Category Archives: Technology

Does the Kindle Tell You Something About Your Pricing?

Economics, Technology,

While I tend to think pricing too low is one of the most common mistakes in small business, there’s still something to be said for finding the pricing sweet spot.

Sometimes elasticity works. For example, in Amazon says it has sold millions of Kindles This Quarter, Business Insider notes:

Amazon [says it] has “already sold millions of our all-new Kindles.”

That suggests that Amazon has sold at least 2 million of the devices this quarter, and perhaps many more.

That’s “more Kindles than we sold during all of 2009,” Amazon’s supposed rep also writes.

Which proves once again, I suppose, that pricing is still magic. If you search for  Amazon Kindle is overpriced on Google you get a flurry of blog posts and business pundits saying just that … but almost all of them from 2007-2009 when it came out at $399 and then sold for a long time at $299. Now that it’s down to $139, nobody is saying that.

In standard economics, elasticity has to do with price and volume: the more elastic a product is, the greater the increase in sales volume for every unit of decrease in price. Pretty obvious, right? But no, actually, at least not always. Some things are more elastic than others. Think for a second about cheap sushi, for example. Would day-old sushi sell well? How about discount dentistry?

And then there’s this: theoretically, to break even on the price drop, amazon.com has to sell 2.15 kindles at $139 for every one kindle they would have sold at $299.  What do you think? I think they’ve hit a price sweet spot, low enough to attract a lot more buyers. Also, I think there’s another factor in the equation, because those higher-volume Kindles get manufactured for a lot lower unit price.

What do you think? Does this tell you anything about your business?

Twitter is the Brush, Not the Painting

Marketing, Social media, Technology, Twitter, ,

On one hand, twitter offers a positive change in business landscape, a brave new world of business possibilities, and you’re crazy to ignore it. On the other, it’s just a distraction, a shiny new thing, that gets in the way of the real business.

Can both hands be right? Yes.

The one hand: I spend hours every day now watching, playing, posting, and reading twitter.  That’s gotten me mentions in Business Week and The New York Times. I find myself speaking up for social media on public forums, spouting phrases like “changing business landscape” and “you’re crazy to ignore it” and “great new low-cost road to market” or “marketing tool.” Twitter is essential to my blogging. Its a window to what’s going on and who’s doing and saying what.  It’s great for my business.

The other hand: You can use it to send useless text clutter to nobody. You can use it to pretend you’re working when you’re just watching the world go by in cute sayings, headlines, and interesting pictures. It can be a total waste of business time.

The synthesis: Twitter is the brush, not the painting. It’s a tool for a new kind of self publishing with a different kind of reach. Talk of business benefits of Twitter are like talk of business benefits of the telephone, or of conversation, or of advertising. It’s all in how you use it. Who or what are you trying to be in Twitter, and what does that have to do with your identity, your message, your business, your self.

Tools enhance power. What matters is not the tool, but what you do with it.

(Image: enhanced from a photo by Victures/Shutterstock)

Why Would You Ever Make a Cold Call Again?

Marketing, Social media, Technology, ,

This interesting exchange comes from a NYTimes interview with Eric Lefkofsky, 40-year-old founder of groupon, serial entrepreneur, who Forbes says is worth about $750 million. The interviewer asks him: Do you think that every business needs to rethink what social media means to its future? He answers:

Today, I think that every business is again in serious flux because of the rise of all these social tools. Take telemarketing sales, for example. Why would your business ever make a cold call again?

When pressed, in follow-up questions, Eric insists that “every business that wants customers” needs to look at social media.

Sure, it turns out, by the bottom of the interview that he’s invested in a tool to help businesses manage social media, so his views are a bit like me insisting that every company needs better business planning. Still, it’s an interesting view, from a very successful Internet entrepreneur. And it makes good sense to me.

For the full interview, here’s the link:

Eric Lefkofsky, Groupon Founder, on Why Social Media Is Hot – NYTimes.com

What Does Creativity Have to Do With Business?

Creativity, Reflections, Technology, Web/Tech, , , ,

What does creativity have to do with business? Business is about dollars and deadlines and suits, while creativity is about nerds and long hair and artsy-fartsy. Or is it?

As the digital technology revolution matures, it is becoming more about creativity and less about engineering.

That’s quoting Fred Wilson, venture capitalist and thought leader, in The Creative Phase last Saturday on his excellent A VC blog. This seems important to me:

Why the distinction between engineering and creativity? Can’t engineers be creative. Of course they can and are. Maybe there is a better word to use. But what I am trying to delineate between is the hard work of designing and building systems and the more abstract efforts to entertain, educate, and emote with these systems.

Looking over New York’s technology scene, he quotes an analysis that notes that New York University’s Interactive Telecommunications Program (ITP), a two-year graduate program in technology, is part of NYU’s Tisch School of the Arts, not the corresponding school of engineering, much less business.

Was it accidental or intentional the ITP was located in an arts school? I don’t know. I should find out. But regardless of why it was done that way, the result has been impactful. ITP churns out talented people who are half engineer, half artist. And the things they build reflect that view of the world.

Of course generalizations are dangerous, Success isn’t creativity vs. engineering; it’s different for every case. There’s also showing up, luck, hard work, and of course marketing and so many other factors. But I think it’s important to jar our assumptions a bit. Fred Wilson’s nod to “abstract efforts to entertain, educate, and emote”  reminds me on my favorite quote about software, from Stuart Alsop: “Good software feels like silk. You know it when you see it.”

And this all reminds me that some serious portion of what we now call the great works of art – all of Shakespeare’s plays, for example – were created by people who were doing it for the money.  It wasn’t the business of art, it was that good art was good business.

I think about some of my favorite tech products: software I use, websites … isn’t Google Earth, for example, more art than engineering? The original Macintosh? Even – and you’ll have to forgive me for this one, but I do love spreadsheets – the first VisiCalc?

When Patents Are Patently Absurd

Current Affairs, Technology, , , ,

Is Paul Allen a patent troll now? The same Paul Allen that was Bill Gates’ partner in Microsoft? Paul Allen who is worth billions of dollars?

Oh no. Say it ain’t so.

Last week wired.com reported Paul Allen Files Patent Lawsuits Against Entire Web … Except Microsoft. Allen, Bill Gates’ original partner in Microsoft, and an extremely wealthy man, is suing nearly everybody who is anybody on the internet (“Google, Apple, Yahoo, Netflix, Facebook, AOL and eBay, among others”) because he has the patent. Wired said:

The four patents at issue allegedly cover basics of online commerce including recommending products to a user based on what they are currently looking at and allowing readers of a news story to see other stories based on the current one, while two others relate to showing other information on a web page such as news updates or stock quotes.

I am not one of those people who – quoting Joel Stein’s latest column in Time – “want everything to be free except what they happen to do to make a living.”

But I do think the patent system is broken. The system was unable to keep up with technology, so patents were issued that made no sense. And patent trolls take advantage.

Wikipedia defines patent troll:

a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic, often with no intention to manufacture or market the patented invention.

Of course people should get to own their own work. If you invent something really useful, like a light bulb or a phonograph or a plane, or a disk drive or a new kind of scanner, you should get to make a ton of money with it.

But who issued these patents? Wasn’t this all fairly obvious? These are ideas, not inventions. And who the hell knows who was the first to have an idea? And do we reward the first to patent it, when it shouldn’t have been patented in the first place? That’s just dumb.

Disclosure: I’m biased. I’ve been close to two different stupid patent suits where somebody took obvious technology and connected it to some dumb old existing patent and sued. And it was cheaper to pay up than fight. So, business is business, the trolls won.

Also, I’m hoping Paul Allen is actually just intending to make a point. If I remember it right, amazon.com had a patent for one-click purchasing, and they brought it up, made their point, and then behaved like decent citizens (do I have that wrong? If so, please tell me.) And I think Compuserve had a claim on the GIF graphic format, and didn’t insist on pursuing it. Maybe that’s what’s happening here.

I hope so.

And I’d like to credit Read/Write Web and cartoonist Rob Cottingham for the cartoon here. It’s from Cartoon: So Sue Me on Read/Write Web.

(Image credit: from Read/Write Web: click here for that post.)

Your Brain on Drugs? No, Your Brain on Computers.

Personal Productivity, Technology, Web/Tech,

Remember the “your brain on drugs” commercials? You’d see the egg frying in the pan, and then the announcer’s voice would say “this is your brain on drugs.” What do you think of the Your Brain on Computers take on this?  It makes it sound almost as bad as your brain on drugs.

That brain on computers theme is from the New York Times piece earlier this week, with the full and scary title:  Your Brain on Computers – Overuse of Digital Devices May Lead to Brain Fatigue. This is not a pretty picture, but it’s the New York Times.  And it cites research. So we have to believe it. Have to.

Author Matt Richtel (of the San Francisco bureau, of course, part of the Silicon Valley … everybody is petting their phones constantly) notes how people fill every last minute with connection. Waiting in line, exercising, they are also checking email or linking somewhere on their phones. He warns (with research studies to cite):

The technology makes the tiniest windows of time entertaining, and potentially productive. But scientists point to an unanticipated side effect: when people keep their brains busy with digital input, they are forfeiting downtime that could allow them to better learn and remember information, or come up with new ideas.

Me, I hate waiting in lines. No, come to think of it, make that HATE waiting in lines, with more emphasis. If I get trapped waiting for something, anything, I’ve got my phone in an instant. If I run out of email, then there’s twitter, or, if I’m really desperate, that novel I’ve been reading. 

But studies, or so says this story, indicate that it’s not that simple. I should breath deeply and reflect on things, absorb things, maybe – God help us all – think. Here’s another quote:

Almost certainly, downtime lets the brain go over experiences it’s had, solidify them and turn them into permanent long-term memories,” said Loren Frank, assistant professor in the department of physiology at the university [of California], where he specializes in learning and memory. He said he believed that when the brain was constantly stimulated, “you prevent this learning process.

This would have worried me, if I’d stopped to think about it. Instead, I turned to my phone to check email.

(Image credit: Roman Sigaev/Shutterstock)

5 Reasons Not To Build That Online Community

Social media, Technology, Web/Tech,

Trends? “Let’s develop a community,” they say, meaning an online community. Search google for let’s develop a community and you get 23 million hits. You tell me: is there a marketing meeting brainstorming web opportunities that doesn’t include an online community?

So, contrarian hat on my head, I want to list some reasons not to develop that online community you and your team have been talking about. I don’t want to be negative … but still …

1. So many communities already.

How many logins can anybody manage? We’re lost in a sea of communities. Each assumes we’re going to log in regularly, check messages, look around, see what’s new, respond to people, and interact. Realistically, though, how many times are you going to do that in a single day?

We’re dealing with several hundred already-established social media communities. There’s Twitter and Facebook and LinkedIn, plus all those others. And then there are those school sites, alumni sites, home town sites, media sites, fan sites, in sites, over sites, and hind sites … never ending. Who can deal with that?

2. Ning, a cool idea, grows up. And gives up Free.

Do you know Ning? One of Marc Andreeson’s brainchildren, it produced hundreds of millions of dollars for its founders, and countless similar-look-and-feel community sites that all did one version or another of community, with log-in, profiles, friending, posting, and so on.

I’ve had notice in recent weeks as one after another of those sites closes shop. Ning is focused on the corporate enterprise market, where there’s money to be billed. And all of those community sites were competing with all of the other ones for your and my limited time available. It wasn’t working.

3. Oh the spam! The never-ending spam!

I’ve been involved with maybe half a dozen serious efforts by major business media and related organizations to build an online community of entrepreneurs, small business owners, and assorted interested parties. I won’t mention names here because I’m involved with most of them, like the people, would like them to work; but they don’t.

The self-serving shallow sales message, some of them thinly disguised, most of them blatant, end up flooding these sites like sewage from a failed treatment plant. Who wants to look at messages when they’re all that? The supposed or alleged interaction, the likes and votes and all, are similarly polluted with commercial sludge. It’s a shame, but it’s also reality.

4. Those disappointing messages.

The business community sites are also flooded with messages that ask authors and experts to summarize, presumably in a couple of paragraphs or so, the thousands of pages already published on that same topic. I know these people mean well, and I like to answer questions. But it would be a lot nicer if they’d look at the site they’re on first, rather than just asking for a three paragraph summary of 50 good pieces already posted.

I get it. They’d like to have it all in a personal message. But it isn’t really that simple. It takes reading all the ins and outs and on the other hands. So that email doesn’t work. And the authors who get it are disappointed, because they thought they’d already answered that question, and put it on the web where people could get it.

5. The molten lava landscape is cooling into solid ground.

I doubt it’s coincidence that two of the three Ning sites I think of first are giving up the Ning model and moving over to Facebook like instead. It’s human ability to support so many different motifs that ends up pushing us all towards a few big ones. With Twitter, Facebook, and LinkedIn, we have consolidated logins, comments, links, suggestions, and updates.

It seems to happen a lot. The winners emerge, the also-rans fade, and the business landscape solidifies.

Please, don’t do that online community you were thinking of.

Do, however, focus on one or more of the already-existing online communities and make it work for you, and your business.

iPhone, Luvya and All That, but Couldya Clean This Up?

Software, Technology, ,

It’s not like I don’t know how to read around this, but with all the slickness of the iPhone, iPhone Weatherwhy allow this simple error? The high for the day is 92 degrees when the current temperature is 100 degrees? Isn’t that just sloppy?

There is no computer language that doesn’t have an IF- THEN clause capable of making this look good. Call the high temperature that was there when we started the day H, and the actual temperature A. I don’t program iPhones but whoever does has the ability to do this:

If A > H, then H = A

Which would replace the 92 with the 100. Why not? Wouldn’t that look better? What bothers me is my own in-my-mind related if-clause:

If a logical error like this one, as obvious as this one is, shows up in this obvious a place, what’s going on with the system software in the core?

Software does have its production values, and it’s not like Apple Computer doesn’t have the resources. My guess is they’ve decided to let us keep the predicted high as a reference value, so we can compare it to the actual. Still, is it just me?

Graphic Evidence of What We Value Most

Current Affairs, Economics, Technology, Web/Tech, , , ,

Like it or not, your real priority, my real priority, our society’s real priority shows up not in what we say but in how we spend our resources, including, of course, how we spend our time. Time is the scarcest resource.

Author David McCandless at Information is Beautiful called it Cognitive Surplus Visualized in honor of Clay Shirky’s Ted Talk.  I don’t love the phrase “cognitive surplus,” but I do get the point. And this chart speaks for itself. Well done.

Business Chart

When I see those two boxes, I can’t help thinking how huge the effort of Wikipedia; how much is there, information on how many different topics, how many people it took, and how many hours it took. Then I compare it to the big box next to it.

With or Without Paper, the News Lives On. I hope.

Journalism, Technology, Weblogs, , , , , , , , ,

As the newspaper business seems to die slowly, I console myself with the idea that journalism isn’t dying with it. The Huffington Post is booming. The New York Times will bring in about $350 million this year. The new iPad shows us how we can spread the paper in front of us with coffee and a newspaper in the morning. There’s hope. They capped the stupid oil spill overnight. Maybe they’ll cap the journalism spill too. Eventually.

I wish I knew who I’m quoting here, but I don’t. Somebody mentioned this quote to me recently:

I don’t care about newspapers. I do care about journalism.

iPad NewsWhat if news didn’t come on mashed-up trees? What if it came online instead? What if the iPad is the future of the daily newspaper? I can still sit with my coffee and page through the news. Sort of.

Can we survive with a few big online news organizations, but no newspapers?

In that case, who’s going to cover the city council meeting? Who’s going to spend months doing investigative reporting? And who’s going to pay the salaries of the people spending months on investigative reporting?

Meanwhile the Huffington Post, by far the most successful news business of the last half decade, is paying journalists full time incomes to develop the news. They have a handful of their own correspondents. That’s not the answer to those questions, but it is a start.

And I read this morning on TechCrunch how Ex-Google News, Bing Engineers Set Out To Build ‘Newspaper Of The Future’. Oh the irony: my stream of consciousness goes from TechCrunch to blogs to declining print advertising to slow death of newspapers; and I read about it in TechCrunch.

And, then, without hesitation, I signed up for both the apps mentioned, Apollo and Pulse, to go with my New York Times, Huffington Post, CNN, USA Today, Wall Street Journal, NPR, and SkyGrid. So it’s not like I won’t have news. And local news? That icon in the lower left of my iPad picture above is the Eugene Register Guard, which is my local newspaper. Now, as long as the local paper can figure out how to survive on its online revenues … sigh…

No, I’m not suggesting the iPad is the big answer or magic solution. It’s mostly just a good illustration. This is a long-term change of worldwide news landscape, and the iPad is significant here because this is how things are going to be. The iPad will have good competition soon enough. Let’s hope it does, and that the competition generates money for news organizations, so that the journalism survives.