Kevin Rose, Evan Williams and the Rise and Rise of the Product Factory

Sarah Lacy has written a great post on Kevin Rose’s new company. The former Digg founder is setting up Milk, a closed innovation shop that, counter to the current Silicon Valley driven incubator-trend, will focus internally on developing up a small number of big hairy audacious game changing products that use the mobile Internet as their enabler.

Firstly, I’d like to congratulate Kevin – I believe he has hatched an awesome plan. Why? He isn’t reliant on bringing on board a steady flow of ‘quality’ entrepreneurs and then melding them to create winners, instead he is using his nous and that of a hand-picked team of coders, thinkers and innovators to quickly iterate ideas and test their viability, pivoting and repurposing when necessary, but always moving forward with a portfolio of potential winners.

Secondly, I’d like to highlight that Sarah has quite rightly picked up on the similarities between Kevin and Evan Williams.

A few years back, Evan and I were having a series of discussions (here, and here)  around product factories – I was infusing product factory magic into a major research lab in Australia and he had set up Obvious along similar lines.

Fast forward four years and his “side project”, Twitter, ended up subsuming everything else in the Obvious pipeline to the point where Obvious fell by the way side. Twitter achieved massive traction and in many respects has been a game changer.

In contrast, I managed to get a number of projects out of my factory – one of which, Open Kernel Labs, has achieved major traction with its virtualization software on 1.1 billion handsets around the world – and more to come. Although we both moved on from our respective organisations, Evan has come full circle recently and is again building up a product factory.

I look forward to seeing how both of them iterate on the product factory concept, how this influences a counter-incubator culture and what they both bring to market next.

How To Win In Mobile Health

Analysts are predicting huge growth in the mobile health applications arena. However, I believe the market is chasing its tail and it is only those players who are bold enough to venture beyond the status quo and seek step change innovation who will succeed.

Firstly, what are the analysts saying:

  • PricewaterhouseCoopers states that 40% of adults in America would be willing to pay for mHealth apps, valuing this market at $7.7bn;
  • McKinsey’s found consumers have a high propensity towards paying for such services as a phone doctor. Their estimates put the US market at $20bn and worldwide at $50bn; and
  • Deloitte uncovered a desire amongst 50% of the consumers they surveyed to have access to a personal monitoring device that will act as a health coach, guiding them to make improvements to their health.

Drilling down, Juniper Research expects mobile remote patient monitoring to be a $2bn market by 2014 and Parks Associates believes wireless home health monitoring will be a $4.4bn market by 2013.

All in all, if the analysts are correct, this is a sizeable opportunity.

What though, is the right model for achieving success in this market?

Jane Sarasohn-Khan has some interesting insights in this respect. Traditionally, consumers rely heavily on some form of medical aid to cover all or some of their medical costs. She says, “When it comes to mobile health, consumers aren’t yet connecting the dots towards “my health” and value.”

She believes that it is perhaps better to be asking consumers not what they’d pay for a mobile health app, but instead, “What’s your health worth to you?”

I think she is right, but only partially. My theory is that we need to turn the entire health + mobile app paradigm on its head.

Let me explain what I mean by way of an example from the bricks and mortar end of the healthcare spectrum. Healthcare these days is more sickcare: 70% of the total healthcare cost is spent on the management of chronic diseases.

Faced with this reality and the desire to set up a new hospital, Nancy Schlichting, the CEO of the Henry Ford Health System, made an interesting choice. She recruited one of the world’s most successful hoteliers, Gerard van Grinsven, to design and run the new hospital in the township of West Bloomfield, which lies within the metropolitan area of Detroit, Michigan.

Gerard was previously a VP with the Ritz-Carlton Hotel Company, and freely admits that prior to his appointment in 2006 he had no exposure to the health industry. Yet there he was, tasked with bringing to fruition a 300-bed, $310m hospital.

Rather than following in the footsteps of countless other hospitals he took his inspiration from the Blue Ocean Strategy theory that to succeed you need to differentiate yourself so much from your competitors that you make them obsolete and force them to change. He wanted to create the Cirque du Soleil of healthcare.

His research uncovered that in healthcare 90% of the purchasing power lies with women. He also found that women are not satisfied with traditional medical care, they want programs that help them in their physical and mental well being.

Armed with this knowledge he set out to challenge the entire industry by creating an entirely new vision that would position his new facility in a completely different way. His premise was that rather than treating chronic health, a hospital should be more of a healing campus and their role within the community should be one of a health coach.

They set out to create an environment in which healthy people actually want to come to their facility to partake in activities and programs that will help them to stay healthy.

The result: the Henry Ford West Bloomfield Hospital is more of a community centre for well being than a typical hospital. For example, the main entrance looks nothing like a traditional hospital entrance. Drawing on his hotel industry insight that first impressions are what it is all about, Gerard created a northern Michigan small town main street effect – lots of activity, lots of nature coming in. In essence, the main entrance communicates wellness.

There is a wellness institute with 11 healing rooms, a body and mind studio, water therapies and alternative medicine practitioners. There is a 90 seat auditorium with a state of the art kitchen line that does cooking classes for people with diabetes, cancer, and heart conditions, but also for healthy people wanting to stay that way.

There is a retail space. There is a healthy cafe that seats 300 people a day, 300 people who come there for the food and ambience, not because they are visiting a clinic. Walking and biking paths are being built on the surrounding acres to let the community come and play. And finally, they are creating a Culinary Learning Institute for Healthcare in which they intend to teach other hospital chefs how to positively change their food culture.

Gerard believed his obligation was to change the way healthcare is delivered by really focusing on how they could become a health coach.

It seems he has succeeded. The hospital became cash flow positive after 12 months, has an extremely high retention rate amongst its 1,800 staff and is rated in the top 1% of hospitals in the United States.

I find Gerard’s story totally inspirational. For me the trick is taking this analogy and applying it to mHealth applications. I hope that as we explore this exciting arena you’ll keep Henry Ford in the back of your mind.

Chomping At The Bit: How To Find iPhone Apps

Australian serial entrepreneur Ben Keighran is starting to make waves in Silicon Valley again with his new venture Chomp. With fellow Aussie co-founder Cathy Edwards and funding from Ron Conway, Blue Run Ventures and other Valley notables the business is aimed at enabling iPhone users to find apps.

Chomp has received some solid coverage on TechCrunch and an interview with Robert Scoble (embedded below) in which Ben explains their value proposition:

Next Line On The iPhone Horizon: Micropayments

Apple has a tried and tested approach of creating complete, yet simple ecosystems and the one it has developed for the iPhone is testament to this genius.

However, ecosystems need to evolve or they devolve to the lowest common denominator. Much has already been said about the “commoditisation” of apps to very basic one offs with gimmick appeal.

Allowing for a deeper level of engagement within an app is key to this “appolution”. And one of the most important steps forward in achieving this in my view is to open the spigot for micropayments.

Om Malik has also called for this:

I would be spending a lot more if Apple extended the API to allow for the ability to transact within apps.” Nothing like buying a song, an application or a ringtone with a simple click, only to be billed in a batch, later. Such buying habits are the reason why we believe Apple’s iPhone could prove to be an ideal micropayments platform.

Top 5 UiPhone Rules: Building Successful Apps

As the cult of Mac gives way to the cult of iPhone, it’s worth putting a peg in the sand around a set of design rules that define what makes an iPhone app work.

John Gruber has posited an excellent starting point with one overarching guideline for iPhone UI design:

Figure out the absolute least you need to do to implement the idea, do just that, and then polish the hell out of the experience.

From this starting point he goes on to list a set of five rules or guidelines to continually parse against:

1. Each screen should display one thing at a time. That “thing” may be a list, but it should just be a list.

2. Minimize the number of on-screen elements.

3. Make UI elements large enough to be easy to tap; place them far enough apart that there is little risk of tapping the wrong target by mistake.

4. Eschew preferences as much as possible, and assume that nearly all users will use the default settings.

5. As you show more detail, conceptually you move from left to right – but it’s best to minimize how deep you can get while drilling down to the right.

Craig Hockenberry, who put me onto John’s “First Law of iPhone Development” reduces this to a one word iPhone principle: simplicity. As he points out, “doing as little as possible” can be your greatest challenge, but it will produce the highest reward – a successful app.

Craig’s methodology is to seek out the core function of your app and keep yourself true to this every time you work on it. He uses the example of Twitterrific, a Mac OS X client for managing your Twitter account. This, however, is not the core function of Twitterrific. Say what?

In fact he sees the core function, or the “nut”, of this app as being reading:

Twitterrific is all about reading what other people are doing, thinking, or experiencing. Even its secondary function, posting tweets, is related to reading. The posting interface functions as a way for you to give your followers something interesting to read.

Knowing this core function, his team at Iconfactory could manifest it within their iPhone app in a number of ways that you can read about in his post.

I really like both John and Craig’s approaches and encourage iPhone developers to adopt their thinking and build upon it.

MySpace Taps The RIM: Record Breaking Blackberry App

Designed to help Blackberry users stay connected to the MySpace social network, a new app from the Fox Interactive company has been downloaded 400,000 times in its first week. This goes a long way towards dispelling the unhipster Blackberry myth.

A Facebook app, which launched in 2007, has been downloaded 2.5 million times.

Android Followed iPhone, But Wait (There May) Be More: The MicroPhone

The Inquirer reportedly has knowledge of a Microsoft Phone, which we are dubbing the MicroPhone.

Thanks to MG Siegler for bringing this to our attention. The veracity of this report is pegged as “highly dubious”.

Either way as I see it at the moment the two key platforms to focus on for native, mobile Internet-focused apps are the iPhone and Android, given that there are already millions of iPhones out there in the wild and it is anticipated that there will be millions of Android-enabled phones out there next year.