Wednesday, November 14, 2007

Addendum

One poiny I forgot to make about Ch 9, was that the authors were talking about T-shaped managers. Workers need to be concerened not only with own division interests, but the organization as well. That is the goal of the on-line info sharing, and getting input and ideas from front line employees.

Ch11

I checked out the website. I guess it has changed since the book was written, as it is now more of a blog. It is similar to the layout of the Freakonomics writers’ blog. There is a section about the book, a blog section where the writers post their thoughts on various news items. The wiki is rather small, and not much is on it. I think the authors thought their book would be a lot more popular than it was, and people would rush to the website to leave their mark.

Ch10

The last real chapter of the book. This chapter summarizes all the writers’ ideas. I am very cynical of the writers’ ideas that mass collaboration is going to change the world. I think it is just a new tool available. Also, the writers say throughout that the IT should drive the firm’s strategy, but as we learned in class, strategy should drive IT.

That new companies are slow to adopt is not a new idea. Schumpeter called this “Creative destruction”. A new firm comes along with a new way of doing things and drives the others out of business. Then another new firm has a even newer and better way, and drives more firms out of business. Or, the old firms adapt to the new way of doing things, and survive. I think this is what will happen with mass collaboration. Either it will change everything, or nothing.
I agree with the statements about outsourcing. The most efficient firms and countries should be the ones producing, and then trade with each other. This is how society maximizes benefits in a capitalistic society.

A major point that I think was underplayed was when P&G said for ever top person they have, there are 200 more just as good out there. I think this is important. Too many people emphasize pedigree ie where you went to school, rather than your actual ability. Many people that I have met that went to fancy top tier schools were incompetent. Their parents happened to be well off enough to send them to a fancy private school, which helped them get into elite colleges. When I worked with them, they were very incompetent. The best tax lawyer in Canada had a C average in law school. F. Lee Baylee went to a small no name Boston law school, failed criminal law twice, and became the US’s best defense lawyer. The problem is, many companies think that unless you went to X school with an awesome GPA, you aren’t worth hiring. All this leads to is grade inflation, and those who are capable get squeezed out for a less capable person who was lucky enough to get a brand name education. Off topic, but I wanted to get that out there.

Finally, some additional info on France and Apple. France is telling Apple that its iPod and iTunes violate competition laws. In response, Apple wants all DRM removed. This would put them and their competitors at equal footing. Otherwise, someone can use iTunes and not iPod and vice versa.

Ch9

This chapter discussed horizontal integration. This is not a new concept, as many companies have been doing this for awhile now. I agree that this is what companies need to be doing, especially including employees in the decision process. This bottom up approach has been used at Toyota for years. If any employee has ideas, and it leads to cost savings, they get a share of the savings as a bonus. Some get put on the management fast track.

Wiki’s may not be the next wave of the future, as many workplaces ban using Wikipedia. China also has firewalls that prevent people from using it. If the most populous country in the world can’t use it, then in a globalized world economy, mass collaboration is not going to take off in my opinion. Rather, it is just a new tool in the manager toolbox. The authors even say so, “Added collaboration tool to palate”. I believe this means that mass collaboration is not going to replace the current way of doing things.

I think the multiplayer games for group meetings that Geek Squad uses is a great idea. I think other firms should experiment with it, as I would lie to see if it works in other settings.

I remember the Star Wars stunt. It was covered in the Canadian news, and thought it was hilarious. More companies should have wacky ideas like that, but they are too conservative and risk averse for that I think.

Finally, this book needs a better editor in the next edition. The spelling, grammar and wrong word errors are getting annoying and distract from the point the authors are trying to make.

Monday, November 12, 2007

Ch8

I wrote this and the chapter 7 comments two weeks ago, but only now got around to posting them now. Sorry it took so long.

It took awhile for this chapter to get to the point. The chapter mentions mass customization. This is also known as the long the long-tail, one of the other books on the reading list. Soon, people will be able to customize everything they buy. This has a large part to do with the internet. People can already go on-line and customize their laptops, cars and clothing. As technology advances, everything will be customizable.

Japan was reverse engineering products before WW2. They did so combining the best elements of German, English, and American engineering. I would also like to hear the Japanese side of the story, as I feel like there is more to the story. It seems very one sided the way the authors tell it.

It seemed odd that Amazon would share their source code. In our law class, we learned that Amazon sued Barnes & Noble for copying the one click shopping. Maybe the sharing is a new development.

The book mentions how Magna makes parts for each auto manufacturer. Magna recently announced that since they make all the parts for a car, they are now making their own car.
The modern supply chain started in the early 1970’s when a typewriter firm found it was cheaper to build in Singapore, import the products, and pay the tariffs, than to build the typewriters in Texas. Just thought I would add that as a bit of trivia.

Ch. 7

I am starting to wonder if the authors had enough material for a book with their ideas. I say this as each chapter seems more drawn out and repetitive. This book should have been shorter.
With regards to the chapter, e-bay already operates as an alternative sales channel. Many firms use e-bay to sell excess inventory. They no longer need a fire sale. Instead, just post the items on e-bay and sell to the world.

Videogames are a great example of mash-ups. Many users will go into the source code of games and modify it or “mod” it to create new games. The most famous example is counter-strike, a mod of Half-Life. This mod was so successful that the creators of Half-Life bought the mod and sold it.

CNN has user generated content. Users can send photos or videos from their cell phones to the network and get credited for it. This allows for instant news.
Amazon prices change every time someone searches for something. If there are a lot of searches for an item, the price goes up. They have been sued for this several times and lost, but the practice continues.

Opening up the code does not work for all companies. Google is extremely proprietary of its code for searches. Giving that up will lose the company’s competitive advantage. The authors talk as if this is the only way, but it depends on the firm’s strategy. It should be done only if it is in line with the firm’s goals.

Thursday, October 11, 2007

Ch6

This started off as an interesting chapter, but got dull as it went on. The problem with Alexandria was that most of what it contained were the only copies. When it burned, much of our knowledge was lost. Imagine if a giant EMP hit the earth and wiped out all our digital knowledge. The writer must not be familiar with history, as Socrates thought that the written word was going to be the end of humanity. He never wrote anything, so his works were not in Alexandria, as there were none. Socrates is a great example of how every generation thinks that new inventions are going to lead to the end of the world. People have been like that for thousands of years, and are always wrong it seems.

Back on topic. I love how most journal articles are on-line now. It makes research much easier, as I press ctrl F and can find what I want without having to read the whole thing. However, this new collaboration of knowledge leads to the free rider problem. This is where the majority will wait for a few to do all the work, but the few eventually saw “why am I doing this for their benefit?” and this leads to little or no progress in aggregate.

We are also going back to knowledge being proprietary. This is due to companies lobbying for favourable intellectual property laws that discourage innovation. Due to this, we may not see as many breakthroughs and consumers suffer. See the RIM/Blackberry patent dispute for more info of how out of hand this will get in the future. What happened was someone filed a patent for a blackberry like product in the late eighties before the technology for the product existed. A trial lawyer bought the patent and sued RIM for infringement. These kinds of suits and patents should be illegal. RIM was forced to pay a $100 million settlement. If there is no reform soon, it could hurt the US competitively.

A great example of collaboration is the internet. One of the early forms of the internet was for two universities to share research over phone lines.

Science today is developing too fast for its own good. I think they need to hold up some advancements in the peer review stage. Most med students knowledge is out of date by the time they graduate.

I have a problem with companies being able to patent human genes. As a libertarian, I find it scary. How long until companies paten human characteristics? Want a baby with brown eyes? Sorry, you have to buy the deluxe package for that.

Another thing holding up progress, but in a bad way is the FDA. The process for approval is so burdensome many foreign companies do not bother trying for approval in the US. The just go to Europe or Canada, were the standard is more realistic, and sell there. I think this is partly due to the legal system, as any yahoo can claim a drug hurt them, sue the company and the FDA for approving it and get some ridiculous sum of money.

Friday, October 5, 2007

Ch5

More second life ;) Speaking of on-line communities, these have been around since the late nineties. I had friends who would make an account for on-line games and build up the avatar and then sell it on eBay. The would also sell the game currency or other items on-line. It was like a job for them, but they had fun at the same time.

We as a society need to be careful how far we allow these game to replace our own lives. People get so immersed in these worlds that they won’t eat, sleep or even go to the bathroom. This leads to health problems, and in some cases death. Eventually, when these are completely immerseable, people will never leave the world, as they could just spend their life fulfilling their fantasies. Society would collapse.

I agree that companies need to take advantage of user customization. One of the other books that was on the reading list “The Long Tail” deals with this. The author predicts that the future is mass customization of products. Nike already allows you to custom design your shoe on its website. You also see it with do-it-yourself renovations. Lowes and Home Depot cater to this market. However, when someone adjusts the product, and they are injured, who is liable. If there was no warning label, would you be able to sue?

People are selling hacks all the time in Chinatown in Toronto. You can buy customized versions of the PSP or Nintendo DS that have all the bells and whistles mentioned in the chapter.

The music industry needs to get over itself. It is grasping to a dying business model and the industry has resorted to suing its customers for not using its products in ways they see fit. In the news the other day, a woman lost a suit against the RIAA and has to pay $20,000 for each song downloaded. That is insane.

With regards to news, not everyone wants user created content. I read the New York Times and Washington Post because of the quality of writing. If they were to cater to the public at large, the articles would be dumbed down so much they wouldn’t be worth reading. The New Yorker experienced this a few years ago when the publisher thought they could sell more magazines by catering to the general public. The Editor in Chief said that that was not the target market, and doing celebrity profiles would tarnish the magazine and alienate the market. He was right and won out. Also, newspapers want editorial control, which user generated content removes. Many news outlets downplay or ignore certain news items for various reasons. User generated content removes this power, and they will not want to give it up.

The previous post should say ch 4

Ch3 Thoughts

I find it interesting that Mueller only received $25,000 for solving the chemistry problem. He probably saved the company much more than that. Its great companies can find cheap solutions this way, but how long is it until people figure out they can get more. I foresee people like Mueller asking for royalties for solving a company’s problems. I would ask for a percentage of the money saved each year from my idea.

Innocentive is a interesting idea for cheap consulting. I think part of the reason for its success though is that it goes outside corporate culture. Many companies train employees to think a certain way, which I think constrains creativity, and results in the need for outside help to solve problems.

Ideagoras are interesting, but are they truly global? I am willing to bet most of them are located in the Western hemisphere. I think this is just a new tool in a company’s arsenal, rather than being a new wave. Several questions arise from this new way of doing R&D. Who owns the ideas? The person, the company or the intermediary? What prevents countries like China from stealing the patents that are put on-line? A foreign company could license the patent, reverse engineer it, then make enough changes to file a new patent.

I can see new developments in IP from Ideagoras. You will start to see companies that solely do R&D and then sell it to the highest bidder. You sort of see this with universities. I also foresee people being able to trade patents and trademarks on an pen market, similar to securities.

Monday, September 24, 2007

Chapter 3

So far I am unconvinced that mass collaboration is the wave of the future. Yes, it has changed many elements of the web, and how companies design programs, but those seem like anomalies. One of the creators of Wikipedia left because it became something other than what he envisioned. I am forced to agree with Thomas Friedman’s analysis in "The World is Flat". Speaking of "The World is Flat", Friedman gives a much better description of IBM using open source and the difficulties they initially had. I also find it interesting that Firefox has a rather large following, but when people want an alternative to Windows, they go to Macintosh rather than to Linux.

The authors mention China is adopting open source, which is not a good thing. With China’s history of human rights abuses and control of speech, I wonder how open source can really be successful.

I find it interesting that this chapter covers ERP as open source at the time we are covering it in class. I wonder how successful an ERP can be as open source. As was seen in the Cisco case, if something goes wrong, who do you contact? Since no one owns the IP, who do you sue if necessary?

Right now, I believe that the real reason many companies are shifting to open source is because it lowers labor costs while giving them access to top programmers for free. They only pay if a commercial product comes out of it, saving R&D dollars. Also, companies won’t have to recruit top talent when said talent will work for free in their spare time.

Finally, the writers mention that companies should change their strategy to fit the IT, rather that having IT match strategy as mentioned in class. As we saw what happened last time this was done, I would have to go with the latter.

Saturday, September 22, 2007

Chapter 2

My thoughts on chapter 2:
· I liked how the authors point out the arrogance of the music industry, especially Sony. This is similar to how the movie and TV industry treats its content on YouTube. This is not new either. The movie industry fought cable, as they saw it as a threat. Instead, it made them more money. Again with the invention of the VCR, the movie industry fought against the new technology. Now, DVD sales eclipse the box office.
· It is interesting that more companies are opening up their source code. You can now post photos from Flickr onto Facebook. Also, many of the applications on Facebook are now user created.
· I forget the name of it, but there is a new wave in advertising where employees create blogs, and will get involved in other blogs. Once they have a reputation as an authority on a subject relating to the company, they then start pushing the company’s products. Electronic Arts is famous for this kind of advertising.
· The growth in blogs has led to a ‘pajamas media’ where some guy in his pajamas with a large readership now can comment on the news, and set the tone for the discussion in the media. You saw this in the last US election with the Swift Boat Veterans, and the famous CBS memos. I wonder what will happen in this next election.
· Education needs to change for the new economy and the web generation. The current education system is still stuck in the 19th century. The school system of people sitting quietly and regurgitating what the teacher said was to prepare people for factory jobs where learning to do repetitive tasks was necessary. In a knowledge based economy, active learning is required, but schools do not follow an active learning model. Reform is desperately needed in this regard.

Chapter 1

Ch 1
An interesting first chapter. Here are my thoughts on this chapter:
· I am surprised the writers never mentioned YouTube, and how it is changing how people are entertained.
· One problem with using Linux as an example of mass collaboration, is that Linux still has not caught on the way Windows has, and likely never will.
· Wikipedia is a great example of mass collaboration. A Canadian newspaper, The National Post did a study and found that Wikipedia had fewer errors per thousand entries than Encyclopedia Britannica
· Some critics compare collaboration to communism, but I though the author could have done a better job of distinguishing the two. I think the stigma of comparing collaboration and communism is going to hold it back, in the US especially.
· I do have to agree with Lenier somewhat with the “Collective Stupidity” idea. Just look at what is on TV today. Not to sound elitist, but it panders to an uneducated, low-brow audience. I watch many British shows, and when the US does its own version of them, they are often dumbed down and lose what made the show appealing in the first place.
· In reference to Gates criticism of offering free products, Google offers all of its products for free, and is extremely profitable.
· I found the MIT example of open classes interesting. I wonder what this will mean for buying case studies, and even business school, in the future.

Monday, September 10, 2007

Test

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