BusinessKardioGram

Agile vs Waterfall – Improved Performance is NOT Guaranteed

2011-09-11T10:48:00.000-07:00

Michael Marchi reminds us that Agile doesn't always perform faster than Waterfall. While Agile helps enables us to move faster, he reminds us that we still need to adhere to a robust definition of "done."

If allowed to go too far, a project team that tolerates this behavior could underperform even a Waterfall project. Agile done well will produce a positive effect. Agile done poorly can be worse than not doing Agile at all. The missed opportunities, nagging design flaws, overlooked defects, and the low quality that results is referred to as “Technical Debt”. The yellow shaded area represents this lost productivity.

Read the entire blog post here.

Can Google's Chromebook Break Windows [Network Effects]

2011-05-20T15:22:00.000-07:00

Michael Mace provides his thoughts on whether or not Google's Chromebooks can break Windows:

I wish it were true. Windows deserves to be replaced. It's just plain old, weighted down with decades of compromises and tweaks. The OS steadily degrades as you use it, and the security software companies will tell you privately that it's impossible to fully protect it from hostile software. I'm sure that with a clean start we could do better.

So I love Google's idea. Unfortunately, the Chromebook as currently defined is woefully unready to take on Windows. It may capture some niches and verticals, but it won't have a major effect on the industry unless Google makes major changes to it. And some of the biggest barriers to its success are inside Google itself.

The core argument underlying Mike's analysis centers around identifying the company that owns the network effects. Indeed, it is Microsoft with its OS and Office that own the network effects. When there is no clear owner of network effects, each technological generation completely opens up the field. However, when there is a clear owner of network effects, the winner of the previous generation gets to carry over it's advantage. Think of it a football rivalry where the score never resets to zero. That is the case with Microsoft. Proof that it owns the network effects is in the pudding (Vista, anyone?).

Microsoft has been scoring for years. For Google Chromebooks to win, it needs a couple thousand points just to be close:

Once a computing platform is established, it's not enough to make a product that's better overall. You have to duplicate the core benefits of the current product, and be so much better in some areas that you overcome the users' natural resistance to change.

For Google to win the network effects, it not only needs to build in features that elicit customer delight, but the basic must-haves for business operations.

Thank You Skyhook, Now It's Mine. Sincerely Apple and Google

2011-05-10T18:20:00.004-07:00

Today both Google and Apple were asked to come before the US Senate judiciary subcommittee regarding a hearing on privacy, technology and the law. You can read TUAW's assessment as well as view a video of the opening statement by Senator Al Franken from today's hearings here.

Tracking Wi-Fi Stations
At the core, Android and iPhone devices have been tracking the locations of Wi-Fi signals. This is important because it allows the phone to know where you are. Simplified, there are three main ways a phone can locate you: satellites, cell towers and wi-fi signals. Using triangulation algorithms, the phone calculates your position based any of these three methods. However, there are draw-backs to both satellites and cell-towers. Satellites take forever and rarely work in urban situations where the signals gets bounced around. Cell towers are great for approximate location. It's through wi-fi signals that phones can pinpoint the location under 100 feet.

However for Wi-Fi tracking to work, the phone needs to be know the location of the Wi-Fi signal it picks up. Additionally, the map of these Wi-Fi stations are constantly changing as individuals set up, move, or take down these routers. While Google and Apple have been getting a lot of heat, Boson start-up Skyhook pioneered the technology. In 2008, Apple decided to use Skyhook technology in its iPod and iPod Touch.

Thanks for showing me how its done

It wasn't long before both Google and Apple, who had originally licensed the technology and the data realized that they had the ability to build their own data layer. And thus, they did. Skyhook is now fighting to stay ahead of the game and become the technology source for wi-fi enabled locationing. Recently Skyhook has sued Google for both patent infringement as well Google exerting its market influence on Motorola to switch providers. You can read the filing.

What should Skyhook do?
The case got me thinking, if I were the proverbial David being crowded out by Goliaths the likes of Google and Apple, what would I do?

Here's my breakdown:

Shifting Winds

Skyhook needs to fight or at the mercy of platform providers (like Google and Apple), Skyhook requires a strategy that centers on the results of current suits and takes advantage of the shifting regulatory/political environment. Beyond the current two suits Skyhook has with Google, recent shifts in both the consumer and political meme focusing on privacy and smartphone data collection may serve as an opportunity for Skyhook.[i] Indeed, we should watch carefully the questions and answers from both Apple and Google when they appear in front of Congress on May 10^th. Because the results of these two events have yet to play themselves out, I posit that Skyhook’s strategy should be played out in two stages.

Critiques on Competitive Advantages

IP/Regulation: Skyhook has a defensible patent portfolio around the technology. As mentioned previously, current political and consumer sentiment may also play a role in upcoming legislation. Skyhook needs to continually battle in courts and win. IfSkyhook can win core patent disputes, it has a defensible IP position. Then it can choose to either follow the route of ARM and become a friendly licensee or go aggressive and resemble the NTP/RIMM relationship.[ii]

Lastly, there is regulation risk. Should the US government decide to further open up the accuracy of GPS or if other foreign countries decide to offer higher grade GPS, it may lessen the importance of Wi-Fi locationing.

Brand: While Skyhook does not have a current brand advantage, the recent focus on smartphone and PND privacy on Google, Apple, Microsoft, and TomTom may be become an advantage of Skyhook.[iii]Skyhook needs to get in front of the issue and position itself as an independent third-party provider that puts the upmost care on protecting consumer privacy. Indeed, its method of data collection sends point data, as opposed to anonymized user data.[iv]

Economies of Scale: Companies benefit from economies of scale. But the location dataset is constantly shifting. Because Google could no longer collect WiFi data from its streetview cars, it needs to find a way to build the database. [v] It remains to see what restrictions will be put on Google and Apple after the May 10^th hearing.[vi]

Given the decaying nature of WiFi location maps, no current player has a sustainable advantage. This is a prime example of the Red Queen Effect. A company needs to have a critical mass of distributed data collectors to build this competitive advantage. It can either build it itself or find a method of leveraging the crowd. The latter is the more cost-efficient method, but companies must be careful due to increasing focus on privacy concerns.

Network Effects: While Skyhook does not have network effects, (as evidenced by both Apple and Google shifting), I question whether Apple or Google currently have it as well.

Employ a Horizontal Strategy where Reach is Paramount

A horizontal strategy is the best chance that Skyhook has to survive. Given its limited access to capital,Skyhook does not have the financial resources to deploy vertically down the value chain. Unlike Qualcomm, Skyhook does not have a secondary business for the company to go vertical only to become a horizontal player. Skyhook operates lean and under very tight cost controls.[vii] Given the length of the current litigation between itself and Google, its resources are even more constrained. However, givenSkyhook’s patent portfolio, it may be able to exert some pressure if it can win favorable ruling in its current lawsuits.

The Race to Own the Database of Current Location Data

Skyhook occupies two portions of the value chain: location data and the location optimizing software. In going horizontal, Skyhook needs to determine whether or not it wants to occupy both or just one piece. Location data is viewed as a critical asset for all the players involved and this is what all the companies will be fighting over. This is because owning the data adds the contextual understanding of the end-user. The ability to serve location-based advertising that understands that a user spends his time at a driving range once a week is projected to become a multi-billion dollar business.[viii] Additionally, providing precise location data is more useful to companies that approximate (e.g. Foursquare proximity check-ins versus Shopkick in store walk-ins) for companies business models.

Skyhook’s many rivals want to own this data. Skyhook’s rivals can be divided into four parts of the value chain:

Value Chain	Example Companies
Device	Apple, Nokia, Samsung, Motorola
OS	Google, Apple, Nokia, Microsoft
Location MiddleWare	Navizon
Applications	Facebook, Foursquare

Horizontal Strategy > Prioritizing Potential Partners

With a horizontal strategy Skyhook should prioritize its strategic partners based on partners that can provide the most scale. For each vertical (e.g mobile phones, digital cameras, PCs, ereaders, portable gaming devices,[ix]etc), Skyhook should approach by: OS, Device, and then Apps.

OS companies like Microsoft, Google, and Apple provide the greatest opportunity. However, it is acknowledged that over time, companies will want to build their own location databases.
Component/Device Manufacturers: Provide the second most scale, while also allowing for the possibility of integrating its software with either the device or the processors.
Applications: The application for wireless devices follows an immense long-tail. Focusing on larger apps like it current partners is desirable, but a bottoms-up approach will drain Skyhook’s already thin capital reserves. Instead of inking deals with developers,Skyhook should open up its APIs to encourage developers to use its location platform.

A solid API strategy will enable Skyhook to grow it’s developer base beyond the initial 200 developers. [x] Skyhook’s API strategy should also focus on applications that require precise information. For example Augmented Reality will become an increasingly ubiquitous technology.

Two Steps: Win Patent, Win Race for Map Database
To date, Skyhook has filed two suits against Google. The first claims patent infringement. The second alleges “unfair and intentional interference with its contractual and business relationships.” The first claim of patent infringement will be critical to Skyhook’s long-term survival. This is because if the ruling is favorable, it can demand and gain licensing from anyone using location (other than GPS) on mobile devices to deliver information, content. [xi] The second claim will provide a payout that will help sustain Skyhook.

Beyond winning litigation, Skyhook has to maintain the largest DB for Map Data. Winning litigation will make it facilitate its strategy as it can employ a licensing strategy and provide value-added services. However, should it win and decide to trade rates much like Qualcomm, it is possible that larger firms with its access to capital may seek to forge methods to cut off Skyhook. Should larger firms succeed,Skyhook will most likely move to become a patent holding company like NTP. If it loses litigation, it will most likely lose the data DB game and become an acquisition target.

The 1-2-3s of Skyhook:

1. Go Horizontal

·         Mobile, Devices, PCs, anything that connects to Wifi

2. Build a Brand (Unlike Apple/Google)

·         Build on privacy concerns and differentiate

·         Leverage brand to get Congress to get Apple/Google to go to a 3^rd party source of location data

3. Defend IP and Win Map DB:

Notes:
[i] Swift, Mike. “Google emails highlight value of location data.” Silicon Valley Mercury News. http://www.mercurynews.com/business/ci_17960065
[ii] Stuart, Wienberg. “NTP In License Pact With Nokia.” Dow Jones Newswires (June 14, 2004). Excerpt below (Emphasis added):

Nokia Corp. (NOK) has licensed five NTP Inc. patents that are at the center of a dispute between NTP and Research In Motion Ltd. (RIMM).

In a four-line press release issued Monday afternoon, NTP said it entered into a license agreement with Nokia under U.S. patents 5,436,960, 5,625,670, 5,819,172, 6,067,451 and 6,317,592 and related issued patents and pending patent applications. The license covers all Nokia products and equipment, but excludes network communication services, the release said.

Last year, a Virginia court ruled that Research In Motion, maker of the BlackBerry wireless handheld device, had infringed on the five NTP patents. The court ordered Research In Motion to pay NTP $53 million, as well as an ongoing 8.55% royalty on the bulk of BlackBerry sales in North America. The court also ordered an injunction on BlackBerry sales in North America but immediately stayed the injunction pending an appeal.

[iii] Needleman, Ralph. “Reporters' Roundtable: The location-tracking dilemma.” CNET. (April 29, 2011). http://www.cnet.com/8301-30976_1-20058678-10348864.html
[iv] Yarrow, Jay. “Everything You Need to Know About How Phones Are Stalking You.” Business Insider. (April 28, 2011) http://www.businessinsider.com/skyhook-ceo-2011-4

[v] http://googleblog.blogspot.com/2010/05/wifi-data-collection-update.html

[vi] Eaton, Kit. “Google Restarts Street View Info-Grab, Without Illegal Wi-Fi Snooping.” Fast Company (July 9, 2010) http://www.fastcompany.com/1668567/google-maps-street-view-wi-fi-wireless-snooping-personal-data-congress

[vii] Skyhook Wireless. Harvard Business School. April 7, 2009. Ref: 9-809-119

[viii] http://www.mercurynews.com/business/ci_17960065

[ix] http://www.businessinsider.com/next-gen-psp-skyhook-2011-2

[x]Skyhook Wireless. Harvard Business School. April 7, 2009. Ref: 9-809-119

[xi] http://searchengineland.com/skyhook-wireless-sues-google-you-lie-about-openness-50902

If the web is dead, who pays for its funeral

2010-10-30T21:02:00.000-07:00

The following post was cross-posted on the Berkeley DMEC blog.

Earlier this week, the iSchool invited Roy Bahat, President of IGN Entertainment, to share his thoughts on Chris Anderson's article, The Web is Dead.

Roy kicked-off the conversation by looking at several technologies and information systems--area codes, television channels, and world of warcraft. Through those analogies, Roy highlighted his perspective on his interpretation of the web is dead:

Analogy of the web as a place is no longer relevant
Abundance destroys meaning
Ebb and flow between choice and simplicity

To Roy, the rise of applications is a return to a less fragmented and noisy world as people seek to reduce choice for simplicity. The web is as we know it is being replaced by an app state of mind.

If true, this has some amazing implications on the space. In the web-based world, the predominate monetization business model for websites was through advertising. The idea of free (also championed by Chris Anderson), has become the predominant way we view the web.

Credit Suisse estimates that the advertising revenue makes up 24.1% of total mobile web revenue opportunities (of an estimated $3.2B US Mobile revenue forecast). The remaining 75.9% ($2.5B) source from mobile paid apps. While we still see display advertising in applications (iAds, admob, and Yahoo!), this introduces a larger channel for who pays.

You, the consumer.

Along with the shift to an app framework, monetization strategies will also change as individuals also become a viable revenue source. The question then becomes, how big will consumer driven revenue be in comparison to advertising driven revenue?

If this is true, it raises two important questions:

Are consumers ready to pay their own way?
What will brands do?

Roy Bahat will be teaching at the Haas School of Business in spring 2011. Both Roy and Chris will be speaking at the 6th Annual >Play conference today

The Internet is coming to a living room near you...

2010-10-08T20:59:00.000-07:00

This was cross-posted on the Berkeley DMEC blog.

We have come to expect the Internet wherever we are and whenever we want. Mary Meeker predicts that by the end of the year, we could reach 10 Billion mobile Internet devices. Yes, that's a B. While we still have the power of a PC in the palm of our hands, one main area has yet to be conquered--the living room.

Many have tried to create linkages into the living room, but few have succeeded. In 1988, Nintendo launched the Family Computer Network Systems. With the purchase of a special cartridge, the Famicom could interact with other terminals or a central computer to monitor and trade stocks. Unfortunately, by the time I got my NES, it only came with a pad to stomp on and gun to shoot ducks with.

Perhaps the next largest leap came from Tivo. With its emphasis on UX, they brought us the concept of time-shifting our content. With a simple phone line, owners would be able to sync their cable stream to the programming list. However, Tivo's glory days were short-lived. Why pay for a Tivo if your cable operator was willing to give you a free set top box?

In the end, the thought of connecting stand alone devices is such a huge mental leap that not even excellent UX can overcome it.

However, the tides are shifting. Over the past year, I've seen a multitude of new ways to connect the living room to the Internet. From simply plug-and-play devices like Roku, to elaborate Microsoft media center setups, people are realizing that the Internet isn't just for streaming videos of cute cats playing the piano or seeing charlie biting his brother's finger. The Internet is able to provide consumers with a lean-back 10-foot experience.

With the GoogleTV coming around the corner, and companies like Boxee that are constantly augmenting their content libraries, the Internet is finally making its way to the living room.

Last spring, my friends and I embarked on an independent study project looking at the this very space. In it, we tested the preferences of lead-users to prove/disprove hypothesis. Here are some of our findings:

Short-Form Content (like Youtube) belongs on the computer monitor
Most mass market consumers do not know the difference between streaming v. downloading content
There is little room for new content platforms, new companies should seek to become embedded with CE manufacturers
Apps for Connected TVs will provide little differentiation. Companies can only lose from not keeping up with its competitors
Consumers want a recommendation engine for content

You can review our final presentation here:

Connected Living Rooms

View more presentations from vincenthuang.

Best Practice or BS? [Social Media]

2009-12-15T06:10:00.000-08:00

For companies, social media is still the wild wild west. There have been some great case studies of companies who have been able to successfully execute a strategy by leveraging Facebook and Twitter. For every successful case study, hundreds of failed attempts have littered the streets of social media.

Stephen Baker highlights the risks and opportunities in a recent BW article:

You can read the entire article here.

linkages between creativity and play [insight]

2009-11-30T06:13:00.001-08:00

Tim Brown from Ideo reminds us about the importance of playfulness in jumpstarting creative thought. What I found most intriguing was the exercise where he gave the audience 30 seconds to draw their neighbor and then share it with the very person.

The reactions were particularly insightful. As adults we are often cautious in front of our peers. It's the same with divergent ideas. We're a bit timid in sharing it because we fear of being judged. Instead, Tim emphasizes the importance of reserving judgement and allowing all ideas a chance.

Watch this classic presentation:

Funding News Stories [Crowd Sourcing]

2009-09-17T15:25:00.000-07:00

In 2006, Time magazine told us that we were the person of the year. Since then, we've seen an explosion of crowded sourced initiatives. We've witnessed the power of the crowd through the explosion of content generated at Wikipedia. We've witnessed the power of the crowd through funding the creation of digital content.

The Center for Media Change and funded by various groups like like the Knight Foundation have started Spot.US, a nonprofit project pioneering:

“Community funded reporting.” Through Spot.Us the public can commission journalists to do investigations on important and perhaps overlooked stories. It’s a marketplace where independent reporters, community members and news organizations can come together and collaborate.

You, me, and technology [Consumer Trends]

2009-09-07T03:49:00.000-07:00

Forrester research finds that we're all gadgetologists.

About 58 million households have an HDTV today, and that is expected to grow to more than 85 million by 2013.
Over the same window, almost 80 million households with broadband Internet access will surge to nearly 93 million, and the 92 million homes with a PC will reach nearly 100 million.
Of those 40 and older who have children, 84 percent are online and two-thirds have broadband. They are heavy purchasers of PCs, laptops, MP3 players, HDTVs and portable GPS devices, as well.

Read Steve Johnson's article at the SJ Mercury News.

Nano Housing [Tata]

2009-08-23T06:55:00.003-07:00

Tata, the India-based car company that launched the Nano (INR 100,000; USD 2300) car and owner of Jaguar and Land Rover is now looking to create low-cost housing. With 1,000 apartments to be built outside of Mumbai, the units range from 218 to 373 feet.

According to businessweek:

Tata’s housing division is targeting a segment of the market that was largely overlooked during the housing boom. India’s builders were concentrating on building shiny new high rises and mansions on golf courses. Builders were after profits, but they were also trying to justify their fast-accelerating land costs, especially in and around Mumbai (formerly known as Bombay) and other major cities.
But some business consultants (most prominently, C.K. Prahalad) were arguing that companies would profit handsomely if they target the “bottom of the pyramid” where the bulk of consumers are. It looks like Tata is taking that advice.

HT: Freakonomics

Lean Coffee Making

2009-08-05T00:58:00.002-07:00

Endless Innovation reports on measures starbucks is making in "lean retailing." From exporting Toyota lean manufacturing techniques to undergoing motion studies they hope to "make more drinks with the same number of workers or have fewer workers."

Behind the curtain [people powered]

2009-07-02T17:10:00.003-07:00

In a recent Esquire article, Richard Dormant applied to 290 different jobs to land 7 interviews. Throughout the experiment, he rotated through three different cover letters--all hot air, all business, and just plain folksy. Surprisingly, the "just plain folksy" cover letter netted him five interviews.

Hello [name],
Wanted: [name of position]. Found: The perfect candidate — me. Just take a look at my attached resume and you'll see why.
Okay, so I know what you're probably thinking: What does a guy who's spent seven years in publishing know about [name of position]? But I'll tell you what: I'm exploring new career options, and I'm a hard worker, a quick learner, and I'm great with [relevant skill (i.e. hands, computers, etc.)]. I also have a strong set of people skills — I get along with everybody — that would make me a valuable addition to your team.
Give me a shot and you won't be sorry. Many thanks for your consideration, and please let me know if you have a moment to talk.
All the best,
Richard Dorment
The expert says: "The 'perfect candidate'? Good grief. This whole letter smacks of conceit and arrogance. Would you want to work with this person? And the 'give me a shot' at the end is cheesy and unprofessional. I wouldn't call this person no matter what their resume looked like, not how qualified they were."

We forget that behind all the policies and procedures are people. We forget that the decision makers have a sense of humor and don't want to come in on Saturdays because they want to make their kid's soccer game.

Negotiations with Steve Young [Life Lessons]

2009-06-24T05:42:00.001-07:00

A bay area native, it was a gem to see Steve Young, a former 49er quarterback, retell life lessons in negotiating on and off the field.

Discontinuous Innovation

2009-05-17T08:30:00.004-07:00

In Blue Ocean Strategy, authors W Chan Kim and Renee Mauborgne researched the effect of creating groundbreaking, creative new products, rather than variations of already existing products.

Their conclusion:

86% of new product launches were variants of existing products and accounted for 39% of total profit.
14% of new products were real new products and accounted for 61% of total profit.

Key Finding: Real innovation = Real profit

Image Source: Aube insanité

Top 50 [BusinessWeek 50]

2009-04-01T04:26:00.001-07:00

Business week recently announced the results of its BusinessWeek 50--their 13th annual ranking of the best-performing companies in the S&P 500.

Citing Clayton H. Christensen, these companies excelled in these turbulent market because of their ability to be "distrupters."

Read the article here.

Image Source: Leo Reynolds

Dividing a Future Empire [Advice on Equity]

2009-03-19T10:15:00.002-07:00

Seth Godin has an interesting perspective on how to split equity in a startup:

A friend asked me to help him think about how to split the equity in a company he was starting. His colleague is contributing office space and some key technology. My friend is responsible for where the business goes from here. I told him this:

Sure, today, your partner's share is worth 50% and yours is worth 50%. His because of what he did, yours because of what you're going to do.

But a year from now, that number can't possibly be right. You may have acquired six more pieces of software, raised millions, traveled the world, closed sales and sold the company. Wow. Or, you may have done absolutely nothing.

So, my best advice is to say, "Today, right now, your contribution is worth 5% of the company and my creation of the company is worth 5%. The other 90% is based on what each of us does over the next 18 months. Here's a list of what has to get done, and what we agree it's worth..."

It's often hard to see the forest from the trees and his advice expands the scope to look at the long-term and not dwell on present. Great frame of mind.

Take the A Train [Infographics]

2009-03-03T09:08:00.004-08:00

I've been a fan of Good Magazine's info graphics. The one shown above is a clean and insightful info graphic on the top five (US and Global) rail systems in the world. The train silhouette represents the length of the rail, and the people represent the ridership.

On the right sidebar is a series of statistical information that one can easily consume.

The graphic is a great because it conserves on ink:data ratio. Each item in the graphic serves a unique purpose. Having lived in DC, Chicago, and now SF, ridden Paris, Tokyo, and Moscow the data is useful in assessing the philosophies of the train systems.

For example, reviewing the SF system, you can tell that it's a regional system with it's spread out routes. With the Paris system, you can tell that it is a predominately city-centric philosophy definitely built before better the maturation of urban planning.

All in all, great graphic. This would make Tufte proud.

Thanks, Li

Books with Legs [E-books on Mobile]

2009-02-07T06:21:00.001-08:00

With the anticipated launch of the new version of the Kindle, it looks like ebooks are starting to mature. Personally, I'm a Sony Reader guy, but I can't help but get excited as I stand on a brink of a rising "curve." NY Times writes how Google is making its digitized content available on a mobile platform.

Google said Thursday that the 1.5 million public domain books it had scanned and made available free on PCs were now accessible on mobile devices like the iPhone and the T-Mobile G1.

By lowering the transaction costs, we gain knowledge at our fingertips. Hopefully, to a touchscreen near you.

Top Sustainable Companies [2009 Global 100 List]

2009-01-31T06:41:00.003-08:00

Knights Inc. with Innovest Strategic Value Advisors Inc. just announced their 2009 list of the 100 most sustainable companies in the world.

In the top 100, 20 are from U.S., 19 from the U.K. and 15 from Japan. Companies on the list include: Amazon.com, Baxter International, Diageo, Encana, H&M, Honda, L'Oreal, Nike, Panasonic, Reed Elsevier, Sims Group, Toyota, and Unilever.

Check out the entire list here.

Super-Encryption Package is Good Enough for the Prez [Blackberry]

2009-01-21T17:33:00.000-08:00

The Atlantic is reporting that Obama may actually be able to keep his backberry after all. From the
Silicon Alley Insider:

President Barack Obama has famously vowed to fight for his BlackBerry (RIMM) while in office, despite advice his phone's data could get subpoenaed by poltical enemies or hacked by foreign governments.
But now The Atlantic is reporting Obama is keeping his cell-phone -- once it gets upgraded with a "super-encryption package".

Thanks Bryant!

Flame On! [Burger King Marketing]

2008-12-30T07:19:00.001-08:00

With the help of Crispin Porter + Bogusky, Burger King has been making inroads with its viral marketing tactics. A huge part of their success has been their unconventional marketing tactics to create and bolster the brand image.

In early November, a friend of mine found a wallet on a busy Chicago street. Accompany a clean dollar bill was a faux driver’s license of the King and a BK Crown card. This accompanied their reverse pick-pocket campaign.

Not be beaten by Britney Spears or Alan Cumming, the King joins the "celebrity" fragrance bonanza. You can get a whiff of “flame-broiled meat” thanks Flame, by BK. Meghan Daum explores the primal relationship between man and meat, but notes that the l’eau pour homme can only be bought in unique spots:

You have to buy it at a Ricky's drugstore in New York, which has an exclusive deal, or on Burger King's "Fire Meets Desire" website, which features its king mascot reclining by a fire and clothed in nothing but an animal fur. Make that, you had to buy it at those places. By Monday, it was sold out at both and going for $73 and up on EBay.

Word-of-mouth marketing has its share of success and failures. In its success stories, the strengths come from:

Low Cost: Campaigns are cheap and easy to initiate
Longer Shelf-Life: People still talk about the subservient chicken

However, from the littered street of failed attempts, companies find it difficult to find the tipping point:

Ethics Vs. Controversy: It’s a fine fine line between edgy and distasteful. Burger King’s Whopper Virgin campaign has been controversial and has garnered a lot of feedback.
Span and Control: By turning over power to the people, companies have to be able to live comfortably with the buzz (good or bad) associated.

Youtube matures

2008-12-12T04:42:00.000-08:00

Given the current business environment, Google too is feeling the pinch. During tough times, its easy for companies to apply a haircut across the board. However, it is as this time, that companies should reassess their strategic priorities and surgically apply cuts.

Gone are the days of too many toys in the box. Companies should judiciously guard growth opportunities and if they have to cut costs, should focus on routing out inefficiences in COGS.

Google is no different, it is currently shifting its engineers to focus on the most promising projects. We've seen how companies that continue to invest in R&D will be positioned for explosive growth when demand returns. What is commendable is their continued efforts to innovate and experiment with their X billion acquisition Youtube.

LA Times writes about how the wild wild west that is Youtube is starting to clean up its act.

In addition to its long-standing campaign to crack down on illegally copied material, in September the site outlawed videos depicting drug abuse and last week tightened its guidelines further to restrict profanity and sexually suggestive content. In other words, before the money wagons roll in...

At the same time, they're experimenting with tons of ways to monetize on their insane traffic. From advertising to selling music, Youtube's entrepreneurial spirit translates to more experimentation.

Yesterday's NY Times article profiles their partners program. The article profiles individuals like Mike Buckley (video shown above), whose share of the advertising profits generate over $100,000 a year.

Is Sustainability sustainble?

2008-10-30T15:58:00.002-07:00

Traditionally, whenever companies seek to tighten their budget belts, initiatives like CSR and sustainability are initiatives to receive a haircut. However, Michael Shapinker, from the Financial Times, writes that despite current market conditions, companies like Wal-mart are sticking to their guns.

Joel Makowever recently keynoted a conference in DC when he was asked by a corporate VP, "How can I justify putting money into things that don't make business sense?"

His answer, "You probably shouldn't bother."

We're starting to see a shift in understanding what sustainability can do for companies. Initially a employee rentential strategy, many companies realize that sustainability can increase the efficiency and effectiveness of their operations. For example, Wal-Mart have been able to reep cost-savings through implementing sustainability initiatives. Leading companies are able to take it one step further--as a source of revenue. A manufacturing plant in S. America discovered that their waste product was a key ingredient to a cement maker up the river.

Sustainability and CSR is a priority at Wal-Mart not only because it allows Wal-Mart to manage costs, but mirrors Japan's rebuilding strategy after WWII-- doing things right first time, rather than correcting mistakes.

Sustainability is still very nascient in execution. In growing the business philosophy, companies will need to experiment and try different business models.

You can read Michael Shapinker opinion piece here. (registration required)

Emerging Markets

2008-10-18T10:14:00.003-07:00

Over 80% of the world's population of the world's population lives in developing countries, and these markets account for 40% of the world economy. While many multinational corporations have entered developing markets, all have not been met with success.

Traditionally, failed companies adopt one of two failed strategies: stamp and skimp.

Many companies are discovering that they cannot stamp out their existing models in these economies. Many companies feel that they can leverage their depth in experience and large scale and stamp out existing strategies in these new markets. Others, like many of the automotive companies who initially invested in China felt that they could use skimped or antiquated versions of their products for new markets.

In a recent article in Forbes by Clayton M. Christensen (of HBS and Innosight), he notes that multinational companies suffer because they are bound by a global business strategy and often operate under limited autonomy.

However, lessons can be learned from companies with humble origins native to the country. Like CK Prahalad outlines in his book, "The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits," companies who understand the unique cultural background of the developing country are more likely to be successful because they are open to new business models.

In the article, Christensen recommends four areas for focus for companies hoping to build disruptive growth in the poorest of countries:

Gain a deep understanding of the jobs that customers in developing countries need to get done
Develop blank-slate solutions that solve problems better or differently
Allow subsidiaries to operate freely
Be patient for growth, but impatient for profits

Read the entire article here.

How companies are reacting to the liquidity crisis

2008-10-13T18:42:00.004-07:00

Given recent developments in the market place, we've all been a bit busy trying to figure out how to successfully navigate through the market. I've recently been working with my colleagues to produce a short-term podcast series to help finance executives read a pulse from the broader membership.

As a business best practices research firm, we have the opportunity to speak to multiple financial executives within a week. We, thus, are leveraged to provide feedback on how executives are reacting to this market.

Here are some topline results:

Treasurers are applying a 20% cut in their liquidity plans
40% of companies have moved exclusively to government securities and insured deposits. However, most are maintaining diversified portfolio including money market funds.
CFOs have been spending more time with their Board of Directors this week to discuss:
- Evaluation of their Capital Structure Policy. As companies review their liquidity analyses using more conservative models
- Evaluation of their suppliers. Companies are concerned that some of their smaller suppliers might be having difficulty. Companies are undergoing comprehensive audits and evaluating their suppliers.

Listen to the podcast here.
Sign-up for the podcast on itunes.
Access the archive of Capital Market Roundup podcasts.

About the Corporate Executive Board
The Corporate Executive Board creates communities of functional executives. In my case, I work with finance executives including CFOs, Controllers, Heads of Internal Audit, and Treasurers. We are an executive education firm that provides these functional executives best practices, decision support and tools to help manage their workflow and their functions.