- 04 Jan 2021
- Working Paper Summaries
The Twofold Effect of Customer Retention in Freemium Settings
Many digital products offer “freemiums”: that is, part of the product for free, often with advertising, and an enhanced customer experience for payment. This research, in a mobile game context, shows the importance of recognizing the short- and long-term effects on customer retention when managing the tradeoffs between free and paid aspects of freemium products.
- 14 Apr 2020
- Cold Call Podcast
'Fortnite' Was a Blockbuster for Epic Games. What’s the Encore?
Epic Games, maker of the incredibly popular "Fortnite" multiplayer game, considers whether to become a PC-games distribution platform. Andy Wu discusses his case study, “Epic Games.” Open for comment; 0 Comments.
- 10 May 2018
- Cold Call Podcast
'Candy Crush' Was a Blockbuster; Can King Digital Capitalize?
The mobile game "Candy Crush Saga" was a megahit for Riccardo Zacconi and his studio, King Digital Entertainment. But can he scale up the business to include several hundred titles? A Cold Call podcast with Jeffrey Rayport. Open for comment; 0 Comments.
- 26 Jul 2016
- Research & Ideas
Where will Pokémon Go with Your Personal Information?
Pokémon Go is a game sensation, no doubt about that. But users should worry about where their personal information is going as well. Willy Shih discusses what happens when technology wizardry meets personal privacy. Open for comment; 0 Comments.
- 04 May 2015
- Research & Ideas
Need to Solve a Problem? Take a Break From Collaborating
Organizations spend a lot of money enabling employees to solve problems collectively. But inducing more collaboration may actually hinder the most important part of problem-solving: actually solving the problem. Research by Jesse Shore, Ethan Bernstein, and David Lazer. Open for comment; 0 Comments.
- 09 Apr 2014
- Working Paper Summaries
Visualizing and Measuring Software Portfolio Architectures: A Flexibility Analysis
Contemporary business environments are constantly evolving, requiring continual changes to the software applications that support a business. Moreover, during recent decades, the sheer number of applications has grown significantly, and they have become increasingly interdependent. Many companies find that managing applications and implementing changes to their application portfolio architecture is increasingly difficult and expensive. Firms need a way to visualize and analyze the modularity of their software portfolio architectures and the degree of coupling between components. In this paper, the authors test a method for visualizing and measuring software portfolio architectures using data of a biopharmaceutical firm's enterprise architecture. The authors also use the measures to predict the costs of architectural change. Findings show, first, that the biopharmaceutical firm's enterprise architecture can be classified as core-periphery. This means that 1) there is one cyclic group (the "Core") of components that is substantially larger than the second largest cyclic group, and 2) this group comprises a substantial portion of the entire architecture. In addition, the classification of applications in the architecture (as being in the Core or the Periphery) is significantly correlated with architectural flexibility. In this case the architecture has a propagation cost of 23 percent, meaning almost one-quarter of the system may be affected when a change is made to a randomly selected component. Overall, results suggest that the hidden structure method can reveal new facts about an enterprise architecture. This method can aid the analysis of change costs at the software application portfolio level. Key concepts include: This method for architectural visualization could provide valuable input when planning architectural change projects (in terms of, for example, risk analysis and resource planning). The method reveals a "hidden" core-periphery structure, uncovering new facts about the architecture that could not be gained from other visualization procedures or standard metrics. Compared to other measures of complexity, coupling, and modularity, this method considers not only the direct dependencies between components but also the indirect dependencies. These indirect dependencies provide important input for management decisions. Closed for comment; 0 Comments.
- 22 Feb 2012
- Working Paper Summaries
The Dynamic Effects of Bundling as a Product Strategy
This paper investigates the practice of bundling as a product strategy, and identifies how consumers make choices between products and bundles in a dynamic environment. Authors Timothy Derdenger and Vineet Kumar look at the handheld video game market to study bundling in a platform setting with the goal of investigating several key questions of interest to practitioners who make product decisions: First, do consumers value bundles over and beyond their component products, indicating a synergy, which some researchers have hypothesized? Second, have there been differing opinions on whether mixed bundling, that is offering both the bundle and individual products for sale, is more effective than offering only pure bundles or even compared to offering only the products for sale? Given the prevalence of bundling in technology markets, it is critical to understand whether bundling is more effective in environments with strong network effects or with weak network effects. Key concepts include: Consumers have a negative synergy effect, that is they are willing to pay less for the bundle than for the individual console and game, leading to the question of whether introducing such bundles can increase revenue. Because bundles act similar to damaged goods, they work well in dynamically segmenting consumers and allow for purchases to occur earlier in time—the presence of bundles induces consumers to purchase earlier rather than wait. The time shifting of hardware purchases has a strong effect on software sales, since more consumers who own consoles will purchase video games over a longer time frame. Mixed bundling is especially effective compared to pure bundling, and the authors find that moving to pure bundling would reduce sales by over 20 percent. Strong network effects do not enhance the value of bundling, suggesting that bundling may instead prove more useful in settings with weak network effects. Bundling is thus a strategy that could serve as a substitute to creating stronger network effects. Closed for comment; 0 Comments.
- 06 Oct 2010
- Working Paper Summaries
Using What We Know: Turning Organizational Knowledge into Team Performance
An organization's captured (and codified) knowledge--white papers, case studies, documented processes--should help project teams perform better, but does it? Existing research has not answered the question, even as U.S. companies alone spend billions annually on knowledge management programs. Looking at large-scale, objective data from Indian software developer Wipro, researchers Bradley R. Staats, Melissa A. Valentine, and Amy C. Edmondson found that team use of an organization's captured knowledge enhanced productivity, especially for teams that were geographically diverse, relatively low in experience, or performing complex work. The study did not find effects of knowledge use on the quality of the team's work, except for dispersed teams. Key concepts include: Using captured knowledge had a positive effect on the team's project efficiency (delivering on budget) but not on project quality (number of defects in the code). When use of knowledge was concentrated in a small number of team members, efficiency improved but quality declined. Knowledge use improved project efficiency but not quality for teams with less experience. For more dispersed teams, knowledge use was related to improved quality but not efficiency. Team knowledge use was related to improved efficiency and quality for teams completing more complex work. Closed for comment; 0 Comments.
- 22 Mar 2010
- Research & Ideas
One Strategy: Aligning Planning and Execution
Strategy as it is written up in the corporate playbook often becomes lost or muddled when the team takes the field to execute. In their new book, Professor Marco Iansiti and Microsoft's Steven Sinofsky discuss a "One Strategy" approach to aligning plan and action. Key concepts include: The book combines practical experience at Microsoft with conceptual frameworks on how to develop strategies that are aligned with execution in a rapidly changing competitive environment. "Strategic integrity" occurs when the strategy executes with the full, aligned backing of the organization for maximum impact. The chief impediment to strategy execution is inertia. The One Strategy approach is less about formal reviews and more about one-on-one conversation. Blogs can be a powerful asset in managing an organization. Closed for comment; 0 Comments.
- 04 Mar 2010
- Working Paper Summaries
The Determinants of Individual Performance and Collective Value in Private-Collective Software Innovation
Why do people expend personal time and effort toward creating a public good? Over the past decade, collaborative, community-based approaches to developing knowledge-intensive products like encyclopediae, music, and software have gained prominence in both practice and scholarly analysis. "Open source software development," for example, is distinguished by self-selection of distributed participants into tasks, free revealing of knowledge, collective creation of shared software artifacts, and participants' ability to generate new innovations by reinterpreting and repurposing knowledge and artifacts created by others. The MathWorks' Ned Gulley and HBS professor Karim R. Lakhani study the determinants of individual performance and collective value in software innovation by analyzing 11 programming competitions that mimic the working of the open source software community. Key concepts include: Knowledge creation and reuse are important dual goals of social systems organized to collectively solve technical problems. Collective value relies on the ability of others to understand and comprehend the design structure of knowledge to enable reuse. Thus deviations from commonly understood rules of practice, while beneficial to the individual innovator, impede adoption by others. Although free riding is a concern in most collective systems, innovators need to realize that the value of the reuse of their work by others depends as much on the new knowledge they create as on the old knowledge they borrow. Closed for comment; 0 Comments.
- 11 Feb 2010
- Working Paper Summaries
The Architecture of Complex Systems: Do Core-periphery Structures Dominate?
All complex systems can be divided into a nested hierarchy of subsystems. However, not all these subsystems are of equal importance: Some subsystems are core to system performance, whereas others are only peripheral. In this study, HBS professor Carliss Y. Baldwin and coauthors developed methods to detect the core components in a complex software system, establish whether these systems possess a core-periphery structure, and measure important elements of these structures. The general patterns highlight the difficulties a system architect faces in designing and managing such systems. Results represent a first step in establishing stylized facts about the structure of real-world systems. Key concepts include: Core-periphery structures dominate the sample, with 75-80 percent of systems in the sample possessing such a structure. It is significant that a substantial number of systems lack such a structure. This implies that a considerable amount of managerial discretion exists when choosing the "best" architecture for a system. Variations in system structure can be explained, in part, by the different models of development used to develop systems. Legacy code is rarely rewritten, but instead forms a platform upon which new systems are built. With such an approach, today's developers bear the consequences of design decisions made long ago. Closed for comment; 0 Comments.
- 30 Jul 2009
- Working Paper Summaries
Fluid Teams and Fluid Tasks: The Impact of Team Familiarity and Variation in Experience
In the context of team performance, common wisdom suggests that performance is maximized when individuals complete the same work with the same people. Although repetition is valuable, at least up to a point, in many settings such as consulting, product development, and software services organizations consist largely of fluid teams executing projects for different customers. In fluid teams, members bring their varied experience sets together and attempt to generate innovative output before the team is disassembled and its individual members move on to new projects. Using the empirical setting of Wipro Technologies, a leading firm in the Indian software services industry, this study examines the potential positive and negative consequences of variation in team member experience as well as how fluid teams may capture the benefits of variation while mitigating the coordination costs it creates. Key concepts include: As organizations continue to depend on the output of teams, and teams, in turn, rely on members with varied prior experience, it becomes critical for teams to manage these differences and dependencies successfully. If the most valuable assets of many companies are their employees, then organizations need to shift from only thinking about their project portfolio to also considering their employee-experience portfolio. Managing employee-experience portfolios will require managers to consider the breadth of types of experience (e.g., customer, technology, etc.) captured across the members of a team as well as their familiarity with each other. Doing so may offer managers an important new lever for improving organizational performance. Closed for comment; 0 Comments.
- 16 Jul 2009
- Working Paper Summaries
Principles that Matter: Sustaining Software Innovation from the Client to the Web
Despite the current strength and promise of the Internet software market, the future pace of growth and innovation is not assured. The principles of choice, opportunity, and interoperability were important in the growth of PC software and in the overall health of the information technology ecosystem, and these same principles will shape competition in Internet software, according to HBS professor Marco Iansiti. Given the unprecedented speed at which this industry is developing, consumers and the industry should watch carefully as different companies compete. Choice, opportunity, and interoperability should serve as an important lens, particularly when focused on companies with especially large footprints in the new markets. Key concepts include: Successful technology companies should not forget that innovation and growth in the technology sector is dependent on promoting a thriving ecosystem of complementary and interdependent products. The competitive principles of choice, opportunity, and interoperability are important in Internet software, because of the increased variety of possible software and hardware combinations and the increased interdependency in the applications and services they deliver. Closed for comment; 0 Comments.
- 28 May 2009
- Working Paper Summaries
Monopolistic Competition Between Differentiated Products With Demand For More Than One Variety
How and when is price competition most significant among firms? This paper develops a theoretical framework for studying price competition between multiple firms. Two examples of markets that fit the description for study are software applications and videogames: There are thousands of software applications as well as games, and different users are interested in different applications and/or games. A given software or game user's tastes may overlap with another's, yet they may have nothing in common with a third's. Thus, although there is a sense in which competition is localized (any given firm competes only with firms whose brands are similar to its own), it is not clear how the fact that consumers are generally interested in purchasing multiple products affects the type of competition waged among firms. Key concepts include: This paper proposes a theoretical framework for studying competition between differentiated products when consumers are interested in purchasing more than one brand. Closed for comment; 0 Comments.
- 14 May 2009
- Working Paper Summaries
Quantity vs. Quality and Exclusion by Two-Sided Platforms
It is common for two-sided platforms to deny participation to some potential customers, who would otherwise be willing to pay the platforms' access and/or transaction fees. Videogame console manufacturers such as Microsoft, Sony, and Nintendo, for example, restrict access to a select set of game developers and exclude many others by including security chips in their consoles, even though the latter would also be willing to pay the per-game royalties levied by the manufacturers. Apple routinely excludes certain application developers from its highly popular iPhone store. Professor Andrei Hagiu builds a simple model formalizing profit-maximizing two-sided platforms' choice of exclusion policies, which is fundamentally determined by a tradeoff between quality and quantity. Key concepts include: A simple model captures the incentives that two-sided platforms have to exclude some participants who would be willing to pay the platform's access fees. Platforms' exclusion incentives are fundamentally determined by a tradeoff between quality and quantity. Closed for comment; 0 Comments.
- 22 Oct 2008
- Working Paper Summaries
Variation in Experience and Team Familiarity: Addressing the Knowledge Acquisition-Application Problem
Team familiarity helps team members successfully locate knowledge within a group, share the knowledge they possess, and respond to the knowledge of others. While team familiarity may help all teams to better coordinate their actions, it may play a particularly important role for teams with individuals looking to apply knowledge from their varied experience. This possibility leads to the question that provides the foundation for this paper: Does team familiarity moderate the relationship between variation in experience and performance? Prior research attempting to link variation in experience and performance has found effects ranging from positive to neutral to negative. Huckman and Staats explain these differential results by drawing on related work from learning, knowledge management, and social networking. Key concepts include: Managers may benefit from a more detailed understanding of the types of experience that are relevant in their setting (e.g., market, technology). If the most valuable assets of many companies are their employees, then organizations may need to shift from thinking about their project portfolio to their employee-experience portfolio. Conditions that assist in the acquisition of useful knowledge, such as variation in experience, will not guarantee—and may even deter—the eventual application of that knowledge. It is important to separate the processes of knowledge acquisition and knowledge application. Closed for comment; 0 Comments.
- 09 Jun 2008
- Lessons from the Classroom
Monetizing IP: The Executive’s Challenge
Many companies fail to develop a strategy around protecting and monetizing their intellectual property. In this Q&A, Harvard Business School professor Josh Lerner discusses current trends in IP including the rise of patent pools. Closed for comment; 0 Comments.
- 14 Apr 2008
- Research & Ideas
The Surprising Right Fit for Software Testing
Software analysts and programmers live to innovate—but hate to run tests. Yet top-notch testing saves many a company money when bugs are caught early. A case study describes the secret behind a Danish consultancy's success: The majority of its testers have Asperger syndrome or a form of autism spectrum disorder. Open for comment; 0 Comments.
- 24 Mar 2008
- Working Paper Summaries
Optimal Deterrence when Judgment-Proof Agents Are Paid In Arrears—With an Application to Online Advertising Fraud
It is commonplace for large entities (both advertisers and ad networks) to enter into relationships with numerous small agents such as Web sites, blogs, search syndicators, and other marketing partners. For example, one well-known affiliate network boasts more than a million affiliates promoting offers from the network's hundreds of merchants, and Google contracts with numerous independent Web sites to show Google's "AdSense" ads. Although these advertising agents are often small, they can take advantage of technology to claim payments they have not earned. In practice, the legal system cannot offer meaningful redress to an aggrieved advertiser or ad network. This paper argues that delayed payment offers a more expedient alternative—a sensible stopgap strategy for use when primary enforcement systems prove inadequate. Key concepts include: Online advertising markets are one of many markets where agents may be effectively unreachable through the legal system. Online advertising contracts presently lack any institution by which the payment structure can enforce good practices. Improving detection technology remains the preferred deterrent of online advertising fraud. Appropriate selection of a payment delay can achieve the benefits offered by contingent payment in other markets. Closed for comment; 0 Comments.
The $15 Billion Question: Have Loot Boxes Turned Video Gaming into Gambling?
Critics say loot boxes—major revenue streams for video game companies—entice young players to overspend. Can regulators protect consumers without dampening the thrill of the game? Research by Tomomichi Amano and colleague.