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A leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation

Friday, September 26, 2008

GM Followup - The Clouds Darken

As discussed in my previous post, GM is betting a lot on the Chevy Volt as a potential savior for the company. GM plans to deliver the Chevy Volt in November 2010.

However, yesterday, I came across two articles in the Seattle Times that cast additional doubt on whether the Chevy Volt will be the savior that GM thinks it will be. The first article was about how Chrysler is currently developing three electric or extended range electric vehicles for release in 2010. Chrysler did say however that it will probably only deliver one of the three vehicles on that timeline. But which one?

In a related article it was announced that Toyota plans to introduce a plug-in version of their Toyota Prius hybrid next year (2009), a full year before the debut of GM's Chevy Volt offering.

I had previously theorized that Toyota would get to market before GM, and now it looks like that will be the case. So, can GM still win if it gets to the publicly available plug-in party a year after Toyota?

What do you think?


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Tuesday, September 23, 2008

Magazine Time Shares

I came across an interesting online/offline service called MagHound yesterday that probably falls into the category of useful but not valuable.

Translation - While it may be a good idea, it is likely to fail to make money.

Why do I think it will fail?

Here are ten reasons:
  1. Do enough people really want to try lots of different magazines at once or actively manage switching amongst different ones every month?

  2. Maghound must build not only brand awareness, but also customer understanding of a new way of buying magazines

  3. Even if they succeed in building awareness, customer inertia is a powerful force to overcome

  4. Annual subscriptions are cheaper (I get a lot of $10 offers these days)

  5. Potential Supplier Revolt - The kind of customers Maghound may be most likely to attract, may not be the kind of customers that the magazine companies want (people who sign up for a short time and then quit or switch)

  6. Ultimately, magazines want subscribers because they can then provide stable demographic data to advertisers

  7. Consumers generally acquire magazines one at a time, which seems more doable to the consumer (Who has time to read seven magazines a month?)

  8. Subscriber acquisition costs are high, and acquisition of "switchers" is likely to be greater when you consider the additional costs to educate people on the value of the concept

  9. Maghound classifies certain magazines as "premium" (from $0.50 to $6.75 per month extra)

  10. If they are trying to pursue a value innovation strategy and go after non-consumers, are they really going to be able to attract them with this strategy?

How might they prove me wrong?

Here are five ways:

  1. Market size may prove larger than I imagine

  2. Average user tenure in any one magazine may prove longer than I imagine
  3. Maghound may find a market competing against the newsstand instead of subscriptions

  4. Maghound may find successful ways of pushing subscribers to magazines they haven't experienced (hopefully by expanding their subscription instead of switching within it)

  5. Customer acquisition prove to be lower than the traditional subscription model instead of higher

What do you think?


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Thursday, September 18, 2008

Floating Storage

I came across an interesting article highlighting that the global power consumption of the data centers comprising the Internet consumed 1 percent of the world's electricity in 2005. The growth in broadband and multimedia usage would put the 2008 number closer to 2-3% of the total by my estimation. According to McKinsey, the carbon footprint of the Internet will be larger than that of air travel by 2020.

The other focus of the article was how:

- Sun Microsystems is putting a data center in an abandoned coal mine to cut electricity costs in half of what the would be at ground level
- Microsoft is investigating putting data centers in the cold climate of Siberia
- Google is investigating the creation of "data barges" that would utilize wave energy and escape property taxes by being stationed seven miles offshore

It is good that big data center technology consumers like Microsoft and Google are looking into power conservation at the same time that hardware vendors like Sun and Intel are finally starting to pay at least a little attention to how much energy their components or solutions consume.

Now what we need is Google to combine the wave action power with solar panels on five sides and maybe a wind turbine or two on masts for good measure.

Or maybe burying them might be a bit easier...

What do you think?


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Saturday, September 13, 2008

Less is More

I came across an InfoWorld article the other day that warmed my heart.

For far too long, especially on the PC, software developers have been building applications with a feature arms race mentality. Because of rapidly expanding memory and hard disk space on customers' machines, developers have not had to write tight code in the same way they had to in the early days of the PC.

Now, hopefully Symantec's focus on creating Norton applications that install in under a minute and consume far less memory will spread to other industry players. Just because I have 4gb of RAM and 160gb of hard disk space does not give software developers the right to consume it thoughtlessly or to make my computer run slower.

Why can't software developers give us adaptive software?

If I don't use a feature of a product in 30 days, it should uninstall itself.

Why can't I choose lean and mean (give me only the basic features) as an install option?

Software should be smart enough to minimize its footprint, while at the same time giving you the opportunity to add a feature easily later. So, an unused feature should get uninstalled, and simplify the menus as a result. But, if I hold the bottom of the menu it should expand to show uninstalled menu features in grey. If I select a greyed out feature it should tell me it is going to re-install it and then do so automatically.

I can only imagine how much smaller Vista, Office, Photoshop, and other applications would get if they were designed in this way.

If you know of applications designed in this way, please feel free to let me know by commenting on this article.

What do you think?


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