2013 Aug 20

Pick a Number, Any Number!

I noted only last week how JetBlue was trying to move upmarket. Essentially, it was envious of the lovely margins that airline industry veterans were getting from those premium paying passengers, and decided to go after them, probably erroneously, in my opinion. Dominic Basulto, in a Washington Post article, applies Clayton Christensen's disruption theory to the airlines, and argues that the airlines are setting themselves up perfectly for disruption. They are constantly trying to move upmarket, focusing (naturally) on the highest-revenue customers, while putting less and less focus on those less-profitable coach class flyers.

2013 Aug 19

When Your Skills Are a Commodity

Earlier this week, I had the pleasure of speaking with a colleague in Silicon Valley who is a top notch expert in one of the hottest fields, Big Data Analytics. As the name implies, he is an expert at creating and performing analysis on massive data sets. This gentleman spent many years as a high-end technology consultant, and I have no doubt he was well worth it. He used an interesting phrase, the "

2013 Aug 18

What Pain-Killer Is Your Product?

Let's say this: there are no magic bullets. They simply do not exist. Nonetheless, your product may eliminate some, even some important, areas of pain from a customer. William Mougayar, an excellent curator and writer from StartupManagement.org, writes how even in the Software-as-a-Service (SaaS) world, enterprise products can be complex to use and, indeed, should take time to fully entrench itself into business processes. Business processes are complex and slow to change; once you are in, it will take a very long time until they become displaced.

2013 Aug 16

The Cage vs the Door: A Facebook-Twitter Story

Every business wants to lock in its users. Even businesses built around openness, easy-in/easy-out, would far prefer that their users stay inside their services. It is often just a question of how the company goes about attempting to keep users in, and the philosophy that drives it. The mobile experience on Twitter and Facebook is a perfect example of the difference in philosophy. Open Facebook on your mobile app. Find a link to a story you like and click on it.

2013 Aug 15

Show Me The Money: Don't Talk About Yourself!

The other day, I saw some marketing collateral from a small startup trying to sell to very large companies. They had just about every buzzword under the sun, repeated multiple times: "advanced visual tools," "gain insights", "advanced algorithms." Best of all, they had highlighted, "we were recently benchmarked against Big Competition, and we outperformed Big Competition in almost every measure." This is a classic mistake in all sales, and especially in startups founded and run by technologists.

2013 Aug 14

Building The Next Generation

Most business owners have a short-term focus: this year, maybe the next. Even startup founders tend to have a long-term vision, but are very focused on what can grow the business right now. Public companies (with a few rare exceptions, notably Amazon), tend to have even shorter quarterly windows. Even when companies pay for research, it is often biased in favour of driving immediate growth in their own business.

2013 Aug 14

Being Half Pregnant

When I worked airline security in the early 1990s, the senior executive who trained us would constantly repeat, "ladies and gentlemen, there is no such thing as half -pregnant! Either you are, or you are not!" In that context, he meant, of course, that either the person was suspicious or was not. If they weren't, they were safe; if they were, then suspect them all the way. Mind you, we were a lot more effective than the current TSA, and treated our customers a lot better along the way.

2013 Aug 12

Forced to Make Money? AT&T, Newspapers and Bezos

Here is an interesting statistic. In 1985, right at the forced breakup of AT&T, their revenues were $1.36BN, or $2.47BN in inflation-adjusted 2005 dollars, according to the official government CPI calculator. But in the same 2005, AT&T had revenues in the voice segments alone of $24BN! What happened in that intervening 20 years? Simple. The government forced a breakup of the AT&T monopoly. It shouldn't be too surprising; after all, the monopoly was largely government created and enforced in the first place.

2013 Aug 11

Setec Astronomy: Too Many Secrets?

The NYTimes had an insightful article on the downside of Setec Astronomy, or Too Many Secrets. Within the hundreds of thousands of "Secret" documents released by Bradley Manning to WikiLeaks, the number of true secrets was infinitesimal. Why do government officials feel the need to classify everything? As always, look at the incentives. There are three key reasons: Duty: Some people have a true sense of protecting the best interests of the country CYA: No bureaucrat ever was fired for saying "

2013 Aug 10

Price vs Rewards? Do Positive Motivators Work?

In an earlier article, we discussed "congestion pricing", or more generally, capturing maximum value using price discrimination. As an aside, I mentioned research being performed by Stanford attempting to use positive motivators (rewards and lotteries) rather than negative motivators (price, i.e. money out of pocket). The motivations behind the research appear to be two: The positive: Quite simply, are there alternate ways to smooth out the flow? The negative: Even if not explicitly mentioned (other than here), pricing means capturing value in a perceived public good, which people tend to instinctively reject.