The Innovators Dilemma demonstrates conclusively that entrenched technologies move upmarket away from challengers. The problem for the incumbents, of course, is that the rate of technological change allows the new tech to eat away at discarded lower-end markets until it can satisfy enough needs of enough customers to cause a massive customer shift away from the incumbent to the new technology.

Check out Scoble making the classic entrenched-industry move upmarket vis-a-vis Windows and a WebOS:

...thin clients fall apart when you fly in planes every two weeks (without Wifi). Is that drinking the Microsoft Koolaid? Maybe, but when you get Photoshop in your browser let me know, OK?

How many people actually need to run Photoshop on their desktop?

Do 90% of computer users use Photoshop? Of course not.

All of my clients are non-techie sole proprietors and small business owners. They’re concerned with keeping their computer operational for dead-simple tasks.

Moving upmarket to defend your product is a sure sign of impending doom.

Many of my friends & family equate software development with a mechanical, mathematical process—it’s hard to explain the abstract creative nature of it.

Derek Silvers has a good metaphor—songwriting.

As I get more and more into programming, I’m constantly struck with how similar it feels to songwriting.

My favorites in his list:

• Both songwriting and user-interface design make you constantly put yourself in the audience’s shoes
• One big problem really wraps around dozens of little problems.
• Every person on earth would solve these problems (both little and big) a little bit differently.
• Even trying to imitate someone else’s creation will make your own unique version of it.
• Both start with an initial flash of inspiration, then take a hell of a lot of work to make it into reality.

Howard Shultz says in a KNOW™ Magazine interview :

The art of marketing today is the ability to build this emotional connection. I am not going to tell people where they should be spending their money, but I would advise that all marketing be authentic, and relate to reaching into people’s hearts to let them know that you want to be part of their life.

Shorter and sweeter than Cluetrain , Charlie’s compiled a list [1] that defines not just a new era in application development, but also a dynamic new way companies can relate to their customers, prospects and voyeurs.

37signals is applying these principals to book publishing ; TextDrive is applying them to hosting.

Many say that for this approach to work, you have to have a great product. That’s true, but not in the traditional way.

TextDrive has had terrible uptime—on the face of it, their product has been anything but stellar. But in big and small ways they’ve built a relationship with their customers, and we’re rooting them on this weekend in their move to new hosting facilities.

Invariably the pitch isn’t “hey, do x better with our software.” It’s more like “hey, we have this idea about how to do x better, and we’ve built some stuff around it. Help us make it great.”

TextDrive can get away with their terrible performance so far because

Ideas are worthless in and of themselves, says Derek Silvers (founder of CD Baby)

The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.

Probably true unless licensing intellectual property is your business model. Of course, that requires its own type of excellent execution.

This month, I’ve read coverage of about twenty to thirty new applications, and was intrigued enough to try out six to ten of them.

I heard about many of these through review sites like TechCrunch and WorkHappy—both of which are entertaining reading about an admirable number of applications.

Invariably, though, they’re not giving “reviews”—they’re fawning about what makes an app cool (or, as WorkHappy says, “killerest”).

They feel like clearinghouses for the “blog relations” departments of various “Web 2.0” startups.

But are these applications actually useful? Are they worthy of adopting?

While there’s a place for the giddy, blushing high (no relationship can start otherwise, right?), getting from coolness to utility is asking a person to change their life in some small or large way.

There’s all sorts of stuff that has to come together to make me change my life and incorporate a new application:

Here are some promising applications that I’ve tried but that didn’t take for me. (As this is the first month of discarded apps, I’ve included a couple here—CopyTalk and TaskToy—that I tossed out a couple of months ago.

• ProtoPage uses the analogy of a web-based desktop, but with extremely limited functionality: you can make lists of links, and sticky notes. Hmm, I already have a place for my links, with lots more functionality and flexibility (Firefox bookmarks, del.icio.us, my blog) and sticky notes are anathema to me as a way to organize and remember information.

• Personal Bee The idea is cool—a feedreader that helps aggregate information from your feeds into a tagcloud that makes it easier to navigate and explore common themes across your feeds. But channels felt limited and its interface was imperfect, including a flawed use of Ajax. There were a limited number of feeds for each channel (err… for each “Bee”). The Web 2.0 channel seemed to be pulling from three or four sources. The tagcloud is in two colors, blue and green, but without any intuitive explanation and no explanation that was easy to find (relative sizes of tags are in both colors). Additionally,
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Apps and online resources that I’ve incorporated into my life during August:

• Yubnub Here’s an earlier description shortly after my discovery of this “command line for the web.” I can now search for or lookup anything that’s web accessible via simple commands typed into the location bar in my browser. For example, to look up domain details on patricksmith.org all I have to do is type
  s dd patricksmith.org
s is a shortcut to a bookmark that I setup for yubnub’s parser (Information on setting up a bookmark like this in Firefox for Yubnub is here)
  dd is the “domain dossier” command
  and, of course, patricksmith.org is the parameter passed to the dd command.
  There are other commands to retrieve information from just about anywhere you’d like, including amazon, ebay, technorati, del.icio.us, on and on…

• Pandora Setup your own music channels using an artist or a song as a seed. It will play other songs with similar qualities (my channel seeded by Bedhead is characterized by ‘mellow rock instrumentation, mild rhythmic syncopation, a vocal-centric aesthetic, major key tonality and electric rythm guitars’) Pandora adds a dimension to my musical experience that makes XM and iPod feel flat. Starting in September, they’ll be charging $36 bucks a year, so it’ll be interesting to see if that new dimension is worth $3/mo to me.

There are a raft of applications that are changing my daily interaction with the web (and others have much the same potential).

Turns out I’m not alone; a lot of folks are calling this generation of applications “Web 2.0”

Putting aside valid criticisms of the moniker (“Generation API,” anyone?), I’ve experienced four key differentiators between these apps and their predecessors:

1. Social software
2. Exposed API’s
3. Responsive Interfaces
4. Syndication
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FlashEarth improves on the usability of both Google’s and MSN’s satellite maps interface with some very simple, intuitive controls.

Like Gmaps & MSN VE, you click-and-drag to move around. The big improvement was being able to use the mouse scroll wheel to zoom in and out (you can also use +/-). The response on the zooming was relatively quick, and it made it really simple to zoom out for context, move the map, zoom in for detail.

You can also switch between Google’s images and MSN Virtual Earth’s images of the same location.

Altogether, it makes a much more seamless experience interacting with the map.

Although you can turn on street labels on MSN’s photos, it’s for the most part just satellite imagery now. It’d be great to see street maps and address searching added to it.