MaskOfZorro's Profile

BTW see this interview:

http://www.nytimes.com/2015/11/22/business/cindy-holland-of-netflix-learning-to-lead-on-a-pair-of-water-skis.html?_r=0

Hey, thanks for your comment!

In my view Netflix has the following strengths:
1. A great analytics team. Netflix has a computer science lineage which is reflected in their decision making process in entertainment & engineering – the algorithm that they used to predict which DVD you’d like based on just 3 previous DVDs is a landmark algorithm.
2. A very relevant & extensive database to analyze and make predictions of of.
3. They have a very astute management which takes decisions ahead of technological trends (their decision to switch from DVDs to video streaming is in the same league as the Steve Jobs ditching the keyboard for the iPhone)….TiVo/Blockbuster which faced similar challenges screwed it up big time.

I would hesitate to say that their strengths will always translate into home runs. The creative nature of the business is inherently unpredictable! (see the related post on Relativity Media)
Netflix has had its fair share of hits (House of Cards) & misses (Marco Polo). On balance, I expect them to do better than competition if they can sustain their strengths. The biggest challenge that they face is the threat of disintermediation by content providers and the rise of Amazon video, who is also their hardware supplier!

Great comment! With creative stuff, one can never be sure, and therefore I am still not convinced that Netflix will be able to consistently hit home runs (shows like House of Cards), though they will be able to produce shows that are consistently successful. The other big question is their complete reliance on Amazon Web Services for infrastructure, which has become a competitor (a lousy one for the moment!!)

Hey Madrid,

Thanks for your comment, you correctly note that while House of Cards was successful, its profitability is questionable. In fact Netflix as a whole is earning very little profit compared to HBO, but it is valued many times higher than HBO. In my view, with the current strategy, Netflix is unlikely to earn huge profits, what they have proven to the investors is that they have great execution skills, which should attract the long term investors ( similar to Amazon)

Hi Ola,
Thanks for your comment. You are absolutely right that their success rate with a completely new series is still a question, on one hand House of Cards was a big hit, on the other hand Marco Polo was a big flop.

What is without doubt, is that they’ve got analytics and computer science in their DNA, so the long term success of Netflix will be a good indicator of the long term competitive edge that Big Data provides.

Agree completely, locational advertising is a great use case for iBeacons. With the introduction of 5G and universal connectivity for all sensors, their applications could explode.

Great Post!! In my post I make the counterargument that analytics can lead to a long term competitive advantage and use Netflix as an example. Would be great to know your thoughts on the same.

Great Post! I believe that GE is also doing a lot of work in this area. The big concern for me is around security. Industrial software has notoriously poor security design which leaves it vulnerable. One unfortunate incident can push back the IoT many years.

Your concern is very valid. I think that Pebble should be very careful to play to its own strengths and not to its competition’s strengths.
Features like a huge battery life, a very easy to navigate interface, its strong emotional connect with the customers and developers are things that define Pebble. Due to its Kickstarter community roots, consumers have a different sort of connection with Pebble than the traditional corporation like Apple or Samsung.

Pebble should be very careful about adding features that do not end up diluting its core brand.

You raise an excellent point. I think Pebble also realizes that it cannot successfully compete with Apple & Samsung on their territory and this realization drives its approach towards hardware/software and managing its developers community. Apps are simple to develop and easily ported to either iOS or Android. The resources to developers are geared towards the small indie developers, and the expected applications are very easy on the resources. Pebble has also invested a substantial sum of money to attract developers to its platform.

I think that as long as Pebble plays in this niche, it can dominate this segment. The crucial thing is to not compete with Apple/Samsung in their territory.

Thank you for your reply. As you rightly point out, this approach is not scalable, but it can be extremely effective for niche categories. Moreover, Pebble benefitted from the fact that there were no established players in the category at that time. I think, that in such a scenario, Pebble’s approach is a very low cost way of testing the market and generating orders.

I think that its been a brilliant idea so far – an extremely simple application which has been leveraged to solve real world challenges!

TripAdvisor has been phenomenal in leveraging and commercializing the crowd. It operates with negligible overhead to create a very useful and relevant platform. However, I am not sure if it has invested in its top contributors which have enabled the success of the platform.

This is certainly an idea which has benefitted tremendously from the power of the crowds and the indirect network effects that strengthen the platform. I see Waze as an enabler to Google Maps and its autonomous car efforts.

Agreed that Apple made a move in the right direction but the execution was remarkably un-Apple like. Lots of bugs and crashes were a big turnoff for the user base.

I am also doubtful if Apple’s strategy of leveraging its iPhone/Mac firepower to distribute Music automatically results in long term success. If that were the case, Apple Maps would have been the leader in Worldwide Maps. Historically, Apple’s software services tend to largely be failures (Ping, Maps, MobileMe etc). Apple Music is still not available for Android and its a very poor second compared to Spotify in terms of user experience anyway. I doubt that it will scale up and gain user traction like iTunes did with Windows.

Great post! Dueling is now of the few companies that have managed to crack the online education model effectively.

Dulingo’s translation model reminds me of Captcha, which used crowdsourcing to improve image recognition softwares. It is certainly successful but it remains to be seen how scalable and substantial it can become.

BTW do you know if Duolingo is profitable?

Excellent point. Amazon doesn’t make any money (profits) on any of its services/products and therefore it is a very dangerous competitor to Apple/Google. However Amazon’s ecosystem is extremely limited compared to its competitors and therefore I doubt that it in the long run, it can pose a serious challenge to either of them.

Definitely agree, the death of the brokers has been foretold for long, but somehow they have managed to survive through the internet revolution. I think that the information exchange that they provide is something that will continue to be in demand for some more time.

I completely agree that Dollar Shave Club has shaken up the staid and strangely uncompetitive Razor market in the US. DSC competes basically on price. When I first heard about DSC, I learnt that they source their razors from a Korean manufacturer called Dorco. Now DSC has served as a platform for introducing and popularizing Dorco razors to a generation raised on Gillete. To a consumer who is really price sensitive, it would make sense to purchase razors directly from Dorco. In fact Dorco is a retailer on Amazon and is now, the highest rated razor company around. For 20$ you can buy 12 months worth of 6 blade razors.

So, I fear that the DSC has a very real threat of being disintermediated if it continues to compete on price alone.

I have been a long time reader of Guardian & I completely agree that Guardian has done an outstanding job of embracing new media. They have one of the best websites and mobile apps around. The thing is that I am not sure if the new media are profitable for Guardian. In other words, they have created a lot of value but they are still unable to capture a proportionate and fair share.

An interesting industry development is the impending release of Apple News. Apple may yet turn out to be the savior that the news industry is looking for.