“Pew Internet and American Life Project reported that 53 percent of American adults play video games of some kind”

are just the kind of figures that lead to ridiculous venture capital funding mistakes. The number doesn’t tell me anything about how often they play (once a day or once a year), what is considered a video game (WoW or Brickbreaker), and whether the games are purchased or free.

An attractive statistic does not a functional business model make.

Posted by: Chris Zach | Dec 14, 2008 1:33:51 PM

via In-Game Advertising Starts To Drift | Epicenter from Wired.com.

I then presented this analysis in a session at BarCampSD (San Diego) on November 12, 2008 to an audience with great interaction and sharing of thoughts.

Fast forward to the present. I have been a bit off the grid the last couple weeks while traveling home for Thanksgiving and working on the family business. So, just yesterday I read the news that Facebook had, so far, unsuccessfully negotiated an acquisition of Twitter.

About time. Their partnership was my first recommendation in the strategy presentation.

In my mind, at least an attempt by Facebook to acquire Twitter was inevitable for these fundamental reasons:

It’s a mutually beneficial relationship

Twitter gets a business model, as tweets are displayed amongst advertisements in users’ feeds.

Facebook buys Twitter’s large, existing userbase and brand recognition rather than battling Twitter head-on with a modified status feature.

They need each other

Twitter has, by far, the largest userbase of all microblogging services. But yet its size pales in comparison to the number of people using Facebook. It’s hard to imagine another way Twitter could scale its userbase so quickly.

Facebook is missing out on all the conversations that occur outside its walls on Twitter. It would be beneficial for Facebook user frequency and volume to have Twitter conversations integrated with profiles, the Facebook platform, and the rest of the user’s social graph.

I called this scenario “Slap in the Facebook World”, describing a situation where Twitter must either partner with Facebook or watch as Facebook builds a Twitter clone and leverages its size to bully Twitter out of the ring.

Other scenarios included in the presentation:

• “Twitter in the Cloud Behind the Curtain” — Twitter as a service provider, with revenue coming from premium API access
• “Microblogging the Microsoft Way” — The microblogging platform with the largest corporate userbase wins the consumer game
• “Open Sesame” — Open standards and open source win (e.g. Laconica) and no company makes significant revenues directly from the product

If you’d like to check out the strategy presentation, I’ve embedded it below.

Disclaimer: I made this presentation quickly and for the purpose of sharing indirectly, not for delivering a speech. Therefore, I don’t advise following my example in such text-heavy slides and lack of graphics. You will put your audience to sleep!

CNN is firing science correspondent Miles O'Brien

But seriously, the root of the problem is that science news does not sell like kidnapped babies news, celebrity news, or holy-crap-the-economy-is-melting news. Journalism is a for-profit business, not a for-the-good-of-the-people business.

I wonder if there is any (scientific) link between a country’s interest in science news and its performance in science and math education?

We often hear how poorly the US performs in science and math education. Is this soft education for youngsters responsible for producing science-illiterate adults? Or is the general distribution of news coverage quite similar across the world, regardless of the prowess of a country’s science education?

I would love to hear more on this, so comment if you have any ideas.

(For a concise summary of Detroits economic woes over the last few decades and through the recent loan requests, read here.)

The government has two fundamentally different questions on its hands in making these loan decisions.

For the Big (and shrinking) Three, the question is,

“Should the government bail out an industry that, regardless of the current recession, is responsible for driving itself to the brink of bankruptcy because of poor strategic decisions in product offering and labor management?”

For Tesla, the question is,

“Should the government bail out a high-tech startup that perhaps overreached in its goals for reinventing the automobile power system?”

While all the companies concerned are “US automobile manufacturers”, the two questions are drastically different in reasoning.

Many have argued that bankruptcy is just the medicine Detroit needs to cure its financial woes. Others feel the painful restructuring process will do more damage to the local and national economies and related industries than is worth suffering, including the auto executives requesting the assistance.

I think the correct response lies somewhere in between. Now that the government has significant leverage over the auto companies, let’s use this bargaining position to our advantage. The EPA has always butted heads with auto industry lobbyists over fuel economy standards. Now the government can write the standards on its own terms. For example, we could model new standards after those in Europe with regulated CO2 emissions.

I’d like to avoid bankruptcies, if only for consumer psychological reasons. Consumers will avoid purchasing cars from bankrupt companies, and this will only exacerbate market share losses to foreign competitors.

But if Congress needs to send Detroit back home a couple more times (driving in their hybrids!) until they return with appropriately detailed and significant plans for their use of the loans, so be it.

Tesla is in a separate universe from the established companies. With its small size, it does not have the gravity in the national economy and its failure won’t send the US plummeting into an economic black hole.

On the other hand, its lofty vision of selling all-electric autos is a force far beyond its fleet size. While the sale of a few hundred Tesla roadsters will not make a significant impact on greenhouse gas emissions, the same bunch of battery-powered cars will exert undeniable pressure on the Big Three to respond with similar offerings.

Sure, Tesla’s only product costs $100,000 and is far out-of-reach for most Americans. But consumers will look at that vehicle and then walk into a Ford, GM, or Chrysler dealership and ask for the same thing at a third of the price. They’ll figure that with the R&D capabilities and scale of a major auto manufacturer, a plug-in auto at a reasonable price should be feasible.

Let’s face it. History shows that American auto companies lack the foresight to take longer-term, strategic factors (like the inevitable rise in cost of oil) into consideration when they do research and design vehicles. So, if they don’t possess the internal initiative to develop cleaner vehicles, then maybe Tesla is just the thorn in their sides we need.

Is it worth $400 million in loans to keep Tesla in place as a carrot to lead Detroit?

I think that is some produce that will really produce.

(Sorry, I couldn’t resist!)

But this post isn’t about that kind of automobile noise. This is about the noise emanating from Detroit in regards to the future of our nation’s decimated auto industry and how we — yes we, the people and our government — will be responsible for keeping the industry afloat.

Thomas Friedman opened an article in the New York Times, called “How to Fix a Flat”, on the subject with this:

Last September, I was in a hotel room watching CNBC early one morning. They were interviewing Bob Nardelli, the C.E.O. of Chrysler, and he was explaining why the auto industry, at that time, needed $25 billion in loan guarantees. It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?

As usual, Friedman’s ideas were thought-provoking. He received 594 comments on the article before commenting was closed.

Friedman paints a picture where auto executives steered their companies away from any long-term competitiveness toward short-term fixes and Michigan’s legislators shielded the industry from the regulation that would have forced it to compete globally.

And now the industry just isn’t asking for votes in its favor it’s asking for billions in financial support. See the industry’s latest innovation below in a comic by Signe Wilkinson.

Detroit's Latest Plug-In Design

Or Nick Anderson’s comic take:

Catch Detroit

I think it is the gift of a truly talented cartoonist to create comics like these, images that make the viewer laugh out of one side of his mouth while he winces with the other. These comics are painfully entertaining.

Friedman unfortunately chose to close the essay with a tired cliche: that all the auto industries need for redemption is a year of leadership from Apple’s Steve Jobs.

While I have deep respect for Mr. Jobs and his achievements leading Apple to design some of the most popular products of this generation, the problems facing Detroit are larger than any one person can repair.

The fundamental, underlying market mechanisms that steer the behavior of the American auto industry are like, well, a buggy GPS system — they told the industry to turn left in the middle of a bridge and now the industry is through the guardrail and plunging headfirst into the abyss. (For a visual, refer again to Nick Anderson’s comic above.)

Why are the product offerings of the Big (but shrinking) Three so out of line with current consumer demands? Because the companies tuned their product lines to produce the greatest possible short-term profit, without regard to their long-term global competitiveness.

When oil was cheap and carbon even cheaper (aka free), it made economic sense to build the most expensive vehicle a customer would buy, because the pricier the vehicle, the larger the profits. And by the way, this is America, and in America, we like to get a lot for our dollar, so the bigger the vehicle, the better. It’s the same game that restaurants are playing with ever-increasing portion sizes, in a way.

Cheap oil refines into cheap fuel, and cheap fuel does not provide much financial incentive for consumers to purchase fuel-efficient vehicles.

Free carbon (dioxide) means that the emission of greenhouse gases has no cost, and this leads to a similar outcome as cheap fuel, because fuel-efficiency and greenhouse gas emissions are related (inversely).

The problem is that oil isn’t cheap (the falling prices are only temporary) and greenhouse gas emissions aren’t free. Ultimately, greenhouse gas emissions have a cost and the price is paid by the environment in the form of climate change.

So, Detroit has been shielded from economic reality in the US by a curtain of cheap oil and cheap carbon. Suddenly the curtain is pulled back and, uh-oh, Detroit is caught on stage with its pants around its ankles.

It turns out that where Detroit’s competitors live — primarily Japan, Korea, and Europe — fuel is a few times more costly and greenhouse gas emissions are regulated by the Kyoto Protocol. The competitors have been preparing for the automobile market of the future for decades, but the Big Three were thrown into reality over the course of about half a product development cycle, and what a cold shower of reality it was.

Yes, the US has Corporate Average Fuel Economy (CAFE) standards, but I won’t even bother to dive into that controversy. Let us just agree that the regulations haven’t prepared Chevy, Ford, and Chrysler for today’s sudden market reality. After all, it was CAFE that laid the red carpet for the arrival of minivans and SUVs to displace place of wagons. Wagon, as “passenger cars”, were required to have higher fuel economy than minivans and SUVs, as “light trucks”.

In the end, the US was lacking the necessary indicators of cost to influence purchasing behaviors towards sustainable automobile designs. Additionally, the stock market rewarded short-term performance, so the auto companies had no incentive to take responsibility and guarantee their own long-term competitive strength. Since the industry was blind and could not look forward to plan for its own future, we — the US people and our government — are now responsible for taking the industry by the hand and saving it from running into a wall of bankruptcy.

The government may soon step in with financial aid, it looks like we the people might all be proud new owners of auto industry stock. Of course, that stock looks less like a stork carrying a bundle of joy and more like a burning, stinking bag on the doorstep.

Just don’t step on it.

Well, Bush didn’t get that message and it turns out he’s going to screw up a few more things before he walks out the Oval Office door. As the Denver Post points out, W. is working to pass anti-consumer, anti-environment “midnight regulations” before the clock rings Jan. 20th and he turns back into a pumpkin.

“Those and other regulations would help clear obstacles to some commercial ocean-fishing activities, ease controls on emissions of pollutants that contribute to global warming, relax drinking-water standards and lift a key restriction on mountaintop coal mining.”

Bush likes to swim in polluted water for fun.

So, despite the fact you thought electing Obama was going to provide a breath of fresh air — or clean water — Bush is doing his best to prevent it.

It looks like Bush can see a little more darkness at the end of the tunnel and is working to bury his legacy even deeper in a quagmire of incompetence. Can January 20, 2009 get here soon enough?

In this scenario, the country’s investments in research (bioengineering bacteria to produce cellulosic biofuels, for example) pay off and we are able to increase our exports to the rest of the world.

The key factor, though, is that the product must be manufactured in the US if we want to reduce our trade deficits and subsequently our borrowing. Biofuel processing will probably always be somewhat localized, as the cost of transport is high, and we aren’t likely to have surplus fuel anytime soon as large as our oil appetite is today. However, we can produce the bacteria, fungus, or other microorganisms in the US and export them to plants around the world.

Here’s the BusinessWeek article and here is my original post.

Update: I just found another BusinessWeek article with four ways the country can use innovation to help the economy recover:

• Inject capital
• Think global
• Focus on public programs
• Support talent

Thanks for visiting,

Chris

As the New York Times addresses in the recent article “Rivals’ Visions Differ on Unleashing Innovation”, the financial crisis is diverting attention in the upcoming election from the candidates’ science and innovation policies to their approaches for fixing the economy today. Since the media suffers from attention deficit disorder and can only devote coverage to one issue at a time, I’ll use my blog to reach the masses (mini-masses?) and share the importance of innovation to the US’s future.

First, I’ll simplify the process of national innovation to the highest degree possible. Check out this 1st-grade-math graphic I created:

Innovation Math

Let’s break this equation down.

For the US to remain an innovation leader, the country needs money to be spent on research and development combined with talented people to do the work and discover breakthroughs.

Show me the money

Where’s the money come from? It is a combination of government and corporate research investment. If you’d like to compare the Presidential candidates on their technology investment policies, read here. Both candidates support making the federal R&D tax credits permanent, which is important for encouraging corporate investment. But Obama supports significantly more government investment than McCain, and I think Obama has it right. One example: Obama supports the investment of $150 billion over 10 years in developing clean technology.

Many groundbreaking technological advances were achieved on the back of government investment in space, defense, and university basic research — fields like computing and the Internet, medicine and nanotechnology, and transportation technology like RADAR. (Note to avoid angry emails: I didn’t say the government invented the computer, just that its investment advanced the progress.) When there is no clear connection between the basic scientific research and a commercialization opportunity with positive R&D ROI, the government is needed to provide the initial investment. The government then receives its ROI when companies later commercialize the progress in research, create jobs, and pay taxes.

The argument for just how the government should manage this investment in innovation is complicated, so I won’t attempt to solve that problem in this post. However, you can hear some interesting perspectives in this podcast from the journal Nature regarding the upcoming election and national innovation policy. Here are couple takeaways to pique your interest:

• Idea to create a new National Innovation Foundation to holistically manage innovation strategy for the US
• Countries like Taiwan, Japan, China, UK, Germany, and Singapore have national innovation strategies, but the US does not
• Over the past 8 years, the number of computer science graduates in the US has declined by 50%

It’s the people, stupid

Now, let’s move on to the people side of the equation. This is why I really wanted to write this post.

All that money won’t do any good if it isn’t paying and funding the research of talented, educated workers. Undoubtedly, you’ve heard by now horrific statistics, like “China is producing 10 times more engineers than the USA.” While numbers like this might be a stretch — read this article from BusinessWeek about the apples and oranges comparison — there is no doubt that global competitiveness is higher than ever before.

We need to get serious about changing the status quo and take real action to influence youth culture and increase the attractiveness of careers in science and technology. If we want to strengthen national innovation, why don’t we first get innovative with science advocacy? According to the above podcast, there are hundreds of programs across K-12 education advocating science, but let’s face it:

Children and teens are not the most receptive to ideas of what is cool and important coming from the classroom.

Children and teens learn what is popular and desirable from their social relationships with their peers.

These programs aren’t effective enough yet because the marketing is wrong. Let’s look at this problem as a business case study and see if we can find some insight that educators are missing.

(I wrote previously about the importance of science education and strategies for making science interesting in this post. Here, I’ll take a different approach to a similar problem.)

You’re the CEO of a company — let’s call it SciTechSchool Co. — and your business model is this: for every student you encourage to be passionate about science and technology and graduate with a related degree, your company makes $100,000. Woah! What a business opportunity!

(I don’t know what the government’s marginal benefit is for each additional scientist or engineer, but it’s reasonable, if not conservative, to think these people might pay an additional $100k in taxes over their lifetimes.)

Hm… How do you show kids that science is interesting? Do you offer after-school programs to teach them more about science after they’ve had a full day at school already? No, that obviously won’t work.

Maybe, instead of trying to push science at school, you look for ways to slip science into kids’ everyday lives? How do you make science a part of youth social fabric? You make small alterations to what kids are already doing, and without them even recognizing it, they’ll be using science regularly.

Let’s use video games as an example, because we know they garner a lot of youth attention. Say Halo is the game of choice. Want to encourage electrical engineering? Players must fix the virtual wiring in their weapons and suit after being hit before they will work again. Chemical engineering? Players collect chemical components throughout the game and then mix them in precise amounts for regenerative medicine. Mechanical engineering? Players must design their own protective gear and truck armor, balancing strength and weight for the best performance. Computer engineering? Players must program booby traps to capture the enemy, like a knockout gas that is discharged when a sensor detects an intruder.

Video games often involve problem solving by design, all your company needs to do is alter these problems a bit towards science. And this is just one example, the same principle could be applied to other youth pastimes, as well. How about a simple programming language on a mobile phone or a bicycle built for modifications and upgrades?

Let’s change the way we think about science education. If business won’t provide the toys, gear, games, and websites kids need to be science-minded naturally, then let’s create an agency to evaluate and designate “SciTech” products. Then, companies can advertise the benefit to parents, and we let them claim additional tax credits for the development of these products.

It’s due time we get innovative about keeping this country innovative.

While working on a totally unrelated task, I came across a spectacular visualization tool representing the US federal budget. (Aren’t the most interesting finds on the Net stumbled upon? And I don’t mean using the official toolbar.)

Now that this post is half parenthetical, I promise I’ll write one whole sentence without any asides.

(Done. Go me!)

The visualization is in the form of a wall-hanging poster available at WallStats.com. The data represented is the breakdown of the 2009 federal budget as proposed by the White House. You can also see in the background the relative size of the federal deficit (>$10 trillion).

This poster caught my attention as it takes something exceedingly complex (5,000 pages of budget documentation) and condenses it into one large, summary graphic.

What’s that old cliche… A picture is worth 5,000 pages?

It’s intuitive, too. The size of the circle is proportional to the amount of money. There is a clear hierarchy of spending from the top level downwards.

As hard as the goverment is working to spend our money, don’t you think they could come up with stuff like this on their own? After all, the federal budget is just the tip of the iceberg as far as complex, poorly-communicated goverment activity is concerned.

Maybe they wanted to budget for a Federal Activity Communication & Explanation Department, but the circle representing the department’s budget was just too small to show up on the poster…

Now, to explain the title of this post, here are the budgets for several different departments for comparison:

Department of Defense: $515 billion

Defense and national security overall: ~$800 billion

Deparment of Energy: $25 billion (Defense-related: $16 billion; Energy efficiency and renewables: ~$1 billion)

Department of Education: $59 billion

If you were listening to the same Presidential election debate I watched tonight, you heard a lot of talk about the importance of energy security and renewable energy to “break our addiction to foreign oil.” But our we investing enough in our future energy needs? Energy efficiency and renewable energy spending is 0.16% of the defense budget.

You also heard often how the American people and their innovation skills are the country’s greatest strength and will keep us strong, safe, and healthy into the future. But are we investing enough in our children’s futures via their education? Our Dept. of Education budget is 7.4% of the defense budget.

Look at the poster. The Department of Defense battleship is so large that it could wipe the Education and Energy dingies right off the budget map.

C’mon, future leader of the USA.

Put our money where our mouths are.

Now, for something a little more light-hearted: Play some Battleship and flash back to your days of imperial naval domination as a 7-year-old!

One great iPhone feature is its ability to feed a user’s GPS coordinates into a location-based service, or LBS. This expands the usefulness of GPS beyond navigation to enhanced social networking activities. TechCrunch recently reviewed the state of major LBS applications for iPhone, and I recently attended the Web 2.0 Mapping and Social Networks Meetup, so it’s time for me to throw my two cents in the pool.

Regarding the title of this post: No, I’m not yet overly concerned with privacy issues regarding the sharing of a person’s location at this point. I just couldn’t think of any other good acronyms at the time. But privacy will a serious matter for the creators of LBS software, and I’m sure they will be working hard on getting the balance right between sharing location with wanted friends and avoided unwanted threats.

The major problem with the LBSs I’ve seen so far is they could more accurately be described as LBFs, or Location-Based Features. These applications don’t provide a full user social experience and don’t really stand up on their own.

As soon as Facebook and MySpace release their own location-based channel into their massive existing user bases, these LBS forerunners, as admirable as their pioneering work is, will be trumped out of the market. I don’t see significant, proprietary innovation occurring at the existing LBS firms, thereby reducing the incentive for Facebook and MySpace to acquire the technology rather than just building it themselves. Plus, any integration tasks would be as significant as building the service in the first place.

Many of the current LBSs seem to be aiming to compete with Yelp’s user-generated business review service. Again, they can quickly be trumped as it will be easier for Yelp to build an iPhone app that pulls GPS coordinates than it will be for a brand-spanking new LBS to build a competitive database of user reviews. Loopt has partnered with Yelp to use its reviews, but again, once Yelp builds the app, why won’t I just use that? Yelp already has my bookmarks and personal reviews, both which would be very useful on the mobile app.

LBS Logo Collage

Venturing a little off topic:

Imagine creating a review while you’re still at the restaurant! (Or after walking out the door if your girlfriend doesn’t approve of you tinkering on your phone during dinner.) The app knows what restaurant you’re at (as long as you have a GPS signal). It can ask you questions to prompt things you might forget later: “Was the service attentive?” or “Were the bathrooms clean?” You can upload photos of the food or interior while you’re still there.

Back on topic:

One last thing.

We don’t know how a LBS should be designed yet because it creates a new paradigm for the way society interacts.

This isn’t the fault of the current providers, but it does highlight the challenge they face it meeting customer demands and continuously upgrading and modifying interactions. For example, how often will I want even my friends to know where I am? How often will I end up changing my discoverability status back and forth? What if I turn discoverability off for an annoying “friend” but then we run into each other at the bar — will I have to lie to cover the fact that I’m digitally hiding from him? Will my phone prompt me for my status every time it detects I’m walking out of my house?

Nobody knows the answers to these questions just yet, but I think we’ll know soon enough.

One of the great things about taking a trip to the West is the peaceful serenity of the plains, prairies, buttes, and mountains. Everyone needs to disconnect from the grid occasionally and reflect on our amazing planet and the beauty that surrounds us, typically missed because his nose is buried in a cell display sending a text or checking status updates. At that point, even a 21st century man feels a connection to his ancestors who roamed this country on horseback, their newest ‘gadget’ the carbine rifle.

But then, even a nature-loving man like myself begins to miss a few things about the Internet, discovering firsthand the withdrawal induced when a beer falls over in the tent and quickly transforms a high-tech mobile gadget into a tent stake hammer.

Here are the top 5 things I miss now that I no longer have on-the-go mobile Internet access:

1. Can’t send mobile updates to this blog!
I had set up a couple methods to post in addition to the normal web interface, namely Jott and email-to-post. (Note: I haven’t found a way to post to Wordpress.com from email, just self-hosted Wordpress.)
I’m setting up Shauna’s phone now so we can hopefully Jott to the blog from it instead.

2. No more GPS
I used my LG Voyager not only as a mobile phone, texting machine, and Internet device, but also as a GPS navigator. This is not a good function to lose on a cross-country trip, as it’s one of the most useful features! It’s valuable for many reasons: get directions, find your current location, search for local businesses, and see how long it will take to get somewhere.

3. No mobile campground searching
It turns out it’s difficult to find a comprehensive, printed listing of campgrounds — at least one that’s not the size of a phonebook. I miss being able to search sites like Woodalls for campgrounds in a given radius.

4. No instant online photos
Until my camera adds a cell phone, I’m getting by with the cell with added camera. It doesn’t provide great photos, or even a flash, but it does the job of getting a photo from capture to sharing across the world in less than a minute.

5. No more phone
I thought I was done after #4, but then I realized that I do occasionally use my cell as a phone. I am so 2007…

I think slow is referring to my bicycling speed, but I'm not sure...

RAGBRAI is half bicycle ride, half post-pedaling party, and half people-watching extravaganza. Obviously there is some overlap to make those numbers work.

We were living in Chicago through most of the 2008 pre-RAGBRAI training season and this posed a little problem. Chicago is flat. Iowa is not (more about that later). Most of our Chicago rides were along the Lake Shore Trail. It was only a mile from my apartment and it’s irresistably scenic.

I can’t say how many training miles I put in because I was riding my new Jamis Satellite and hadn’t installed a bike computer until just before RAGBRAI. I’d guess a little over 300 miles. Recommended training was 600 miles, so I got half way there! You know that those “recommended training” distances are always over-estimated to compensate for people’s over-confidence in their abilities, anyway. (”I’m in great shape. I don’t need to train for this marathon. I’ll just wing it.”)

The center of the state of Iowa is called... *drumroll* State Center.

Shauna's birthday bicycling get-up. She did get some comments on the placement of those balloons.

RAGBRAI itself this year was 471 miles over 7 days of riding with 22,500 feet of climb (interactive map). The hardest day was Monday, the second day (my girlfriend’s birthday, ironically). We rode 83 miles and climbed 5239 feet. Since Sunday was a relatively short day, I didn’t experience real muscle soreness until Wednesday — it always takes 48 hours for the suffering to begin!

On the bright side, I was able to avoid chafing over the course of the week, so the worst-case suffering was avoided. (Sorry, but when it comes to long bicycle rides, you just can’t avoid this subject.) Of course, my sit bones were a bit tender to the touch, but that pain subsided to numbness after the first five minutes of the morning ride. Now, if you promise to keep it quiet, I’ll let you in on the secret to avoiding the fire of friction. C’mon. A little closer. This is top secret…

LIBERAL AND FREQUENT APPLICATION OF CHAMOIS BUTT’R!!!

This product is a gift from god dermatological scientists. I reapplied at every stop just to be safe.

Now, for the most popular RAGBRAI rumors.

RAGBRAI Rumor #1

There is pie.

Yes, there is pie in this picture. But it's harder to find than you'd think!

That statement is not entirely false, but there certainly is not the amount nor variety of pie on RAGBRAI that the media would have one believe. Especially when you’re pulling up the second half of the pack and all the good food has been picked over. (I became very accustomed to seeing half of menu boards crossed out.) My own guess is that pie is just too labor-intensive to bake in the quantities necessary to feed 20,000 hungry bikers, so it’s often replaced with grilled (frozen) hamburgers instead.

RAGBRAI Rumor #2

Iowa is flat.

As I mentioned above, we climbed 22,500 feet over the course of the week. That’s 2,000 more feet than the height of Mt. McKinley! (Of course, the Tour de France does this much climb in about 2 days, but those guys are pros!) Sure, some parts of Iowa are flat (the northern parts, particularly), but the western and southern regions have almost nothing flat. I remember thinking that exact thought, actually, during RAGBRAI. “Where the heck is flat road around here?”

RAGBRAI Rumor #3

You must be in great shape to bicycle 471 miles in one week.

The newest member of The Incredibles shows off his stuff.

While it is true that being in shape will make the ride a lot easier, I saw an incredible assortment of riders during the week, and I’m now convinced that if there is a will, there is a way to ride across the state. I crossed paths with a 72 year-old woman several times, and I’m sure she wasn’t the oldest rider out there. Some people were carrying a lot of extra weight up those hills, but they just took it slow and made it through. There were a number of riders with special trikes that are propelled by pedaling with the arms instead of the legs, and several amputee riders pedaling with their prosthetics.

And that brings me to the most important lesson I learned on RAGBRAI:

The only force that can stop you from achieving your dreams are your own doubts.

So, with that, get out of your own way and take on a dream today.

Dipping our tires in the Mississippi after completing the ride

I was doing some research recently into GPS solutions for flying as my father is training for his sport pilot license in pursuit of piloting his new powered parachute. Surfing around Garmin’s site, I was surprised to see the lack of support it provides for making a shopping decision. It’s not easy to pick the right device — in the automotive category alone, there are at least 31 different GPS devices from which to choose.

Although not unique in its lapse, I believe this sort of marketing shortcoming is entirely inexcusable. The most advanced shopping feature is a side-by-side comparison tool. How about a product advisor that asks questions about how I’m going to use my GPS or what features are important and then recommends the best options?

Want to navigate me to the best one?

I understand that Garmin does not retail its own products, but that shouldn’t keep it from helping me select the perfect product from its lineup at Garmin.com so I can go buy it at a nearby electronics store.

After all, who should be more helpful and knowledgeable regarding a product line than the company who designs and builds it? No doubt everyone in their marketing department could help me pick the right product if I met them over a beer at a local bar. But they can’t help me on their own company website?

This is a missed pre-sales opportunity, without a doubt. If I get to this site, I am already interested in Garmin’s products. Garmin needs to seize this opportunity and make sure that I find the right product from its lineup. Scaring me with a massive grid of options is as likely to send me clicking to a competitor as it is to present the best choice.

Keep the shopping simple. Don’t miss an opportunity to educate the customer on why they should by your product. 3 is better than 30 when it comes to encouraging the customer to make a decision and purchase.

Here’s the description of the event from MITEF:

Come for the excitement!

Come for the thrill of the competition!

Come to find out about some of the most innovative ideas in Chicago!

Join the Chicago innovation community as we celebrate the best and brightest new ideas that will shape our future.   Come cheer on 15 [actually 13] carefully selected presenters as they compete for a $5000 cash prize! [Split amongst the top 3 places: $3k, $1.5k, $500]

The presenting finalists will have 5 minutes and a whiteboard to describe their innovative concept in front of a panel of Chicago’s most experienced judges and an audience of 200 [I heard about 141 showed up].  No powerpoints, no props, no kidding.

As a participant, you’ll be a part of the process as your vote, over your mobile phone [if you had reception in the auditorium], will account for 20% of the total overall score.

The Whiteboard Challenge is the most exciting innovation event in Chicago and you don’t want to miss out.

The winning presentation was delivered by Dan Masterson for the Guardian Angel Outlet. See a video of the concept demo here.

Rather than talk give reviews of the concepts themselves in this quick post, I’m going to point out 3 helpful tips for delivering a less-formal whiteboard presentation as compared to a more-typical PowerPoint slide sleepfest presentation.

1. Embrace the whiteboard’s unique visual characteristics

By nature, an image on a whiteboard appears gradually as the presenter draws it, one line at a time. This has advantages over a digital presenation where it’s easy to overwhelm the viewer with too much information too fast. It also adds a subconscious suspense component as the viewer waits to see what’s going to show up, like Pictionary on business steroids.

When you’re presenting in front of a whiteboard, add visual information to the board gradually, at approximately the rate you’re divvying oral information. What you want to avoid are the extremes: talking for 4 out of 5 minues without drawing anything (you’ll lose the viewer’s attention as their eyes drift around the room to the captivating carpet stain) or drawing a complicated graphic in silence for 3 minutes (you’ll overwhelm the viewer as soon as you start talking again because you’ll have so much to explain at once).

2. Always write or draw the most important points on the board

If you’re telling the audience how many lives your product will save, or how many 100’s of millions of future customers are lining up at your door step ready to buy (must be hard to sleep at night), then make sure you write this number down (and include the zeros for big numbers — it adds drama as you draw them out, one Cheerio at a time).

And make sure you write the company or product’s name on the board. This is probably the most important thing a viewer should remember, right?

3. Watch game film — in this case, UPS commercials

What can brown do for you? In this case, it can teach you how to give a strong presentation when you’re writing on a board.

The gentle, Bob Ross-with-straight-hair presenter in these commercials (here, here, more here, and here, and on UPS.com here) can teach you a few presentation skills: even though you’re writing on a board, try to do as much talking as possible while facing the audience (people remember faces, not haircuts); draw neatly so that people can concentrate on the message (and not how you scribble like a 3rd grader); and finally, if you’re going to break tip #1 and draw something complex, at least do it right at the beginning so there aren’t interruptions to your flow for the rest of the presentation (the UPS guy gets a head start drawing during the preceding commercial, apparently).

What can whiteboard do for you?

$3,000, at least.

That’s a lot of dry erase markers.

The two topics are

my dad

and

science.

Being Father’s Day, I think it’s an appropriate time to give my father the credit he deserves for being a kick-ass dad.

When I think about what I’ve learned from my dad, one of the most important qualities is that of a scientific mind.

What do you mean, a scientific mind?

First, a little background:

My dad, Larry Zach, is a nature lover by, well… nature. His passion for observing, learning about, and being immersed in the outdoors seems to be innate, according to stories my grandma has told me about him wandering off outside alone while still in a diaper.

He would later (far post-diaper) go on to study fish and wildlife biology and teaching at university and become a middle and high school science teacher for 18 years. He is now a full-time wildlife artist.

More important than his titles and training, though, is the way his mind works, and subsequently, the way I’m wired as well.

So now we can continue with the scientific mind stuff. I think a scientific mind is one that views the world with wonder for its intricate, beautiful, and complicated workings, and with excitement for the challenge and satisfaction of understanding how it all works behind the scenes.

From as young an age as I can remember, my dad instilled in me this appreciation for nature and passion for comprehending its function. He took the time to explain how things worked and often asked me if I could figure it out myself first. He was a science teacher by nature, even outside of the classroom.

Now, I didn’t realize he was teaching me science, or to think scientifically about things, when I was a child. But I did know that I enjoyed it. I enjoyed that, if I thought hard about a question, I had a chance of discovering an answer all on my own. I enjoyed that scientific knowledge is democratic and even at a young age would expose itself for me to grasp.

To me, this scientific framework is invaluable, even in day-to-day life. Walking down the aisle of any health store or past any magazine rack is an exercise in scientific reasoning as claims for “melt away the fat!” or “erase wrinkles overnight!” shout out from the packaging. (I will write a full post soon dedicated to marketing BS, one of my greatest business frustrations.)

As soon as I read a claim, my mind is asking questions: “What evidence, and how much, does such a claim require to be proven true?” “Does the company provide any evidence?” “Does this claim fit within my understanding of how the system (the human body, in this example) works?”

Brian Greene wrote recently an Op-Ed piece for the New York Times titled “Put a Little Science in Your Life”. Here’s a short excerpt from that article:

Science is a way of life. Science is a perspective. Science is the process that takes us from confusion to understanding in a manner that’s precise, predictive and reliable — a transformation, for those lucky enough to experience it, that is empowering and emotional. To be able to think through and grasp explanations — for everything from why the sky is blue to how life formed on earth — not because they are declared dogma but rather because they reveal patterns confirmed by experiment and observation, is one of the most precious of human experiences.

Science is a way of life and a perspective on life for me because of my dad. I am one of those “little scientists” Greene mentions who was lucky enough to grow into a big scientist without losing my intrinsic scientific passion.

But, unfortunately, we do quite poorly as a nation in educating our children with the importance and excitement of science. We scare kids and teenagers away from science before we even take the time to show them why it’s important and how it’s fun. This educational “can’t see the forest for the trees” isn’t a problem unique to science, but it does seem to make science particularly frightening for many children.

I’ll continue working with Greene’s analogy to music education. If you were a 3rd grade teacher and your goal was to encourage as many children as possible to appreciate and participate in music, which teaching method do you think would bring you the best results? in other words, when these same kids graduate high school nine years later, will the ones from group A or group B be the most musically active?

A) Start on Day 1 teaching students the most basic music theory. After all, if they’re going to understand music, they need to start at the beginning with the most fundamental principles. What is the staff? Treble and bass clef? Notes and rests?

B) Start on Day 1 by dividing the class up into competing Rock Bands and playing the entertaining video game during class. Show kids through experiences that music need not be intimidating and that it should be fun to create. Teach kids rhythm and pitch while they don’t even realize they’re learning.

I think we can all imagine, having been kids once too, which method would get us more interested in music as something fun and entertaining instead of the scary material of flash cards. (I should mention that I’m not supporting this claim with research-based evidence, so this is only a hypothesis.)

The same principle apply to science education. The world of science is one that is fascinating in its complexity and awe-inspiring in its scale. We’d do our future generations a favor if we came at science education from the perspective of Indiana Jones, using adventures to portray scientific discovery, rather than our sleepy, classic methods memorizing lists from Astronomy to Zoology.

After all, our fundamental task as educators of the next generation of citizens (all of us — not just parents and teachers), isn’t to force kids to learn as much as they can handle, but to get them so excited about learning that they’ll want to do it by their own interests.

We can give children knowledge while they’re in school, and they’ll have about 12 years worth in their heads when they’re done.

Or we can teach children why knowledge is so exciting and empowering, and they’ll yearn for it the rest of their lives.

This is what I learned from my dad, and is a lesson I’ll pass on one day when I have my own “little scientists” running around the yard.

I love you, Dad. Thanks for everything!

The relatively low risks to launching a new Internet business, compared to physical ventures with higher capital requirements, also leads to exciting, experimental ventures that can afford to launch in a less-than-perfected state and then polish and revise their product as users provide real-world feedback.

But these same qualities that attract attention of aspiring startups, like honey for entrepreneurial bees, also leads to the recurring bubbles and hype that seem inextricably tied to the Internet business world.

The low up-front investment requirements and accompanying cheap maintenance costs lead to ventures with uncertain, and often completely unknown, revenue prospects. But this itself is not the problem. I won’t dispute that a business with hundreds of thousands or millions of passionate users has a realistic possibility of eventually discovering a method to monetize those customers — even if that business model is not apparent up-front.

The problem is that a profit-producing business model is not the only wrench missing from these companies’ strategic toolboxes. On the contrary, some of these ventures are so far from defensible profitability, they’re bringing a standard wrench to a metric party.

Let’s look at Slide, the social network widget company, as an example. In its fourth round of financing, they raised $50 million, valuing the company at around $550 million. They just opened an office in New York City from which to sell more advertising. If you need more background on Slide, read here.

As I said earlier, the problem for Slide isn’t necessarily that they haven’t cracked the humongous money nut that is their 170 million unique monthly viewers. Hearsay evidence says that their CPMs aren’t anything spectacular. But they will probably figure this out eventually.

The problem for Slide isn’t that they don’t already make tons of cash off their sky-high viewership numbers.

The problem for Slide is that they aren’t going to last long enough to solve the business model puzzle.

Let’s grab a few of Michael Porter’s 5 Forces out of the strategic toolbox and start wrenching on the broken machine that is Slide — let’s say, barriers to entry, threat of substitutes, and degree of rivalry, for starters.

Barriers to Entry

The barrier to entry in Slide’s industry, producing widgets for social networks, is like a speed bump in front of a monster truck. The driver might feel it, if he’s sitting just right.

Brand identity:

Almost nonexistent. No user cares who wrote the tool that allows them to chest bump their friends. They just care that they can now do it online and no longer have to risk pecular injury or social embarrassment should their super chest bump end in a super pile of flailing arms and legs.

Capital requirements:

Lunch money. It doesn’t cost anything to put your application on a social network and the network does the hosting for you. You might even have change left over for a rectangular piece of lunchroom pizza.

Threat of substitutes

Switching costs:

Again, almost nonexistent. What keeps me from uninstalling your application from my profile and never using it again? The years of experience I’ve accumulated and deep integration of my workflow with your software? Oh wait, that’s Photoshop. Nope, I can learn a new application in the time it takes to super fart on a friend.

Degree of rivalry

Product differences:

Does Slide possess a unique ability in the industry to design a widget user interface that revolutionizes the marketplace, a la the iPod in a sea of mediocre MP3 players? Nope. Their viewer advantage is due to moving first, network effects, and questionable practices in recruiting users’ friends to add an application. But now that Facebook, for example, has cracked down on runaway app invites and is redesigning the profile page layout, Slide’s previous advantages have melted away like a chocolate bar errantly placed near my laptop’s cooling fan. (I swear it’s about to burn up.)

Now Slide needs to rely on actual product development talent to provide useful, long-term solutions for their customers — not flash-in-the-pan fads, which will never scale into a large, predictable revenue stream. Investing in venture capital is already like gambling. Slide’s investors have either steel balls or empty skulls to want to scale up the risks even greater and bet big on a company, like Slide, whose fortunes ride on something as unpredictable and finicky as consumers’ flavor-of-the-week poking preference.

Not to mention that the social networks themselves can quickly duplicate Slide’s applications on a whim and erase Slide’s business model. The next day, what were the basis of an entire company are now one of a hundred features of someone else’s product.

Sliding into home (aka The Conclusion)

If you’ve made it this far, it’s should be sufficiently clear that the strategic flat tire that will drag many Web 2.0 companies off the information super highway and into the ditch of dot-com blowouts isn’t simply their lack of a business model.

The fact that companies like Slide can build huge viewership numbers isn’t a freestanding sign of success. McDonald’s gives away millions of free toys every year. But with every one, it’s selling a burger-like hockey puck or nuggets that taste like chicken. And making money off of them, too.

Right now, Slide’s products are the equivalent of Happy Meal toys I didn’t ask for. If I show up at Facebook and find a Kung Fu Panda figurine in my Inbox, I’ll probably have fun with it for a while. I might even tell my friends to get one so we can start a big plastic-throwing fight.

But just because you’re good at getting millions of people to play with your free toys for a while doesn’t mean you’re the next Google.

Slide, if you’re listening, remember this:

You need to do something unique and useful.

Uniqueness is different than novelty. Novelty wears off quickly because it’s replaced quickly. Uniqueness comes from solving a problem in a way no one else can.

Usefulness is different than full of users. Making decisions expressly to grow your viewership, when you aren’t making much money off viewers, is aiming at the wrong target. Aim to be useful, first, to just a small number of people, and your audience will grow as everyone realizes your product is indispensable.

Be unique and useful first, and eventually you will find your proverbial chicken-flavored nugget of gold.

The Internet as been creating many opportunities for small companies (including sole proprietors) to act bigger than they could afford in the offline world, and the branding world is no exception.

My client is a successful, talented, and established artist. He is looking for help in differentiating himself from the abundant competition going forward. Considering his openness to innovation and taking a unique path from typical artists, I believe his biggest opportunities for differentiation are not in the content of a future painting but in establishing himself as a brand that encompasses his artwork and extends far beyond it.

This presentation will focus on leveraging the power of the Internet to create a brand with much further reach than could be achieved by an individual offline.

Please feel free to borrow what is useful (as I’ve borrowed from others to create this) and leave any comments if you think I’ve left something out.

I’m particularly looking for some strong examples of small businesses or individuals who’ve created a well-known brand online — ideally outside of the tech industry, to prove that you don’t have to work in tech to use technology to your brand advantage.

OUTLINE

• Why do I need to build a brand?
  • What is the Internet’s role in branding?
  • How does this brand extend into the real world?
• Why build a dialogue and a community?
  • How do I build a dialogue and a community online?
  • How does this extend into the real world?

IN PROGRESS

• What are examples of (personal) brands built online?
• What are examples of dialogues and communities built online?
• What is my brand?

PRESENTATION NOTES

Why do I need to build a brand?

• People do not connect to products or services.
  • They connect to the brand accompanying a product or service.
• Consumers have too many choices — a brand provides differentiation
• Perceived value beyond the basic commodity level is carried in the brand
• The brand is the expectation or promise of value
• A strong brand reduces the need to compete on price alone
• A strong brand gives employees focus and a sense of purpose in their work

What is the Internet’s role in branding?

• It’s easy to be visible on the Internet
  • You are able to publish up-to-date information whenever you want
  • The information is available to anyone with Internet access around the world
• Information on the Internet is largely persistent
  • Once it is created, it exists “forever”
  • A piece of information only has to be published once for it to be communicated continuously
  • Example
    • In the analog world, a story about the inspiration for a print must be told individually to each customer, or broadcast in a newsletter
      • After its initially delivered, its power to impact additional customers falls off quickly
    • In the digital world, the same story is published once but lives onward, easily being forwarded to others, referenced in links, and arrising in search results
      • A larger audience can be reached and in serendipitous ways
• People increasingly look to the Internet first to learn about a company before making a purchase or to answer a question
  • Your website will be the first impression for many potential customers — what do you want it to say about you?
• Digital information is easy to share with others
  • Nothing builds a brand more intimately or effectively than a recommendation from a trusted friend or family member
• Your Internet branding machine is working while you are sleeping
  • You can take a vacation half way around the world to New Zealand, but your brand can still be growing as, for example, a blog post you wrote sparks discussion on a much-debated topic
• The Internet can bring your products to life in a way that is not possible on paper or through words
  • Videos, slideshows, and capturing navigation add interest and depth to information
• Most popular tools for online branding
  • Blogs, online videos (YouTube), social networks (Facebook), websites, email newsletters

How does online branding work offline?

• All content created for online publication can be repurposed for printing or presentations
  • Offer to be a presenter at banquets, art shows, fundraisers, conservation group meetings — anywhere you can share knowledge and be seen by potential customers
  • A blog post forces you to think through an experience, event, activity, or piece of knowledge and put it into words
  • This composed, thoughtful perspective is then prepared next time the topic comes up at a banquet, art show, dinner, or interview
• Writings can be distributed in print magazines and newspapers or with purchases

Why build a dialogue and a community?

• Fans, customers, friends, and colleagues are an important marketing vehicle for your brand
  • What they say about you is crucial to the shaping and publicizing of your brand
• Communicating with people in a dialogue rather than talking at them engages and compells them
  • These people are much more likely to share your brand with their family and friends

How do I build a dialogue and a community online?

• Be yourself
• Be compelling to your audience, open, authentic, consistent, transparent, and well-known
  • People forgive mistakes and differences in opinion when the speaker is sincere and honest
• Share and talk about your own passions
  • The topic won’t have impact if it’s something you don’t love
• Be a teacher
  • Share with people from your unique knowledge and experiences
  • If you give away something of value, the receiver feels valued
• Ask questions
  • To learn what customers want
  • To learn from others’ experiences
• Use your influence
  • Use your name, publicity, and network to reach out and help others
• Be open to contact
  • Publish an email address and answer all emails within 24 hours
• Share a common cause with the community
  • Chances are you share a common passion outside of your business connection with your customers
    • Examples: conservation, environmentalism, green living
  • Designate a place for these people to meet and share ideas and experiences
    • Social network, blog
  • Make it easy for the community to share what they’re doing with their friends and spread the brand

How do I take online dialogue and community offline?

• Meet in-person with customers beyond purchasing decisions
  • Have important, engaged customers visit the studio and see Larry at work
    • They will more than make up for the time required with their recommendations to new customers
  • Talk about more than the artwork when giving presentations
    • What do you care about?
    • People will see who you are as a whole person (your personal brand), not just a painting-creator

What are examples of personal brands?

• Gary Vaynerchuk
  • Took a wine store and made it undeniably unique in personality
  • He does not try to appeal to everyone — that would only water down his brand and his uniqueness
    • He is himself and people appreciate it
  • He gives a face and a personality to what is otherwise an impersonal experience — buying wine online
  • He does all he can to engage with his fans
    • Answers all emails
    • Encourages people to write
• Looking for more great examples! (Particularly outside of the tech industry)

What are examples of dialogues and communities built online?

In progress

What is my brand?

Will work through this exercise with the client

Some sources at which you might take a peak:

The Brand Gap

First Impressions, Marketing, Brand, and Participants