Tag Archives: paradigm shift

iPad Bet Revisited: I was wrong (sort of).

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It’s always been a peculiarity of prediction making that we frequently hear the boasting over accurate guesses but rarely hear of the admission of (more frequent) bad bets. I thought I’d start the New Year (I intended to write this post last week but was distracted) by acknowledging a bad bet in my own blog going back a couple years. Back in October 2009, my longtime friend Brad Kay posted on his blog how he believed the combination of iPad and Bumptop would “forever change the computing experience as we know it”. You can view the exchange on his blog here.

I pounced on the statement for a few reasons. One, those kind of grandiose statements are always suspect to me. They roll off the tongue easily but often without  definition or context. I took issue with Brad’s statement on two fronts:

What does it mean to ‘forever change the computing experience as we know it’?

Change it how? Would we all be using iPads in two years? What percentage of the population needs to own iPads and use them a lot to constitute ‘changing the computing experience as we know it’? The statement sounded suspiciously like ‘paradigm shift’ talk and I found that hard to believe given the two-year event horizon. Paradigms don’t shift, they drift. Change happens slower than our sensationalistic media would lead us to believe.

For what it’s worth, I still stand by this point, but the more important piece is what I wasn’t seeing at the time. That brings me to the second issue I had with Brad’s prognostication.

What is the functional role of the iPad in a world of iPhones, laptops and desktop PCs?

I had trouble understanding what the iPad was going to be used for. Like many other nay-sayers at the time, I was trying to understand where the iPad fit for those of us who had an iPhone and a laptop. In several blog posts I tried to imagine how people would do much of anything productive on the iPad. I argued that most folks would not give up their laptop as a work tool. Conversely, in terms of checking email, visiting Facebook, watching YouTube and tweeting, my iPhone seemed sufficient. Why would I elect to lug around yet another device in my already heavy satchel?

And that’s were I was mistaken. I was assuming two things. First, that it was a zero-sum choice and second that productivity was the driving force behind acquiring an iPad. What I was missing was that the iPad, unlike any device before it, fits in a novel modern need set – one that has never existed before because we didn’t have the surrounding backbone and opportunities to warrant it. That need set is of the small task producer-consumer role we all play in varying degrees. In our multitasking lifestyle we now are rarely ever in a purely consumptive or purely productive mode. Instead we do a little of each which is a relatively new behavior pattern for us. We post to Facebook while watching TV and we check and write emails while reading magazines. We flit from production to consumption and back many times each day as we dart from small task to small task and short burst of content to short burst of content.

The other piece I wasn’t getting at the time was the important role of the app developers in defining the iPad’s utility. The device itself didn’t really need a purpose so long as it was sexy and desirable (it was and is) and the developer community could imagine uses for it. Developers have certainly seen uses of the iPad that I’m sure Apple didn’t anticipate. Instead Apple built the device with hooks that allowed it to crowdsource uses. And unlike tablets in the past which were made with productivity in mind, Apple focused on consumption foremost leaving productivity to the app developers to dream up.

In hindsight, Steve Job’s description of the Pad as ‘magical’ was spot on. With magic, no one knows exactly what’s going to happen. The delight in magic is that it is surprising – exactly the joy the iPad delivers to owners who find uses for it they never expected.

I finally got an iPad2 this year (I skipped the first version) and have fallen in love with it. I use it for simple tasks and simple consumption. It doesn’t replace any other device I have, and I suppose in a pinch it is something I could live without, but it has changed the way I experience computing and I’m guessing it has done so for many other owners too. It isn’t in enough hands to be considered paradigm shifting in my opinion. Once you’re away from urban commuters the sightings of iPads drop precipitously, but its heading in that direction and if prices drop as usual, eventually iPads and their like will find their way into more classrooms, offices and homes.

So while today tablets are a long way from being the dominant form factor for digital experience, they are a consideration on the minds of anyone making anything in the digital space from new products, to new marketing, to new tools, to new operational procedures in business, to new entertainment distribution systems, and on and on and on. In that sense, its influence is certainly changing the computing experience as we know it.

So Brad Kay, I owe you a beer. You were right.

That said, the other half of your prediction – that Bumptop thing – not as much traction on that front. Maybe we can buy each other a beer?

Quantifying A Paradigm Shift

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For some months now I have had a friendly sparring session going on with my friend Brad. Last October, Brad posted to his blog a piece on iPad and Bumptop that I took issue with. My issue – to be clear – was less with the eventual outcome than with the timeframe. As followers of this blog know, I take a Now Not New outlook on technology and believe that despite the hyperbole and headline writing, the rate of adoption of technology is not quite as fast as advertised.

Clay Shirky wisely measures cultural revolutions (which I’m equating with the popular term ‘paradigm shift’) not by technologies but by enough people modifying their behavior because of them. I do not believe Apple’s iPad, or any tablet device for that matter, can possibly ‘change the computing experience as we know it’ in two years – which is the line Brad drew in the sand.

In a past post, I made note of the actual rate of MP3 player adoption into mainstream culture, noting that while it seemed that suddenly everyone had one, in truth the technology had taken nearly a decade to achieve the current ubiquity it enjoyed (which, incidentally is still less than half the population). Was this game changing? Absolutely. Did it happen overnight or even within two years? Not at all. Paradigms don’t shift, they drift and that presents opportunities and a mandate for calm, level-headed thinking.

Numbers talk.
Back to iPad. Brad playfully swatted my proverbial hornets nest when he Tweeted at me that at 2MM sales, he was ahead of his own schedule in terms of his prophecy.

I decided to do some digging to build my argument:

Apple has sold 2MM iPads worldwide, mostly in America. For arguments sake, let’s attribute ALL of the sales to America.

According to one source, the population of North America was approx. 340,831,831 in 2009*.

(*Its worth noting the U.S. census numbers for the U.S. are lower but that only 72% of people participated in the census in the first place.)

Working from the same first set of numbers above, 259,561,000 of this 341MM were internet users – or 76.2% of the population. That means 1 in 4 people weren’t even using the Internet yet which as an aside somewhat surprised me.

Attributing ALL iPad sales to North America, the 2,000,000 iPads sold are in the hands of approximately 0.58% of the North American population. That’s just a hair over a half of a percentage point. So yes, iPad sold faster than iPhone, and that’s a neat short term stat, but within the perspective of the internet-using population we’re talking fractions of a percentage point here.

As an interesting aside (thanks to my friend Jim for pointing this out) when the government went to switch from analog to digital TV in 2009 anywhere from two million to six million U.S. homes still had rabbit ears on their set top. Ask a techie and 2MM in terms of an iPad is a paradigm changing mass. 2MM in terms of legacy rabbit ears is a fringe minority. Subjectivity is a funny thing.

Ok, for argument’s sake, let’s peg a ‘paradigm shift’ at perceptual ubiquity in the marketplace. Per this study MP3 players enjoy a 44% market penetration in 2010. They feel pretty ubiquitous right? They’ve changed entire industries after all and it seems everyone owns one so I’m going to use 44% for now (we can revise later).

Let’s assume Apple iPad sales will continue at pace moving forward, even though some people are beginning to back away from this bullish outlook. I’m feeling generous, so if Apple sold 2MM iPad units in two months let’s give them 1MM in sales per month in perpetuity. That’s fairly liberal I think as the early adopters’ enthusiasm is being assumed as ongoing and applicable to everyone.

By this figure, to be in the hands of 44% of the North American population (150MM people), thereby equating with the iPod in terms of game-changing impact for a significant proportion of the population, Apple will have to sell iPads, at 1MM units/month, for the next twelve and a half years.

Unfair to put the burden solely on Apple when Samsung, HP and Dell are all working up tablets? Okay, let’s double the sales figures per month for tablets. Even at 2MM units per month you’re still looking at 6 years to reach 44% of the population.

Driving the point back to my friend Brad’s two-year plan; to put a tablet in the hands of 44% of the population in two years, you’d need to sell 6.2MM units per month beginning on day one. That’s very aggressive in a new category wherein the market need being met is poorly articulated at this point.

To those arguing with my subjective benchmark of 44% pegged to the MP3 player, this brings us to the definition of paradigm change. First, MP3 players are more appropriate than say iPhone/smartphones because the latter has even less market penetration. Second, the free (mis)use of phrases like ‘paradigm shift’ and ‘change the computing experience as we know it’  and the running-around-with-our-heads-cut-off  it creates is precisely what I am taking issue with.

To call something a paradigm shift, which is defined as a fundamental change in approach or an acceptance by a majority of a changed belief, attitude or way of doing things, it must impact the behavior of a larger population than the smart phone (currently about 10% of the marketplace) or iPad do. Not by a little… by a lot. By the definition of the word, even the MP3 player/44% example is not a valid basis.

By contrast, according to this nifty website there have been about 153,073,000 PCs sold in the world this year. That includes laptops, desktops, and notebooks but not handhelds. That’s a paradigm shift in process (that was at its early stage three decades ago). Smartphone and tablets are still at their early stage. Will they take three decades too? Probably not. But they won’t take two years either.

So why am I making such a big deal out of this?

Overcoming NYopia.
My point here is not that the iPad isn’t a successful product by business terms. Apple continues to impact the computer industry and the iPad will effect lasting change on computing. No arguments here. Even more encouraging is the fact that you don’t need to create paradigm-shifting technology to do quite well in business. Hell, the people who reshaped rubberbands, colored them and call them Sillybandz are making a fortune on a very old technology.

The important realization – I’ll say it again – is that paradigms drift, they don’t shift. This gives us time to think and consider. This gives us the ability to make plans, create a strategy and spend wisely. This means we need to take a collective deep breath and think about things a little more.

Yet any time a new technology hits the media hypemachine, businesses (from Wall St. on up) have a collective freakout. Reason goes out the window, everyone begins truncating thought and talking in superlatives. Worse, companies begin allocating a lot of resources and money based on these knee-jerk reactions fed by poorly contextualized information. You can call this jockeying for early-mover advantage but this doesn’t always work. You can shoot from the hip in the name of ‘experimentation’ if you want, but experimentation without a process for learning is wasteful. And yes some companies do these things and still come out on top. But that’s the would-be actors in Hollywood dynamic. For every Tom Cruise there’s 10,000 waiters working for $8.75/hour. Shouldn’t we want to improve our odds a little?

So Brad my sparring partner, I do not contest that tablet computing, like the mouse, modem and microchip, will have a lasting impact on the evolution of computing. I do not, however, believe that will be experienced by the vast majority of people within the next two years. I also believe that it is this vast majority of people that most companies do business with. It might make sense to spend some time looking at how they really live, act and engage with the world.

They say fortune favors the prepared mind. Part of preparation is looking ahead. The other part is keeping your head amid the exaggeration flying around.

Paradigm Drift – TV in the Internet Era

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The Economist just ran a terrific feature on television. The piece underscored a mantra I constantly preach to clients, “now not new.” I’d link to it, but you need a subscription to get the articles.

The thrust of the feature is that despite the numerous cries of paradigm change and a death sentence for TV, the good ol’ boob-tube has fared quite well – better in fact that the rest of the media industry (music, news, publishers).

To quote:
“As a study through the Council for Research Excellence has shown, Americans spend more time watching television than they spend surfing the web, send emails, watching DVDs, playing computer games, reading newspapers and talking on mobiles phone put together,” [my emphasis]

The feature went on to note that overall time spent watching TV continues to increase. Interestingly, attempts to make TV-viewing more feature rich, portable, interactive, etc. have all met with resistance from television viewers. From DVRs to MobileTV to Hulu, Joost and YouTube, numerous alternatives and peripheral devices have been offered but fundamental viewing habits have not changed. In many cases the devices have had trouble finding large audiences.

This gets to the essence of Now Not New, which is the idea that what makes something novel – the newness of it – is not the driving factor businesses should focus on. Rather executives should look at how people use technology ‘now’, today, when the money is being spent and markets are being made. It’s easy to become infatuated with new devices and there is always a group of early adopters who wait in line for whatever is next simply because it is. The masses though, always trail, and often this trailing adoption takes much longer than the media hype machine would have us all believe.

Getting back to TV, one article amusingly titled The Lazy Medium points out that TV viewing remains a largely live and passive experience. That is, even with TiVo’s and such, 85%+ of programs in England are still watched at their live time slot and 60% of shows recorded on a TiVo are watched within a day. In this supposedly paradigm-shifting new digital world we are not only watching more TV than ever but even with the power to enjoy our programming on demand still largely plunk ourselves on the sofa at the time broadcasters ask us to. The technologies available may be new but they’ve yet to fundamentally changed our behaviors en masse.

Slow to change, at least by today’s standards.
Behavioral change among any sizable population tends to be much slower than people think. While celebrities and sensations seemingly appear overnight, in truth they often labor in obscurity for quite some time before flashing upon our collective radar. Just as with watching the stock market daily (or hourly), tracking too much media buzz (a symptom of our age) creates a sense of erratic, endless flux where we’re all always playing catch-up as something new is introduced by the minute. This can obscure more useful trendlines like broad adoption. We also don’t tend to notice the failures that just silently drift away after their 15 seconds of fame. They don’t make good news stories so why cover them? In our media, the story is always about what’s new, what’s coming and what’s next. Even if there’s no reason to believe it is anything more than just new at the time the stories run.

Admittedly, relative to centuries (or even decades) passed, behavioral change is happening faster. The relevance of this, however, in business terms, is a matter of which perspective you choose to take.

Futurist Alvin Toffler wrote a terrific book called The Third Wave which was a treatise on the increasing rate of change and the new third wave of innovation that was sweeping across the planet at the time it was written (1980). Viewed as he did, in terms of centuries, there’s no doubt things changed much faster in 1800 than in 1200 and are changing faster now than in 1800. That’s a useful observation in some contexts.

For companies working in today’s frenetic environment however, the rate of change – and by this I mean behavioral change that leads to market leadership shifts and lucrative new categories of business – is much slower than often expected.

For example, Apple’s Newton appeared in 1993. The PDA concept didn’t really catch on until around the new millennium and it’s only in the passed few years that smart phones have seen some broad utility. Part of this is due to continued technological innovation, part is due to infrastructure (broadband, 3G, etc.) and part of it is behavioral – it took people a while to figure out what they really needed a PDA-type device for. This latter piece is still being ironed out by thousands of app developers building tens of thousands of apps – very few of which, its important to note, see much broad usage.

To be sure, the path to the future is paved by experimentation. However, companies should be cautious before deciding to be one of those pioneers. Being first doesn’t always mean being number one in your category should that category actually emerge as a marketplace.

The bleeding edge and bleeding out.
I would offer that experimentation is on the leading edge of change waves. It is followed very closely by industry sensationalization. This happens because there are a lot of media channels all competing to ‘break news’ (and thereby stay in business). As such, the media will latch on to anything, regardless of how unproven, and present it as the beginning of seismic change.

This frontline of experimentation and subsequent hype turns into first-mover entrepreneurialism. Small start-ups get funded and develop largely experimental products and services to offer consumers.

Then there is often a culling of the herd where new technologies and the numerous startups that cluster around them begin to suffer because the aggressive adoption they expected doesn’t happen quite as fast as anticipated. The venture capitalists sometimes pull out, or the technology becomes obsolete before it reaches a tipping point. Still at other times the companies themselves become unsustainable due to how they’re structured (see ‘DotCom bust of 2001′). Finally, at some point still later one, broader acceptance is gained. This happens when the improved versions of these technologies – which reflect the hard-learned lessons of market realities and consumer demand – are taken up by enough people to deliver broad utility. Then, and only then, does a meaningful change take place wherein markets arise and empires are built.

As an example, look at digital music, a technology held up for its paradigm changing, industry decimating, distruption. MP3 players made their debut in 1998 (it was a RIOPMP300, not an iPod). Apple’s first came out in late 2001. But even Apple’s first few iPod versions had very modest sales. It wasn’t until 2005 that iPod sales began to escalate. So while today it seems like MP3 players blew up the music industry overnight, even by 2005 only 11% of the U.S. population had MP3 players. In fact, according to a 2010 Arbitron study, only 44% of Americans own an MP3 player today (get the study here). That’s still less than half the population a decade into the “paradigm shift”. More people have PCs, TVs, and mobile phones. This makes MP3 technology more of a paradigm drift in my eyes. I’m not contesting that digital music technology has made a mess of traditional music industry models and changed the way we engage with music. However, it did not happen overnight, it happened over a decade and still has a way to go before the technology becomes truly ubiquitous.

Compared to the 1800′s, a decade might represent rapid change. Compared to today’s business environment with Moore’s Law and increments defined in ‘Internet Years’, not so much. It’s all about perspective. For academics looking across centuries is enlightening. For businesses having a clear look across years is probably more helpful.

Paradigm Drift – TV in the Internet Era
My intention here is not to say change is happening so slow it can be ignored. It is, however, to note that change is happening slowly enough – from a business perspective – that it can be addressed. The Economist piece points out that while digital technology has created havoc in industries like music and news (and more recently, book publishing) the television industry has adapted quite well. That should offer a ray of hope to businesses contending with change.

Television still faces hurdles – from a declining portion of revenue coming from advertising to a polarization whereby mass hits are sustainable and smaller, less popular programs struggle more. There is also the matter of interactive media and the blurring of lines between TV screens, laptop screens, smartphone screens and possibly tablet computer screens (which I believe will neither has the paradigm shifting rate of change or broad adoption currently being set as an expectation by the media machine). However, goliath, bureaucratic, television is faring okay. It is still the dominant medium of our time, even though its death was predicted with urgency decades ago.

Businesses, take heart. Paradigms don’t shift, they drift. Change happens but it is not something that will necessarily uproot an enterprise overnight. It can be addressed if it is attended to (vs. denied, as the new and music industries did during those years change was permeating mass culture).

Sure, keep an eye on the road ahead, but don’t let the deluge of hype and hyperbole that is at the vanguard of change unbalance your business. Focus instead on how people engage with change the here and now. Waves of change might be impossible to predict, but if you surf along with your customers, you can align what you’re building now with what they’re asking for now. This is supply and demand and one sure way to keep the register ringing as the months, days, years and decades drift by.


Few people buy something ‘like you’ve never seen before’.

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patselfonbackA moment of self-indulgent back patting here:

This article in the New York Times does a nice job pointing out something I have mentioned in this posting and more recently in this one.  This has everything to do with Now Not New.

While it’s geek chic to talk about paradigm shifts and technological revolutions, the reality is, people like the comfort of a frame of reference.

If something is truly ‘like nothing you’ve ever seen before’ disorientation comes alongside curiosity. Without a sense of how a new technology fits into their lives, people may be momentarily curious but will soon move on.

It’s worth noting, this also holds true for all the jibberish industry jargon that circulates around the Internet space. People will listen, initially, but if it’s too hard to decipher or sounds like SAT-wordwashing they’ll move on.