Early last year, Tim O’Reilly boldly predicted that the Kindle could be gone within two or three years. After the iPad announcement today, it seems that his words will soon become reality.

With the same 9.7″ display size and similar prices, it’s hard to believe anyone would pick Kindle DX ahead of Apple iPad. And the biggest weakness of Kindle is the file format. Amazon forced publishers to user their own file format which can be read on Kindle only. Basically, all your books will be locked to Amazon which is the single point of purchase.

Tim O’Reilly believes:

what Amazon seems to have missed is the important role that “free” played in the success of the iPod. People didn’t populate their iPods solely with music purchased from Apple. It was easy for them to “rip” their own CDs into the standard mp3 file format and load their entire music collection onto the device.

On the other hand, iPad is using the ePub format, the open format from the International Digital Publishing Forum which is supported by a lot of e-book readers.

In this way, Apple can play the same game with their new iBooks Store. Although there is no easy way to “rip” a book, customers can load some of their own epub-based e-books purchased from other vendors onto the iPad. So no single bookstore will take over the e-book world.

According to Paul Aiken, executive director of the Authors Guild:

Amazon is selling e-books at a loss in order to spur Kindle sales – it sells books for $10, but pays publishers more than $10 per copy. But once Amazon gets control of the market, it will be free to impose price reductions – to force publishers to reduce their e-book rates to less than $9.99.

I am sure publishers don’t want to see that happening.

Although Amazon is the pioneer in this category, it seems they still haven’t found the best way to sell digital contents effectively. They should know that if books are not shareable and controlled by one vendor, the marketplace for books will be diminished eventually.

Both Amazon and Apple want to become the nation’s largest e-book retailer. Both of them have revolutionized their own markets with amazing innovations. Who will win this battle at last? While Amazon is the leader now, I am sure Apple will catch up soon, very soon.

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“The Mind Reader“, Steve McCallion from Ziba Design, recently wrote a series of great posts about Consumer Experience on Fast Company Magazine.

Steve argues that entrepreneurs are always looking for a silver bullet or killer app but forget that orchestration can also create significant value to their customers. According to Steve:

In an orchestration it’s the collection of things that create value, not necessarily the things themselves. It’s not the individual notes in the song, but the collection of those notes. When creating meaningful experiences, it is often this orchestration that is the primary source of value creation.

By innovating the user experience using a “metaphor”, a collection of products and services together can help your business win in a competitive market. Steve believes:

A metaphor creates value by transferring associations from a previous experience to a new one. It functions as shorthand to help people understand the offering and what it means in their lives.

So how can you use “metaphor” as the silver bullet or competitive advantage for your company?

Steve gaves us some good examples in the offline world. These companies redefined their respective categories by leveraging the power of metaphor to create a meaningful experience for their customers.

A lot of the products selling in these companies are obvious and shared by other competitors (may be except for Apple). However, orchestrating the obvious around a metaphor helped them become winners in their industries.

Can we do the same on the web? I think so. Below are a few examples of online businesses which understand the power of metaphor.

Do you know any other web businesses using the power of metaphor? Let me know in the comment area. Thanks!

I find this idea very similar to the concept of “Those little ladders in your head” in the classic marketing book – “Positioning” by Al Ries and Jack Trout.

The authors believe our mind will reject new idea that is new and different. It accepts only that new information which matches its prior knowledge or experience. To put it another way, if your product is truly new, you should look into the mind of the potential customers to see what mental images already exist and then select one you can tie your product/company into. Using a metaphor is a good way to do so.

Did you pay too much attention to find a silver bullet or create a killer app for your company? Have you make your business meaningful to your potential customers using the power of metaphor? Never ignore the obvious.

Photo source: steve xavier @Flickr

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We always have a perception that corporate giants cannot innovate because of bureaucracy and slow moving speed. Look at how General Motor destroyed themselves. They know that sustainable growth is not possible without innovation. Yet often time companies are fear to change. They just want to stay in the status quo and try to protect their existing profits by cutting costs and firing people.

So does that mean scale and innovation cannot coexist?

Many people will just give up when facing this dilemma, especially when their firms are still profitable. However, in today’s challenging economic environment, businesses need to innovate in order to move forward. Like Steve Jobs said:

“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.”

Google is another great company that will do everything to foster true innovation. No one can argue that this company is highly profitable when they are earning more than 4 billion dollar last year. But they believe that’s not enough. With 20,000 employees, Google thinks they can keep innovating by taking advantage of their scale.

Google’s co-founder, Sergey Brin, can go to extremes to insure the continuous innovation in his company. He said:

“Instead of having our employees in large buildings, we could have several thousand houses each with a garage – there’s nothing stopping us from doing that.”

Due to this belief, the Google teams have produced numerous excellent products from Gmail to Google Maps and the latest one – Google Wave.

Two years ago, two engineers came to Brin and told him that:

“We want to do something new and revolutionary, but we’re not even going to tell you what it is. And we want to go back to Australia, hire a bunch of people and just work on it.”

The engineers thought Email was designed more than 20 years ago without any advanced technologies that we have today. Thus they believe they can do a better job and re-design this product.

I believe most companies in the world will reject this so-called proposal. Redesign Email? It’s just too crazy. But Brin thought otherwise as those engineers are the same ones behind Google Maps, a highly successful product. He thought it was a reasonable request.

Now they have created a product that aims to redefine email and online communication tools. Google Wave is an attempt to replace not one but all communication methods on the web – email, real-time chat, comments, media sharing, link sharing and wiki collaboration. We are still not sure if Wave is able to go mainstream. But this is definitely a high quality innovative product. It also proves that big companies are able to innovate when they have the right corporate culture.

How about your company’s culture? Have you motivated your workforce to innovate? If not, your company is standing still and eventually moving backward.

Additional Resources

Google Wave: A Complete Guide @Mashable

Photo source: starbuck77@Flickr

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Americans always love to do something new and different. It seems innovation is deeply embedded in their culture. So when you hear people saying US people are lack of creativity, you pay extra attention.

Coincidentally, Michael Mandel, Paul Kedrosky and Peter Thiel all recently talked about insufficient innovation may be a cause of our current crisis. Peter pointed out that the dot-com boom of the late 90s is a fraud and most innovation we have received is only marketing hype. Since technology had not made much progress to improve our productivity, people tried to achieve high returns through high leverage. He said we shouldn’t count on established technology companies like Cisco, Microsoft and Intel to give us innovation because their technological progress is extremely slow.

There is no better way to illustrate this situation than talking about what I have seen in the last company I worked for. For some reasons, that company always likes to change their product’s names from time to time but the content is still the same. May be they want to do something new and different but those products are the same old ones that they have provided to customers in the past decade. They may change the pricing a little bit but is that an innovation? Of course not! :) The company changed the names just for the sake of change. Unfortunately, we can always see these practices in the market nowadays.

As Paul Kedrosky mentioned, “new products took much longer coming than anyone expected“. People sometimes underestimate the difficulty of commercializing technologies because companies like Apple and Google make it look so easy. However, how often have revolutionary products/technologies, like the Internet, radio, TV, got invented in the past? We need to understand that only breakthrough products can produce sustainable strong growth to the whole economy.

Discipline not Innovation

While these conclusions sound reasonable, the management guru, Jim Collins, has a different view. He thinks that the economic turmoil happened because companies lost discipline. Because people tried to do things differently all the time. He argues that our economy was not lack of innovation. Just think about those hedge funds, derivatives and creative financial engineering. Companies only tried to make things more complicated and forgot about their core values. We sometimes tend to rely too much on innovation to produce high growth.

At this moment, it’s hard to say which side is correct as Jim Collins won’t talk about this topic until his new book comes out and he still hasn’t started writing yet :) . But in my opinion, insufficient innovation may have correlation to the economic problems but it shouldn’t be a cause. Taking on debt that you can’t repaid, buying a house that you can’t afford, and investing in derivatives that you don’t understand. I call them greedy or insufficient satisfaction ;)

Photo source: Jason Nicholls@Flickr

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