Category Archives: Google

A reminder that the “web isn’t dead”

By | Google | No Comments

Google announced yesterday that Chrome now has 800m active users on mobile. That’s up from 400m a year ago. They didn’t say how much of that is on Android and how much on iOS, but there must be a good amount of growth on the latter. That’s impressive given the power of defaults and a welcome news for fans of open systems like myself who have not had much to cheer about lately. As Google said “Not only is the web not dead, adoption of the web is growing dramatically, particularly on mobile and this is opening up huge opportunities”.

On a similar note Google search is now indexing the content of Android apps which don’t have matching content on the web and will stream the content to the device is the app isn’t installed. This has the potential to bring app discovery to the browser and end the app store mess. That would be a massive boon for startups who are largely crowded out of the app stores by larger companies – take a look at the chart.

Comparing Google’s and Facebook’s grand strategies

By | Facebook, Google | No Comments

Facebook and Google are the second and twelfth most valuable companies in the US (accurate at 22/6/15 see here), they both rose to prominence extremely quickly setting records for rapid valuation growth on the way, and as a result they are both very aware that their shelf life could be limited. They’ve seen great companies like Yahoo and Microsoft lose relevance and they don’t want it to happen to them.

The lesson from those businesses is that developments in technology can quickly undermine a company’s core strength. The internet and mobile marginalised Microsoft’s dominance of the desktop and improvements in search took away the need for Yahoo’s portal of curated links.

As a result Page and Zuckerberg have both made bold moves to future proof their businesses.

Google has launched a range of bold and innovative projects including Android, self driving cars, a project to deliver internet connectivity to the developing world via orbiting balloons, and Google Glass. They even went as far as changing the name of the company to Alphabet, emphasising the point that the Google search business is just one part of what they do.

Facebook has mostly moved via bold acquisitions, starting with $1bn for Instagram six weeks before their IPO, moving the through $24bn for WhatsApp, before paying $2bn for Oculus. That said, they also have a track record of making radical changes to their product, often in the face of user protest. Introducing the Newsfeed and splitting Messenger out from the main Facebook platform are stand out as the two best examples where they did that successfully.

The obvious difference between Google’s bold moves and Facebook’s bold moves is that Google is venturing much further from its core business. At first look Facebook’s acquisition of Oculus might look like it’s a big step away from social media, but if you think of their business as mediating social interaction then it doesn’t seem that way.

I suspect Google is innovating further from its core because it’s a more mature business than Facebook. Android was one of Google’s early bold moves, and it’s easy to see how that was closer to the core because it helps maintain their strength in search. It was only as their search business began to face existential risks that they started making moves designed to open up whole new areas. It’s impressive is that they have started making these moves so early.

Facebook’s acquisitions of Instagram and Whatsapp and the separation of Messenger from the main Facebook app are clear moves to protect and extend their core social media business. These strategies have helped them continue to grow their audience and advertising revenues and whilst individual properties might whither, potentially including Facebook, there’s still no sign of an existential threat to social networking as a category. To put numbers on it, back in March they had 1.4bn MAUs on Facebook, 700m on Whatsapp, 600m on Messenger and 300m in Instagram. That’s four of the six largest social media properties on the planet, and they’re all still growing.

All of which has me thinking that Facebook might become more radical as its business matures.

Musings on Twitter, networks, and mission driven businesses

By | Google, Twitter | No Comments

I read a very interesting and typically well written post from Umair Haque over the weekend titled Why Twitter’s Dying (And What You Can Learn From It). Everyone seems to be writing about Twitter at the moment, but this piece doesn’t mention Jack Dorsey or Twitter’s product challenges per se.

Umair goes deeper.

As he sees it Twitter’s challenge is that low level abuse and snarkiness is undermining the experience for most users and they are walking away.

He put it like this:

…let me be clear what I mean by abuse. I don’t just mean the obvious: violent threats. I also mean the endless bickering, the predictable snark, the general atmosphere of little violences that permeate the social web…and the fact that the average person can’t do anything about it.

We once glorified Twitter as a great global town square, a shining agora where everyone could come together to converse. But I’ve never been to a town square where people can shove, push, taunt, bully, shout, harass, threaten, stalk, creep, and mob you…for eavesdropping on a conversation that they weren’t a part of…to alleviate their own existential rage…at their shattered dreams…and you can’t even call a cop. … Twitter could have been a town square. But now it’s more like a drunken, heaving mosh pit.

These are strong words, and I think they over-state the extent of unpleasantness that exists on Twitter, but there’s a basic truth in the observation.

But these problems are not unique to Twitter.

In fact they are faced by every growing community.

Let’s take a step back and think about what makes communities work. I wrote this back in 2007:

People hang out in communities (online and offline) because they are pleasant places to be. You choose the communities you like in large part because the other people there are polite and behave in the way that you like to behave. There are unwritten rules which determine what is acceptable and what isn’t and the community is policed by its members. Think rural village or social network – it is the same for both.

When these rules work well the community thrives, and if they stop working the community can fall apart.

The challenge for Twitter and others is that rules which work well when the company is one size stop working as it grows. New rules are needed, usually to cope with rising challenges of signal vs noise, spam, and abuse.

Facebook is the best example of a company that has done a great job of evolving the rules to keep the company relevant. They constantly tinker with the algorithm which determines what shows up in the Newsfeed and offer users new features to filter stuff out and have managed to keep the balance right. Often they drive their users mad because they can’t understand the why’s and wherefore’s of what shows up, but they understand they need to disappoint some people in the short term to keep the company relevant in the long term.

Maybe Twitter’s problem is that they haven’t evolved their rules. They have done bits and pieces with lists, trends, recommended Tweets, and now Twitter Moments but for most people the experience is still looking at everything from all the people they follow in their main feed.

Towards the end of his post Umair notes that the history of revolutions is not great:

We dreamed that we created a revolution. But we did not heed the great lesson of revolution. Today’s revolutionary is tomorrow’s little tyrant. The French Revolution started as a glorious paean to people power. And it climaxed in a tidal wave of terror and bloodshed. So, too, goes every revolution too arrogant to history — including the digital revolution. Cross the line, and the inquisitors will come your way. Better then, to stay silent, than to dare the fury of the revolution itself.

Umair’s advice to Twitter, and indeed to the whole of web media, is to focus on the quality of social interaction. If the quality of social interaction is high, people will enjoy Twitter and come back to the network.

I think he’s right, but I think Twitter confused their end goal with the best way to get there.

This is Twitter’s mission statement:

Our mission: To give everyone the power to create and share ideas and information instantly, without barriers.

Independent of context this doesn’t say anything. There’s no ‘so what’. However, back in 2006 when the company was founded most people still didn’t have a voice and the idea of lowering the barriers to publish would bring more people into the conversation was hugely exciting.

But, and this is the key point, it was exciting because we all thought that with more voices the quality of the conversation would improve, democracy would improve and the world would be a better place.

I think that happened for a bit, but to Umair’s point the quality of the conversation has declined recently. If Twitter’s mission statement had been to ‘improve the quality of online conversation’ then they would have caught this early. However, because they see their role as making it easy for people to speak introducing rules to manage the quality of the conversation is somewhat awkward for them.

Extending this point to all businesses, companies with a durable mission at least stand a chance of enduring, but to be enduring the mission should talk to an enduring customer benefit. Google’s mission to “organise the world’s information and make it universally accessible and useful” is one that should stand the test of time – whether they can execute on it as the world’s information moves into silos they can’t access is a different question.

Companies without an enduring mission are in danger of being co-opted by shareholders or blindsided by technology change to the detriment of customers, and that only ends one way. Moreover, these days customers are so alive to this risk that they seek out businesses with durable and authentic missions from the get go.


Will device and OS proliferation break the app economy?

By | Apple, Google, Mobile | No Comments

Jerry Bowerman wrote an interesting article on Techcrunch yesterday arguing that device and OS proliferation is driving the cost of supporting apps up to unsustainable levels.

The evidence cited is that corporate departments spend $40bn per year on apps, more than twice consumer spend, and that they are reaching aggressively for “create once, run anywhere” solutions.

If apps aren’t the future, you might be wondering, what’s the alternative?

Jerry says:

a future where something like “on-demand apps,” as I call them, work on every device and can be centrally managed by the corporation without going through a proprietary app store


My issue with this argument is that the problem statement is much stronger than the solution. I see our companies struggling with the costs of maintaining Android and iOS apps, a problem made worse by the app store gatekeepers demanding platform specific functionality or design in return for featuring, so I buy into that. I also crave a world in which distribution is more meritocratic, as it was on the open web, so I would love to see Apple’s AppsStore and Google Play lose their duopoloy. Finally – app based shopping isn’t great, in general, for ecommerce and marketplace startups and a resurgence of the mobile web would help the startup ecosystem.

But identifying problems only gets us so far. The app economy is only going to break if there’s something better to replace it. Jeremy points to corporations using HTML5 and thin native app wrappers when they need direct access to a hardware sensor, but we’ve been talking about that for years and I see no sign of HTML5 apps making inroads into the consumer space. In fact I think the trend is the other way.

Perhaps where apps are going next, and this is certainly what Apple and Google hope, is to disappear into the OS. That’s what’s going on with Google Now On Tap and Apple’s swipe left from the home screen (see this post from Benedict Evans for more details). However, whilst these developments are exciting from a consumer convenience point of view I’m not sure that they will help app developers reduce their overheads or address the discover problems I list.

I remain hopeful that open standards will triumph in the end, but I’m no longer sure that they will.

As an aside, whilst half of Jeremy’s post is about open standards on mobile, the other half is about what it takes to be a visionary. I love his comment on timing:

Both men [George Lucas and Ken Williams] are wicked smart and naturally curious, two characteristics often attributed to visionaries. What people often miss, however, is that they are both brilliant businessmen. They understand you can have too much vision, seeing a far-off future that won’t come true within the right time frame. As an entrepreneur, the challenge is funding from where you are today until enough customers agree with your vision that they pay for your expenses. You need to know where you are on the vision timeline.

Google is the new Microsoft – musing on the meme

By | Google, Uncategorized | 2 Comments

We have just learned that over half of Google searches are now on mobile which has got me reflecting on where the company is going.

Before I go any further I should say I’m a massive fan. Google has had an amazing run as a company, built many amazing products, is pursuing lots of super interesting and brave projects, and generally handles itself well. Moreover, I’m a very happy customer both professionally and personally and I have many friends who work there.

However, the world has turned decisively in directions that don’t favour them. The Apple driven smartphone revolution has taken attention from the open web where Google is strong to apps, the Facebook inspired social media revolution has taken traffic from the open web to closed ecosystems which Google can’t access, and they are haemorrhaging search volume to Amazon.

Microsoft’s monopoly on desktop software looked unassailable until the internet came and similarly Google’s monopoly on desktop internet looked unassailable until a couple of years ago. Microsoft invested big in the internet with Internet Explorer and their MSN portal (remember that?) and now Google is investing big in Google Maps and Android and has numerous failed attempts in social. In an interesting parallel, Microsoft’s internet products were free just as Google’s mobile products are free. Both wanted to protect their core business model.

In another interesting parallel both launched lots of new projects in an attempt to build new revenue streams. Prosaically they both moved into enterprise and more radically Microsoft achieved good success with Xbox whilst the jury is still out on Google’s self driving cars and other Alphabet projects.

Despite all these similarities the companies feel very different. In the 1990s Microsoft was an aggressive monopolist and few people liked them. In 2015 Google has a mix of supporters and detractors but to my mind at least the company has many endearing qualities, as I’ve said.

It’s unclear how much that will matter though. In the arena of business profits count, and whilst feelings might buy Google some loyalty from people like me that won’t be enough to save them from being the next Microsoft. In fact, as I write this it’s difficult to see what will.

I would love for their autonomous cars to become a serious business, or maybe project Loon, but if they do they will become Google’s equivalent to Microsoft’s Xbox, thus completing the parallel.

Finally – being the next Microsoft is far from a fate worse than death. As of June 30th they were still the world’s second most valuable company, and on top of that they are now enjoying a resurgence.

Will we persist with two mobile app ecosystems?

By | Apple, Google, Mobile, Uncategorized | 5 Comments

In the Apple App Store and the Google Play Store we currently have two vibrant mobile app ecosystems. Going back a few years the prevailing wisdom was that network effects would ultimately make this a winner takes all markets and that over time users and developers would eventually coalesce on a single platform. That was the lesson we all learned from Windows in the 1990s.

Then more recently people have been saying that both the ecosystems are large enough to be self-sustaining and that Google and Apple have both ‘won’.

That view made sense to me. Both ecosystems were growing and Apple’s dominance at the high end meant that developers mostly built for iOS first giving them sustainability in the face of Android’s faster growth. That’s part of the reason I ditched my long term allegiance to Android and bought an iPhone earlier this year.

Now new data from Apple and Google compiled by Benedict Evans is an early indication that the duopoly might not be stable after all (caveat: this analysis is based on a small number of datapoints and may be subject to large rounding errors).

IOS Growth Slow

The news is that iOS growth looks like it has stopped – Apple App Store revenue has flatlined at $10bn. Meanwhile Google Play Store revenues are continuing to grow fast. Extrapolating the trend lines for the last year suggests that Play Store revenues could overtake App Store Revenues this year.

There are many more Android devices out there and hence the revenue per device is significantly lower on Android, but there too the gap is closing.

For developers gross revenue on the platform and average revenue per device are key numbers and if/when the Play Store passes the App Store on these metrics I expect increasing numbers of developers will choose to go Android first, which will bring users across and further accelerate the growth of Play Store revenues. That in turn will encourage more developers to switch and we may see a repeat of the Windows movie from the 1990s when the winner takes all.

And I will have to switch back to Android.


App store discovery a little less broken?

By | Apple, Google, Mobile | 11 Comments

It’s a common refrain that the process by which apps are found or discovered is broken. Discovery and hence download volumes are driven more than anything by ‘app store placement’ and by being ‘featured’, both of which seem to be more down to the whim of Apple and Google than the merit of the app. What we need is an equivalent of Google’s Page Rank, but for apps. That way good apps would float to the top and discovery would be more meritocratic. That would be better for startups who often have great products but lack the resources or the networks to curry favour with Google and Apple.

The current discovery process isn’t completely broken, in that Apple and Google do take the quality of the app and it’s popularity into consideration, but it isn’t right. Consider these stories. Two similar stage startups that we are close to have recently been playing the App Store game with Apple. They both networked hard to get close to the right people at Apple, developed features that Apple suggested they should and then held back release of those features in the hope of getting promoted. One got promoted in a big way (Stylect) and the other got only a low placement in an App Store category with little traffic. Neither knew until the day of the promotion. That can’t be the best way to do things.

However, Apple and Google are both heavily invested in the status quo. Their app stores earn them a lot of money and are a protective moat for their mobile phone businesses. So I’m not expecting things to change quickly. Thus I was surprised to read this morning that app store competition is increasing. Tomasz Tunguz has found that app store volatility has increased substantially over the last twelve months which indicates that new entrants are doing better and that discovery is getting less broken.

That’s a little bit of good news for startups in an area where they don’t usually get much. I like to think that one day we will have an open system on mobile, but until we do life will be harder for young companies than it needs to be and we will get less investment and innovation in mobile than we could.

Space; the next frontier – now at the mainframe computing moment

By | Google, Startup general interest, Venture Capital | 4 Comments

There were two Tweets about satellites in my newsfeed this morning. Usually there aren’t any.

The first was an Economist article about nano-satellites describing how satellites are getting smaller and cheaper. Remember what that did to the computer market? We could well be on the brink of something similarly transformational in satellites. Nano-satellites weigh as little as a few kilos and are ‘thousands of times cheaper’ than their larger brethren, and launch costs are falling rapidly too (the article doesn’t provide detail on the speed with which launch costs are falling, but I guess they correlate with weight). Nano-satellites are less capable, or course, but can still do useful tasks.

And as with computers declining cost has resulted in increased unit volumes. Around 1,000 large operational satellites are circling the earth, and in the last year they have been joined by around 100 nano-satellites. And 1,000 more nano-satellites are expected over the next five years.

In rough summary, costs have fallen by around three orders of magnitude and number of new satellites in the next five years will be roughly equal to total the number previously launched (forgetting about satellites that have been launched but are no longer operational).

If I was to map this to the computing industry I would say costs and unit volumes are comparable with somewhere in the late 1950s, the first decade of the mainframe era. In 1953 it was estimated there were 100 computers in the world.

You have probably guessed where I’m going with this – we could be on the cusp of a wave of satellite based innovation, and if so there will be startups… I don’t think satellites will be as transformative to society as computers, but it could nonetheless be powerful. It’s true that it’s difficult to envisage what that transformation might look like, but then the same was true of computers in the 1950s. It wasn’t until the 1970s that Bill Gates said he wanted to put a computer in every home, and even then people thought he was crazy.

The second piece of news was that Google has bought nano-satellite company Skybox for a rumoured $1.2bn. It seems they are thinking along the same lines I am and that space is the next frontier. (I wanted space to be the final frontier, but if space is next, then I think the human body, or maybe human brain, will be the final frontier.)

$40bn wiped off newspaper ad revenues in ten years

By | Google, Startup general interest | 3 Comments

Newspaper ad revenues

In 1942 Joseph Schumpeter wrote that creative destruction is an ‘essential fact of capitalism’. Old ways of doing things need to fall aside to make space for more productive methods. Another essential fact of capitalism is that it drives an ever increasing pace of change, and we see these two essential facts coming together in the chart above which shows $40bn in revenues disappearing from the newspaper industry in little over ten years – an amazingly rapid collapse by historical standards.

That money hasn’t disappeared, it’s been taken by something else, and the good news behind this chart is that innovators somewhere have captured this $40bn and harnessed it for the good of their companies. Some of those innovators are in the news industry, but most will be in other industries entirely.

As the pace of change and creative destruction continues to increase we will see charts like this more and more often. Banking revenues is one I’m particularly looking forward to, however, it won’t just be old world industries that suffer. Operating systems and personal productivity software are two newer categories that are suffering the same fate and I wouldn’t be surprised if search advertising goes the same way before too much longer.

Google slashes cloud prices

By | Amazon, Google, Startup general interest | No Comments

I love Amazon and AWS for the way they keep cutting their prices and for the way they support the startup ecosystem. As an example they offer Forward Partners companies, and the companies from many accelerator programmes $10,000 of AWS credits, effectively making it free to get started on their platform. For these reasons Amazon is the first choice for most startups.

However, Google just slashed its cloud prices and is not cheaper than Amazon for all but the heaviest users. Significantly cheaper in fact. Pricing for these products is complicated, but by the analysis of cloud management software company Rightscale Google is 30-60% cheaper for on-demand usage (i.e. light usage), 21-32% cheaper for 1 year heavy reserved instance pricing (i.e. moderate usage) and 3-19% more expensive for 3 year heavy reserved instance pricing (i.e. heavy usage).

Price decreases come regularly in this market and I’m sure Amazon will take action soon, otherwise startups will start turning to Google. I can watch this sort of price competition all day long, but it will be interesting to see how Google fairs playing the price game against Amazon. Historically they have been a high margin monopoly type business whilst Amazon has always been about low prices.

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