Price isn't a competitive advantage. A competitive advantage is something that differentiates your product from the competition.
A company competes on price alone only if you're selling an undifferentiated commodity. In most markets, companies attempt to differentiate their product, which creates a localized monopoly and, in the absence of good substitutes, yields extraordinary profits.
Excellent article by Cringely. A key point from the article:
If a resource doesn't give you a competitive advantage, you can outsource it without any damage. But if it is a key differentiator, NEVER outsource it.
Too many companies seem to be forgetting this these days. If it's your core competitive advantage, you can't outsource it.
If you need to develop better technology, if your products need to be higher quality, if your customer service needs to be better than your competitors, you can't outsource that part of your business. Any competitor can duplicate anything you've outsourced, often as easily as hiring the same subcontractor, so anything that is oursourced can't be a source of competitive advantage in your market.
The key here is productivity. Even if wages are lower elsewhere, if the US produces more per worker, it is more cost effective to do the work here. The US can maintain high productivity by investing in education and infrastructure. While some jobs may be more cost effective to do elsewhere, anything where the US is more productive will not only remain in the US, but flourish and grow.
Even if India or another country had an absolute advantage (more efficient than the US at every task, an extremely unlikely event), jobs would still remain in the US because it would be more efficient to not try to do everything elsewhere.
You're just not going to see all the jobs get outsourced. Simply won't happen.
You're correct that summer of 2002 was a rumored date, not an officially announced date, and perhaps it is not fair to consider that a real delay. Nevertheless, you have to admit that this game has taken a long time to come out. Half Life, the original, was released in 1996.
If TiVo is only passing along aggregated, anonymized data on user behavior, is there a privacy issue? From the article:
Privacy advocates have decried such technologies as invasive, but TiVo officials say they do not pass along information that would identify individual viewers.
While it's true that TiVo needs to collect "every click" as the first part of compiling this aggregate data, if the final data is just summarized habits of TiVo users with no individual information, is there a privacy issue?
It's amazing how many times this game has been delayed. Vague promises of 2002, then summer 2003, then Xmas 2003, most recently mid-April 2004, and now summer 2004. It's so bad that HL2 was Wired magazine's #1 vaporware product of 2003.
HTPC should integrate act like a component not a computer.
I don't understand this. You have a fully functional computer. Why not use it like one?
The attraction of a HTPC for me is that it can do a reasonably good job playing DVDs and recording TV (replacing a dedicated DVD player and TiVo) and also function as a full computer, allowing me to browse the web, read e-mail, work, and play games. In particular, playing PC games on a huge 80" projection screen with a surround sound system is pretty sweet.
The 250M searches/day may be low since it's from Feb 2003. It also doesn't include Google's Adsense program, putting Google ads out on other sites, which probably doubles the amount of page views.
Google has unusually high clickthrough rates and payments per click because of their AdWords targeted advertising. Ads are matched to keywords and then optimized, with the most effective ads showing more and least effective dropping away.
Certainly enterprise revenue (licensing the Google search engine for use on other sites) is part of their revenue, but I suspect the majority is from advertising.
Re:It's like Netscape v. Microsoft in that...
on
Google v. Microsoft
·
· Score: 1
Google is different than Netscape in that it is very high quality, something Microsoft isn't likely to match
I'm not sure Microsoft has to match Google in quality. If it's just "good enough", people will use it since it's the default in IE.
Google's remarkable market share despite MSN Search being the default in IE shows how poor MSN Search is. But, if it just gets to the point where it is good enough for 99% of searches, your casual computer users probably won't bother to type in "google.com" anymore.
Excellent point. That is the danger of printed receipts. They can be used as proof that you voted a particular way, allowing people to buy votes. Leaving the receipts at the polling place is a good solution.
At a minimum, electronic voting machines need to print out a paper receipt. That would allow a recount and increase accountability in the system. Without a paper receipt, you may not even be able to determine that an attack has occurred.
To be clear, I (and Eric in his article) only said that ideas are worthless without execution. We didn't say that ideas are worthless with execution or that executing on a bad idea is worthwhile.
As you said, the trick is to find a great idea and execute on it.
Some excellent advice in that article. What I thought were the key points:
Ideas are worthless It's all about execution. The idea by itself is worth nothing.
Know Yourself Are you really prepared to do what it takes to force this company to succeed?
Understand the business You may not need a business plan, but you need to understand your product, competitors, and where your cash will be going during the first several quarters.
Seed capital Initial financing is difficult to acquire for a risky new startup and, even if you do find it, you'll end up working with little or no salary for the first several months.
A startup can be rewarding, but risky, difficult, and challenging. If you're going this route, be prepared for the difficulties and determined to make it succeed.
Unfortunately, most wireless products on the market ignore security. Baby monitors, wireless cameras, cell phones, etc. should all be encrypted by default, but they're not. Ideally, consumer pressure would force the companies to implement features to prevent snooping, but most consumers don't understand the security and privacy issues with these technologies.
If the thermostat incorrectly activates, someone will turn it off.
Not so sure about that. Send people up there and, if the thermostat incorrectly activates (Opportunity) or a software error causes the entire system to shut down (Spirit), people die. Manned space exploration is expensive and dangerous.
It's offtopic, but I'm curious what suggestions you might have for a "face lift" for the site, especially since you're a frequent user of Memigo. If you'd be willing, please get in touch at the e-mail address provided on the About Findory News page. I'd very much appreciate hearing your comments. Thanks, cpeterso.
Findory News isn't the same as Google News. Google News does pull from a broad variety of sources, but it shows the same news to everyone. Findory News is personalized. It learns your interests and emphasizes the most important news for you. More information is available in the about and FAQ pages.
An LLC is a corporation. Forming an LLC is incorporating. But, yes, LLCs are a good choice for many small businesses.
But, even though I agree there are advantages of LLC's, there are also some disadvantages. LLC's are more complicated to form, don't have normal forms of equity (so you can't easily offer stock options to employees), and can't have venture capital investors. S corps have the tax advantages (pass through of profits and losses) of an LLC without the complexity, but they aren't as flexible. C corps are a good pick if you don't meet the restrictions for a S corp and don't like the disadvantages of an LLC or if you intend to go public (probably not a concern these days).
If you're looking for a good book on this, I'd recommend The Entrepreneur's Guide to Business Law by Bagley. Great book, broad coverage of this and many other legal issues for a startup. Not a particularly light read though.
We're getting a bit offtopic, but I'll briefly respond to this.
Advertising revenue cratered in 2001-2002, but it's been picking up again. Google, for example, is estimated to have nearly $1B in ad revenue in 2003. Google's technique, in Google AdWords, is to make advertising targeted and useful. They do text-only ads, but they achieve much higher clickthrough rates than obnoxious popups or take-over-the-screen ads that you see elsewhere because they're actually relevant and helpful to Google's users.
I'm not going to go into how this technique could be applied to a personalized news site like Findory News, but I'm sure you can imagine some possibilities.
There's a lot of expenses for a startup. At a minimum, there's legal costs from incorporating with your partners, but there's a bunch of small administrative costs as well, especially if meeting with those customers involves any travel.
But the biggest challenge is not drawing a salary for a long period of time. Most people don't have enough savings to live for 12 months without any income.
The biggest problem for unemployed software engineers getting together and forming a company is financing. If you're unemployed, you probably don't have a lot of cash around to provide seed capital for your business. If you do scrape together enough seed capital or find an angel investor, you're usually stuck with not drawing a salary and having no health insurance for about a year as you try to ramp up your business. And you're doing all of this for a high risk venture where only 1 in 10 businesses actually succeed.
Nevertheless, I'm building a startup right now, Findory.com. But I wouldn't underestimate the obstacles here. It isn't something that can be done lightly.
So push it hard, but don't expect to see much movement for a while.
It's not really clear what the average person can do to promote change in the patent system. Do you have any suggestions?
I'm completely serious. I like many others are unhappy with the current situation, but I honestly don't see a way to change it. What can the average person do to promote constructive change in the US patent system?
Seems to me that this is only true if the virus writers represent the Linux community.
Just because the virus attacks SCO and some Linux users dislike SCO doesn't mean that there's any guilt for the Linux community. That'd be like saying that Al Queda hates the US and so do some people in [pick any of a number of countries], therefore all citizens of that country are complicit in the 9/11 attack.
Slashdot Mirror
- Their main competitive advantage is a lower price
Price isn't a competitive advantage. A competitive advantage is something that differentiates your product from the competition.A company competes on price alone only if you're selling an undifferentiated commodity. In most markets, companies attempt to differentiate their product, which creates a localized monopoly and, in the absence of good substitutes, yields extraordinary profits.
- If a resource doesn't give you a competitive advantage, you can outsource it without any damage. But if it is a key differentiator, NEVER outsource it.
Too many companies seem to be forgetting this these days. If it's your core competitive advantage, you can't outsource it.If you need to develop better technology, if your products need to be higher quality, if your customer service needs to be better than your competitors, you can't outsource that part of your business. Any competitor can duplicate anything you've outsourced, often as easily as hiring the same subcontractor, so anything that is oursourced can't be a source of competitive advantage in your market.
The economy will survive because jobs will move from industries where the US has no comparative advantage to industries where we do.
Why would all the jobs get outsourced?
The key here is productivity. Even if wages are lower elsewhere, if the US produces more per worker, it is more cost effective to do the work here. The US can maintain high productivity by investing in education and infrastructure. While some jobs may be more cost effective to do elsewhere, anything where the US is more productive will not only remain in the US, but flourish and grow.
Even if India or another country had an absolute advantage (more efficient than the US at every task, an extremely unlikely event), jobs would still remain in the US because it would be more efficient to not try to do everything elsewhere.
You're just not going to see all the jobs get outsourced. Simply won't happen.
It's a good point (and was a concern on the first Moon missions).
But, did you have to use one of the worst movies ever made as your evidence?
You're correct that summer of 2002 was a rumored date, not an officially announced date, and perhaps it is not fair to consider that a real delay. Nevertheless, you have to admit that this game has taken a long time to come out. Half Life, the original, was released in 1996.
- Privacy advocates have decried such technologies as invasive, but TiVo officials say they do not pass along information that would identify individual viewers.
While it's true that TiVo needs to collect "every click" as the first part of compiling this aggregate data, if the final data is just summarized habits of TiVo users with no individual information, is there a privacy issue?It's amazing how many times this game has been delayed. Vague promises of 2002, then summer 2003, then Xmas 2003, most recently mid-April 2004, and now summer 2004. It's so bad that HL2 was Wired magazine's #1 vaporware product of 2003.
- HTPC should integrate act like a component not a computer.
I don't understand this. You have a fully functional computer. Why not use it like one?The attraction of a HTPC for me is that it can do a reasonably good job playing DVDs and recording TV (replacing a dedicated DVD player and TiVo) and also function as a full computer, allowing me to browse the web, read e-mail, work, and play games. In particular, playing PC games on a huge 80" projection screen with a surround sound system is pretty sweet.
- Surely not the ads.
Why not the ads? A simple back-of-the-envelope calculation shows it's at least plausible.250M searches/day * 3 ads/search * 1-2% clickthrough/ad * 365 days/year * $.10/clickthrough = $274M-$548M/year.
The 250M searches/day may be low since it's from Feb 2003. It also doesn't include Google's Adsense program, putting Google ads out on other sites, which probably doubles the amount of page views.
Google has unusually high clickthrough rates and payments per click because of their AdWords targeted advertising. Ads are matched to keywords and then optimized, with the most effective ads showing more and least effective dropping away.
Certainly enterprise revenue (licensing the Google search engine for use on other sites) is part of their revenue, but I suspect the majority is from advertising.
- Google is different than Netscape in that it is very high quality, something Microsoft isn't likely to match
I'm not sure Microsoft has to match Google in quality. If it's just "good enough", people will use it since it's the default in IE.Google's remarkable market share despite MSN Search being the default in IE shows how poor MSN Search is. But, if it just gets to the point where it is good enough for 99% of searches, your casual computer users probably won't bother to type in "google.com" anymore.
Excellent point. That is the danger of printed receipts. They can be used as proof that you voted a particular way, allowing people to buy votes. Leaving the receipts at the polling place is a good solution.
At a minimum, electronic voting machines need to print out a paper receipt. That would allow a recount and increase accountability in the system. Without a paper receipt, you may not even be able to determine that an attack has occurred.
Bruce Schneier, author of Beyond Fear and the fantastic Applied Cryptography, has an old but good commentary on the some security issues of electronic voting machines in his Crypto-gram newsletter.
To be clear, I (and Eric in his article) only said that ideas are worthless without execution. We didn't say that ideas are worthless with execution or that executing on a bad idea is worthwhile.
As you said, the trick is to find a great idea and execute on it.
- Ideas are worthless
- Know Yourself
- Understand the business
- Seed capital
A startup can be rewarding, but risky, difficult, and challenging. If you're going this route, be prepared for the difficulties and determined to make it succeed.It's all about execution. The idea by itself is worth nothing.
Are you really prepared to do what it takes to force this company to succeed?
You may not need a business plan, but you need to understand your product, competitors, and where your cash will be going during the first several quarters.
Initial financing is difficult to acquire for a risky new startup and, even if you do find it, you'll end up working with little or no salary for the first several months.
Unfortunately, most wireless products on the market ignore security. Baby monitors, wireless cameras, cell phones, etc. should all be encrypted by default, but they're not. Ideally, consumer pressure would force the companies to implement features to prevent snooping, but most consumers don't understand the security and privacy issues with these technologies.
- If the thermostat incorrectly activates, someone will turn it off.
Not so sure about that. Send people up there and, if the thermostat incorrectly activates (Opportunity) or a software error causes the entire system to shut down (Spirit), people die. Manned space exploration is expensive and dangerous.It's offtopic, but I'm curious what suggestions you might have for a "face lift" for the site, especially since you're a frequent user of Memigo. If you'd be willing, please get in touch at the e-mail address provided on the About Findory News page. I'd very much appreciate hearing your comments. Thanks, cpeterso.
It's a little offtopic, but I'll briefly respond.
Findory News isn't the same as Google News. Google News does pull from a broad variety of sources, but it shows the same news to everyone. Findory News is personalized. It learns your interests and emphasizes the most important news for you. More information is available in the about and FAQ pages.
An LLC is a corporation. Forming an LLC is incorporating. But, yes, LLCs are a good choice for many small businesses.
But, even though I agree there are advantages of LLC's, there are also some disadvantages. LLC's are more complicated to form, don't have normal forms of equity (so you can't easily offer stock options to employees), and can't have venture capital investors. S corps have the tax advantages (pass through of profits and losses) of an LLC without the complexity, but they aren't as flexible. C corps are a good pick if you don't meet the restrictions for a S corp and don't like the disadvantages of an LLC or if you intend to go public (probably not a concern these days).
If you're looking for a good book on this, I'd recommend The Entrepreneur's Guide to Business Law by Bagley. Great book, broad coverage of this and many other legal issues for a startup. Not a particularly light read though.
We're getting a bit offtopic, but I'll briefly respond to this.
Advertising revenue cratered in 2001-2002, but it's been picking up again. Google, for example, is estimated to have nearly $1B in ad revenue in 2003. Google's technique, in Google AdWords, is to make advertising targeted and useful. They do text-only ads, but they achieve much higher clickthrough rates than obnoxious popups or take-over-the-screen ads that you see elsewhere because they're actually relevant and helpful to Google's users.
I'm not going to go into how this technique could be applied to a personalized news site like Findory News, but I'm sure you can imagine some possibilities.
There's a lot of expenses for a startup. At a minimum, there's legal costs from incorporating with your partners, but there's a bunch of small administrative costs as well, especially if meeting with those customers involves any travel.
But the biggest challenge is not drawing a salary for a long period of time. Most people don't have enough savings to live for 12 months without any income.
I'm not sure it's that easy.
The biggest problem for unemployed software engineers getting together and forming a company is financing. If you're unemployed, you probably don't have a lot of cash around to provide seed capital for your business. If you do scrape together enough seed capital or find an angel investor, you're usually stuck with not drawing a salary and having no health insurance for about a year as you try to ramp up your business. And you're doing all of this for a high risk venture where only 1 in 10 businesses actually succeed.
Nevertheless, I'm building a startup right now, Findory.com. But I wouldn't underestimate the obstacles here. It isn't something that can be done lightly.
- So push it hard, but don't expect to see much movement for a while.
It's not really clear what the average person can do to promote change in the patent system. Do you have any suggestions?I'm completely serious. I like many others are unhappy with the current situation, but I honestly don't see a way to change it. What can the average person do to promote constructive change in the US patent system?
Seems to me that this is only true if the virus writers represent the Linux community.
Just because the virus attacks SCO and some Linux users dislike SCO doesn't mean that there's any guilt for the Linux community. That'd be like saying that Al Queda hates the US and so do some people in [pick any of a number of countries], therefore all citizens of that country are complicit in the 9/11 attack.