At a talk alongside other data scientists in San Francisco in April, he brought up the notion of a single place where consumers could see the data companies collect. This sort of thinking suggests that Weigend is part of a group of people defining what data sharing should look like in the years to come, and how both companies and consumers will have to adapt.

Perhaps another indication is that he’s got fans. After the April talk, he took a few students and friends out to dinner at a family-style Italian restaurant. Long after the meal, some students lingered and asked him questions, as if he were an oracle or celebrity. And it is easy for people to listen to him talk for hours. He frequently makes references to foreign people, places and companies and seems to take it for granted that you are just as worldly as he is. If you engage him in conversation, you will immediately receive a vigorous response, as if he is pre-programmed to share his views, so as to have the best shot at getting others on board. This is not a man who keeps his hunches to himself. He looks the part of an idea guy, with blond curls fizzing up from his head.

Andreas Weigend. Source: Flickr user alvy.

When your data is no longer your data

When it comes to being transparent with data, Weigend thinks Amazon has done a pretty good job. “One of the things we worked for at Amazon was to make it trivially easy (to show) all of the things you clicked on,” he said. The site also lets customers see what they purchased. Those are key data points for Amazon’s recommendation engine, which Weigend describes as a grid — if you view or purchase one item and then another, Amazon can line up that performance with that of other users and then to serve up items you might like.

Amazon also uses customers’ purchase history to help improve the user experience for purchases that customers attempt to make in real time. “If you buy a book which you have bought before, Amazon tells you, ‘Are you sure? You bought this item already, on December 17, 2007,’” he said. “It’s trying to help you minimize regret. It’s trying to help you make a better decision. This is how we refine the raw data, the data you created, in order to help you make a better decision.”

Other companies are not so revealing. “Some airlines don’t remind you, ‘Look! Your miles are expiring in three months,’” he said. He has nothing against airlines. It’s just that he flies a lot — he splits his time between homes in San Francisco and Shanghai and attends many conferences each year — and has plenty of examples to share in the context of flight.

An airline customer-service representative won’t permit Weigend to hear about his previous customer-service calls over the phone or see that data on the screen behind the counter at an airport, even though Weigend was the one who helped the airline create that data. And flight attendants might use fake names on name badges, even though they could conceivably access customers’ names. Weigend has a word for this sort of peculiarity: asymmetry. He is trying to fight against it.

As a consultant, he tries to change the way companies generate, analyze and share data about users and customers, among other things. That might mean advocating for data symmetry. It also might mean motivating companies to assign costs to problems such as unresolved customer calls and then figure out ways to improve the situation. His ideas stem from experiences such as ensuring that particle-physics data wasn’t being thrown off with dirt on a photo plate at CERN and incorporating external data sets to arrive at new insights while reviewing financial data for Goldman Sachs and other companies.

Voice recordings, itineraries, maps

Still, the world is not yet as Weigend feels it should be. How does Weigend live in this imperfect world so lacking in data symmetry? He leads by example, in a sense.

On his personal website, Weigend lists his flight reservations. When he does call an airline customer-service representative, as soon as he hears someone say this call may be recorded, he retorts that he will most certainly be recording the call. He carries around a voice recorder, and he has a mic that can hide underneath his shirt.

Recording customer-service calls might come across as a bit awkward. But should it really push our social buttons? One day it could be common for companies to share that sort of data with customers, and then it will not seem so surprising.

Weigend also uses mobile devices in combination with Google Latitude for keeping tabs on his whereabouts, going back several years. He makes current location data public on his website and shares it with friends.

When it comes to Latitude, he knows he is an “edge case.” But his father, Johann Weigend, spent years as a political prisoner in East Germany, where the government was convinced he was an American spy. “I believe in having people know where I am. If something happens to me, somebody at least knows where I am,” said Weigend, a native of Germany, no stranger to issues of personal privacy.

When data is just wrong

In using geolocation, Weigend has become aware of a problem he calls sketchy data. He believes users should be able to correct data, because it’s not always right. At least once, Google Latitude has shown Weigend was in one place (Weehawken, N.J.) when he was actually in another (the west side of Manhattan). Google might think Weigend is in a head shop when in fact he is visiting his friend who lives above the head shop. And it’s not unusual for county officials to enter real-estate data into computer systems wrong, he said.

Some websites permit users to change their data, such as Amazon.com, on which customers can remove items from their purchase history. And it asks if something is a gift, so the system won’t use gifts to modify its algorithms on users’ actual preferences. Weigend likes those options a lot.

Where personal and business meet

How do his personal patterns overlap with his perspectives about what companies should do? It might come down to the best way to help people and companies and engender trust among all.

“Getting people to think about the amazing world of big data, that’s more about Hadoop and all that poop,” he said. “It really is about the questions that we ask. What world do we want to create? And that’s, you know, my little part in this world.”

Feature image courtesy of Flickr user aweigend.

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We have calls into the e-commerce giant and will update this story when we hear back. Gizmodo was first to report on this at 11:25 p.m. PDT. As of 12:05 p.m. PDT, there were no indications of problems with Amazon Web Services on the AWS status page.

Update: As of 12:34 p.m. PDT, the main Amazon.com page was accessible again.

Since the subsites appear to have worked all along, the inactive main page could be due to a DNS configuration issue, or as some have claimed on Twitter, a DDOS (distributed denial of servie) attack on the site, as reported by  BetaBeat.

While there have been quite a few instances of Amazon Web Services glitches over the past year, for the main site of the online store to disappear is quite a big deal, as evidenced by user reaction rippling through Twitter (which had its own issues today) and other outlets.

Amazon has not yet responded to requests for comment.

Update: At 2:06 p.m. PDT  An Amazon spokesperson issued this comment via email: “The gateway page of Amazon.com was offline to some customers for approximately 49 minutes.  Other pages of the site were accessible and AWS was not impacted.”

This story was updated several times during the day.

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Profit margins of Wal-Mart, Amazon, Best Buy, Target, Home Depot and Apple over the past decade.

Mobile ubiquity, in turn, has led to “showrooming,” where consumers use their nearby retailer as a personal testing ground to try before they buy — and as often as not, make a purchase on Amazon instead of at the retail store. And broadband is transforming entire categories of products (music, video, books) that were once exclusively analog to digital, and boundary-less.

Obviously, the game has permanently changed for brick-and-mortar retailers (see Best Buy CEO Brian Dunn’s recent letter), and companies must evolve to survive.

I’d argue that offline retail stores have three primary paths to avoid extinction (note: my first career was in retail real estate asset management).

1. The first, and least appealing, is to compete on price. The hard truth is that in the age of the connected consumer, the real cost of a product is transparent. In the most commoditized of segments, this means that retailers have to live within Walmart (3.4 percent) or Amazon (less than 3 percent) profit margins, or they will die.

This is an incredibly challenging strategy to execute over the long-haul. Even at low-margin price points, consumers expect educated pre-sales service, functional post-sales support and seamless logistics from store to home.

2. The second path is to embrace a store-within-a-store model, where retailers focus on a few key product lines. With this approach, retailers and manufacturers work hand-in-hand to ensure that their products are meaningfully differentiated from the competition and that sales personnel are trained to articulate these differences.

Target is beginning to experiment with this via two different avenues. One is to work with Apple to create mini-Apple stores within Target locations, with a goal of tapping into everyday consumers who might not otherwise be looking for electronics. And under the name The Shops at Target, the company has partnered with specialty boutiques to co-create affordable, limited-edition collections.

3. The last path is to focus the totality of the business on creating products and experiences that are proprietary and unique. This, of course, is the Apple story. Apple focuses every fiber of its being on transformative solutions that blend design, development and distribution.

There are numerous innovation strategies that retailers can pursue on this path. For example, creative marketplaces like Kickstarter and Etsy could evolve into R & D farms for retailers. The upstarts get symbiotic funding, incubation, distribution and joint marketing, and the retailer gets exclusivity and a low-cost way to seed R & D.

Retailers can also build brand loyalty by retooling their manufacturing processes so that consumers can participate in product creation. Nike is doing some amazing things with their Nike ID system, which helps people design their own custom shoes and updates customers as their shoes are being made.

By perennially thinking beyond conventional wisdom about product categories and logistical boundaries, Nike has grown its stake of consumer mindshare, and it’s done so profitably through differentiation.

Applying this same ethos, retailers can optimize their entire supply-chain to achieve real-time agility within the markets they serve. With this approach, companies produce smaller lot sizes, tailor their inventory to suit local geographies and change inventory as rapidly as tastes change.

This strategy has served fashion retailer Zara extremely well. Zara’s “fast fashion” model has been a game-changer for the company, enabling new designs to move from the catwalk to its stores in two weeks (the industry average is four to six months). This helps Zara stay in sync with the latest fashion trends, and the new designs create a sense of exclusivity. The net effect is that 85 percent of their clothes sell at full-retail price, and the company now sees dramatically higher return visits by customers.

The critical point here is that each of these approaches goes way beyond platitudes about “delivering better customer service.” Instead, each path focuses on innovation, integration and extension to deliver a retail experience that is more than the sum of its parts.

Mark Sigal is an eight-time entrepreneur, whose ventures have sold to Apple, IBM and Intel. He is chief product officer at Unicorn Labs, an eBooks and eLearning platform provider.

Carousel image courtesy of Flickr user teofilo.

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Amazon CTO Werner Vogels

Amazon Web Services says its new Simple Workflow Service (SWF) will run applications that are distributed between customer sites and Amazon’s cloud infrastructure, further blurring the line between the customer’s data center and their chosen cloud.

Amazon, the leader in public cloud infrastructure, appears intent on erasing the line between applications customers run in-house and those “out in the cloud.” The ability to run some workloads (or put some data) in the AWS cloud is important for many businesses that want to save money. But many also balk at putting their mission-critical work outside their own firewalls into a public cloud. If Amazon makes it easier for them to run distributed applications securely across internal and outside infrastructure, AWS stands to gain.

Orchestrating workflow is an important concern in enterprise applications. As Amazon CTO Werner Vogels said in his blog, many applications now rely on asynchronous and distributed processing to achieve scale.

By designing autonomous distributed components, developers get the flexibility to deploy and scale out parts of the application independently as load increases. The asynchronous and distributed model has the benefits of loose coupling and selective scalability, but it also creates new challenges. Application developers must coordinate multiple distributed components to get the desired results.

Vogels went on to say that SWF, which appears to be a much more complex tool than the company’s existing Simple Queue Service, relies on a “decider” process  in which tasks represent logical units of work, which can be executable code, scripts, web service calls and human actions. Developers, he wrote, will have full control over implementing and orchestrating these tasks but won’t have to worry about underlying complexities such as tracking their progress and keeping their state.

In his post on the Amazon Web Services blog, evangelist Jeff  Barr said:

This new service gives you the ability to build and run distributed, fault-tolerant applications that span multiple systems (cloud-based, on-premise or both). Amazon Simple Workflow coordinates the flow of synchronous or asynchronous tasks (logical application steps) so that you can focus on your business and your application instead of having to worry about the infrastructure.

SWF will feed into Amazon’s Management Console and will give developers a view into each step of application execution, according to Vogels. SWF will retain the history of executions for a period determined by the developer, up to 90 days.

This is just the latest Amazon service to blur what was once a fairly clear line between a customer’s own data center and Amazon’s public cloud.  In late January, Amazon introduced its Storage Gateway that, as my colleague Derrick Harris reported at the time, lets companies upload data to Amazon’s cloud-storage services directly from their on-premise storage systems. That happened just a week after it unveiled its DynamicsDB DynamoDB NoSQL database. 

The news is not a complete surprise. TechCrunch wrote about the proposed service earlier this month.

All of this sounds great, but it likely will take some time for enterprise developers to truly get on board with all that AWS is presenting them in terms of new architectures. One thing is clear: Amazon’s attempt to be an enterprise application platform is ambitious indeed.

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Zinio

Selection:

Zinio is the oldest, most mature magazine platform on the iPad, and as a result has the largest selection. The music and photography sections are well stocked. The only writing magazine available I like is The Writer (Writer’s Digest is missing) and for Apple-related magazines Macworld magazine is available, but MacLife is not.  As an aside, while Zinio does carry adult magazines, those are not available on the iPad app due to Apple’s guidelines. Where Zinio’s selection truly shines is the large back issue catalog — Digital Camera World has issues going back to 2002. News and tech-related magazines tend to have a short shelf life, but for arts magazines I love I can go that far back. The News section seems well stocked, but, oddly, the the Russian version of Forbes is the only one available.

The  shopping experience is very unobtrusive. Since Zinio’s primary business is selling magazines, it’s very easy to browse the store and purchase magazines from either your browser or app. Zinio does a good job at organizing the magazines into sections, so you can browse just by Photography or Music sections. It would be nice to see another sub-level where I could sort by just guitar-oriented magazines.

Zinio has the highest up-front cost of the three options because most subscriptions are for the year, and individual prices are close to newsstand prices.

Reading Experience:

The first few releases of the app were rough going with each page taking a while to come into focus, but with the latest version of the app, I barely notice it on an iPad and never notice it on an iPad 2. The text has a nice weight and the images look fine. You can sort your reading view by issue release date or title, but you can’t group them by section. The quality varies on the table of contents between magazines. Some magazines just show you the content page; others have an interactive table of contents, making it easy to get to the article you want to read. There is an option to display a lengthy article in an easy-to-read text format, but it not used nearly enough. You can bookmark pages, but not highlight passages.

Macworld magazine in the Zinio app

Amazon

Selection:

Of the three options, Amazon has the poorest digital selection with roughly 420 Kindle magazines available. Amazon’s Arts and Entertainment digital magazine section has only 120 magazines; Zinio’s Photography section (also under its Arts section) has 118 magazines alone. That said, there are a few magazines like Guitar World that are available on Amazon, but not Zinio. Searching the store is a bit of a hassle. The default sections are too broad making it hard to narrow your selection. Also the keywording isn’t implemented well; searching on Photography did not bring up Digital Camera World, but searching on Camera did.

There are also no back issues available. This is a problem if you get into a new interest and want to get a backlog of magazines. As I mentioned in the Zinio section, it’s nice to get into a new hobby like photography and be able to scour the back issues.

In terms of pricing, I found Amazon to be the most consumer-friendly. Most magazines can be subscribed to month-to-month for about $1 to $2.99 and a free 14-day trial is available for all magazines. Unlike Zinio, you do not have to purchase a full year upfront.

Reading Experience:

Your magazines are well-integrated into the Kindle app, showing up in both the All Items view and the Newsstand tab. I found the page layout view to be the poorest of the three, with the text being slightly heavier than Newsstand and Zinio; it’s about halfway between regular and semi-bold. Against  a white background it’s not bad, but it really looks poor against a color. What is nice is Amazon’s Text view for magazines is much more useful than Zinio’s. It’s supported on each page and you can customize the layout and fonts.

Finding old issues you want to download, again, isn’t clean. All of your old issues are in a Periodicals: Back Issues folder. Back Issues also seem to go into the Archived section of the Newsstand tab. What’s a little weird is if you archive a magazine it only shows up in the Archived area, not also the Periodicals: Back Issues folder.

Mac|Life magazine in the Kindle app

Newsstand

Newsstand isn’t one service. Instead, it’s a collection of magazine apps that are grouped by Apple into their Newsstand folder in iOS 5. While each app does have its own idiosyncrasies, there are  some common themes I’ll be mentioning here.

Selection:

The selection for Newsstand roughly falls between Kindle and Zinio with around 1,620 Newsstand apps available. However, it’s in searching the thing falls down on its face. You can either search the store for the magazine and then refine the search for Apps only, or you can scroll through the entire Newsstand catalogue. It’s darn near impossible to browse a section. Shutterbug magazine will show that it’s in the Photo and Video section, but clicking on that section shows me all of the Photo and Video apps; not just Newsstand apps. You also cannot search and purchase through the web.

Most magazines are available for monthly $1 to $2.99 subscriptions with a few I’ve seen having a minimum of a three-month subscription. There are no free trials. Back issues vary from app to app; some only go back to when the app was launched, some go back over a year.

Reading Experience:

For the most part, reading a Newsstand magazine is on par with reading a PDF of the magazine. While that’s largely true of Zinio and Amazon, at least they offer niceties like the table of contents and a text view; the Newsstand apps I’ve tried do not. Also, there is no bookmarking or text selecting. Newsstand apps take a second or so to focus in on my iPad, but it’s better on my iPad 2. However, unlike the Kindle app, the text looks fine in page layout view.

While Newsstand does a decent job of grouping magazine apps together, the entire reading experience feels kludgy. If you have a lot of apps, it’s hard to find out which ones have recent copies since the app stays in the same place in Newsstand even after a new issue has been downloaded — although some of the apps show a “new issue” flag on the app. You can turn on notifications and badges, but I limit my notifications to alerts that are truly important.

An obvious point that bears mentioning is that Newsstand is the only one of the three that’s not cross-platform. One of the draws of Zinio and Amazon Kindle is they do work on non-Apple devices. If you also have a Kindle Fire in addition to your iPad, Newsstand is not the choice for you.

Mac|Life magazine in Future's Newsstand app

Where my purchases go

When I look for a magazine, Zinio still remains my first destination since that’s where the bulk of my library resides. After that, I look on Amazon for a Kindle version. If it’s not on Kindle but is on Newsstand, well, frankly I make a decision if I really need the magazine that badly. There are two reasons I choose the Kindle second, even though the quality is the poorest of the three: it shows up with the rest of my books in the Kindle app, so I only have two apps that I need to look towards for reading — and it is cross-platform. One thing I’m trying really hard to do is make sure the content I consume is cross-platform. With iOS, I know I’ve got some lock-in on apps, but since Zinio and Amazon have gone out of their respective ways to make sure my content can be read on different platforms I know I can read my books and magazines on a Kindle Fire if I get one.

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Facts are lazy and facts are late

Facts all come with points of view

Facts don’t do what I want them to

—From “Crosseyed and Painless” by Talking Heads (written by Brian Eno and David Byrne)

Business growth at established companies tends to decline relentlessly over time in the absence of inspired innovation, an impact I affectionately refer to as “gravity.” If CEOs want to fight this gravity and improve the long-term growth trajectory of their businesses, they need to take proactive, concrete steps to make it happen.

As CEO of OpenTable, I was always trying to develop and test a portfolio of potential new initiatives, targeted at both optimizing the core business and adding new layers of growth (see my last post on this topic, “Adding Layers to the Cake”). I wanted to identify completely new initiatives that would boost business growth — things we weren’t already doing. Things you are already doing are largely yesterday’s news, and their impact on future growth tends to wane over time. Implementing completely new innovations can help your business fight gravity.

At OpenTable, one of the most highly leveraged examples of an innovation to optimize our core business was developing a rigorous methodology to pursue and assess potential site improvements. A while after I became CEO, my predecessor Thomas Layton (who did a spectacular job positioning OpenTable for long-term success) sent me a fascinating video of Ron Kohavi (previously the director of data mining and personalization at Amazon) talking about Amazon’s approach to something Kohavi called data-driven product development. Here’s a link to one of his presentations: http://videolectures.net/kdd07_kohavi_pctce/. (FYI, it only works sporadically.)

The video details how Amazon rigorously deployed A/B testing to optimize website efficiency. Kohavi starts the presentation by showing a number of different executions of the same feature that they had tested over time. He then asks the audience to vote on which they thought had performed better. The folks in the audience — all website geeks — were unable to consistently pick the winning execution. That was mildly surprising. But what was astonishing was the delta between the results driven by different executions of the same feature: what often appeared to be a subtle change could drive huge improvements in performance.

In the video, Kohavi also talks about the impact of the “HiPPO” (Highest Paid Person’s Opinion) in the product development process. Not surprisingly, most HiPPOs believe they know intuitively what will work best (spoken by the former HiPPO at OpenTable). But pretty much none of us have the product instincts of a Steve Jobs, and Kohavi makes a very compelling case for letting the data and not the HiPPO make the decision.

So we resolved to test data-driven product development as one of OpenTable’s potential core business optimization initiatives. We tasked a talented product manager, Julie Hall, to lead the effort, and we procured the necessary tools. For the art side, we found the low-cost and highly efficacious UserTesting.com service, which enabled us to get qualitative user feedback literally overnight to inform what we planned to test. And for the science side, we bought the overpriced but also highly effective Test&Target system from Omniture, which enabled robust quantitative measurement of a number of simultaneous A/B tests.

These two tools worked together marvelously. One time, we stumbled upon a big “improvement opportunity” (aka a nasty usability problem on the site). We used usertesting.com to task a handful of unregistered users with making a reservation. Then we watched in horror as a significant minority of the test users got trapped in our “Sign-In” functionality and couldn’t complete their online reservation. In the real world, they probably would have gotten pissed off and simply picked up the phone (OpenTable’s biggest competitor for consumers) and called the restaurant, a disaster for our user acquisition, brand affinity and OpenTable economics.

Here is the offending page:

The problem we encountered was that non-registered users would set the radio button that said “I am a new OpenTable customer” and then fill in their email address and select a password, which sat under the “I am an OpenTable member” section. This combination caused the page to return an error message.

In response, we developed alternative treatments of our sign-in functionality and tested them via Test & Target. The winning executions presented non-cookied users with a form tailored directly to new users, with clear visibility of a link for existing members to sign in:

After the user hit the “Complete Free Registration” button, we then presented them with a popup that prompted them to register to become an OpenTable member:

These simple changes boosted our reservation success rate by 10 percent over the prior implementation. And a 10 percent improvement in the revenue stream that comprised well over half of the company’s total business due to one simple change was a monster win for the business.

Over time, the data-driven product development methodology at OpenTable matured into a highly disciplined testing regimen. Hundreds of tests have been run in the past few years. Not all were home runs like the change above, but lots of singles and doubles supplemented the occasional home run to have a highly material impact on the business. I can’t recommend a rigorous data-driven product development process enough to managers of website businesses — it’s extremely low-hanging fruit in the pursuit of growth.

Other examples of core business optimization initiatives that helped OpenTable boost growth include:

• Developing a new version of our enterprise software used by restaurants that improved search-to-reservation conversion by having the software better mimic the decision-making process of the person at the host stand
• Redesigning key pages of the site to improve their efficiency, such as a complete overhaul of our search-results pages (tested thoroughly through A/B testing)
• Focusing dedicated resources on optimizing the percentage of OpenTable restaurant owners who had “make an online reservation” links on their own websites, as well as improving the visibility of those links
• Applying concerted product and engineering efforts to boost our ranking in search engine results
• Hiring a lot more sales people to accelerate the acquisition of restaurants using OpenTable (not a product change, but highly effective)

The key takeaway here is that all of the above were new, concrete initiatives that were not yet part of the company’s arsenal. Their successful deployment helped fight off the impact of gravity and led to accelerated growth for the company.

Jeff Jordan is a general partner at Andreessen Horowitz. Previously, he was president and CEO of OpenTable, president of PayPal and senior vice president/general manager of eBay North America. He blogs at http://jeff.a16z.com/.

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