The $300 House Challenge is showing us that individuals and companies are willing to make a difference.
Check out WorldHaus from Bill Gross and his team at IdeaLab. Read his Harvard Business Review post on the “design challenge” here >>
The $300 House Challenge is showing us that individuals and companies are willing to make a difference.
Check out WorldHaus from Bill Gross and his team at IdeaLab. Read his Harvard Business Review post on the “design challenge” here >>
The Gap screws up with their logo redesign. A giant failure of imagination in the boardroom.
But Umair Haque asks the right questions:
We all need to wake up. The Chamber of Commerce approach to design isn’t going to work anymore.
David Smith‘s HBR post on the financial challenge of the $300 House raises some very important issues:
Cracking the challenge of slums is the world’s biggest problem of the next quarter-century, because the ecology of slums and the ecology of cities are linked. We cannot have a healthy global economy without healthy cities, and we cannot have healthy cities without tackling slums.
Join us >>
We’re building a “creationspace” (JSB’s word) for the $300 House-for-the-Poor at 300house.com >>
Please sign up, and tell your friends!
The political intentions of our GOP friends would leave the US with a hollowed-out economy.
Here is an example of how Obama’s unpopular bail-out for the auto-industry led to the creation of a new and critical cleantech industry – electric batteries – in this country. What say you, FOX News?
Good for you Alex Bogusky! Can this ex-ad-man save the planet?
More on Hunter Lovins and Catherine Greener >>
Go J.R.! Note he mentions my client – the Solar Electric Light Fund. Stay tuned for more news about them…
I like the SolarWorld ads Hagman does quite a bit. Here he’s talking to Sue Ellen (who seems to be blaming him for BP’s mess in the Gulf):
Shine, baby, shine! Well said, Larry Hagman!
The thing about Hagman is he put his money where his mouth is – years ago – by converting his estate to solar, before solar was cool.
Jail time for these environmental terrorists.Call your congressperson…
For the first time, in 2010, online advertising will pass traditional advertising on TV and print:
While this is remarkable, I can tell you where the highest ROI is.
It’s with the Republican party. You can buy every single Republican vote for a paltry $34 million, as the health care circus has shown us.
Wow. Who needs Google when all you need is the budget for one Superbowl ad. Think about that: all it takes to buy the entire GOP is one Superbowl ad. There goes the future of our country.
PS – On a side note, I wonder what it takes to buy our Supreme Court… 5 bucks to Clarence Thomas’ wife?
Just a few days ago I praised Forrester‘s decision to create individual blogs for all their analysts. So they finally get it, I thought. Boy, was I wrong!
Yesterday I noticed how their migration to the new blogging platform was executed:
Yes, that’s the dreaded “The requested page could not be found” message.
Apparently, for Forrester, moving to a new platform means all old URLs die.
This is just so wrong. Linkrot is a common mistake that companies and institutions make all too often. For this to happen at an institution like Forrester shows me they don’t understand web basics. Don’t get me wrong, a lot of big companies have made this mistake, but for Forrester it’s inexcusable!
Maybe Forrester should have a chat with Jakob Nielsen. Check this:
Any URL that has ever been exposed to the Internet should live forever: never let any URL die since doing so means that other sites that link to you will experience linkrot. If these sites are conscientious, they will eventually update the link, but not all sites do so. Thus, many potential new users will be met by an error message the first time they visit your site instead of getting the valuable content they were expecting. Remember, people follow links because they want something on your site: the best possible introduction and more valuable than any advertising for attracting new customers.
At other times, it becomes necessary to re-architect a site and impose a new structure. Even then, the rule continues to be: you are not allowed to break any old links. The solution is to set up a set of redirects: a scheme whereby the server tells the browser that the requested page is to be found at a new URL. All decent browsers will automatically take the user to the new URL, and really good browsers will even update their bookmark database to use the new URL in the future if the user had bookmarked the old URL.
I remember when the same stupid mistake was made by Harvard Business Review back when they switched domains from hbswk.hbs.edu to harvardbusiness.org. Overnight, they destroyed their online ecosystem, as Forrester has just done.
What’s the big deal, you ask? In today’s connected world, this is brand destruction plain and simple. Not the way to build an attention platform.
In 2000, back when I was working at a large software company, I was responsible for building their online communities. And part of the challenge was trying to explain to executives that “marketing is a conversation” and that conversations occur between people – opinionated, passionate people – not PR departments.
I’d make everyone read the cluetrain manifesto.
People are brands. And like brands, they can be fake or real. The real dilemma is this – is there a line, a demarcation between the voice of the company and the voice of the individual?
My point has always been this: when companies allow their employees to blog, they are strengthening their brand by making connections, building relationships, improving the quality of the conversation with the market, etc. etc.
And yes, there are times when people go off the deep end and act unprofessional. So you’ve got to have an employee blogging policy; and these days that means you’ve got to have a social media policy which covers Twitter, Facebook, and god-forbid, MySpace, along with the rest of the social stuff.
But all of this boils down to common sense; see
Sun’s, Oracle’s blogging policy, for example. The older version spelled it out like this:
1. Do not disclose or speculate on non-public financial or operational information. The legal
consequences could be swift and severe for you and Sun.
2. Do not disclose non-public technical information (for example, code) without approval. Sun
could instantly lose its right to export its products and technology to most of the world or to
protect its intellectual property.
3. Do not disclose personal information about other individuals.
4. Do not disclose confidential information, Sun’s or anyone else’s.
5. Do not discuss work-related legal proceedings or controversies, including communications with
6. Always refer to Sun’s trademarked names properly. For example, never use a trademark as a
noun, since this could result in a loss of our trademark rights.
7. Do not post others’ material, for example photographs, articles, or music, without ensuring
they’ve granted appropriate permission to do this.
8. Follow Sun’s Standards of Business Conduct and uphold Sun’s reputation for integrity. In
particular, ensure that your comments about companies and products are truthful, accurate, and
fair and can be substantiated, and avoid disparaging comments about individuals.
When it comes to thought-leadership or a CEO blog, the voice of the individual is even more important.
Forrester gets this, finally. In a recent blog post, Cliff Condon, Forrester’s VP in charge of their social media efforts, explains the company’s official position on the topic of analyst blogging:
1. Forrester wants more analysts using social tools because it makes for better research. The research we write for clients has always depended on a rich two-way conversation with experts and practitioners in the marketplace. The rise of social tools like blogs and Twitter allows analysts to extend that conversation with more people in the marketplace. The more smart people our analysts interact with, the better our research will be. That’s the basis of the Groundswell. Therefore, Forrester is investing in building social tools and associated best-practice training for our analysts so that more of them get involved.
2. We are building a new blog platform to provide each analyst with a personal blog. Our platform today supports team blogs based on the professional roles we serve – such as the Forrester Consumer Product Strategy blog. The new platform we are building will allow our analysts to also maintain an individual blog on their coverage area. We are doing this so that our analysts can have direct conversations with key players in the marketplace and so clients have the flexibility to engage at an individual analyst level or a team level.
3. We want to make it easy for our clients. Our clients rely on us to help make them successful. They have told us that they are starved for time – they subscribe to our services in part because they conveniently get the insight they need from us and others who join in the Forrester conversation. Therefore, we can best serve client needs by placing all of our blog content in one place (at blogs.forrester.com), and put it in context alongside the rest of our data and analysis.
I hope that adds some clarity to what we are working on – I’ll share more as we move closer to roll-out later in the quarter. However, I felt it necessary to add to the conversation now since there has been discussion about analysts’ brands and the Forrester brand. The fact is we want to do everything possible to give analysts a high degree of visibility. Giving every analyst a personal blog is a step toward that goal. Our analysts’ reputation and our own are tied together. Our new blog platform is being designed to boost them both.
Definitely a step in the right direction for Forrester.
Every now and then, a CEO or company founder asks me one (or both) of these two questions:
1) must I have a separate blog from the company site?
2) do I have to use my name on the blog?
My answer depends on the individual. It’s quite simple, really.
If I think they’re a thought-leader in their industry – that’s to say their opinions and ideas lead the field – then I often encourage them to blog under their own name on a blog that stands outside their company domain (more on that in a second).
The key assumption is that they are thought leaders. If I don’t get this assumption right, we are all wasting time. There’s no point setting up a double-loop model if you aren’t going to have something important to add to the conversation. Here’s what to do instead: have a company blog, put your press releases on it, and talk about your products. Have your agency Twitter and Facebook away to their heart’s content. Just don’t call it thought leadership, because it isn’t.
So, now that we’ve established that, let’s look at what is thought-leadership.
How do you know you are a thought leader? Here are some clues:
1) people you’ve never heard of start emailing you long (relevant) notes about something you said on your blog
2) your clients start reading your blog – so do analysts, journalists, and others you respect
3) you notice your blog gets ten times more traffic than your company website
4) you start getting calls from prospects asking for your services (and products)
If these four things don’t happen, (1) you’re not blogging right, or worse, (2) you aren’t a thought leader.
Now let’s talk about individuals and why using your name is actually a very good idea.
Authenticity. People relate to other people. We see this in entertainment: Oprah, Martha Stewart, David Letterman, Elvis, Bob Marley; in sports: Shaun White, Cristiano Ronaldo, Pele, Ali (and unfortunately Tiger Woods); and in business: Warren Buffett, Bill Gates, Richard Branson, Jeffrey Immelt. So if you’re the founder or CEO, and you have a message worth getting out, you want people to know who you are. The connection is personal not corporate.
Passion. If you believe fiercely in what you say, do, and think, then it is this passion that people want to connect to – directly. Without that PR person. Passion can’t be staged.
Trust. Your voice as an individual is far more trustworthy than a faceless corp. And you are believable when you believe.
Findability. People search for names. So if you write a book, they’ll search for you, the author. “Byron Katie”* gets 10X more searches than “The Work,” for example.
Longevity. As a person, you live till you die. You may switch companies, or labels, or publishers. You, the brand, stays constant. Your attention platform is how you go direct to the customer, no resellers necessary. Your followers stay with you forever.
Ideas. Companies don’t have good ideas, people do. Good ideas originate in the heads of your people. These are your thought-leaders. Don’t make them anonymous thinking this will help your company; it won’t.
The Brand. Too much has been said about you, the brand. A company can renovate its brand by hiring an ad agency. You, on the other hand, have the opportunity to be real.
Lately, even large companies are seeing the benefits of using thought leaders as ambassadors for their brands.
So we see Don Tapscott and Tammy Erickson* at NGenera, JSB* and John Hagel* at Deloitte, Chris Meyer at Monitor, etc. etc.
At academic institutions we see examples like Vijay Govindarajan* at Dartmouth and Tom Davenport* and Larry Prusak* at Babson College.
The CEO blog works well for startups and SMBs as well: Gaurav Bhalla* for Knowledge Kinetics, Francis Cholle* for The Human Company, Dean McMann* for McMann & Ransford, Phil Townsend* at Townsend and Associates, Bob Freling at SELF, and Steven Feinberg* at Steven Feinberg Inc.
When a blog is shared – i.e. when more than one executive participate – then it is alright to pick another name, usually connected to the topic we want to blog about. See: Steve Lesem* at Mezeo.
* disclosure: Tammy Erickson, JSB, JH3, VG, Tom Davenport, Larry Prusak, Gaurav Bhalla, Francis Cholle, Dean McMann, Phil Townsend, Bob Freling, Byron Katie, and Steve Lesem are some of my clients.
Vijay Govindarajan on the HBR blog: The U.S. Must Grab the Lead on Green. High time our business leaders started leading, as VG encourages them to do.
According to VG:
At the company level, many energy businesses are unwilling to
cannibalize their existing services and their current investments. At
the national level, the same dynamics are in play. Aided and abetted by
the U.S. Chamber of Commerce, the traditional energy lobby (oil, coal)
is using its political and economic muscle to stifle innovation in
alternative energy and clean technologies.
Don’t get me started on the losers at the US Chamber of Commerce!
A nice story from the World Bank blog about a grass-roots organization‘s efforts to stop petty corruption in India and around the world:
…the idea was first conceived by an Indian physics professor at the
University of Maryland, who, in his travels around India, realized how
widespread bribery was and wanted to do something about it. He came up
with the idea of printing zero-denomination notes and handing them out
to officials whenever he was asked for kickbacks as a way to show his
resistance. Anand took this idea further: to print them en masse,
widely publicize them, and give them out to the Indian people. He
thought these notes would be a way to get people to show their
disapproval of public service delivery dependent on bribes. The notes
did just that. The first batch of 25,000 notes were met with such
demand that 5th Pillar has ended up distributing one million zero-rupee
notes to date since it began this initiative. Along the way, the
organization has collected many stories from people using them to
successfully resist engaging in bribery.
I like it. Now let’s send some “zero dollars” to the Famous Five justices Supreme Court, the Blue-Dog Democrats, and the entire Republican party.
This is what we are fed daily… small wonder we don’t watch the news!
Go Google, Go!
It’s time. The Chinese government never has any qualms about “doing evil,” so it’s good to see Google stand up for some principles.
This is how the government in the UK is helping the public understand the significance of Copenhagen.
In the US we’ve got Sarah “Snake Oil” Palin – who is only too happy to urge a boycott.
Why is she still in the news?
This is something that keeps happening with IBM’s FTP server.
I was just trying to download this report: Seizing the advantage. When and how to innovate your business model”…
I have to say, this happens all the time on the site.
What’s going on IBM? This is not exactly the best way to win friends and influence prospects.
P.S. – will let you know if I ever get to the document!
UPDATE: Not sure if this is the same document, but I found it on the UK site.
UPDATE #2: Look what I found at Booz >>
UPDATE #3: And this from EY >>
How do you encourage curiosity across a global organization?
“Many consultants out there would rather just give answers and are even afraid to ask questions. We deliberately hire people who aren’t like that, even early in their careers, and senior consultants coach them on how to be inquisitive. Sometimes that means asking a client’s managers very difficult questions, really pushing them hard to reveal or do things they’re not comfortable with–getting a CEO to explain lagging sales, for example, or to acknowledge why a competitor’s pulling ahead. Other times that means encouraging constructive dissent–deliberately engaging with people who disagree with you and being willing to probe them on their point of view. That can be tricky, but persistent questioning usually produces the best solutions.”
– Orit Gadiesh in an interview HBR, Sept. 2009
Remember when she debuted? Too bad her purple reign is over…
According to MIT and the Internet, this is who I am (click to enlarge):
Find out who you are here >>
Alan Grayson makes the case for reconciliation at StopSenateStalling.com:
Throughout the administration of President George W. Bush, the Senate passed much of its key legislation by majority vote:
* The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 passed 54-44
* The Energy Policy Act of 2003 passed 57-40
* The Jobs and Growth Tax Relief Reconciliation Act of 2003 passed 51-49
* The Tax Increase Prevention and Reconciliation Act of 2005 passed 54-44
* The FY2006 budget resolution and Deficit Reduction Act of 2005 passed 52-47
* The Dominican Republic-Central America-United States Free Trade Agreement Implementation Act passed 55-45
* The FY2007 budget resolution passed 51-49
Today, under the administration of President Barack Obama, the House has passed bills preventing climate destruction and reforming our broken health care system, while the Senate searches for 60 votes in the face of Republican obstruction. Every day the Senate delays, more people die from lack of health care.
The filibuster should apply to the initiatives of both parties or to neither. Why should launching wars, and cutting taxes for the rich, require only 51 votes while saving lives requires 60?
Why indeed? Go to StopSenateStalling.com >>
If you haven’t heard about free2work.org, you will. This is part of a growing explosion of consumer-education organizations dedicated to exposing “worst practices” among multinationals.
The hope is that if consumers know what is going on, they will vote with their purchasing power and seek out the companies that are doing good. I’m all for it. Who wouldn’t be? Oh, I forgot about the US Chamber of Commerce…
On the academic side of things, we see the same story emerging:
Rosabeth Moss Kanter‘s latest book, SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good argues that “the model of American capitalism that worked so well to raise the fortunes of millions of people last century appears to have hit a wall. What’s good for General Motors may no longer be good for the country. In its place must arise a new model of the company, one that serves society as well as rewarding shareholders and employees.”
Maybe Doug Smith was just a little ahead of the times when he wrote On Value and Values: Thinking Differently About We in an Age of Me – which to me is still the best book in this space.
Step one: Know who you are…
borrowed from Alina Wheeler’s Designing Brand Identity: An Essential Guide for the Whole Branding Team
Phil Townsend wonders why GE hasn’t opened up it’s Reverse Innovation model in his post: Opening up Reverse Innovation >>
Townsend makes a good point:
So why can’t a company like GE follow down this path with “open reverse innovation”
– inviting small companies in India and China to submit their products,
services and ideas to be evaluated by GE for global distribution. Of
course, the open model would require an environment of trust –
but what better way to create goodwill in new markets than to be seen
as a development partner in the China, India, and resource-starved
Africa? A.G. Lafley sits on GE’s board; surely he could help them get started.
Townsend also proposes the formation of innovation collaboratives funded by companies like GE to create a pipeline of new products for GE.
Not a bad idea, if you consider that a recent
McKinsey survey found that 20% of companies have opened up their
innovation processes to employees and customers and they report a 20%
rise in the number of innovations, on average.
Edo Segal has an interesting guest blog at TechCrunch describing the “Future of Media.”
He points to Apple’s App Store as an example of what the rest need to learn:
The only way to block the incredible ease of pirating any content a
media company can generate is to couple said experiences with
extensions that live in the cloud and enhance that experience for
consumers. Not just for some fancy DRM but for real value creation.
They must begin to create a product that is not simply a static digital
file that can be easily copied and distributed, but rather view media
as a dynamic “application” with extensions via the web. This howl is
the future evolution of the media industry. It has arrived from a
company that is delivering the goods. Apple has made it painless for
consumers to spend money and get the media they want where they want
it, proving that consumers are happy to pay for media if delivered in
ways that make it easy and blissful to consume.
He also states, rather matter of factly, that “he premise of extending the media experience to the cloud is a core
necessity for the survival and growth of the media industry.” I agree. The media industry needs to “sell access and experiences, not media files.”
So how does an artist or a media company build these experiences?
I’ve been doing some thinking along these lines for a band I’ve followed for many years – Steel Pulse. What’s interesting is that while the band has a huge, global, cross-generational following built over the past 35 years – the media companies that were responsible for promoting them have done absolutely nothing to tap into this enthusiasm. Not one thing.
The same goes for most of my business thought-leader clients as well. The publishing houses do nothing to create a conversation with the passionate fans.
Engagement is the key. How does a musician or an author engage with their audience, their fan-base? It starts with the quality of the conversation. And let me tell you, it’s far easier for an individual thought-leader or musician to do this than companies, largely because companies are too formal, too corporate, and don’t usually communicate with a human voice.
What’s needed is a way to go direct.
Let the celebrity or thought-leader engage with their fans directly to build an attention platform, unique to the celebrity. The company that empowers this attention platform, and builds new services for the fans, will build the next media empire with the “lock-in” that comes with authentic engagement.
Of course, none of this works without authenticity. The celebrity must remain true to themselves. In Steel Pulse’s case, this means they need to stick to their core brand dimensions. So each successive album, each song, each product, each statement, builds on the Steel Pulse Experience.
They could even track the core messages of a successful album – in this case “True Democracy” – and extend their meaning in new songs and releases:
So now let’s talk engagement, and I’ll break it into two simple phases – push and pull (borrowed from JSB and JH3).
Phase One: PUSH
So what does the celebrity do today? In Britney Spears‘ case, she’s
tweeting her launch of a new song. To me that’s not much of anything.
Yes, she’s reaching out through social media -Twitter, Facebook, and MySpace – but these are all still one way marketing pitches – push media.
The artist pushes their songs, their products, their newsletter, their tweets, etc. etc. No discussion, no give and take. Products are created and sold. One market, one size fits all. Core fans are treated the same as newbies. Nothing special except the show and the products – media files: audio or video. See what I’m getting at?
All of this is still just pushing product.
Phase Two: PULL
What happens if the fans come to you – with their suggestions, requests, and insights? What happens when they want to participate? Is it possible to co-create products and services based on insights from yoru fans? Of course it is.
Start the conversation. Go 80/20: focus on the 20% of fans that will get you 80% of your profits. Start talking (and listening) to your biggest supporters.
Engage: physically meet the 20%. Create special events for them. In soccer for example, fans pay $30-50 dollars just to watch Cristiano Ronaldo practice. What’s wrong with doing a 30 minute sound check for your fans? Invite them to the sound check – and have exclusive “sound check products” available only for these fans – available at the event, and online as well. You could even have a question and answer session that they get to download later that evening.
Then of course you sell the live version of the show – for a “limited time only.” Vary the show slightly with the song set, so every night is a different.
Let your fans download the raw tracks and make their own mixes. Have a contest for the best mixes. Sell the mixes to other fans. Use them in your album.
And when you create a new album, it’s version-time. Reggae music has a long history of selling versions. What’s sad is they’ve stopped this traditional practice when really they need to be exploiting it. (See Hal Varian on versioning.) So every song should have the following versions: album version, extended version, dub version, accapella version, acoustic version, dance version, Nyabinghi version, etc. etc.
Talk to the fans about the songs through webcasts, band-calls. Let then know where and what’s next. Let them vote on what you should do next.
For legacy songs, make sure you sell versions-in-time. The 1983 version of Chant a Psalm a Day is quite different from the 2000 version, which again is totally different from the 2009 version. Real fans want them all.
All of this is do-able today. It’s not about technology, it’s about attitude, and the ability to communicate, to lead. For a cause-driven band like Steel Pulse, this is their opportunity to shine.
And let your fans share in creating and spreading your experience.
Now let’s take a quick look at the business world.
VG, as he’s called affectionately, is an author and well known strategist. His latest article in the Harvard Business Review, co-authored with Jeffery Immelt and Chris Trimble, has been a huge success – introducing the world to a concept called reverse innovation.
What we’re doing now is building his engagement strategy – through his innovation newsletter. The idea is to start a conversation about innovation with the people most interested in this topic.
A small step to start, but I know from experience that a “simple” newsletter can drive over 50% of monthly sales online.
The great news is anyone can build an attention platform like this. And if you have something important to say, your platform will bring you the attention you deserve.
It may even elect you President!
As I was finishing up on this, I just saw a tweet from John Hagel on author platforms (read here). Again, if Apple can help an author or musician build that platform, then Apple will “lock-in” that artist for life. Same goes for Amazon.com. The distribution model for media is changed forever, period.
This is a digital reprint of an interview I did about ten years ago with UC Berkeley’s Hal Varian. At the time Varian was co-author of a bestseller: Information Rules: A Strategic Guide to the Network Economy; it’s still worth reading today. Today he’s the Chief Economist at Google. There are still a number of good things in this interview that the media companies could learn from… (I’m a bit embarrassed by the silliness of my questions, but hey.)
I suppose we should begin by asking you for your definition of “information” and what you call “information goods”.
When we talk about information goods, we mean anything that can be digitized. Text, pictures, moving images, sound, all the media that can be delivered over a digital connection. Some people call them digital goods.
Information goods have some interesting properties. On the supply side there’s normally a big fixed cost to create the first copy, of say a movie, and then a negligible cost to create additional copies. On the demand side, the interesting feature is that you don’t really know what information is until after you’ve consumed it. So you have to experience it to know what it is.
When you’re selling information, you’re dealing with how do you give free samples, how do you give part of it away, how do you establish a reputation so people will purchase the information you’re providing, etc. etc.
I read about a travel publishing company that put its contents on-line, and their book sales went up, because people wanted the books with them when they traveled…
Yes. Another example is the National Academy of Sciences. They found when they put all their content on line and people could actually look at what the content was, they were more likely to buy.
What are some of the techniques you find companies use to create and sell information products? How do you sell an information product to different customers at different prices? How do you find out what the different customers will pay? Can you do this on a website?
The trick is to “version” your information product: construct a product line of your information goods that will appeal to different market segments. A common way to do this is to use delay: issue a book first in hardback, then, a few months later issue a cheaper edition in paperback. The people who are really interested will get the hardback, whereas people who are only casually interested will wait.
We see financial sites on the Web that sell real-time stock quotes, but give away quotes that are 20-minutes delayed. A movie first comes out first in the theater then six months later in video.
Then there are other things, user-interface, for example. If you look at Dialog, which is a search company, they have two types of search engines- one is a professional search engine, with Boolean searches and all sorts of options, and then they have an “ordinary-person” search engine, with a stripped down interface. It’s nice because the ordinary person wants to use the simpler interface, while the paying professional uses the professional interface. So there isn’t any cross-market cannibalization.
Other dimensions on which to version your product are user convenience, image resolution, capability, features, tech support, etc.
You mention Gresham’s Law of Information in your book. What is it?
Gresham’s law said “bad money crowds out good”. We coined “Gresham’s Law of Information” which says “bad information crowds out good”. Low-quality, cheap information can displace high-quality, authoritative information: look what happened with Encarta and Britannica. However, Britannica is now fighting back and has come out with products that are much better suited to computer use. Smart consumers will look for quality information.
Your example of the struggle between Encarta and Britannica, how Britannica lost out to the upstart $49 Encarta…
Right, although they’re coming back. They’re doing some clever things now. What happens there is the incumbent in the industry has a very low marginal cost, so they should be able to beat the entrant but they can’t quite change their business model. It’s hard. Telephone companies are having this problem, the print/publishing media is having this problem, TV networks have this problem vis-a-vis cable.
(This was before Wikipedia!)
Since there’s a high cost of innovation and a low cost of imitation on the web, isn’t it harder to keep “first-mover” advantages?
You’re right, we talk about this — the competition is only a click away. But the clever company, which has that first-mover advantage, will try its best to create “lock-in” for their customer base. For example, look at what Amazon has done- one click ordering, keeping information on what you purchase so they can recommend books to you. If Amazon is recommending good books to me and I want to switch to say Barnes & Noble, I have to start all over.
Another good example of that is e-toys. You put in the birthday of your nephew, your neice, and your cousins, whatever, and they send you a reminder that your nephew’s birthday is coming up and here’s a nice stuffed rabbit that’s very popular with children in his age group.
Can you tell us a little more about your lock-in strategies?
Since the competition is just a click away on the Web, it pays companies to invest in building customer loyalty. The best way to do this is to produce a product that is so much better than the competition that they don’t want to switch! But there are other ways too, such as loyalty programs, like frequent flyer programs that reward frequent purchasers.
What about lock-in strategies for suppliers and partners?
What we were thinking about there was that if you have a group of loyal customers that are purchasing your products, and there may be other complementary products that they would also purchase, but you may not be the best firm to supply that. So then what you do is sell access to your customers.
The portal companies are doing this. For example, I go to Yahoo, and Yahoo charges other companies to have access to me. Let’s say e-toys wants to move into baby or children’s clothes. They might not do that themselves, but they could partner with other companies that do that.
So once you have a loyal customer base, then you can sell access to that customer base for other products that complement what you are selling.
What about the dangers in this, with privacy issues?
It’s certainly convenient for me to be reminded when my anniversary is or my nephew’s birthday or something. That’s a service, a good thing. Of course they can use the information about me in ways that could be detrimental- they could sell it to mailing lists and I get deluged by email. So the trick is to make sure that consumers give their consent; you want to know exactly how the information is going to be used by the company in question. There are companies like e-trust which meet a very important need.
I was looking at ANX, the auto-industry supplier network, and I found out that Chrysler, despite its enthusiasm during the pilot, isn’t part of the production version of ANX. And if you go to the Chrysler supplier website, you find they’ve created tons of business applications. So when does it make sense to join a standards organization and when does it make sense to go it alone?
There’s this fundamental equation that says that the value to you is your share of the market value times the size of the total market. So some of your actions, like standardization, can increase the total size of the market, but it can decrease your market share because it creates more competition. So you have to trade-off these two effects.
So you’re saying if the total size of the market gets bigger, and you make a bigger profit despite a lower market share, then you are on to something… How do you protect intellectual property on the web? Will the current move of providing patent protection to internet business models help or hurt the future of e-commerce?
The point is to maximize the value of your intellectual property, not maximize its protection. You can charge a lot lower price for content on the Web because you can reach a much larger audience.
I’m quite unenthusiastic about patent protection for Internet business models and feel that it will retard progress in this area.
(Like I said, my questions are quite stupid, but the versioning of information goods – that’s still something the media companies can learn about! This cartoon was also done about the same time…)
Finally, to get you up to speed, here’s a decent interview with Prof. Varian with the [global-warming deniers](http://blogs.harvardbusiness.org/winston/2009/10/superfreakonomics-misses-the-b.html) at Superfreakonomics >>
The lies are simply who the Cheneys and the Republicans are.
Why is anyone surprised at this any more?
The entire structure of corporatism is built on these lies and astroturfing:
And now we have Liz “Liar 2.0” Cheney and that lying Fox – Rupert Murdoch – continuing in this tradition of lies:
Here are some more lies:
– Hunger and Republican Values
– Healthcare Reform: Shameless Lies
– When Lies Become the Truth
– GOP Gone Wild
– How Much Does that Senator Cost?
Apparently you can fool 30% of the people all of the time. Coincidentally, that would be the same number of people watching Rupert Murdoch’s FOX News.
Of course, you have to listen to a comedian to learn about how FOX operates:
How can companies and businesses keep doing this? Funding these lies?
Is it time for a shareholder revolt yet? This isn’t going away.
Happy Halloween, everybody.
In their article Innovation in Turbulent Times, Darrell Rigby, Kara Gruver, and James Allen make the case that the key to growth is pairing an analytic left-brain thinker with an imaginative right-brain partner:
Fine, but the problem is that in most “rational” industries – dominated by “maximize shareholder value” thinking, there no room at the top for the creative thinker. In fact, I would argue that most companies are too sharply skewed to the left brain. The CEO, CFO and the heads of all the business units are too focused on P&L to think outside the proverbial box.
They need to improve their “intuitive intelligence” by chatting with Francis Cholle >>
Simply put, it’s a values issue.
The irrational position of the US Chamber of Commerce should cause member companies to rethink their position within the organization. PG&E, PNM Energy, Apple, and Exelon Energy have already quit the Chamber, rather than continuing to support an organization which is so out of touch with reality.
Ultimately, companies must ask themselves – is it worth my company’s reputation and brand to stand on the wrong side of science and history?
The following companies are still part of the US Chamber of Commerce:
State Farm Insurance Companies
United Parcel Service
The Charles Schwab Corporation
Massey Energy Company
American Water Works Company, Inc.
Landstar System, Inc
Lockheed Martin Corporation
DonahueFavret Contractors Holding Company
Ryder System, Inc.
Leading Authorities, Inc.
Aircraft Owners and Pilots Association
My Chef Catering
VAST Solutions, LLC
Allied Capital Corporation
Telcom Ventures, L.L.C.
The Coaching Group, LLC
Deere & Company
The Robertson Foundation
Nortex Holdings, Inc.
CAIVIS Acquisition Corp.
CVK Personnel Management & Training Specialists
Sunrise Senior Living, Inc.
The Dow Chemical Company
Eastman Kodak Company
Buffalo Supply, Inc.
HARM GROUP LLC
Quam-Nichols Company, Inc.
FACES Day Spa
Vulcan Materials Company
A.O. Smith Corporation
Alpha Technologies, Inc.
Constangy, Brooks & Smith, LLC
Paper and Chemical Supply Company
Incorporated AGL Resources Inc.
Arnel & Affiliates
J.R.’s Stockyards Inn
Entergy Services, Inc.
PEPCO Holdings Inc.
Fox Entertainment Group
Harrah’s Entertainment, Inc.
Wegmans Food Markets, Inc.
New York Life Insurance Company
American Medical Association
CVS Caremark Corporation
Stanwich Group LLC
Kirby Financial, LLC
The Carlyle Group
Rolls-Royce North America, Inc.
Kirkland & Ellis LLP
Tandy Leather Factory, Inc.
Norfolk Southern Corporation
CUNA Mutual Group
KCI Technologies, Inc.
International Bancshares Corporation
Ingram Industries Inc.
National Association of Chain Drug Stores
Memphis Chemical & Janitorial Supply Company
Awkard & Associates
Nana Development Corporation
Duke Energy Corp.
Burlington Northern Santa Fe Corporation
Ruan Transportation Management Systems
CNL Financial Group, Inc.
Ford Motor company
Human Genome Sciences, Inc.
Mountain Plains Equity Group, Inc.
RPM International, Inc.
COMSYS Information Technology Services, Inc.
You can help urge them to quit – here >>
From the Economist:
A survey by the Centre for Work-Life Policy, an American consultancy, found that between June 2007 and December 2008 the proportion of employees who professed loyalty to their employers slumped from 95% to 39%; the number voicing trust in them fell from 79% to 22%.
At France Telecom, 24 of the firm’s employees have taken their own lives since early 2008.
What’s up with this craziness? Of course, the recession is partly to blame, and industries like the automobile industry and the telecoms are under real stress. But to decide that you can’t live without your sorry job?
Everyone needs to get some perspective.
Sure, the Great Cycle of Failure is spinning away as fast as it can go at your company, but don’t let it mess you over.
Ask yourself, if I was starting today, would I join this company? If the answer is no, then you need to rewind and reassess. What do you really love doing and are good at? Are you better at it than just about everyone? Then go do it.
Sure it sounds simple, but it’s a lot of work. Back in 2004, I ended up quitting my steady corporate job to start a new company with no prospects and no customers in hand. I wasn’t even a good salesman. And yet, I survived. Not because I was so clever, but because I did what I thought was best for each customer. Sometimes I even told them that what they wanted wasn’t the right thing. And now I have a handful or two of loyal customers who work with me through rain and shine. I really do see their successes as mine. And that’s my job description: help my customers succeed.
We know they’re just another Republican puppet organization, and now it’s so obvious it’s hurting them.
But don’t expect them to back off.
Global warming is a hoax to these people, and nothing short of a memo from Exxon-Mobil will make them change their views.
Yes, the US Chamber of Commerce is irrelevant.
VG has touched a chord with this article in Harvard Business Review.
How GE is Disrupting Itself describes the concept of reverse innovation – how products developed in and for low-cost countries (like India and China) by multinationals (like GE) lead to growth – not only in the low-cost market, but at home as well.
VG says the article has touched an “emotional” chord with readers who are saying that this approach is just what “western” multinationals should be doing – designing products for the local market at a price-point which is within reach.
Check out the advertisement for one such product:
To me, this is just the first step to being truly global (as they say at Thunderbird). With business commitments at a local level, social commitments will surely follow.
Now let’s see some “ecomagination” in action and build portable solar/wind electrical generators for off-grid villages at an affordable price-point. Right, Bob?
I wonder what the late Peter Drucker would have said about Michael Moore‘s Capitalism: A Love Story?
I think he’d be very sympathetic. Drucker’s disillusionment with the level of executive greed he saw and we see today makes it very likely that he’d be a supportive fan.
And here’s an interesting quote from the man himself:
The leader cannot act in his own interests.It must be the in the interests of the customer and the worker. This is the great weakness of American management today.
[from A Class with Drucker: The Lost Lessons of the World’s Greatest Management Teacher, William A. Cohen, AMACOM 2008]
When results are poor, executives don’t deserve bonuses, right Peter?
Corporate fascism? What’s that?
Listen to this Henry Wallace quote from 1944:
“The dangerous American fascist is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power…
Still another danger is represented by those who, paying lip service to democracy and the common welfare, in their insatiable greed for money and the power which money gives, do not hesitate surreptitiously to evade the laws designed to safeguard the public from monopolistic extortion…
The American fascists are most easily recognized by their deliberate perversion of truth and fact. Their newspapers and propaganda carefully cultivate every fissure of disunity, every crack in the common front against fascism… They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.“
Hard to believe? Not.
Here’s an example of the latest garbage: CO2isgreen.org. What global warming?
Go Michael Moore!
Michael Moore is serious, and most of all, he’s right.
It’s time for Capitalism 2.0. Let’s get some True Democracy going.
Michael Arrington‘s tips on how to network are basic, but sorely needed by the nerd community:
1. Never underestimate the power of an introduction. A mutual friend who introduces you by email or in person is far more effective than a cold self-introduction at a crowded event. Approaching someone randomly should be your last option.
2. Don’t approach someone when they are clearly in the middle of something. If I’m throwing a conference, there likely isn’t any time at all that is appropriate to approach me. But there are 2,000 other people there you can hit up who aren’t as busy as I am at that time. Hit me up at the event that I’m attending but not running.
3. Don’t approach someone when they are in the middle of a mob trying to get their attention. This is usually after a speaker has just left a stage, and everyone hits them at once. If you must grab them then because you have no other way of meeting them, make it very, very quick and aim for nothing more than their business card so you can email them later.
4. If you get someone’s business card, never call them. That mobile phone number isn’t for you, the person who just met them. A random call to their cell phone is never welcome. Send an email. (I kinda messed up on this one. Larry Hagman gave me his card once, but it didn’t have his email… so I never called! Ha.)
5. When you approach someone, don’t assume they know you even if they do. You see them across the room, note them, approach them and say hello. You’ve had a few moments to think about it, but all they see is a face in front of them, a thrust out hand and a “hello!” It’s not reasonable for them to decide if they know you, remember your name and where you work in a half-moment.
Instead, say “Hey Bob, It’s Mike from TechCrunch, good to see you again” slowly and clearly. You’ve just told them your name, where you work, and the fact that you’ve previously met. Trust me, they are thankful for all that information, and everything will go smoothly from there.
6. If you forget to tell them who you are, don’t get offended if they don’t know. There will likely be a few sentences of very unspecific conversation as they try to remember any detail about you, or even if they’ve met you before. If they start off with “how are you?” or “what do you think about the event?” then things are going badly. They should be asking “how’d that financing with Sequoia go?” or something much more specific.
7. If you’ve blown it to this point, for the love of God fix it. Drop in something like “yeah, since I met you at the whatever event we’ve been rocking at TechCrunch. We finally launched that new blog on bicycles.” Bam, you’ve saved the situation. Notice how much better the conversation goes from there.
8. Look for body language. If you pay attention you can tell how engaged they are. If they aren’t engaged (looking away, never talking, etc.) don’t try too hard to get them to focus. Instead, move on to what you want. Get their card, see if a meeting or a call is possible and ask for the best way to make that happen. Some people think the more time they spend with a person the more likely they’ll get what they want. In reality, it’s the opposite. Don’t take time just because they are too polite to end the conversation.
By this time, you’re probably asking: am I a geek, dweeb, dork or nerd?
Thanks to John Hagel for clarifying:
Vijay Govindarajan’s Innovation Quarterly is now open to subscribers.
It’s free, and it’s going to be good.
Sign up if you’re interested in how innovation works.
Disclosure: VG truly is one of the sharpest minds in the business world, and I’m privileged to work on his newsletter!
After talking about it for several years, my daughters have finally launched Planet Green. I wonder how long they’ll demonstrate “constancy of purpose”?
Thanks to their activism, we have now been vegetarians for several years, we worry about water, and try to stop wasting natural resources. In many ways they have helped shape my green thinking, by opening my eyes to the news and to our stunning inaction as the planet dies around us. The Silk Milk boycott was their idea, as was their insistence that we should minimize the use of paper towels, etc. etc.
It will be a fun experiment, I believe.
Michael Moore brings his unique perspective to the issue:
Question: why is this a unique perspective?
Because, all too often, we don’t really care about our customers.