Cogitare

My old boss Steve Brill is back in the journalism game after a successful run as founder and CEO of Clear, the airport security pre-screening company. If real journalism is going to survive, the industry has to figure out how to get people to pay for it again--newspapers are coughing up blood and yet there's more news and journalism available than ever before. This effort should be a serious shot at creating a subscription model for quality journalism, but will it be enough? Beyond news junkies, will the average citizen pay enough for content to offset the gap between print and online advertising revenues? We'll see....

Building Better Industry Communities (and Conferences)

Seth Godin has a post on his blog about building better hallways to build communities among "tribes" of individuals with common interests.

What would happen if trade shows devoted half a day to 'projects'? Put multi-disciplinary teams of ten people together and give them three hours to create something of value. The esprit de corps created by a bunch of strangers under time pressure in a public competition would last for decades. The community is worth more than the project.

He's absolutely right. Many trade shows include a social activity or competition (the iMedia Summits are great for this) that put small groups of attendees together for activities like sailing or skiing or mountain biking, affording everyone the opportunity to get to know each other better, and knit the community together with shared experiences.

Wouldn't it be infinitely more interesting and valuable to put those groups together to accomplish something useful and at the same time really learn what makes each individual so good at what they do? I spoke at a small conference in NY organized by Lennart Svenberg on mobile marketing that included just such an exercise. We divided into small groups for an hour and created innovative marketing campaigns for a fictional service, then presented them to the other attendees. It was an enjoyable and rewarding experience, and I learned more about my fellow group members than I would have from casual conversations over drinks or golf.

At an internal conference at Yahoo we spent an afternoon in small interdisciplinary groups coming up with the next great Yahoo property. A few were good enough to warrant further exploration, but everyone made new connections within the company that I'm sure contributed more to the company's success than did the projects we worked on that afternoon.

Wouldn't it be even more interesting to do the same thing, but have non-profits apply to supply the exercise and be able to use the results? I agree with Seth that the experience is more important than the outcome, but why waste the output?

Coupons Take Off

Ad Age article on the boom in online coupons. Go Coupons, Inc.! I think we've finally reached that tipping point where printable coupons are going to rapidly grow to a significant share of the coupon distribution market, e.g. 10-20% in the next couple of years, or maybe more. Newspapers, sadly, are on the verge of collapse, and the various means the FSI publishers are using to try to keep circulation up can only go so far. Yet the demand for coupons from both consumers and advertisers is growing. The Internet is the logical outlet for cost-effective mass distribution.

Righteous Indignation at AIG

Jake DeSantis very publicly resigned from AIG today, and his missive to CEO Edward Liddy provides interesting insight into the mindset of executives at our financial institutions.

DeSantis is indignant at his treatment by, well, just about everyone involved in the AIG mess. He has reason to be--he was made reasonable promises and those promises have not only been broken, he and others have been demonized for ever having been made those promises in the first place.

Let's start with the defense: DeSantis and his colleagues agreed to work for $1 a year--$1!--to stick around and help unwind the AIG-FP business. How many of you have agreed to a $1 annual salary? Not many. In return, he was promised the same bonus payment he got the year before. OK, that prior year bonus was probably one of the bigger ones he's ever received, and not necessarily reflective of what it would really take to retain him for another year. But it was a deal, and in the context of over a decade of traders and the like receiving gobs of money without so much as a whimper of protest from the American public, probably made a lot of sense a year ago.

DeSantis goes on to make it clear that he had nothing to do with those evil credit default swaps that killed the company. That only a handful of people, who have since skulked off into the night, did it, and he's taking the blame. His indignation and sense of injustice ("none of us should be cheated of our payments") is palpable. The populist backlash that is throwing him out with the bathwater is too much to bear. And let's face it, our Congressional representatives, with their finely honed abilities to make a big show out of closing the doors of long-empty barns, aren't helping anything.

Now I have two problems with all this. First, DeSantis was paid $742,006.40 after taxes. In his mind, he generated a lot of profit for AIG, and he deserves his cut. How many of us get a "cut" of our employer's revenues? That's the problem right there. The financial industry has created this culture of entitlement to a cut of our earnings. They gamble with our money and then they get a cut. Sometimes they get a couple of cuts. Lots of people get stock options and that is sort of a cut of the success of your employer, but AIG execs got those too--a triple cut! Let the financial firms shower stock options on these folks and then at least the people who invest in and with those firms will benefit along with the employees who helped make it happen.

DeSantis seems completely oblivious to the fact that people are finally questioning the wisdom of paying these people enormous amounts of money for making bets on the success or failure of other people's hard work. 

I'm not joining the populist wave and crying "off with their heads." But I am saying that this BS about paying enormous, "cut of the winnings"-based bonuses being the only way to attract "the best and the brightest" is wrong. It may attract a certain type of the bright kids, and some of the best, but certainly not all, or even most. Most of the best and brightest still go off to create things not money, or help people, or heal people, or lead people. Until the financial industry wakes up from this dream that has turned into a nightmare and realizes that it is a professional services business, one that should pay its own best and brightest quite well, not obscenely well, it's going to be vilified. [Update: Seth Godin framed this in terms of the firms failing to market their jobs on any basis other than salary, worth the read.]

Second, the finger-pointing is unbecoming. Sure the swaps were the proximate cause of the crash at AIG, but DeSantis was as much a part of the culture that set up the conditions for such a crash as anyone else. Maybe DeSantis was a cautious, prudent trader, maybe he just got lucky, I don't know. But He certainly wasn't running for less-green pastures when the CDS's were racking up the profits, was he? He wasn't writing Op-Ed pieces decrying the system that saw the complexity and risk in the system spiral out of control? Hey, he's just an average Joe "best and brightest" guy being paid over $1 million a year in bonuses, how's he supposed to figure this stuff out?

It's nice that DeSantis is contributing his bonus to charity. Personally I think he should keep it; he clearly believes he deserves it. I think Congress should shut up about the bonuses, say "we f**ked up, next time we'll know better" and fix some real problems. And I think we should all think long and hard about what kind of financial institutions we want to rebuild and give our money to when this is all over.

The wrong kind of community

A post on Brad Beren's blog reminded me of something I came across while researching online TV shows. I was checking out an episodic web TV show with about 17 episodes, done by Vuguru, which is the new media studio owned by Michael Eisner's The Tornante Company. The show seems to have recently wrapped up, but the website is active, and there's a big "Community" link at the top. So I click on Community and I get a phpBB-driven, generic looking forum page with exactly one topic. OK, so that's pretty cheesy right there, but I click through because it shows that there's a very recent post. Inside there's nothing but spam postings, most for erectile dysfunction medications and porn, and a few for incest porn sites. Incest. From Michael Eisner?

Now none of this should surprise any of you from a technical standpoint--if you don't really know what you're doing, your forums are going to be loaded with spam. But for goodness sake, this is a real production from a major player (albeit a few steps removed) in Hollywood! Did someone have a checklist that said "Create Community around Show" on it? BB launched, check!

Moral of the story: pay attention to your own stuff, and if you don't have the bandwidth, take it down! Hmmm, better check the comments on this blog now....

Microsoft Understands Consumers

Microsoft understands us. They know we're all about elegance and simplicity now. That's why they've boiled these instructions down to three simple steps. Mind you, these instructions tell us how to open the box Vista comes in. Seriously, check out these instructions!

This is the company that is going to buy Yahoo! and together they are going to go out there and change the world after looking deep into the souls of consumers and figuring out how they really want to be marketed to. It's inspiring, it really is.

Focus Groups

This is great. Now to be fair, the greatness of the original Mac ad was somewhat a product of the times. It may be hard for people to grasp why a computer commercial would use the imagery that Apple used back then. In 1984, you got it. But it's still a great exercise and reminds us that great things come from great minds, not focus groups and demand analysis.

Word of Mouth vs. Viral Marketing

Seth Godin blogged on the difference between word of mouth and viral marketing, and since the misuse of the term "viral marketing" has bugged me for a long time, I think it's worth commenting on. While I know Seth can talk for an hour (or write a whole book) about viral marketing, I think he shortchanged the explanation in his post. The basic difference, as Seth explains, is that word of mouth decays and viral marketing compounds. This isn't exactly right, I humbly submit, because both word of mouth and viral marketing can involve compounding, and they both can and will eventually decay. The difference is in the method of transmission of the idea and the source of the energy used to propogate it.

So here's my take on it, perhaps influenced by my distant pre-med past. A virus is characterized by the ability to get a cell to make copies of the virus instead of itself, by injecting a genetic package into the cell. Thus the cell becomes the energy source for creating new viruses. (Unlike other types of cells which use their internal energy to reproduce.) Once a whole bunch of new viruses have been created, they bust out and infect new cells, compounding the growth and spread of the virus. Hence the term "viral marketing" for something that creates this compounding effect by getting "infected" people to reproduce something that in turn infects others.

Too often, however, the term is applied to phenomena that are simply really good word of mouth. Someone tells you to visit a great website with hysterical pictures on it, and you do, and you like it, and you tell 5 friends to visit that website. They tell 5 friends, and so on, and pretty soon the website has a $15 billion valuation. But there's no viral marketing going on in that example. Just good word of mouth. The interaction between infected "cell" and a new host doesn't involve the transmission of the virus itself from one to the other.

On the other hand, if I visit that website and there's this app that helps me make a really funny picture, and I click a button that says "send this image to 5 friends" and I do, and in that email my friends see the image and after laughing their asses off notice that below the image it says "Jeff made this image on ROTFLMAO.com, and you can too!" and they not only forward the email I sent them to 5 more friends, but visit the site, make their own images and forward those to 5 friends, you've got a real viral marketing engine going there.

The difference, to me at least, is that in the first example the thing that you're trying to increase isn't transmitted to others. They just hear about it, and have to go see for themselves before becoming "infected" by the brilliant website. In the viral example, the act of telling the friends about it "infects" them. Some of the infected ones will successfully reproduce the virus and infect others.

Why does this difference matter? Well, like Seth says, good word of mouth is great, but tends to dissipate as it gets further from the source of energy, the person that had the original experience. Eventually the experience has lost too much energy to inspire anyone to pass it on. "My friend's cousin's girlfriend's sister's niece's babysitter saw this great website" Yeah, whatever.

A real viral campaign carries the original, infecting experience to each person it touches. Everyone gets hit with the *original* level of energy, and the likelihood that the virus will be passed on doesn't change as it spreads further from the original source.

There's nothing wrong with good word of mouth, it just ain't a virus.

Novatel Merlin XU870 Cingular on MacBook Pro

This thing rocks! I just hooked up this 3G (HSDPA) modem and was up and running in seconds. The modem is an Expresscard 34 size wireless modem card that runs on the Cingular network in the U.S. It suports HSDPA, which Cingular has rolled out in the major metro areas, and covers most of the area here in Silicon Valley. When it can't connect via HSDPA it will drop to UMTS, EDGE, or GPRS if necessary.

Novatel touts Mac compatibility, and it was indeed a snap to get things running on the Mac. Here's all that was necessary: buy the card, sign up for Broadband Connect on my Cingular account (you may want to get another line of service so you get a separate SIM card. Otherwise you'll have to use the card from your phone, and what good is that?), insert SIM card in the XU870, pop it in the Expresscard slot, and surf away!

OK, not quite that simple. When you insert the card, the Mac recognizes it and it self-configures. I'm assuming that's due to the recent update that added WWAN support to OS X. It hard-coded certain cards for each of the major carriers, including the XU870 on Cingular. So the Network Pref Pane for the Novatel HSDPA card automatically entered the right dial numbers and account names and such. I clicked connect, it connected, and I've now got very usable, fast connectivity. In my living room I'm showing only 1 bar, but connected at HSDPA/UMTS (I'm pretty sure HSPDA is only applicable to downloads). Speakeasy shows I'm still getting 998kbps down and 347kbps up. That's about as good as my DSL connection.

Assuming I can get this kind of speed in hotels and airports and other places on business trips and other out of the office locations, this is going to be great. Internet access in a hotel, which usually tends to be relatively slow and finicky, is around $30 for a 3 day stay. This service is $60 per month, unlimited. It'll pay for itself pretty quickly!

One thing to note is that Cingular will be selling a (different) Expresscard format card very soon, which I assume you'll be able to get a rebate on when you sign a Broadband Connect contract.

Jura-Capresso Impressa F7

We recently finished renovating our kitchen, and thought it would be great to upgrade the coffee machine as well. We've been using the Cuisinart Thermal Grind & Brew, and while it's pretty good, it had a few drawbacks. Mostly, you have to clean the damn thing constantly, because the steam from brewing turns a certain percentage of the ground coffee to sludge in the grinder and the chute. So basically you clean everything every day. It's also fairly tall, and you can't fill it if it is under the cabinet.