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The Unlikely Marriage Between Apple and IBM

2014 December 17
by Greg
Apple 1984 Ad

For the Macintosh launch, Apple released their historic 1984 ad during the Super Bowl.  The premise was that Steve Jobs’ vision of personal computing was a direct challenge to IBM’s bland corporate offering.  The individual, rather than institutions, would be empowered.

Soon after, both companies had near-death experiences. IBM was almost broken up, but emerged as a global leader in corporate services.  Apple became nearly irrelevant before the return of Steve Jobs and a shift from computers to personal devices.

Today, both companies have sharpened their visions.  IBM has mostly abandoned the consumer market, while Apple has become almost as much of a media company as it is a technology company.  So the partnership the two companies recently announced is big change, to say the least.  Why is the uber-hip Apple getting in bed with Big Blue?

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The Social Tax: Why Firms That Ignore Social Engagement Pay A Heavy Price

2014 December 13

Businesses used to be tied to their communities.  Local store owners would know their customers and their families by name.  They would go to the same social and religious events.  Many firms had operations rooted in their communities and so had incentives to invest in them.

Globalization and the rise of professional managers changed all that.  Production was outsourced to faraway places.  Big Box retailers replaced mom and pop shops. Managers, driven by the need to create shareholder value, looked to spreadsheets, rather than their communities, for guidance.

Yet as Marshall McLuhan predicted a half century ago, we are now living in a global village. Corporations and other institutions must relearn to connect with their communities on a personal, rather than a wholesale basis.  Anonymity has become a pipe-dream and a dangerous one at that.  Those who do not effectively engage will pay a hefty social tax.

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Let’s Face It, We Don’t Really Care About Privacy

2014 December 10
Privacy Gagged

It seems that not a week goes by these days that we don’t hear about another massive data breach.  From large-scale retailers like Target to money center banks like JP Morgan, cybercrime runs rampant, violating our privacy and exposing our financial information.

The costs are enormous.  A recent report by the Internet security company McAfee estimates that security breaches cost us over $400 billion globally, but that’s just a small part of the story.  Our data, when combined with advanced algorithms, can reveal our most intimate secrets.

So it is curious, to say the least, that we don’t seem to care very much.  While there was a spike of concern following the massive Edward Snowden leaks, years of warnings from industry groups and government organizations have mostly gone unheeded.  Even now, despite the uproar during the Snowden affair, the fervor has mostly died down. Why is that?

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The Synchronized Organization

2014 December 7
by Greg
London Olympics Womens Synchronized Swimming

Hundreds of consumers standing in line at your local Apple store.  Thousands of protesters rushing to flood the streets of Kiev, Istanbul or Hong Kong. Millions of fireflies blinking on and off in complete unison.  These are all synchronized systems.

Our hearts are synchronized systems too.  They rely on millions of pacemaker cells to coordinate every second of our lives.  If they falter even once, we cease to exist.  Yet they rarely do.  They continue to carry out their mission, with little conscious effort to organize them on our part.

So  why is it that the institutions we build—and put so much effort towards managing—are so rarely able to synchronize?  Despite our best efforts, most organizations are highly dysfunctional.  Fortunately, research into network science has begun to shed light on how synchronization happens and how we can make our enterprises function more effectively.

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Could Ukraine Be The Next Silicon Valley?

2014 December 3
Ukraine candle

Even among the sordid histories of Eastern Europe, Ukraine is particularly tragic.  In just the 20th century, it was starved by Stalin, decimated by Hitler, subjected to seventy years of incompetent Soviet rule, looted by its own government and, most recently, invaded by Putin.

Ukraine’s situation today remains desperate.   It is in dire financial straits, dependent on financial assistance from the IMF, US and EU. Crimea has been annexed, the eastern provinces of Donetsk and Luhansk are caught in a frozen conflict and its chief antagonist, Russia, controls its gas supply.

Yet still, Ukraine is not without promise.  While much of its Soviet era industry lies dormant within the conflict zone, its tech industry is booming.  I recently talked with Yevgen Sysoyev of AVentures, a venture capital firm in Kyiv, and he thinks that we may be seeing the birth of a new Ukrainian renaissance.  While that may sound crazy, he might very well be right.

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The Truth About Foxcatcher

2014 November 30
by Greg

Every story is a caricature, especially a Hollywood film. Some details are omitted to maintain the flow, while others are added to sharpen one aspect or another.  The truth is always multifaceted and even the most faithful telling cannot capture any narrative in its entirety.  I think it’s best to see the new movie Foxcatcher in those terms.

The film boils down nearly a decade’s worth of events to a little over two hours.  It tells the story of Dave and Mark Schultz, two of the best wrestlers the USA has ever produced and focuses on their dysfunctional relationship with John du Pont, a scion of one of America’s most prominent families.

Foxcatcher is based on Mark Schultz’s life story and is mostly told from his perspective.  It portrays two brothers taken in by the twisted psyche of a coddled aristocrat who wants to buy his way into their world of elite accomplishment.  Yet the most disturbing aspect of the story is not about du Pont or the Schutz brothers, but the part the rest of us played in it.

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Why It Doesn’t Matter If Consumers Are Willing To Pay For Content

2014 November 26
Pay For Content (1)

It doesn’t seem so long ago that the best way to get instant access to content was to stop by a newsstand and handover a few dollars for the publication of your choice.  You could also fill out a little card and receive a subscription for a discounted price.  Either way, you paid for the privilege.

Yet now, everybody expects to get content for free from their phone, tablet or laptop and publishers don’t like it. They think that if consumers paid then, they should pay now and have come up with a variety of schemes, such as paywalls, to get them to pony up.

The truth is that it doesn’t really matter if consumers are willing to pay for content or not.  As long as the economics favor free distribution, consumers will favor products that they don’t have to pay for.  And that, for the most part, is the market reality today.  Publishers, for their part, need to stop whining about it, and start innovating their business models.

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Sometimes Being Wrong Can Be More Valuable Than Being Right

2014 November 23
by Greg
Albert Einstein Tongue out

Alexandre Dumas is thought to be the first person who said that “nothing succeeds like success.” Yet hard to know who really said it first.  It’s one of those aphorisms that seems so obviously true and it’s been repeated so often, by so many, that it’s become almost an integral part of the lexicon.

Failure, on the other hand, is the mark of a loser.  Nobody brags to friends, “my son dropped out of college today,” or “my 6th startup went bust!.”  Failure is something that you are supposed to crawl away from, try to forget and do your best to avoid next time around.

Nevertheless, not everyone treats failure that way.  Thomas Edison, when asked about his many unsuccessful attempts to create the light bulb, insisted that he never failed, he just found 10,000 things that didn’t work.  The truth is that some of the most important ideas get uncovered that way, when something we thought was right ends up being very much wrong.

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Disruption Can Be Beat: How A Small Radio Shop Found Itself At The Center Of The Internet Of Things

2014 November 19
Radio Row

As of 2011, only 67 of the original Fortune 500 companies were still in business.   Meanwhile, Gartner estimates that by 2017, 50% of the applications for the Internet of Things (IOT) will come from startups less than three years old.  We live in a truly disruptive age.

The truth is that success often breeds failure.  A young company will develop core competencies, build out a distinct model and begin to prosper.  Then the market environment shifts, new firms take the lead and the old dogs find it hard to learn the new tricks.  Eventually, every business model fails.

Yet Arrow Electronics is living proof that it doesn’t have to be that way.  Starting out as a small electronics shop in 1935, it’s seen every stage of evolution in the technology industry since its inception.  Yet each time its business was threatened, Arrow saw opportunity and found a way to thrive.  The story is an important lesson: Disruption can be beat.

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The Future Of Money

2014 November 16
by Greg

In the early 1970’s, the financial industry was transformed by a strange confluence of events.  In 1973, The Chicago Board of Trade opened the first options trading floor and, almost as if on cue, a month later the Nobel prize winning Black Scholes options pricing model was published.

Soon after, Hewlett Packard introduced a pocket computer small enough for traders to use on the floor and that, combined with a glut of engineering talent made available by the closing of the Apollo space program, created a wave of revolutionary change that is still being felt even today.

Almost overnight, finance was transformed from a clubby world of cozy relationships to a mathematical one of complex securities, abstract formulas and computing power.  Now, a generation later, the financial industry is about to be remade once again, except this time, it is not obscure financial securities that are being transformed, but very nature of money itself.

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