Below are detailed, chapter-by-chapter changes so that faculty using v. 3.0 of the book can make a quick scan for areas their syllabi & teaching material might need some updating. Also note that I’ve personally updated all quiz and exam questions provided in faculty materials. I hope this is helpful!
– John
Setting the Stage
- New intro information on the sharing economy, the emergence of monster Chinese tech firms, updated stats and goose bump-inducing examples (including a photo of the space stations 3D printed tool and a mention of Google’s Alphabet),
- A much-needed addition of female founders to the “It’s Your Revolution” section. Payal Kadakia of ClassPass gets a call out, as do Jenn Hyman and Jenny Fleiss of Rent the Runway (who also get their own chapter).
- New data on several topics, including tech-fueled M&A, and tech industry hiring trends.
- The Pages Ahead previews the book, including new chapters and content.
Strategy & Technology
- Added discussion of new delivery players (Amazon, Instacart) to FreshDirect example.
- Replaced CapitalOne differentiation example with Apple. Now relates Apple Store to differentiation and distribution channel, and the role of these efforts in creating the most profitable firm in the US and the largest quarterly profit in worldwide business history.
- Additional information about the extent of OpenTable’s network-effects-fueled monopoly-like dominance.
- Info on Supreme Court making technology-enabled business methods more difficult to patent.
- Info on streaming earning more than digital downloads for Warner Music.
Zara
- Improved discussion of Zara in-store use of mobile devices to gather customer insights that can inform product design.
- New information (including a video) demonstrating Zara’s use of RFID to streamline operations and better serve customers.
Netflix
- GameStop struggles added to discussion of the atoms to bits shift.
- Better discussion framing content as a unique (highly differentiated) good, empowering suppliers with exceptional bargaining leverage. This helps students return to the Five Forces model and see how product offering (commodity vs. differentiated goods) influence strategic thinking.
- Updated stats and new data throughout, including information on HBO’s new streaming-only service.
- Info on Netflix’s new original content (including movie offerings) is included in this update.
- New charts added on homes with streaming services (comparing leaders) and home broadband usage.
- Latest information provided on Netflix international expansion and challenges in certain markets, especially France and China.
Moore’s Law and More
- Note that the discussion of disruptive innovation and the bitcoin minicase is now broken out as a separate chapter, following this one.
- New video showing Gordon Moore discussing the 50th anniversary of Moore’s Law. Students may find footage of the semiconductor fabrication process to be interesting.
- Updated information and stats on the Internet of Things.
- Streamlined discussion of material alternatives to silicon, adding state-of-market updates while reducing overall content.
- Significantly updated section on Watson, including firm’s new efforts to license the technology. Video of the firm Elemental Path’s Cognitoys Dinosaur helps illustrate the consumer potential for Watson, and its ability to become a service empowering entrepreneurs to make the impossible become possible.
- A new minicase “Mickey’s Wearable” discusses DisneyWorld’s use of the MagicBand and MyMagic+ systems for streamlined park access, an improved customer experience, data gathering and analysis, and more. The development of the effort is discussed, including challenges associated with large scale project design, planning, and implementation. A video showing the technology in action helps illustrate how the technology is actually used at the park.
Disruptive Innovation
- Now a separate chapter.
- Updates throughout, including current information on bitcoin and positive statements by leading banking firms and finance executives regarding the potential for the blockchain in industry innovation.
Amazon Chapter
- Very large rework of fulfillment operations discussion, including two videos of new Kiva robots initiative and the benefits that robotics offer the firm.
- Sidebar “Amazon: Your Campus Bookstore“
- AmazonSupply is no longer offered. New effort is Amazon Business.
- Mention of Amazon’s increased capital expenditures – largely targeted at fulfillment centers and cloud infrastructure – as a reason for the firm’s recent profit dip. Primes the pump for accounting by pointing out that the capex spending increase is visible in the operating cash flow vs. free cash flow gap.
- Same day shipping in 14 cities mentioned
- Failed Amazon Elements diapers experiment mentioned
- Inclusion of video on the new Amazon Dash Button
Network Effects and Platform Creation
- New key term: social proof is introduced.
- Several new examples introduced throughout the chapter. Apple Stores, CurrentC, Kickstarter campaigns.
Social Media
- Extensive update of statistics. Includes more coverage of the impact of messaging apps. Slack, the world’s fastest growing business app and a $2 billion firm shortly after its first birthday, is also mentioned.
- New chart of top mobile apps underscores social impact. Six are messaging, all are social.
- Streamlined the blogging section.
- Introduced the key term SEO in the paid, earned, owned media section, conveying the importance of inbound marketing to improving a firm’s search rank.
- Added Richard Branson and Ben Horowitz to examples of executive bloggers.
- Streamlined the wiki section.
- New Sermo saves a life example (powerful)
- Streamline social media section
- Streamline and major rework to Twitter section.
- Includes information on Twitter Fabric platform and the novel method of expanding the firm’s revenue and reach by embedding itself in the apps of others.
- “While you were away” is clarified inside Twitter’s otherwise uncurrated streams.
- HedgeStreet is now renamed Nadex
Sharing Economy
- Offered a more precise definition of the sharing economy.
- Information on San Francisco’s “Airbnb law” capping rental at 90 days.
- Peer-to-peer financing sites and clashes with the SEC are also now detailed, along with a shift from the original mission of citizen-lending to one where most funding is provided by large institutions and the wealthy.
- The discussion of “Social Media and Trust Strengthening” gives examples of system weaknesses, such as evidence of TaskRabbit sub-contracting by highly-rated suppliers.
- This same section also includes important information on how crowdsourced ratings can reinforce crowd bias and penalize minority participants in the sharing economy. Some tactics for combatting bias are introduced, and this creates an opportunity for additional class discussion on technology ethics.
- Airbnb minicase updated to include information on law violations and changing attitudes in some municipalities. A new exercise question encourages students to think like lawmakers and make a list of the pros and cons of allowing similar services, and any concessions they feel they should extract from providers, if it allows such operations to occur.
- Uber case includes many new statistics.
- Details on several incidents that have led to bad press, as well as how technology is used by Uber to improve trust and safety.
- Coverage of the firm’s new API platform and how this leverages partner apps to expand Uber’s reach, making Uber a platform play.
- Ubers challenges in China and India are detailed, and related to timing and the creation of strategic assets.
- A side bar offers valuable insight on the peril of estimating a disruptive market by examining the current size of existing players. Uber’s ‘bigger than market’ growth is compared with initial underestimation of the mobile market by McKinsey and AT&T, as well as the source and cost of that error in judgment.
Facebook Chapter
- Chapter’s new name reflects the heavy emphasis on the realities of competing in a mobile world. The chapter helps students understand how mobile differs from the desktop, as well as strategies firms can leverage when going mobile first or building market share for mobile users.
- Students are challenged not just to think about mobile as a limited platform, but also as one that can do much more than the desktop and act as an innovation catalyst (think sensors, location services, address books, voice interaction, usage pattern detection, and more). There’s a saying in computer science that “a computer should never ask you a question that it should be able to work out the answer to.” Well, a smartphone can work out much more! Sensors, the address book, location services like GPS and iBeacon, easier payment methods with form fill like Apple and Android Pay, links to robust APIs (many that are mobile), and ubiquitous voice-to-text are among services making mobile better in many innovative contexts.
- The remarkable rise of Facebook’s Messenger app (now at over 700 million users worldwide) is chronicled, including what worked, the potential for the business, and its emergence as a platform for apps, payments, customer service, and more.
- Data has been updated throughout the case, including new information on Oculus Rift and WhatsApp.
- Many of Facebook’s recent app initiatives are mentioned, including several which have struggled, such as the Hello dialer, Paper, Poke, Slingshot, Rooms, and Moments.
- Facebook/Bing partnership referred to in earlier versions has been cut given firm’s scaled back efforts, new info on FB search is offered.
- “What’s it take to run this thing?” has been reduced in size, while still giving students a sense of the firm’s distributed hardware needs, cost, technology, programming language, and open source
- Some areas were juggled into a new section titled: “Lessons from Facebook as an Apps Platform: Early Promise, Continued Challenges, Mobile Missteps”
- The ad section is now called “Advertising and Social Networks: A Challenging Landscape but a Big Payoff” to reflect Facebook’s proven track record in advertising. Old material that speculated on challenges that didn’t materialize has been cut, while new material shows what’s working, including an emphasis on mobile ad growth, data effectiveness, the Facebook Audience Network ad network, “Instant Articles” and the success of cached and locally served video, and more.
- New information on org closes the case, including a discussion of benefits, critique, and a new video of Zambian users discussing the effort’s impact on their lives.
Rent the Runway
- An entirely new chapter illustrating the creation and growth of what many consider a standout of the sharing economy.
- Young female entrepreneurs are profiled leading a tech-centric, disruptive firm at a time when all are concerned about industry diversity
- Big data’s impact across the firm, from customer service to sourcing to operations is illustrated.
- Chapter discusses how social media can influence a business, and how the firm has leveraged customer social sharing for success.
- The firm provides an excellent example of building network effects through a win-win for customers and suppliers
- The company’s tech-fueled operations, and necessary human element, are detailed – essentially a reverse logistics business where everything sent out is returned, prepared as if it were new, and where timing and quality are key
- The firm’s move into showrooms provides an opportunity to illustrate when retail makes sense.
Understanding Software
- Case is made regarding the importance of software architecture in M&A, firm valuation, and firm partnerships.
- Old graph of OS market share was removed. It’s notoriously difficult to find consistent and reliable numbers. Instead a link to a very neat time and region interactive showing smartphone data worldwide has been included. An exercise question will ask students to look up market shares, compare them, and ask why the numbers vary so much.
- Significant updates to the section on distributed computing, now titled “Distributed Computing, Web Services, and APIs.” The old Southwest.com example of web services is replaced with one from the Expedia Affiliate Network, and the fact that APIs drive roughly $2 billion in Expedia sales. A new diagram accompanies this piece, replacing the one from Southwest.
- The Rearden Commerce (now Deem) section has been deleted.
Software in Flux
- Chapter already had a big rewrite last year w/info on Heartbleed and a new section on Apps and mobile. Minor tweaks this year:
- GitHub references have replaced SourceForge.
- Mentions new $1B plus open source players including HortonWorks, Cloudera, MapR, MongoDB, and Cloudera.
- Business models for the above firms are also briefly mentioned, pointing to OSS firms that now provide cloud hosting and additional add-ons and features for a fee.
- Description of virtualization is improved.
- The concept of Containers (behind the fast and massive rise of the firm Docker and its open-source effort) is also introduced.
The Data Asset
- Removed Tesco Firm’s recent struggles make it a less attractive, more nuanced firm to introduce in this context.
- New sidebar example of LL Bean allows students to see how business evolution influences technology choice (big data/Hadoop/NoSQL/cloud-based data warehouse) that drives systems for customer satisfaction.
- New sidebar example: Spotify’s EchoNest which uses machine learning and other tech-driven techniques to analyze and categorize music, identify tastemaker insights online via blog scans, and act as a personal DJ queuing up tunes you’ll most likely be interested in.
- Added information on Apple’s Research Kit in discussion of opportunities with data and healthcare.
- The failure of Google Flu Trends is offered as managerial caution in understanding the source and consistency of data over time.
- The concept of machine learning is introduced, as well as several new AI and machine learning examples, including software-‘readers’ making scientific discover, and the rise of machine-created journalism and other written content.
- The Caesar’s Entertainment minicase was cut. While the firm’s actions are a now-classic example of data-driven CRM, the firm itself has suffered significantly due to macro-factors in the industry and given the amount of new content in this year’s text, it seemed appropriate to retire this piece. Faculty who like the case can inquire with Flat World about customizing their current text to include this content from the older version inside the latest update (it’s nearly as easy as copy and paste).
Telecom Chapter
- Updated info on the predicted expiration date for IPv4 addresses (Summer 2015), plus info on Microsoft’s multi-million acquisition of IPv4 addresses from other firms, and Amazon’s $4.5 million+ purchase of the “.buy” gTLD.
- Info on 2015 FCC’s new definition of broadband where download speeds would run at a minimum of 25 mbps and upload speeds of three mbps.
- Additional information on spectrum rights, auctions, and the potential negative consumer impact of high-stakes spectrum bidding wars.
- Updated info on LTE average speeds (often averaging above 40Mbps download and near 20Mbps upload).
Security
- Sony, Anthem, and OPM hacks mentioned among recent examples.
- Added projected loss to US tech businesses in the wake of the Snowden revelation.
- Ransomware added to malware description list.
- To streamline chapter, removed section “All the News that’s Fit to Print (brought to you by scam artists)“. An earlier reference to scams in adware raises awareness of ad scams and partner integrity, so this section seemed redundant.
- Definition of multi-factor identification added, along with examples of why even these systems are not foolproof.
- Information on Apple Pay & Android Pay’s use of multi-factor authentication, biometrics, encryption, and tokenization is included as an example of how mobile devices are improving electronic payment security.
- Updated figures, graphs, stats.
- Intro and last chapter sections mention firm’s evolution to Alphabet http://abc.xyz
- Information on Google prioritizing ‘mobile friendly’ sites in searches on mobile platforms.
- Cut sidebar “Trendspotting with Google” to streamline chapter. Exercise question encouraging students to explore Trends from a manager’s perspective is still in the chapter.
- Cut sidebar “Not Exactly Google’s Idea” to streamline chapter.
- Ad Rank formula updated according to Google’s new guidance: Ad Rank = f(Maximum CPC, Quality Score, expected impact of extensions and formats)
- Google’s latest guidance on how actual CPC is calculated is also included.
- To streamline the chapter, the chart on most costly keywords has been cut to streamline chapter. A range price and likely buyers of costly keywords is instead included in the section.
- The section “Mobile Apps and the Challenge for Google Search” is no longer a sidebar. The section includes a definition and example of deep linking – a hot topic in advertising, especially as it relates to mobile and apps.
- Google’s new mobile ad formats are mentioned for opportunity to keep users in Google products vs. apps with vertical search, but it’s also pointed out that these cause channel conflict with billion dollar plus customers and raise the possibility of further antitrust issues.
- Description of Google’s work to partner with Acxiom (similar to Facebook’s work) to demonstrate online ad influence on offline purchasing, as well as attempts by involved firms to allay privacy concerns.
- Fraud section includes new information, including information on social influence fraud.
- The term and definition of Turing Test is introduced.
- Point is made that ad fraud is now considered one of the most lucrative forms of cybercrime, largely because security for banks, credit cards, and other efforts has become tighter.
- Google is no longer the default in Firefox
- Updated information on Google’s European antitrust woes (vertical integration, favoritism, and Android concerns).
- Faculty should note that although Google (and Facebook) have said they no longer plan satellite Internet to underserved areas, Google is still an investor in O3b, which already has satellites in place blanketing 70% of the globe and serving areas without access to fiber. Those who would like access to satellite internet for themsevles should know that such services are available through the solutions offered by companies like HughesNet.
- The concept of the MVNO (Mobile Vitual Network Operator) is introduced in the context of Google’s Project Fi wireless service.
- Cyanogen, the open-source, venture-backed, Google-free Android startup is mentioned in the discussion of Android fragmentation.
- Google Wallet section is removed, replaced with new info on Android Pay
- Google+ section has been replaced with Google Social section, mentioning the breakoff of Hangouts and Photos from Google+.
- Global issue includes new information on Spain’s policies that required a shutdown of news.google.es, and France’s attempts to extend its national laws beyond its borders to impact the entire Internet.