Why do you have to burn $4bn to add mobile apps to taxis?

In the first quarter of this year, Uber lost about $520 million before interest, taxes, depreciation and amortization, according to people familiar with the matter. In the second quarter the losses significantly exceeded $750 million, including a roughly $100 million shortfall in the U.S., those people said. That means Uber’s losses in the first half of 2016 totaled at least $1.27 billion.

Meanwhile, revenue:

Bookings grew tremendously from the first quarter of this year to the second, from above $3.8 billion to more than $5 billion. Net revenue, under generally accepted accounting principles, grew about 18 percent, from about $960 million in the first quarter to about $1.1 billion in the second.

It’s expensive to start a global, meat-space business, even if you’re “assetless”:

Uber, which is seven years old, has lost at least $4 billion in the history of the company.

I find the continuous usage of Uber as an example of “the way forward” in business unhelpful. Not because it’s not an interesting business, but because without these kinds of numbers in context, you think it’s easy. If you’re prepared to burn through $4bn before profit, sure thing!

The advantage established businesses should have is less spending to build a market: they just need to do better serving their existing customer base at first, not spend all that money to start from zero. What I find devilishly fascinating is why it’s so hard for those large organizations to take advantage of the assets they already have and why, possibly, it’s easier just to start from scratch, as Uber has been doing with that $4bn.

Source: Uber Loses at Least $1.2 Billion in First Half of 2016

Pinterest Instapaper

I’ll finally be a heavy Pinterest user:

People use Pinterest and Instapaper for similar reasons. The similarity is almost too close for the deal to make sense. Pinterest started out as a way for people to collect content from around the web for themselves and others to check out later. At first, people were mainly saving images, but they’ve also started saving articles, to the point that Pinterest considers that “a core use case.” But saving articles is the same reason people use Instapaper — its “core use case,” if you will. So why would Pinterest buy a company whose product largely duplicates its own?

Because Instapaper stores the actual content, removing the need for people to leave its app to view it. And because eight-year-old Instapaper brings with it a bunch of insight into the articles that people save and read, which translates into data six-year-old Pinterest can use to get a better idea of what content it should recommend to its audience. That data could be combined with the data Pinterest already has on what content people like to post to and view on its service. And it could give Pinterest a way to try to rival Facebook as a popular place people go to find things to check out, be it wardrobe ideas, tattoo designs, how-to videos or news articles.

Source: How buying Instapaper could help Pinterest become a media portal like Facebook

Agile Development’s Biggest Failure Point—and How to Fix It

Companies commonly make one of two mistakes when selecting a product owner. Often they tap a junior employee with ­limited experience and therefore a limited understanding of how the project fits into the larger mission. Product owners need enough seniority to inspire and motivate peers across multiple business units. By earning the respect of teams in customer experience, enterprise architecture, and risk and compliance, for example, the ­product owner can help ensure that ­projects move smoothly without costly ­bottlenecks. Other companies err in the ­opposite direction, selecting a senior ­executive who is too harried to devote ­adequate time and may not adapt well to the highly responsive, iterative nature of agile development.
So what should companies look for when appointing product owners? In our view, the key is to find people who think and ­behave like entrepreneurs.

Much of the advice here falls under the category of “if you do good things, good things happen”:

success comes from simply managing a sound process: conducting market ­research, understanding the customer’s needs, identifying where the product will create the most value, prioritizing the most important features, testing ideas, capturing customer feedback, and continuously ­refining their vision over time.

The tasks is setting up and environment, processes, even “culture” that encloses and rewards good behavior like this. And the protecting that structure from corporate barbarians. That’s a job – and the responsibility – of management. So, perhaps it’s good to get some management consulting advice on what good looks like.

Source: Agile Development’s Biggest Failure Point—and How to Fix It

Don’t ever read the comments

In July [of 2016?], NPR.org recorded nearly 33 million unique users, and 491,000 comments. But those comments came from just 19,400 commenters, Montgomery said. That’s 0.06 percent of users who are commenting, a number that has stayed steady through 2016.

“Back in my day,” over on the RedMonk blogs we had some lovely comments from time to time. I hear Horace gets good conversations going. I’m tempted to say that niche topics – like tech industry strategy – get good comments, but of you look at the comments on my Register columns they’re a predictable mixed bag.

At first when I was writing definition pieces in DevOps, which El Reg‘s audience seems to loath, the comments were terrible. But recently – and I’m not sure why, really – I’ve found the discussion between commenters really interesting. They’re full of anecdotes (often goofy, but still helpful) and read like a transcript of IT therapy.

All that said, one of the various ad blockers use turns off most comments, so don’t see them on the web. Based on how many likes and smiles pictures of my kids get in Facebook, I think people just like the speed of Facebook and Twitter liking and reactions. That seems like a good “dial” to put in front of people instead of a keyboard.

Source: NPR is killing off comments. That’s great news!

Calculating the ROI on IT Innovation

Many IT professionals believe innovation in IT pays for itself. But a surprising number of companies I visit aren’t in a position to prove this hypothesis. They typically don’t know what it costs to provide their IT services and can’t quite put a figure on the benefits of IT innovation projects. Without these key data points, they have a hard time quantifying the ROI or payback on any IT project—making it difficult for IT to compete internally with other departments for scarce business funding.

The rest has many considerations for planning our ROI, plus contingencies to muck about with.

For much more detail, see Mindy Cancila’s write-up over at Gartner from earlier this year.

Source: Calculating the ROI on IT Innovation