Social Media Measures You

Our social media tools measure many things and I like things measured. So I suppose I should not be surprised that I find myself drawn into the social media vortex.  In the technology marketing industry, measures matter, and that probably explains why we all find ourselves talking about social media often.  

The ultimate measurement in our business is the top line.  Our job is to generate revenue for our clients and revenue is quite measurable.  Accordingly, we spend our time working to correlate activities to revenues with the goal of understanding which activities to expand and which to kill off.  As potential revenue makes its way through the sales pipeline from campaign to lead to opportunity to deal to actual revenue we measure every step.

Within each step there are intermediate things to measure.  The size of the market, the number of potential opportunities, the qualification of potential opportunities, the number of attempted contacts, successful contacts, conversion rates, close rates, cycle times...an endless stream of things to measure and we have not even added in the cost of each and the resulting ROI.   

So why are we so attracted to the prospect of measuring more things?  Why do we want to add followers, friends, links, hits and other social media measures to the mix?

Maybe it is the same reason I like to mow my lawn.  For me, mowing the lawn is an individual pursuit.  I do it by myself.  I know when it needs to be done, I know when it is done, and I can see the result of my effort.  So far, social media is a decidedly individual exercise and with the exception of a few companies that have implemented collective social media campaigns, the measurements are mostly measurements of us as individuals.  

So I think we like social media because it measures us as individuals.  The rest of our work is collective and the results are team results.  Our efforts are hampered by a multitude of dependencies and corporate constraints.  Our social media activities are refreshingly unencumbered by comparison and we can apply our creativity directly and see the results directly.

The DVR Killed the Superbowl (for me anyway)

I admit that I am not a big pro football fan.  Either way, I have always enjoyed big sporting events and the drama leading up to them.  The Masters, the US Open (Tennis or Golf), and the Rose Bowl were always on my TV watching calendar.  

A few years back I started using a DVR and did so for the sporting events too.  At least half the time I knew the outcome before watching the game -- how can one avoid knowing who won the superbowl withing 5 minutes of the end of the game?

Part of my interest was certainly the big personalities involved, and the way the story unfolded.  Another part comes from the fear of missing the best game ever.  Believe it or not, there was a time not long ago when if you missed the game that went into overtime -- you really did miss it.  You got to read about it in the paper but the chance to experience it yourself was lost.

We are clearly not in that time anymore.  Knowing that I can go back and see the best game ever -- any time I want -- has left me with just about no interest in watching the game.  I am not exactly sure how that happened.

I find myself reading much more now that the DVR killed the Superbowl.

America's Cup is Not the Top of the Sport

Throughout my life I have been enthralled with sailboat racing.  At times I have been consumed by it.  Lately not so much due to other interests.  

I will be watching the Americas Cup on Monday, but for all of you that do not follow the sport, please do not judge us by this spectacle.   Some of our sport's greats have been drawn into the fray -- I suspect because of the big money.  Russel Coutts, John Kostecki, and other true greats are competing.  But if you want to see who is who in sailing -- check the list of gold medal winners in the Olympics.  

The Americas Cup is a circus act.  Too weird to look away -- but not a representation of the sport of sailboat racing.

Capacity of a Salesperson

How many salespeople does a country need in order to achieve its GDP growth? Can salespeople increase GPD (pull us out of a recession)? If we only had enough salespeople, we could put the whole country back to work. Clearly the world is not this simple, but hidden in a ridiculous argument like this may be a few interesting things to think about.

Every industry has its key metrics and just about every industry has salespeople.  From what I can tell the mid point in salesperson production is about $1 Million in revenue and $100,000 in compensation.  A Starbucks Barista would generate much less and get paid much less, and a bond salesperson on Wall Street -- well much more on the pay part anyway!

So I know this number is weak, but let's just go with it for this discussion.  One salesperson = $1M in Revenue.

The other day I analyzed 8 tech companies including Apple, Google, Microsoft, IBM....  Together those companies generate $400 Billion in revenues.  Using our little formula above, they collectively would need to have 400,000 salespeople to generate this amount of business.  Even though they collectively employ 900,000 people, clearly half of their employees are not in sales.

So where do all of those other sales come from?  Some from automation (Google's service apparently sells itself), but most comes from channel partners.  Partners ranging from the distributors, to the retailers, to the four person computer consulting company in Everytown, USA.

Despite what has been happening on the NYSE the last few days, the economy is showing signs of life.  Our President is looking for ways to get more jobs into the recovery.  Many economists are pointing towards small business as the place where the hiring is going to happen.  Well the President should be proud because this is exactly what we are seeing happen right now.  

The large technology companies are ramping their channel partner programs up in a big way.  This is presenting many opportunities for growth in their channel partners, and those channel partners are hiring.  And for every 100,000 new salespeople we will grow a whole IBM ($100B) worth of new GDP. 

On Speaking: The Frame

I was asked recently to coach some young leaders on public speaking. I am looking forward to the exercise. I love to speak, and talking about speaking is about as fun as things can get. It should be a good opportunity to capture some thoughts on public speaking -- and I will do my best to post them here.

The Frame

The curse of knowing a subject well leads many public speakers to neglect to frame the subject. We all want to jump right in and get to the main point and supporting evidence, but those points will be lost without a good framing statement. A good framing statement should be one tight sentence that orients the audience. It should be strong enough to bring even the most distracted listener into your universe. It does not have to make your argument or seal the deal. After hearing the framing statement your listener knows what you are going to talk about. This is the first Tell in the Tell, Tell, Tell speaking structure.

Here are some examples of framing statements for some common speeches:

• On a book you wrote: I did not know that I was changing my life when I wrote the first page of my book fourteen years ago.
• On a trip you took: Mount McKinley is obscured by clouds 345 days of the year.
• On a company you started: Like many entrepreneurs, I started my company because I wanted to be the first customer.
• On a cause you support: Of 100 students entering high school in the Seattle Public School system, only 2 of graduate from college.

No matter how well oriented your audience was when they decided to attend your talk, at least half of them will have forgotten their own reason by the time you start to talk. So take a second to give them a good framing sentence. You just want them to think 'oh right, this is the guy that started that company'; or 'OK, we are talking about education'.

There are as many flavors of this as there are speakers, and you want your framing statement to fit your style and your situation. If you are leading a meeting you could say "This meeting is about..." If you are giving a sales presentation you could say "We are here today to present our solution to your..." If you were introduced at the podium you may need to pull people back from momentum established in the content of your bio by saying "Even though my day job is as a lawyer, I am here to speak to you today about..."

Using jokes as to frame your subject is tricky. It can be great because loosening up your audience with a joke is great fun. However if you go that route, you have to realize that you will both have to be funny and do it in the context of your subject. A funny joke that propels your audience in the wrong direction is probably not going to get you where you want to go.

Using a rhetorical question is also complicated. If you do, make sure to answer it right away -- say in the next sentence. Unresolved items like that can chew up the brain power of your audience and distract them within the presentation.

Step one of your speech should always be to get your audience into the frame with a good framing statement.

Microsoft = Platform

My first job out of college was as a Computer System Analysis for Boeing Aerospace in 1987. Our group of about 16 people had two responsibilities: get office users in the company to start using all of the computers the company had bought, and establish standards for desktop computing. For those of you who are interested, back then we did email on the HP 3000, used Netware for PC networking, did word processing with Word Star, databases on Rbase, and Lotus123 for spreadsheets. And all of the PCs ran on MS Dos.

I remember getting a call one day from a friend at Microsoft who was working on the MS Word team (Dos only back then) asking about how we made decisions and the dynamics of the relationships inside the company and how influence impacted purchasing decisions.

Microsoft already knew that its success depended on its partners (Novell, WordStar, Rbase, Lotus...) who made apps that ran on their MS DOS platform. Microsoft was just starting to think about another layer to their partner program; internal or external consultants that had an influence on setting standards and purchasing decisions. Back then everyone bought software from Egghead Software -- in today's lexicon, Egghead Software was the Microsoft App Store. It sold all of the applications available to run on the Microsoft Platform. Microsoft has evolved considerably since the late 80s and now has as many partners in the consulting side as it has in the application development side.

Steve Jobs made a big deal last week about the iPhone/iTouch/iPad Platform, the 140,000 applications, and the 3 billion downloads. In technology we love new things and really don't like old things much. So the whole platform idea has been recast as new by Apple. Microsoft has so many applications built on its many platforms that no one can even count them all.

Apple may have a large and growing number of people writing applications for its platform, but in an effort to completely control its environment has actively discouraged hardware partners - even bringing out its own chip this time - and has no interest in building a consulting partner base.

All of this reminds me a little of a company everyone thought was on the way out 20 years ago -- but now generates $100B in revenue with 400,000 employees (IBM).

It would be crazy to count Microsoft out of the platform game.

Book Review: Free by Chris Anderson

There are so many great books on my reading list that moving Chris Anderson's "Free" to the top was not something I was all that excited about. In the tech marketing business it is hard to go a week without someone referencing his book however, so to the top it went. I really liked "The Long Tail" and therefore had no justifiable reason to read it begrudgingly. Turns out it is quite good.

I do not ordinarily read with a pen or pencil in my hand. I used to underline things but found I never went back and used the markings so why bother. About 30 pages into Free I found I had 10 pages dog eared and got out my pencil. Just about every page in the book now has a note on it. The book is very well researched, easy to read, and full of great quotes I will want to find easily. The exercise of reading Free also added half a dozen other books to my reading list.

No small part of my reluctance to read the thing was based in the thought that I already knew what he was going to say. Free drives traffic, traffic is value, value converts to dollars some other way...example, example, example, done. While the book does follow this framework, it is much more interesting than that. I had heard many other arguments that the new currencies of attention and reputation were more valuable than dollars, but this book makes the idea pop and then locks it in with solid facts and a convincing cast of supporters.

The author tackles the critics head on and even devotes a chapter to a list of many arguments against the idea of Free and then crisply refutes them one by one. Now there is a limit of course. I am pretty sure I know what would happen should I call up the IRS and suggest that living in this country should be free.

Clearly everything cannot be free, but Chris Anderson does a good job of articulating why some businesses are better off adopting the model.

The two current high profile tests of this idea: Rupert Murdoch against Google, and the New York Times 2011 pay wall decision, happened after the publishing date; and both the NY Times and the WSJ are cited numerous times. These new developments do not take away from the book, and somehow even make the reading seem even more relevant.

Here are some other very good reviews. All of them come in on the too good to be true side. I will post a rebuttal at some later date because I am in the middle of a couple of other contra argument books and I want to give both sides equal time before I conclude anything dramatic.

The New Yorker

NY Times Book Review

Washington Post

Here is a link to the book on Amazon.

Separate the Diagnosing from the Curing

Ten years ago we spent a bunch of time and money on the Y2K problem. While it is impossible to know if there really would have been a problem at the change over from 1999 to 2000 -- the consensus at this late date is that we dramatically overstated the problem, and dramatically overspent on the solution.

Our military regularly overestimates the size of threats in an effort to bring about a response; either in terms of funding for the military or outright action. We know some form of this played into the Iraq war.

The financial bail out of 2009 was identified and addressed by same people, and those people were tied very closely to Wall Street.

Large food companies have boosted sales of their products, particularly in developing nations, through misleading marketing. So much so that the World Health Organization had to create guidelines to discourage the practice.  

Our pharmaceutical industry routinely convinces us we are sick and then sells us the cure. They are now busily convincing the rest of the world that they are sick too.  

We all need to be wary of anyone who both dispenses the diagnosis and profits from the cure.

Book Review: Home Game by Michael Lewis

I have liked Michael Lewis ever since Liar's Poker, and he did not disappoint in the New New Thing either. Moneyball is still on my list. I just finished "Home Game" and it was great. It is an easy one or two night read as long as you don't stop too often and read passages to your spouse like I found myself doing.

The opening story set at a resort pool in Bermuda was so hilarious that we (unintentionally) woke up the kids even though we were trying to keep a lid on it. I admire writers who can tell the funny stories and also just lay out the unflattering stuff too.

Micheal Lewis has quite a talent. I am so glad he did not get sucked into wall street all those years ago.

Here is a link to the book on Amazon: 

Two Big Speakers this Week

Two of the most iconic figures of our time took the stage this week. To someone who has been a student of public speaking since I took my first public speaking class in the 9th grade I am bound to find the performances interesting regardless of the content or context.  Add to this my interest in both technology and our nation and Wednesday was quite a day.

Steve Jobs Introduces the iPad

Technophiles and ordinary citizens alike are all hoping this is not the last new product presentation we get from Steve Jobs. His gifts are many and to see them on display is a thrill. He himself has raised the bar so high with the Mac, the iPod, and the iPhone that it seemed almost impossible for him to deliver yet another home run. Of course only time will tell on the success of the iPad but and I found the presentation to be short of my own expectations.

He did not help his credibility when he massaged the numbers to position Apple as the largest mobile devices company in the world. Comparing all of Apple's forward looking revenues to just the current mobile devices revenues of Sony, Samsung, and Nokia does not hold up to event the dimmest scrutiny. This illuminated the fact that he was really speaking to the already converted and I find that the underlying fabric of the whole presentation and product.

There were many references to how the iPad will interact with existing Apple products. This emphasizes the closed nature of the Apple environment, and with their own chip, the porting of existing iWork apps, the exclusion of flash, and the extension of iTunes into iBooks -- this is putting another layer of bricks on the wall around the Apple community. The fans are going to love it, but the product is not cool enough to be the catalyst to new conversions from other platforms.

Ahead of the announcement some had speculated that the device and deals with content partners would save the TV industry. It appears that was never part of the vision for the product. Featuring the NY Times was nice but incremental -- no revolution there. As a gaming platform bigger is better, but gamers are not going to make this their main device -- so I don't really see that as a big change either.

In the end I did not think Steve really was wowed by the product either. If they have sold 250 million iPods -- they clearly will sell tens of millions of these things. But the primary motivation will be for one Apple fan to tell another Apple fan that they have it.

I will get into my thoughts about the Apple upgrade cycle some other day, but that is another reason to not buy the iPad now. Apple will continue to innovate on the platform and 12 months from now the new version will be cooler, cheaper, and maybe not even backwards compatible with this one.

Regarding killing the Kindle -- since Steve proclaimed that ALL iPhone apps work out of the box on the iPad -- that means that anyone buying the iPad can read their Kindle books on the Kindle App for the iPhone. This is great news for Amazon. Amazon has never been a hardware company and I bet they make much higher margins on the books than the Kindle device. So iPad could mean more Kindle book sales for Amazon. Also, Jeff Bezos will be off the hook with the publishers now that Apple is in the biz. So I don't think the Amazon people are going to be unhappy about this.

President Obama Calls it Like it is

It has been quite a year for the President. The vitriol between the parties has left everyone diminished and the independents in between seem to jump back and forth every day. It will be years before we understand how the decisions made by our well intentioned President re-shape our universe. Getting out of the financial crisis by turning from bank regulator to bank owner, and getting out of the war by putting more of our people in harms way, are hard things to explain even when over half the members of the choir are your own.

The good parts came when the President focussed our attention on the reason we need to make changes: The "How long should we wait? How long should America put its future on hold? ...I do not accept second-place for the United States of America." sequence hit the target right in the middle. All of the references to the things we are going to do -- particularly those laced with details like forgiving student loans in 20 or 10 years or $20 billion in savings in government spending next year -- do not resonate at all because we are skeptical about our government's ability to do anything. With the possible exception of sending tax dollars to special interest groups on Wall Street and the Pharmaceutical companies -- there is very little evidence that our government can do anything.

One year into his term, the repeated claim that the problems were not created on his watch, were tiresome and hurt his credibility.

Our President did rise to the occasion however and he showed his resolve calling out the "Deep and corrosive doubts about how Washington works." His proposal to put all earmarks on the web is bold and would be a big step in the right direction. His willingness to get some of the mud on himself by calling out the broken nature of our political process is great leadership. President Obama believes that the government can do good work. He has called out the bad stuff, committed himself to do something about it, and I believe his intentions are honorable.

We should not give up hope and all of us should do what we can to contribute to his success.  

People are not Computers

Last week a very interesting book came out, "You Are Not a Gadget" by Jaron Lanier. I am about half way through it and will post a review on this page soon. I had the good fortune of meeting Jaron this morning when he make a short presentation at Emerald City Rotary Club in Seattle. Here are the two main thoughts I took away from his talk and the discussion after:

People are not Computers (or visa versa)

The book goes into this in great detail, but Jaron does a good job of encapsulating the danger of thinking of computers as capable beings. He uses Facebook as an example of a system that we may think tracks in parallel with humans. He went on to point out that Facebook does not come very close to approximating the richness of human relationships. If we give Facebook enough authority in our society we will subject ourselves to its inadequacies. If we subject ourselves to Facebook, and Facebook cannot approximate real life, we will start to limit ourselves in real life to only the things that Facebook can recognize. So what you ask?

In America we are all big fans of reinvention. We built our country on the idea. Those of us that grew up before Facebook never thought twice about creating a whole new self if it suited us. We may not have gone as far as Don Drapper, but I know I tried on many personalities before I decided who I was. It is true that Facebook cannot stop us from doing that (or anything), but we can stop ourselves from doing it because we are worried about how it will be represented on Facebook.

We are giving away both ends of the value creation chain

Some time ago we came to the conclusion that inventing was the place to be, and the making could be done somewhere else. This follows our belief that labor is the main component of making and that ideas are the main component of inventing and we want to be the idea people. Some time later, about ten years ago, we decided that ideas should be free. We decided that writing, music, software, and many other pursuits of the mind should be shared freely (on the Internet) and that money would be made some other way. Sure these two changes were separated by about half a century. So we can forgive ourselves for not connecting them together. But now that we don't make things, and we give our ideas away for free -- what part of value creation do we own?

I am really looking forward to getting to the end of the book because Jaron has made some pretty good arguments that we are driving the bus right off the cliff. I for one don't want to go off the cliff. When I get to the part about what we should do -- I will report back. I suspect education and privacy will be involved.

Here is a link to Jaron Lanier's web page.  

Please do not hesitate to leave your comments.

Paying for Things We Don't Need

I travel a fair amount and like anyone who encounters the TSA regularly, I have reduced the number of things I bring with me as much as possible. This has been a great exercise, because for a quick trip I just do not need much stuff. As a society, we probably need more constraints like this because we have gotten out of the habit of making well considered purchasing decisions.

One of the things I started leaving behind was shaving cream. I did not know if it was a liquid, and the can was clearly over 3 oz. Indstead I used plain soap from the hotel and for me it worked just fine. Soon I was not using shaving cream at home either. It had always bothered me that the company that made it was "innovating" by making it difficult to dispense just the amount of product that I needed. By some miracle of engineering the can always shot out about twice as much as I needed. Fortunately I don't need them at all now.

I was an early adopter of an IP phone service. I tried it out and it worked OK, but then the hardware failed - and well, we never cut over. After paying for the service even though we were not using it for several months, I called to cancel. The company charged me $35 just to cancel my account -- even though they could plainly see that I had no activity on my account. They got my $35 -- but I am no longer a customer.

Here are some other examples of commerce in our daily lives that may not be adding any value.

• Retailers will sell you a warranty on just about anything -- and their business model is to fulfill as little on the warranties as possible.
• Many health insurance companies deny every claim the first time around -- just to see how badly you want them to pay.
• Stock brokers will charge you a fee for an account that goes unused.
• A fairly high percentage of gift cards go unclaimed -- which is pure waste for the purchaser and pure profit for the seller.

How much of our GDP is based on waste like this?

As consumers we should think more about what we buy. As shareholders we should make sure we don't own shares in companies that have revenues earned this way.

Sales vs Engineering

We are coming into earnings season and accordingly we have the chance to look at the financial reporting of companies in our industry. IBM and Google both posted their numbers last week and that got me to thinking about one of my favorite subjects -- how companies choose to spend their money. Specifically I am interested in how much a company spends on sales and marketing, how that compares to engineering (R&D), and how they each compare to the amount of money a company has available.

We know that gross profit as the amount a company has available to spend on all things not associated with delivering their products or services to customers. There are essentially four places this money goes. General and Administrative, Sales and Marketing, Research and Development, and Profit. A company cannot survive without just the right balance of each of these four things. So I thought it would be interesting to take a look at how eight well known companies in the technology industry choose to spend their money.

Here is a graph comparing the companies on sales cost as a percentage of gross profit. Google has made a big point that their products are so good they sell themselves. They clearly are backing that up with good performance. They are only spending 13% of their gross profit on sales and marketing. The only company spending less is Amazon at 11%. One could argue that insufficient investment is sales will show up in slower growth rates -- but both Google and Amazon are defying that with 8% and 20% growth rates respectively. Salesforce.com is also growing at 20%, but is spending 57% of its gross profit on sales and marketing. So I think you want to be on the left end of this chart -- spending enough to grow the company but not too much.

Anyone wishing to have products that are so good they can sell themselves should be investing in R and D. One of the highest impact decisions a CEO can make is allocating resources between sales and engineering. The temptation is to invest more in sales because the results will show up faster there. But a company that starves its engineering effort in order to invest in short term sales results will pay the piper later. Here is a graph showing R&D spending as a percentage of gross profit. I think the left side of the chart is where you want to be for long term health in the company.

Once we add the two together, it is interesting to see that Apple, Google, and Amazon end up on the good (left) end of the chart. And all three of them are also turning in impressive growth numbers. The stock market agrees with this analysis because these three companies are on the high end of P/E ratios as well. Strangely, the highest P/E ratio of all is for Salesforce.com -- a staggering 110. I don't get this. To me it seems like Salesforce.com is having to try very hard to generate revenues by spending 57% of its gross profit on sales and is investing less than anyone in R&D. Could be a correction in the works there.

Finally, I think sales spending and engineering spending diverge in one significant area. Sales should always be compared to near term revenue, but investments in engineering can in some cases be disassociated with current revenues. In other words, size does matter here and this is where we see Microsoft flex its muscles. Microsoft is not spending the highest percentage of gross profit on R&D, but it is way ahead of the pack on total dollars committed -- over $9 Billion! This is a full 50% more than the next biggest number which is IBM -- who has 4 times the employees and two times the revenues.

Microsoft is spending six times as much as Apple. So far Apple has been the premier innovator -- something that will be hard to forget this coming week. But don't count Microsoft out yet.

Motivated People Win

Thomas Friedman has a good column in today's NY Times  where he points out that our President needs to generate more jobs and he suggests a few ways to do it. I think he is right, we need more jobs, but I am not sure his suggested approach of using the highest office to create a million new ventures in a "Start-Up America" will work.

The winners in the new economy are going to be the people that are the most motivated. Motivated people try harder, find their way to education, find their way to capital, and overcome the many many hurdles any new business encounters. Right now the most motivated people are not in our country. So if we want to win as a country, we have to motivate the people that are already here, or let some new people in.

Another SMB Move by HP

In my January 5 post on predictions I listed the line between consumer and business as one of the interesting things to watch in 2010. In the last few weeks, HP has been made a few announcements that seem to be focussed on this very issue. First they entered into a partnership with Microsoft to promote cloud computing to SMB and yesterday they announced a new sales and marketing effort called SMB Exchange to go after what they have estimated to be a $55 billion market in the US. As the market in between the consumer and business, SMB has always been tough to tackle. True it is not as fragmented as the consumer market where there are just as many decision makers as there are PC sales, but the dollars add up almost as slowly.

Of the approximately 150 million people employed in the US, half of them work for the roughly 120,000 companies with 500 or more employees. So if you want to sell computers to the 75 million users on the big business side -- you only have to target 120,000 companies. If you want to sell to the other 75 million users -- you have to pursue over 6 million targets. This is why companies like HP rely so heavily on channel partners to reach the SMB market, and presumably why HP has launched this effort. Working down from the 500 employee line, there is probably $55 billion in IT spending in the 700,000 businesses that employ between 20 and 499 people. Even this is a daunting number without partners.

So to those that are thinking that HP intends to cut their partners out of the market, take comfort in knowing that no matter what HP does in Rio Rancho, they are not going to be able to cover this entire market. In addition, there are 5 million businesses in the under 20 employee market up for grabs. Many economists have been thinking that this is where the hiring is going to happen when the recovery finally turns into more jobs. It will be interesting to see how our industry works to take advantage of that trend.

You Can't Kill Me -- I'm Rich

One of my favorite authors for casual reading is Larry McMurtry. The Texas native is best know for his western novels including Lonesome Dove. In 2002 he wrote the first of the Berrybender novels set in the 1830s about a very rich English family on an adventure up the Missouri River. Lord Berrybender and his subjects were seemingly oblivious to the danger they were exposed to; as if they felt protected by their aristocracy. Funny thing though, the people of the new American west didn't care that they were aristocrats from England.

They did make some preparations for the trip -- including towing a separate boat behind their steam driven paddle wheeler -- just to carry the wine. The Berrybenders were stunned when they found that some Native Americans would happily kill them, and those that were not interested in murder felt free to just take their wine.

We now find ourselves cast as the Berrybenders. We do not fully understand the way the rules are changing and feel entitled to continue to enjoy our status and lifestyle. I just hope we don't find ourselves frozen in the middle of the river without enough food and no idea what to do next.

Book Review: Work Hard. Be Nice. by Jay Mathews

This lively and easy read about two Teach for America teachers who go way beyond their two year commitment and well above the call of duty to change lives is an inspiration for anyone who has been exposed to public schools in the US. The stories about overcoming amazing resistance by students, parents, other teachers, and administrators to give kids a chance of success are a delight to read and at the same time a reminder of how daunting the job of education reform is.

Their creation, the Knowledge is Power Program (KIPP), is a combination of teaching methods, parent involvement, longer school hours and calendar, and incredible passion by the teachers. Some of their ideas are cool, but the passion part really impacted me. These guys really put themselves into their work -- absolutely immersed. Yes they are smart, but the 24 X 7 commitment to success and refusal to accept failure is what I think made the difference.

Now over 20,000 kids are enrolled in KIPP schools across the country.

Bill Gates posted a great review of this book on Monday.

Here is a link to the book on Amazon

Google is China: Only the stakes are higher for China.

The recent tension between China and Google has focussed our attention on the contrast between these two organizations. However, anyone capable of suspending their own perspective will find some similarities too. Here are a few I can think of:

Long Term Perspective

Both organizations take the long term perspective. China is 30 years into a plan that spans a century or more and Google is a decade into theirs without any sign of letting up. Both organizations focus intently on stability in leadership, China with a one party system and carefully crafted power transitions, and Google with a two tiered corporate governance structure that insulates the leadership from typical wall street pressures.

Driven by Engineering Minds and Data Decisions

Google is famous for collecting data on everything and using it to make better decisions. They believe there is a better way to do just about everything and the new ways will be discovered by those that are willing to try new ideas and measure everything. China is a student of their own experiences and everyone else's. They know good ideas are out there and are willing to bring them home and try them out. China measures everything too.

Growth Attracts Attention and Invites Compromises

Both organizations are experiencing very rapid growth and as a result have attracted the attention of the world. Everyone else wants to be around these growing entities and are often times willing to make significant sacrifices in order to do so. Many companies have compromised their values in order to do business in China. Many have exposed their intellectual property in order to gain access to a market that contains 25% of the world's population. Similarly, individuals and companies alike have turned large volumes of data over to Google. This data about users and their behaviors, that used to be considered private, is Google's biggest asset.

Willing to Accept Collateral Damage

China and Google both know that the growth and change they are navigating through will be painful. China jails its dissidents, and Google has disrupted industries resulting in significant employment dislocation. The leaders of both organizations are able to maintain their focus on their plans without being distracted by the human factors. It may be unfair to equate China's human rights abuses to Google's impact on the newspaper business but the point here is that neither leadership team shows any sign of diverting from their mission because a few lives are impacted.

The Stakes are Higher for China

So far China has raised the standard of living for 500 million people to above the poverty line. The largest and fastest advancement by any nation ever. The mind numbing volume and significance of the choices the leaders of China have had to make to bring about the rise of their nation is awe inspiring. Each misstep has had very real consequences -- in extreme cases measured in the loss of life due to starvation or unrest. The ascension to power and prosperity in our own country pales in comparison. On this scale the stakes at Google really don't register at all.

Motto or not, Google is stunned when it finds us worried they will do evil things with our data. The Chinese leadership is less naieve about the way the world reacts to its policies. They step in a careful and calculated way through their priorities, and work to influence our view of them. They know we view them through the lens of our perspective and so they study us to better understand how we see the world. Someday they will address the things that bother us including piracy and human rights. Until then, we should spend more time studying China so we can pursue mutual interests and compete more effectively.

And the spying and cyber attacks...what about them? I bet the Chinese have a long way to go to catch up our our level of sophistication in these areas. The CIA and the NSA are tough acts to follow.

Old Channels meet New Channels

Channel marketing in the tech industry is not really all that new -- unless you compare it to car dealerships.   I often refer to the network of automotive "channel partners" when speaking about how the intermediated sales model works.  The next few years in the automotive sales and marketing business are going to be very interesting as the marketplace gets more fragmented and cars gain more technology.  It was pretty hard to miss Ford at CES this year!

Tech has had a hand in automotive sales peripherally for a few years now.  Every time a car was considered or not considered on the basis of iPod integration -- Apple had a very large impact on auto sales.

Todd Bishop has posted a good article in TechFlash  on some technology companies from the Pacific Northwest that are leading the way in this convergence of the auto and tech businesses.  It is only a matter of time before the sales and marketing elements of these industries also start to blend together.

Book Review: Too Big to Fail by Andrew Ross Sorkin

It took a while but I finally finished Too Big to Fail. This is a big book about the 2008 financial melt down and bankruptcy of Lehman Brothers.  The author does an amazing job of taking us through events in 2008 that we have already heard so much about. He makes the book work by recreating the conversations between the players in such a lifelike way that you feel you are there. Sure he did a great deal of research -- but part of me has to think there was a fair amount of artistic license taken. Even so I highly recommend the book and I have a much better understanding of our financial system and these events from reading it.

Key take aways:

• When you hear "That will never happen" -- look out! Ten years earlier the geniuses at Long Term Capital Management were saying that about interest rates, and this time it was real estate. Who knows what it will be next time, but when the markets start to think that naturally occurring cycles are no longer occurring naturally -- go to cash fast.
• Henry Paulson is not as bad a guy as I thought. The then Treasury Secretary was on the top of my list of corrupt people before reading the book and by the end I came to the conclusion that he was not such a bad guy. Even so we would be fools to think his bias towards Goldman Sachs was completely neutralized -- clearly his being there helped that firm.
• Goldman Sachs is a truly remarkable firm -- not so much remarkable as in good but remarkably good at what they do. And what they do is take care of themselves. Their tradition of sending their retired leaders to Washington is pretty smart. They were also smart enough to see the water draining out of the system and made repeated significant efforts to protect themselves -- both by using their influence and raising mountains of capital.
• Street fighters like Dick Fuld of Lehman Brothers are not well equipped to make it through a catastrophe like this credit crisis. His major weakness was his long string of successes fighting against everyone and prevailing. It left him with no friends and no way to see the truth in what was happening.
• The people in the government are at a distinct disadvantage. The smartest ones have ties to their former firms so they can't really be trusted to look out for the public and the ones without wall street experience don't really know what is going on.

Here are some other reviews of the book.

Business Week

The Independent

New York Times

The Economist

In the end the point of the title comes out. The only way we are going to solve the many problems of our financial industry is to figure out how to make sure no one is Too Big to Fail. The author does not address that in the book.

You can find the book on Amazon.com by clicking this link.

Another good book in this vein is When Genius Failed.