Targeted oncology has gained momentum over the years. Instead of looking for one blockbuster drug that will treat the over 200 types of cancer, firms have started looking to develop specific treatments of particular cancers. Many firms, big and small, are in the race here. And indeed The Economist is right to say that Roche and Genentech (majority owned by Roche) have a strong franchise in this space. Their recent acquisitions of NimbleGen and 454 Life Sciences made that franchise stronger.

Yet there is a problem. Roche is still stuck with the traditional vertically integrated model of Big Pharma. I believe that the shift away from one-size-fits-all drugs to more specialized (and, in the future, personalized) drugs requires a business model change. What is needed is a disaggregated model where the firms focus on a few core areas of competence, such as drug discovery, development or marketing and outsource the rest to the growing legion of biotechnology start-up firms, contract research organizations, independent drug-development firms and freelance sales organizations. Other forms of cross-company collaboration are also needed to build a new drug delivery system and a new sales model. I am still waiting for a Big Pharma player to move past the tinkering stage to the take-leadership stage.

[Several earlier posts: Looking at Orbit Change in Three Industries and Big Pharma is Feeling the Pressure are also relevant to this discussion]

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I think July will be better and I am going to try posting 3 times a week.

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Let’s put things in perspective. Apple expects to sell about a million iPhones in 2008. That’s a good number. But then Nokia sold about half a million phones in just one day in India alone (see news item here). Well, you might say that this is not a fair comparison. You are comparing apples with oranges. After all iPhone costs $500 and the bestseller Nokia phone in India, Nokia 1100, is only $30. It’s not about volume; it’s about impact. Look how iPod revolutionized the online music industry; iPhone will build on that legacy. It will have an industry shaping impact. Really?

First let me debunk the music myth. Apple sold about a $1b of music through iTunes in 2006. On the other hand, ringtones/ringbacks on plain-old-humble cellphones sold at least six, yes, six times as much (according to Gartner).

The fact is that these plain-old-humble cellphones are not just revolutionizing music; they are also changing television. Just look at American Idol. Do you think that format would have happened without SMS? SMS voting using plain-old-humble cellphones has spawned a multi-billion dollar genre worldwide.

Even FM radio is seeing an uptick due to the plain-old-humble cellphone. In fact in places like India a large part of the audience and advertiser growth of FM radio is attributable to the low-end phone with built-in FM radios. This trend is sure to spread to other markets.

Let’s face up to the new reality of our era that revolutions now come from the bottom of the pyramid. Gone are the days when a cool Silicon Graphics workstation could be touted as a harbinger of industry change.

Please don’t misunderstand me – I have no doubt that iPhone will be a great product. Let’s admire it as one would a new 7-series BMW. But please let’s not suggest that it’s going to change the car industry. If that’s the kind of impact you are after, better look for something like the Tata $2000 car.

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1. Safest way to get what you want is to deserve what you want.
2. To deserve what you want you need a lot of “assiduity”. And what’s assiduity? It’s the ability to sit down on your ass until you do it.
3. In addition you need to practice continuous learning. People who rise in life are not the smartest, sometimes not even the most diligent, but those that are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.
4. You must never allow yourself to drift into self-pity. It’s a ridiculous way to behave and when you avoid it, you get a great advantage over everybody else or almost everybody else because self-pity is a standard condition, and yet you can train yourself out of it.
5. Finally go through life anticipating trouble. So when it comes you are prepared financially and mentally. It’s your duty to deal with a terrible blow in a constructive fashion.

Read the whole speech here. (Thanks Yuvraj for sharing).

[My earlier post on Passion, Happiness, Work, Play and Life may also be of interest to you.]

Update: Sadagopan has a nice post on this as well.

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The deal, of course, has something for the private equity players. The PE guys see a company with good amount of cash on its balance sheet and a healthy maintenance revenue stream. They will be able to extract some value through clever financial engineering.

Avaya doesn’t get much from this deal – in terms of technology, products, talent - that would make it a more successful player in the market. Why then, you would ask, did the Avaya management agree to this offer from the PE firms?

I have a hypothesis that sometimes a company running a marathon – as Avaya was doing – gets fatigued and simply gives up. In a real marathon, somewhere along the half-way point, the glycogen stores run out and the mind starts telling you to slow down or stop. If you haven’t prepared for this energy depletion event, it’s very hard to go on. Companies adjusting to industry transformation are running a marathon too. Somewhere halfway through the process they feel tempted to just give up. Digital succumbed to this temptation and went into the arms of Compaq. More recently, VERITAS Software merged with Symantec more out of fatigue than any other reason. Now, I suspect, Avaya has given up although the CEO Louis D’Ambrosio would never admit that to be the case.

This capitulation is sad because Avaya was holding its own in the VoIP PBX market. It was doing well against Cisco; its market share in the first quarter was 25.3% compared with Cisco’s 25.2%. It was also doing well in the burgeoning call/contact center market in India compared to Nortel and Cisco. Generally speaking, it had been able to tap into the desire for evolutionary change on part of the enterprise customers as they migrated from traditional circuit switched technology to VoIP.

The nest stage of this story is not pleasant. My fear is that we will see demoralized employees, anxious resellers and edgy customers. And a downward spiral will gradually take hold. I hope I turn out to be wrong.

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Although I didn’t mind being cut off from my email and RSS feeds, I did miss the Internet. There were many times when I wished I could have dived deeper into a particular geological feature. For instance, most of the geyser activity is in the Yellowstone caldera which itself is not too dissimilar to the Ngorongoro crater I visited last year. Both are about the same size (less than 30 miles in diameter) and similar in age (less than 2 million years old). Given this, it would have been fun to explore the similarities.

How we interact with nature is changing due to the digital age. Gone are the days when people would buy postcards to remember their visit to a place. Now everybody wants to take their own special pictures of landscapes on a trip. My 9-yr old daughter isn’t interested in a nice picture of the beautiful Yellowstone Lake in a coffee-table book; she wants her own special photograph. Photography is no longer about recording a vista; it’s now about personal expression.

Similarly learning about an awe-inspiring geyser is no longer about reading a plaque put up by YNP. Instead it’s about using that plaque as a starting point for making your own personal mind-map using the Internet. This doesn’t mean that you need high-speed internet on the phone - I don’t expect to be standing in front of the geyser and browsing on my phone. I want to be able to soak in the moment at that time but later back in the hotel room be able to reflect on it more deeply using the Internet. It’s not much to ask for. But on all my recent vacations, this hasn’t been possible. For instance, it would have been nice to look at Jean-Pierre Houdin’s theories about pyramid building when I was in Egypt.

We need to rethink solitude in a connected world.

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While the report acknowledges that mobile operators are impediments to any quick rollout, it blithely ignores the significance of this point. I would have liked to see a stronger treatment of the adoption dynamics. If anybody has to make a case that old status quo doesn’t change just because new technology becomes available, it should be the Economist. After all, they have been very eloquent in the past about the same issue in the context of the US healthcare provider industry. Despite new technology (electronic medical record keeping, handheld devices, EDI, etc.), the old inefficient status-quo hasn’t budged.

In any case the take-up of RFID has been slower than expected (see here and here). In a way this is not surprising because enterprise adoption is a slow process. Just look at ERP. It’s been around for donkey’s years and is only now beginning to see some level of full penetration. Despite the ‘coolness’ factor of M2M and mesh networks, its going to take quite some time before they become widely deployed.

Basically the report is just too optimistic. The right thing to do would have been to carry an abridged version of this report in the Technology Quarterly section of the magazine. What do you think?

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Interestingly, the Wright brothers, despite being pioneers, were edged out in business, in part, by clever use of the patent law. The story goes that Glenn Curtiss of Hammondsport, New York started stealing the designs of Wilbur and Orville Wright. The Wrights sued but Curtis had shrewd lawyers who kept the suits from causing damage. Eventually Curtiss Aeroplane Company started turning out better planes. The irony is that eventually the company changed its name to Wright Aeronautical Company.

1905 to 1918 was a period of intense innovation in aircraft design. Interestingly the initial traction came from Europe. One of the Wright brothers traveled there to get initial business. In fact, most of later US efforts were built on British designs. US did have better engine technology but Europe held its own in aircraft design all the way till the end of WW II. Looking at Boeing and Airbus, the rivalry has never gone away.

It is tempting to draw parallels between the aircraft industry and the IT industry – both have been nurtured by the military at one lime or the other and have seen innovation and growth spurts yield to a period of maturity. But this ground has been covered before so I won’t go there. For me the more fascinating parallels are “micro” in nature. Sometime back Nick Carr used the 1937 invention of the runner O-ring that made retractable landing gear possible as an example of reverse salient. More recently I used the development of jet engines to illustrate the value of constraint-based management. If you know of more examples please do share here.

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