When Your Strength Becomes Weakness: Microsoft & Web 2.0, Google & Social, and now Apple & AI
Clayton Christiansen popularized the notion of disruptive innovations which he characterized as an innovation which transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost are the status quo.
This theory doesn’t explain every industry changing innovation. For example, the iPhone famously violates this theory by creating a technology which started off at high cost and is now more ubiquitous than indoor plumbing. However even with the iPhone the theory does a good job of explaining the reactions of incumbents when faced by a competitor that changes the game.
The key observation is that when challenged by an industry changing competitor, many companies fail to compete because what they were good at becomes a liability. Polaroid & Kodak didn’t stop getting good at making cameras (game changed by smartphones), paper map makers didn’t stop being good at cartography (game changed by smartphones) and most recently taxi cabs didn’t stop knowing how to pick people up when dispatched (game changed by ride hailing apps).
The same has happened to big tech companies like Microsoft, Google and now it’s begun to happen to Apple.
Microsoft and Web 2.0
I spent eight years of my career working in one of Microsoft’s online services teams, Windows Live. Going back and reading the press release for Windows Live is illuminating when one considers how web services evolved over the past decade. A key excerpt is below
Windows Live™ is a set of personal Internet services and software designed to bring together in one place all of the relationships, information and interests people care about most, with more safety and security features across their PC, devices and the Web. Microsoft demonstrated early versions of several new Windows Live offerings, some of which are accessible at http://ideas.live.com, a new Web site where people can try the latest Windows Live beta services:
Going back and looking at a snapshot of the Windows Live Ideas page linked above, one sees that Windows Live had offerings about a decade ago in areas that are now some of the hottest categories in consumer services
There was Spaces (social networking), QnA (a Quora-like question & answer forum), Expo (an Etsy-like peer to peer marketplace), Messenger for mobile (like WhatsApp complete with a back end that supported bots) and so on.
However Microsoft could never escape the gravity of being a PC software company despite its early relatively participation in consumer web services. One doesn’t have to look much further than the Windows Live web pages in those days to understand how much the culture of that product group was dominated by PC (and specifically Windows) centered thinking to the extent that our pages were designed to look like the Windows start menu
The PC-centric thinking didn’t just manifest in our user interface design but also how we approached building & delivering software. While many tech companies at the time had started to practice what Steve Yegge describes as “good agile” in his epic essay Good Agile, Bad Agile in which teams ship software in a rapid & iterative manner without being primarily driven by fixed launch dates. Windows Live at the time shipped software in waves, every two years or so, to mimic the manner in which PC software like Windows & Office were at the time. In 2016, it’s obvious in hindsight that any app which updates once every 2 years isn’t going to be competitive when users can engage with apps and websites that are updating every week or two.
Google and Social
A lot has been written about how much Google doesn’t get social and there is a long list of failed or failing Google social networking products which back up that assertion including Blogger, Orkut, Buzz, Dodgeball, Latitude, Wave, Jaiku and most recently Google Plus. In fact, Google currently has 5 different chat apps in a desperate hope that one of them will be a hit.
One of the most illuminating views into Google’s culture around building social apps can be gleaned from reading
The above article is from a “design ethicist” at Google whose job it seems is to point out how addictive social apps are and how negative that is for their users. Here’s an excerpt from the article
If you’re an app, how do you keep people hooked? Turn yourself into a slot machine.
The average person checks their phone 150 times a day. Why do we do this? Are we making 150 conscious choices?One major reason why is the #1 psychological ingredient in slot machines:intermittent variable rewards.
If you want to maximize addictiveness, all tech designers need to do is link a user’s action (like pulling a lever) with a variable reward.
…
But here’s the unfortunate truth — several billion people have a slot machine their pocket:
When we pull our phone out of our pocket, we’re playing a slot machine to see what notifications we got.
When we pull to refresh our email, we’re playing a slot machine to see what new email we got.
When we swipe down our finger to scroll the Instagram feed, we’re playing a slot machine to see what photo comes next.
…
But now companies like Apple and Google have a responsibility to reduce these effects by converting intermittent variable rewards into less addictive, more predictable ones with better design. For example, they could empower people to set predictable times during the day or week for when they want to check “slot machine” apps, and correspondingly adjust when new messages are delivered to align with those times.
Now, do you think there’s somebody whose job at Facebook, Snapchat or any other popular social app is to complain about how their app is making people check their phones too much?
That job exists at Google. That’s what it means to not get social.
It’s like at Windows Live when we had people whose job was to ensure we spent several months planning and several months testing software before we released it only to find out within hours that users didn’t like it (so back to the drawing board, see you again in 2 years). We had constructed a scenario where success was impossible.
Apple and AI powered by Big Data & Machine Learning
This weekend my news feeds are full of pointers to Marco Arment’s essay Avoiding Blackberry’s Fate which contains the following excerpt
No new initiative, management change, or acquisition in 2007 could’ve saved the BlackBerry. It was too late, and the gulf was too wide.
Today, Amazon, Facebook, and Google are placing large bets on advanced AI, ubiquitous assistants, and voice interfaces, hoping that these will become the next thing that our devices are for.
If they’re right — and that’s a big “if” — I’m worried for Apple.
Today, Apple’s being led properly day-to-day and doing very well overall. But if the landscape shifts to prioritize those big-data AI services, Apple will find itself in a similar position as BlackBerry did almost a decade ago: what they’re able to do, despite being very good at it, won’t be enough anymore, and they won’t be able to catch up.
Amazon, Facebook, and Google — especially Google — have all invested heavily in big-data web services and AI for many years, prioritizing them highly, iterating and advancing them constantly, accumulating relevant data, developing effective algorithms, and attracting, developing, and retaining tons of specialized talent.
The above is spot on if you ignore the oversight in not mentioning Microsoft’s Cortana and our CEOs vision of conversations as a platform which is now being echoed by Google’s CEO as AI being the next evolution of Google search.
Much of what is described as Artificial Intelligence (AI) today is a combination of two trends; the availability of big data due to the massive amount of activity being generated by people & captured by the apps they use daily and machine learning which is basically recognizing patterns in this data.
Google’s Inbox app is an email client with an almost magical ability to suggest a set of answers to an email you just received which are very reasonable responses to what is being asked.
Google can do this because their software has read hundreds of millions to billions of people’s email responses and has detected the patterns in certain questions and answers. The barrier to entry in being able to compete with this involves
- Collecting lots of data about user activity
- Being able to analyze the data
Many people focus on Apple’s challenges with #2 above but this is actually an easily solvable problem because you can always hire or buy your way to success. Facebook bought Instagram, Google bought YouTube and Microsoft bought the Halo franchise.
However #1 is actually Apple’s bigger challenge because it is a cultural issue and strikes at the heart of who they are as a company. Last year Apple’s CEO’s criticized Facebook & Google’s approach to user privacy which was covered by the Guardian as follows
The speech, as reported by TechCrunch, did not pull any of its punches. “I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information,” said Cook.
“They’re gobbling up everything they can learn about you and trying to monetise it. We think that’s wrong. And it’s not the kind of company that Apple wants to be.”
While Cook did not name companies specifically, he made a clear reference to Google’s recently-launched Google Photos service, to hammer home the intended targets of his comments.
“We believe the customer should be in control of their own information. You might like these so-called free services, but we don’t think they’re worth having your email, your search history and now even your family photos data-mined and sold off for god knows what advertising purpose,” he said. “And we think some day, customers will see this for what it is.”
It’s hard to compete with an industry trend if you believe that trend compromises your principles. On the other hand, how many consumers will consider getting Star Trek style computer interfaces as a consequence of using the apps they already know and love as a terrible thing? Not any that I know.
At this point Apple sounds like the people who used to tell me years ago that the no one would buy a phone without a physical keyboard and online advertising would never be a meaningful business compared to selling software.
I wish them luck, they’re going to need it.
