Another recommended video: Jeff Bezos gives a terrific talk at TED 2003 about the Internet, the Gold Rush and the Invention of Electricity. Lots of thoughtful analogies to ponder.
So I’m driving by Huskies Stadium this morning on the way back from dropping our dog off at the groomer, and I notice that it’s "Windermere Cup" day in Seattle, the opening day of boating season.
I see a guy in a cowboy hat protesting Windermere, with a lone sign that says "I trusted Windermere and you shouldn’t. www.renovationtrap.com". Here he is, a lone protester of Windermere, standing around on a gorgeous Saturday morning, holding a sign and looking very angry.
Here’s his story: www.renovationtrap.com. Check out the amount of time that guy is investing in telling his story.
Treat someone wrong, and they don’t just tell 10 people. They can tell 10,000 or 100,000 or more.
Just watched the keynote presentation today by Microsoft at MIX07, an annual conference Microsoft holds for web developers and designers.
They key announcements centered around Silverlight.
Silverlight is a complete set of offerings that take on Flash on the desktop, and also further entrenches Microsoft’s .NET CLR (Common Language Runtime) on the web.
In one sense, Silverlight is a renamed Windows Presentation Foundation / .NET. But it’s much more than that. It’s pretty clear that MSFT is not just going after Flash; they are also very much going after YouTube and Google with Silverlight, combined with their ample data services announcements.
Silverlight is not just a Flash competitor; it’s also a way to install the .NET Common Language Runtime (CLR) across all browsers. It’s also a cheap media hosting solution that allows you to stream media from Microsoft-hosted servers. I was particularly impressed with Ray Ozzie’s ability to summarize the tradeoffs that current web developers make every day, as well as Scott Guthrie’s very competent an accessible overview of the technologies involved. (Watch the keynote here.)
What does this mean?
- Adobe is in a lot of competitive trouble with this
- Much, much richer browser applications are on the near-term horizon
- The principle barrier to writing in .NET (whether it’s C#, VB, Python, or now even Ruby), which was honking-big download size, is now gone. More than 90% of all users have Flash installed today; I’d predict that more than 90% of all users will have Silverlight (and therefore the .NET framework) installed within 12-18 months.
There’s a lot here with Silverlight, and I think MSFT is going to have some pretty considerable success with it.
I’m also very impressed with Ray Ozzie, and happen to agree with his perspective 100% — check out the Q&A with Michael Arrington at the end.
Michael Arrington’s post on Silverlight is here.
There is an interesting story today about a home builder, RSA Homes, that got a bad writeup in the online watchdog site "Rip Off Report". Turns out that when people searched Google for RSA Homes, the complaint filed with the "Rip Off Report" was showing right under the company’s own site. Unhappy with this exposure, the firm took the unwise step of suing Google and the "Rip Off Report" in what is probably a baseless suit.
The irony is that by suing, they were covered by the media, and blogs much more widely read than this one. This in turn is creating more and more news around the topic, thereby increasing the PageRank of this story, keeping their brand name in hot water for a long time to come. Sort of an unintended "suicide" Google Bomb, if I may make a very crass analogy. (Check out a Google search for "RSA Homes" as it appears right now.)
One of the new things on the web these days are "Widgets", little panels or gadgets that expose some data from the site to other users. One of their purposes is to let users easily share data to them. For instance, My BigOven widget gives you access to the recipes I’ve taken the time to rate, the recipes I’ve posted, my all-time favorite recipes (at least those that are on BigOven), and my "Try Soon" queue. In other words, you can have a look at what I’m going to be eating soon…
Delta Airlines CEO Gerald (Jerry) Grinstein of Delta announced on Tuesday that when Delta emerges from its wrenching bankruptcy period, he will forgo all additional compensation or payouts beyond his normal salary (approximately $330,000/year, a pittance for a Fortune 500 CEO).
"Instead, Delta’s plan calls for the distribution of an estimated $995 million to about 39,000 nonunionized employees and 1,000 managers within 12 to 14 months of the company’s exit from bankruptcy proceedings." — Wall Street Journal
Typically, bankruptcy plans provide a considerable compensation for the CEO and senior leadership, ostensibly to keep them motivated to see it through during difficult times. This plunder is, in part, what attracts many leadership "superstars" (at least on paper) to the turnaround world, but it seems wrong to me — particularly unfair to the firm’s employees and investors who’ve suffered even more. Regardless, because it’s common practice, my guess is the press and most investors probably would have shrugged their shoulders if he and the board carved a multi-million dollar package and doled it out in the spring when they emerge from bankruptcy.
But that wasn’t something Jerry wanted. Delta, like all other major US carriers, had wrung some hard-fought concessions from pilot, flight attendant and mechanic unions. They also fought off hostile acquisitions from US Air, and wrestled with major increases in fuel cost, not to mention the security fallout from 9/11. I guess Jerry just didn’t find it right for him to benefit beyond the emotional payoff of a job well done. I wholeheartedly applaud him, and agree.
There’s a personal angle to this story beyond just Jerry as a role model for nobility in business. I had the great pleasure of having Jerry Grinstein on my board of directors at VacationSpot.com. He came to us as representative of Madrona Venture Group, the first venture firm to invest in VacationSpot.com, and served a little more than a year. I was constantly impressed by his wisdom and integrity, which is especially evident because of the context in which he served (the go-go-Internet year of 1999). I remember him as the kind of guy that listens 99% of the time, speaks less than 1% of the time, and you’ll always learn something important and new with that 1%; it’s always pithy and well-considered. In one offline exchange, I remember Jerry being openly critical of various revenue swap schemes going on at various Internet firms like AOL more than a year before they were broadly considered sketchy.
If there were annual awards for nobility in business (and why aren’t there?) I’d nominate Gerald Grinstein for this year’s award.
How often have you read "Microsoft Gets It" in the technology press? Well, they’re writing that about Xbox Live. Microsoft is currently out-innovating and outselling Sony and Nintendo (and hell, even Apple) in this field of connected entertainment.
While I didn’t ever directly work on Xbox live, I feel like a founding father of sorts. I have the great honor of founding Microsoft’s internet gaming effort in early 1996, and I planted many of the seeds for what would become Xbox Live. The Internet Gaming team that I formed and led created Microsoft’s first matchmaking meeting space on the Internet, and introduced all of Microsoft’s v1.0 concepts around online matchmaking, score-management, online chat, tournament play, avatars and more, all more than a decade ago. This gave Microsoft a terrific head-start in both operational knowledge and design knowledge, which I think has been pretty helpful in delivering its next-generation Xbox Live.
The story’s a long one, but I’ll try to make it brief.
I joined the games group in late 1995 from the CD-ROM division at Microsoft. I’m not too much of a gamer, but I was very interested making a career transition from marketing to being more central to technology planning and development. That is, in Microsoft-speak, moving from a lead product planning role to a group program management role. The opportunity arose in Games, and I thought there were some interesting technical challenges there, and that I could both learn, and try to contribute there. I also thought that games might be a great mixture of Hollywood and Silicon Valley. That part was all true. But it didn’t make me a gamer. To this day, I’ve never owned a game console, and I hope to keep it that way, much as I enjoy playing them.
When I joined the games group, it was a very opportunistic set of products (MS Golf, Flight Simulator, and a pretty mediocre game for Windows 95 that was being worked on called "Hover", as well as an online Chess game being written for the non-TCP/IP, proprietary MSN 1.0 platform.) Then there were the joint venture activities with Dreamworks SKG/Dreamworks Interactive. Quite frankly, it all struck me as a pretty haphazard bunch of unrelated projects.
The FlightSim group was generating strong and consistent revenue growth, and the games GM at the time had a strong plan to bring the third-party developers behind FlightSim and Golf in-house. Good call. As 1996 continued, I was struck by how the Internet could be used to create a matchmaking ground, and perhaps could be used to bring some unity and coherence to the titles.
When Bill Gates’ "Internet Tidal Wave" (.PDF) memo came out in May of 1996, it was a defining moment in the company, and each of us in our groups thought long and hard about what the Internet meant for our businesses.
At the time, I was a lead program manager for the Action & Strategy products at Microsoft (Fury3, Age of Empires, Close Combat and a few other titles). I wrote a paper summarizing where I thought Microsoft should go in online gaming, and it quickly got Bill’s attention, as well as Rick Rashid, Patty Stonesifer, Nathan Mhyrvold and others in the company.
I felt strongly that an online gaming platform was needed that provided matchmaking services, a place for people to meet to start games, avatars (later called "GamerTags"), share scores, and socialize. I wrote that it was inevitable that whoever built such a place could monetize the platform through advertising, subscription revenues and add-on sales (both of entire games — download to purchase — as well as game add-ons). Low-latency gaming was also something we looked at, but eventually decided against building (or acquiring) a large network.
This period of my life also included the single worst business meeting of my life.
Now, through my seven years at Microsoft, I was fortunate enough to participate in dozen or so meetings with Bill Gates. And despite the reputation that Bill and Steve Ballmer both have in being difficult and abrasive in meetings sometimes, I can report that every single one of them was a very positive experience.
However, my absolute low-point ever at Microsoft was when Nathan Mhyrvold, then leading advanced research activities for the company, stopped by to hear a presentation about our online games strategy. Nathan has a well-earned reputation for sparks of sheer brilliance, but sometimes obtuse comments and just plain wrong-headedness. For instance, there is a famous email exchange in which Mhyrvold tries to tank one effort inside Microsoft because, economically, it was based on taking a "vig" on each transaction, and that "no one can sustain a margin with that kind of business". Far better, he argued, was investing heavily to create original content, like Disney. The two products he was comparing? Well, the one he wanted to kill became Expedia (built on transactions, later to go on to create over $8 billion in market cap and establish clear leadership in the online travel world), and the one he was championing was Slate (a noteworthy, perhaps even notable effort still but struggling to deliver a solid ROI).
One former senior Microsoft executive summarized Mhyrvold this way: "Meeting with Nathan is just like smoking pot. When you’re in it, you feel really smart, but at the end, you sometimes don’t really know what was said."
Back to my meeting with Nathan in the spring of ’96. I had been on the job of building the online games business for Microsoft for only a couple weeks, and admittedly, I was still struggling for the right metaphor for the business model that would emerge. I stumbled through a few points, drawing an analogy between what we were trying to build and increasingly narrowcast television channels — one for casual games, one for action games, etc. The strategy was to build a platform where people can meet each other to play games, upload high scores, exchange voice chat, buy game add-ons, etc. Mhyrvold peppered me with a few questions, several of which I didn’t even understand. He later wrote a blistering memo (published to the whole company) about how group managers need to be better prepared, and drew on several incidents from that infamous meeting.
I feel less bad about my performance, and was buoyed by Bill Gates’ comments to me at the end of a product review just six months later on the Internet gaming effort that Microsoft’s purchase of Electric Gravity was extremely inexpensive compared to what we got out of it. Bill said it was a great purchase, perhaps one of Microsoft’s best in terms of Return on Investment, and I agree. (I’m not at liberty to disclose what we paid for our purchase, but it pales in comparison to nearly all other Microsoft buyouts.)
Today, thanks to the great creative team that build it, the MSN Gaming Zone is the Internet’s largest place to play games, and a strategic asset for Microsoft that will allow it to extend into the living room. I saw Charlotte Guyman (the former VP that I reported into for a few years at MSFT) at a coffee shop recently, and she told my wife, who she had met for the first time, that I was the guy who "saved Microsoft’s games group". That’s a huge complement, but also I fear a huge exaggeration. I definitely think I put some significant english on the ball at a critical time, but I wasn’t the prime player. I do think I helped Microsoft think much more strategically about games, publishing, and developer relations, however, as well as lay out a solid version 1.0 effort in what would soon become the largest online game site in the world. I did this primarily by pointing out some pretty obvious conclusions about how platforms play to Microsoft’s strengths, and Microsoft needed to either create a comprehensive platform for gaming, or exit the business. Luckily for all of us, they chose the former.
The Arena* project that I led with a team of people from ’95-97 established many of the key platform and matchmaking concepts that have now been implemented and improved in XBox Live. And I’m extremely gratified by the sense that in this area at least, the press is starting to recognize that Microsoft Gets It. I’d argue that in online gaming, Microsoft gets it better than any other entity in the world. Better than Sony, Apple, Linux, and all the other albatrosses Microsoft has had to tackle from a standing start. XBox Live is laying a foundation for many more important services to come.
So, in addition to trying to set the record straight, I guess the purpose of my post is — don’t let people’s reputation or negative feedback sway you. Sometimes, they’re just plain wrong and don’t have the full context. Make it happen.
*"Arena" was the codename we coined in 1995 for this project (it’s a place people go to play and watch games). Arena launched as the "Internet Gaming Zone" in 1996. The Zone was the first Web-based multiplayer matchmaking space, and now has millions of players from around the world.