Why GM’s Randy Mott has it right

Ok I confess I am not a fan of GM. You know why? Because I owned a early 90’s Pontiac Grand Am – so there! That was about 20 years ago now and I still remember telling the service manager that I’ll never buy another GM. (still true)

But this post is not about old GM, it’s about today’s GM and their new CIO Randy Mott. Now I’ve never met Randy and probably never will but I will say he’s got it right. If you haven’t seen the recent news well here’s the quick jist of it. GM, under Randy’s watch, will reverse their current outsourcing strategy and bring most of the IT work back to GM staff. You can read the very long version here.

Put aside the difficulty of executing this strategy for a second and then ask yourself why the change? I believe that it fundamentally boils down to the fact that current vehicles are nothing without the software. If that sounds ridiculous or grandiose – it’s not. I stole that from Marc Andreessen who said the excate same thing about Apple and Jawbone in Wired. You can split hairs and say that Marc is mainly focusing on true tech companies and that’s clearly not GM.
Well guess what, GM IS a tech company – just like (surprise!) Caterpillar. Last week at Fortune’s Brainstorm Tech conference in Aspen, Colorado, their Chairman and CEO Doug Oberhelman spoke about how important software is to them. He credits software for making the diesel engine more efficient, and that many of their 500 yearly patents come from software.

So is Randy Mott taking – as Chris Murphy states in the InformationWeek article – a  “high-risk strategy”? I’m sure Chris would agree that strategically this isn’t a large risk, it’s the logical conclusion of GM checking out the weather charts and having a “come to Jesus moment”.  The greater risk strategic is to do nothing at all. Innovation has lead to cars which are no longer purely mechanical creatures and with electric cars on the horizon,  it’s the software that has the ability to shift the competitive landscape.
Executing this strategy is however a maelstrom of risk. Conjuring up strategic vision is simple, anyone with a napkin and a pencil can come with a pie-in-the-sky plan. The hard, long, and tricky part is ALWAYS executing the strategy. I’m sure Randy will have a lot of 9 to 9 days in front of him and Mondays will really be a bitch, but if it works he’ll set GM up for the future.

Corporate Coping And The Failure To Adapt

Corporations are interesting places. Sometimes their intrinsic functions work flawlessly, much to the surprise of new arrivals. Other times they work, but only because their participants have taken to alternative routes which slightly impede the process. Worse yet, are those – typically large, typically monopolies or there about – institutions which fail nearly everyone’s definition of “timely” and are a far cry away from be characterized as “nimble” or “agile”. Those are foreign terms reserved only for marketing literature and repeated ad nauseum to the unentrenched observer. More likely is that they are simply a daily utterance from exasperated employees in the form of  “I really wish we were more …”
What many fail to ascertain is that the latter examples illustrate – at best – coping, and – at worst – flat out failure to adapt.
Both of these institutions are therefore failures in execution. The processes have, or will if left unchecked, mutated from simple and necessary to over-regulated Rube Goldberg machines. And thus both institutions will ultimately fail their staff, their partners, and their customers.
I don’t have a solution to present, merely a sympathetic ear, and an understanding that the alternatives do exist, but that they are probably with the fast moving competitor.

Ok, I believe, WPF is dead

When I first saw Scott’s post about the demise of WPF I was skeptical. I didn’t know him, so I thought that maybe he was just some crazy going off on Microsoft. Turns out he’s just Australian, and he was actually right.

Over, and over, and over, and over again (see below) evidence poured forward that signaled the demise of WPF and most likely Silverlight. It’s looking like both are headed for ‘legacy’ status under Windows 8.

I do believe Scott was had it nailed all along.

WPF is finished and Silverlight is on the ropes – still in it but absorbing massive body punches. The only thing that’s left to be determined is how much will be required to use these old friends with the new Windows 8 toys. Will they be painfully lost to the legacy app status or will Microsoft provide a magic pill to make them fully part of the new new next thing. I don’t know, and I suppose we won’t get any clues until Build.
I would love to be at Build but that’s not possible. I would love for MS to communicate – apparently that’s not happening until Build.

If Microsoft refuses to make a statement then it’s going to be a long and torturous road to September.

Stay tuned…

 

For those of you just joining the conversation and are thinking, ‘Hey WTF is Joe going on about?’ or ‘Maybe he’s just Canadian?’ here’s a cheat sheet….

 

June 2, Microsoft drops (and here) the now infamous HTML + JS ‘comment bomb’

June 3, Developers begin to express their rage

FUD runs rampant for a few days…

June 14, Developer brains CTRL-ALT-Del themselves back to rationality – early signs of what might exist in Windows 8 show up in the Milestone 3 build.

June 20, Some good news, and a whole a lot of questions begin to emerge about Win8

June 23/24,  XAML team enters the WinDiv inner circle. (Here and here)
Finally, a summary of how we got here and where we might be heading…

Windows 8 + SkyDrive = The Beginnings of Microsoft’s AppStore

Yes it’s true, Microsoft has an app store (not to be confused with WP7 Marketplace). Well ok, it’s not official yet – or done- but the framework is starting to falling into place. Microsoft just updated their SkyDrive “cloud storage” offering. The update has made it more web friendly by replacing the Silverlight interface with a HTML5 version. The initial “away for the browser” test of SkyDrive will come from the upcoming Mango release for WP7 which will allow users to upload photos, videos and Office docs to SkyDrive. To me this seems like only the first step.

I believe that Microsoft has bigger plans for SkyDrive than a just narrow phone integration because Microsoft needs a response to Apple’s iCloud and Mac App Store offerings and what better way to respond, than to build a full integration into the next version of Windows. This is also exactly what people are digging up in the early access release of the Windows 8 Milestone Build 3 – hooks to a Windows Store. Since this is only Milestone 3 it is clearly unfinished, however I expect a better picture to emerge as we start seeing Release Candidates. And as we near release of Windows 8 I also expect to see a whole host of integration code to allow developers to easily write code that interacts with variety of Microsoft cloud services. This is key point – Microsoft has to engage the development community otherwise the store will become another ‘also ran’ offering. Microsoft may be late to this party too (as they were with WP7), but I can’t imagine them not responding to a changing competitive landscape and thus, it is only logical that would attempt to leverage their desktop dominance to facilitate growth by extending the platform into the cloud.

Weakness

A weakness in your competitor is an area of opportunity for your business.
A weakness in your business is an area of opportunity for your competitor. 

A weakness in your business that you find, correct, and leverage, before your competitor does, is the sign of leadership.

A Happy Day for Facebook and Google

You really can’t tell, and they won’t admit, but I imagine that this morning there is a small celebration or two going on behind closed doors at Facebook and Google. As most of us have heard, Microsoft bought Skype. But why are the competitors and rumored rival bidders happy? Easy, the staggering price that Microsoft paid for a company it really doesn’t really need – most of what Skype can do is already baked into a MS product somewhere. So where did this valuation coming from?

First a little financial history – Skype was founded in 2003 and then sold in 2005 to eBay for $2.6 billion. Then in October 2007 eBay wrote down the value of Skype by $1.39 billion. When eBay finally sold off 70% in November 2009, Skype was valued at $2.75 billion.

Today, for some reason, Microsoft has paid $8.5 billion – roughly 1.5 years later.  What’s curious is this is on revenue of 860 million, roughly 10x multiple. (I won’t mention the fact that the net was a loss of 7 million for 2010)

Wow! – for technology they mostly had.

I really don’t get it, unless

  • is MS struggling to execute?
  • has their management lost internal faith?
  • there was no better alternatives to using their overseas cash?

I’m really curious to see how this purchase will be viewed in 2-3 years.

One founder with no competitors

One aspect of entrepreneurship that I believe gets less attention than it deserves is successful companies which have a single founder. Many times these companies are not fast rising stars or those which raise large amounts of venture capital. (Note: Venture capital people tend to not like single founder companies.) One such company is Viking Range. It is a single founder company but what makes it more impressive is that Fred Carl Jr. admits there where no existing competitors.  What I love about this story is that it highlights two things:

Attitude –  Fred realizes that no one else in this business and he says,  “this is a business”. Many entrepreneurs would reconsider jumping in, but Fred didn’t.

No overnight success – while it’s true that Viking had a successful launch in 1987, success did not happen overnight. Raising the initial capital was a friends and family affair and it took about 4 years to get the first product out the door.

One of the advantages of being a single founder is that you can follow a passion and make it a success. When there’s two or more founders, passion can get lost in risk control.

Patient Innovators – Do public markets hamper innovation?

Absolutely. The short term focus on quarter to quarter results creates an environment where accepting the inevitable decline of the established business model is difficult. And when the reality can’t be brushed aside anymore, the ability to transition is limited by investor patience. This makes for an artificially quick – and likely poor – transition to the new model. ie. everyone is looking for the blockbuster product rather than focusing on sustainable and scalable growth. However not all public companies suffer equally, Google has had tremendous leeway in developing and growing new innovations because their primary revenue stream is so robust.

With few exceptions, I believe that the the ability to be patient and focused on the long term is a key advantage for a private company. A leg to this stool is the capital structure of the private entity. In other words, a private company building on organic growth, rather than external funding, has even more latitude to experiment. Good examples of patient innovators are companies like W.L. Gore and SAS.

Software Innovation: 2011 Salary Guide

The 2011 Robert Half Technology Salary Guide is out. For me, a highlight of the report is the executive awareness that understaffing has negatively impacted their ability to innovative. Couple this with the fact that just over half of these executives experienced difficulty finding skilled IT staff and you end up with very challenging innovation environment. Not only are companies under fire to innovate from their competitors but they are also hampered in executing their own innovation initiatives.  The report delves into more detail about in demand skills and specific roles etc. You can find the full report here.

Over thinking the vision

One of the hardest battles an entrepreneur must endure is thinking too much about “the vision”.  I’m not sure why this trait is so common or where it stems from: maybe it’s the fear of risk, maybe it’s to overcome a technical hurdle, or maybe it’s the need to convince himself that the vision really does have legs. Whatever the reason it can become an cancer on the execution of the vision. To put it another way, too much reflection achieves exactly that – nothing but vision.

One strategy that I’ve used in the past to overcome this trap is to break the larger vision down into smaller bits with the provision that each bit must deliver incremental value to the user. You then organize these bits into a delivery timeline that ultimately achieves the larger vision.  The best thing about this approach is that allows the latter bits to be a bit fuzzy and even undefined, which allows you plenty of opportunity to pivot without crushing that grand, finely honed, vision you worked so hard on.