Since the dawn of the internet, the titans of this industry have fought to win the “starting point” — the place that users start their online experiences. In other words, the place where they begin “browsing.” The advent of the dial-up era had America Online mailing a CD to every home in America, which passed the baton to Yahoo’s categorical listings, which was swallowed by Google’s indexing of the world’s information — winning the “starting point” was everything. As the mobile revolution continues to explode across the world, the battle for the starting point has intensified. For a period of time, people believed it would be the hardware , then it became clear that the software mattered most. Then conversation shifted to a debate between operating systems (Android or iOS) and moved on to social properties and messaging apps, where people were spending most of their time. Today, my belief is we’re hovering somewhere between apps and operating systems. That being said, the interface layer will always be evolving. The starting point, just like a rocket’s launchpad, is only important because of what comes after. The battle to win that coveted position, although often disguised as many other things, is really a battle to become the starting point of commerce. Google’s philosophy includes a commitment to get users “off their page” as quickly as possible…to get that user to form a habit and come back to their starting point. The real (yet somewhat veiled) goal, in my opinion, is to get users to search and find the things they want to buy. Of course, Google “does no evil” while aggregating the world’s information, but they pay their bills by sending purchases to Priceline, Expedia, Amazon and the rest of the digital economy. Facebook, on the other hand, has become a starting point through its monopolization of users’ time, attention and data. Through this effort, it’s developed an advertising business that shatters records quarter after quarter . Google and Facebook, this famed duopoly , represent 89 percent of new advertising spending in 2017.
Read More »Apple is an exception to nearly every rule
Walking into my first ever meeting with a structural packaging designer, I started rooting around in my bag before exclaiming, “This is the sort of thing I want!” She leaned forward in her chair, delighted to have a customer with a strong guide, then groaned audibly when she saw what I had placed on the table: the packaging from my new iPhone. “You can have anything you want,” she countered, “but if you want your packaging to look and feel like Apple’s, you’ll have to increase the unit cost for your packaging by 10x.” Packaging is just one example — there are dozens — of why Apple is a rank outlier in almost every way. Or, put differently: Using the Cupertino-based company as your template for how to build a startup is not a great idea. Let me tell you why. Manufacturing constraints be damned! Apple is unusual in many ways, but nothing sets it apart from your hardware startup quite as much as its cash reserves. The company sits on a quarter-of-a-trillion-dollar pile of cash , about twenty thousand times more money than even the best-funded startup in the world. Having a rainy-day fund the size of a national budget means you’re able to demand certain things. One example: Chipset manufacturers will jump through hoops to make things possible for Apple that they wouldn’t do for anyone else. At Apple, design is the driving force, with manufacturing and engineering fully dialed in to support that vision. In practice, that means that Apple’s designers make choices nobody else would be able to make. The amount of custom CNC milling that goes into Apple’s unibody laptops is incredibly hard to scale. For example, when designing the new unibody Macbook Pro, Apple’s designers had a very specific design in mind
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