Paul Wallbank | Paul Wallbank - Communications Professional

Did Apple kill the Finnish economy?

The Finnish Prime Minister jokingly blames Apple for his economy’s problems, but the real challenges are familiar to all western countries.

Last week the Finnish Prime Minister, Alexander Stubb, raised eyebrows with his suggestion that Apple killed the country’s economy with the iPhone putting Nokia out of business and the iPad reducing global demand for paper.

The real reason for Finland’s immediate problems is a lack of diversity; any country dependent upon one or two businesses or industries is going to be vulnerable should markets move against them.

In the longer term though the problems facing Finland are similar to those across the western world; an aging population, shrinking workforce and tepid export markets.

Finland’s real problems are our problems. How the Nordic nation deals with them will provide some valuable lessons to us all.

Revitalising the tablet market

Ahead of tomorrow’s announcements by Apple, the strategic leaks are happening fast on both the next version of the iPad and Google’s Nexus appearing in the media today.

The problem for tablet manufacturers is that sales have stagnated in recent times with the products no longer flying off the shelves.

Part of the reason for this is customers are happy with their existing products; a three year old tablet will do most of things a brand new one will do so there’s little reason for upgrading.

For vendors like Apple and Google it’s further proof that the PC industry model of three year upgrades is firmly dead, the sector will need something more than planned obsolescence to drive growth.

How smart hiring paid off for the PayPal mafia

Companies miss out when they won’t hire former business owners as PayPal shows

One of the challenges facing people who’ve started their own businesses is re-entering the broader workforce. Many managers are reluctant to hire previously self employed workers; the PayPal experience shows that attitude could be hurting working

At the Dreamforce Conference in San Francisco yesterday three PayPal alumni, part of Silicon Valley’s infamous ‘PayPal Mafia’, discussed why the company was such a successful incubator of talent.

“The company was composed of a bunch of young folks who were very driven,” said founder of LinkedIn and early PayPal employee, Reed Hoffman. “Once they sold the business to eBay they weren’t the type to retire.”

Along with PayPal’s founders being driven, the company also tended to hire people who had run their own businesses but were finding the going tough in the economy at the time; “Silicon Valley was collapsing under its own weight,” observed PayPal founder and fellow panellist Max Levchin.

“There was a lot of running for safety in the Valley,” Levchin remembers. “We were looking for people who were into risk taking and were excited to take a risk and this would be the last company they worked for because the next one would be their own. As a result we biased the selection towards entrepreneurs.”

Copying that hiring practice today is Stripe where co-founder John Collison told Decoding the New Economy last month that one of the keys to managing a fast growth business is to hire entrepreneurs and former self employed workers.

“They are self starters; they don’t need much supervision,” said Collison in describing how hiring people who’ve run their own businesses makes running a business that has gone from ten to 150 employees in three years.

it’s no coincidence that one of the investors in stripe is Peter Theil who along with Levchin founded PayPal and is probably the best known of the ‘PayPal mafia’.

PayPal and Stripe’s experience show the folly of overlooking workers who’ve run their own businesses; in a world where business is becoming more competitive, having entrepreneurial employees is an asset too good to miss out on.

Salesforce faces the end of the database era

Cloud CRM giant Salesforce faces a challenge as searching unstructured data and analytics companies like Splunk change the business model.

Last week we looked at the way we organise information is changing in the face of exploding data volumes.

One of the consequences of the data explosion is that structured databases are beginning to struggle as information sources and business needs are becoming more diverse.

Yesterday, cloud Customer Relationship Management company Salesforce announced their Wave analytics product which the company says “with its schema-free architecture, data no longer has to be pre-sorted or organized in some narrowly defined manner before it can be analyzed.”

The end of the database era

Salesforce’s move is interesting for a company whose success has been based upon structured databases to run its CRM and other services.

What the company’s move could be interpreted that the age of the database is over; that organising data is a fool’s errand as it becomes harder to sort and categorise the information pouring into businesses.

This was the theme at the previous week’s Splunk conference in Las Vegas where the company’s CTO, Todd Papaioannou, told Decoding The New Economy how the world is moving away from structured databases.

“We’re going through a sea change in the analytics space,” Papaioannou said. “What characterised the last thirty years was what I call the ‘schema write’ era; big databases that have a schema where you have to load the data into that schema then transform before you can ask questions of it.”

Breaking the structure

The key with programs like Salesforce and other database driven products like SAP and Oracle is that both the data structures — the schema — and the questions are largely pre-configured. With the unstructured model it’s Google-like queries on the stored data that matters.

For companies like Salesforce this means a fundamental change to their underlying product and possibly their business models as well.

It may well be that Salesforce, a company that defined itself by the ‘No Software’ slogan is now being challenged by the No Database era.

Paul travelled to San Francisco and Las Vegas as a guest of Salesforce and Splunk respectively

Attacking Apple iPhone 6

Attacking Apple is not the way to beat them in the marketplace

One of the saddest things in life is the company that bleats ‘but we thought of it first’ when overtaken by a smarter or more credible competitor.

Since the release of the iPhone 6, the knives are out for Apple with Samsung, HTC and even Sony poking fun at the new product pointing out the features already in their products.

The problem for Apple’s competitors is the market isn’t listening to the attack ads. In China alone a million iPhones were sold in first hour they went on sale.

For companies competing with Apple they have to find a compelling product, not be sniping at the market leader. For Samsung in particular with its falling revenues it needs to be generating some excitement in the market, not depressing its customers.

Here’s the Samsung ad; while it’s pointing in the wrong direction it’s good in that it holds the critics to account but it makes not a spit of different to the marketplace.

You’re being scanned

Recognition technology is advancing rapidly, creating opportunities for marketers and privacy concerns for consumers.

A cute little story appeared on the BBC website today about the Teatreneu club, a comedy venue in Barcelona using facial recognition technology to charge for laughs.

In a related story, the Wall Street Journal reports on how marketers are scanning online pictures to identify the people engaging with their brands and the context they’re being used.

With the advances in recognition technology and deeper, faster analytics it’s now becoming feasible that anything you do that’s posted online or being monitored by things like CCTV is now quite possibly recognise you, the products your using and the place you’re using them in.

Throw all of the data gathered by these technologies into the stew of information that marketers, companies and governments are already collecting and there a myriad of good and bad applications which could be used.

What both stories show is that technology is moving fast, certainly faster than regulatory agencies and the bulk of the public realise. This is going to present challenges in the near future, not least with privacy issues.

For the Teatreneu club, the experiment should be interesting given rich people tend to laugh less; they may find the folk who laugh the most are the people least able to pay 3o Euro cents a giggle.

Stretching out in coach: Air New Zealand Premium economy

Air New Zealand’s premium economy service is comfortable but no substitute for business if you need a good night’s sleep

Comfort is not the word that comes to mind when travelling economy across the Pacific so when a chance to upgrade a fourteen hour flight between Auckland and Los Angeles to Premium Economy comes along it’s worth grabbing.

Among Air New Zealands plethora of flight classes the airline offers a premium economy Spaceseat service on its long haul Boeing 777-300 services.

With extra space and legroom along with an improved food menu, the service is a step up from basic economy but is it a suitable substitute for the more expensive business class?

At first view, the premium economy seats are certainly more spacious than United’s business class with the cabin being six abreast in a 777-300 as opposed to eight on the US carrier’s service.

The seats themselves have a strange positive feedback system where it’s necessary to push the seat into the position you want. The recline on the seat also isn’t as far as expected being not a great deal more than standard economy.

Although the recline isn’t great, the leg room and space for working is excellent with no problems such as the passenger in front of you reclining into your face or mangling your laptop.

One major advantage Air New Zealand’s premium economy has over United’s business is the ample elbow room; the wide cushion beside your seat gives plenty of space for placing drinks, books and other inflight paraphernalia, something really useful on a 14 hour flight.

Stretching out however isn’t so easy, the seats are nowhere near lie flat with additional leg room provided in small well in the back of the seat in front. Within that well a small bean bag is provided to give extra leg elevation.

Alongside the seat is some more storage space where at the start of the flight the airline provides a bottle of water. Be careful putting anything valuable on this ledge as it can fall down behind the seat, in my case I lost a set of eyeshares although the basic amenities kit provided another pair.

The food provided is a big step up from standard economy with the serves being more generous with wider choices. The smaller cabin also means faster service and Air New Zealand have avoided United’s mistake by providing sufficient toilets for the Premium Economy section.

Once the food is packed away the real test of the flight is how well one can sleep, particularly on a 14 hour flight that crosses the International Date Line (your arrival time in Los Angeles is earlier than the time you departed).

Unfortunately the rest isn’t that great, the poor recline still makes it hard to sleep and the bean bag isn’t enough to give your feet much elevation. While it’s better than normal economy, you aren’t going to get a great night’s sleep.

The night’s sleep is where business class wins out; the ability to lie flat gives you the opportunity for a decent slumber while Premium Economy will still leave you sore and tired.

On balance, Air New Zealand’s Premium Economy is a good upgrade if want to pay extra for a bit more comfort or, like this writer, have points to squander.

If you’re travelling for work and the need for a good sleep before arrival is important, then premium economy won’t replace the benefits of a lie flat seat in business.

Paul travelled to Los Angeles as a guest of Salesforce, the upgrade was part of a points redemption.

Google expands its campus program

Google expands its Campus program to new cities

One of the reasons for the success of London’s Silicon Roundabout neighbourhood was the Google Campus that provided a drop in centre and community venue for the growing tech hub.

It turns out the success of London’s Google Campus can be replicated, as shown by the Tel Aviv outpost having similar results.

As a consequence Google are now opening new campuses in Warsaw, São Paulo, Seoul and Madrid.

Whether these cities will have the same success as London and Tel Aviv, both had a thriving tech start up community before their Google Campuses opened, remains to be soon.

One thing is for sure, we’ll see other cities’ governments and tech communities lobbying Google to base a Campus in their tech neighbourhood. It may be worthwhile they have a look at the London one to see what works and how they can set their own local hub.

Conglomerates fall out of fashion

It’s worth remembering that conglomerates come in and out of fashion in the business world, right now seems to be a bad time.

After the announcement earlier this week that HP will split into two, now Bloomberg reports Symantec is considering splitting, this comes after the news that PayPal is being carved off eBay and that Yum foods is looking at divesting some of its Chinese assets.

It looks like we’re moving into a period where conglomorates are out of fashion; that’s good news for lawyers and consultants advising the companies however it will be worth watching to see what this means for customers, employees and shareholders.

That HP is reportedly shedding 55,000 jobs says some of these conglomerates were chronically overstaffed so it might be good news for the stockholders of the split companies.

Either way, it’s always worth remembering that conglomerates come in and out of fashion in the business world.

Adrift in the data lake

We’re awash with data and businesses have to figure out how not to drown in it

Last week Yahoo! closed down their directory pages ending one of the defining services of the 1990s internet and showing how the internet has changed since the first dot com boom.

The Yahoo! Directory was victim of a fundamental change in how we manage data as Google showed it wasn’t necessary to tag and label every piece of information before it could be used.

Yahoo!’s Directory was a classic case of applying old methods to new technologies – in this case carrying out a librarian’s function of cataloguing and categorising every web page.

One problem with that way of saving information is you need to know part of the answer before you can start searching; you need to have some idea of what category your query comes under or the name of the business or person you’re looking for.

That pan was exploited by the Yellow Pages where licensees around the world harvested a healthy cash flow from businesses forced to list under a dozen different categories to make sure prospective customers found them.

With the arrival of Google that way of structuring information came to an end as Sergey Brin and Larry Page’s smart algorithm showed it wasn’t necessary to pigeonhole information into highly structured databases.

Unstructured data

Rather than being structured, data is now becoming ‘unstructured’ and instead of employing an army of clerks to categorise information it’s now the job of computers to analyse that raw information and pick out what we need for our businesses and lives.

As information pours into companies from increasingly diverse sources, a flood that’s becoming so great it’s being referred to as the ‘data lake’, it’s become clear the battle to structure data is lost.

At the Splunk Conference in Las Vegas this week, the term ‘data lake’ is being used a lot as the company explains its technology for analysing business information.

Splunk, along with services like IBM’s Watson and Tableau Software, is one the companies capitalising on businesses’ need to manage unstructured data by giving customers the tools to analyse their information without having first to shoehorn it into a database.

“Thanks to Google we got to look at data a different way,” says Splunk’s CEO and Chairman Godfrey Sullivan. “You don’t have to know the question before you start the search.”

Diving into the data lake

It’s always dangerous applying simple labels to computing technologies but some terms, like ‘Cloud Computing’, don’t do a bad job of describing the principles involved and so it is with the ‘data lake’.

Rather than a nice, orderly world where everything can be pigeonholed, we know have a fluid environment where it wouldn’t be possible to label everything even if we wanted to. A lake is a good description of the mass of data pouring into our lives.

The web was an early example of having to manage that data lake and Google showed how it could be done. Now it’s the turn of other companies to apply the principles to business.

Google fatally damaged both Yahoo! and the Yellow Pages, other companies that are stuck in the age of structured data are going to find the future equally dismal. Don’t drown in that data lake.

Paul travelled to Las Vegas as a guest of Splunk

Breaking down old technology empires

HP and eBay splitting their businesses is part of a structural change in the technology industries

HP’s CEO Meg Whitman announced today that the company will be splitting in two with its Printer and PC division being carved away from its consulting services.

The two new companies will be Hewlett Packard Enterprises and HP, the latter being the old printer and PC division.

For HPs shareholders this split is a decade too late as the printer and PC division is in an industry where declining margins are the norm.

It’s not hard to think though that both businesses are ultimately doomed, it wouldn’t be surprising to see the smouldering ruins of both companies being picked up by companies like India’s Wipro or China’s Lenovo in the not too distant future.

That HP is divesting isn’t surprising as the trend is moving away from the big conglomerates model of the past decade; two weeks ago eBay announced it will be splitting its PayPal division and the float of Alibaba will almost certainly see Yahoo! begin to hive off businesses that have underperformed under their corporate umbrella.

An era where the key to growth in the technology industries doesn’t involve buying competitors and startups to build online empire will leave the Silicon Valley greater fool business model somewhat lost. It might be time for a few venture capital and seed funds to think about their pivot.