Andy Grove’s biography by Richard Tedlow has an excellent account of the episode and the mistakes Intel made. Intel was on a high in 1994 having just released the Pentium which was received well by the market. Towards the end of 1994, a professor in Virginia discovered a bug in the Pentium’s FPU and started writing about it. This was the early days of the internet and the information spread quickly through newsgroups. Intel was already aware of the bug by this time and had decided to fix it in the next version of the processor. According to Intel, the bug did not impact most users – it was so small in comparison to other bugs in shipping products that it wasn’t worth the effort to pursue it as something very important. They decided to “just go about their business”.

What started as a minor bug covered by some trade magazines and on the internet soon became a major embarrassment with the mainstream media getting on Intel’s case. An Intel representative came on CNN and was dismissive of the bug describing it terms of the distance between the Earth and the Sun and how insignificant it actually was. Andy Grove himself posted to the com.sys.intel and wrote a “long winded” response. His post has an uncanny resemblance to Apple’s response to the antenna issue -

Intel:

The Pentium processor was introduced into the market in May of ‘93 after the most extensive testing program we at Intel have ever embarked on. Because this chip is three times as complex as the 486, and because it includes a number of improved floating point algorithms, we geared up to do an array of tests, validation, and verification that far exceeded anything we had ever done.

Apple:

The iPhone 4 has been the most successful product launch in Apple’s history. It has been judged by reviewers around the world to be the best smartphone ever, and users have told us that they love it. So we were surprised when we read reports of reception problems [...] We have gone back to our labs and retested everything, and the results are the same— the iPhone 4’s wireless performance is the best we have ever shipped.

Intel:

Not that the chip was perfect; no chip ever is. [...] After almost 25 years in the microprocessor business, I have come to the the conclusion that no microprocessor is ever perfect; they just come closer to perfection with each stepping. In the life of a typical microprocessor, we go thru half a dozen or more such steppings.

Apple:

To start with, gripping almost any mobile phone in certain ways will reduce its reception by 1 or more bars. This is true of iPhone 4, iPhone 3GS, as well as many Droid, Nokia and RIM phones. But some users have reported that iPhone 4 can drop 4 or 5 bars when tightly held in a way which covers the black strip in the lower left corner of the metal band. This is a far bigger drop than normal, and as a result some have accused the iPhone 4 of having a faulty antenna design.

Both companies are vehemently defending their product at this stage. Back in 1994, as Intel was trying to handle the situation, IBM resorted to a low blow and decided to stop shipping Pentium based PCs (There is a history to this too. Tedlow describes how Intel was largely disliked by their OEM partners at this time and IBM just took advantage of the situation). The resulting fall in the stock price forced Intel’s hand and they decided to replace the Pentium processors upon request. As Andy Grove wrote:

Our previous policy was to talk with users to determine whether their needs required replacement of the processor. To some people this policy seemed arrogant and uncaring. We apologize. We were motivated by a belief that replacement was simply unnecessary for most people. We still feel that way, but we are changing our policy because we want there to be no doubt that we stand behind this product. (emphasis mine)

As Tedlow points out even this response was too long and lacked grace. Just a simple “we’re sorry and will provide a replacement without question” may have been better. I’m sure Intel was right in their assessment that it was a trivial bug which they tried to communicate for a long time and failed. It’s the same in Apple’s case. Saying “We’re sorry, there was bug in the software. We’ve fixed it. Update coming.”, would have possibly prevented a lot of debate. In the minds of its customers Apple products “just work”. That is the biggest thing at stake here.

Andy Grove is recognized as one of the best CEOs the technology industry has ever had and Steve Jobs is right up there with him. It’s fascinating to see the similarities in how the two strong-willed leaders find it hard to let an “unfair accusation” go. Both know how hard they’ve worked behind the scenes to ship an amazing product and feel compelled to make that case to their users. But, as the Heath brotherswould say, maybe they need to move past their “curse of knowledge” and simplify the message.

Apple has waived the restocking fee if people want to return their phones. Nobody knows if the lawsuits will force a recall. It’s unlikely that Apple’s partners will abandon them like IBM did, but it’s looking like this story has a few more chapters in it.

I came across ESPN3 as I was trying to find out where I can watch the World Cup matches online. It works for someone who’s not obsessed with the game. When I started watching the games on ESPN3, I didn’t realize that it was accessible only because I had a cable connection from Comcast. Then I came across a post on NewTeeVee which explained the ESPN3 model. I went back to read a post by Bill Gurley that I had bookmarked on Instapaper but hadn’t got to (Instapaper is turning out to be another Google Reader. I can never keep up). It is a fantastic explanation of the economics of the TV business and why the vision of “free TV on the net” may never materialize. To summarize, the cable companies are the biggest customers of the content creators. The $32 billion of affiliate fees that cable companies shell out is what allows a lot of the content to be created in the first place and they are extremely wary of losing their customers to free online video. Their basic argument is – if the content creators don’t expect services like Hulu to pay any affiliate fees, why should they? This is why there are rumours of Hulu going behind a pay wall soon.

With the TV Everywhere initiative, which BusinessWeek has covered well, it looks like people will have to continue paying the cable companies irrespective of the device / connection from which they access video. I don’t mind paying somebody every month, but where is the innovation that the internet allows? Hopefully, Google and Apple can bring about the disruption that smaller players like Boxee and Roku haven’t been able to.

During the implementation phase, I built the server-side part (yes, I’m still talentless when it comes to visual and graphic design), while Ljuba built the iPhone app, which in my biased view has turned out to be the best public transit app on any platform. The people who judged the final projects this year seemed to agree since Transporter won the Chen award for the best project in the user centered design track. Version 1 of the application is in the App Store now and it’s free!

Here is a process book that I created as a deliverable for the class if you’re interested in the design process – from idea to working application.

This demo video shows how Transporter works:

In startup land, that’s pretty much one of the key aspects of customer development. Figure out the market or business model first – experiment and iterate to identify a replicable, scalable revenue model before stepping on the pedal. Chances are quite good that a product is world changing only in the entrepreneur’s head. It doesn’t matter if it was agriculture a hundred years ago or high technology startups today, some basic concepts remain the same.

Of course, the customer development methodology is a lot more than the one analogy I described above. I heard Steve Blank’s first class was standing room only last week! But, it’s possible to find lots of resources on the web. Here’s a good video series – part1, part2.

As part of the IOLab course, we worked on a bunch of mini-projects related to themes like the semantic web, controlled vocabularies, distributed classification etc. We spent around 15-20 hours on each project. The Flickr Tagr, which Ljuba and I worked on, was one of the projects that was in a complete enough form. Here’s how we described it:

Flickr Tagr visualizes photographs based on social classifications (i.e. tags). It allows users to search for photographs tagged with particular words while showing them additional tags related to the ones selected so far. The goal is to allow a user to quickly visualize the photos available for an arbitrarily selected intersection of tags, while exposing them to other tags they might find interesting. Users can also click on a photograph to see a larger version in a custom-built light box.

We thought the faceted search interface to Flickr was fun to play around with!

PowerMeter, Microsoft’s Hohm, WattVision, a YCombinator backed startup and others pull in data from smart meters and visualize it for end users. Studies have shown that providing data can help change behaviour, so the main aim is to reduce electricity consumption. The big guys like Microsoft and Google don’t charge for the service, but the startups have a revenue model based around the value add of providing access to the data and sales of hardware that prevents having to go through the utility. But, I think there is a third possibility that is around the corner, waiting for large scale deployments of smart meters.

When we were discussing information leakage in the privacy and security course I took in the Fall, I remember Doug mentioning that it is possible to study the electricity consumption pattern and determine which applicances / sources drew power based on the wattage consumed, duration it was on etc. Given a large enough corpus of data (with signals based on actual consumption, geography, number of residents) it should be possible to do it quite accurately. That should make temporal targeting of ads very feasible. If you open the fridge to get a bite to eat at an odd hour and load a web page when you get back to the seat, it should be possible to display a dieting ad. A shampoo ad after getting out of the shower? Of course, there are privacy implications, but this is a world where people are willing to share their credit card transaction details, so there should be takers for it if you promise a reduction in the power bill. Behavioural data is already being used for targeting ads online. This just uses meat space behavioural data. Creepy? Sure, but so was Gmail for about 1 month when it launched. The argument that only machines look at the data was good enough then and should be good enough in this case too.