Gaining Personal Productivity on the Apple Revenue Curve

| Analysis

There is a direct relationship between revenue and focus in products. Apple stays on the high side of that curve while many others flop around on the low side. That means that if we want to increase our own productivity, we should avoid excessive use of technologies still in search of a revenue model and focus.

Everyone -- or most everyone -- wants to be productive. Any life coach will tell us that to remain productive, we have to remain focused. Tools that help us stay focused are worth paying for while tools that are diffuse, hard to use well and hard to monetize into value are time wasters.

Take a look at this chart.

 

focus #1

With Apple TV it's incredibly easy to focus in on what you want. iTunes -> TV Shows -> Networks -> FOX -> Dollhouse. It's that simple. On the other hand, drifting around on the Internet in general, there is no universal guide (yet) that tells one how to find a specific show, whether one has the plugin to watch it, what the saturation of ads will be. There's a lot of flexibility, but not much focus. As a result, a good business model is hard to come by, and we're spending too much time trying to organize a mess with things like boxee and the new ZeeVee (not yet on Mac).

Here's another example of focus and, hence, user leverage.

 

focus #2

We've come to learn to pay for infrastructure, but not for services unless the services are highly focused and costs can be controlled. So, for example, we're willing to pay a fixed fee for access to the Internet each month. Or pay for the privilege of making a personal call to a cell phone number with high expectation that someone will answer -- even if they're driving a car in many states. Or texting.

E-mail and Twitter are somewhat less reliable when it comes to an immediate, guaranteed connection. The person may be off line and there's no certification that a POP message will ever be seen or acknowledged. It's a crap shoot.

Woven into the idea of infinite flexibility is that the value tends toward zero, so hardly any specific service of that kind is worth paying for. That's why e-mail clients are generally free.

Trying to monetize iffy propositions, like marketing via e-mail, which has struggled with its direct-mail, opt-in model and now Twitter is a lost cause. Lack of focus and utility leads to poor prospects for long term business models. That's what happened to eBay when it bought Skype: in an age when everyone wants to chat with everyone, eBay couldn't figure out how to exploit that legacy free service and use it to accelerate their own business.

I find it amusing that so many people are working so hard to extract money from Twitter, which uses the same fundamental technology as e-mail. It's a useful tool, but big money will be lost trying to turn it into the Golden Goose. In the end, people will just move on to the Next Big Thing, leaving a lot of investors duped.

Finally, here's one more chart.

 

focus #3

Newspapers are struggling with moving to the Web. No one wants to pay for a subscription to a local newspaper, dead in print, as it moves to the Web because there's so much replication and so much free stuff to chose from when one is stationary, at home or in the office. But when one is mobile, it may be worth having a newspaper subscription or two, if it's compelling, in an iPhone newspaper app. Wrapped in the convenience and mobility of the iPhone, an inexpensive subscription has utility and value.

Dying newspapers are in fantasy land if they think they can simply move onto the Web and charge for access as we sit at our desks on broadband.

Companies like Apple (and FOX/NBC Hulu) who provide a focused business framework for monetizing a technology are going to do very well in the coming decade. Others will just thrash around on the low end of the curves above, trying to extract something from nothing.

The interesting thing is that there's a big attraction for experimenters and hobbyists at the low end of the curve, but they engage because of the technical challenge and low cost. Extracting money from those endeavors is hard, even though they provide a lot of geek appeal in the blogs. We shouldn't confuse technical wizardry with either their profitability or our productivity.

What we have to decide, as professionals, is how far up the curve we want to be, how much we can spend, how productive we can get, and how we spend our time. Apple caters to that process more than ever these days, even if we didn't always realize it. It's why Apple customers have Macs, Apple TVs and iPhones.

Comments

deasys

Insightful—thanks, John.

jbruni

The part that just jumped out at me ? infinite flexibility entails a value approaching zero ? brings to mind the value of operating systems. People are willing to pay for OS X and for Windows but generally not for Linux. Perhaps, it’s because Linux is too flexible. Perhaps Window is too flexible in the same way:  It runs on too wide a variety of hardware. OS X remains focused, running only on Apple-branded hardware, and does not try to be all things to all people.

JonGl

OS X remains focused, running only on Apple-branded hardware, and does not try to be all things to all people.

Which is why the “hackintosh” mods will never really threaten Apple’s business model. People will pay the premium for productivity. (and those willing to hack probably aren’t willing to pay).  (said the guy who hacked OS X onto his Wind) wink

-Jon

ctopher

While I generally agree, I think the Newspaper analogy was a step too far. Newspapers are really not that flexible, and that’s a good thing.

Perhaps it’s because I’m an old guy, but I find the physical newspaper a more focused way to ingest the news. I may be able to get the same content (and more) on the web, but the “packaging” of the physical newspaper better fits my daily news reading.

Never mind the portability and ease of use of the paper, and never mind that in general, it’s easier to read text on paper than on a screen, I find that the paper has all the news I want in an easy to use form. I know that in an hour or so I can easily get local news, national news, opinion, sports and even comics without having to actively navigate. Sure I have to turn the page, but because it’s a familiar medium, I can quickly decide if there’s content I want to read. If not, I just keep turning. when I get to the last page, I know I’m done and because our newspaper is a good one, I know that I’ve gotten a good overview of the days events.

So move Newspapers over to the “More Focus” side of the graph.

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