September 6th, 2008

Captain Obvious

X360 red ring of death, in depth.

Microsoft’s strategy depended on beating its rivals to market. It couldn’t afford to stop and delay the launch in order to solve its quality problems, or so upper management believed. What Microsoft’s leaders didn’t realize was that getting to market first with a flawed machine would only win them a battle; and it risked the loss of the war. "They got enamored with the idea of the Microsoft army rolling everything out at the same time," said one knowledgeable source who asked not to be identified.

The quality problem negated much of the advantage of going first, and it has delayed the company’s plan to aggressively market the console and slash its prices. (Microsoft disputes this point; it cut the price of all three versions of its Xbox consoles by $50 to $79 on Wednesday. And the company believes it will sell more boxes than Sony will. But prices ought to be lower still during this stage of the console life cycle). That has stopped the company from reaching the broader market of consumers that Nintendo has won over. It has lowered its ambitions, hoping instead just to get a clear edge on third-placed Sony. The future profits that the company once hoped for are now likely to wind up in Nintendo’s pockets.

Microsoft’s top game executive, Robbie Bach, president of the Entertainment & Devices group, said at a dinner in July that Microsoft’s own research shows that gamers have largely forgiven the company for defective Xbox 360s. Microsoft has still sold more Xbox 360 consoles than Sony to date. But there is no doubt that the company has lost considerable good will among gamers. Before Microsoft offered free replacements, connsumers grumbled that they had to turn to forums, such as those on Ars Technica, to vent and to find solutions to problems that the company didn’t openly discuss. And for a couple of months now, Sony’s PlayStation 3 has been outselling the Xbox 360 in the U.S. for the first time.

"Fundamentally, their thinking shows that they are a software company at heart," said one veteran manufacturing executive. "They put something out and figure they can fix it with the next patch or come up with a bug fix."

I have a simpler explanation: MicroSoft is simply unable to ship non-shoddy products. And I don't mean they have bad engineers - I mean they have bad managers who don't listen to the engineers. Their entire management culture seems to revolve around making things that are pretty but poorly engineered. Why would the 360 be any different?

Starting a business and wooing VCs - the fuck-off money factor.

Which startup odds do you prefer?

50% odds of making $1 million
20% odds of making $20 million

Assume the work involved is the same, and that in both cases that the alternative is a complete loss. If you’re economically rational, you’ll compute the "expected value" of each investment.

50% of 1 million => 500k
20% of 20 million => 4 milion

I’m not a millionaire yet, so I’d choose option 1. Wouldn’t you? But a VC has to be rational to maximize return for their partners. And that’s the crux of the problem: our incentives are not aligned.

We don’t have to play by the same rules. Just as the cost of starting a company has been going down, it’s also become less risky to pull off small successes. 20 million isn’t 20 times more useful than 1 million. It won’t make you 20 times happier or let you be 20 times more effective. But 1 million is more than enough fuck-off money for most hackers.

Fuck-off money a term I first saw used by Taleb. The $35 million he made in 1987 allowed him to write books and ponder epistemology.
Trajedy... for YOUUUUUUUUUUUU!!!!

A very nice summary of everything that's wrong with America.

Aside from the obviousness of political protest no longer being in the slightest bit protected, I also can't help but snark at McCain's little speech: "[Russia] invaded a small democratic neighbor, to gain more control over the world's oil supply, intimidate other neighbors, and further their ambitions of re-assembling the Russian empire."

Oh, you mean EXACTLY LIKE WE DID TO IRAQ?? This has always been the Conservative position, of course. "It's perfectly okay if WE invade, occupy and murder on a whim. But when YOU do it - now that's across the line!"

And this guy is polling even with Obama?

You are just fucking stupid as hell, America...