Prediction

Prediction: Sometime in July, Hillary Clinton will make a Shermanesque statement regarding her candidacy on the ticket as Obama's running mate. Something on the order of "I have contacted Sen. Obama to let him know that I am categorically not interested in a spot on the 2008 ticket, and will not accept if asked."

This will be a face-saving move for her as she faces the fact that Obama doesn't want her on the ticket—probably even coordinated by Hillary and the Obama campaign. And it will begin the process of letting the Hillary supporters down slowly, before the convention. They have to be comfortable with this idea before then, else there'll be backlash and disappointment during the big show in Denver when someone else is named as running-mate, and that won't be good PR.

Sucky Domain Registrars

Like most internet geek types, I own a few domains—waldronfaulkner.com and a handful of others. And over the years I've worked with three different domain registrars, each one evil in their own way. Network Solutions was solid and trustworthy, but a giant pain in the ass to use.

I switched to Register.com for ease of use several years back, but they're expensive.

So I tried GoDaddy.com. Oh, GoDaddy, is there any any revenue stream you won't aggressively push?

Last April GoDaddy was in the news for some evil practices. The governing body for domain names, ICANN, took some action against them. In short, they were "locking down" domain names for 60 days after a user's contact information changed. The Catch 22 is that under ICANN rules, users must keep their contact information up to date, else risk forfeiture of their domains. GoDaddy's practice effectively forced some people into a situation where they'd have to either renew with GoDaddy or risk losing their valuable domains.

Even though I know GoDaddy was both ugly and evil, I still now prefer them to Register.com because the price gap is ridiculous. Register.com is still on this $35/year price point, whereas the rest of the industry is down in the sub-$10 range for individual domains. Register.com didn't get left behind in the rush to reduce prices industry-wide; instead of reducing their prices for users who were already accustomed to paying $35/year (idiots like me), they simply re-branded their service under new names, with different sites, and got competitive there, instead.

But what do I do with the domain that expires in 2 days? I don't want to leave it with Register.com because they're too expensive. I'd rather not transfer it to GoDaddy because they're ugly, shameless, and potentially evil. I considered switching to Google's registration service, but the sign-up process made it a little unclear what I was getting... it's associated with Google App Engine, and it wasn't clear whether I'd be able to just use the domain registration part without also transferring my existing sites to the App Engine infrastructure. They wanted to give me a new email address in the domain I was transferring... an email address I already have and use, in fact.

So I decided to transfer yet another domain to the potentially evil GoDaddy, from Register.com. I learned that Register.com has its own evil ways. In order for GoDaddy to complete the transfer, I have to provide an authorization code provided by Register.com. How do you get this code? You have to call them on the phone. After they do the standard verification-dance, they send you a different code to your email address. Then they ask you to repeat the code to them before they send you the real code you can use in GoDaddy's transfer process.

I've worked in a good number of consumer-focused Internet businesses. A good rule of thumb is that each step you put a user through, about half will drop-off. This is true both in the positive direction (don't make users go through a multi-stage sign-up process if you want to increase adoption) and the negative direction (if you make them call you on the phone before they cancel, fewer will cancel). Some of those consumer Internet businesses were also mature businesses, and I know what it is to push the revenue envelope. I know what it is to flirt with the line between increased revenue and dubious business practice, but Register.com crosses the line with this retarded, two-part authorization code thing. Lets review:

a) they email you a code
b) you repeat the code to them, ostensibly to prove that you have access to the email account.
c) they email you a different code

Huh? This verbal repetition of the code accomplishes nothing. They could have just sent me the real code. Access to the email address didn't need to be proven.

Now, I could see this process being implemented if someone just called them up and told them to send the code to some random email address, but this was the email address of record for the account.

So far, I've spent about an hour on this, working between the two sites, making phone calls, checking email etc., and I'm still not sure it's done.

Please, if you have experience with a domain registrar you actually like, please do let me know who they are... I'll transfer all my domains, maybe even all at once, instead of just when they get close to expiration.

My Prediction* For The WWDC

"Oh, and one more thing... we'll be offering these cool new iPhones in both GSM and CDMA versions, and we have deals in place with each of the major US mobile carriers, so we can offer you an iPhone for your existing Verizon Wireless, Sprint, or T Mobile account."

How might this happen, in light of Apple's famous Five-Year Contract with AT&T?

Two possible scenarios:

• The actual contract between Apple and AT&T might be very flimsy. Details as to what the contract contains are sketchy. It might be as weak as "we agree to do this deal exclusively with AT&T for five years, unless we opt out of it in June of 2008." Why would AT&T have gone for this? Because a real contract might not have been on offer, and this version at least allowed them announce a five-year exclusive deal. The announcement allowed them to convert a ton of Apple fan-boys/girls after the initial release—fan-boys/girls who might otherwise have waited around for a year or more to get a phone with their existing carrier, which would have been bad for both ATT and Apple

• Or say the contract with AT&T isn't flimsy. Apple could still get them to agree to nullify the first contract in exchange for their cutting AT&T in on a piece of every non-ATT iPhone sold in the US. There could even be a different cost structure for non-ATT phones (dovetails nicely with rumors of an AT&T subsidy).

Face it, Jobs needs a "one more thing" that'll catch even the most speculative fan-boy predictors by surprise. This would certainly do that, and simultaneously provide an announcement worthy of mainstream media attention, not to mention an avenue for increased iPhone sales volume, which is likely necessary to meet the goal of 10 million by end of 2008.

* Prediction = Wish

Stanford Launches Venture Fund

Standford has launched an on-campus venture fund: SSE Ventures.

In business school I took a course called "Managing Innovation", which I had hoped would focus mostly on a subject I consider to be a personal specialty: the difficulties of leading teams of highly intelligent, curious, independent individuals toward the accomplishment of a unified goal. In fact, we studied only a little in that line, but focused much more on the organization of innovative networks (network in the non-geek sense), and communities.

One thing we studied at length was the phenomenon of communities—usually attached to a geographic area like Silicon Valley or the Boston Rt. 128 corridor—becoming super-innovative powerhouses supporting the virtuous circle of technological invention, successful businesses development, and high returns capital investment which then feed back into the system.

Nations, states, and regional communities often try to synthesize these communities from scratch, by offering tax- and other incentives to would-be entrepreneurs, hoping to spark creation of a technological center akin to Silicon Valluy, which lead to higher rates of employment and transform the local tax base.

If my memory of the class serves, the following components are all requisite (but do not guarantee) for such communities to develop and flower:

• Academic centers of technological innovation
• Access to ready capital
• A few seed power-house businesses in the specific vertical where the community will excel

And the key ingredient, missing in nearly every synthetic, non-organic "tech center", and the one thing missing in Rt. 128 which lead to Silicon Valley—and not Boston—becoming the king of microprocessor innovation and manufacturing:

• A culture of cooperation and collaboration, rather than secrecy, ownership and protectionism.

I don't see this new venture fund materially changing the capital structure of the regional tech powerhouse that is Silicon Valley. There's already plenty of capital on Sand Hill Rd., and indeed anywhere else a promising young Stanford entrepreneur might turn. But if the fund's intent isn't to cherry pick the most outwardly promising-looking candidates, such a fund, willing to providing capital a bit earlier than the area's more established venture and angel investors, could definitely kick-start careers and further strengthen the S.V. tech community. More and younger companies keep talent in the area and draw more talent, and the myth of Internet-powered, globally distributed high-tech industries fades still further into the background.

Why Google might be in the Skype business

There's a not-so-outlandish rumor going now that Google might acquire Skype from eBay.

There are multiple reasons why Skype would make a good addition to the Google portfolio... which is good because there weren't any good arguments for the eBay acquisition. I'm particularly interested in two of those reasons: one makes sense if you take Google's "don't be evil" code of conduct statement on face value, and another if you think of Google as the scheming Dr. Evil of the technology space.

In the Don't Be Evil scenario: the relevant ingredients are these:

• Linux-based Skype client
• Linux-based Android mobile OS (the so-called "Google Phone")
• Open-access to 700 MHz wireless bandwidth or white space spectrum
• Grand Central (Google acquisition in July 2007)
• Goog-411

Mix it all together and you can offer consumers a carrier-free (or at least carrier-independent) mobile phone-and-gadget solution that does voice, with plenty of free add-on services. Google would run Skype's client on their Android OS platform, partnering with a big name carrier like ATT or VZN (or both!) for high-speed wireless data, but not for voice service. Mix in Grand Central for managing your voice life and messaging, and throw in free Goog-411 to make users' lives easier.

This is the scenario many pundits see as the crowning logic on the transaction.

However, there is a Doctor Evil scenario to consider as well.

• Skype service in its current form as a PC-based voice & video client
• Voice-to-text analysis software added into the Skype client
• Google AdSense
• Double-Click (Google acquisition completed March 11 after FTC and EC review)

In this scenario, Google has software in the Skype client which monitors your conversations, listening for keywords it can use to assign you into marketable/targetable "segments", which would be transmitted back to Google. This now creates another way, besides just your day-to-day browsing habits, for Google/Double-Click to target you for optimal ad-delivery. The same segmentation could then also be used with AdSense to deliver text-ads that aren't just based on the content on the page, but also on your current, Skype-determined ad-segments (which capability they're getting anyway in Double-Click, if not via your voice-conversations).

The idea of conversationally-contextual ads was mocked in a recent April Fool's Day joke on the AdSense blog. But the Doctor Evil scenario is much more in keeping with Google's core business than the Do No Evil scenario, and technologically easier for them to implement in the near term. The Do No Evil scenario involves carriers or other provisions for wireless bandwidth, plus completion of the Android platform (which is open), plus handset makers who must provide the devices on which Android will run. That's a lot of messy relationships and agreements. Easier to just acquire the core components you need and go from there.

For both scenarios: if there's anything we've proven over the past 10-12 years, it's
that a pay-for-service model will spiral toward zero revenue if there
is a cheaper/free ad-supported model in competition to it. So
Google-powered voice ads, to go along with free Skype service, targeted
to you based on your browsing (if not your conversations) is not at all difficult to envision.

Get ready for "free" voice service... the most annoying free voice service you could imagine!

Music Discovery: Bon Iver

What will my eleven week-old think of me when he's a music-obsessed teen and learns that, even though I hold a degree in music, I never seem to listen to it much? Poor kid will be disgusted with me, and rightly so. Perhaps as disgusted as I was with my parents, who had a lovely stereo system but owned only "Sgt Peppers" and the entire Herb Alpert catalog—and never listened to either.

Right or wrong, I'm blaming my musical complacency on lack of "discovery". The few times I've been excited about music again (music other than my own compositions, that is) has been when I discovered something new. So I've decided to go hunting for new music because I have no intention of being as out-of-it as my own parents were, and it won't be that long before my son grows old enough to realize how out-of-it I currently am.

So I'm taking you along for the ride. Here we go!

I find a lot of interesting new-to-me music via the KEXP song-of-the-day podcast. Recently in their feed:Bon Iver (on MySpace, and bio here).



Bon Iver (pronounced eevair, as in French for winter, intentionally misspelled) is the brain-child of Justin Vernon, and emerged from his spending a Thoreauan, isolated winter in northern Wisconsin as he faced-down some inner turmoil. Rather than simply "hibernate", which had been the original plan, he recorded nine songs, which he released as the Bon Iver album For Emma, Forever Ago.

The first song, Skinny Love, is just beautiful. An mp3 is here (can't vouch for its legality). You can also stream the song on his Virb page, and his MySpace profile. His album, For Emma, Forever Ago, is on Jagjaguwar records, and is available digitally on Amazon, as is the CD.



A trained musician such as myself should be well capable of explaining why a piece of music appeals to him. Over the years I've drifted further and further away from music that appeals to me intellectually, and back toward music that appeals on a visceral level. That was going to be how I avoided the question of why I like this piece of music, because I honestly didn't have it in my really analyze this piece of music. Seems at odds with the spirit of the song, anyway. But then I learned the back story of Justin Vernon and his isolated winter, and the appeal began to make sense even without an analysis of the music. I've been most prolific with my own songwriting (and most successful) during introspective times of my life, when I've intentionally isolated myself. I'm not going to compare my own music to this one song or album, but at least the motivation and the recording style are familiar to me. Maybe that's why this song reaches me.

Purists who get off on hearing the imperfections of hand-crafted recordings—first-take kind of stuff, complete with creaks & pops—will love this album. So will people who get off on super-promising "freshman" releases... you know, people who love to be disappointed by sophomore releases.

Anyway, please enjoy this song, Skinny Love, and check back soon for other "discoveries", new and old.

Why Zipcar Rules

On my other blog, which is about the advent of fatherhood, I once posted an argument in favor of my wife and I spending $750 for a baby's stroller, on the grounds that it provided an alternative to spending more than $180,000 in car and parking-related expenses here in parking-deprived Boston.

So we bought the stroller and justified it by continuing to use short-term car-rental company, Zipcar, rather than buying a car. We love Zipcar.

Today, Consumer Reports published new data that calculates car ownership costs for every model they track. So I looked-up the little Subaru Outback model Mary and I have been eying, and did some math*. I learned that for what it would cost us to own and park a Subaru Outback, we could:

• Use hourly Zipcars for 20 hours per week (using the hourly rate)


• Reserve Zipcars for 11.5 full days per month (using the daily rate)

For us, this isn't even close. In all of 2007 we spent just $788 on Zipcar. In 2006, we spent a lavish $1267, which included unlimited use of a small SUV for the week of our wedding. On average over those two years, we spent a bit more than $1000, which was less than 10% of the projected cost to actually own and park a car. Sorry, but the extra convenience of never having to return the car on a deadline just isn't worth 10 times as much money.

We continue to love Zipcar.


* To find my annual cost to own an Outback, I took the total 5 year cost of ownership published by consumer reports, added a conservative $325 per month for parking, and a modest 10% increase for living in Boston (insurance, fuel, repairs all cost more here in Mass, especially in town). To find my annual cost for Zipcar, I took their annual fee ($50 here in Boston), and prorated their membership application fee ($25). For hourly-rate Zipcars I used $11/hour (we usually use $10/hour cars, but sometimes we go for the $12/hour models). For daily-rate Zipcars I also split the difference between $78/day and $85/day cars, and used $81.50

The Doom of Disruptive Change for Incumbents

My friend Rags Gupta wrote a post today on how the record labels can save their dying business, (published on GigaOm... nice!), a comment on David Hyman's manifesto on the same topic.

The back story, for the even-less-initiated than me, is that the amazing efficiency of Internet-based digital music distribution has eroded the big four record labels' main, historic business model—the sale of physical media. It's the classic old story of a disruptive technology coming along and not leaving enough table scraps for the old, fat-cat incumbents. It's now nearly free to get a piece of produced music from the artist to the consumer. No more expensive media (CDs, tapes, records), no more physical distribution chain, no more brick & mortar retail outlets... all the little way-stations that used to clutter the path between you and, say, Boston 90's underground sensation,Morphine—are gone.

Why the cost isn't appreciably lower to you is something Steve Jobs still has to answer for. But that's beside the point right now.

Rags is a smart guy, and so is David Hyman; I wouldn't presume to analyze their prescriptions for the music business, but the situation does beg the question: what should we expect a big, slow, intractable business to do when faced with a disruptive competing technology / model / business / competitor? They are, after all, big and slow and intractable. Even for private companies, it's just not realistic that they will do the most rational thing: recognize the coming change (or, in this case, the one that's already here), and accept the new reality—that they get to keep pennies-on-the-dollar of their old business.

Kodak is a notable example of what's possible: they were a huge, market-leading company which made a sharp and painful move to follow the consumer & professional trend away from film, toward digital. They dismissed 20-25% of their workforce at one point. They have survived the changeover from film to digital, but as you can see from the chart below, that's about all they've done: survive. Kodak is virtually flat since 1970, whereas the Dow has increased roughly 15 fold in that same time.



A company like Warner Music Group, notoriously non-progressive with regard to digital distribution, will try its damndest to preserve the old way, even when faced with logical, inventive alternatives like the ones Rags and David Hyman outlined. They'd much rather fight to the death than surrender to the disruption and adjust their expectations to something more reasonable given the new realities.

But as I say, the question isn't just what should they do to save their businesses, it's: what can we reasonably expect from a dinosaur? More to the point, what do investors expect from a public company? I'm not sure how Kodak proceeded, but what happens to the already beleaguered WMG stock if they announce that they're doing away with DRM, slashing their rates for streaming, or doing anything at all but fighting the uphill battle against change? That's probably something they can't just do without being badly punished by Wall Street, which has serious repercussions to their ability to compete.



What amazes me now is how the big four have focused so exclusively on changes to their distribution model, when they're sitting on marketing gold. They don't always own the rights to online and/or mobile distribution—my understanding is that these rights are negotiated per artist—but they should endeavor to do so in future, and modernize their marketing efforts to take full advantage of the rights they do maintain. In theory, they are. But in practice, would-be innovators like my friend Dan Pelson face uphill battles, I assume in all the big four.

Whether you bend with the winds of change like Kodak or fight against them like Warner, the moral of the story is the same, in business, in politics, or anywhere else: being on the incumbent side of an industry facing major disruption is no good. It's much more satisfying, lucrative, and inspiring to be on the motive side of change!

Why Google is in the Photoshop Business

Slashdot ran an article Wednesday on how Google has hired a team of developers to improve the performance of Photoshop running under emulation on Linux.

Why does Google care how well an Adobe product runs on Linux? Because Google knows that a consumer-focused Google OS, which is based on Linux (extending GooBuntu), must automatically, immediately run the entire panoply of everyday consumer software. Development progress on native, GUI-intensive consumer software for Linux has been—at best—slow but steady. Google knows that the existing library of Linux software certainly won't cut it for a broad OS release to a non-geek consumer public. And they know that current Windows emulation software ("Wine"... published by the same firm Google hired to do the Photoshop gig) isn't ready for prime time.

Why Photoshop? Because it's a processor- and GUI-intensive consumer title which, if not being the key individual title needed for potential Google OS, will certainly cover a lot of ground for other titles which could run under the same emulator.

Why didn't they use MS Word or Excel instead? Two reasons: first, neither of those titles regularly push PC processors toward the edge of their abilities. But also: Google doesn't care whether their OS runs those titles because their OS distribution will come equipped with browsers; browsers with which consumers will be able to find their way online, to Google docs. The whole purpose of the Google OS may be to drive traffic to their online applications.

Is there a Microsoft-like anti-trust argument against Google owning the OS and the consumer software which run on it? It's a weird situation because Google will only be distributing browsers, and those browsers won't be Google, they'll be Firefox (or whatever). Google's apps won't be distributed with the OS. The biggest anti-trust argument that can be made against Google in this scenario (and it's a valid argument, in my opinion) will be that the Firefox which Google will distribute with its OS will be completely tricked-out for easy-access to Google apps... plenty of links, shortcuts, maybe even a toolbar. With a much-superior, tricked-out version of Wine available underneath, to run other high-end apps (e.g. Photoshop), they'll have a pretty compelling alternative to Microsoft's flopped Vista and out-dated XP.

Why The U.S. Health Care System Needs Reform

...well, one of the reasons it needs reform.

There was an editorial in today's NYTimes. It's about how the numbers which insurers use to calculate "reasonable and customary" rates for health care services are provided by a company that's wholly owned by UniteHealth Group. How convenient for them. This is why your 80% coverage of an out of network medical service almost universally covers less than 80% of what you spent.

An investigation by the NY State Attorney General's office implies that major health care companies are rigging the system to shortchange beneficiaries... both patients and doctors.

As I was readying my outrage at this, it struck me that I didn't really know who was responsible for overseeing the health care companies. What's the FDA or FAA for health care? Of course I thought first of the American Medical Association, but realized immediately that they're a private non-profit, not a federal agency. Who has oversight for our nation's citizens' health? I dug around a bit on the internet and found Joint Commission on Accreditation of Healthcare Organizations, but hell... who are they? We have a Nation Transportation Safety Board but no federal organization to oversee the interests of the citizenry in the face of "Big Healthcare"? Not right.