ThinkFlood Blog

Earlier I wrote a few postings about why it is so hard to make things easy to use. I have been thinking about this concept recently, but from a different angle.

The world is a big place. It’s big enough that we have a hard time comprehending its size. Six billion inhabitants or so. 40 million meters in circumference. Modern transportation and communications make these things seem relatively trivial. Most of us today think it is rather quaint that people only a century ago rarely traveled far from home, or that six or seven centuries before that people actually believed the world was flat.

With so much out there in the world, it’s awfully hard to do something original. In fact, it’s so hard to think truly original thoughts, that when someone does and bothers to document it, we give that person a doctoral degree. (And even then, doctoral theses are starting to seem less unique and perhaps more petty.)

Perhaps as individuals we do not feel the need to be quite so unique. After all, many of us spend large portions of our lives trying to gain some level of acceptance and approbation from those around us. But for companies in capitalist markets, the rule is differentiate or die. To this end, company leaders are constantly asking themselves what they can do to distance themselves from the competition — how they can erect barriers to entry on their turf.

In fact, I believer there are relatively few true barriers. Some will argue that things like patents, copyrights, and trademarks are barriers to entry. I suppose they are — but they are particularly weak ones. Clever imitators can easily get around most of these — and that’s only if they choose to abide by the law. These methods are particularly ineffective for small companies, as most cannot afford to hire armies of lawyers to prosecute offenders (indeed, they may be struggling just to keep away illegitimate challenges).

To me, the real barriers to entry are more about doing things that others will not do. Of course there are several reasons why others may choose not to copy. One reason may be that the idea is a poor one. A company pursuing a bad business idea will generally enjoy a competition-free landscape, but that does not make it business successful. When the idea is a good one, however, others usually shy away for one of two reasons: either the work is too hard, or the work is too dirty.

At this point, I am sure there are people out there screaming at me, saying that there is another reason: that others simply do not comprehend what it is that we do. The old trade secret argument. But the fact of the matter is that trade secrets are nothing more than hard work performed only once and then protected (as opposed to the kind of hard work that is recurring). With six billion people in the world, there really is not anything stopping others from reinventing what you may have already discovered. In fact, they are just as likely to do it better — and then what value is the secret?

So, if we want to win the game, we are left with the choice between hard work and dirty work. Of course these types of work take many forms. And one of those forms is to design for usability. Because usability is not easy to achieve, it’s devilishly difficult. Usability requires making choices that are not always fully quantifiable. It requires top down innovation that sometimes rejects the results of focus groups and customer surveys. It requires leaps of faith, and gut wrenching challenges to the status quo. It requires relentless rethinking of fundamental principles coupled with rapid implementation and enough consistency and familiarity to remain almost unnoticeable to most people. Usability is one of the toughest, most precarious balancing acts around. And it is therefore a magnificent barrier to entry. No wonder most companies wish they were doing it. No wonder most don’t.

If you run in entrepreneurial circles, you know that there are a lot of people out there looking for the next killer app. It’s a cyclical thing, really. There is a groundswell of interest in a particular area, and eventually a couple of leaders emerge. Most of the competition gets swallowed or disappears, and then everyone moves on to the next big thing. In hindsight, the outcome always seems predictable. For example, let’s consider Internet businesses. The mid- to late-90’s were a great time for Internet-based trade. EBay and Amazon took that by storm. Then it was time for better search and a new way to advertise, and Google was made. After that came social networking, which Facebook seems to be dominating right now. Each trend seems to fit nicely into a progression, and we all envy the handful of people that were there at the right time.

The thing is, when you’re in the middle of the search for the next big thing, it just isn’t so clear what that will be. What’s next? The green movement is big right now. Biotech seems to be ever-present. And there are a lot of people going after video and Internet protocol television (IPTV). I’ve got my money on something else: photos.

Photos? What’s the big deal? Good question. Let me turn it around a bit. What’s the big deal about search or social networking? Online retailing? On the one hand, we find these things indispensable today. But none of them is all that thrilling. After all, search is incredibly utilitarian — we do it because we have to. Social networking and online retailing are simply things that we do in the physical world ported over to the web. Sure, each of these things has special benefits. But I believe that none of these businesses would have taken off if the companies that are now in control of them had not come up with new, interesting, and — most importantly — incredibly useful ways of making them work.

However, great ideas and great execution are not enough — there is also an element of timing. For example, online retailing only really picked up when Internet access moved out of universities and government laboratories and into people’s homes. Search-based advertising really gained traction only after consumers became comfortable evaluating products and making purchases online. And social networking took off because people became comfortable not only finding products and services online, but also developing new relationships and maintaining old ones there, too.

Timing is the reason I discount the IPTV segment. About a year ago, I actually thought that it might be time for IPTV, and that Apple was going to make it happen, just as they did for (legal) music downloads. But lately their package has become a little unraveled. First, there was the AppleTV. This was an interesting product, but it suffered a little neglect because Apple had bigger fish to fry (the iPhone and a new version of the Mac OS). But more than just neglect, the AppleTV highlights how far we have to go in terms of networking to get something that looks good on our HDTVs (the compressed standard definition video coming out of iTunes just isn’t appealing on anything bigger than a computer monitor). Even worse, no one seems to have a solution to the revenue issue for production studios. If anyone had enough clout to make this work, it might have been Apple. But because they are so big, the studios are hesitant to give them more power, and they have their own struggles trying to figure out how to make money (just look at the music studios post-Napster, or consider the beef that the screen writers’ guild has over residuals). There are just too many issues – technological, legal, social – for IPTV to work right now. Unfortunately, it will probably be at least a few years before these things get ironed out.

The nice thing about photos is that, from a timing standpoint, everything is in place. Half of the households in the US now take their pictures digitally. There are no copyright or ownership issues, because the content is all user-generated. And even at high resolutions, pictures are so much smaller than video files that we can zip them around on our existing broadband networks nearly instantaneously.

So the timing for photos is good, but aren’t there already a bunch of companies in this space? The answer is yes, but that’s really the point. There is no clear leader in digital photos sharing over the Internet. Photobucket has the largest market share (~44%), but their offering is mostly appealing because they offer free service and permalinks that have been widely used on social networking sites like MySpace. The other major players have diminishingly small market share, and no one seems to really offer anything compelling enough to attract the masses. Online photo sharing is a market looking for a leader. The technology is all there, but the winning product offering plus business model combination is still missing.

Undoubtedly there are other areas where enterprising people will develop game changing companies. And when they do, these developers of killer applications always have two things on their side: the right timing, and the insight to deliver just the right product or service in just the way that the rest of us want it.