VenChar

Business Objects

I've been reading Michael Cusumano's The Business of Software and encountered this anecdote re: the beginnings of Business Objects. The founders, Bernard Liautaud and Denis Payre had both worked for Oracle France in sales and marketing. They were approached in the late 80s by an engineer and consultant named Jean-Michel Cambot with a concept for a decision-support tool. His software made it possible to generate SQL statements from a simple user interface, without the user having to know SQL. He had approached Oracle to productize and distribute his prototype, but they had declined. Liautaud and Payre bought the software from Cambot and founded Business Objects in 1990.

From the beginning, Business Objects went after a big “horizontal niche” rather than a “vertical” market. It attempted to “cross the chasm”… by riding on the backs of Oracle customers… The company was not trying to create a new platform to work with all database technologies, but rather was positioning itself as a “complement” to Oracle.

Interesting market entry strategy for several reasons: (1) horizontal rather than vertical strategy, (2) leverage the large installed base of a big successful company and sidestep the Early Adopters and the Chasm, (3) by creating a complementary offering, you get to work with BigCo’s salespeople, help them win more deals, make their product work better, etc., (4) since the product is complementary and improves the performance of the established product, this opens up the possibility of an acquisition down the line. Another example of this strategy would be PayPal and eBay.

Structural holes in social networks

The NYT has this piece profiling the work of Ronald Burt that suggests that new ideas tend to come from people whose social networks span "structural holes" and link different social/workplace networks. The thesis that new ideas emerge at the interface between functional areas makes intuitive sense.

It turned out that the highest-ranked ideas came from managers who had contacts outside their immediate work group. The reason, Mr. Burt said, is that their contacts span what he calls "structural holes," the gaps between discrete groups of people. "People who live in the intersection of social worlds," Mr. Burt writes, "are at higher risk of having good ideas."

People with cohesive social networks, whether offices, cliques or industries, tend to think and act the same, he explains. In the long run, this homogeneity deadens creativity. As Mr. Burt's research has repeatedly shown, people who reach outside their social network not only are often the first to learn about new and useful information, but they are also able to see how different kinds of groups solve similar problems.

KnowItAll

Ars Technica links to an interesting research project (KnowItAll)at the U of Washington aimed at developing a search tool for extracting large collections of facts from the web. If you wanted to know about used car dealers in San Francisco, for instance, the tool would generate a list of dealers for you. The search engine uses an awareness of syntactic patterns to extract information from phrases such as "used-car dealers including XXX". DARPA and Google are reported to be funding the project.

From the abstract of an overview paper on the project's website:

Manually querying search engines in order to accumulate a large body of factual information is a tedious, error-prone process of piecemeal search. Search engines retrieve and rank potentially relevant documents for human perusal, but do not extract facts, assess confidence, or use information from multiple documents. This paper introduces KNOWITALL, a system that aims to automate the tedious process of extracting large collections of facts from the web in an autonomous, domain-independent, and scalable manner.

Collaborative divorce

Via Catallarchy, this interesting article in the NYT on a new practice known as collaborative divorce:

In some ways, the method resembles mediation in its problem-solving approach. But rather than a neutral mediator, each party brings a lawyer to the sessions, as advocate and adviser. But the very format changes how lawyers behave. The cornerstone of the process — and its most controversial element — is that the two lawyers sign a pledge to withdraw from the case if either of their clients decides to go to court. This gives the lawyers an economic incentive to leave adversarial habits behind. It also encourages clients to stay at the bargaining table, since bolting means starting over with new counsel.

Furthermore, this approach attempts to avoid the winner-take-all litigation scenario which inherently poses greater risk to both parties. As Jonathan Wilde points out in his post:

There is a clear difference between dispute resolution in public and private domains. Public dispute resolution is nearly always a winner-takes-all game, because coercion is used to back up verdicts. Judges are not working for a profit, and thus, do not have to please both parties in order to attract future business.

In contrast, lawyers specializing in collaborative legal resolution have to build reputations not just for being strong advocates for their clients, but also for expeditious resolutions without the usual emotional nastiness and financial trauma that accompanies state-based divorce proceedings.

The ideal resolution to a divorce dispute should leave both parties with at least some degree of satisfaction. The state legal system is loaded with incentives against this type of bilateral benefit.

Barcode technology adoption

Fortune has an article (subscription required) on barcodes and how they have come to be so pervasive. It is an interesting study on the adoption of new technology and exhibits many familiar features:

* Key enabling technologies need to advance along their trajectories of improvement: Joe Woodland, an engineer, decided to invent a way to automate supermarket checkouts and came up with the idea of barcodes in 1949. “By 1952, Woodland and a partner had patented their system. But ... lasers and computers, which would play integral roles in bar-code systems, didn’t yet exist in cheap form. And so, despite joining IBM in the hopes that it would produce his invention, Woodland watched his idea languish and eventually sold his patent to another company.”

* The importance of standards: “For an automated checkout system to work, supermarkets and packaged goods companies would have to agree on one standard code to translate lines into prices. There would be chaos if different stores implemented incompatible codes. So representatives of supermarkets and their counterparts from consumer-goods companies convened to tackle the problem. After weighing proposals, the committee chose the universal product code, or UPC, an IBM design that built on elements of Woodland’s idea.”

* The challenge of finding the right first application: “Supermarkets liked bar coding because it allowed them to eliminate price stickers, saving labor costs. Industry planners hadn’t considered that shoppers might not cotton to that. Food inflation in the early ’70s was intense. And now the stores were asking customers to buy products with no stickers on them and trust that prices weren’t being changed behind their backs. Consumers were incensed, and the supermarkets’ response didn’t help. A number of them dispensed grease pencils so shoppers could copy prices off the shelves. That didn’t placate shoppers, and state legislatures began passing laws mandating price labels. Faced with potential federal legislation, the supermarkets capitulated and promised to label items.

Initial bar-code adoption was so anemic that in 1976 Business Week published an article headlined ‘The Supermarket Scanner That Failed.’ Experts had predicted 1,000 stores would have scanners by that point, but only 50 had installed the costly equipment. Not until the early 1980s would scanners become pervasive in supermarkets. "What really turned the corner was not the grocery industry, but the mass merchandisers," says Stephen Brown, author of Revolution at the Checkout Counter: The Explosion of the Bar Code. "When the mass merchandisers, most notably Kmart, decided to adopt the system, that built a momentum that never stopped."”

* The scope and scale of the impact of new technology can be hard to foresee: The guy who invented barcodes saw in them a way to automate supermarket checkouts. However the real value in barcodes, not initially foreseen by the inventor, is information. “As often happens with seemingly minor technological changes, bar codes have had a huge and unexpected impact. Cash registers had been mere repositories of money; post-UPC, they became data conduits par excellence. Each time a product is sold, a record of the item is now preserved. And as any student of Wal-Mart can tell you, that altered the balance of power between retailers and manufacturers. Once, manufacturers controlled data about product sales via warehouse inventories. They understood what was selling much better than the retailers. But now the stores had data too—and both sides would learn to mine that information.”

It will be interesting to see how the RFID wars play out and in what unforeseen ways they will change the world of business as well as our lives.