Changing the World – SONOS Lays Off and Apple Pays Off

I haven’t written a post in the “Changing World” category for a couple months, but it seemed appropriate given the shocking news that Sonos, one of my favorite companies, had layoffs this week that included acoustic engineers, marketing, and human resources personnel. The title of the Engadget post, “Sonos announces layoffs, refocuses on streaming and voice tech” says it all, but what happened? They make fantastic products that “just work,” last for years, and have incredible sound quality. They revolutionized the wireless home music system industry years ago with the first mesh Wi-Fi networking speaker systems. The article mentions that one reason for the layoffs is competition from Amazon’s Echo which is a hands-free speaker you can control with your voice. Maybe, but Echo is a completely different product so the problems seem to go much deeper. Two issues seem dominant: marketing and technical stagnation.

In marketing, Sonos seems to think they have the mass appeal of Apple, which of course, they don’t. Even Sonos’ most recent high profile ad during the Grammies, “Apple Music +Sonos” doesn’t showcase the advantages of a multi-thousand dollar mesh network music system over hundred dollar Bluetooth speakers. Apple on the other hand has focused on marketing the value of their products throughout the life of the company. When Steve Jobs returned to Apple one of his first projects was the highly successful Think Different campaign. I even wrote about it in the post, “Right Intent: Explaining the Unexplainable.” Recently I came across a video, “Apple Confidential,” in which Jobs is speaking at an internal Apple meeting right before the campaign’s launch. He explains that marketing is about values and that Apple has to be very clear about what it wants people to know and remember about them. Sonos has obviously had trouble with this. Later, at 6:34, Jobs goes on to say that Apple’s core value is that people with passion can change the world for the better. A lofty goal, especially for a meeting in 1997 when Apple was very close to going out of business.

Sonos has actually changed their industry dramatically, but has stagnated in recent years. Purists might care about a speaker that adapts its audio response to its vertical or horizontal orientation, but many more people care about Bluetooth connectivity, which Sonos does not support. Their app has no problem streaming from a wide variety of music services, but it was also clear they were stagnating when it took six month to integrate Apple Music. The result was their best year ever in 2015 followed by layoffs in March of 2016. This was clearly not a commitment to changing the world for the better, but more like giving up at the first sign of problems. It immediately changed my opinion of the company and now it looks like they are simply preparing themselves for sale. Even worse, the high end customers they appeal to will certainly be concerned now that Sonos’ long term viability is questionable. With proprietary hardware and software, their speakers simply will not work long without regular software updates.

Apple is not having an easy time these days either, but they are fighting for their values, releasing new products, and generally adapting in the face of competition. Sonos could have done so many things with their world class audio labs and acoustic engineers: headphones, Bluetooth, speech recognition, and simply reducing prices in some key areas. Instead, they just let employees go, dealing a blow to their wonderful reputation and a corporate culture they worked so hard to create. When Apple had trouble with their iAd business, they did “layoff” about 100 people, but committed to “compensate for iAd layoffs with new job openings.”

Companies sometimes fall onto hard times. The loss of a major account or the entry of a major competitor can seem like the beginning of the end. However, to healthy companies, it is an opportunity to refocus on strengths, create new sales and marketing strategies, and in general rise to the challenge. The next post in this series will provide details on how and where to implement this change and don’t worry, you won’t have to “meet your Waterloo” to do it.

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Star Wars – It’s Time for a New Story

The recent Star Wars movie is the highest grossing film of all time. I recently saw it and was shocked to find that it was almost an exact copy of the first Star Wars released in 1977. It also made me sad. Why repeat the story when there are so many new directions possible? Of course, money is the biggest reason. To create a flop in this iconic series would be a financial disaster for Disney (that bought Lucas Films for $4B) and J.J. Abrams. A review in The Examiner said it best, “The fanboys have already arm-twisted the culture to ensure that it is considered an instant classic, so any attempt at criticism is moot.” However, it is important to criticize because the poor retelling cheapens a story that was once great.

How does this relate to high tech businesses? Last year, I wrote a post “Walking the Razor’s Edge of Change” that explored the fine line between obsessive “change for the sake of change” and the healthy change related to growth. To me, healthy change is like a great story. It is based on classic themes with heroes and villains and has a plot that “goes somewhere.” Healthy businesses have great stories. Apple creates a story with their products and their marketing is almost completely based around it.

yodaMany people don’t realize that George Lucas created Star Wars as a way to reintroduce the power of mythological stories into modern culture. He based it on the work of Joseph Campbell, a writer and lecturer at Sarah Lawrence College who was an expert on comparative mythology and comparative religion. The connection to Star Wars is well described in the “Film and Television” section of Campbell’s Wikipedia article. Campbell also coined the often misused phase, “Follow your bliss.” The 1988 PBS documentary with Bill Moyers on this subject can be found on YouTube as well as a 1999 interview of George Lucas by Bill Moyers called, “The Mythology of STAR WARS” (a transcript of this interview can be found on Bill Moyers website). Lucas said in the interview, “When the film came out almost every single religion took Star Wars and used it as an example of their religion and were able to relate it to young people… it’s a tool that can be used to make old stories be new and relate to younger people, that’s what the point was.”

I’ve worked with people who thought their story was the only correct one. Threatening their story was perceived as a personal threat so they had to protect it at all costs. They only hired people who supported their stories so the same old stories gained more power and influence. The result was they left no room for new stories to be created and told. The cycle was perpetuated, eventually leading to a stagnant organization that collapsed under its own dysfunction.

How can this be prevented? One way is by finding heathy ways for new stories to be created and nurtured. If you have time, at least watch the one part of 1988 PBS documentary on Joseph Campbell with Bill Moyers on “following your bliss.” It’s only 6 minutes long and is a great introduction to creating our own new stories. As Campbell says, “If you do follow your bliss you put yourself on a kind of track that has been there all the while waiting for you and the life that you ought to be living is the one that you are living right now.” If that’s not a story waiting to be told, I don’t know what is.

Monthly Recap: Happy New You 2016!

No, that’s not a typo in the title. It’s something a close friend of mine used to say every new year. I said it in last year’s January post and it’s worth saying again since it’s such a great reminder of the positive aspects of change. Since the news has negativity and fear mongering well covered, here are a few positive things that happened in 2015:

1. Google changed its logo. The New Yorker hated it, but let’s be honest, these are engineers so you know there was a good reason besides “clean lines” and the banishment of those “old fashioned letters.” It is now only 305 bytes, compared to their “old” logo at ~14,000 bytes. Considering the billions of times that logo is stored and transmitted, the new logo is a stunning technological improvement. As a side benefit, the change inspired the New Yorker to write my favorite sentence of the year: “The letters’ literary old serifs were subtly authoritative: the sturdy, handsome G, the stately, appealing little oo, the typewriterish, lovable g, the elegant l, the thoughtful e.”

2. Pope Francis visited the US. Besides riding around in a Fun Fiat with a great backstory, his visit was historic for many reasons. His speech to Congress covered a wide range of topics including Congress itself, religious fanaticism, family, the refugee crisis, compassion, and wealth disparity. It’s a long read, but well worth it for the positive message of change that can be applied to any belief system.

3. Online education exploded. The Observer’s post “The 37 Best Websites to Learn Something New” lists amazing learning resources available at low or no charge. If you only have a couple minutes a day, subscribe to a Highbrow email course. As they say, “Choose one course – Receive new knowledge every morning – Learn, grow, repeat.” For professional level training, try Lynda. It costs $20 / month, but the courses are outstanding. I’ve taken courses from Coursera (Stanford course), Skillshare, and EdX (MIT course). You can find details on my experiences by searching ElephantTech.com. Education is one of the fastest paths to change.

4. Finally, Elephant Tech’s December posts were my favorite to write so far. “Right intent” inspired two posts: “Explaining the Unexplainable” and “The Sound of One Hand Clicking and Right Intent.” There is certainly more to be said on this topic. “Sophisticated Simplicity” and “21st Century Meetings and Training” explored the power of simplicity. Technology is a wonderful tool when used appropriately.

As we start 2016, Elephant Tech would like to wish you all the best in the new year. The world is going to continue to change for better and for worse in some cases so it might be easier to go with it instead of fighting it. As Joseph Campbell once said, “We are in a freefall into future… All you have to do to transform your hell into a paradise is to turn your fall into a voluntary act. It’s a very interesting shift of perspective and that’s all it is…”

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EdTech: Good Karma and the Eventual Death of WiFi

Update on 5/15/2017: The company that sells Karma Go has been taken over by people who are making questionable business decisions so I cannot recommend this product or company anymore.

Here’s a weird story about Paul Miller, a techie who spent a year without the Internet and wrote about it in a 36 part series on The Verge. Soon after, he joined Karma, a company that makes a hotspot that “gets you online anywhere you are” with no contracts or data plans that expire. Days before he rejoined the online world, he realized “the Internet doesn’t make me who I am; I do it to myself, thanks.” It was major breakthrough for Paul after a difficult year, but what he did afterwards was even more amazing. You would have thought he would have written a book, given a TED talk, or started a speaking tour. However, the experience was too negative for him. Instead, he joined Karma and wrote “Future Facts of a Wireless World.” It wasn’t until I had finished reading it and researched the author that I came to a shocking realization: the same guy who went a year without the Internet was now an expert on making the Internet available everywhere, all the time.

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For industry leading companies, it is a great example of the future-looking content they should be creating. Paul’s personal experience of being isolated by not having Internet access allowed him to create a compelling summary of the current (horrible) state of WiFi and Wireless. He goes on to describe a vision of the future of Internet based around Karma’s vision. Here’s a TL:DR summary of the vision: in ten years, all Internet will be delivered wirelessly via cell towers and be accessible to all – bye bye WiFi. Phone numbers will disappear, voice calls will just be another service, and mobile providers will “fade into the background.” It’s quite a utopian goal, but it is already happening in many third world countries where wired internet was never installed. Instead people have jumped from no connectivity to 100% wireless systems. They also use apps like WhatsApp and Skype to avoid paying the high text message and voice calling rates.

If you are an industry leader in any technical market, you also have the deep expertise required to create this type of content. Consider adding a few pieces of “showpiece” literature like this to your marketing materials. Avoid corporate speak: “enhanced ROI through synergistic application of core competencies” says nothing. Instead focus on honest explorations of the current and future state of your market with emphasis on how your company is pursuing that vision.

In the meantime, you might find a Karma Go useful, especially if you have a mobile provider that restricts tethering. Their LTE WiFi hotspot is small, powerful, and fast. The best part, if you don’t use it for months, the data (and battery charge) will be there when you do need it. Here’s to Good Karma!

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What’s in Store for Microsoft and Apple

I went to a Microsoft store recently and it was weird to say the least. First, it looked a LOT like an Apple store except that there were very few people in it and many products that had nothing to do with Microsoft like RockBand 4, 3D printers, Xbox, and Minecraft.

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Minecraft had its own whole section.

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The 3D printers were also front and center.

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Ok, technically the last three are Microsoft products, but I went to see the new Surface Pro 4 and Surface Book which were in short supply. In fact, there was only one Surface Book in the store and it had a broken hinge. The Lumina phones looked interesting, but I picked one up and it said “no network connection.” I want to like Microsoft again even if I don’t use their products, but this huge, beautiful, empty store with a single broken flagship product and unusable demo units just made me sad. To their credit, the employees were extremely knowledgeable, helpful, and available… Even with a lack of demonstration products to show, they knew the technical features and differences between models (which were significant). Hopefully their massive new store opening in New York on Monday will be better, but it points out one of the major problems trying to copy the competition: by comparison, Microsoft looks like a bunch of talented amateurs.

In contrast, I took a photo at the Apple Store a day later and it was exciting.

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It’s smaller than the Microsoft store, but the buzz was unmistakable. At one table, a group of women were learning about their iPhones in an hands-on class with an Apple employee demonstrating on a large screen, the genius bar was full, and people were trying every type of product from the Apple Watch to massive 27-inch retina iMacs. Employees were a mix of men and women of many age groups and ethnicities. All the products worked and software was installed properly with demonstration content. I could walk up to any computer and start editing a movie on iMovie or a soundtrack on Garageband using footage supplied by Apple.

The press knows the problem and Fortune magazine published the article “What Microsoft can learn from Apple at retail” just three days ago. Do you have to buy into Apple culture to appreciate Apple products? The short answer is no. Roughly 800 MILLION iPhones have been sold to date and it is estimated that they will sell the billionth iPhone in mid-2016. That is even more impressive considering the iPhone was released less than 10 years ago (2007). Apple created their niche and they continue to ride a wave of success that carries over into their stores.

High tech companies can do the same thing, but only if they honestly understand their key strengths in the marketplace and formulate a strategy based on them. Some companies are cost leaders, successfully manufacturing popular products at lower costs. Others are innovative, create new solutions to challenging problems and successfully commanding higher prices in the marketplace. The problems come up when a company doesn’t understand their strengths and weaknesses. Maybe an established company used to be innovative, but the rest of the market caught up or perhaps the market’s needs changed. Microsoft is in the second category. ArsTechnica published an article yesterday, “Bing profitable, but Microsoft revenue down 12 percent as shift to cloud continues.” The headline is misleading, Bing Search doesn’t have much to do with anything, but the “shift to the cloud” is critical. They can make an Xbox if they want, open hundreds of stores, sell 3D printers, but in my opinion Microsoft’s strength is enterprise products. It always has been. The Surface Pro and Book are great ideas: enterprise level products that show the market the power of Microsoft’s Windows 10 software ecosystem. Putting Microsoft Office onto the iPad Pro is another great, enterprise level idea. Apple knows it, that’s why they are supporting Microsoft in the project. Google knows their strengths too. Do you see “Google Stores” around the country? No, but you do see Street View vehicles, self driving cars, thermostats, cameras, and products like their Nexus phones touting the “Pure Android” experience. Anything that supports their key strength: organizing the world’s information (and selling advertising based on it).

So “What’s in Store for Microsoft?” Hopefully more of what they are great at, the products that do the heavy lifting for businesses around the globe instead of empty cathedrals of technology. To paraphrase Sun Tzu (who lived around 500 BCE), “If you know the competition and know yourself, you need not fear the results of a hundred battles.”

Have a great weekend!