federal tax credit)
Volt: $41,000 (same as above)
Etrons: Will vary, probably from as low as $50K to $200K
SLS Electric: Too early to say
Porsche: Way too early to say, but it's coming
The Tesla Roadster starts at $101K and the Model S will start at $56,500. Both of these prices are before the tax credit.
Do you see the problem? I can buy an electric car from Nissan or Chevy, who have been around and building cars for a long time, for 32-41 grand, or I can buy a 56K Tesla. For the sports cars, I can buy a Lotus Elise with an electric drivetrain from Tesla, or I can buy a sportscar from Mercedes Benz or Audi. Which one are you really going to buy? Still on the fence? Let's take into account things like...
Dealership Network
For breakdowns, at least initially, I think Tesla is on par with the competition. Nissan and GM will need some time to handle the teething problems, and I'm sure we will all hear about someone taking their Leaf or Volt for service and someone at the dealership trying to gas it up, or wanting to replace the catalytic converter. With performance cars, there are always special considerations regardless of the manufacturer. But over time, how far will Nissan, GM, MB and Audi pull away in terms of service? One huge advantage they have is a dealer network. They can each provide you service and if needed, tow your car, to a nearby dealer. Tesla doesn't have that and has insisted on taking an Apple-like approach to their dealer network, owning each location. That will limit the number of dealerships that ultimately pop up.
At this point some of you are going, "OK so what? Do you think there are a ton of Spkyer, Lotus, Morgan, etc. dealerships out there?" There aren't a ton but then again, they aren't necessarily trying to revolutionize the industry, an industry that in the U.S. has more products on the road than people. Tesla is and this is no easy task.
Investment from Daimler and Toyota
Yes, Daimler and Toyota have both invested in Tesla. For Daimler, I believe it was an investment in the purest sense. They think there is a chance that Tesla will develop their tech enough that it can be used in Daimler products. So does the Mercedes Benz SLS Electric use Tesla technology? No. Kinda weird huh?
Toyota has a marketing angle that I believe is the main reason behind the investment. Toyota had shuttered the NUMMI plant, and Tesla wants to use it. Toyota was also embroiled in the biggest crisis it had ever faced and could have used some positive PR. $50 million later, they have some decent PR spin. But that's not all. Toyota's had been working on, and has prototypes of, plug in Priuses. So why do they need Tesla? Maybe they felt there might be something to gain from looking at their tech, maybe they aren't as far along as they would like, maybe it's a great way to buy a shortcut. I don't know.
Tesla's Impact is bigger than itself
So I've pretty much laid out my argument. All of this means I think Tesla is inconsequential and doesn't really matter, right? After all, Tesla didn't invent the electric car (not by a long shot) and they really haven't mattered much. Those last 4 words are where you and I might diverge since I think they have mattered quite a bit. I think the cars coming from more mainstream manufacturers might have never come, or come much later, if Tesla hadn't stepped in and shown that there is a possibility of producing, and selling, electric cars. Almost as important is that Tesla made an electric SPORTSCAR, not a bland mobile. By starting a fresh new company unconstrained by bureaucracy, Tesla was able to try something that other makers may have thought of and then decided against. There is no doubt that Tesla was seen as arrogant by many, possessing an attitude of "Those Midwesterners are doing it wrong, let's show em." (See here.) Sometimes you have to ignore arrogance and see the idea behind it, it's like being a fan of Kanye West. On the other hand, building, selling and supporting cars is not like doing the same with a website, iPod or computer (Musk says Tesla is more like Apple or Google than GM or Ford) and I really truly think Tesla is going to learn that the hard way.
As a cop out, when someone doesn't believe you, cite others who agree with you. Here are my "cop out" links:
http://www.focus.com/fyi/operations/tesla-next-delorean/
http://www.allcarselectric.com/blog/1020424_tesla-model-s-may-fail-to-deliver-on-its-hype
http://siliconcowboy.wordpress.com/2010/07/08/tesla-ipo-fail-why-marketing-shouldnt-be-left-to-engineers/
http://community.nasdaq.com/news/2010-07/the-truth-about-tesla-motors.aspx?storyid=29959
Tuesday, July 27, 2010
Surprise, the jury is still out on Twitter as a marketing tool
So Twitter still has tons of people scratching their heads. I'll admit, if you are interested in hearing from other Internet marketers, or getting specialized advice/correspondence for some particular industries, Twitter can be awesome. But it seems that as a tool for reaching a larger market, or connecting with your fans, Twitter's possibilities are still being debated and played out.
I personally love hearing about what you had for lunch, or what your child just did, on Twitter about as much as I like hearing about it on Facebook, which means I couldn't care less. But apparently there are enough people out there obsessed with themselves that Twitter's traffic is strong. Weird. In the meantime I'll continue to assume that the only person interested in the details and nuances of my weekly, daily or hourly life is me.
Monday, July 26, 2010
iPhone users = love AT&T?
Apparently the vocal minority has distorted the perceived dissatisfaction of AT&T's service among iPhone users. The great antidote to anecdotal knowledge, research, seems to indicate that almost 3/4ths of iPhone users are happy with AT&T's service. This would definitely come as a surprise to someone who receives their information solely from blogs written by smarmy know it alls and self inflated MBAs who claim to know what everyone is thinking (wait, isn't that this blog?). Well, let this be a lesson to you and me, you can't believe everything you read, whether it's on paper, E ink, or retina display.
Sources below:
Friday, July 23, 2010
I should've become a city administrator
Looking back on my life, sometimes I have regrets. Perhaps I shouldn't have gotten my MBA, perhaps I should have tried to follow a path that would make me rich, perhaps I should have become a city administrator...
Yeah, no kidding, 3 city administrators were just ousted from the city of Bell, CA once someone got wind of what they were making. The top dog, who apparently made $750K a year, was forced to retire with a life pension of $600K a year. That should teach him and any other corrupt official out there...
I'm sorry to announce, this will be my last posting. I'll be pursuing my new career as secretary ombudsman to the grand pooba in Tracy, CA.
Calif. council accepts resignations of 3 managers
http://news.yahoo.com/s/ap/20100723/ap_on_re_us/us_bell_salaries
Yeah, no kidding, 3 city administrators were just ousted from the city of Bell, CA once someone got wind of what they were making. The top dog, who apparently made $750K a year, was forced to retire with a life pension of $600K a year. That should teach him and any other corrupt official out there...
I'm sorry to announce, this will be my last posting. I'll be pursuing my new career as secretary ombudsman to the grand pooba in Tracy, CA.
Calif. council accepts resignations of 3 managers
http://news.yahoo.com/s/ap/20100723/ap_on_re_us/us_bell_salaries
Thursday, July 22, 2010
When Pigs Fly
As tech companies continually diversify and as the U.S. airline companies’ ‘impending-doom’ business models go obsolete, the airlines are bound to be taken over by someone outside the airline business, aren’t they? Here’s how we think that would go.
GAir from Google
· Free air travel for everyone! However, they will stream ads into your brain customized to what you are dreaming about. And when you wake up, you will realize that you only want to buy Google products.
· Will fly into every city, every country and every corner of the world and will have 17 restaurants on board so that you can eat sushi on Wednesday and organic on Friday and vegan on Sunday. They will also be powered with hydrogen.
Air China
· Really cheap tickets but you have to build a toy and a shoe while you are sitting in the plane.
Air Starbucks
· The tickets would be priced at least three times as much as the competition. But there would be an airport on every corner, making it impossible to avoid.
Air Goldman Sachs
· With their ‘innovative’ hybrid-collateral-flexi-auction pricing models, you would never know how much you paid for your ticket. The airline executives would earn huge bonuses everytime a plane crashed.
Air Obama
· Everyone would feel really good about getting on the plane, but would never know where they’re going.
iAir from Apple
· The flight is awesome, super easy to book, great customer service, lots of games and media but the plane can only fly to 3 cities
· All passengers have to sit in a certain angle for the plane to fly and if you hold the seat rest 'incorrectly' the plane will crash and burn.
· iAir Engineers will release the product inspite of knowing the defects and Steve Jobs Jr would give away free travel pillow to offset the negative PR.
· After iAir builds its first planes, GAir will try to replicate the plane while adding the extra benefit of allowing passengers to sit in any direction on the plane they want (even upside down!) In the end, everyone will find it a bit more awkward to have your fellow passengers choose to sit with their heads in your crotch, and always just an imitation. But the iAir passengers will now be able to complain - why don't we get to sit upside down? Funny thing about it is that despite all of this, everyone will still fly iAir.
Wednesday, July 21, 2010
Sarah Palin: mother, leader, hunter and Shakespeare
This piece from Gawker cracks me up. Money shot from the blog post:
“Well, that settles it: Sarah Palin is Shakespeare, and if you think "refudiate" is a dumb word that doesn't mean anything new, it is because you are not celebrating the English language, and are probably some kind of Mexican.”
Sarah Palin is an idiot, and she could’ve been President of the most powerful nation on the planet. *shudder*. Thank God she’s kind of hot.
Why the hell is BP photoshopping its efforts?
Let’s recap: big corporation messed up and spilled a gazillion gallons of oil in to the ocean, simultaneously killing all living things in the vicinity, putting people along the shore out of jobs and wasting a resource that’s getting scarce by the day. Then, big corporation fails to rectify their mistake promptly despite its best efforts. Well apparently BP’s best efforts were directed more towards photoshop than actual oil spill containment. And those best efforts were crappy too. Apparently the pictures on its website showing their efforts were photoshopped...twice. When called out, BP’s spokesman claimed that there was nothing “sinister” about the photoshopping. He got that right, it was just retarded.
WTF is BP doing? What sort of clowns are running this company? Someone please offer an explanation as to why a company in the middle of so much shit would take such a stupid risk and post photoshopped images on its website. The only reason I can think of is that they think they could get away with it.Monday, July 19, 2010
R.I.P. Nexus One
Google announced that they just received their last shipment of Nexus Ones. After this shipment sells out, they’re done. Apple fanboy-in-chief, Gruber, sarcastically points out that with the demise of Nexus One there is no Android phone currently on the market running the latest Android OS.
Google, you fucked up homes.
This led me to thinking if having an ‘open’ approach to mobiles is the right way to go. The same approach in PCs made Bill Gates a fortune and got Steve Jobs fired. Here we are again, decades later, same battle on a new battlefield. When my uncle asks me if he can do a certain task on an Android phone, I can’t simply say “yes” or “no”. In true MBA fashion, I answer, “it depends”; only in this case it really does. It depends on which handset he bought in which year and which OS that handset is sold with and if that manufacturer updated to the latest OS or if it runs something like the HTC Sense on top of Android etc etc.
I think the open approach did wonders for the PC because it was a nascent industry. People were keen on mixing and matching their PCs, and looking under the hood and exploring their PCs. Even though touchscreen smartphones are relatively new, mobile phones have been around forever. They aren’t uber high-tech geek toys anymore. They’re consumer devices. I don’t want to tinker with my phone, I want to tap a button and have it show me how to cook vindaloo.
Thursday, July 15, 2010
What's Apple gonna do?
So Apple has a press conference scheduled for tomorrow, what are they planning on doing? Will Jobs come out and tell everyone they don't know how to use the iPhone? Will they say we are so sorry, we were stunned to discover the antenna design sucks? Free bumper covers for everyone?
I have to say it's smart for Apple to react swiftly, the question is what will the actual reaction be? I don't see it being a recall, but you never know, and they have tons of cash to cover the costs.
Thursday, July 8, 2010
Can we start using iPhone for making calls some day?
Most people have realized that they love their iPhone but yet they think that it is not the best device to actually talk. People (including myself) sometimes use skype for iPhone (using their paid service called skypeout) to make calls to other people (landlines and cellphones) because the call quality is much better and there is no risk of dropped calls (specially when u are on imp calls and u have no landline to call from.
I was thinking whether ATT could partner with someone like Skype and automatically use the Wifi network to make calls when there is not a great reception. Obviously there must be technical issues in achieving this but I hope that you guys get the idea. There could be Rev-share arrangement between ATT and Skype (or anyone for that matter). But imagine how much it would improve ATT's reputation.
Mary Meeker, MD for Morgan Stanley ( a very well respected Internet and Telecom Research stalwart) was at Y! yesterday as a guest speaker and she admitted to using Skype for making calls from her iPhone. Hence, I was hoping that I am not the only wierd person doing this..
I know I am missing something very obvious here and there is some flaw in my thinking.
I was thinking whether ATT could partner with someone like Skype and automatically use the Wifi network to make calls when there is not a great reception. Obviously there must be technical issues in achieving this but I hope that you guys get the idea. There could be Rev-share arrangement between ATT and Skype (or anyone for that matter). But imagine how much it would improve ATT's reputation.
Mary Meeker, MD for Morgan Stanley ( a very well respected Internet and Telecom Research stalwart) was at Y! yesterday as a guest speaker and she admitted to using Skype for making calls from her iPhone. Hence, I was hoping that I am not the only wierd person doing this..
I know I am missing something very obvious here and there is some flaw in my thinking.
Tuesday, July 6, 2010
My beloved iPhone
With tears in my eyes, I buried my iPhone. My LTR with my black (I am not racist, its just the color of my iPhone) iPhone ended 20 days before our scheduled divorce. A day spent in mourning, am ready to get my iPhone4. Yeah baby.. thats what Austin Powers will say. I think I am feeling the same way.
Getting back to getting my new iPhone, I am wondering when I can physically claim it to be mine. The apple store pre-orders are still 2 weeks into the future. Well atleast they do not charge me for placing a pre-order. On the other hand, AT&T is providing fulfillment orders only if you pay em. Guess what, an AT&T store rep gave me a full hour of pre-order 101 training and I was dumb enough to listen to it. Anyways, 2 more weeks of my bang-boom relationship with my go-phone until I get my iPhone.
Midst all this turmoil, I was trying to decipher who is paying for my iPhone after all. The total bill of materials on a $600 iPhone — the supplies that go into final assembly — is $187.51, according to iSuppli. Source: NY Times. Which leaves me to believe that Apple actually loses money on iPhone.
Assuming that cost of marketing and in-store costs and other fulfillment costs amount to $20 per iPhone, Apple stands to lose $7 on each iPhone unless AT&T pays the remaining price.
Lets say Apple negotiated $400 with AT&T (sounds reasonable eh.. )
Customer LTV = [ 40 (voice plan) + 30 (data plan) ] x 24 months
of which Apple keeps 30% (we know what a deal maker Mr Jobs is)
So Apple net gain seems to be close to 700 bucks
For poor AT&T, its hard to say they make $$ on data. Data mongers like us playing pandora all day long hardly leave any profits. Lets say on voice, AT&T makes 70% margin, which brings us to believe that over 2 years AT&T makes @$16 a month (subtracting Apple Share) = close to 400 bucks
Subtract that 200 concession, we have 200 bucks for AT&T. Not bad eh..
Is that a good ARPU, is that sustainable. Hmm, I dont know. All I know, that I want my iPhone and yeah, its orgasmic.
Sent from my iPad
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