by Ian on January 16, 2010
In this month’s New Yorker, Malcolm Gladwell has a piece entitled “The Sure Thing” (digital subscription required) about entrepreneurs and risk. Gladwell builds on a recent book by a couple French scholars called “From Predators to Risk: Exposing the Myth of the Business Hero” (only in France, how un-Ayn Rand of them).
According to Gladwell, great businessmen are more Predator than Hero. The word “predator” is repeated ad nausem in the article. Given that this is not a word most people have positive associations with, we can assume that the author is not trying to promote entrepreneurs.
Predators are defined as being more analytical, and less so “hero’s” that take gigantic risks with huge potential upsides. He cites several real world stories, including:
- Ted Turner inherited the largest outdoor-advertising firm in the South, and leveraged that to build his first cable channel on UHF, minimizing the risk of the purchase
- John Paulson was engaging in very low-risk trades that led to one of the largest paydays ($4 billion) in Wall Street history. He simply looked at the numbers, saw a housing bubble, and bought assets that would appreciate in value once that bubble burst
I think what is under debate here is the cultural notion of the Business Hero; great self-made men that scale unimaginable heights to make billions. This argument attempts to take the romanticism out of business. There’s nothing revolutionary about the fact that great businesses are build based on calculated risks. Big risk does not mean good business.
Perhaps the term Business Hero is actually a metaphor for Capitalism, and this perspective a shot against the individualism of Capitalism. Fair enough, because any capitalist who thought that Business was not about calculated risks won’t find themselves getting very far.
It’s a worthy read in that it’s easy to get carried away about taking big risks with huge upside. Sometimes it’s important to quantify a risk to ensure that it is a smart, calculated risk.
by Ian on November 2, 2009
History is repeating itself in the mobile marketplace. Some of the companies have changed, but the business strategies and even a few of the players are still the same.
In looking back to how the PC market developed, Microsoft took an open approach. They licensed their OS to lots of hardware makers and said “you do what you do best and we’ll do what we do best”. Companies like Dell, Gateway, and Compaq built hardware and licensed Windows for the OS. They benefited from the usability and consumer familiarity with Windows.
Apple, on the other hand, insisted on having full control of both the hardware and software. There was no licensing of the OS. You could only get the Mac OS on Mac hardware. Sound familiar…iPhone?
Fast forward 30 years and now Google is taking the open approach, and then some. Their Android mobile OS is open-source and companies like Samsung, HTC, and Verizon are the new hardware players. You won’t see an Apple mobile OS on any of their devices anytime soon, and likely ever.
Now, an important point is that the economics have changed. The mobile OS market is more competitive than it was when PC’s were gaining mass adoption. Microsoft was able to insist on hefty licensing fees for Windows. Android is open source . In some cases, there are even revenue benefits for the hardware markers, as Bill Gurley wrote on his Above the Crowd blog. Bill calls this the “Less than Free” business model.
Apple hasn’t changed and that is becoming more and more clear. They may also be trying to learn from past lessons. Microsoft has powered some core apps on the original Mac, notable Excel. Google powers two core apps on the iPhone pre-installed OS including YouTube and Maps, plus have many popular apps in the app store. Google Voice could supplant arguably the core feature of the iPhone – voice calls. Apple is afraid of becoming to reliant on Google for core OS apps.
Notice that Google built Google Maps with GPS for Android phones first – not the iPhone. What do think happened then, when Microsoft released MS Office on PC’s before Macs? Consumers flocked to PC’s because that’s where their most useful apps were.
This about it from the consumer perspective. Today there are several mobile operating systems including ones by Blackberry, Google Android, Symbian, Microsoft Windows Mobile (they’re way behind), and probably a few I’m neglecting to name. As a consumer, I don’t want to have to become comfortable with a new OS every time I get a new phone. It’s too much work. In the same way that Windows became the standard OS for PCs, there will be a standard OS for mobile devices. This is the target Google Android has their eyes firmly set on.
We know how things developed in the personal computer OS market. Microsoft created one of the most powerful monopolies in history. Apple owns its slice of the pie, but this is not nearly as big as Microsoft’s.
Is the same thing destined to happen in the mobile computing space, except replacing Microsoft with Google? Does this mean Microsoft has already lost in the mobile OS market?
