This is a short (6 minute) overview of the book “If You Build It Will They Come? Three Steps to Test and Validate Any Market Opportunity” (Wiley, 2010). This is a great overview done by Julie Davis of Risk Communities.

If You Build It Will They Come? Video Overview from Rob Adams on Vimeo.

It’s hard to believe that Google can stumble, maybe even get things wrong, in this age of always-connected devices where social networking is ubiquitous. The hip internet juggernaut seems perfectly positioned to leverage its considerable assets and successes into the social networking arena; but somehow they have just plain blown the privacy issues, and their “beta-test-forever” approach to product releases is not giving them any cover from the criticism.

Social networking sites are thrashing wildly to develop sustainable revenue models to justify their valuations and monetize their user bases. Prime examples are exposing private information, as Facebook recently did, in an attempt increase revenue and traffic. The culprit? In changing how users can manage their privacy settings in Facebook they also exposed just about all of a user’s private information to everyone on the site unless users took explicit steps to block the process.

Google could have done incredible things learning from Facebook in rolling out Buzz; but in this case they did almost the exact same thing. The primary culprit is by default Google Buzz publicly discloses (based on the user’s Google profile) a list of the names of Gmail contacts that the user has most frequently emailed or chatted with. This is the default when the user takes the “Try Buzz in Gmail,” with “no setup needed” option. Needless to say, users are reacting negatively, special interest groups are jumping in, and law suits are flying.

Google Buzz could have “Googled” the social networking space, but they now find themselves in the dubious position of being the canary in the coal mine; fortunately for them a well resourced canary. The conclusion is social networking has a significant, double-barreled problem to fix. The first, and most critical to their short term survival, is getting a revenue and business model that makes them sustainable. The second is maneuvering the minefield of privacy issues.

As Google has discovered, relying on its larger corporate business model to fund is social networking foray is the easy part; their simple violation of obvious privacy issues may forever taint them in this fast growing market segment.

There’s a great event coming up on March 26, The McCombs Alumni Conference. I’ll be presenting at it along with great professors like Sandy Leeds and Jim Nolen. I’m going to avoid the free market gloom and doom apologies of my finance professor brethren and focus on two major topics. The first will be the pending introduction of Texas Venture Labs, a program to increase entrepreneurship across the UT Austin campus. The other item I’ll focus on will be the process we’ve used thus far to produce the successes of multiple UT Austin based start-ups, and that’s the process of Market Validation.

In a new twist on economic development, Topeka is look to rename itself Google! As Google looks at a city’s “commitment” to embrace its ultra high speed broadband, Topeka is pulling out all the stops. Names can be changed, I think tattoos for the city council would show real commitment…

In a previous blog post I covered how Apple’s iPhone and Google’s Android phone operating systems were pulling away from the emerging second tier phone operating system providers Microsoft, Nokia and Intel. As these second tier players lose more and more market share these suppliers thrash their operating systems to respond to the competition.

As covered by Ashlee Vance in a well done NYT article, the stakes are high. Microsoft’s share alone moved down from 11.8% to 8.7% (according to Gartner) in a year, while smartphones with other operating systems are surging. Analysts expect more smartphones than PCs will be sold by 2012.

Microsoft’s strategy originally followed the Windows desktop in an effort to leverage the huge installed base and existing user’s “muscle memory” from using Windows every day – a great strategy in theory. The reality was a user interface that didn’t fit in the limited real estate and keyboard of a smart-phone user interface and sluggish performance based on the overhead-heavy Windows architecture. This strategy has backfired, and now Microsoft is moving to mimic it’s Zune music player.

Microsoft has its work cut out for it. Can the company develop a strategy that keeps them competitive without leveraging the installed base of Windows? Is the Zune interface really the one to mimic? Microsoft is also pushing to control the headset design that uses its operating system, a business tactic that is bound to get some push-back from smartphone suppliers.

From a strategy standpoint, Microsoft’s strict adherence to software worked well with a PC architecture, where it dominates. It does not transfer to the smartphone environment. Apple has always controlled both the hardware and operating system, giving it total control of the user experience. Google, with its Android operating system, is following the same course of action by developing its own hardware platform while making the operating system widely available to other handset suppliers.

Stay tuned. As Microsoft’s strategy unfolds I’ll continue to blog about it.

Talk about waking up and knowing you were going to have a bad day, how would you like to be in the newspaper industry these days?

First Warren Buffett, who has a large stake in the Washington Post (WPO), had some choice thoughts about the newspaper industry. Some of his better comments (sourced from an article by Alistair Barr) include the possibility of “unending losses” for the industry and that Berkshire Hathaway wouldn’t do a current investment in the industry “at any price.”

This comes on the heels of a recent and bold announcement by the New York Times (NYT) to charge for frequent access to its website. The announcement showed the leadership position the Times holds, but the fine print proved somewhat cowering; the details were not available and the policy will not go into effect until January 2011.

The print model for news is dying fast and the question is how long will it take before even stalwarts like the New York Times and Washington Post succumb? What is the next generation of content distribution? Has Google already won? Regardless of the outcome, the opportunities that will be opened up are pretty significant.

There’s been a lot of speculation in the press about the shortcomings of the iPad. This is just Apple’s execution of shipping a minimally acceptable feature set; get the product out, get people to pay for it and follow up quickly to address the shortcomings. It really reflects their entrepreneurial roots and is the right way to capture early adopters who will spread the word about the product.

To see how this has successfully worked for them in the past, look back to the first iPods. Wall Street hammered their stock (remember back when it was around $6?) for selling a “low” margin consumer product to teenagers versus their higher margin desktop machines to corporations. The first iPods were expensive, had short battery lives and a high failure rate. In hindsight it’s hard to argue with Apple’s current stock price, and the fact that 100 million iPods have been sold in the US alone. I think its safe to say the strategy worked.

Fast forward from the first iPod to the current iPhone and even today critics point to the shortcomings. Here again, it’s hard to argue with success. Arguably the iPhone is in the early phase of market demand as evidenced by the only domestic carrier is still AT&T, so they have plenty of runway left, and the US is one of the smaller markets for the product when you look at China and India. Again I’d say the strategy worked.

The bottom line here is to be entrepreneurial, you have to ship what you’ve got versus waiting for perfection. If you doubt this, look no further than Apple’s market capitalization, which is still bigger than Dell’s and HP’s combined.  The market says their strategy is working.

This is a great article on taking a commodity item, the mailbox, and finding unique differentiation to stake out your own territory in the marketplace and executing with entrepreneurial vigor. This couple found a compelling need; a secure depository for delivered packages in an era when lots of people order on-line and are seldom home when the goods are delivered. It’s got some great examples of entrepreneurial energy; I particularly like it when one of the founders told Home Depot exactly what stores to put the product in because she was so on top of demand and then she dug up Jeff Bezo’s mailing address to send him her “better mailbox” for his birthday – knowing the kind of problem Amazon was experiencing with stolen packages. A great story.

In a interesting change in product strategy, Verizon announced it would be supporting a version of Skype for use on its network. Skype is available on the iPhone, but can only be used when connected via 802.11. The Verizon offering allows Skype to access the Internet over the cellular network, circumventing the phone company and it’s well established revenue model.

The implications here are staggering and can’t be ignored – this is the beginning of the end of classical telecommunications services. How long it will take remains to be determined, but sometime in the next decade there will be no need for the classical cellular network as 802.11 becomes widely available. This also spells the end of the typical cell phone companies and their revenue models; AT&T, Verizon, Sprint, etc.