Ontologi - Where Strategy Begins
 

If someone tells you that you can’t do something, that you’re not allowed, or it’s not possible, what is your reaction?

Have they given you a Constraint or a Limitation? And what’s the difference?

Both constraints and limitations are boundaries on what you can do. But depending on how you think, one will condemn you to do less and one will enable you to do more.

I Can’t

What does it mean when you say “I can’t.”? It means you’ve made a decision; a decision to take no further action. There’s nothing to be done. I can’t.

This is where “limitation” brings you. It says what you can’t do. It’s gaze is on the other side of the boundary and all the things over there that you can’t do, that you can’t have, that you can’t be.

It’s the opposite of focus! It’s like Barry Bonds standing at home plate thinking to himself, “I can’t hit a 700 foot home run. I’m not strong enough. You can’t do it with a wooden bat - you’d need a metal bat. Man, I can’t even hit an 800, 900 or a 1000 foot home run!”

Focus Through Constraints

Think in terms of limitations and suddenly focus is gone. You’re spread out across all that you can’t do. Thinking about what you can’t do is a waste of time.

But with a constraint, you’re aware of the boundary and you simply focus on an objective inside that boundary. The boundary hasn’t limited you, it has helped you focus. It eliminated a whole swath of choices and decisions for you to make.

Examples

A limitation example from TechCrunch on the release of the iPhone API:

Perhaps future versions of the iPhone, with additional CPU and memory resources, won’t have this limitation. But for now, whole classes of applications are useless, or are significantly less useful than they otherwise would be.

The focus is on what can’t be done.

Consider this post from 37Signals on creating webapps for the iPhone:

As I was working on some UI ideas, Ryan and I were talking about some of really cool things about designing for the iPhone…I remarked that I loved the constraints…It’s a return to the power of text, shape, color, and basic HTML.

The constraints of a small device used as motivation for innovation.

Hank Williams devotes quite a bit of thought to what he can’t do with a product he doesn’t intend to use (the iPhone):

Lets look at some of the specifics of what kind of limitations the “no background apps” policy really imposes…[920 words of what you can’t do follows]

So much time and thought dedicated to the 800 foot home run.

Andy Rutledge’s perspective as a designer:

Constraints are a designer’s best friend. They’re signposts, not shackles. In a sense, constraints amount to the solution half-built. It is merely up to us to then realize the other half according to what these signposts indicate is appropriate.

It is helpful to know what you can build. Why waste effort on what can’t be built?

Twitter CEO Jack Dorsey back in May 2007:

We’re fond of constraints that inspire creativity. Constraints inspire us in how we approach the press, how we approach business relationships, how we do everything.

Constraints require creativity.

Merlin Mann: Creative Constraints: Going to Jail to Get Free:

Twitter’s making me a stronger writer. I think harder about how to say more using fewer and shorter words. Nothing beats hitting the Twoosh.

Really it all comes back to control. You talk in terms of limitations when someone or something that you don’t control, does what you don’t want. You look at what you can’t do as a conspiracy to make you impotent, instead of the reality: You control very little.

But when You focus and when you use, and even look for, constraints to help you focus, creativity, ingenuity, innovation and genius spring forth.

Ignore limitations. Feed on Constraints.

Update:

37signals put up some great links on contraints. Choosing to constrain yourself, to do less, to work with less, requires you to be more creative.

I know I’m contradicting what seems to be the Holy Writ out there right now but so be it. The iPhone is, in no way shape or form, a convergence device.

It does not combine a phone, an iPod and a “revolutionary communications device” into one utopian device.

Ready?

The iPhone is a computer. Just as your desktop computer is a general purpose computer for stationary work, the iPhone is a new type of computer specifically designed for mobility.

And just like your PC, the iPhone does two very important things. It diverges and it enables divergence. Too buzzwordy?

The PC was a new category - it broke out from the room sized mini-computers before it. But more than that, it enabled other companies to create new categories of software: Desktop Publishing, Word Processing, Video Editing.

They just keep getting smaller…

The iPhone breaks out, not from phones or PDA’s or communicators, but from laptops. It creates a new category of portable computer. And it enables new categories of software that couldn’t exist without the iPhone’s hardware as a platform.iPhone Computer

What we’re seeing in the iPhone is not the convergence of 3 devices, but the commoditization of those 3 into “software applications”.

Just to make it clear

The iPhone is not a convergence device. It is a divergent device that enables further divergence through software.

Allow me to prove it to you. Let’s go back to the early days of the PC. It’s 1979 and the Apple II is a hobbyist’s toy, great for techies but useless for everyone else.

Enter Dan Bricklin: the man with the problem.

Dan Bricklin was studying for his MBA and was struck by the limitations of a common (paper) spreadsheet. As a professor was giving a lecture, he found an error in a single cell and was forced to change the value in every other cell. Bricklin imagined…a simple interface that would allow him to create spreadsheets that could be corrected and redone on the fly.

The program went on sale in November of 1979 and was a big hit. It retailed for US$100 and sold so well that many dealers started bundling the Apple II with VisiCalc.

The success of VisiCalc turned Apple into a successful company, selling tens of thousands of the pricey 32 KB Apple IIs to businesses that wanted them only for the spreadsheet.

Businesses didn’t want the Apple II, they wanted VisiCalc and they had to buy an Apple II to get it. But now businesses have the Apple II and other players can create whole new categories of software applications to solve other problems.

There’s no convergence here. The concept of a personal computer was a big break from the shared machines that came before. And now, the existence of an installed base of Apple II’s provides the foundation for divergence in software.

And why is that valuable? Innovation in software is much, much, much cheaper than in hardware. Faster iteration, easier testing, easier distribution, lower marginal costs - the list of benefits goes on and on.

People, Software, Hardware

In that order. People use software. Software needs hardware. Without hardware, there is no software and the people disappear. Without software, the hardware does nothing and people won’t buy it.

There is of course, another name for software like VisiCalc that makes new hardware desirable: The Killer App. The application that makes buying the hardware worthwhile.

The Killer App for the iPhone is actually a suite of software. It’s a phone application, a music/video application, and a couple of connectivity apps. It’s exactly like buying a new machine so you can run Microsoft Office. You want the software so you buy the hardware that it runs on.

From Typewriter to Microsoft Word

Most notable about what Apple’s done is that they have switched from a hardware phone device to a software phone application. Remember all those benefits of software over hardware? It all applies to the iPhone’s phone app.

And the release of the SDK brings us back to the Apple II. The Killer App has attracted customers and now there’s an installed base of a divergent, new category of handheld computers. What new problems can we solve by writing software for it?

For further proof of the iPhone’s breakout from laptops, observe the relationship between the iPhone’s OS and software development tools versus the OS and tools for Apple’s Laptops and Desktops.

The same OS and tools are used for both. The only differences spring from the constraints that exist for mobile devices.

What were we thinking?!?

If the iPhone is truly divergent, how did we come to think of it as a convergence device? Simple. We assumed that Apple would call it what it is. They call it an iPhone, so it’s a phone right? And they’re adding stuff to a phone, that’s convergence, right?

The oldest trick in the book

What Apple did is analogous to renaming the Apple II, the VisiCalc or selling a PC called The Microsoft Office Machine. They just named the device after the killer app (or part of the suite - same with the iPod Touch). And boy have we bought it:

Patrick Dubroy thought the iPhone was the “make-or-break test for the theory of convergence” in iPhone is the acid test for convergence.

Matt Rosoff at CNET asked, “The real question: can the iPhone break the convergence rule?”

The TW BrandBlog sees initial sales for the iPhone as proof that, “Apple has grown the market size for smart phones.”

Laura Ries panned it pretty hard, but her analysis is spot on, if the iPhone is a phone and not a computer:

The bottom line is that smartphones are compromised. The phone, email, music and internet functions are very different from one another. One small device doing all of them cannot be better than individual devices doing each of them. It is a fact of life.

With the iPhone, Apple has definitely produced the best, most fantastic smartphone ever. It is a beautiful and elegant piece of hardware with simple well designed software. But it is still a smartphone, a multifunction convergence device.

Hmm…

On your desktop computer or laptop, is having a phone application (Skype), an email application (Mail), a music application (iTunes) and internet functions (Safari, Firefox, Internet Explorer) convergence? Because they run on the same machine are they all somehow weakened?

Not at all. Looking at the iPod, Laura gives the reason why:

The iPod is a divergence product. It does one thing extremely well: plays music.

Divergence in Software

Skype is a software based divergence product.
It does one thing extremely well: makes calls.

Mail: manages email.
iTunes: plays music.
Firefox: browses the internet.

(And incidently, Web browsers have enabled whole new categories of divergence through, you got it, webapps)

Each of these applications can focus on the one thing they do well because they have the general purpose hardware to back them up.

Adding these same applications to a phone device, that would be convergence. Building new versions to run on a new category of portable computer: That’s divergence.

What’s in a name?

Notice that other than a cellular radio, nothing about the iPhone’s hardware is specific to a phone. The interface wasn’t designed for a phone. They certainly didn’t need a to create a new version of OSX just to make a phone. They didn’t need a screen that big for a phone.

The same is true for all the other software on the iPhone. None of the hardware is specific to those applications. General purpose hardware, specific purpose applications.

Apple II and VisiCalc.
PC’s and the Microsoft Office Suite.
iPhone and the i’mPortable suite.

This seems familiar

Is the iPhone the first in this category? No. The ultra portable computer has been tried and tried and every attempt has failed.

The iPhone is an attempt to be the first successful ultra portable computer by making 3 changes.

  • Creating the most versatile interface for a device that size.
    • Eliminate the stylus - annoying and easy to lose. Typing is easier than writing by hand.
    • Eliminate the mouse cursor - Why put it on a screen so small?
  • A suite of software that together forms a Killer App justifying the hardware purchase.
    • Strong software that users really enjoy using.
    • Sets new Human Interface standards for portables.
  • Deriving the OS from a full Desktop OS.
    • Shared development software with Desktop Development.

Windows Mobile has sort-of done the OS thing before, but the software and the interface weren’t strong enough. And most of the devices are more…convergency (Can I say that?)

OQO CloseupThe OQO brings the Desktop OS directly to the small device but brings the Desktop interface and *ugh* the mouse cursor as well.

There are some linux based “smartphones” that are really computers too, but they lack the killer apps and the interface.

Money to Burn

Apple made a portable computer, called it a phone and sold a million of ‘em. Now Kleiner Perkins is making a $100 million dollar bet, not on cheezy little apps for a phone, but on mobile applications for a new category of computers.

James Cherkoff at Collaborate Marketing saw it:

Steve Jobs…created a whole new product category by calling a computer a phone and thereby making it seem less dorky…Now, the phone which is actually a computer which is actually a new computing platform is actually a marketplace. Stick that in your media convergence pipe and smoke it!

I can’t predict the future but I do like the odds for the category.

Starbucks means quality coffee. Not sandwiches. Not 99 cent bargain coffee. Not even music. It means coffee. I know this and I don’t even drink coffee.

So when Starbucks is faced with the inevitable, the slowing of its stellar growth, what’s the solution? Some say expand into other areas, widen the focus. Laura Ries gives a great analysis on how Starbucks is now backtracking to its roots, coffee, to drive it into the future.

The three hour shutdown of Starbucks for barista reeducation is indicative of renewed focus. Of doing what they do best: coffee.

But what about those breakfast sandwiches, cakes and the like? These things complement coffee. Many do enjoy eating something with their beverage.

Is it possible to satisfy this need while not distracting from Starbucks’ focus?

It is if you let someone else do it. Just as focus is valuable for coffee, focus is valuable for foods that complement coffee. There are others out there who make great foods that would make a cup of joe that much sweeter.

While Dunkin Donuts is hawking sugar covered donuts, Starbucks could be partnering with chefs in every city to create pastry and breakfast counters inside Starbucks locations. Not to provide the same fare in every location like a Dunkin wannabe, but to capture the local flavor of each region.

The partner would handle inventory, storage and food preparation in space reserved for them on site. The Starbucks baristas focus on coffee - no more warming egg sandwiches. The partner focuses on creating quality foods that complement Starbucks coffee. And the partner operates under their own name, their own brand, not Starbucks. You can get it at Starbucks but it’s not Starbucks food.

Starbucks takes a share of the profits that each partner generates, reaping the benefits of the relationship without moving from their focus. They introduce more local flavor to each location. They provide more inducement for people to meet, congregate and conduct business at Starbucks and if a partner isn’t performing, pull it from the location and find someone new.

From Starbucks’ perspective, the partnerships simply bring people into their locations to buy coffee.

Adding sandwiches to a coffee shop can increase the bottom line, but not if it undermines the reason people come in the first place. Don’t expand your focus, find or create partners with a complementary focus.

P.S. To really make it interesting, pay 100% of Starbucks’ cut of the food partner’s profits to the location’s employees for every purchase that involves food and coffee. Encourage the team to find food partners who bring people in for coffee. The more coffee that moves, the better for Starbucks. Focus.

Getting to the Core of Business

This post on the process of lead generation is quite good. It reminded me of a larger question that we are wrestling with. What makes a business process good?

Yes it must produce results but there are some processes that produce results sometimes and nothing at other times - imagine a process for creating hype.

Let’s just start with this: A good process is one that inevitably produces results.

Put some apple seeds in the ground, give them water and sun and prune appropriately and you will get apples. With that process it’s inevitable.

So it is with business. The next question is: How do you take your current processes and turn them into “inevitable” processes?

So…Why Do You Do Yoga?

This Yoga mat idea with a built in flexible display demonstrates the challenge of predicting the future of technology.

We look through the lens of how we currently use today’s technology to come up with fantastic potential applications 5 years in the future.

This Yoga mat plays mp3’s. Why would you use this mat instead of an mp3 player? It also plays streaming video right on the mat. Why is that better than a TV? You can video conference with friends or a Yoga instructor…The camera must be somewhere else.

Mp3’s and streaming video and Yoga are popular…So we put them together and get a poor mp3 player, strange video player and obscenely expensive Yoga mat.

All that complexity seems to be the exact opposite of what Yoga is about…

I’m a little late commenting on this but I feel compelled to say that I disagree with the popular sentiment expressed in Lewis Green’s characterization of Steve Job’s and Apple’s $200 price drop on the iPhone.

He says the price drop means:

  • The product was never worth the higher price.
  • Apple screwed up.
  • But maybe no one will notice if they stick the correct price tag on their product.

The iPhone was worth the higher price - People paid it. By definition, it’s worth what people pay. And this wasn’t a mistake by Apple; lowering the price will benefit them and their customers in the long run. It was a missed opportunity.

Seth Godin nails it. This price change was an opportunity to reward the early adopters by making their purchase even more exclusive.

Prices on high tech gadgets always plummet. But how often does a price drop make your earlier customers even happier?

Satisfying nearly a million customers at $600 is good.
Potentially satisfying another 10 million at $400 is better.
Convincing the first million to cheer the price drop is priceless.

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High Inventory means No Focus

There are geniuses at Ford Motor Company. They know exactly what customers want. So well in fact, that they load up an inventory of tens of thousands of cars at dealerships, confident that each car is exactly what one of their customers wants.

So how does Ford have such prescience and Dell has been doing everything in its power to reduce inventory for the past 10 years?

The benefits of reduced inventory, high turnover and “velocity” are well known. But I prefer to dig a little deeper. With high inventory: Where is your focus?

If you had hundreds of millions of dollars of inventory, like Ford, sitting out in the sun and rain depreciating, where would your focus be? On the cars or the customers?

Let’s Play

Let’s play with making car manufacturing a little more like Dell’s fulfillment process and see where our focus shifts:

Dell doesn’t begin to assemble your computer until after you’ve purchased it. The internal components have already been manufactured: hard drives, LCD screens, mother boards, microprocessors and DVD drives. But final manufacturing and assembly according to your specific preferences is held off until the last possible moment.

The “general” is done in anticipation of a purchase and the “specific” is done only after the customer places an order.

A Smaller Dealership

Imagine a dealership with unpainted bodies, unmounted motors, partially finished dashboards, seats without upholstery; an inventory not of finished cars but of finished and semi-finished components to be assembled when the customer selects features, fit, finish and trim.

Right now a dealer might have 100 Ford Expeditions on the lot. But if they only sell 2 a day, then they only really need 2-4 Expedition frames, dashboards and bodies on hand per day and, based on forecasted demand, some inventory of pre-painted body panels, fabrics, navigation units, rear lift-gate motors etc.

Benefits?

But so what? What does this give us? Well, if a recall prompts a design change to a specific part, swapping in a new version on an unassembled car is trivial.

If consumer demand indicates a preference for different interior/exterior color combinations, the parts inventory can be changed in a matter of days as opposed to months - Or even hours if you can paint body panels on site.

And the factory? It can be made simpler, smaller and more efficient because it doesn’t need to create versions of vehicles, only generic finished components. Everything that makes a vehicle individual to a customer is done at the dealership. You don’t ask “How many red Ford Expeditions should be made?”, you ask, “At what rate should we produce Ford Expedition frames and bodies to satisfy demand?”

Do you see the difference? Ignore the reduced capital costs. Ignore the lower insurance, depreciation, real estate and transportation costs. Ignore the savings from eliminating dealer incentives on mountains of unsold cars.

Filling up lots with cars requires that we focus on making cars. By reducing inventory and waiting until a customer makes his final selections to do final assembly means our focus is on providing exactly what the customer wants.

Reducing inventory requires that you be more responsive to customer demand. A finished car that can’t be sold should never have been built.

Bringing it home

Ford has a process that produces inventory which is then sold.
Dell has a process that produces computers that have already been bought.

Ford creates thousands of cars and then puts billions into selling what it has. Dell has customers who already want to buy and simply lets them choose exactly what they want.

How can Ford or any car manufacturer produce 100,000 cars before asking the customers what they want? The only way to know exactly what a customer wants is to watch what they do with their money, to watch what they buy.

And so to produce all that inventory before you really know what the customer wants is…well, arrogant. To evolve your processes to be receptive for when the customer takes out his wallet and declares what he wants is to recognize reality: you serve customers. Orient everything towards satisfying customers, not filling inventory.

Reducing inventory isn’t just about using capital wisely, it’s about removing distractions to your focus, the customer.

Google Trends and Focus

How do you know which blogs are consistently wasting your time? Enter Google Reader’s Trends feature and 30 days of data collection.

This is a tale of 3 blogs: Engadget, Techmeme and Lifehacker. According to Google Reader these three blogs produce, on average respectively, 29.4, 22.8 and 13.8 posts per day. Now, I knew they posted a lot and I had become a bit frustrated with the volume but I never suspected this much.

Well, over the past 30 days I’ve gone through my routine, searching for valuable nuggets fed to me from throughout the ‘verse. The numbers for Engadget, Techmeme and Lifehacker? Here you go:

My Subscription Trends

1-3% Quite low, no? But more interesting is that before this month began these numbers were much higher. The difference? Google Reader’s Trends feature reminded me that I need to say “No”. When I see headline after headline on Engadget about a fancy new gadget I have no interest in or blogger after blogger annoucing the same news on Techmeme, why to I declare, “Yes! I will invest my time in reading that!”, and open the post?

There is far too much information in this world to be consumed, I should be saying No much more often. I should only say Yes, when the information, insights, wisdom or encouragement from a given blog help me get where I’m going. Less Yes, More No.

Buh Bye

30 posts a day and I read 1 in 100? You are so fired. But not so fast. What about that 1 post? Can I get that one bit of wheat from among the chaff? Well, I could change my subscription to the category or tag feeds these blogs offer to filter out large swaths of subject matter that don’t interest me.

Not good enough.

I don’t read blogs to consume the fruit of machine analysis. I consume the thoughts, ideas, wisdom, perspective, triumphs and failures of people.

I’m looking for a person, maybe two or three, with a blog who has no interest in the chaff and only wants to talk in depth about the wheat. Not a content factory that comments on everything that comes its way and expects me to figure out how to filter it all.

A few blogs whose posts I read in their entirety more than 75% of the time:
Cafe Hayek
Signal vs. Noise
Cox & Forkum (95%) - this is low, I guess I missed one
Fresh Thinking
Joel on Software (100%)
Andy Rutledge Design View

Technology is cool. It looks cool, makes us look cool, and has improved our quality of life in incalculable ways.

And it aggravates us to no end.

We sift through hundreds of features in our software to find the one we actually need. We suffer through clunky interfaces just to fight with a bleeding edge gadget for a whiz-bang feature with 5 minutes of utility and an eternity of gimmick.

Too much technology is made for technology’s sake with only a token thought for the humans who actually use it.

Glen Reynolds of InstaPundit has an article in the May issue of Popular Mechanics, Bring Back Our Knobs: Analog vs. Digital.

Not so long ago, if I wanted to adjust the heat in my car, or the volume on my car radio, I could grab a nice, simple knob. Turn it to the right, and the car got warmer, or the radio got louder. Turn it the other way, and the opposite occurred. I could always sense how far I was adjusting things — without ever taking my eyes off the road — because millions of years of evolution have produced a neurological feedback mechanism that lets me know just how much I’m turning my wrist.

Easy, effective, intuitive.

We could look at this purely as a design issue. Minimalism versus Simplicity. Whereas Minimalism wants fewer knobs and dials compressed into one beautifully stark design, Simplicity wants however many or few knobs and dials it takes to let a human do what they value most, effortlessly.

A older post on Garr Reynolds Presentation Zen, Gates, Jobs, & the Zen aesthetic, turned me on to a great quote:

“Simplicity means the achievement of maximum effect with minimum means.”
— Dr. Koichi Kawana

“Maximum effect with minimum means” doesn’t mean 800 functions in one knob! Maximum effect is achieved through what is most valuable. Not only are Functions 5 through 800 less valuable, their presence detracts from “maximum effect”.

It’s iDrive versus iPod.

And even deeper than design: For whom is technology created? People, People, People. It doesn’t matter how cool, fast, small, efficient or new; if no human values it, it’s worthless.

“But I’ve got a cool widget that would make life better for all pets everywhere!” Talk to the owners, ’cause the pets ain’t listenin’.

Have you seen a commercial for cat food recently? The slow motion shots of luscious, scrumptious, moist cat food? Can a cat understand any of that? Of course not. Would a human find cat food appealing? I hope not.

So why talk about how cat food tastes? Because it’s not about the cat at all. It’s all about the owner, the human. High end cat food exists because of the value people place on giving the best to their cats. It’s about people.

Cat food marketers have figured this out, but too many in the high technology business have not.

And what happens when we don’t “get it”?

Complex interfaces exposed to drivers while ignoring the potential of an undistracted passenger.

Unnecessary technology mashed into washing machines while ignoring the problem of how to wash and dry 6 loads of clothes without baby-sitting the machine very 45 minutes.

Do I need to mention that my cell phone needs rebooting every day?

It’s about people. Not features. Not specs. Not throughput. Not cool. Not sexy. Not trendy. People.

Why do BMW’s, the ultimate driving machines, have so many driver distracting gadgets?

geneva2007pics3_022
Engaget and Wired Blogs report that BMW is rolling out a concept satellite/WiFi/Cellular entertainment console in the dashboard. Entertainment for the kids in the back, sure. Download content off satellite TV so you can watch it when you get to the hotel, absolutely.
But why put it in the dashboard of the ultimate driving machine…Driving.

I’m not a fan of BMW’s iDrive system, I think it’s distracting, over complicated gadgetry. I have no problem with its functionality, but for the driver of a driver’s car it exposes unnecessary functions while driving.

Get In. Sit Down. Shut Up and Hold On.
The real brain teaser is what’s the passenger doing? Given that the driver needs to…well, drive, what can a passenger do with all this dashboard technology?

Passengers aren’t driving so they don’t need any voice activated wizardry. They can use both hands, both eyes and both halves of their brains. Granted, there isn’t always someone in the passenger seat but that’s the point. There isn’t always no one in the passenger seat.

What could you do with a navigation system when the user doesn’t have to navigate through traffic and change lanes with semis bearing down? What couldn’t you do with an entertainment system?

In car games with the kid’s in the back? Control a camera in the front grill to create a time lapse video of the trip? Monitor 4 camera feeds and advise the driver while parallel parking? Check the weather. Find motels along the highway. Look up restaurant locations and read the reviews. Plan routes with multiple stops along the way and change the plan halfway through.

Or how about when that useful worthless service light stains the driver’s dashboard, actually show all the diagnostics to the passenger. Who wants to go back to the dealer when all you need is windshield washer fluid?

All passengers can do today is twiddle their thumbs and change the radio station. And all drivers really need to do is drive. There’s no reason the ultimate driving machine can’t add the ultimate passenger experience.