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92 posts tagged business interestingness

Expect Excellence

Now that’s a company vision.

Driving Innovation

There’s so much brokenness in our existing patent system. I’ve never understood why anyone would think we can fix it.

Intention

My dad has a saying, “You get what you intend, not what you hope for.” How many things in our lives are we actually intentional about, though? In the creative (and development) world, I consistently see studios grow beyond their optimal size. Our culture rewards it, and often our internal drive is to be bigger because we’re told that bigger is better. But is it?

I haven’t been distracted by pushing a boulder up the wrong hill. I get to focus on doing really great work for excellent clients.

Like Berger & Föhr, I’ve been intentional about operating as a shop of one—I’m a bit of a design and development multi-tool. Some projects I team up with others (like Berger & Föhr) and other projects I handle by myself. I may not be this size forever, but it has been an intentional choice and a lot of rewarding things have come from it. The biggest bonus, though, is simply that I haven’t been distracted by pushing a boulder up the wrong hill. I get to focus on doing really great work for excellent clients. And, contrary to popular belief, my access to bigger and better projects has often come as a result of my practice size, not at the expense of it.

How intentional are you about the size and goals of your business?

On Free Music

I go around and around in my head and continue to end up back in the same place: as a consumer, I love services like Spotify and Rdio. As someone who has plenty of friends in the music business, I worry about their futures. As a music fan, I can’t help but wonder if we’re creating a situation that will greatly change the amount and type of music offered in the long-run.

Music will never go away, but if the number of people who can make a full-time living at making music dwindles, that will change the landscape of the industry. We can argue whether that’s good or bad, I just wish we would all recognize that we’re doing it to ourselves.

If you get a chance, read Derek’s full article. He’s also linked through to a number of other gems. For example: I knew that Spotify varied its payment agreements between different labels, distributors, and indies, but I did not know that Apple is less compromising and gives everyone the same deal to work from.

Overall, Webb still has a very positive outlook for independent—as he calls them: blue collar—musicians. That said, I would like to hear more from artists who are starting out today. From what I understand, Derek Webb established himself before the industry began its digital transformation. I think he’s a great example of an artist that is constantly looking forward, not resting on past success, and trying new things, but I can’t help but wonder if anything would be different for him if he were to start from scratch today, without the support of a music label or the old industry infrastructure.

Know How You Add Value

Don’t Call Yourself A Programmer

A lot of really great nuggets in this post. It’s a longer read, but worth it.

I did not study design or software development in school, I studied business. I often downplay it as having been a waste of time, but if anything, the area where it helps me the most is understanding what, ultimately, my clients want me to help them do. We (designers and developers) are not artists; we are part of the system which helps build businesses and make them successful. So, next time you are talking over a project with a client, keep in the back of your mind how your goals can align with their goals.

As McKenzie notes, if you can’t do that, “…go back to school and study something that doesn’t matter”.

Priorities

I’ve been slowly watching this change over the last few years. As a designer, creative, product guy, etc., I think there’s a huge opportunity in this shift. Not everyone has the right priorities yet (or ever will), but for those of us that do, let’s keep our heads down and keep making good shit.

If there was ever a time for design to wield its influence in many, many different industries and capacities, it’s now.

Why is there no iPhone 5?

Great analysis (as always) by Horace Dediu. He answers the question that a lot of people have asked: is Apple leaving sales on the table because some people hoped the iPhone 5 would be released yesterday instead of the upgraded iPhone 4. He’s basically arguing that, considering the available target markets, Apple would not actually be able to sell many (if any) additional iPhone 5s in comparison what they would have sold regardless of which device was on the market.

Additionally, I’m a bit amazing at how many people claim to be “disappointed” in a significantly upgraded device who’s exterior still surpasses everything else in the market. Are we that vain? Probably.

Allowing for Focus

A follow up to my thoughts on the Netflix split from last week: Their former CEO and co-founder, Marc Randolph wrote an excellent post weighing in. The quote above comes from it, and you’ll want to read it in its entirety.

His take? Focus.

Randolph claims no insider-knowledge, so it’s just a theory, but I’d file it under educated guess considering his past ties to Netflix. His take? Focus. He thinks Reed Hastings wasn’t simply trying to spin things when he said that Netflix-proper wanted the freedom to focus solely on the streaming service and that it was a bold and gutsy move to do it when they did.

He makes a compelling argument and backs it using the example of Netflix’s original transition away from DVD retail (something I didn’t know about). I still wonder if there are some other ancillary reasons for the spin-off and I still expect Qwikster to be up for sale sooner than later, but the spin-off will certainly allow for the type of focus Randolph talks about.

By freeing our designers from having to create a sign-up flow that accommodated two types of business, we were able to cut out steps, clarify instructions and simplify the process. Conversion went up.

I’d not thought about it that way, but the entire exercise could be an incredible lesson in product design. Having two split sign-up paths has to increase sign-up attrition rate. Now think about companies that are trying to simultaneously pursue several models. The ability to sell one thing and sell it well is really attractive.

Double the Fun?

Netflix splits into two

If you’re a Netflix subscriber, or a member of the internet at large, you’ve probably heard the news already: Netflix is spinning off its DVD rental service into a separate company named Qwikster. You can read the letter from CEO Reed Hastings that was mailed to subscribers on the Netflix Blog

Unlike their recent price changes, this new move not only caught me by surprise, but doesn’t initially make sense.

As a consumer (and subscriber) this doubles my effort for what used to be a seamless, integrated service.

As a consumer (and subscriber) this doubles my effort for what used to be a seamless, integrated service. I now get billed separately, have to deal with two customer service departments, and two sets of policies that may, in time, conflict. Not only that, but when actually searching for movie I now have to search two websites, separately. I’ve always maintained two queues on Netflix, but it was very convenient to search for a movie, notice it was available for streaming and add it to that queue instead of the DVD queue.

I pride myself on having a bit of business savvy and it’s not often that a company I greatly respect leaves me scratching my head, so I’m trying to guess why Netflix would be willing to make such a bold move. I’ve got two theories:

#1 Sell while you’ve got something to sell

I think it’s no secret that Netflix doesn’t see a future in DVD rentals. They haven’t exactly made a secret of it. Just look at which part of their offerings is retaining the company name and brand. Hint: it’s not the DVD service. Hastings, in his letter today went so far as to say it this way:

“Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business.”

The rational is that they need to split off DVD service so that they can focus on streaming service. I think there’s validity to this, but I wonder why the split needed to be so public? The services were already essentially split internally, so why split them formally? Why put your customers in some temporary pain? Other companies have made major transitions (Apple, for example) without formally splitting their business offerings into separate companies.

I wonder if the split is actually their exit strategy.

I wonder if the split is actually their exit strategy. Yes, companies that can’t shift focus don’t move into the future well, but Netflix has already demonstrated that it is focused on streaming and the future. Nobody questioned that, even before the price/plan restructuring, let alone this split. But what usually happens to companies that go through a large transition is that their old offerings become a drag on the company. They often can’t exit the business fast enough and go through a period where they lose money before shutting it down for good. What if Netflix, with this move into Qwikster is not only trying to avoid that scenario, but they’re trying to build a separate, currently-profitable company to make it attractive to potential acquirers? It would actually be a brilliant move, if they could pull it off. They sell off their DVD service, while it’s still successful, at for a financial windfall and use the revenue to fund continued development of their streaming offerings. Qwikster becomes a success story for them and, when the day comes in the next few years that the DVD service isn’t tenable, they don’t have it to anchor them down or distract them.

#2 Divide and conquer (Hollywood)

My other theory has to do with rights—the agreements Netflix makes with studios and production companies in order to rent DVDs and stream media. This is a grey are for me, I don’t know exactly how this works, so I’m making some top-level assumptions.

They make more money off of DVD rental agreements and they’re afraid of the scenario the music industry faces with streaming…

On the whole, Hollywood has been reluctant to embrace streaming rentals. They make more money off of DVD rental agreements and they’re afraid of the scenario the music industry faces with streaming: getting paid a paltry few cents for the streaming of an entire album. They’re happy with the status quo (always were and probably always will be) and have little incentive to change. I wonder if that hurts Netflix in negotiations?

It’s possible that now, in rights negotiations, Netflix can wipe the slate clean. Anytime a movie industry executive brings up DVD agreements as a reference point for streaming licensing Netflix can say: “that’s not relevant,” and actually, literally mean it.

It’s all business

I think my second theory, while it doesn’t hurt, still doesn’t seem to require such a drastic change. I also can’t see an angle where this is better for the consumer in the short-run (the short-run being as long as someone needs to rent a physical DVD because something isn’t available for streaming). So my money (literally, I have a very, very, small investment in Netflix stock) is in theory one.

Today, as a subscriber of Netflix, I’m unhappy. As a stockholder, I think I understand it and I’m guardedly-hopeful that it’ll work out the way they intend.

Visit the Link

iTunes Match Not Laundering Pirated Music, It’s Driving A Subscription Future

(emphasis mine)

That’s all well and good, but notice who will receive payments: labels. When people talk about the music industry, what they usually don’t factor into their equation are independent artists who are not on a label and don’t have a major-label distribution deal. They also neglect to factor in the (usually) one-sided contracts other artists sign with labels that often ensure they don’t get a cut of royalties like this. In reality, I suspect the artists themselves—signed or not—will see very little money from iTunes Match, if any.