Planning, Startups, Stories

Delightfully and Disturbingly Human

A blog post calls another very well known and well liked blogger an idiot. That's the title: "So-and-so is an Idiot." A mutual friend tipped me off in an email. I know the alleged idiot in that post, I do business with him, I like him, I respect him, and I've recommended his writing a lot.

Still, that's good blogging, right? Be controversial. Make people mad. Get traffic. I've done it myself, although I don't think quite as blatantly as that. I've certainly wanted to do it a few times. And the title, particularly when the subject is well known, is really powerful. And besides, nobody's always right, right? A disagreement here and there adds spice.

Is it all about traffic? Is sharper, meaner, and more obnoxious better?

You could, after all, start the post with "Not really. But I do think he's wrong when he says ... " Actually, this annoying attack  post cites, in small print down at the bottom, a much better post by Jon Dale that says essentially the same thing right. And better.

Because in the middle of that meanness, there is a point -- indiscriminate high-volume Twitter use, to the point of near-Twitter-spamming, is probably not such a good idea, even if our well-known and well-liked friend says it is. The real point to be made is (and I'm not citing the URL on purpose, because I really don't like the title, or the personal attack):

The days are numbered for these types of tricks. I think everyone will agree that the world is changing into a more transparent place. Long tail success is created by genuineness and honesty. The days of the glamour and illusion created by mediums like television are coming to and end, being replaced by the blinding light of reality that is already creeping through the cracks of our world. We are about to step out of the casino doors at eight in the morning, after drinking and gambling all night, into the sunshine of honesty and truly seeing people for who they are.

And this ends with a very strong conclusion, reassuring, that we don't have to be celebrities:

Be honest. Be yourself. Be genuine in thought, word and deed. We will be drawn to you and love you for it.

So far and so good, a nice conclusion, and the idea of success mapping to genuineness and honesty is very attractive. A mean title, and kind of a mean attack, but a good point. Right?

But then I made the mistake of reading the comments. I really like the comments sometimes. Even the nasty name-calling all-uppercase-shouting comments can be fun sometimes. Very human. The best and the worst of human nature.

But by the end of the comments, it was diatribe, like an instant message argument, between two people; dull and ugly. Blogging gets really delightfully and disturbingly, both at the same time, human.

That's just my opinion.

USA as a Restart

I just picked up USA as a Restart on Early Stage VC. Very well done. Provocative.

"The USA looks like a classic Restart ‘opportunity.’ What happens in a restart? First, existing stakeholders get wiped out; The $7T of ‘new money’ is accomplishing that. Second, management gets changed. November 4 did that. We now have new managers who have a four year ‘vest’ and, probably, a ~100 day cliff. They don’t have a new incentive model – that’s a problem – and we have a tier of managers, called Congress, closely resembling the old group, except for some changes at the edges among the most junior members.

"Managing this as a VC Restart is more than just throwing money and new executives at the situation and hoping it gets better. Success requires that you have a point of view of about how to rig the situation to win. Winning here means more than growth. It also means productivity. Productivity is the profit margin in an economy. A VC restart wouldn’t invest to do more of the same. It would invest to grow the kernel of value. I won’t get into what’s the ‘kernel of value’ in USA, Inc. That’s a debate unto itself. I simply point out that capital allocation should follow a market mechanism, like an auction, rather than a budgeting process like a bailout.

"A VC Restart would also look for alliance partners to strengthen the offering. Perhaps a merger with another competitor with complementary skills, e.g. China? Merging with China might resemble YHOO+ MSFT – distance and culture conspiring against success. We might also argue about valuation, as there are dramatic differences in growth rates between enterprises. Perhaps a more logical partner would be Canada. Proximity, history, and language work in our combined favor. Canada brings natural resources and we bring ‘value-added processing.’ (We may have to spinoff Quebec to make this work.)

"Above all, a VC restart would begin with a re-definition of the core competencies of the Enterprise. What they once were or might have been is irrelevant. What is paramount is what they are now and how they can be organized to create value in a larger competitive environment. A ‘Green Manhattan Project or Green Marshall Plan’ might be one such initiative. Another might be an initiative to reinvigorate biological research to find a genomic equivalent of Moore’s Law and become a dominant and low cost producer of therapeutics as the world ages. I am sure there are several more big ideas out there.

"The current discussions (December 2008) in Congress and the Press resemble the discussions original investors have about failing companies. How big should the bridge loans be? What are the terms? How deep are the cuts? Are they deep enough? Who's fault is this?

"Like it or not, we are all now VCs. We have a stake in the Restart of the USA. The discussion has to turn to What is the Affirmative Plan of Record and How will we know if the Plan is working? Let's start asking these questions from our new executive team. "

That's by Peter Rip, a partner in Crosslink Capital, on Early Stage VC.

Packaging Design Can Kill (Your Business)

Design came to mean a lot to me in business when the lack of it nearly killed my business in 1993. The Palo Alto Software of those days had only me and two other employees. We got into retail with packaging that was environmentally friendly and ethically "nice" (and I've tried to find a better word for it, but for smaller boxes using recycled materials with dull colors, particularly back in 1993, I can't think of one).

Kathy Kolder, a VP at Fry's Electronics, put it very concisely: "Tim, your boxes suck." In fact, they almost killed the company.

So I came to appreciate design; and the fact that I'm not a designer. Packaging design for retail feels almost like a tax, adding no value, really, but required.

And I've learned that it isn't a matter of what I like. There's none of that "I know what I like" business with me and packaging design. I know enough to know that what I like is completely irrelevant.

What's design? What works and why? The fact that I don't know makes me only that much more appreciative of good design when somebody else points it out. So take a look at what gets honored as  great book designs for 2008:

The Book Design Review

I'm not claiming any expertise on this subject, just thanks for the list here, with the visuals.

One of my mentors sent me to the design shops in the late 1980s, when I was too far into the do-it-yourself mode. It felt like a tax, but it helped. Then, through the following years, cheapskate at heart, I forgot, and started doing it myself by 1993. Never again.

What? Luxury Edition? Are they Kidding?

My wife came in the other day with the recently arrived TIME magazine luxury edition. I agreed with her sentiment, which was basically: "What, are they crazy?" It's hardly a time for talk about luxury.

Technically, I think it was the Style & Design special issue, which had a luxury theme. It's not the regular weekly TIME magazine. Still ...

The Sunday New York Times noticed the same thing, with a piece by Stephanie Clifford titled Celebrating Luxury in the Time of Melancholia:

Daniel Kile, a spokesman for TIME, said the magazine’s editors didn’t realize how bad the economy would get when they were planning the issue. “Most of the issue was closed in early October, before the severe economic downturn,” Mr. Kile wrote in an e-mail message.

Before the issue closed, the staff hastily added a few articles addressing the climate, including one about luxury shoppers who were indulging by buying virtual products at the site Second Life. (That is no cheap habit, though: a woman featured in the article had spent nearly $10,000 in the last two years buying virtual luxury gear for her virtual luxury self.)

Many luxury-magazine editors and publishers have been arguing that luxury spending will continue, but in the last few months, ad pages have started to plummet. The ad pages for this issue were flat from the issue a year earlier, Mr. Kile said.

No increase in ads? Really?

Really, by early October we'd already had the bailout and the stock market crash, housing prices had been going down for nearly a year, and more than a million jobs lost since January 1.

They're running TIME magazine ... aren't they supposed to realize?

The Girl Effect

Thanks to Garr Reynolds on Presentation Zen. I don't feel like I need to add anything, just watch the video. You can click here for the YouTube source page.

Are Bizschools Training the Wrong People the Wrong Ways?

What if we measured the effectiveness of education -- any education -- by the impact on human lives? What if we said an MBA degree isn't about earning power and recruiting, but thinking power and effectiveness and getting things done; by how many businesses we've started, or grown; by how many new jobs we've created; by how many houses our employees have purchased to live in with loved ones?

What if we measured education by how well we treated our fellow humans in the workplace, on the street, and in the home? Shouldn't that be a relevant scale?

Consider this, a great quote, in a business school context:

"It was our view that you need to think critically about what you are doing every 100 years or so, whether you need to or not."

That's Harvard Business School Dean Jay Light, as quoted -- with tongue obviously in cheek -- in Harvard Business School Discussed the Future of the MBA, on the HBS site. Yes, he meant to be ironic, and yes, the Harvard Business School is 100 years old this year. And, (third yes in a row), yes, a lot of business school leaders are looking critically at MBA programs. With depressing results.

For their research project, Datar and Garvin interviewed 30 deans and associate deans and roughly 100 students in large and small groups. They wrote case studies on MBA programs at Chicago, INSEAD, Stanford, Yale, and HBS, plus a case on the Center for Creative Leadership (all are available from Harvard Business Publishing); collected data on aggregate trends in MBA enrollments and program designs; and compiled a detailed curriculum analysis of eleven business school programs. To complete the picture, they also interviewed leading academic critics and 28 executives and recruiters. The findings presented a mixed diagnosis of the health of MBA programs, but on balance were, in the words of one HBS faculty member, "depressing."

Depressing, despite the fact that business schools worldwide are producing half a million MBAs every year, 150,000 of them in the United States.

And here's another interesting quote from that same post:

Henry Mintzberg of McGill University in Montreal devoted a book to his contention that "conventional MBA programs train the wrong people in the wrong ways with the wrong consequences."

It gets worse as you read on, even more depressing, except for the fact that these are a lot of the best schools putting their heads together and trying to figure this out. And that's not depressing, because critical thinking seems like a good step towards improving things. How do you teach business? And how, for that matter, do you measure the value of having been taught?

Here's one thing I know (or at least I'm sure of) about this subject: you don't measure the value of education by income. And you don't measure it by utility to employers.

And I'm still glad, about 30 years later, for my two years in business school. I liked the life we led as a family on campus, I liked the profs, I liked the classes, and those two years worked for me to pass me through the tunnel from journalism to building my own business. I wouldn't have missed it.

And on the other hand, I don't have much evidence that it's good for you, or the next person, or everybody.  It worked for me.

Don't Tempt Fate. Be Thankful.

Many years ago I sat with my older brother Frank in a pleasant sunny end zone and watched the Stanford football team get ahead of Washington State 25-14 at halftime. We rooted for Stanford.

I made fun of the game and it's score, saying that it was all over, we could go home now, the end result was completely obvious. Frank got angry. "Don't tempt fate!" I was joking, but he was serious about it, and to him it wasn't funny.

And, lo and behold, as if it were bad fiction, Washington State won that game 49-42. To this day, when it comes up (and it just did, in email) Frank insists that Stanford's surprising loss was my fault, because I had tempted fate.

Today, Thanksgiving holiday in the U.S., don't tempt fate. Be thankful. I am. I won't bore you with all the reasons here, but please think of some for yourself. It could always be worse.

Don't tempt fate.

Charity Add-on: Does it Work? Is It Real?

(Note: I posted this first on Small Business Trends, and I'm reposting it here for convenience of readers of this blog. Tim)

I got an email over the weekend from an online retailer asking me to post about its new offer of donating "5-10% of the company's profits to charity." A press release explains that there's a drop-down menu at the end of the online purchase process, offering a choice of charities including MADD, Teach for America, Doctors Without Borders, and so on.

Frankly, that's not news. Local supermarkets and such have been doing that for years. Other websites do it.

But it interests me, so I ask you: does it work? Are you going to seek out the online retailer that does it? Is this real, or is it just a ruse, as in a cynical attempt to spin?

I'm quite cynical about giving a percent of profits. I think it's kind of a ruse. I don't doubt that they actually do it, but "profits" and "percent of profits" is a deceptive term. I think it's often used to quietly trick people into thinking "percent of sales price" when it's really just a percent of that tiny bit that's left over after all costs and expenses are paid.

The whole illusory nature of profits comes to mind again after that annoying flap in the presidential debates. I'm sure a lot of people misunderstood how big a company has to be before it produces $250,000 of profits before tax. Profits sound like money, when they're really just the leftovers.

In my mind, after 30 years of running my own business, profits are third priority, after cash flow as first, and growth as second. Even in good years, giving even 10 percent of profits in most businesses means less than a penny per dollar of sales price.

Furthermore, I really wonder, aside from the profits gambit, how much do people take greater good into their purchase decisions? Do you?

And, if you do, are you going to seek out retailers who offer up a percent of profits, as opposed to goods made in developing nations, or not made in sweat shops? How are you going to sort through that?

And, if you do, are you still going to be doing that these days, when you're worried about your house value, or the threat of widespread recession hitting the sales of your own business?

Big Ideas in Few Words

What a kick! A Twitter writing contest. That means, of course, writing within a 140-character limit. Haiku, you're too easy.

I found it as The Winners of Twitter Writing Cont est 2 Are… on Brian Clark's Copyblogger. You can go there to see what's what, but in the meantime, here are the winners. And just to make it fun, I've taken the two third-place winners and the second and first place winners and put them in order of my preference, best first, which is not the same order the judges put them:

Unfolding the note / his heart anticipating / the rest of his life

Words… just like sun rays / the more they are constricted / the stronger they burn.

“I’m following you” / A compliment on Twitter / Not so in real life

A wandering ghost / My dead father cries “Uncle!” / I must have revenge.

I like them all, but in that order, which isn't the order the judges set. The prize winner gets a MacBook Air. Which one do you think it is? 

Great Writing, Sadly True

One month later, I still think one of the best, possibly the best, think piece that I've seen about the economic crisis is Paul Krugman's The Widening Gyre column in the New York Times in late October.

His first paragraph:

Economic data rarely inspire poetic thoughts. But as I was contemplating the latest set of numbers, I realized that I had William Butler Yeats running through my head: “Turning and turning in the widening gyre / The falcon cannot hear the falconer; / Things fall apart; the center cannot hold.”

He refers one of the few poems I know relatively well. Its last line is:

And what great beast, its hour come round at last, slouches its way to Bethlehem to be born?

Krugman also refers to the leadership crisis in the United States. His conclusion is:

What’s happening, I suspect, is that the Bush administration’s anti-government ideology still stands in the way of effective action. Events have forced Mr. Paulson into a partial nationalization of the financial system — but he refuses to use the power that comes with ownership.

Whatever the reasons for the continuing weakness of policy, the situation is manifestly not coming under control. Things continue to fall apart.

Paul Krugman was awarded the Nobel Prize a while back for his work in Economics. He's been chillingly accurate these last few months about our economic crisis. He should get a Pulitzer to add to his award shelf, not exactly for his work in economics, but for his writing about the economic mess.