Alex Muir

I’ve been in Berlin for almost two weeks now - it feels like a lot longer but I’m not sure that’s caused by the city. It’s been positive - having a desk has kept me productive and I’ve turned a corner in learning Ruby on Rails. I’m working on a webapp that’s a marketing dashboard - emailing, SMS, social media - all in one place and designed to make it easy for non-technical people, or even technical but non-social-media types. I am also trying to finish off How to Use Torrents, which is a wizard to get non-techs up and running with torrents.

Myth: Berlin is cheap

Berlin is not cheap. It is around 15% cheaper than London, and considerably more expensive for some things. 5 stops on the bus costs €2.30 (admittedly this takes you anywhere for two hours, but if you only need 5 stops then that's what you're paying). A weekly travel card is my best option at €27 a week - surely the same as London.

Food is the same price, restaurants are slightly cheaper. I have just paid €440 for a one-bedroom studio for 19 days.

Fact: Berlin is sleepy

I roll out of bed around 10am most days. And this seems pretty standard. The streets are deserted even at 9am on a weekday - no-one seems to do anything until 10am. This is a sleepy city.

Fact: Berlin is nice

Berlin is very similar to Budapest. So much so that I'm wondering why I'm here paying double the rent to be here. There's a nice mix of concrete soviet-era blocks, 1900s redbrick buildings, industry and modern architecture. It's a very arty city and creativity leaps out at you everywhere. People are distinctive looking, trendy and unique. This is far from a city of sheep.

Crime seems virtually non-existent, there are plenty of parks and green spaces, traffic isn't crazy at any point. There are canals all over the place which make nice walks and runs.

Overall, this is a good place to live. I was equally impressed by Hamburg. Germany seems to have a viable balance of tat-merchants, service businesses, public sector and industry.

I left a rainy London and arrived in a rainy Berlin.

A couple of things had stuck in my mind from discussions about the city : that I’d love it, that the public transport is amazing, and that rents are dirt cheap.

I haven’t really found any of them to be true - with the exception of the public transport which is good, but really only on a par with London.

Rents seem fairly high - I’m paying €180 a week for a massive room in a shared house right next to Alexanderplatz. I can’t seem to find any reasonable places for under around €600 a month for a one-bed flat.

It really is just like any other city that I’ve ever lived in. Though the streets are FILTHY - there’s dogshit about every 20 yards and broken glass everywhere. Walking around is like playing minesweeper. This might just be fall-out from NYE parties; there are firework casings everywhere too.

I’ve taken a desk at Betahaus, which is a coworking space about 2km from where I’m living at the moment. It’s €180 a month for 24/7 access (including a workshop which I have yet to explore). There’s a reasonably priced coffee shop downstairs with (I’m told) two chefs who cook up a decent €5 lunch each day - they’re off this week.

As Randy Pausch would say, here’s the headfake - I’m not paying for a desk, I’m paying for myself. €180 buys a month of my productive time - that’s got to be a bargain.

In other news, I ran 8.3 miles this morning and just redownloaded Pzizz in anticipation of a few naps around the office.

Ryanair is a business built for the stupid.  If you are smart, and organised, you will enjoy cheap flights subsidised by morons, exactly the way business class used to subsidise economy.

Stupid people pay more, far more, and it is from them that Ryanair’s profits come.  They book late and they buy the ‘suggested items’ - overpriced travel insurance, suitcases, in-flight meals and champagne.  Only an idiot would buy these.  These are the people who overpay for all the affiliate services - credit cards, car hire, transfers.

They get their dates and/or names wrong and have to book another flight.  They can’t print their boarding pass and have to pay 40EUR to check in at the airport.  They bring the wrong size bags and have to pay to put their bags in the hold.

Around 30 stupid people always book Priority Boarding, when there are only 12 good seats.

They buy the ‘tax-free shopping’ on the plane, they buy the smokeless cigarettes.  They consume the bulk of the on-board food and drink.

The most stupid of them all buy the ‘charity’ scratchcards on the flight.

The downside is that, as someone who isn’t stupid, all of the pushy selling of these things annoys you.  It frustrates you that ‘admin fees’ and ‘credit card fees’ aren’t included in the price - because you don’t think it fools anybody.  It does.  It fools the fools - and they are the ones paying for your cheap flight.

This isn’t just a Ryanair issue - it’s mirrored by all budget airlines.  And increasingly by other businesses too.  Train tickets (in the UK at least) are now the same.

Now, there’s an argument that this has always been the way.  That smart people have always been able to get the best prices for things.  That’s true.  But I think business models are moving towards the stupid subsidising the smart, and away from the business subsidising the consumer.

Afterthought: The stupid don’t use price comparison sites.  They don’t know how.  They are the most profitable customers for virtually any industry that has been disrupted by the internet - car insurance, credit cards, hotels, and travel agents, etc.

The crux of this post is the first section.  The rest is my thoughts on Apple’s future direction.

Apple’s share price is ticking back up towards its high, and every time this happens I try to think deeply about whether I should sell my modest holding and what the future prospects are. The thinking below has come from long flights, extended toilet pondering and soaks in the bath. It doesn’t really follow a path to a single conclusion - possibly because it’s incomplete, and also because I don’t think a company the size of Apple has a single direction.

Apple must build a console

Apple have got to get into the living room. They’ve got to be at the centre of the home, as they are at the heart of your jacket pocket. I believe this is where growth over the next five years will be found, and I’m waiting for signs of it before making a decision.

Apple TV needs to evolve into an iOS based home entertainment system. Audio (stored/streamed from iCloud), video, games and web-widgets. Apple TV must become an the iOS equivalent of an Xbox with XBMC installed. That’s what I’m saying. The ecosystem is there, the technology is there. All of Apple’s competencies are here. Sony and Microsoft (Xbox) have failed to move from a games console to an entertainment hub - they lack the marketplace that Apple has built. Boxee hasn’t worked, partly for the same reason.

Console games bought and downloaded in iTunes. Seamless integration with the iPhone, iPad and iPod for some controls. Airplay to stream media around the home. It will get people genuinely excited. The rumour of an Apple console will be as intoxicating as the rumour of an Apple tablet.

The time is right - both the Xbox 360 and PS3 are nearing the ends of their lifespans. The Wii has been and gone.

One of the first steps I’d like to see in this direction is building live streaming of TV into iOS devices. I see no reason why this can’t be done, and TV networks would love it.

– END CRUX

iPod

The iPod range still has a place, and just because it isn’t growing it shouldn’t be scorned. iPods are a vital stepping stone into the Apple eco-system for kids and old people - two markets where there’s huge range for growth among more profitable products. My friends buy their parents iPods. My friends who are parents buy their kids iPods. I also believe there may be growth to be had in emerging markets on this one - it’s easy to forget that CDs have only just supplanted cassettes in third world cars and taxis.

The iPod Touch may have to become an iPhone - there may come a time when it actually costs more to have a whole product line that is identical, save for the lack of a GSM unit. People more knowledgeable about patents and licensing will be able to answer this.

Phones

The iPhone is almost at the limit of its evolution. It is constrained physically by the form it must take, and externally by the bandwidth of mobile phone networks. The screen cannot be improved in resolution or size. The camera is good enough, and leading the pack. Signal strength, battery life, speed and storage are the only hardware improvements that I see in the near-term (less than two years).

Software improvements (Siri and notifications) will still be forthcoming. I can’t judge Siri as a) I don’t have a 4S, and b) I won’t get one because a lot of its features don’t work in the UK. These software improvements are less sexy, less visible (releasing a white iPhone probably attracted more people than a 4S), and, arguably, easier to imitate.

I believe Apple may be at risk of its phone range ending up where the Mac range languished from 1995 - 2005. That is to say, preferred for aesthetics, integration and ease-of-use but expensive and constraining. I don’t think it’s controversial to say Android is the equivalent of PCs - more fiddly, less tightly designed, but cheaper, more powerful at the cutting-edge and cheaper. Combine this reality with an acceptance that mobile networks, the internet (Google, Facebook) and every other consumer electronics company are gunning for Apple - I’m concerned this may be a mature product line, just as iPods are.

Tablets

Apple is the only player in the tablet arena. This is largely the result of hardware and pricing - the initial $500 pricetag has effectively proven unassailable for would-be competitors. Compared with the iPhone, the tablet is less about apps, or other iTunes media. (Books and magazines are nowhere near as dominant as apps. They are also more easily ported between eco-systems than apps). The iPad isn’t protected by the moat of the iOS / iTunes ecosystem - it’s essentially nice hardware wrapped around a webkit browser. Apple is reliant on patents and supply agreements to retain this space - hence its hard fight against the Galaxy Tab. I see strong competition from Amazon - tablets are the future of all non-fiction books and textbooks. This is still a massively growing space.

Desktops

If not dead, then so niche as to barely think about.

Laptops

This is the area I am most positive on. Macs are becoming the tool of choice for developers. They are largely immune to the sort of PC annoyances that plague novice computer users (my mum).

Look around any upmarket coffee shop / student area and Macbooks are verging on, if not already, dominant. They are expensive, no doubt, but I don’t think this matters in a world (the West) where most work (and the most economically valuable work) is done using computers. Generally, a good guide to what the future holds is probably to look at what people with a choice are buying. People with the choice bought iPhones instead of Blackberries. RIM is now basically over. People with the choice are now buying Macbooks instead of PC laptops.

I’m not suggesting that Macbooks will replace PCs. But that they will take a greater share of the market, and the most profitable share at that.

iTunes

I am disappointed that Apple has failed to capitalise on the success of its music store. It is being beaten out of the video market by Hulu and Netflix - there is a HUGE market to be had from visual entertainment. People spend far longer watching TV than listening to music. Now I know that this isn’t Apple’s fault, but it has to be accepted - iTunes has lost its competitive advantage in the video space. Conclusion

Apple is going to do well. But there’s nothing stellar that I can see currently around the corner. I expect quite a few more record-breaking quarters of reporting, and a share price that ticks up to reflect this, albeit buffeted by economic woes. I worry that we’ve seen the high-watermark of apps, and that 2012 may be the year when there really wasn’t much difference between a $300 Android handset and a $500 iPhone. I am looking for signs of creative life.

I just watched a video of Tim Hartford’s talk at TED Edinburgh, entitled ‘Trial, error and the God complex’.  The summary is that he says any successful system has been produced by a process of trial and error.  And the idea of a system is exceptionally broad - he points to the evolution of the human body.

Our ‘God complex’ is that we believe we are able to understand problems which are far beyond the grasp of a single (normal) human brain, and that this belief leads us away from trial and error and towards intuition.  Successful businesses evolved, they weren’t formed in their current shape.  And evolution has to be hallmark of a startup.  Google initially intended to charge businesses to use their software to search their internal documents.  Apple spent years trying to be a better PC company.  Airbnb wanted to rent airbeds in people’s homes - they’re evolving into a booking engine for apartments, hostels and guesthouses.

When I think of businesses that I’ve been involved with, our biggest successes have come from trying things out.  Some stuff didn’t work, some stuff did.  If you aren’t trying new things then you aren’t going anywhere.  Even if you’ve got a plan.  You’ve got to say “Let’s try it”, and see where it leads to.

A huge part of being able to evolve is admitting when something is wrong.  This is why government IT projects are, by and large, a disaster.  Politicians do not admit they were wrong - it basically never happens.  In fact, if you admit you were wrong then you’re going to be shown the door.  So there is no evolution.  There is a single trial - The Project - and there will be no errors.  Even if there are errors, they will not be errors.  And there will be no further trials.  It either works or it works.

In fact, the phrase that sums this up is ‘not fit for purpose’.  Something will be built, in a straight line, from A-Z on the plan and completed.  There will be no pivot, no change, no evolution.  Then, when it’s finished (and after a suitable interval) if it doesn’t work then it’s not fit for purpose and has to be destroyed.