Embracing Chaos

My girlfriend has a kindle that she very much enjoys.  One of the biggest benefits from it she gets is having a large amount of content in a very small device.  She is a scientist who is very much an information worker.  Having access to a great many research papers in searchable form is very useful for her.  (If only the PDF import worked on multi-column papers!)  She also tends to live out of a backpack, so being able to have several interesting things to read at any give time is very appealing.

So she’s often reading her kindle on the bus.  She’s noted one interesting difference between reading her Kindle and reading a regular book while on the bus.  When she’s reading a normal book, people will ask her what booj she’s reading or will look at the cover and just talk to her about the book itself.  With the kindle the question is always "how do you like the gizmo?"  Which gets old after a while.

Here’s a suggestion to Amazon on how to address this social problzem: offer full-color PDFs of the covers of books that you purchase for the Kindle, so people can print out their own covers.  These could slide into a convenient holder on the Kindle’s attractive leather case.  Long-term it’d be great to have a color e-paper cover for the book, but we’re not holding our breath for that one.

Amazon has a history of facilitating disruptive change.  First by selling books online, they demonstrated the advantages of a well-run online store.  Then with music, movies and just about everything else, they have shown that centralizing inventory and customer experience allows for reduced costs and an improved experience over a traditional distributed retail model.  Today, Amazon Web Services is starting to disrupt IT operations similarly by providing a higher quality service at lower cost than most companies can manage themselves.  They achieve these scale economies through centralization.  With Kindle Amazon is attempting another disruptive change, this time in the way people read books.  Lower distribution costs give electronic “e-books” an intrinsic advantage over physical books, hinting that e-books are inevitable.  But will Kindle be able to “cross the chasm” and become a mass-market device?  Amazon’s complementary assets, scale and technology all make it likely that Kindle will succeed.

Several startup companies have sold e-book readers in the past, but none successfully.  Sony is the only other large company to have tried.   Assurance that a risky new technology is backed by a company that won’t disappear is important for mass-market adoption, giving Sony and Amazon an advantage.  This is especially important for devices that consume media, as the device’s utility dwindles without new content.  Amazon is especially well positioned to offer media for Kindle through its complementary assets.

Amazon’s established relationships with book publishers are extremely valuable to Kindle.  Book publishers control e-book content.  Amazon’s history of selling physical books has earned them the trust of almost every publishing house, ensuring easy access to electronic versions of books. In addition to existing e-books, Amazon’s scale gives them leverage to encourage publishers to release electronic versions of books.

Beyond that, Amazon has rare technology to make electronic versions of books available with far less work on the publishers’ parts.  Amazon has spent years scanning physical books to enable a feature called “Search Inside This Book” on their website.  Along with Google, they have one of the only large archives of scanned physical books in the world.  This enables selling e-books for books that publishers don’t even have original electronic copies of, with rights negotiations as the only remaining barrier.

Innovators have been jibbing together their own e-book readers out of laptops and PDF files for years.  Early-adopters look for concrete advantages like the ability to search books.  Med-students give Kindle rave reviews for this capability.   The easy availability and portability of dozens of books appeal to the small segment of truly voracious readers.  Kindle seems to serve these early segments well.  To cross the chasm into the mass market of the early majority, Kindle must make the experience simple and reliable.  Kindle’s wireless data connection sets it apart from all previous e-book readers.  By leveraging Sprint’s nation-wide 3G cellular data network, Kindle can load content without the operator even owning a computer.  Thus Kindle dodges the inevitable complexity that arises anytime a PC is involved.  This, along with Amazon’s well-established customer service, promise to make Kindle much easier for the early majority to accept.

Kindle seems well positioned for acceptance by the mass market.  If successful, Amazon will need to balance publishers’ need for DRM against consumers’ desire for open content.  The music industry has exposed these issues but certainly not solved them.

[This is another recycled homework assignment.  Something to keep y'all entertained while I'm in New Zealand!]

A trend in modern successful websites is the democratization of information and decision making.  The so-called wisdom of the crowds is at the heart of what makes a web 2.0 company successful.  I’m going to compare how three companies have democratized the process of making product development decisions.

Amazon makes extensive use of so-called A/B testing to try out new UI’s and optimize the user flow.  This works very well for them because their end goal is very well defined: they want people to buy stuff.  They are facing a very hard optimization problem, but their objective function is clear and easy to measure.  So they can try out new UI’s for 1% of users, and if it does well according to this well-defined metric, roll it out to a broader audience.  This is essentially best practice for any modern successful online company.

Google has done a lot to democratize the internet — notably by democratizing search through PageRank which allows anybody to implicitly vote on the relative merit of a web page.  They have also democratized the way some product development choices are made through through their policy of encouraging developers to build whatever they want in 20% of their time.  The result is that everything you can possibly imagine is probably being worked on by at least one googler, and the ideas with merit gain momentum and get built into real services.  But before they get launched to the public they still must be approved by a central authority.  Sure Google does A/B testing like everybody else, which is great for UI tweaks and to verify that new services won’t crash when hit with massive traffic.  But it’s extremely difficult to do A/B testing on major changes to functionality.  For example, it’s hard to imagine testing a change to how g-mail delivers mail through this kind of test.  Moreover, depending on how the test goes, the change is either rolled out to the entire user base or not at all.

Facebook’s platform offers another alternative.  ISV’s have the opportunity to offer major new kinds of functionality to Facebook users in a very democratic way.  Users can try out the new features, and if they like it, they’ll tell their friends about it, and the feature will spread.  Some features which are only appropriate for a certain segment of a user base can naturally find that segment.  This mechanism doesn’t really lower the cost of adding new functionality compared to how Google does it — Google is always launching new features that you’d never know about without reading their dozens of product blogs.  But it democratizes the process of figuring out which of these new features are valuable enough for a mass audience.  To continue with the democracy analog, these decisions are still made by a communist-style central-planning committee in Google’s world, whereas Facebook users can vote with their keyboards on what features are worth using.  This will make the Facebook platform very competitive in the arena of user’s attention.