Explaining Southern California's economy

Tech Geek Monday: All hail PandoraJam!

Pandora Jam

Bitcartel

It's the little Pandora app that makes a very big difference in how you use the music streaming service.

I've been a big Pandora fan for about a year now. Lately, my love has been getting steamrolled by various Spotify evangelists, but for me, I don't feel like I've really gotten everything I can out of the Pandora experience. As you probably know, Pandora is internet "radio" — its killer technology is a predictive algorithm that can take a song, artist, even an album title and turn it into a stream of music, by using the song's DNA. This is the "Music Genone Project"). You provide an input based on what you like — say, Ozzy Osbourne or Gustav Mahler — and...Pandora's box of music is opened! 

Pandora has effectively replaced iTunes as my go-to music resource. iTunes is fine, but I've always liked radio better than the self-programming that more self-contained music formats entail — everything from mix-tapes in the 1980s and '90s to iTunes playlists now. Like the radio, Pandora does the work for me. (See, this is how I wound up working at a radio station!)

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The state of venture capital and tech investment

TechCrunch Disrupt SF 2011 - Day 3

Araya Diaz/Getty Images for TechCrunch

SAN FRANCISCO, CA - SEPTEMBER 14: (L-R) TechCrunch Founder and Co-Editor Michael Arrington,500 Startups Venture Capitalist & Founding General Partner David Mclure, Tasty Labs Co-Founder and CEO Aydin Senkut, Freestyle Capital Founding Partner Josh Felser, SoftTech VC Managing Partner Jeff Clavier, and SV Angel angel investor Ron Conway speak onstage at Day 3 of TechCrunch Disrupt SF 2011 held at the San Francisco Design Center Concourse on September 14, 2011 in San Francisco, California. (Photo by Araya Diaz/Getty Images for TechCrunch)

If you aren't reading Fred Wilson, you should. He's a venture capitalist who runs Union Square Ventures in New York and regularly writes about being a VC at his aptly named blog, AVC. Many people who are pondering the woeful state of the U.S. economy are looking to tech as something that may lead us out of the woods. Problem is, tech costs money. And tech is extremely competitive. And there's been some discussion of late that VCs are having trouble raising money to fund new companies.

Wilson breaks it down. Here's what I think is his most interesting point:

5) The internet investing market is transitioning. Social was the driving force for the past three or four years. In the wake of Facebook and Twitter, how could it not be? Mobile has also been a hot theme. Both sectors have consolidated a few winners and a number of additional interesting emerging companies. But how many social platforms of scale will there be? Five, ten, twenty? And mobile is hard because distribution continues to be limited to the app store model where you get on the leaderboard and win or you don't and you don't. Investors are moving into new areas like cloud, peer to peer marketplaces, and trying to take what worked in consumer into the enterprise. There is no lack of interest in internet investing, but investors are having to learn new markets and new sectors. And that kind of transition takes the heat out of an overheated market.

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Maybe Apple won’t be fine after Steve Jobs

First off, it’s definitely sad that Steve Jobs is stepping down as the CEO of Apple. I shed a small tear when I read his resignation letter. So did Reuters' Felix Salmon. Harvard Business Review put up six separate post about Steve’s departure and what it means. This is Topic A right now in the global business conversation.

I’ve never owned anything except Apple computers (no iPhone, so far), but I have used plenty of PCs. No contest, really. Apple builds a nicer machine (I won’t say better, at the risk of discounting the many legitimate complaints John Dvorak has made over the years).

The consensus among the technorati and among observers of Apple’s business is that Jobs has done as much as he can to ready Tim Cook to take over. Plus, Apple has a good bench of senior leaders, and the company hasn’t even come close to extracting as much value as possible from the current product lineup (this is Henry Blodget’s take at Business Insider). So... no worries. In the midst of his justifiably misty recollections, Felix makes the Apple Forever case:

Does Apple still have an outsize personality who can slice away extraneous features on hardware, say no to the demands of the marketplace, and give us not what we think we want but what we never knew we wanted? I think it does: Jony Ive fits the bill quite nicely. And Apple’s amazing relations with its suppliers — the way that it can get chips and hardware into its devices that the rest of the world can’t get its hands on for any amount of money — is now baked in to the organization, rather than being reliant on a single man.

The formula, then, is clear. And with or without Jobs, Apple is, for the foreseeable future, going to coin simply astonishing amounts of money. It made $7.3 billion of profit just in the last quarter, on revenues of an almost unimaginable $28.6 billion. That makes Apple one of the most profitable companies the world has ever seen — and makes its stock look almost cheap, even at a market cap of $350 billion. 

No argument on the financials, but I don’t entirely buy that Apple’s future growth is guaranteed because the company re-Steved itself after the near-death experience of the late 1990s. Also, as much as I share Felix's admiration for Ive, being a great designer isn't the same as being a great American idea man. Apple’s lifeblood is innovation, and as we march toward iPhone 5 and iPad 3 -- and see the steady decline of the iPod -- it's clear that Apple needs to remake the user experience of an another business. So far, Apple TV has been disappointing. iAd hasn’t really transformed mobile advertising -- in any event it hasn't been able to command the premium that Apple wanted. Remember, this is the company that created desktop publishing, revolutionizing an industry that hadn’t really seen much meaningful change since Gutenberg.

Apple saved the music business. Apple made cell phones super-cool. Apple made tablets a reality, rather than something that had previously been seen only on Star Trek. Some tech pundits think gaming is next (with its Xbox, this is just about the only place where Microsoft has long-term leverage over Apple), although earlier this year Forbes argued that Apple already has a gaming platform, of an ad-hoc nature. Weirdly, for closed-down Apple, gaming has been a triumph of free-form open development. 

I wouldn’t put it past Apple. Angry Birds certainly has game-box makers and developers freaked out.

Still, something important has changed in Apple’s DNA since the iPhone and iPad became the key products, edging aside laptops and desktops. Apple has devoted itself to building devices that are dedicated to consumption rather than creation. Plus, you don’t really think different by buying an iPhone -- you think like 100 million other people who use iPhones worldwide.

True innovation in business is exceptionally rare. Jobs picked his spots: Apple didn’t invent the PC, it made it better; Apple didn’t invent the mobile phone, it made it better. His genius was to look at things that were deemed important to the future and make them accessible, effortless, easy. Jobs didn’t just do this in tech -- at Pixar, he took animated movies and made them broadly relevant again, a move that shook up Disney so much that it bought the company.

But jobs hasn’t preserved anything. He’s always looking to disrupt, albeit with an esthetic differentiator (which is itself a type of disruption -- BlackBerrys and ThinkPads were effective, but hardly beautiful). That’s why new CEO Tim Cook’s first message to Apple isn’t necessarily reassuring. This is from the email he sent out today:

I want you to be confident that Apple is not going to change. I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.

But Apple needs to change. In fact, as the Jobs Era ends, it needs to change more than ever. Nobody wants to see the now most-valuable tech company -- and almost most valuable company company -- in the world replay its previous decline, when merciless price competition and a disorganized product lineup nearly bankrupted it. The temptation for Cook will the preserve, preserve. And that would be a big mistake. Apple needs to spend its money on the next big thing, not on staying Apple.

Photo: Apple

 

 

 

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