Over at “The Big Picture”, Barry Ritholtz has been doing terrific work reporting on the shenanigans in the markets and the economy. Today he let rip a rant that’s worth sharing. Here’s a taste:
When this era of excess and absurdity is treated by historians in the future, the question I expect to be asked most is not why many of these people weren’t jailed for their financial felonies. Rather, I expect them to wonder why so many of these folk weren’t placed in protective custody, and heavily medicated, for the only rational explanation for their statements and behaviors is that they have gone so far beyond the bend as to be completely and totally insane.
We all tend to see the world through our own lens, that’s a given. UX people think UX is the most important thing in developing a product. Developers think that great programming is the secret sauce. Entrepreneurs think that if you’re not at a startup, you’re a loser. Marketers think that without marketing, you’re toast. Others say that “Marketing is the price you pay for creating mediocre products”. And on and on it goes.
If there’s one thing I’ve learned in my years in this business, it’s a sense of perspective. In this case, it means remembering this:
It’s not just about building insanely great products, it’s also about building an insanely great company.
And to do it, you need a balanced team with a firm grasp of not just the nuts and bolts, but also the bigger picture.
The history of the Valley is littered with stories of people and companies who couldn’t get the balance right — great ideas poorly executed, slick promotions that couldn’t save a piece of crap product, great products ground into the dust by badly-managed companies, and many more besides. Success is very, very difficult.
Fail to keep your sense of perspective, though, and it’s that much harder to achieve.
Over at Mobile Opportunity today, Michael Mace makes a point that’s true not just for technology products, but for virtually any kind of product development:
Very often tech companies will fall in love with a concept that is compelling to people in the company, but not to non-technologists. They’ll convince themselves that people will want it because, well, they ought to want it.
A related problem: A company will come up with a product that’s nice, but doesn’t really address [a pain point]. You know you have this problem when someone in the company says that need a marketing campaign to explain to people why they should want the product. The really good products need marketing for visibility, not persuasion.
I think this is the underlying problem behind most failed web applications. They do something interesting, as opposed to something compelling.
What makes this whole problem especially tough is that you can’t just ask customers what they need.
Emphasis added.
I’ll add the caveat that the line between visibility and persuasion is not cut-and-dried. Look at the advertising for the iPhone. Most of the spots are product demonstrations. Clearly, you’re raising visibility by showing what the product can do, but isn’t that also a form of persuasion?
And as always, one person’s “eh, interesting” is another person’s “OMG must have now!” But even so, the point is valid.
Deep in the news reports about the government economic stimulus package today was this nugget of information:
To address the mortgage crisis, the package also raises the limits on Federal Housing Administration loans and home mortgages that Fannie Mae and Freddie Mac can purchase to as high as $725,000 in high-cost areas. Those are considerable boosts over the current FHA limit of $362,000 and the $417,000 cap for Fannie Mae and Freddie Mac’s loan purchases.
For those of us living in high cost of living areas, that has the potential for a much bigger and more long-term boost to the economy than a quick cash infusion, becasue now many more people will be able to avoid some of the ‘jumbo’ loan penalties put on loans that are bigger than FHA guidelines.
I wasn’t going to link to the Richter Scales’ awesome “We’re In Another Bubble” video, but after reading Mike Arrington’s thoughtful big-picture post today, I thought it would be an appropriate counterpoint. Together, his article and that video define the yin and yang of the whole crazy technology startup game.
Here’s an excerpt of Arrington’s post on the shadow of the dot-com crash and how the impact still affects people today:
Entrepreneurs who didn’t go through the crash don’t carry that burden. They don’t have memories of looking their employees in the eye as the laid them off. They were never trashed on F*ckedCompany for making ridiculously stupid decisions. Basically, they’re optimists, as any entrepreneur should be. They have no baggage.
And as a result they do exactly what they should do - they take big risks and hope for a big payoff. For the venture capitalists it’s even more important. They need one or two big wins in every fund to generate enough profits to keep their limited partners happy. A gun shy entrepreneur may not take appropriate risks at appropriate times, and the chances for success plummet.
I’m definitely a bit tainted myself. What I saw happen to startups in the first bubble makes me hesitant to raise money (we never have), hire too many people, or generally spend money (our offices are still in my house). I think less about growing the business sometimes than I do about losing what we’ve built so far. That’s part of the reason why I hired Heather as CEO to take over the business side of things. She’s conservative, but knows when its time to take risk and grow the business.
My interactions with Edgeio, a company I co-founded and which went into the deadpool last week, were similar. It seemed like every board meeting I was saying the same thing - stop spending money, stop hiring, stop. I was out voted, and the company followed its own path. The fact that they ultimately failed, though, doesn’t mean I was right. The investors felt that the time to spend and try to grow was now. It doesn’t matter that Edgeio failed, what matters is that it is the right approach if you are trying to make something big. If you want to be conservative, don’t be a silicon valley entrepreneur.
I don’t blame Arrington one bit, because I completely understand that mindset. Fear of failure is poisonous. You can tell yourself any kind of lies you want in an effort to justify your choices to yourself, but if you can’t remember the last time you swung for the bleachers and took a big risk on something, then you’re probably a victim too.
Which is not to say that this video isn’t also true. Some excess and stupid choices are a necessary part of the process. Remember the normal distribution curve? Outliers in both directions are inevitable.
If you live and work in the Valley, this is the life you chose — the excess and the fear, the hits and the misses. You need to be able to take it all in stride, because sooner or later it’s going to be your turn to be the hero, and the goat.
I like to think I can handle it all, but I know I still have work to do in not letting fear shut me down. What about you?
These are my notes from the Corporate Blogging panel at BlogWorld Expo.
Debbie Weil, moderator:
Executing a corporate blog takes work. Policy, lots of decisions to make.
Technology is the easy part. A balance of creative and strategic. How do companies speak to their customers?
We’re in the early stages of a revolution.
FEAR - of being criticized, of losing control. Biggest block to adoption. Actually, a blog is a way of increasing control, not losing it.
Very few CEOs have the skills and disposition to blog. Hence ghostblogging.
Kodak blogger (Jennifer Cisney):
Kodak started a corporate blog (A Thousand Words) about a year ago. PR / CorpCom lead the charge. They host the blog offsite & focus on content. It is NOT a CEO blog, it’s mostly about photography and people who love it. Minimal editing after content is submitted. Every post has a photograph in it. Also a connected photo gallery. Lots of storytelling, very powerful, not a lot of product focus.
A Thousand Nerds - a newer, more commercial / technical photography blog.
HP Blogger (Pete Johnson):
HP IT is a showcase for their customers, so they are hosting internally. Large numbers of internal blogs - around 50. Very distributed approach. “Anyone who can make a business case for a blog can have one”. Describing different things people at HP do with their blogs - ranging from why HP is not in Second Life to templates you can download for your inkjet printer. Working with the HP standards of Business Conduct — proprietary information disclosure, proper crediting of information quoted, dealing with requests for support.
Cisco “Blogger in Chief” (John Earnhardt):
About 2 years since they started blogging. Started with the government affairs group - small team trying to increase their reach. It was hard to keep going so they started talking about issues a little beyond their scope & eventually it got notice. Currently 15 official corporate blogs. They are trying to do CEO blogging with video since Chambers is “more of a talker than a typer”. PR is attached to each blog to stay on top of it although they do not vet content before publishing. They have requirements for bloggers to make sure blogs are sustained once started. They treat key bloggers like reporters and treat them similarly in terms of outreach and support.
Southwest bloggers (Paula Berg, Brian Lusk):
They knew there was online conversation about Southwest and wanted to get involved. “We’re not afraid to take risks.” It is a major time commitment & took a while to get the balance right. Been great for getting notice from journalists. It’s a virtual focus group, they get immediate and passionate feedback, as many as 700 comments. The miniskirt issue was blog crisis management but they feel they did not do a good job managing it. They have some limits to their comment policy — no swear words, no personal attacks, no “where’s my bag from flight X?” — but try to be not too controlling. They try to do a blog post consecutive with every press release in order to give customers a place to comment. They run every blog post by an exec before it goes live.
Some common themes: blogs are generally an extension of PR not advertising. Try to drive individual customer support issues towards the proper channels. CEO blogging is hard and probably not the best way to go. Some comment moderation is appropriate. Be upfront about the grund rules and what customers can expect from the blog to avoid issues down the line. Comment moderation - everyone does it, but it’s about 50/50 between allowing comments to go live before moderation and screening all comments before they go live.
Notes from the Q&A:
Company culture comes out in a blog. If you have a lousy company culture do not expect that you’ll be able to paper it over in a blog.
Traffic is a metric but not the only one that defines success.
“The Ghostblogger” raises the issue of blogging and authenticity. The panelists didn’t like it that CEOs are ghostblogged - he defended the practice. General consensus seems to be that blog posts should not be scrubbed and crafted because that’s “inauthentic” and just like regular PR. Blogging should be different.
Noted today: a report on the state of PCs in Japan. The interesting part of the report:
“The household PC market is losing momentum to other electronics like flat-panel TVs and mobile phones,” said Masahiro Katayama, research group head at market survey firm IDC.
Overall PC shipments in Japan have fallen for five consecutive quarters, the first ever drawn-out decline in PC sales in a key market, according to IDC. The trend shows no signs of letting up: In the second quarter of 2007, desktops fell 4.8 percent and laptops 3.1 percent.
NEC’s and Sony’s sales have been falling since 2006 in Japan. Hitachi Ltd. said Oct. 22 it will pull out of the household computer business entirely in an effort to refocus its sprawling operations.
“Consumers aren’t impressed anymore with bigger hard drives or faster processors. That’s not as exciting as a bigger TV,” Katayama said. “And in Japan, kids now grow up using mobile phones, not PCs. The future of PCs isn’t bright.”
Is this a sign of things to come? Will the personal computer go the way of the dodo in another decade? Possibly, although it seems to me that Japan is a bit of an outlier when it comes to a passion for cutting-edge gadgets.
Perhaps the takeaway here is a reminder: consumers care more about what they can do than the tools they do it with. If they can do everything they need to on a cell phone, or with a DVR attached to their TV, then those tools will outsell PCs.
As for me, I’m a little old-fashioned. I like a full keyboard and a bigger screen when I’m writing blog posts, editing photos, or reading feeds. But 10 years from now, who knows what cellphones will be able to do?
UPDATE: Tony Hung weighs in with some good points.
I can take being rejected for a job because I don’t have the necessary skills, or because someone else was a closer match to the skillset in question. That’s business. But this is another matter altogether:
A state appeals court reinstated a fired manager’s age-discrimination suit against Google Inc. on Thursday, saying a jury should hear his evidence that a supervisor told him that his ideas were “too old to matter” and that the giant search engine company gave its older employees lower ratings and lesser bonuses.
[snip]
As part of the lawsuit, Reid presented a statistician’s study of employees and managers in his department at Google that found older employees consistently received lower evaluations than their younger colleagues, and older managers got bonuses that were 29 percent less than those awarded to managers who were 10 years younger.
Age discrimination is not new to Silicon Valley, but you’d think that as the industry matures we’d see less of it. Not yet, it seems.
Look, we know what we’re talking about here won’t be able to happen today, tomorrow, or next week. It’s going to require some serious time, dedication, and faith in the brand you’ve built. Your stock is tumbling, the lowest it’s been in months; your customers have lost faith, and those buying Treos seem to be just going through the motions; your efforts to expand your business have gone unfulfilled, and perhaps most importantly your consumers are unhappy and looking for the next great thing — that you’re not providing. But it’s not entirely hopeless. Your biggest competition’s already shown its hand, and you’ve seen how successful they’ve been. Look at what they’ve done right (and wrong), and build upon it.
Even if you only implemented half the suggestions we’ve laid out here we think you could really turn things around. And we do, honestly, want you to make it through this thing. We want to love Palm like we loved it in the old days, and know somewhere, deep down, you’ve got some fight left in you. And believe you us, this is your shot. The bottom’s about to drop out on the Treo, and if you can’t make it happen soon, you may never get another chance to get a foothold on innovation.
Sadly, I think Palm is neither willing nor able to listen.
Entries (RSS)