Lots of people have been saying that “data is the new oil”.  Data flows through networks, powers applications, lubricates markets – the analogy makes perfect sense.  But it occurred to me recently that data is also taking on a more structural feel.  Instead of data being simply a flow, it’s feeling more like a foundation.  My favorite example is Zynga which was built on top of Facebook which was built on top of you and me.  Personal data is the oil for Facebook, but Facebook data was the steel for Zynga.  It’s the resource they used to build their business.  Twilio data was the steel which GroupMe used to build its application.   There are many examples.

Data is the new steel.

I like the analogy because it helps me think about concepts like Big Data in new ways.  It helps me recognize that analytics are not the only useful applications when confronted with massive data quantities.  John D became the richest man in history peddling oil.  But the #2 guy didn’t do too badly either.  His name was Andrew Carnegie and he was all about steel.  I’ll write more about this theme in the coming days.

I won’t be getting any fan mail from the wireless carriers on this one but I feel it’s my duty to share what I think is the truth about wireless product innovation today.  It’s too hard and doesn’t have to be.

Carriers are in the networking business – that is, connecting things together.  And more and more today they’re recognizing they need to offer more than just that if they hope to keep their customers, and Wall St., happy.  No one wants to become the proverbial “dumb pipe”.

What am I talking about?  Ask yourself this question.  When was the last time you went into any wireless carrier’s retail or web store, and were simply blown away by the variety of new devices you had no idea existed?   I’m not talking about new versions of existing categories – smart phones, tablets, etc.  I’m talking about the devices that seriously surprise and delight you.

Now compare this to say, the Apple AppStore, with over 700,000 applications available for download.  Hmmm.  See the difference?  You’ll say I’m comparing Apples and oranges and it’s true to an extent.  But here’s where the analogy applies perfectly.  Apple bends over backwards to provide literally everything necessary to make application development and distribution a complete no-brainer for the innovator.  They invest MILLIONS of dollars in their developer ecosystem – tools, education, documentation, networking, events, the list goes on.  Before Apple, Microsoft did the same thing, and still does, putting the independent software developer at the center of their existence.  The results, in both cases, speak for themselves.  I don’t think it’s a coincidence that both companies are now among the most valuable on the planet.  The model works.

To be fair, the top wireless carriers of the world are starting to make the right moves.  But they are baby steps.  They need to recognize that their future is tightly bound to the growing population of hardware and software innovators of the world.  For example, why do they continue to believe that only the largest OEMs can provide products that their customers want and need?  Great innovations lay in wait in communities everywhere.  They spend the vast majority of their resources on their network infrastructure, which makes sense – if you’re a carrier.  But Apple and Microsoft also have massive investments in operating systems (their infrastructure) and STILL invest heavily in encouraging 3rd party innovation on that infrastructure.

These are my top FIVE recommendations to any network owner:

1 – Create MUCH more comprehensive developer programs around encouraging and supporting innovation on your networks – software AND hardware.

2 – Set a GOAL of tripling the size of your developer community by the end of 2012.

2 – STOP TAXING innovators with your absurd certification processes.  Make it easy to use your network in way that’s affordable, reliable and safe for your network’s performance (yes – I do understand that you need to protect it).  Right now, just this part alone stops many (most?) innovators in their tracks.

- RECOGNIZE that your future depends on not finding THE next Steve Jobs but finding the next 2,000.

- LOVE your developer communities and be respectful of what you receive in return.

The wireless carriers have everything they need to pull this off.  Let’s hope they have the will too.

The title proves the point.  My spell checker squealed but you could read it just fine and understand exactly what I meant.  Nuff was good enough.

Clayton Christiansen, in his famous book “The Innovator’s Dilemma” argues that disruptive innovations are often far from perfect products.  In fact, they are so unremarkable that in many cases they’re totally ignored by the companies whose products are, in fact, most vulnerable to the coming storm.  My favorite example from the book (I’m not alone – it’s used all the time) is how Sony’s simple, crappy little battery powered transistor radio took on the mighty RCA.  Obviously, that wasn’t Sony’s intent at the beginning.  But the transistor vs. vacuum tube battle that ensued is where the story resides.   The sound quality of Sony’s products did not, in any way, measure up to RCA’s.  But they were cheaper, portable and good nuff.  I won’t try to paraphrase the whole story because it’s worth getting the book and reading it thoroughly.  But suffice to say that, in the end, Sony completely disrupted RCA.  And it isn’t the only example.  There are many.  And the lessons are the same.  Perfection should not be the goal when thinking about disruption.  Speed, agility and a willingness to take risks are more important.

We’ve been trained over the past several decades to believe that electronics come to us in certain, basically immutable ways.  We like things hermetically sealed, cheap and ready to go.   Lately, Steve Jobs has dramatically raised the bar and forced CE vendors to match a breathtaking level of quality and workmanship to even get in the game.  And that’s a good thing.  How could I possibly argue against it.  But it’s not necessary for the vast majority of devices one would deem useful.   And for Apple, it could actually become a vulnerability.

For example, take the carriers’ latest smartphone offerings.  You’ll notice that they all look EXACTLY ALIKE.  I would argue that they ARE exactly alike.   And tablets?  There were something like 50 new tablets announced at CES this year and guess what?  They are all identical.  Check out this picture I snapped at the AT&T Dev Conference.  Er – if I’m a hardware vendor that’s a very scary slide.  There is literally no way to stand out.  All the value goes to the software and content guys.

When everyone starts to look and act the same, the time is ripe for disruptive innovation.  Mr. Jobs and Co. have convinced everyone that the future looks like the iPhone and iPad (and whatever else they bless in the coming quarters).  But if you lift your head a bit you will recognize that that’s bulls**t.  It’s like believing that Facebook will become the new Internet.  Uh.  No.

Electronics design needs energetic new thinking.  I would argue that the Internet has radically changed many industries but it has not worked its magic on electronic product design.  You can trace today’s smartphones and gee-whiz gizmos back to the Palm Pilot and Newton.  Seriously.  They are more beautiful and cool and wireless, blah, but are essentially the same.  We have yet to see a new generation of truly network-inspired products.  Devices that do to the world of electronics what Amazon and eBay and Google did to the world of information.  And the truth is, the innovators who will make the revolution happen are not the companies we currently know and love.  It will be a raft of newcomers.  And they will innovate in completely new ways using open source everything, leveraging net-connectedness in new/novel ways, and solve tech problems that have been thorns in our sides for decades – health care, energy management, home automation, the list goes on.

I’ll end my screed here.  But for the record, I think we (and I mean anyone remotely interested in making progress in this space – inventors, entrepreneurs, investors, regulators, etc) desperately need to recognize the opportunities that are available.   We just have to stop the group-think, leverage the new technologies that are now coming available for rapid innovation and productization and get on with the 21st century.   We need to try new things.  Make things good nuff to disrupt the status quo.  Think like Sony did in 1955.   And remember, almost a hundred years ago, cars were being called motorized wagons and airplanes hadn’t been invented

Last year, I went public with my first ever “Top Ten Predictions” list.   And now for the first time ever I get to grade how I did.  All in all, I think I did ok.  I rate myself on a scale of 1-10 below.

1 – Autos are the next “killer app” – ok, I probably went overboard with the hyperbole but I wasn’t totally wrong.  I think it’s safe to say that just about every car maker is now seriously looking at what Ford has accomplished with their Sync product line.  The logic for putting these “mobile devices” on line is as compelling as ever.  Score – 7

2 – Microsoft becomes cool again – Again, while I overplayed it I was sort of right – Bing is doing well.  Windows 7 is actually sort of useable and xBox continues to impress.  However, the dark clouds hanging over Redmond persist.  Score – 7

3 – DIY goes mainstream – Almost!  We’re getting there.  My favorite new indicator is Nova’s new show “Making Stuff” with David Pogue.  There was also the awesome, sold out Open Hardware Summit that Bug Labs helped organize.  But neither are good examples of true mainstream.  Score – 5

4 – US carriers realize they need to support 3rd party innovation – I think this one was spot on and I’ll use Bug Labs’ signing of every major US carrier to strategic partnership agreements as proof. – Score – 9

5 – Google’s Android has major growing pains – meh.  I think their gains outweighed any pains.  Sure there is some complaining about fragmentation, etc. but for the most part they hit it out of the park in 2010. – Score – 2

6 – The government embraces Open Source – I feel pretty good about this one.  From success of GOSCON and Tim O’Reilly’s Gov 2.0 and the latest Open Government Initiative from the White House, I think we’re entering an era where government will seriously consider how openness (not just open source software) are beneficial to everyone.  Score – 8

7 – Apple continues to kick ass - that one was a bit of a no-brainer.  Why didn’t I buy more of their stock??  Score – 10

8 – Sony continues to produce nothing of interest – another safe bet.  Score 10

9 – Obama gets more gray hair – have you seen his pictures lately??  Score 9

10 – Peter (me) gets on stage with guitar – ahem, no, I didn’t do that.  However, I did compose a string quintet and had it played in my apartment for my birthday (thanks to my lovely wife!). – Score 4

So all in all I averaged a (self-graded) score of 72.  Clearly needs work.  So – let’s try again for 2011!  Please see my next post.

Photo credit – wonderferret

Boy Genius Report got it’s hands on the latest Verizon Wireless summer device catalog.  It’s a beautifully produced brochure that lays out what VZW hopes will be a killer collection of hard-to-resist wireless gadgets.  But the truth is, it’s not really a “device” catalog.  It’s actually a cell phone catalog.  And as such it’s not bad.  But to me it represents the absolute corner the carriers are stuck in right now.   These phones are all they got.  If none of them appeal to you, they’re screwed.  What if you want some cool wireless device that’s NOT a phone?  I’d hate to have the job that selects what goes in that book.

Contrast this device world to software.  You can go to Apple’s Appstore right now and avail yourself of 250,000 applications.  A collection that grows everyday.   Anyone with the time and talent (and Apple’s approval) can add to the collection.  Verizon’s catalog has…wait for it…25 options.  And these change on a quarterly basis at best.  For example the Microsoft Kin is in this catalog.  Oops.

This dichotomy is artificial.   The world would benefit equally from a device catalog with 250,000 choices.   I know it seems sort of inconceivable, but it’s not.  All the pieces, technical, economic and now cultural, are in place for it to happen.  Everyone – consumers, producers, the environment – benefits from greater choice.