Intel Business Plan, July 1968

The US Constitution might not have seemed like much at the time it was written. Mutatis mutandis, neither this document looked like much when Gordon Moore and Bob Noyce were setting up Intel. However, it was enough for venture capitalist Arthur Rock to raise $2.5 million in less than 2 days.

Apparently the document does not resemble most today's business plans. It includes neither a financial estimate, nor a clear exist strategy. The text, however, includes many typos!

Sources: Intel Museum and Darius Mahdjoubi, October 2005

SCRUM - Agile

Please, allow me to briefly (dis/at)tract your attention to the software/product development approach called "SCRUM." Yahoo and Google seem be be using it--at this time, within a limited scope.

My bias would be to say that: SCRUM makes sense when developing technologies that could be described as wide rather than deep. In other words, an ERP package won't fit the model...

According to FT, here is how Scrum works:
Scrum is a key element in the so-called Agile process revolution for software development.
The main principles are daily collaboration between business people and developers throughout the project, frequent delivery of working software and openness to frequent change of customers' requirements.
Scrum does this by creating a "product backlog" - a compilation of all the features the program needs, prioritized by the "product owner," who represents the interests of everyone with a stake in the project and results. The highest-priority items are taken for completion in a "sprint." These normally last a month and end with a 15-minute meeting where the scrum-master asks the same three questions of the team: what did you do since the last meeting; what are you doing until the next one; and what prevented you from doing more work.
The self managing aspect of Scrum also obliges team members to (learn how to) manage their own time.

What do you think:
  1. Would you personally enjoy such an environment?
  2. In what context and at what 'expense' could such a model be adopted?

For details, check out Jeff Sutherland's webpage

As well, a link to:

On Qualia

Looking for some info online, I stumbled upon the following piece. Not being sure whether or not Mr. Mogi is associated with Sony, but knowing about Sony's high-end Qualia line, I felt compelled to read it. It makes for an interesting read, especially for those earning their existence at the intersection between aesthetics and technology. This reminds me of the ad page model, put together by Mr. Ogilvy, and some more.

Ken Mogi
A Familiar Yet Mysterious Concept

Many facts about the workings of the brain have been uncovered with the advance of neuroscience. We now know what part of the brain becomes active with which activity, and what ability becomes lost when a certain part of the brain is damaged. But one significant problem remains: we still cannot explain the nature of consciousness.

Since the late 1990s, the enigma of consciousness has been the focus of much research in neuroscience. Though it is clear that our consciousness results from activity in neurons, not much more is known about it. It cannot, for example, be understood just by looking at the discrete functions of the brain. It was in this predicament that the concept of “qualia” emerged as the key to the missing links.

The word “qualia” is a Latin plural meaning “qualities.” It is an ancient word and appears as early as the fifth century, in Augustinus’s De Civitate Dei. It was first used in the discourse of consciousness in the 1980s by an Australian philosopher, who proposed that the various elements that make up our subjective experiences – qualia – cannot be explained by existing science. This work had a significant impact on the neuroscientific world, and “qualia” has since become a central issue in cognitive science.

The concept of qualia should be familiar to all of us, since the world offers us a multitude of sensory qualities (like colors and textures) to perceive. However, in cognitive research, it remains an elusive subject.

In scientific research, “qualia” poses a perplexing problem, because qualia generally cannot be represented with numbers. Science thus far has targeted concepts that can be counted or measured. How much there is of a certain substance, how long it is, how fast it is – most things can be described using numerical representations.

But qualia –like the sting of cold water, like the sweet strains of a violin, like the perfume of a rose – are experiences that cannot be replaced by numbers. For this reason, the usual tools of science we use to solve a problem, like expressing a characteristic in numbers and using values in a formula, do not help us here.

Of course, though qualia cannot be quantified, they are still phenomena that accompany physical processes in the human brain. Yet the natural laws governing the intricate processing of qualia are still to be discovered and may pose one of humanity’s greatest intellectual challenges yet. It would probably be difficult to solve the puzzle of qualia completely. My guess is that if qualia were to be explained in a theory, it would be far more difficult than Einstein’s complicated theory of relativity. But everyone can understand the idea when it is explained. One’s view of the world changes just by being aware of it. “Qualia” has this interesting twosided quality.

Humans Seek Qualia

Often in Japan, you see groups of women taking a trip together. What do you suppose they are expecting from this trip? Some will climb a mountain, and others will explore a tourist area. Some will soak in a hot spring, and some will enjoy the local cuisine. Destinations and activities may vary, but in the end, all of them are looking for the same thing.

Human desires differ from those of other animals because of their bigger, developed brain. Desires are not limited to nourishment, longevity, or ease, for example. People additionally seek new, undiscovered qualia. Wanting to eat a manju (a sweet) particular to an area, for example, is a manifestation of this human desire. The traveler is not seeking nourishment or notable healthfulness from the manju. No, she hopes to experience qualia heretofore unknown to her.

Qualia have the quality of being unknown until experienced. The qualia of food, for example, cannot be understood until eaten, no matter how much someone tries to describe its delicious flavor. The fact that qualia cannot be ours unless experienced makes untried qualia all the more appealing. We travel, watch movies, and go to the theater to satisfy our desire for and to consume qualia.

This idea, that humans are driven by a desire for qualia, applies as well to romantic relationships. Remember how you felt when you were a teenager? You wondered what it would be like to date a boy. You wondered what it would be like to date a girl. Such feelings akin to curiosity stirred something deep inside you.

This idea also applies to our appetite for culture. We want to delight in good literature. We want to enjoy beautiful music. We want to experience new things in movies.

These desires are particular to humans. The drive for qualia does not appear to result from biological necessity and cannot be found in any other animals. Humans seek qualia.

The Qualia of the Grand Canyon

Sometimes you need to go to a particular place to experience certain qualia. That is why people travel.

The time I visited the Grand Canyon, for example, I experienced qualia that could not and cannot be experienced elsewhere. I knew of course about the Grand Canyon before going there. I had seen numerous photographs of it, and I even knew how far down it was to the river. But the experience of the Grand Canyon exceeded the sum of these bits of acquired knowledge. The qualia were indeed particular to the site.

When I actually stood there and gazed at the distance to the opposite cliff (twelve kilometers) I suddenly felt faint and had to sit down – and it was not a fear of heights. I was hit by the realization that I could not possibly throw a rock to the other side, no matter how hard I tried. The canyon was that vast. This new qualia experience, of unconquerable distance, overwhelmed me and made my head reel.

If you think about it, there are very few situations in everyday life when you can experience distances between yourself and a certain visible place that deny all possibility of your approaching it. The moon and the stars are examples of vast distances that cannot be overcome, but you are quite aware that they are celestial, not terrestrial. Thus you can make excuses for their inapproachability. The top of a city skyscraper is also unapproachable, but you can easily give up the idea because it is so high up. In contrast, the opposite side of the Grand Canyon is at eye-level, yet it cannot be walked to, and it is too far to throw a rock to. The great abyss between me and the opposite side awed me, and I felt qualia that were somewhat similar to dizziness.

It does not matter how intimate you are with the facts. The qualia of the Grand Canyon cannot be experienced unless you actually go there. It cannot be felt otherwise. People travel in pursuit of such qualia.

The Qualia of Chateau Latour

Wine, too, has qualia that cannot be perceived unless they are actually experienced. I was once at a French restaurant in Tokyo, celebrating a special occasion with two friends. On this occasion we ordered a bottle of Chateau Latour. This much-acclaimed red wine is really quite expensive, but we decided to treat ourselves this one time. The bottle was brought to the table in a reverential manner and poured. The glasses glowed a dark ruby red.

The first glass, however, did not make an impression upon me. In all honesty, I could not tell whether it was any good. Although my friends were clearly already excited with it, I did not know what to say about it, and still uncertain, I took a sip of my second glass.

Then, all of a sudden, the qualia of Chateau Latour made sense to me. It was like a once-in-a-lifetime meeting with a truly attractive, magical person. The emotion is not simply one of happiness or pleasure; your heart is in fact racing at an alarming rate. You have no idea what to do with yourself because everything is terribly exciting. It is the long-awaited arrival of spring with all the flowers bursting into bloom. That was my stunning qualia experience with Chateau Latour.

Until that moment, I had never tasted an expensive wine with any seriousness. That was the first time I realized that the qualia evoked by a really good wine cannot be described just in terms of tannin, bouquet, or acidity, as with an ordinary wine. The experience exceeds the sphere of this limited vocabulary.

Ideas that can be expressed in numbers can often be imagined to a certain extent without actually being experienced. Four meters is two meters doubled and so is probably this long. 200 km/hr is twice 100 km/hr and so is probably this fast. The comparative method works. But the qualia of good wine are not two or three times better than the qualia of ordinary wine. The analogy fails here. The qualia are of a different nature altogether.

I remember the first time that I tasted konowata, I felt that the qualia could not be compared to the qualia of any other delicacy I had ever tasted. Konowata is a Japanese delicacy on a par with caviar, and is made by pickling the entrails of sea cucumber. The taste is a little similar to pickled squid, but as those of you who have had konowata know, it has a strange and mystifying citrus fragrance.

Qualia, when new or very good, cannot be compared to that of past experiences. This characteristic is true of all qualia, not just of food.

But sometimes, even familiar qualia can suddenly become unfamiliar. For example, when we eat or drink something, we are usually prepared for what we will experience when we put it into our mouths. If completely different from expectation, qualia of even the most ordinary sort can jar.

Once, while watching a movie at home, I reached for a glass of milk thinking it was soda. With my eyes still glued to the screen, I took a gulp. The shock was great. For several moments, I could not tell at all what it was. I could only think that I had put something unrecognizable into my mouth. Then, after some time, I realized that the qualia were of milk. Perhaps this experience is similar to a baby’s experience when he first tastes milk.

My initial incomprehension upon tasting Chateau atour was perhaps due to the fact that the qualia were completely new to me. The qualia of Chateau Latour were utterly unlike my expectations of a wine.

How Do We Know New Experiences to Be Completely New?

The world is filled with an infinite number of qualia, and there are many that a person may never experience in a lifetime. Had I not had the experience of Chateau Latour, I would probably have continued to believe that wine can be described calmly, in precise parameters of tannin, bouquet, and other commonly known factors. I would never have believed that the qualia of the wine can only be described as that of meeting a dream, a wonderfully mesmerizing person.

Qualia cannot be understood unless experienced. We are driven by curiosity and are constantly on a quest for new qualia.

The ability of the human brain to recognize the newness of new qualia – that the qualia are unlike any experienced before – has yet to be explained. You may not be able to describe the uniqueness or the subtlety of the new qualia at the moment of contact, but your brain recognizes immediately that the qualia are new. This wonderful feature of the human brain has not yet been explained by neuroscience.

There are many qualia in the world that I have not yet experienced. This thought is exciting. The yearning for new qualia, for fresh, unknown qualia, is in everybody’s hearts. This is the universal desire for qualia shared by all human beings.

Qualia must be experienced firsthand to be understood. Before coming into contact with certain qualia, there is no way of knowing what the experience will be like. But still we long to come into contact with them. Qualia have this mysteriously enticing quality.

Looking at photographs and reading descriptive text of the Katsura Palace in Kyoto will not tell you what kind of qualia you will experience once you step inside the gardens. But people are drawn to the yet unknown qualia that they anticipate, and travel to the Katsura Palace to experience them firsthand. I want to see things that I have never seen. I want to go places that I have never been. I want to eat things that I have never eaten. These wants exist inside everyone. This universal desire, in other words, is a desire for unknown qualia.

The Allure of Qualia

Sometimes we are unknowingly taken by something that we cannot quite explain in words. This is true of qualia.

People are naturally drawn to qualia that are not yet fully understood. That is why we are drawn to other people, for example; other people are wonderfully mysterious to us.

The impression of a person changes slightly with every meeting – ten years ago, five years ago, two years ago, today. It is the same person, yet he is somehow different. Sometimes he is an admirable character, and sometimes he seems a bit mean. Sometimes he is interesting, and sometimes he is dull. What results from all these experiences is the qualia of this person. This person’s qualia are not borne of just one meeting, but are formed from numerous meetings, and with every encounter, the sense of this person evolves.

The same can be said of wine (though of course, its complexity does not compare to that of human beings). The qualia of Chateau Latour will probably change with every encounter. Yet there will probably be something in the qualia that will help affirm that the encounter is undoubtedly yet another aspect of the Chateau Latour experience.

Every bottle is of course different. The vintage may be different; even two wines of the same vintage will be different depending on when they are opened. A wine is also dependent upon storage conditions and the manner in which it is served. And even if two wines were exactly the same, the qualia of one would differ from the qualia of the other depending on whom you share the bottle with. In this way, the personality of a certain brand of wine emerges from the many encounters with it. After a time, you begin to understand and recognize the qualia of this wine.

The discrete qualia are different every time, but a new form of qualia appears from experiencing all of the individual qualia. This total form of qualia is perhaps the qualia that we are most attracted to, and hence, continue to pursue.

Though we receive a different impression every time, when we process these many encounters, a new kind of qualia emerges. This mechanism may be analogous to the power of brands. For example, all animated films by Pixar have a certain “Pixar-esque” feel to them, even though each film is different. Each is different; yet they share a certain quality.

Something attracts us to people and objects and scenery, but a large part of the allure disappears as soon as we think we know what that something is. People are attracted most to those things that appeal to a subconscious place. Therefore, when a person feels that she has completely understood a brand, a wine, or a relationship, the wonder is gone.

One tries to get close to it, and sometimes it seems within reach – but it can never be fully grasped. This is the kind of qualia that is most alluring to us.

I would like to live in a world where nothing less should come as expected from the intersection of (personal) technology and aesthetics...

link to Sony QUALIA

Product management / marketing functions

A representation of the product management / marketing functions.

Credit is due to Pragmatic Marketing


The 8th Circuit Court of Appeals has affirmed a lower court decision Blizzard vs. BnetD which ruled that the Digital Millennium Copyright Act prohibits the reverse engineering needed to create an open-source program that extended a video game for people who lawfully purchased the original. The court also affirmed that clickwrap licenses are enforceable to prevent reverse engineering.

If you are in the business of creating add-ons for, or extending, copyrighted software (for profit, open source, or both), check out this decision at:

As well, this ruling is of interest to those who wish to protect their code from reverse engineering via a clickwrap license.

On product management performance

How about a set of performance metrics to determine how a product management program is performing?

Product managers (PMs) are those individuals entrusted by their companies to make the most at the intersection of customers, internal capabilities, partners, and industry trends. The output of the PM work is the product requirements document--a document detailing the product features for the next version of a product/technology, and supporting evidence (business case or rationales). Usually, in your typical organizational chard, the PM function is between engineering and marketing. In small companies, the PM role is still a function of the executive management. The PM functions get formalized as such when growing companies are in a position to release later versions of their initial products or when new product lines are about to be released.

To start off, there ought to be different sets of metrics at a large software company compared, and a startup, respectively. Metrics will drive behavior and performance, so choose wisely, discuss with (executive) management! One gets what one measures/rewards, so make sure that's what you want!

In a mature business, product managers get measured by:

  1. Number of recorded customer visits and/or calls;
  2. PRD references to customer visits.

Typically, 10 visits per quarter are a good result, 7 average, and 4 below average. This is also dependent on what kind of prep goes into a visit.

This is followed by a percentage metric for the product requirement document (PRD)--how many features have named customer input. This can be tricky to formulate into a sensible measurement, but basically it monitors that product managers go through customer visit reports and mark the source of a requirement into the PRD. It has more management interest, but again it does confirm that PMs actually get requirements from the market, not from an engineering sugar high.

In case customer input is a dimension of the metric, make sure PMs get customer input on the specific value (i.e. what they will pay for it) of the feature(s) tagged as customer-driven within the PRD.

The above metrics are used for bonus pay-out, but also could work as a stoplight metric for individual managers and products.


Especially in a cost-sensitive environments, small enterprise, make sure that things like "market share" or "sales" are NOT considered. Too often organizations focus on exactly the wrong metric. Profits are what count.

Also, at a startup, you will likely want to expand your customer base, so think about a metric there also. If any operational responsibility lies with the PM (some do, some don't), think about an appropriate metric there depending on the company's production model.

Yes, a startup will have different needs from a large company. Not the least of which is strict financial discipline, managing your business for positive free cash flow. There is another one. Slightly different from profits…

Further refinements

Customer acquisition and retention are key. Worth measuring for are plan vs. result conformance (i.e. did the team do what it said it was going to and when).

In certain contexts, it may also be worth measuring the "downstream effects" of PM’s requirements on the Engineering, such as the amount of rework due to spec misunderstandings (indicates whether or not the specs contain sufficient detail), and the percentage of features that meet PM's acceptance criteria on the first try (indicates the quality of communication between PM & Engineering).

The availability of data will emerge as a difference between a start-up and a larger company; large companies routinely store quite a bit of information that can be useful on scorecards. It may be more of a task to find meaningful, measurable data in a start-up.

This is reminiscent (for some anyway) of measuring the "cost of quality" of a product, service or operation. It was always really the inverse (cost of poor quality), but it gave support for investing in doing things better. The real problem was that only big companies could afford the time/money of gathering and analyzing the data on an ongoing basis. Perhaps the better take-away is to add *concept* to the 5000 other things going on in the back of the PM's head. Then, if/when a situation arises that strongly, but anecdotally, reflects a large cost of quality, then you have a rationale and approach to analyze and document what could be institutionalized to make things consistently better.

A group can look in the right area for an important measure of performance, but still - in practice – generate "sterile metrics." A high visit *count* involving golf without shoptalk, superficial conversation without probing, talking only to users and not buyers (or vice versa), and other scenarios still amounts to poor performance. Again, it's *understanding* the craft, not just launching on the buzzwords.

Further, while Profit is definitely a critical (maybe most critical) measure, in the real world it is difficult to avoid drowning in a QUARTERLY profit mentality. Excepting start-ups for the moment, growing and large companies too often will rationalize (or simply drop) bug counts in their release criteria to get a product "out the door" to either book sales or make the cut for an analyst report. It is way too easy for that to become a pattern, and the company's true brand.

And, in several industries/markets that evolve very quickly (like telecom) it is really advantageous to have two-tiered engineering: one group reads IEEE publications and scratches their heads over requirements 2 years out, while the other group wraps and ships current product. With a good dose of the quarterly profit disease, it is, again, easy to jeopardize even a major advantage in the NEXT market cycle to make the next release date - which was probably set arbitrarily anyway. However, even this (the firm two-tiered effort) can be taken to dangerous extremes. It is still a matter of "balance."

What about the aspects of profitability that are out of a PM's control?
Counterpoint: if the PM is not responsible for ensuring a profitable product, who then?

Customer interaction and gathering market-input in product definition are critical to product success, and therefore should be part of measuring a PM's performance.

One cannot hold someone accountable for that over which someone has no control. In most companies, the PM does not manage the entire product team. For example, the product manager typically cannot hire and fire:

  1. Sales people selling the product;
  2. Marcom folks marketing the product;
  3. Engineers developing the product.

Yet the profitability of the product depends on the performance of the sales, marcom, and engineering personnel over which the product manager has no authority.

So no single person can be held accountable for product profitability unless

  • It is a one-product company, in which case the CEO has ultimate responsibility, or
  • The PM has complete authority over the entire product team.

bits and pieces:
On the use of PPT presentations

What is the appropriate use of multimedia/PowerPoint "passive" presentations--presentations with no personal interaction?

  • Are people using these types of presentations to communicate product (or service)?
  • features or benefits?
  • If so, where?
  • On their website?
  • As sales collateral?
  • How deep is the content?
  • Are they used as "leave behinds" to recap a detailed sales discussion?
  • Could they replace that discussion altogether?

Are sales teams too reliant on these types of presentations to the extent that such presentations have replaced (quality) interpersonal discussions?

The above concerns are well known, especially through associations with sales folks in small(er) corporations.

Canned, passive presentations should be used carefully and sparingly. Of particular concern becoms their use--or even consideration--as "replacements" for detailed sales discussions altogether. Just think how much one checks out of a supposedly interpersonal discussion when the presenter shoes up with a 60-slide deck.

For passive interaction, 1-2 pager notes are able to communicate the necessary product feature/content. One can even model these notes as "product datasheets." These could be published through emails / websites / events. PPTs have a great impact during interpersonal meetings since they help manage the flow and structure of the discussions. Also, PPT presentations help people in audience to take down key points in their notes.

In a way, PPT presentations have come to embody the communication assassinator of corporate America. And, that's when they are accompanied by a verbal script. Passive PPTs are even more removed and impersonal. The next step on that slippery slope is miming. A prospect has to be pretty darn desperate to actually flip or click through an unaided PPT presentation. These days, sellers seem to default to PPT presentations when approaching a prospect because "everybody does it that way." Prospects, on the other hand, seem to be immediately turned off by the mere appearance of a PPT because, well, "everybody does it that way." While these PPTs sometimes work as a suitable leave behind in a competitive pitch, there are clearly more interesting and more effective mediums, such as a Flash presentation or just a real, live conversation.

bits and pieces:
Authority, PM, Matrixed organizations

In matrixed organizations one could well be accountable for product P&L with no line authority. In a case like that, authority isn't handed over like a tap from the Queen's sword, but is rather earned by establishing good working relationships with the other constributors. Success doesn't come from authority anyhow. It comes from influence more than anything. In most organizations, ultimate authority lies with the CEO/General Manager and, at the limit, if decisions are all pushed up to that level, those companies will fail in the long run, as the model isn't scalable.

Brand-manage yourself!

In the 21st century multi-faceted corporation, managing your professional image amid increased variety ought to be a deliberate exercise by which you become the author of your own identity. HBS professor Laura Morgan Roberts says if you aren't managing your own professional image, others are. She proposes a strategic, proactive approach to managing your image consisting of the following steps:

  • Identify your ideal state.
    • What are the core competencies and character traits you want people to associate with you?
    • Which of your social identities do you want to emphasize and incorporate into your workplace interactions, and which would you rather minimize?
  • Assess your current image, culture, and audience.
    • What are the expectations for professionalism?
    • How do others currently perceive you?
  • Conduct a cost-benefit analysis for image change.
    • Do you care about others' perceptions of you?
    • Are you capable of changing your image?
    • Are the benefits worth the costs? (Cognitive, psychological, emotional, physical effort)
  • Use strategic self-presentation to manage impressions and change your image.
    • Employ appropriate traditional and social identity-based impression management strategies.
    • Pay attention to the balancing act?build credibility while maintaining authenticity.
  • Manage the effort you invest in the process.
    • Monitoring others' perceptions of you
    • Monitoring your own behavior
    • Strategic self-disclosure
    • Preoccupation with proving worth and legitimacy
This is not unlike any branding exercise. The novelty could be in self-awareness informed by such an exercise.

Keep in mind: Cost, Quality, and Timeliness

Harvard Business School professors Pankaj Ghemawat and Ramon Casadesus-Masanell have recently co-authored an academic paper Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows. They explore several answers to the fundamental competitive dynamics question:
Will open source software (OSS) ever displace traditional software from its market leadership position?
In their formal economical model, they structure the problem in terms of a dynamic mixed duopoly in which a profit-maximizing competitor (Microsoft) interacts with a competitor that prices at zero (Linux), with the installed base affecting their relative values over time.

They go on further to ask what conditions are needed for Linux to take over Windows:
  • Is Linux's superior demand-side learning sufficient to win out?
  • What is the effect of forced procurement by governments and some large corporations on the long-run equilibrium?
  • How do cost asymmetries play out?
  • Can Microsoft use piracy strategically to improve its market position?
Summing up their findings, the authors say:
"We believe that there is still a great deal of confusion and puzzlement on how this competitive battle will develop."

Worth pointing out are their recommendations for Microsoft to strategically to remain competitive against a product that is argued to be of better quality, is updated more frequently, and is free:
  1. Increase its own demand-side learning.
    1. Listen to the demands of the user community to better exploit the benefits of demand-side learning. Microsoft must facilitate communication between the user base and the company to have prompt feedback on the performance of its products.
    2. Make an effort to incorporate improvements in the code (fix bugs and introduce new features) as soon as possible.
    3. Reward those who propose improvements for the code. At the very least, Microsoft could publicly acknowledge those who proposed new features or discovered bugs.
  2. Feed its direct and indirect network effects.
    1. Support as much as possible the independent software vendor community so that the quantity and quality of complements is substantially above that of Linux.
    2. Encourage competition between the different ISVs. The lower the prices of applications, the more appealing the Microsoft system will be.
    3. Price discriminate. Give Windows and applications away to schools and universities so that users build their file libraries on Microsoft, not Linux.
  3. Minimize the number of strategic buyers.
    1. Let governments access the source code and give guarantees that sensitive data is treated confidentially
    2. Price discriminate. Give binary away to organizations and individuals who are not willing to spend money on Windows but who would be willing to use Linux because it is free.
  4. Reduce costs to be able to sustain long periods of time with low prices.
  5. Decrease Linux's demand-side learning.
    1. Because the way to do this involves some questionable (from a legal point of view) actions, we will refrain from suggesting specifics.
  6. Lessen Linux's direct and indirect network effects.
    1. Make it as hard as possible for Windows applications to work on Linux.
    2. Same for MS Office documents.
    3. "Promote" Linux's code forking.
  7. Infuse fear, uncertainty, and doubt into the Linux user community. For this to work, the statements must be perceived as credible. Credibility requires some past FUD announcements to be realized.


The model is structured in terms of price, quality, and frequency of updates. In Competing Against Time, George Stalk, a consultant with BCG, shows how companies that respond faster to customer needs can expect to be twice as profitable as the industry average, and to grow up to 3x quicker. Stalk arrived at his findings structuring the problem in terms of supply chain, which he described along the following parameters: cost, quality, and timeliness. Not unlike those of Ghemawat and Casadesus-Masanell.

What to do when starting?

You are thinking of materializing your concept into a company or simply put got tired of tiring for others? Here's where you may want to start:

  1. What problem is being solved by your product/service offering?
  2. Talk to potential customers to understand the problem;
  3. Know the cost to customers of the problem you are trying to solve so that you get the price right;
  4. Define your customers as a group linked by a common problem;
  5. Keep the business simple and focused on one mission and one target;
  6. Protect your ideas where possible.

If I could speak to the authors of so many business/management books...

... I would ask them for a favor: write an article, don't waste precious resources on a book! Your need for money or recognition is hardly a reason for most to read your book.

Oh well, and then there are the HBS editors...

Top 50 most looked-up words in 2004

advice, having held the top spot for all but two months of the year, is not surprisingly the most frequently viewed entry on Cambridge Dictionaries Online in 2004. Perhaps more surprising is the fact that the only change in the top 6 is the fall of idiom from 4th place in 2003 to 17. The lack of movement in recent monthly top 20s is possibly a result of the sheer number of searches being carried out - over 75 million in 2004, by far our most successful year ever.

While major world events are frequently reflected in the monthly top 20 charts, their impact is usually too short-lived to affect the annual top 50. However, it is interesting to note that the highest new entry to the chart is inquiry.

1 advice (1) 26 discreet (29)
2 liaise (2) 27 inquiry (-)
3 effect (3) 28 implement (25)
4 regard (5) 29 request (44)
5 comply (6) 30 oblige (38)
6 appreciate (9) 31 retain (35)
7 commit (12) 32 assume (47)
8 assess (8) 33 aware (-)
9 endeavour (16) 34 defy (32)
10 acquire (13) 35 use (39)
11 paradigm (7) 36 access (-)
12 information (14) 37 despite (45)
13 analyse (10) 38 subtle (49)
14 intend (15) 39 continue (41)
15 affect (11) 40 achieve (-)
16 provide (17) 41 concern (-)
17 idiom (4) 42 interest (-)
18 propose (22) 43 competence (48)
19 emphasize (18) 44 ambiguous (23)
20 ubiquitous (21) 45 criterion (33)
21 compete (27) 46 allege (42)
22 benefit (26) 47 schedule (-)
23 enhance (36) 48 enthusiasm (-)
24 respond (30) 49 procure (31)
25 relate (28) 50 experience (-)

This list shows the 50 entries that were looked at most frequently on Cambridge Dictionaries Online in the year 2004. The numbers in brackets indicate the position of that word in 2003's top 50.

Any lessons one may draw from outsourcing war?

From the March/April 2005 issue of Foreign Affairs, we learn from P.W. Singer 5 types of problems that arise in military/defense outsourcing. To the extent such lessons, learned from the interaction of military with private military firms (PMF's,) could be leveraged by those who may consider outsourcing/offshoring in the corporate world, it's worth having a look at them:

"The first involves the question of profit in a military context. To put it bluntly, the incentives of a private company do not always align with its clients' interests--or the public good. In an ideal world, this problem could be kept in check through proper management and oversight; in reality, such scrutiny is often absent. Still more worrisome from a policy standpoint is the question of lost control. Even when contractors do military jobs, they remain private businesses and thus fall outside the military chain of command and justice systems.

The second general challenge with PMFs stems from the unregulated nature of what has become a global industry. There are insufficient controls over who can work for these firms and for whom these firms can work. The recruiting, screening, and hiring of individuals for public military roles is left in private hands. In Iraq, this problem was magnified by the gold-rush effect: many firms entering the market were either entirely new to the business or had rapidly expanded.

The third concern raised by PMFs is, ironically, precisely the feature that makes them so popular with governments today: they can accomplish public ends through private means. In other words, they allow governments to carry out actions that would not otherwise be possible, such as those that would not gain legislative or public approval. Sometimes, such freedom is beneficial: it can allow countries to fill unrecognized or unpopular strategic needs. But it also disconnects the public from its foreign policy, removing certain activities from popular oversight.

PMFs also create legal dilemmas, the fourth sort of policy challenge they raise. On both the personal and the corporate level, there is a striking absence of regulation, oversight, and enforcement. Although private military firms and their employees are now integral parts of many military operations, they tend to fall through the cracks of current legal codes, which sharply distinguish civilians from soldiers. Contractors are not quite civilians, given that they often carry and use weapons, interrogate prisoners, load bombs, and fulfill other critical military roles. Yet they are not quite soldiers, either. One military law analyst noted, "Legally speaking, [military contractors] fall into the same grey area as the unlawful combatants detained at Guantánamo Bay."

The final dilemma raised by the extensive use of private contractors involves the future of the military itself. The armed services have long seen themselves as engaged in a unique profession, set apart from the rest of civilian society, which they are entrusted with securing. The introduction of PMFs, and their recruiting from within the military itself, challenges that uniqueness; the military's professional identity and monopoly on certain activities is being encroached on by the regular civilian marketplace."

Despite obvious limitations (e.g.. when offshoring is not an option, one deals with legal contiguity,) the value of such model comes at least in marking the type of problems one is likely to encounter at one end of the spectrum.

On economics and business

The science of economics should serve the smart business person the same way Marxism has done for the left banks of our academic institutions. Not much reliance in many an object of study as much as dependence on the economics' way of building up an hypotheses-based modus operandi.

Music Making and Business Leadership

Studying leadership is a very elusive undertaking. Understanding business leadership seems to be governed by the Heisenberg's Principle of Uncertainty: "The more precisely the POSITION is determined, the less precisely the MOMENTUM is known."

So, what is left to do for the student in business leadership, other than apprenticeship? HBR and its likes do a good job at giving one angles. Yet, few such proxies come as close to offering a meaningful metaphor about business leadership as music making. For my taste, of organization and music, jazz and classical will do. Let us proceed with some illustrations.

Take the case of a conductor. When dealing with a symphony, the conductor resembles very much your typical CEO. The metaphor changes when the conductor deals with a concert; the interplay with the soloist(s) becomes like the interaction between the CEO and the board or the CEO and a powerful president (of the board maybe.) Claudio Abbado, Herbert Karajan, and Sergiu Celibidache are just three examples of conductors--soft-, autocratic-, all encompassing-leadership, respectively.

With chamber music, you deal with a type of leadership from within. This is the case with consulting partnerships or teams with people at about the same levels of authority and experience. Dependence path is everything here.

In jazz, there are also a few models. The whole idea behind jazz--improvisation, swing, spontaneity, creativity on the move, etc.--corresponds nicely to the smaller entities (e.g. start-ups, workgroups.) Leadership in jazz comes in a few flavors. For example, Miles Davis is the all might and power derived from the authority of his knowledge and creativity. This type knows when and why to come in strongly or let things evolve on their own. John Coltrane is the ever present leader, almost a factotum of the group. This is the type that is all about his idea and ways of doing things. They turn ideas into start-ups. Mingus on the other hand is the type of leadership the exercises authority from behind, he's there only for those who know where/how to listen, he's the ultimate enabler. Jazz epitomizes, musically, the task oriented ad-hoc teams.

Obviously, chamber music and jazz usually offer metaphors applicable to smaller teams whose membership is similar in skills and culture.

For illustrations, have a look at the myriad of DVD's on musical subjects. Especially valuable, one is likely to find those that explain the mechanics of conducting by taking the viewer through a rehearsal. Click here to find a link to a wealth of sources on: Conductors and music making, as leadership metaphors!

Enjoy, and happy session-jamming out of Heisenberg-types of uncertainty!

Markets are conversations...

The Cluetrain manifesto

On management frameworks as metaphors

There is nothing new with how the (strategic) management frameworks or paradigms proliferate--there is a flow out there coming from academics and 'high-powered' management consultants. The utility of such flow is unquestionable for the authors , and to some extent, for the general readership as well. For a practitioner or general interest reader, I suggest the following: Look at these as mere metaphors meant to inform your decision making, and exercise your brain. When solving a problem, one may consider elaborating and deploying a hypothesis-based methodology. Such methodology ought to be informed by what one reads / learns (management frameworks included) and, more importantly, must contain elements of the following cycle: observation(s) --> concept --> testing --> implementation --> measurement --> observation. Hypothesizing should take place especially in the observation and concept phases. In the testing and measurement phases, one ought to see how good one's initial hypotheses were. Obviously, one can play with the above elements as one wishes on the condition that they all come down to hypotheses and (in)validation. Just a thought...
"[S]cience seems impotent to explain the music of chance..."

random thoughts when starting a (technology) business...

Be an evangelist for what you believe in, and what you do. First, it helps you get few like-minded people around you, later it will help you spread the virus of your enthusiasm for the product to partners, money managers, and customers.

You probably start out with a product/service idea for a company and, what is equally if not more important, with a vision. The vision may be about what you and your company will (not) be about. The quality of your vision, pushed by your enthusiasm, is a good measure for the type of people you'll initially attract.

Know what you know and what you don't know. Letting others do what you do not know is vital. This is true at a personal level and company level as well. Focus on your strengths in each case.

Invest in people. Besides selling in a broad sense, investing in people is your most important activity. You'll be amazed by the returns in, let us say, those two instances out of ten when you trusted and invested in people. The happy returns will outweigh by far the five unsatisfactory ones. Never forget to give another chance to the other three by changing assignments, etc.

Understand the role of venture capital money and do not hold on control all costs. Control is the only token of exchange you'll have for a long time. No sin in trading the control at a premium if you can, but stay reasonable.

The most expendable commodity is your own pride!

For you, the founder, titles (should) matter little. This may not be so for the others. Keep this under consideration.

Organic growth (i.e. from within) is the best. Time will tell you that 'organic' may also be just a dream. Quality may be traded-off for speed when growing--when you consciously make this decision look at it as ebb and flow, thus consider always the first opportunity to prune the growth.

Once started on a path, make sure you do not share your 'last night dreams' with your technical folks. They often take those as directions in which to steer their focus. Hedge carefully your words!

Thresholds for growth:

1) Getting the first 2 or 3 around you. Everything floats in the air. High energy levels and great synergy. Chances are these will be your friends for a long time.
As early as this stage, put down on paper some details related to the mechanics of the organization (e.g. ownership quotas, dilution cycles, handling and management of default states/exceptions.) If done well, this will help you build the culture for your future company. Culture being that combination of written and un-written rules that govern the functioning of your organization. A good culture is the first premise for being effective and, on top, efficient--as in strategic and tactic. This is the DNA formation stage. Here's when you decide what you want your company to be.

2) Between 5 and 15 employees: It is still honey-moon. Enjoy the extended family and stay focused. Add some metrics to the culture and think ahead. It's a good time to evaluate the quality of the second wave hirees. If brighter/more specialized than the first wave then you may be on the right track. Now it may also be the time for you to decide who's going to be the CEO. Do you enjoy or are the most productive thinking of paychecks, benefits, legal issues and such? Those missed payments and such won't be ever forgotten.

3) Between 15 and 25 employees: You may no longer know everybody by their names. What you are as a company at this stage is a good predictor for what you'll be in the future. It's time to think partnerships. Shy away from exclusivity in your partnerships. Get to know very well your customer--it's the only asset you'll have in a changing world. This may be the time to call in services provided by entities such as those represented by the undersigned. Considering options and intersecting them with capabilities, bringing clarity and definition to what you (want to) do, have a multiplier effect!

4) Between 25 and 50 employees: Congratulations, you've made this far! Here's where you have to decide the strategy of your company as a grown-up. Venture capital involvement in this process may be unavoidable. Your company is proof you've done something right and worth scaling up. Strategies to consider are: tie yourself to a large and generous platform (e.g. Microsoft's .NET, IBM's WebSphere, open source,) grow through IPO, venture money, organically. Exit strategies may come into the picture--at least for the sake of fund-raising and/or employees' morale. Here's time to see what you can be. Make sure you have clear lines of communications and authority in the company.

5) Between 50-150. I'm glad you are still there! It's time to think channels. If entrepreneurship is your state of being, it may be time to arrange for a gracious exit--depending on the vesting schedules and such, of course. By your leaving, make sure the people behind won't fell like the sky is falling, you may still be emotionally invested, if not materially, in the success of the company.

6) Happy surfing wherever life might have brought you, and don't forget, you are among the lucky 10% who ever make it this far!