Christian Renaud's Blog

SRIC-BI Friday & Metanomics Monday

Shame on me!  I am so accustomed to having a large firm behind me with a public relations and marketing team that I am still forgetful to do my own shameless self promotion.  :-)

On Friday, I participated with David Wortley of the Coventry Serious Games Institute, Justin Bovington of Rivers Run Red, and Nick Wilson of Clever Zebra on a panel for SRIC-BI in Menlo Park, in Second Life.  We walked through the current state of Virtual World technology and future prognostications, and we were (mostly) in violent agreement about where things are and where they are headed.  I believe Nick put up some notes over at his blog regarding the questions, and hopefully Eilif Trondsen at SRIC-BI will post the transcript or mp3 of the event.

Tomorrow, Monday, I will be speaking with my friend Robert Bloomfield on his Metanomics program in Second Life at 11a Noon PDT (I refuse to say 'SLT', its seems like some childish affectation like calling your friends by their Warcraft names in the pub).  Robert is setting me up for some smacking around in his promotion of the event, as he quoted one of my prognosticating posts saying that Second Life and it's closed ilk will fade into the sunset in the promotion of the event.  So, tomorrow I get to walk into a room of Second Lifers and explain that sentiment.

Be sure to drop by for what promises to be an entertaining time.  I will have to make sure my blood sugar and green tea are well balanced before wading on in.

On a related note, I have had the distinct pleasure to work with Aliza Sherman/Cybergrrl Oh again in preparing the lead-in to the Metanomics event, as she aggregated some professional background on me as context.  I don't know exactly how that will play out but she already has incriminating photos of me in flip flops in an early mail-room job, so it can only go uphill from there.

I'll look around to see if anyone captured the output of the SRI event, and I'll make notes of the Metanomics conversation tomorrow as well on the blog for those who cannot attend.  (Update- the Metanomics text/audio/video transcript of the event is here.)

Time for a change

"We must always change, renew, rejuvenate ourselves; otherwise we harden."

- Johann Wolfgang von Goethe

In October 1996, I moved from a very comfortable and sunny Southern California bachelor lifestyle to cold and dreary San Jose to work with Cisco.  In the nearly 12 years there, I have personally worked on remote access servers (the ISDN and 56k modem varieties, if you recall those, dear reader), router encryption modules, packet voice gateways of a practically infinite variety, IP telephony for the enterprise, home gateways (routers), broadband over powerlines, grid computing, spam, data loss prevention, autonomic networking, intelligent power grid systems, and networked virtual environments (avatar mediated communication).  I long ago lost track of how many products and technologies I helped create over those  many years. 

One consistent thread during all of those years was that we were Inventing and Creating.  Sometimes they were completely new businesses or technologies, sometimes they were simple (albeit lucrative) adjacencies to existing businesses.  There was an entire portion of the technology map that said 'here lie dragons' that we charged headfirst into to be first to market with each new innovation.

It is time to Invent and Create again, however this time outside of the comfortable embrace of a large corporate sovereign.  Today is  my last day at Cisco.  I am both starting a new company (more on this soon)  as well as working with two other startups on helping them with their technology strategy and go-to-market. 

Cisco is an excellent company, the best I have ever worked for.  John Chambers and his executive staff are some of the most brilliant people I have come into contact with, bar none.  As is the case at good universities and working with top researchers from MIT, Stanford, and the Santa Fe Insitute, working at Cisco is an addiction for mental adrenaline junkies.  You are always pushing yourself to do better, think faster, be smarter than the Mensa co-workers of yours.  It will be a form of withdrawl to wean myself from the daily interactions with that group of such amazing people as well as the access that the 'Cisco' business card could grant me to some of the best 'outside' thinkers on the planet.  I hope I am able to stay in touch with them.

Moving forward, look for more detailed updates on the new businesses and how I manage to balance work and actually being physically present for my wife and daughters. 

Apple fumbles 3G iPhone Launch?

Let me get in my time machine for a second.....

Apple predicts that it will ship 10M iPhones within a year from it's July 2007 launch.

Apple ships about 5.7m iPhones (by multiple analysts conclusions) before supplies mysteriously begin to dry up in late March. By early May, even New York City has no inventory and a line for iPhones starts forming.

April 2nd, Henry Blodget at the Alley speculates that non-authorized international demand is consuming 'buffer inventory' and driving the shortage.

When Apple first introduced the iPhone 1.0, they could ship it 30/60/90 days post-announce because they had no shipping revenue product to stall.  You really don't want to induce a revenue stall in a shipping product if you can avoid it, however Apple learned the hard way that you also don't want to anger your installed base of loyal/feral customers as they discovered with the iPhone price drop.  So, you end up walking a fine line between angering your customers with lack of supply (or over-supply of new models) and angering Wall Street with periodic flatlines in your revenue stream.

The answer is to gracefully manage product transitions.  This is an art form in itself, in the timing of messaging transitions, moving manufacturing lines, selling off inventory, upgrade and price protection programs, and the like.

Apple seems to have been caught in a perfect storm of unanticipated demand (Blodget's article about Europe) that they needed to quickly react to in the form of temporarily increasing the production line of iPhones so they could gracefully trickle out of them about May 30th....just in time to release the iPhone 3G and open up the larger price-sensitive and 3G-hungry market, and a new product introduction when they need to ramp down production of the older model in favor of the newer one.

So, do you ramp up or ramp down?  Do you flatline sales of your iPhone line for 75 days during a key fiscal quarter (Summer/graduate presents) or do you enable your overflow production lines and meet demand at the risk of price-protection/exchange/returns exposure on your bottom line for a percentage of the customers who buy in May?  It reads like a loaded MBA mid-term question from a sadistic professor who enjoys handing out 'C' grades to all students.

It appears Apple chose to flatline.  I don't envy the beating they will take from Wall Street for this fumble, even though every Wall Street Analyst is slobbering over themselves today to say how much of a fait accompli the 3G iPhone is to wrest the title from the Blackberry for #1 in sales.  I wonder how they will balance the stick and carrot of beating them for the quarter stall while praising them for the new product.

And it isn't an inevitability that Apple will more than address the revenue shortfall with the 3G iPhone.  Even if Foxconn can overcome their initial production issues and achieve their 10M unit number, the revenue and profit per unit of the $199/$299 iPhone 3G are abysmal compared to the initial 1.0 iPhone at $499/$399.  We used to have a sarcastic punchline back in the early Cisco IP Phone days..."We'll sell it at a loss but we'll make it up in volume!"

It could be worse, you could be the product manager at eTrade who announced yesterday the new eTrade Mobile Pro trading platform for mobile devices, exclusively for the BlackBerry.