21 Great Technologies That Failed

Jeremy A. Kaplan and Sascha Segan:

The most innovative tech doesn’t always succeed. Here we present 10 great technologies each from Apple and Microsoft that were simply too far ahead of their time.
Mention technology that failed and people instantly think of Microsoft Bob, the IBM PCjr, and worse. But those weren’t necessarily great products—heck, Bob wasn’t a good idea at all. The ideas and innovations that succeed aren’t necessarily the best either; they just happened to be in the right place at the right time.

Southwest Flies Past High Oil Prices

Marketplace:

BOB MOON: We’re seeing the results of all this financial turbulence in the not-so-friendly skies lately. Both American and United have announced they’re cutting flights domestically and internationally.
Across the industry, companies are trying to nickel and dime their way to profitability, hitting consumers with fuel surcharges or extra fees for baggage, but one carrier has managed to navigate a relatively smooth flight path.
Marketplace’s Jeff Tyler looks at how Southwest has steered clear of trouble.

Perhaps one day, Madison will be fortunate to enjoy Southwest service.

A Look Back at The Bill Gates’ Era; and a few lessons

The Economist:

Mr Gates also realised that making hardware and writing software could be stronger as separate businesses. Even as firms like Apple clung on to both the computer operating system and the hardware—just as mainframe companies had—Microsoft and Intel, which designed the PC’s microprocessors, blew computing’s business model apart. Hardware and software companies innovated in an ecosystem that the Wintel duopoly tightly controlled and—in spite of the bugs and crashes—used to reap vast economies of scale and profits. When mighty IBM unwittingly granted Microsoft the right to sell its PC operating system to other hardware firms, it did not see that it was creating legions of rivals for itself. Mr Gates did.
….
And look at what happened when Mr Gates’s pragmatism failed him. Within Microsoft, they feared Bill for his relentless intellect, his grasp of detail and his brutal intolerance of anyone whom he thought “dumb”. But the legal system doesn’t do fear, and in a filmed deposition, when Microsoft was had up for being anti-competitive, the hectoring, irascible Mr Gates, rocking slightly in his chair, came across as spoilt and arrogant. It was a rare public airing of the sense of brainy entitlement that emboldened Mr Gates to get the world to yield to his will. On those rare occasions when Microsoft’s fortunes depended upon Mr Gates yielding to the world instead, the pragmatic circuit-breaker would kick in. In the antitrust case it did not, and, as this newspaper argued at the time, he was lucky that it did not lead to the break-up of his company.

Why Rivals Don’t Copy Southwest’s Hedging

George Anders:

David Carter, an associate professor of finance at Oklahoma State, has an interesting perspective on why rivals haven’t caught up to Southwest. Prof. Carter helped write a 2004 case study on Southwest’s hedging that is taught in business schools. Although the study details how Southwest uses home-heating-oil futures and other instruments to make its hedges work, Prof. Carter says he has heard from only one other airline that seemed interested in putting that knowledge to work: the German carrier Lufthansa.
Other carriers may have opted for caution because it is psychologically hard to switch strategies when prices are moving against you, Prof. Carter says. Airlines that didn’t hedge much when oil was at $25 or $40 a barrel might have felt uncomfortable launching a big hedging program when oil got above $60.
Frequent management shuffles at many airlines also might have made it harder for carriers other than Southwest to jump into hedging in a big way, Prof. Carter adds. A hedging blunder early in a CEO’s tenure might overshadow whatever else that boss might be accomplishing.
Southwest’s treasurer, Scott Topping, offers another possible explanation of why his airline has stayed ahead of the pack so long: Since the late 1990s, Southwest’s hedging strategy has been set by two or three people, rather than by committee, making it easier to act decisively.

Pleasant Rowland Lists Homes in Aurora, NY

Sara Lin:

Pleasant Rowland, the founder of doll company American Girl who spent six years and millions of dollars restoring much of Aurora, N.Y., has put both of her houses there on the market.
From 2001 to 2006, Ms. Rowland renovated town buildings owned by Wells College, her alma mater. Some townspeople criticized the renovations as too extensive. “I just simply saved a town that was crumbling,” Ms. Rowland says now. “My work there is completed.” She says the dispute isn’t her reason for leaving town.
One of the houses in Aurora, which is 46 miles southwest of Syracuse, is a 10,000-square-foot Queen Anne lakefront mansion built about 1902 with six bedrooms. It could use some interior renovation, Ms. Rowland says, and comes with 200 feet of frontage on Cayuga Lake, a dock and a boathouse. The two-acre property is listed for $2.2 million. The other house, an 1830 Federal-style home of 4,000 square feet with three bedrooms, is restored, Ms. Rowland says. The four-acre property is listed for $2 million.
In 1985, Ms. Rowland founded American Girl, which Mattel bought for $700 million in 1998. These homes represent the last of Ms. Rowland’s recent ties to Aurora. Last week, she sold Aurora-based MacKenzie-Childs, a decorative-tableware and home-furnishings company. She’s based in Madison, Wis. Paddington Zwigard of Brown Harris Stevens has both home listings.

It must be noted that former Mattel CEO Jill Barad signed the $700M check.

Another Round for the Guild

Private Equity Hub:

The Guild Inc., a Madison, Wis.-based online art retailer, has raised $2.5 million in Series C funding, according to a regulatory filing. Shareholders include Dolphin Equity Partners

The Guild, a company with many lives, must be north of $50,000,000 (!) in funds raised over the years.
Related: A Pravda View of Guild and 1/11/2006: Guild Raises another $6M.
Fascinating.

Innovation lessons from Pixar: An interview with Oscar-winning director Brad Bird

Hayagreeva Rao, Robert Sutton, and Allen P. Webb:

If there’s one thing successful innovators have shown over the years, it’s that great ideas come from unexpected places. Who could have predicted that bicycle mechanics would develop the airplane or that the US Department of Defense would give rise to a freewheeling communications platform like the Internet?
Senior executives looking for ideas about how to make their companies more innovative can also seek inspiration in surprising sources. Exhibit One: Brad Bird, Pixar’s two-time Oscar-winning director. Bird’s hands-on approach to fostering creativity among animators holds powerful lessons for any executive hoping to nurture innovation in teams and organizations.
Bird joined Pixar in 2000, when the company was riding high following its release of the world’s first computer-animated feature film, Toy Story, and the subsequent hits A Bug’s Life and Toy Story 2. Concerned about complacency, senior executives Steve Jobs, Ed Catmull, and John Lasseter asked Bird, whose body of work included The Iron Giant and The Simpsons, to join the company and shake things up. The veteran of Walt Disney, Warner Brothers, and FOX delivered—winning Academy Awards (best animated feature) for two groundbreaking movies, The Incredibles and Ratatouille.
Ten days before Ratatouille won its Oscar, we sat down with Bird at the Emeryville, California, campus of Pixar, which is now a subsidiary of Disney.1 Bird discussed the importance, in his work, of pushing teams beyond their comfort zones, encouraging dissent, and building morale. He also explained the value of “black sheep”—restless contributors with unconventional ideas. Although stimulating the creativity of animators might seem very different from developing new product ideas or technology breakthroughs, Bird’s anecdotes should stir the imagination of innovation-minded executives in any industry.

Taxis in the Sky

Jim Fallows:

True, a cover story I wrote for this magazine seven years ago, contending that the era of tiny, convenient, and relatively affordable jet airplanes was at hand, won an Article of the Year award from an aviation lobbying group. But it would be fair to describe the broader reaction as: Oh, sure! (“Freedom of the Skies,” June 2001, was excerpted from my book Free Flight.) New and more fuel-efficient jet engines; new, quieter, and more comfortable small airplanes; new and more-automated ways of routing aircraft around bad weather and away from congested areas—these and other innovations, I wrote, might make a new kind of air travel more practical for more people. This wouldn’t mean personal aviation in the Jetsons sense—a plane in every garage, people zooming around at will. But it might provide business travelers with something that until then only the truly rich had enjoyed: a fast and personalized alternative to the ever less delightful experience of travel on commercial airlines.
Most readers thought that personal airplanes, like personal yachts, would always be the playthings of the very rich. The familiar (and aptly named) Airbus or Boeing aircraft would have to do, as would impenetrable modern fare structures and the grind of big-airport congestion. It obviously didn’t help that three months later, the use of passenger airplanes as terrorist tools put aviation in general under new limits and scrutiny. Allow new routes and possibilities for air travel? Ha! Everything air-related was destined to be more controlled.