|Ken Novak's Weblog
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Thursday, February 22, 2007
The endowment effect, the 9X problem and collaboration:
Nice summary from HBS. "the "endowment effect" [is when] we value items in our possession more than prospective items that could be in our possession, especially if the prospective item is a proposed substitute. We mentally compare having the prospective item to giving up what we already have (our 'endowment'), but because we're loss averse giving up what we already have (our reference point) looms large.
And Gourville points out three factors that make the situation worse for product developers who want their offerings to succeed. First is timing: adopters have to give up their endowment immediately, and only get benefits sometime in the future. Second, these benefits are not certain; the new product might not work as promised. Third, benefits are usually qualitative, making them difficult to enumerate and compare. ..
Because of all of the above, Gourville talks about the '9X problem' -- "a mismatch of 9 to 1 between what innovators think consumers want and what consumers actually want."1 The 9X problem goes a long way to explaining the tech industry folk wisdom that to spread like wildfire a new product has to offer a tenfold improvement over what's currently out there...
Email is a channel technology. It creates a private conduit between the sender and receiver. Other parties don't know that the email was sent, and can't consult its contents. Wikis, del.icio.us, Flickr, Myspace, Facebook, and YouTube, on the other hand, are all platform technologies. They accumulate content over time and make it visible and accessible to all community members. [They also foster emergence, where structure emerges rather than being imposed by "groupware" products.] .. So the new tools are not direct substitutes for email; instead, they're intended to provide capabilities that email can't. Will they succeed? It depends heavily, I believe, on whether companies and their managers want technology platforms for collaboration. This desire will be an important factor in solving email's 9X problem. " 1:44:26 PM
How To Tell The Open Source Winners From The Losers:
A 9-point checklist for evaluating open source solutions:
- "A thriving community: A handful of lead developers, a large body of contributors, and a substantial--or at least motivated--user group offering ideas.
- Disruptive goals:Does something notably better than commercial code. Free isn't enough.
- A benevolent dictator: Leader who can inspire and guide developers, asking the right questions and letting only the right code in.
- Transparency: Decisions are made openly, with threads of discussion, active mailing list, and negative and positive comments aired.
- Civility: Strong forums police against personal attacks or niggling issues, focus on big goals.
- Documentation: What good's a project that can't be implemented by those outside its development?
- Employed developers: The key developers need to work on it full time.
- A clear license: Some are very business friendly, others clear as mud.
- Commercial support: Companies need more than e-mail support from volunteers. Is there a solid company employing people you can call? "
Australia wants (incandescent) lights out by 2010:
"Australia looks set to become the first country to phase out incandescent light bulbs in favor of more energy-efficient compact fluorescent bulbs, as part of its drive to reduce emissions of greenhouse gases. The Australian federal environment minister, Malcolm Turnbull, said Tuesday that he would work with the states to get rid of incandescent bulbs by 2009 or 2010. .. "Electric lighting is a vital part of our lives; globally it generates emissions equal to 70 percent of those from all the world's passenger vehicles." ..
Australia already has minimum energy performance standards that apply to electrical appliances, and a similar system will be applied to light bulbs. The standards would ultimately make it impossible to sell incandescent bulbs. Turnbull said the government would consider some exceptions to the restrictions for special applications like medical lighting and oven lights. Australia has used similar means to phase out water-thirsty lavatory cisterns and high-pressure shower heads.
Australia would be the first country to implement such a plan. The initiative appears likely to move ahead with little political conflict. Environmental groups are also pleased, particularly as the center-right government of John Howard was, until recently, unwilling to accept climate change as a reality." 12:48:36 PM