INNOBLOG

We (and many others) have been tracking Googles steadily expanding low-end disruptive challenge to Microsoft Office. A year ago Google acquired online document server Writely, then it launched an online spreadsheet app, and then combined the two into a free software bundle that lacked many of the advanced features of Word and Excel, but enabled universal access, online collaboration, free storage, platform independence, and automatic version control. Now, unsurprisingly, comes word that Google is readying low-end, online, collaborative presentation softwareputting PowerPoint in the cross-hairs.

Microsoft, clearly, faces an Innovator's Dilemma. What can it do to respond? Has anyone here used the new collaboration tools embedded into Office 2007? Are they good enough to obviate some of the advantages of Google Apps? Or are they clunky, complex, slow...?

Earlier this year 60 minutes ran a segment on Geek Squad, a group within Best Buy that provides residential and commercial computer support services. Like any online article, the piece has become more interesting as people add their comments. Computer aficionados think that the geeks aren't skilled and that their services aren't good enough, while the tech-challenged sing their praises.

This isn't too surprising if you look at the company through a disruptive lens. Geek Squad opened up computer services to a group of nonconsumers that were previously locked out of existing solutions because they weren't easy to access and were too complex. Tech savvy consumers could always make upgrades to their computers and repair them on their own, and large corporations have IT staff to service their computers. The average less tech savvy customer or small business owner that purchase their computers online or at big-box retailers will run into problems with their PCs, such as losing files, busted displays, or keyboard keys that fall off... It is a hassle for these people to call the manufacturer and these problems usually happen right after the warranty ends and its a huge pain in the butt to be put on hold with tech support only to be told that you can't fix it yourself. Geek Squad and its services provide a simple, convenient solution to this problem for this group of customers.

Best Buy purchased Geek Squad for $3 million in 2002 during a time when analysts were worried that Best Buy was juggling too much. In 2002 Best Buy's same-store sales were declining and the stock was hurting from the $696 million they paid to acquire Musicland, a mall-based retailer of CDS in early 2001 in the hopes of capturing more music sales. The timing could not have been worse as Internet downloads hurt CD sales and it become an expensive write-off for the company. Analysts worried that Geek Squad would follow in Musicland's footsteps. Geek Squad was a new business model for the big-box retailer. The core customer, the target job to be done and the way they would make money were all different -

- Core customer: tech challenged, older people, time-crunched vs. tech gurus who know what they want and upgrade their computers for fun

- Job to be done: get my files back, get my computer to turn on, replace the key that came off vs. should I buy a Dell laptop or an HP? Is this the best optical mouse for gaming?

- What they're selling: computer support vs. computers and computer accessories

- How they're selling it: a la carte services (e.g., $49 for a printer hook up to your computer) vs. computer parts, accessories and warranties

Geek Squad has proved to be a great business for Best Buy as they transition their strategy from pushing gadgets to serving customers. Best Buy should earn $280 million in operating profits on just over $1 billion in sales in 2007 according to Piper Jaffray analyst Mitchell Kaiser and has estimated the home and small and medium business computer support services market at $20B.

Geek Squad gives customers the help they so desperately need and are willing to pay for (as shown in the impressive revenue figure) as more and more of their critical data is stored on computers, such as personal tax returns, small business financials, and precious digital photos of the family.

Have you tried out Geek Squad? Do you think they will get disrupted? Perhaps most importantly, what do you think of their mode of transportation (see photo) :-)?

Lifecasting was born on March 19, 2007 when 23-year-old Yale-graduate Justin Kan launched his new website Justin.tv, a 24/7 live streaming broadcast of his life. With a mobile webcam strapped to a baseball hat, a high-speech cellular uplink and a battery pack in tow, Kan broadcasts his daily activities which can range from checking his email at an internet caf, going on dates with Justin.tv fans, or discussing the business strategy with Justin.tv co-founders.

Justin.tv was conceived six months ago as a new business venture and has entered the budding internet video space with a low-end disruptive strategy. After a brief scan over comments left by Justin.tv fans, it appears as though Justins lifecast addresses the consumer "job -- "make my workday more interesting and website designer Emmett Shear has equipped the website to get this job done. The audio/video quality is far from perfect and often stutters and freezes, but the quality is "good enough for those who are interested in getting a peek inside a day in the life of a stranger. When Justins activities are particularly mundane, viewers can discuss Justins life in one of the 23 embedded chatrooms, watch clips from earlier broadcasts, check out Justins daily schedule, or post suggestions on what Justin should do next. At any point in the workday, Justin.tv fans have multiple options for engaging with Justin and other fans.

Ultimately, Kan and friends will package and sell the mobile webcam technology and personal website to consumers who want to stream their own live video diary. In time Justin hopes to create a community of lifecasters whose websites will mimic television channels. With multiple simultaneous lifecasts, viewers can "tune in to their favorite personality, chat with others about the content, or directly interact with the lifecaster via text or instant message.

After appearances on the Today Show and ABCs Nightline, Justin.tv has gained its share of fans as well as critics. Many predict Justins lifecast will end once the novelty wears off. But what appears to be an exercise in vanity is in fact the collaborative effort of a few twenty-somethings to democratize the media. In an interview with the San Francisco Chronicle, Kan identifies the potential applications for live video broadcasting in different contexts, "Imagine what you could do if you had the ability to broadcast live video from anywhere, anytime. It changes the way news is gathered. It makes a whole new kind of travel show possible. It allows the broadcast for sports that arent large enough for ESPN. With this statement in mind, Id like to hear about some of your ideas about the other potential applications of this technology. Is there a future for lifecasting?

See:
"Asian Pop: Man with a Cam. SFGate.com. March 27, 2007.
"Justin Kan Vlogs 24/7 at Justin.tv. Washingtonpost.com. March 27, 2007.
Justin.tv