The long Con

Devil's Business dictionary(Tech heavy entry): Data, Workstation, Powerpoint.

2007-05-02T01:40:00.000-07:00

Data:
(n) Aggregation of numbers with little or no intrinsic value. Highly prized and sought after by collectors.

PowerPoint:
(n) the obfuscation of thought through typeface and animation.

Workstation:
(n) A device for the increase of productivity, equipped with diversions and distractions enabling the effective use of time gained.

Advertising then and now: Coca Cola

2007-04-30T00:57:00.000-07:00

I have been doing some advertising anthropology on the web as research for a premise I had that body copy in advertising is dying. Have a look at the latest coke print ads for example:

Pure concept and no need for explanation. Compare that with a typical coke ad from 1939.

This style continued for much of the 40's 50's and beyond and it was my premise that only in the last decade or so have we become more interested in the concept than the sale.

Until I came across this ad from the 20's:

Pure visual concept no need for explanation and none given seems like they might have been as cerebral almost a century ago as we like to think we are today. Definitely opened my eyes a little. I'll see what else I can dig up.

Time to throw away your keyboard?

2007-04-25T23:37:00.000-07:00

If you havent yet seen this clip of Jeff Han demonstrating his multi point touch screen interface check it out and then get in line behind me for the production version. It might be a long wait though.

http://www.ted.com/index.php/talks/view/id/65

Devil's Business dictionary: Analysis, Delegate & Manager

2007-04-18T00:10:00.000-07:00

Analysis:
(v) Extracting meaning from data. The practitioners of analysis are an arcane sect calling themselves analysts, reputed to be direct descendants of the alchemists of old. cf Alchemy.

Delegate:
(v) The deftly executed pass of a career limiting project.

Manager:
(n) One who can manage. Ant. worker.

Texas Hold'em Marketing part 4 - Decision Making

2007-04-16T02:51:00.000-07:00

Daniel Negreanu one of the world’s foremost poker professionals often describes hands that he has played in poker tournaments in some detail in his online journal.

Below is a description of one such hand that gives you an idea of the complexity of thought and the reliance on past information that make the difference between a lucky guess and an excellent display of skill. I'm posting the full article because I want you to see the full thought process.

”I started the day with about $18,000 in chips and was up to about $22,000 when I got involved in a key hand that I'd like to share with you:
The blinds were $150-$300 with a $25 ante when everybody folded to me on the button. I looked down at the 7 5, and the thought of folding never crossed my mind. This was exactly the type of hand I wanted to see in this situation.

At the $150-$300 level, my standard raise is usually $800, so that's what I made it. Annie Duke was in the small blind with close to $40,000 in chips, which was a very good-sized stack at that point in the tournament. After an awkward hesitation, she reraised to $2,800. The big blind folded, and it would cost me $2,000 more if I wanted to see the flop. Anytime I can get 2-1 pot odds, implied odds, and position with a suited connector, you can count me in!
Normally with a hand like that, I'd be hoping my opponent had two aces, but in this case, it didn't feel like aces. I picked up something before the flop (no, I won't tell you what it was), and believed my opponent had a marginal hand. The first hand that popped into my head was A-8, or maybe A-9. The reraise looked uncomfortable to me, almost like, "This hand is too good to just call with, but I'm not all that crazy about the situation." Anyway, that's the read I got at that point.

So, I called $2,000 more and the flop came 10 6 4. Annie went ahead and bet $3,600 into a pot that had $6,000 in it. It had the feel of a post oak bluff (a minimal bet intended to create the appearance that you want a call) or a weak lead. Normally in these types of situations, I would be happy to call the smallish bet, hoping that I could win a huge pot if I hit my hand on the turn. This situation was different, however. In order for me to win a big pot if I hit the straight, my opponent would have to have an overpair.

My preflop read was ace high, and that flop bet also screamed of ace high. I got a chuckle when I watched the broadcast later and Michael Konik called my situation one of "raise or fold." Michael, Michael, Michael, how am I going to fold on the flop?
Anyway, I was faced with an interesting dilemma, and it was not raise or fold. It was (a) call, (b) raise, or (c) move all in. Strangely enough, all of the above seemed like good choices, but there had to be one choice that was better than the rest.

Before I proceeded, I had to ask myself one key question: Would she bet the flop when out of position with just ace high? Absolutely. In fact, based on my read of her play, she would have bet the flop regardless of her hand.

It's a play born out of limit hold'em, and her teacher, Howard Lederer, is one of the best limit hold'em players around. "If you raised before the flop, you keep the lead on the flop." While I think that works to some degree in no-limit hold'em as well, it's a much more dangerous proposition, especially when out of position.

So, with my preflop read of the raise and my read of the bet on the flop, I finally decided to rule out (a) call. After making the call, I would have an additional $15,500 left to raise. So, the question remained: Should I move all in or make a standard-sized raise?

After replaying past hand histories that my opponent may have seen, I finally decided that moving all in looked too much like a drawing hand, while a raise of $8,000 almost invited a call. Of course, by raising $8,000, I was essentially moving all in anyway. If Annie were to raise me all in, that raise of $8,000 would have committed me to the pot. If I happened to be wrong and Annie did have a pair, I'd be getting close to 4-1 odds for my last $7,500, which is an automatic call.

Once I figured out the situation, I went ahead and raised $8,000and awaited my fate. I was fully expecting Annie to throw her ace high into the muck. About 10 seconds went by and nothing happened. "Hmm, I guess she has a pair of eights or nines, then. Now I really want her out!" Another 10 seconds went by … then another, and another. "Uh-oh," I thought. "She has to have some-thing; if she had ace high, she would have folded by now."

After sweating it for what seemed like an eternity, I finally got the result I was looking for, as my semibluff worked. Later when the show aired, I finally got to see what she had — A-9! Sweet.”

More thought in one hand of poker than most “offsite marketing strategy breakaway” sessions. What is amazing about the thought process is not so much the memory and the information storage but the synthesis of information on the fly and the resulting decision making.

Too often it is not a lack of information that hinders marketing strategy but an inability to select which information is pertinent, analyze that information correctly and come up with a timely executable strategy based on the analysis. In poker a second’s hesitation gives too much information away. In marketing stalling a decision is a surefire way to give your competitors the lead. The key is making decisions and making them when they are needed, this ability is often confused with “a Knack for marketing” or “pure intuition” when it is really just good decisions based on a synthesis of past information.

If you didn’t read Daniel Negreanu’s thought process you would have put his play down to prescience or intuition. He really just had a very good read on the hand and the ability to make a decision based on the information he had,a simple but extremely rare and valuable skill.

Virtuoso violin vs Juggling in Covent Garden

2007-04-13T00:46:00.000-07:00

A post on Seth Godin's blog I'd ignore him too (which links to a Washington post story about a concert violinist who was ignored while playing in a subway station) got me thinking about busking in general.

I was in London on business a few years ago and happened to walk through Covent Garden during the annual street performers festival. The contrast between the way these professional street performers went about their business and the usual ply your trade and wait for coins subway violinist was an important business lesson.

The pattern was always the same:
Spend some time setting up your various bits of equipment while interacting with passers by (polite conversation, small tricks and jokes - anything to make them strop and stand).

When you have a few people standing and watching determine a stage ( a bit of rope or chalk something that gives visual clues about where the audience should be).

Use your audience to draw a crowd (most just simply asked the audience to clap and make a noise to draw a crowd - this also warmed up the audience).

Do your thing (make it short and buildup to a close).

Before your finale tell the audience this is how you make your living you are a professional you expect them to pay something even if its just a compliment or criticism and hurl abuse (in a joking way) at a random passerby for sneaking out without paying.

Do your finale (Make it big and use fire if you can).

Walk around with a hat collecting from your audience and talking to them.

Wait for a new crowd and go back to the beginning.

Or you could just sit in a corner playing virtuoso violin and being ignored.

Linkage:

2007-03-13T01:01:00.000-07:00

How to start a startup - Good

The ArsDigita Story - Old but great

Texas Holdem Marketing part 3: Research

2007-02-08T04:12:00.000-08:00

Sklansky's Fundamental Theorem of Poker:
Every time you play a hand differently from the way you would have played it if you could see all your opponents' cards, they gain; and every time you play your hand the same way you would have played it if you could see all their cards, they lose. Conversely, every time opponents play their hands differently from the way they would have if they could see all your cards, you gain; and every time they play their hands the same way they would have played if they could see all your cards, you lose.

Information, or the lack thereof, is they key ingredient in poker. I know what my cards are and as the community cards are dealt I get a little bit more information but there is always a gap in what I know. I will never during play know exactly what cards my opponents hold. If I did the game would be simple, because I don’t, the more information I have on my opponents cards the more I am to be able to maximise my wins and, as importantly, minimise my losses. Poker professionals are masters at extracting information (although not the sort of information extraction that involves bright lights and heavy blunt objects Vegas used to be famous for), they will scrutinise each hand and remember details of how it was played that may be useful later on in the game. Each bet and raise provides data. When the way a player behaves is matched to the opportunity to see his cards at the end of a hand (when there is a showdown) a good poker player takes notice.

This is where marketing differs from other professions where there is always a way to calculate the best possible move (or a close approximation thereof). In finance or engineering or any of a variety of other professions the answer to a problem is solved by looking at all the information and assessing it from a variety of angles and going through a number of permutations until you come up with a solution that fits the situation given all the information.

If scientific reasoning were limited to the logical processes of arithmetic, we should not get very far in our understanding of the physical world. One might as well attempt to grasp the game of poker entirely by the use of the mathematics of probability.
- Vannevar Bush

In chess given enough computing power you can find a way to beat almost any human player because chess is deterministic. You merely (sorry Bobby Fisher) go through all the possible permutations and possible results and come up with the best move in the circumstances. Marketing is not completely deterministic if it was ads would merely list features and specifications for comparison. We don’t always know why we buy the products we buy let alone why our customers buy the products we sell. In Marketing there will always be a lack of complete information. You will never know exactly what your competitors are up to, you will also never know with absolute certainty how your target market will react to your marketing proposition. This does not mean however that cooking up the campaign in a vacuum send it out the door and praying is the best strategy. The use of, the gathering of and the procesing of information are key to maximising profitable campaigns and minimising losing or negative ones.

Occam’s razor and the Business Corollary:

2007-02-06T01:36:00.000-08:00

I was thinking of a solution to a business problem recently when Occam’s Razor popped into my head (In Layman’s terms Occam’s Razor http://en.wikipedia.org/wiki/Occam%27s_razor states: "All things being equal, the simplest solution tends to be the best one.") And that got me thinking about the opposing forces of logic and self interest in business.

In business more is better; more hours, more product features, more ideas no one ever gets told off for putting in extra effort. In Science, Mathematics and even in Art the simplicity of the solution is often as praiseworthy as the solution itself.

In Business I often come across the opposite the complexity and the input are praised often above the outcome. In a corporate environment the hours you are seen at your desk are more measurable than the simple solutions to complex problems that might even reduce your own workload. A reduced workload that might even highlight you as a non productive employee

So with that I give you:
Occam’s Business self interest Corollary: "All things being equal, the solution that improves personal self interest tends to be the implemented."

Business card dictionary: Spreadsheet / Risk / Time Management

2006-11-17T03:44:00.000-08:00

Some more definitions:

I like the simplicity of this one:

Texas holdem Marketing: Part 2

2006-11-10T03:17:00.000-08:00

A simple game of skill

Poker players are said to number 70 million in The USA alone, most playing the game as a form of entertainment amongst friends in a home game. Most of these players think they are playing a game of chance and you will invariably find that in every poker school there are 1 or 2 regular winners who understand some of the workings of the game.

It’s a wonderful thing for a poker player to sit at a table full of players who think that, no mater what they do, the outcome will depend only on the fall of the cards, card sharks keep a sharp lookout for these weak “fish” and know that the game gets progressively easier to beat with each fish at the table.

Poker is deceptive; it is quite easy to see how people who do not know the game (and even some who play it regularly) would confuse it with other card games where luck is the over-riding factor. Players are dealt cards and the one who has the best hand at the end wins, where’s the skill in that?

If you fill a table with poker novices the game will be played in such a way that luck is the only factor. The game is very simple to understand, anyone can pickup the rules and be playing in minutes, this is a contributing factor to the fact that poker is so easily misunderstood as a game of chance. Poker is quite unlike other games of skill such as bridge or chess where it takes time to figure out the workings of the game and one can immediately see the depth of the understanding needed to win. The complicated workings of these games lead people to the immediate conclusion that they are games of skill. When the game is simpler most people tend to put the game on the level of a simple game of chance, you can play blackjack if you can count to 21, you can play roulette if you can push pieces of plastic onto a felt table. Likewise you can play poker if you can order the cards according to the hand rankings and figure out which hand is the winner. Notice in all of these cases I have said play, not win. Roulette is as close as you can get to a pure game of chance, if you play perfect strategy blackjack you have a chance of lessening your losses in the long run but unless you can count cards, and not be detected by the house, you will never be a big winner. Professional roulette players do not exist, professional blackjack players are more commonly known as compulsive gamblers, but poker is different. There are a select group of people who make their living winning at poker, men and women with ever increasing bankrolls of cash who consistently beat the game. Either these professionals are very lucky or there is an overriding skill in the game of poker. If you take the time to delve deeper into the strategies, mathematics and innate skill of a poker professional and you will find that luck has very little to do with winning in the long run.

"These two have no idea what they're about to walk into. Down here to have a good time, they figure, Why not give poker a try? After all, how different can it be from the home games they've played their whole lives? Luck. All the luck in the world isn't gonna change things for these guys. They're simply overmatched. We're (the pros at the table) not playing together, but we're not playing against each other, either. It's like the Nature Channel. You don't see piranhas eating each other, do you?"
-Excerpt from the movie Rounders
So where does marketing fit into all this? The tendency amongst most people to equate marketing as a game of smoke, mirrors, illusion and luck I spoke about in my last post in this topic is a telltale sign of the amateur. Most companies don’t consider their marketing departments to be the backbone of the company after all marketing is just about pretty pictures and words. “anyone can do that”, all you have to do is make sure it looks good, shows your product and tell you some stuff about it.

These companies are making the same mistake as a fish sitting down at a poker table of Vegas Sharks they believe that the apparent simplicity of the mechanics is all there is to the game.

Anyone can (and indeed most people do) have an opinion on marketing, it is the one area of business where anyone in the company from the managing director to the bookkeeper will offer advice and expect to be taken seriously (try that with your legal department one day).

Marketing, like poker, is simple to understand and difficult to master, anyone can put together an advert or choose a package design and hope that their choice will be correct when the cards fall. Few can take a product and elevate it to the point where it will become an automatic choice for the consumer.

In every home game around the world there is someone who dominates, he might venture beyond his home game to a nearby casino or poker club where he will meet other guys who have dominated their home games for years and he will invariably be fleeced by the local sharks. These local sharks might one day make the trip to Vegas and play in the lower limit games if he holds his own here and manages to grind out a profit he might become a Vegas regular who invariably plays a tight low risk game and beats the rake and the local tourists. Those who manage to dominate the game move up in stakes and find a tougher and tougher game until they swim with the real sharks the Vegas Pros who win and lose millions on the turn of a card and the slightest hint of a bluff.

Most marketing departments start off in small companies with one or two people who can hold their own in the small local marketing needed to get the company off the ground. As the company grows and the game develops it is the ability of these people to grow with the game or the foresight of the company to bring in heavy hitters that understand and can play the game and compete at the highest levels that distinguish a company’s marketing strategy and how it gains or loses market share in a tough marketplace. The Scott Bedburys and Sergio Zymans of the world are marketing’s equivalent of a Vegas Pro someone who can be thrown into almost any competitive marketing situation and come out ahead of the game.

If you begin by understanding just this about marketing it won’t make you a marketing-shark overnight but it will illuminate some of the skills you will have to hone and perfect to sit down with the masters of the game.

Texas Hold’em marketing

2006-10-25T02:08:00.000-07:00

Marketing is a competitive sport.

How do you compete and win in the world of high stakes marketing?

Anyone can play poker and a lot of us do, over 70 million Americans are estimated to have played. It’s a simple game to learn and seems to involve none of the deep thought required to play a good game of chess or bridge. Chess and Bridge are the rocket science or brain surgery of competitive games, if someone tells you they are a bridge master or a chess master you may give a few sage nods and impressive looks (arched eyebrows work well here) and change the conversation before your brain begins to hurt, the same response you would give on hearing someone is a brain surgeon or a rocket scientist.

There is a different response that normally occurs when someone hears you are in advertising or marketing. The response is along the lines of: “hey have you seen that ad with the guy and the thing? ... amazing/great/terrible/killer ad what’s it for again? Hey I thought of a cool ad the other day you’ve got this girl, right and …..” I’m not sure how the rest of the conversation goes I’m normally numbing my brain by beating it against the table or feeding it Jack Daniels by this point. The problem with marketing, to borrow a punch line from Rodney Dangerfield, is you “don’t get no respect.”

The reason for this is that your end product is aimed at, and needs to be understood by, the public at large and therefore, from the outside in, it seems all very simple. We aren’t the chess masters of the world we are the poker players, the game is easy to understand and from the outside its difficult to see where its more than just a game of chance. You don’t find many people standing behind a chess master and giving him tips but anybody can and will tell you what you should have done differently in the last hand at the poker table. Anyone who has ever worked in the marketing department knows that this applies to marketing. No on ever questions the legal team on their complete obfuscation of the point or the accountants on their categorization of expenses, but everyone from the tea lady to the MD will have an opinion on the color used in your latest promotion or the body copy of your latest ad.

Memorizing the hand rankings does not make you an expert on poker any more than watching ads and buying stuff makes you an expert on marketing. True marketers relish the prospect of competing against companies where the legal team has had as much input in the latest campaign as the VP of marketing. It’s a wonderful thing for a poker player to sit at a table full of players who think that, no mater what they do, the outcome will depend only on the fall of the cards, card sharks keep a sharp lookout for these weak “fish” and know that the game gets progressively easier to beat with each fish at the table.

In my years as a marketing and advertising professional I have come across the tendency amongst most people to equate marketing as a game of smoke, mirrors, illusion and luck. Most companies don’t consider their marketing departments to be the backbone of the company, and fill the positions with reasonably competent individuals amongst all the soft hires and sheltered family employment, after all the real business is done in the production, finance, distribution and other real working arms of the business.

These companies are making the same mistake as a fish sitting down at a poker table of Vegas sharks, they believe that the apparent simplicity of the task is all there is to the game. Let them keep thinking that while the rest of us swim with the sharks.

To be continued ……

The Merchant and the donkey

2006-10-12T02:06:00.000-07:00

A poor merchant pushed his wagon through the market sweating as he hefted the cart and manoeuvred through the narrow streets. Stopping to wipe his brow and stretch his aching back he noticed a well dressed man loading a donkey with a variety of items and giving the donkey a gentle pat on its rear sending it on its way down the street. He then moved on to another donkey and proceeded to do the same thing. Curious enough to overcome his shyness he approached the man and asked him what he was doing.

The man stopped what he was doing offered the merchant a seat and a drink and proceeded to explain that the donkeys he sent off had been trained to deliver merchandise to different areas of town. While they are delivering he had more time to go about meeting buyers and attending to business. The merchant was astounded. “If only I had a donkey like that” he thought “then I could make something of my business”.

Emboldened by the idea he immediately began to negotiate a price for one of the donkeys and having secured the deal walked the donkey home with a smile.

The next morning he loaded the donkey with merchandise and sent it on its way with a note to his largest customer across town. He then went about his business and even took the time for a leisurely lunch as he waited for the donkey to return.

The next day he decided that if he were to add a bit more merchandise to the Donkey’s load he could cover all his deliveries in one load and would be able to go out of town for the day and see if he could sell some merchandise in the neighbouring towns. The donkey didn’t seem to mind the extra weight and everything went according to plan. He now had time to visit more customers and the orders began pouring in. He was now having some trouble fulfilling orders. He began loading a little more onto the donkey each day in an effort to speed things up and it didn’t seem to affect the donkey.

A few days later however the donkey didn’t simply go on its way but a well placed hit on its rear with his hand solved the problem and the donkey went. The same thing happened the following day and he reasoned that the donkey had reached its limit it needed a little more coaxing than before but that was nothing he couldn’t handle. When the donkey didn’t immediately go on its way a few well aimed hits with the palm of his hand normally sorted it out, and on the odd day that it was particularly stubborn he would find a stick, not only did it improve the donkeys motivation but it prevented the sting he would have felt on his hand.

In time the donkey grew more and more stubborn and he began to lighten its load in order to get it going, but still found himself reverting to the stick more and more to get it started on its way. Until one day when the donkey stubbornly refused to move. He hit it, pulled its reigns, shouted and ultimately removed half its load but still it refused to budge. Finally he tied a rope to the reigns and began pulling it along. He made his way through the market cursing and shouting and bemoaning his fate to all within earshot.

“Look at the luck I have this stubborn beast worked for years for someone else with no trouble but no sooner do I buy it and it stops working. This is why I’ll never be a rich man.”

2006-09-13T14:18:00.000-07:00

Business card dictionary: Objective

2006-09-11T10:38:00.000-07:00

The Merchant and the Galley Slaves

There was once a small trader who peddled his meagre wares on a small wooden cart that he wheeled between the hustle and bustle of ships unloading their wares at port. In between selling and pushing his cart around he sat on the docks and watched the ships unloading merchandise and frequently overheard the deals being done as loads of merchandise were transferred from ships to awaiting wagons. He began to notice patterns; occasionally a new item brought in would command a huge premium and the merchant involved could almost set any price on the desired goods. However weeks later when additional shipments arrived the price would be lower. He noticed a period of time, between realising that the goods were sought after and the arrival of the next shipment en masse, where the price of the goods remained extremely high. Again and again he watched the same thing happen: a new product would land and sell well for a few weeks the price would remain high and any available stock would be sold immediately. This would continue until a bulk shipment arrived. The time it took the average cargo ship to make the trip across the sea and back would determine the time at which the higher price existed.

Logic told him that if he were able to bring in a small shipment of the desired goods before the market was flooded he would be able to sell quickly and make a high margin. Initially he reasoned that if it was that simple someone would have done it before; but the more he watched and saw the pattern repeated the more interested he became in testing his theory. He scraped together enough to buy a small, ancient longboat, big enough to squeeze in a strong rowing crew, himself and space for a crate or two of merchandise. He worked nights modifying the boat, stripping off excess weight and at once repairing and modifying the vessel. When he was nearing completion he went to the slave market and negotiated terms with one of the slave traders allowing him enough time to make one trip. He bought nine of the strongest slaves he could find and, having staked everything he had on this idea, promised the purchased slaves freedom and payment on successful completion as an incentive. That night he bought drinks at the local tavern plying sailors and captains with liberal amounts of alcohol and listening intently to their tales of adventure at the high seas. They responded willingly to his questions and filled in all the details he needed. The next morning he bought as many dates as he could fit into his vessel. Loaded the ship and taking his place at one of the oars set off across the sea. They rowed hard, eight at a time, the other two catching fits of restless sleep amongst the sacks of dates on board.

When they arrived they worked quickly; unloading, selling and purchasing a shipment of spun cotton for the return trip. They rested and slept for a few hours and set off early the next morning. The round trip was completed in the time it normally took for a one way crossing and the reward was ample. A sizeable profit for the merchant and more than adequate compensation for his, now free, slaves. He sat on the boat contemplating his next move, he obviously had to carry on trading in this way the rewards were good, better than anything he had hoped. He approached two of the harder working slaves that he had bought and subsequently freed, with a proposition; They would continue to work for him and be paid (even more handsomely than they had been on the previous trips) if, in addition to their previous work they helped him purchase slaves and keep them in line during subsequent trips (the possibility of mutiny and the dangers he might have faced being the sole free man on board during the previous trip now entering his mind for the first time).

For a time business was good and the merchant was able to build up a sizeable business (and healthy bank balance) but he was tired of spending his days cramped in the small boat travelling in all weather back and forth across the seas. He began work on a new bigger boat with enough galley space to make it as fast as his small sleek craft. The new boat was magnificent streamlined in design but far larger, with ample storage space in the centre for cargo and berths for his slave masters. His quarters above deck were well appointed and offered unencumbered views of the seascape. He had ingeniously installed communication tubes from his berth from where he could inform his slave masters of the small changes of course needed to keep them on course. The new boat was a success and once again business flourished, the bank balance increased, and he rewarded his loyal slave masters well, growing more confident in their abilities every day.

In time the merchant began to settle into society, his wealth providing status and standing in the community to which he gave of his money and wisdom freely. He also caught the eye of more than one of the towns’ young ladies of marriageable age, one of the more beautiful and daughter of a local magistrate captured his heart and they were married in a lavish ceremony. As a family man he began to resent his time travelling and in time this resentment grew as did his family. However he had the services of two loyal and capable slave masters who he believed more than capable of continuing his business even in his occasional absence. He was however reluctant to give up his well appointed berth aboard the ship, and as he did after all visit important dignitaries on other shores from time to time felt that the business could be run from below deck after all they had been doing this for years with very little guidance from him.

The first few trips under new management went well there were no unforeseen events and they kept well on course. But after awhile the ship began to take longer to make its trips, a change of wind would set them off course and it wouldn’t be noticed and the large vessel would take awhile to turn and set itself on the new course. The merchant noticed that his profits weren’t as large as they used to be but when his slave master advised building a more traditional vessel to add to their fleet since now they had capital and didn’t need to rely solely on speed to compete he agreed of course now his business had come of age and could join the ranks of other successful merchants plying there trade on the seas.

Somewhere on shore a small trader sat at his cart and wondered if there wasn’t a better way to transport merchandise form far off lands ….

2006-09-07T04:28:00.000-07:00

I have a few business definitions that I tend to jot down in really productive meetings. I'm sure you know the the type, those meetings where you are really considering sticking thumbtacks in your eyes to dull the pain (or is that just me?)

This is one of my favourites, I'll post more from time to time - let me know if you have any of your own or perhaps you don't attend meetings as stimulating as mine.

2006-08-29T00:44:00.000-07:00

Jester of the Board.
A business parable

A young King came to power after the passing of his father. He immediately began to assemble a group of trusted advisors and confidants, men who were experts in their respective fields of governance. The country prospered under his rule and he became known far and wide as a great and wise ruler. Years passed and he began to notice that his advisors were not listening to him and making decisions without his involvement. Surely they recognised what a great ruler he was, how could they ignore his advice? Indeed how dare they ignore his commands? The King began to get involved with every facet of his Kingdom and ordered his advisors to get his seal on every decision. He suddenly felt more in command and began enjoying the feeling that he was making a difference. His advisors began to wait for his input before doing anything, and simply nod their collective heads in agreement when he offered advice.

The Kingdom slowly began to go downhill as the advisors abdicated their decisions to the King. The advisors would get together every now and then and grumble about the way things were and complain about the King’s lack of confidence in their abilities. Many suggestions were made behind closed (and bolted) doors; committees were suggested by some of the older men while revolution was on the lips of a few of the younger advisors. These gatherings always ended without progress and the advisors would go back to waiting for the advice of the King.

One day a travelling jester made his way to the court of the King and begged leave to entertain the King. A feast was proclaimed and all the most powerful men in the Kingdom were assembled for a night of merriment and festivity.

The Jester proved his worth and his antics had the court spilling copious amounts of wine as they rocked in laughter. He was an accomplished performer juggling, acrobatics, song and comedic wit all within his repertoire. His forte however was mimicry and as the evening progressed and he observed the members of the court he began to mimic them each in turn. Assuming before the eyes of the assembled the stance and belly of the bawdy governor of the southern provinces leering and spilling wine down his shirt to huge guffaws. The tight lipped ashen military advisor with the quick darting eyes managed to assemble the faintest of smiles as his apparent twin gave an impromptu inspection.

For his finale he gestured to the King to vacate his throne and regally sat down and surveyed his kingdom. He began to bark orders and moving swiftly from the throne assumed the stance and demeanour of a lowly peon bowing scraping and nodding. Another swift movement, another order barked, a blur and more nodding. Suddenly the whole room seemed to be filled with one figure shouting orders and a thousand nodding their heads. As if taking their part in the performance all bodies in the room shrunk down silently and watched and waited for the Kings reaction, somewhere in the background as is obligatory in these scenes a goblet clattered heavily on the flagstones amplifying the silence.

The King frowning looked around and slowly smiled and began nodding as relief swept through the room and chatter broke out once more.

In the time of Kings decisions were autocratic, swift and based on the whims of one man and his trusted advisors (Does this sound familiar?). The King however always held power and the decision would ultimately come down to what he wanted or, if he was in the least benign, felt would be the best course of action. An advisor on the wrong side of a decision might find himself without favour or in extreme circumstances without a head on his shoulders. So the king was likely to find himself surrounded by a bunch of yes men nodding vigorously at every hint of suggestion. Every Kings needs someone fool enough to hold up a mirror and show him the absurdity of his ways. Few Kings have the foresight or courage to have such a fool on staff and most fools having performed for Kings who do not heed their advice will command huge fees to perform for crumbling kingdoms on a consulting basis.

2006-08-17T01:47:00.000-07:00

How to make Venture Capitalists dance.

I have spent my share of time presenting to VC's. Angel investors and sundry other investment types and most of the time I was the one doing all the dancing. So I feel duty bound to share my newfound discovery how to make venture capitalists dance.

Step 1: Go to http://www.generalcatalyst.com/team.html (let it load before doing anything)

Step 2: Put on some dancing music ( I recommend Dancing Fool by Frank Zappa)

Step 3: Move your mouse over the pictures in time to the music. Now we're really grooving ;)

Enjoy!

Reccommend before and after every trip to Sand Hill road.

2006-08-17T01:34:00.000-07:00

The Nike advertising myth and the Google corollary.

Advertising agencies love the Nike story, the use of high value frequent media space to imprint the soul of a company on our collective psyches.

There is no disputing that this works if done exceptionally well, but that is the problem. For most mediocre brands, with average appeal, driven by average marketers and executed by average agencies the most you can hope for is a slight jarring and some recall the next time we are pushing our shopping trolleys past the your product category.

You might say that in this day and age there are no average creatives in our world class agencies, but consider what average means. The average is determined by peer group, the guy who comes 5th in the Olympic 100m final is way above the collective average but try and name one person who has come fifth in an Olympic event.

The Nike myth tells us that if we utilise the media well and execute well we build a great brand. This is what leads marketers to follow other “similar brand type” successes, when the original success came from the juxtaposition of a unique message in a stand out medium.

In order to succeed in your product category, like Nike did in theirs, the answer is not to follow what has worked before but figure out what could work that hasn’t been done (or done on a large scale) that fits your brand or product. AOL chose to unleash a discstorm on the US while Prodigy and Compuserve were fighting each other on the networks (as suggested by their very well paid agencies) and were handsomely rewarded with customers. Scott Bedbury on leaving Nike for a little coffee company called Starbucks didn’t follow the same path in creating the now dominant coffee brand worldwide.

Advertising should not be formulaic and when it is it is decidedly average.

The corollary to the Nike myth is one spawned by the internet and its myriad of Brands that have never spent anything on advertising to claim their space in the collective conscious. This myth feeds on search and its promises of relevance and timing.

Put your message in the time and place when a user is about to make a decision. Sounds perfect; subject A is hungry, Google adsense for thoughtwaves (beta release set for early 2008) makes a lightbulb go off in A’s head and A is heading for the nearest Burger King.

The problem with this model as the ubiquitous one is that it in its purest form it is advertising after the fact. I need to decide I want something before Google can steer me in the right direction. The Nike model on the other hand makes me believe my life is not complete without something I never knew I needed before. The bottom line fact is that there are no hard and fast rules for advertising other than hard work, constant innovation and testing and the guts to scale when it appears as if you have hit the sweet spot.

Postscript: The Google corollary is only valid as a myth if we see search advertising as the ideal form of advertising. Google’s strength however is that for every Nike there are millions of small companies and traders for whom the idea of large full scale advertising is more of a fantasy than a methodology. So what if we am not convincing customers they have to have my product, the fact remains that every day people buy things they need; all we need to is be there when they need what we have to offer.

2006-03-06T10:10:00.000-08:00

Web 3.0 - the next boom.

In the first boom the internet was going to change the way we did business, everyone from booksellers to potato farmers would experience a paradigm shift and the world as we knew it would change before our eyes.

In the wake of the boom a few niche businesses have managed to find a gap in the economy where disintermediation brought with it real cashflows and the promise of riches. We were also left with a few key phrases, "irrational exuberance" comes to mind, a graveyard of business plans, superbowl ads and paper millionaires.

The VC's turned their eyes towards biotech stocks as the internet funds dissolved and disappeared. A powerpoint presentation, rudimentary html knowledge and an untapped vertical market no longer opened the keys to the safe. This was now once again a rational world in which business fundamentals held sway.

Enter Boom 2.0 in which a beta offering, rudimentary Ajax knowledge and an untapped social market are prying the safes open. No doubt the wake of this boom will see a few stellar companies and its own graveyard of business plans.

The web 2.0 boom is hardly over in fact we have yet to progress through the totally irrational phase but I believe that we are already seeing signs of the next boom.

Any businessman will tell you that the key to expansion is moving a unique product or service into new growth markets, think McDonald's and Coke, perfect your offering and move it into new territories. Google is one company that is setting it sights on globalization as a major expansion plan.

North America makes up 5.1% of the worlds population yet it still accounts for 22% of the world's internet usage.

In contrast Asia accounts for 56.4% of the world population but only 35.7% of internet usage.

Africa which makes up 14.1% of the world's population makes up only 2.2% of its internet users, but is growing at an annual rate of 403.7%. A growth curve that puts it 2 years away from surpassing the current online population of North America.

Companies that currently have a sound online business and the means to take it global will benefit from the next internet boom Web3.0 the third world boom.

2006-03-02T10:44:00.000-08:00

Feeding my aDigg-tion:

I procrastinated over this blog for quite awhile before going ahead with it and it is at the moment fueled as much by my addiction to digg as it is by wanted to say a few things to the world. Digg in my case at least is driving me to find unique/interesting/thought provoking content to share with the world. And in this I believe I am not alone.

Digg, del.icio.us and others of their ilk make this a two way conversation, a chance for people to find these words other than through a billion to one random chance. I get a rush every time I see another person bookmarking a link of mine on del.icio.us my heart skips a beat waiting for the page to reload on digging hoping for another elusive digg.

I calculated the overall percentage of stories that get enough diggs to make it to the home page : 34 out of 1230 in a 24 hour period.

2.76% of stories posted will get more than a just a few sideways glances. Leaving 97.24 out of 100 people with an unsatisfied sigh as they see the page reload with no new diggs.

But what about the uber diggers, the elite? Is it just volume that gets them there or are they more connected to the soul of the community?

Let's look at the numbers:

Of the top 30 users the lowest home page to submission ratio is 13%. In translation that means the lowliest of these users is 4.7 times more likely to know what's interesting than the rest of us.
(even user number 300 is 2.6 times more plugged into the digg matrix than average)

And at the top of the food chain? (excluding Kevin rose of course who has a 99% hit rate) User number 10 has a 71% hit rate on 192 submissions that's 25.72 times better than average.
go see for yourself who it is ... Oh and while you are there digg this article and help end the sighing

2006-02-27T09:57:00.000-08:00

Web 2.0 vs Oldschool - The steel cage matchups part 2

I used Alexa a few posts back to compare the relative popularity of a few different businesses. Pitting them against each other in a head on head competition sometimes with surprising results.

Our first fight tonight is a classic; pitting centuries of tradition with a few years of communal effort.

Yes Britannica is on the same graph you can just make out the red line at the bottom. I figured this would be a runaway victory but I wasn't prepared for a first round knockout.

The next bout was held in a dark (firewalled) corner of the internet.

It seems that not all internet pursuits are cerebral (but most of us knew that). If in your next web design meeting it comes up that no one reads on the internet. Use this as a comeback.

Ok now for tonight's main bout:

Is craigslist the death of all classifieds printed? Not unless it gets itself a heavyweight coach, with static traffic patterns and no hunger for the fight its not really going to trouble the major contenders yet.

2006-02-24T03:25:00.000-08:00

Social Bookmarking Optimization; the long tail of PR?

As more and more companies cotton on to the power of social bookmarking sites to move large volumes of traffic around the internet. Kottke.org and others have made public the effect a front page story on digg.com can have on website traffic. I predict it won’t be long before a host of Social Bookmarking Optimization (SBO – a new TLA remember you read it here first) “experts” pop out of the woodwork offering the opportunity to make your company’s blog on the wonders of carpet cleaning the centre of the world’s attention.

Google gave small companies around the world the opportunity to be found and in doing so created the long tail of advertising. Causing small Mom and Pop businesses around the world to consider an advertising budget and pay serious attention to marketing perhaps for the first time.

Del.icio.us, Digg and others in the same realm might just inadvertently have created the long tail of PR. Sure my business is never going to feature on the Front page of the New York times, Wired or even USA today but given the right circumstances, a dash of hyperbole and a bit of spin you might just find your company blog in the middle of a flood of traffic. Even carpets can be interesting sometimes.

The can of worms that this opens with regards to volume spam, fraudulent digging (voting) is not something I want to get into yet, that debate will come in time andit will have to be addressed by the sites involved. The interesting thing now is looking forward to the entrepreneurial possibilities this opens up. Journalistic and marketing skills are more important in this realm than tech skills (this is probably the reason we haven’t seen a proliferation of SBO companies already) a young hotshot with writing and internet skills is more likely to be able to survive in this new world of PR than someone with a large rolodex collected over expensed lunches. It might be fun to see a PR company explain results rather than column inches for a change.

2006-02-22T09:53:00.000-08:00

Apple vs. Google is this a remake of Apple vs. Microsoft?

A lot of people are saying that when Google launches a competitor to iTunes it will fail. I am not so sure yes particularly if they don’t learn from past mistakes. Have a look for yourself and then make your own mind up. But I wouldn’t be shorting Google stock anytime soon.

Apple vs Microsoft
Apple:
Installed own client base
Tightly integrated hardware and software platform
Excellent brand image
Coolness factor
Ahead of the market curve

Microsoft:
Selling through open channels
Software primary and usable across multiple device brands
Brand is secondary to distribution (initially)
Utilitarian
Behind the curve in innovation ahead of the curve in distribution

Apple vs Google

Apple:
Installed own client base
Tightly integrated hardware and software platform
Excellent brand image
Coolness factor
Ahead of the market curve

Google:
Open channel and access to large client base
Software primary and usable across multiple device brands
Brand is secondary to utility
Utilitarian
Ahead of the curve in innovation ahead and in distribution

2006-02-20T10:32:00.000-08:00

digg vs Slashdot, Flickr vs Kodak, Istock vs Gettyimages, del.icio.us vs webring
is Web 2.0 really kicking butt?

I starting playing around with some Alexa graphs and for fun started comparing old (well comparatively in some cases) vs new companies with some surprising results.

I know you want to know the digg vs Slashdot comparison but I'll leave that till last and start with one which really matched up to my expectations. Istock vs Getty Images.

Istockphoto for those that don't know is an upstart in the stock photography business, charging as little as $1 for professional quality photographs that have traditionally been in the $350 - $500 range. The photographs are taken and uploaded by a growing army of enthusiasts, hobbyists and professionals who have found a more direct outlet for their talents. A classic case of disintermediation.

OK next match up an old world heavyweight and and the Web 2.0 posterchild.

A runaway victory for the company that understands its place in the lives of its users. Kodak it seems is struggling to drag its brand into the digital age despite a century or more of experience on its side (or should that be weighing it down).

This is fun whose next?

Some of you may remember a youngster who really "got" the net bringing us a way to group like minded sites together a few years back. Webring provided a means to let site owners group themselves with others so that if we found something we liked we could hit the "next" button and presumably get more of the same.

Turns out that letting the user decide cumulatively what they like is just a little more powerful.

OK now we get to tonight's heavyweight bout.

looks like a victory for the reigning champion here with a rematch definitely on the cards.

But our fun isn't quite over yet. If these are our two tech heavyweights shouldn't we throw the original tech news destination into the mix?

Whoah there. It looks like there is a space for the creation of content in this new world. If every site was a "social bookmarking" site where would they all point to? And it looks to me as if when users find an efficient way of finding content that appeals to them as a group, the creators of the content benefit in far larger proportion than the sites who merely point the way.

Or maybe I'm just reading too much into this. Either way I'll let you know when the next fight night is scheduled.

2006-02-20T10:16:00.000-08:00

Can you define a meeting?

Most meetings in business are strategic. There are strategies for appearing as if you care, strategies to mask incompetence and most importantly strategies for staying awake so that the drool doesn't start to slide down your chin.

I used to doodle until I discovered a new game: coming up with real business definitions.

I'll share them with you through this blog from time to time and here are a few to start with:

Advertising: (n) Reviving the ancient practice of wealthy patrons supporting the whims of those artists who are able to peddle genius.

Analysis: (v) Extracting meaning from data. The practitioners of analysis are an arcane sect calling themselves analysts, reputed to be direct descendants of the alchemists of old. cf Alchemy: Transmuting base metal into gold.

Data: (n) Aggregation of numbers with little or no intrinsic value. Highly prized and sought after by collectors.

Workstation: (n) A device for the increase of productivity, equipped with diversions and distractions enabling the effective use of time gained.

2006-02-09T09:56:00.000-08:00

Is the first post in a blog the same as the first line in a novel?

It could set the tone for the whole of whatever is to come, or it could just keep you staring at a blank keyboard for hours.

Best to just get it done.