That’s Not an Egg!

Some time ago in this space I speculated that Apple needed to come up with the next Big Thing in personal electronic devices, and noted that while the iPhone has been the mainstay of their business model for several years, there is a limit to how far they can develop the smart phone using the current technology. They needed to come up with a new product that would renew the company’s previous reputation for innovation and cutting edge technology, and I really doubted that the new Apple Watch was going to be that new product. Although, to be fair, I also noted that I didn’t have any better ideas, and pointed out that I could be wrong about the watch…

Now, I don’t suppose it will come as much of a shock to anyone that the product development people at Apple know their customers better than I do; that is their job, after all. I’ve been using Apple equipment ever since my family got its first home computer (an Apple II+) in 1981, but I’m still not one of the fanatic Apple fans who will buy whatever the company produces and then tell everyone in the world that this is the greatest thing ever (even if they don’t know exactly what it does). I own an iPhone, for example, but I’m writing this post on a Windows machine. Based on the news reports we’ve been seeing lately, however, I’m pretty sure that no one in the Apple-using community, or even anyone from the company itself, was expecting that nearly one million people would purchase the Apple Watch during the first six hours of the pre-order period…

You can pick up the original story from the Washington Post website if you don’t believe me, and I can certainly understand why you wouldn’t. The Post is estimating that 957,000 people placed orders, and that at least some of them placed multiple orders, with an average of 1.3 units per order and an average sale amount in excess of $500. Customers who ordered any of the more expensive Apple Watch types went even higher, with an average sale price of over $700. If these numbers are accurate, the gross sales amount on this new product exceeded $481 million in just the first six hours they were available for pre-order…

Now, I still have my doubts about the long-term prospects of the Apple Watch. For one thing, it seems that fewer and fewer people are even wearing watches these days – a lot of my students tell me that when you carry a device around with you that has a time and date function on it, a separate device that just tells you the time seems redundant. There’s also the fact that you need to sync up the Watch to some other Apple device (usually an iPhone) to use most of its functionality, and the fact that most of those functions are already present on the iPhone itself. But what this argument does not consider is what else the development teams may have learned during the process…

One of the most important factors in any R&D project is what you learn by doing it, and while this often gets overlooked when we talk about product development research, all of the same points apply. Sure, the circular hotdog never made it into production because it was the dumbest-looking thing anybody had ever seen, but the company that invented it has been making money on products that make use of the same meat-extrusion technology for at least the last 30 years. Apple’s first attempt at a small electronic device (the ill-fated “Newton” personal digital assistant) cratered hard, but the experience in building compact electronic circuit boards, power systems, displays and housings paid off when it came time to build the first iPod, and then again with the iPhone. And even if the company’s first attempt at wearable computer technology had failed, there’s no telling what they might have learned in the process…

That doesn’t look like it’s going to be a problem in this case (957,000 orders in the first 6 hours?), but I think it’s worth pointing out to anyone else who might be considering public statements questioning the development of the Apple Watch…

The Ethics of Screening

Once again, let me being by assuring everyone that I have no issues, ethical or otherwise, with the constructs that prevent insects from flying into your house, upon which you watch movies, or with which your t-shirts are decorated; the screening I refer to today is the use of test questions asked of job applicants in advance of your interviewing them. This is hardly a new practice; the use of telephone screenings predates the existence of the Internet and most of its current users, and the use of intermediaries to lower the number of applicants you personally have to speak with predates the Industrial Revolution and possibly the rise of human civilization. But given the new technologies being used for these procedures, and the potential for abuse in the Internet era, it seemed worth discussing further…

With the rise of Internet job search services like Monster and Career Builder the traditional task of weeding out the applicant pool has expanded by several orders of magnitude – because so has the size of that pool. Before these systems were available it took time and cost money to apply for a job – there was the cost of typing a cover letter and the expense of printing a copy of your resume on nice paper, not to mention postage to get it there. Consequently, most job seekers were limited in the number of resumes they could send out, and would elect to concentrate their resources on jobs for which they actually qualified. Today, applying for a job is as cheap and simple as pushing a button, and millions of people apparently do this without even bothering to look at the job description…

To counter this, many companies have taken to using automated systems that can use the incoming applications and materials to create a database, which they then mine for applicants who might actually prove suitable for the job. Unfortunately, some of these work better than others, and even very good human resources software is far from perfect, resulting in many applicants who would otherwise be ideal being excluded on the basis of minutiae like formatting and font size, while many others who should never have applied in the first place end up clogging up the works. Clearly there is a saving in salaries to be realized by not having to pay people to dig through this mountain of useless resumes, but if the optimal applicant is not selected for interview (and therefore not hired) there will be a non-zero cost as well…

Then there’s the use of telephone or Internet-based testing. Phone interviews clearly offer an opportunity to use human discretion and judgment when evaluating applicants, but they put hearing-impaired applicants and anyone who particularly dislikes telephone conversations (it’s more common than you might think) at a significant disadvantage. Internet-based assessment tests eliminate the awkwardness of trying to persuade someone who can’t see you (and whom you can’t see) to hire you, but they impart a significant disadvantage to anyone who can’t see well, can’t type well, or does not perform well on standardized tests (computerized or otherwise). In fact, some of the number-sequence and reading-based questions are so disproportionately difficult to some applicants (dyslexics, for example) as to be questionable under the Americans with Disabilities Act…

All of which leads me to ask: do we have an ethical responsibility to give all applicants an equal chance to be selected for interview, and an equal chance to make their case for why they should be hired? If so, does that responsibility over-ride our fiduciary responsibility to our ownership group to contain recruiting costs? Can we ethically use electronic and/or telephone screenings knowing that some worthwhile people will be denied the opportunity to work for us because they will be unjustly screened out? Can we responsibly use such methods knowing that in some cases the best applicants will be incorrectly screened out, resulting in financial loss to our company? Or should we just leave matters up to the hiring managers involved, and let them make the choices they are being employed by the company to make anyway?

It’s worth thinking about…

Watch That Computer!

There was a story on the UPI website this week about an incident at a Radio Shack in Maryland last week, where the salesman wrote an unflattering description of the customer onto her receipt after they exchanged words regarding the 5-cent “plastic bag” tax implemented in the community around the store. If you’ve ever been to a Radio Shack you’re probably already familiar with their in-store Point-of-Sale computer system (which is called a POS for a reason), and the annoying way the clerk has to input your contact information every time they sell you anything. What you may not have realized is that the system also requires all of the same information for refunds, even if the customer is angry and wants his or her money back because a local ordinance is adding five cents to her total charge…

It’s easy to imagine the scene, isn’t it? The clerk, who couldn’t do anything about local taxes and charges if he wanted to; the customer who has had one too many things go wrong today; the increasingly unpleasant exchange, and finally the demand to just refund the whole transaction – and the refusal to repeat any of the contact information. It would undoubtedly have gone better if the clerk had entered something else into the contact information pages (even random keystrokes); the clerk should have realized that anyone who was already that irate was likely to blow up at him for such a prank, and that anyone who would demand a full refund over a 5-cent charge would probably make a huge stink out of his prank, writing to corporate headquarters and informing the media. Still, I can help reflecting that things could still be much worse…

I was transported back to an event that happened nearly 18 years ago now, when I was working in a drug store in Los Angeles. The company’s advertising slogan at the time was “[Company Name]: Count on People Who Care!” which was repeated on television ads, billboards, and at the bottom of all receipts. But one day a story turned up in the paper about someone (it later turned out to be a disgruntled employee) who had reprogrammed one of the stores’ computers to print “[Company Name]: Ask Us If We Care!” Corporate Headquarters in Chicago (and our regional HQ in Anaheim) went into overdrive trying to bury the story, but as our local paper had a circulation of a million and a half, that didn’t really work. And there wasn’t much they could do about spinning it…

Now, since that time I’ve seen a lot of unauthorized comments on receipts (and other documents), and there’s no question that our chain of drug stores got off easy in the 1994 episode – or that Radio Shack is likely to avoid any major bad outcomes from this incident, either. And it’s probably unrealistic to expect every employee down on the sharp end of customer service to behave like a perfect gentleman after some unbalanced customer has jumped all over him for a 5-cent municipal fee, especially when (as is often the case in retail) he’s only being paid minimum wage. I call this story to your attention because this customer is still out there, along with thousands (or millions) of others just like her, and sooner or later one of them is going to pick a fight with someone from your company, too…

Spear Phishing

About ten years ago I was still working in corporate America when an email warning came down from the company’s Information Technology department warning of a nation-wide virus attack that would arrive as an attachment to an email titled “I Love You.” The folks in IT warned all of us not to open any attachments from unknown senders, and advised that we should just delete any messages with that title for the next few days; they also made a point of warning everyone who had their email set to automatically open all attachment to uncheck the boxes, and in fact included the instructions for how to do that. One might reasonably expect that everyone in the company would have complied with these instructions, especially when a follow-up message came from the senior management team commending the IT department on this timely warning (which had been all over the news for the previous 48 hours already) and ordering everyone to take heed…

You’ve already guessed what happened, haven’t you? Yes, that’s right: nearly every member of senior management opened at least one of these infected emails, and every one of them had their email program set to automatically open attachments. In fact, the officer who sent around the follow-up message and condescending orders opened no less than a dozen of them (or possibly his secretary did to make him look even stupider than usual). It took our IT people almost two days of working around the clock to get all of the virus packets out of our system, and a hard as it may be to believe, within minutes of their finishing the job and bringing our email back up, a half-dozen people opened MORE infected emails, again with automatically opened attachments, and crashed everything for another couple of days. The following week, people from the IT building went around to every office and deleted the “automatic open” setting whether the user agreed to it or not – which caused some fireworks up in the executive suite, as you might imagine…

It all seems so quaint now, given the way virus attacks, email fraud and identity theft have become part of our lives. But anyone who thinks that the war between online thieves and security people is over really needs to read this article from The New York Times about a new practice called “spear phishing.” These attacks are similar to the more familiar email scams where someone will attempt to convince you to enter your password or personal information into a fake interface (so they can steal your identity, drain your bank account, run up fraudulent charges on your credit card, and so on), collectively known as “phishing” schemes, except that these new outrages are specifically targeted and meticulously researched, in order to make the target think they are legitimate. For many years now the majority of phishing schemes have failed because they are so shoddily constructed in the first place, with absurd grammatical and spelling mistakes, outrageous requests, and idiotic appeals to do things that no sane person would do – and I’ve been wondering when someone would finally realize that even a few attacks that actually work would be better than millions that are automatically deleted, and plan accordingly…

Of course, as time goes on and the race between measure and counter-measure grows ever more complex, there will inevitably come a time when the computer security of this time appears childishly primitive, and the fact that anyone ever fell for a spear phishing attack will seem as quaint as the people who were fooled by the “I Love You” virus do to us now. The real lesson here, I think, is that the ongoing war between hackers and counter-hackers is not likely to end within our lifetimes; if we expect to be considered competent managers and business people (or at least to avoid complete fiduciary misconduct) we will have to continue to learn and adapt, and remain vigilant. Because I can almost guarantee you that the hackers will…

The Ethics of Google

One of the units in the Strategic Management class I teach these days covers intelligence gathering, and specifically the need to use all of the people who work for you to gain and process information about customers, vendors, competitors, and environmental factors that might possibly impact the company. Information has always been the limiting factor on strategy development, and forward planning in general, and in the Internet age just about anyone who works for you could run across some critical piece of information on any given day – without even knowing what they’ve discovered. To illustrate the idea, I gave them the example of using Google to research your teachers before starting a class – and how, if they had Googled me they would have found this blog and all of the information it contains about my political, social, economic and personal biases. A good essayist could use that information to tweak a paper to hit my buttons, and even without that application, it would still help you to decide how much reliance to place on my lessons. But while everyone in the class seemed to be able to grasp the idea of gathering this sort of intelligence, a number of ethical issues came up in the same conversation, and I thought it might be interesting to take a closer look…

First, there’s the issue of whether using such information to get on someone’s good side is ethically correct. Granted that there’s not much point in sucking up to a graduate student instructor like me, but suppose it’s your boss – or the CEO who will determine if you’re going to have a long and lucrative career or go back to the farm. It’s hard to imagine how using publicly-available information to conform to his or her ideals of what an employee should be like would be illegal or immoral in absolute terms, but it’s still ingratiating behavior, and inherently dishonest, at least in potential. A more extreme example would be using someone’s online writings (blogs, fanfics, self-published poetry, or whatever) to profile them, and then using your profile of their psychology to manipulate them. It’s certainly possible, using modern search resources, but is it ethical?

Alternately, there’s the possibility of using these new resources to dig up dirt on someone. Examples like the teacher who used to be an “adult film star” are going to be relatively rare, but the old dodge of finding something that the CEO will hate about your rival (or even your boss!) and making sure that information gets loose around the company pre-dates the invention of the Internet by generations. This is also deep into an ethical grey area. On the one hand, you’d certainly want to know if your new company Controller did time for embezzlement, and it could be argued that you have a fiduciary responsibility to the company to make sure higher management knows about this, too. On the other hand, these same resources can be miss-used to tell your boss about a co-worker who attended a rival college, voted for the wrong party, or did something else to which your boss will take an unjustified but virulent dislike…

There was a time when gathering this sort of information would take months of pre-planning, days in the library, huge bribes, and occasionally the employment of private detectives; today the mad geniuses at Google can make all of this information available to you in a couple of keystrokes. The power that would once have been limited to a handful of rich and powerful individuals is now available to anyone with a computer and an Internet connection, and most people aren’t ready for that. The world has evolved, but our ethical structure hasn’t caught up with it yet. In many ways, the misuse of informational resources is just the flip side of the “cyberbullying” cases we’re starting to hear more and more about – and as we move further into the digital age, new social customs and corresponding laws are going to evolve. But until that happens, individuals with Internet access and search abilities will have a huge advantage over everyone who does not. So I have to ask you: is it ethical to use that power to gain a competitive advantage over your rivals in a business context?

It’s worth thinking about…

The Commodore 64: Not Dead Yet

Thirty years ago next summer there were two great divisions among geek culture: Commodore and Apple. Much as was the case with Ford vs. Chevy a generation earlier (and among gearheads to this day), most geeks belonged to one camp or the other, and maintained that group identity in the face of all arguments of reason or logic. There were people who espoused loyalty to Tandy TRS-80 machines, Kaypros, Osbornes, Franklin ACE units, and even more obscure brands – just as there are gearheads who champion Nissans, Toyotas, Hondas, Studebakers, Packards, Hudsons, and many other forgotten car makes – but mainstream users were generally either Commodore or Apple. Back in 1981-1982, at the dawn of the personal computer age, IBM was still ignoring the PC market, as were Wang, Xerox, Cannon and Hewlett-Packard; the chairman of Digital had gone on record as saying that no one would ever want a computer for home-use, and Michael Dell was still in high school…

What most people do not realize is that while Apple has evolved to the point where the personal computer is no longer the focus of their business model (or the mainstay of their income, either) while the original Commodore corporation slowly went bankrupt in the early 1990s, the Commodore 64 computer itself never actually went away. To this day, there are dozens (possibly thousands; no one really knows) being used to run simple computer-controlled equipment left over from the 1980s, such as electronic message signs and even computerized manufacturing equipment. Their limited capability and miniscule memory may seem laughable by today’s standards (I’ve sent emails of more than 64K size in the last week alone) – but the new models coming off the line won’t…

According to the story that ran last week on the New York Times technology page , a new start-up company has purchased the old Commodore logos and console designs, and will be offering an upgraded version of the old all-in-on computer for the new Century. It’s the same size and shape as the old model 64 (the size of a large keyboard unit, which it actually is), but the new version features a 1.8 gigahertz dual-core processor, an optional Blu-ray player and built-in Ethernet and HDMI ports, as well as Windows capability (it comes with Linux). Functionally, the concept lands somewhere between a conventional desktop and a laptop machine; the new Commodore (like the original) needs to be plugged into a screen, but you can easily unplug it, tuck it under your arm, and walk off with it. The real question with the resurrected product is will anyone buy it?

It seems likely that there will be at least a few fans of the original machine who will buy it for the sake of nostalgia, and with the current vogue for “retro” design styling, the company should be able to manage a few sales on the basis of how much these things look like the best-seller from a generation earlier. That said, the original company was not able to compete in its niche market, either, and the new company will need more than just the handful of nostalgia sales if it wants to succeed. It may be possible for them to sell the convenience and portability of the all-enclosed design to the public, especially if they can find some way to make the purchase of large, high-definition screens separate from the CPU housing attractive to the buyer. If the new Commodore management can arrange some kind of strategic alliance with the people who make HD display units, they might do quite well indeed. Alternately, if they can find some way to bring greater functionality to their product at lower prices than you would pay for a typical desktop machine, they could probably compete on price and/or features…

So should we start looking forward to television commercials that begin with “Hi, I’m a Mac! And I’m a PC! And I’m a Commodore 64!” Or will the new company follow its predecessor onto the ash heap of history? Only time will tell…

Planned Obsolescence

I was reading through this week’s collection of consumer ranting and raving over at The Consumerist site when I noticed a posting about a class action suit against Dell Computers, claiming that the company has deliberately designed its computers to fail and require expensive repairs. This is said to include cooling systems that don’t, power supplies that fail much sooner than industry standards, and motherboards that won’t last, along with other interesting design flaws than the plaintiffs claim were inserted into the design on purpose. I was immediately transported back to the early years of the new millennium and the first laptop computer I ever purchased – also a unit from the Dell Inspiron line – which had exactly this set of problems…

It’s probably worth noting that I initially blamed a number of the issues I was having with the computer on Windows Millennium Edition (often pronounced as “Windows meeeeeee” by people who were plagued by it, since it was widely believed that sheep could have created a better operating system). It was only after it became clear that the thing was overheating for no apparent reason AND the motherboard was failing that I got it looked at and discovered that the entire machine was a complete pile of crap. Even worse, I had failed to take out the extended warranty, thinking that (as is most often the case) the computer would either work for the two or three years I would keep it or fail right out of the box, in which case the manufacturer’s original warranty would suffice. I hadn’t counted on the machine being designed to fail on the ninety-first day in service, or at any rate, the day after the warranty expired…

This led me to referring to the product as the “Expiron” for a number of years, or more commonly the “Dell Doorstop” model, because after ninety days or so the only possible use for this machine was to wedge the door open. As bad as it sounds, however, this was not the worse computer I worked with during that period. In the first year of our consulting firm’s operation, the Senior Partner acquired a number of no-name PC clones (desktop machines, not laptops) from a local shop that built them from bulk components. They were extremely generic machines, but they functioned acceptably for a year or so – until one of them quite literally burst into flames one afternoon…

When I showed the (now charred) wreckage to our usual repair people they were astonished. “We always thought that ‘crash and burn’ was just a figure of speech,” the lead repair guy told me. They were able to recover a surprising amount of data off the singed hard drive, and we had backed everything important up anyway, so the event was more of an operating loss than an actual disaster. But we were unable to get any restitution from the store that sold us these incendiary lemons, because by the time our computer caught fire the shop had gone out of business and no one we could reach had a forwarding address for the owners…

I’m not going to do any better on this class action suit, either; they’ve restricted the class to owners of other models, and in any case you have to have had your Dell repaired by the company in order to qualify. If the plaintiffs here are successful, however, I’d anticipate a flood of other Dell customers suing for damages incurred due to the failure of other Inspiron models, as well as pain and suffering caused by lost data, failed classes, missed deadlines, lost business, and anything else we can think up. I don’t know how the company will play this one, but if the allegations are true, it’s going to be a very long winter for Dell – and anyone who owns part of the company…

Too Good to Fail?

I saw an interesting item on line this week regarding the highly-anticipated and massively hyped computer game “Spore” – developed by Maxis, the creative team behind the wildly-popular “Sims” games and published by Electronic Arts, one of the biggest video game publishers in the world. For those non-geeks in the audience, Spore allows the player to create his or her own life-forms, combining various shapes and design elements as desired to produce almost anything you’d like. Once you’ve designed your creature, you can have it evolve into a sentient – and eventually star-faring – race, which must then colonize other worlds and solve various puzzles. Released to enormous fanfare, Spore was supposed to become the most successful video game ever, bigger than “Sim City,” bigger than “Pac-Man,” bigger than “Leprechaun”…

Okay, in fairness, nobody in North American ever heard of “Leprechaun,” unless you frequented a little-known video arcade in Isla Vista, California in 1985, where a lot of obscure video games went to die. But Spore was actually expected to be huge; according to this article on Yahoo News the game was supposed to sell at least two or three million copies in its first year. Yet, in almost a year and a half, the game has sold less than 1 million copies, and is still not running away with the market as it was expected to, despite the introduction of new add-on features. It’s certainly not a failure; when you include the iPhone and other mobile versions it has sold nearly 4 million copies world-wide. But the original software – the original heart of the business model – is still not the hit it was supposed to be. It’s worth asking why not…

The commentator on Yahoo blames the disappointing results on an over-hyped product (something that couldn’t help but disappoint customers when they got it, since NOTHING could have lived up to the pre-release hype Spore got) and a lack of focus – the game is too complex to appeal to the casual user, but not complex (or exciting) enough to appeal to the power gamers who made up its key audience. It’s certainly not a faulty product, having made back much more than the cost of developing it, but it appears to have missed both ends of its potential customer pool by trying to play to the requirements of both groups – and that isn’t always possible…

Which is, of course, why I am calling the situation to your attention. The idea of a product with mass appeal – a comic book that can win mainstream book awards; an animated film that can win best picture; a mass-produced hamburger that can win restaurant awards – these are the ultimate goal of every new product development team in the world. The problem is, without a clear customer base to market to, a new product has no way of actually gaining traction. In this particular case, while the Spore concept is certainly interesting, it doesn’t compete well with the high-quality, immersive narrative games that have become the standard for console gaming in recent years. Eventually the user is going to get tired of creating fantastic beasties and want to move on to a game challenge – and this is where the Spore program fell down, with unimaginative (and repetitive) game play and no clear story line to follow. Compared to a realistic simulation of modern warfare, or a heroic quest to destroy evil and return the rightful king to his throne, or even the antics of two beloved arcade characters finally getting their due, it just doesn’t stack up…

So before you release your next product, ask yourself: Does this product really have what it takes to gain and hold the projected market share? Or are we just convinced that it’s going to be a success because it has so much going for it that it MUST be too good to fail?

Too Easy Again

From time to time I call to your attention a story from the world of business that is just too easy – something that I could have a lot of fun mocking, pointing out the weakness of, or making suggestions about, but it’s just too easy. It’s days like this when I like to say that this blog practically writes itself, or at least it would if all I did was make snarky comments about business-related moves of dubious intelligence. But this time, at least, it seems MSNBC agrees with me…

In a story being reported by the MSNBC Technology page we find the curious new marketing site launched by Dell Computers. Called “Della” for reasons probably best left unexamined, this site is attempting to market a new class of notebook computers, called “netbooks” to a female audience. There’s nothing wrong with the idea, of course; women have disposable incomes, too, and they might like a highly-portable, extremely capable new computer as much as men would. It’s just that Della is marketing these units to women on the basis of the netbooks being “cute” and “fashionable” rather than powerful or capable – and they’re using ad copy right out of the 1950s…

I’d mock Dell for this, but there isn’t much left to say after the MSNBC article, and even if you didn’t follow that link, I’m not sure there’s much I can add to what Dell’s copywriters have come up with for the Della site. It’s not just that they’re marketing these lightweight computers in the same terms you would use for handbags and scarves, or even that they’re suggesting that grown women would be attracted to these machines because of how “cute” they (the computers, not the women) are. It’s the condescension in the add copy; the suggestion that their female customers have never considered that there might be some use for a personal computer beyond email and instant messenger functions…

Now, I understand that it’s usually too much to expect logic from the people who brought you microscopic women flying up your nose on jetpacks . But unless we are willing to believe that there were no women involved in the “Della” project – or that all of them have the mentality of housewives from a 1950s sitcom – then you would think somebody would have mentioned the inherent problem with this approach. I suppose we should acknowledge the possibility that the whole thing is some kind of self-referential joke – using the copy as an ironic commentary on what people from earlier times (and unenlightened ones from this time) would expect to see women doing with portable computers – but if so, I regret to say that the humor is too subtle for me…

Of course, it’s possible that this is yet another case of any publicity being good publicity; that the people at Dell knew this reaction would happen and that they are intentionally using the outrage, mockery and just plain amusement to generate a word-of-mouth buzz for their new site. Certainly, I wouldn’t have heard about it otherwise (I don’t buy Dell products anymore following my experiences with the “Doorstop 3200” notebook I purchased from Dell in 2001, and thus I’d have no reason to go to their website), and it could be argued that this approach has reached all of the people on MSNBC yesterday and all of the people like you who are reading blog posts about this site, all of whom are now thinking about Dell products. But even if that is the strategy being employed, I have to question whether this is really the best way to sell a consumer product…