Free Association

Free market solution to terrorism

I've been away on vacation (Portugal, London, and New Jersey [down the shore]) and busy working on several start-ups in various stages of incubation. As a result I haven't blogged in awhile. I'm back for the 10 people who care. :-)

Lots of conversations in the world and in the blogosphere about Global Warming. This interesting speech by author Michael Crichton got me thinking. He's a fascinating guy. He wrote an autobiography (called "Travels" as I recall) which I read years ago. He's almost 7 feet tall (which most people don't know), he climbed Mount Everest, among other things. Anyway, this speech is a bit sobering regarding our intense stupidity when it comes to understanding the complex system that is the world. He points out some interesting past calls of gloom and doom that never came to pass. He now turns his focus to Global Warming.

My view is that we should act to move away faster from fossil fuels and from all carbon-based fuels (like ethanol and methanol) as well if possible, as I agree the preponderance of evidence is that Global Warming is indeed real. No matter whether human activity is the cause or not, burning fossil fuels does release lots of earth warming molecules (greenhouse gases) and alternatives should be found. But that is a difficult decision to make economically. Changing the entire US and World energy economy away from oil is not going to happen easily, quickly or cheaply. It is literally a multi-trillion dollar infrastructure. Nonetheless, I believe it is time to begin to act as quickly as possible. Government change is almost always the least efficient means to effect change. Free markets are almost always the best means.

But there are other motives for change that have nothing to do with Global Warming that are now driving the innovation that is change.

 

Perhaps the most ironic motive for change is what's happening in the Middle East. A move away from an oil economy would weaken terrorists, removing the source of their funding and (except for Israel) remove many "US interests in the region" that cause us to try and police this volatile and backward region of the world.

The good news, and yet another irony for me is that the instability in the Middle East (some caused by us, much of it not) has caused an historic rise in the price of oil. This has in turn caused the price of gasoline to spike. This has then made alternative fuel sources - previously too costly to explore - more economically viable in the marketplace. I like to think that the terrorists, being human, have underestimated the complex systems of their regions natural resource, oil, and have unwittingly put into play a market driver to move away from oil - and away from their financial lifeline. Without oil revenues, within 10 years the Middle East will descend into poverty.

Ironic eh? The ingenuity of entrepreneurs in all the free nations of the world, including America, now have economic incentive to solve this problem and make lots of money for themselves. More ironic still, even the oil companies (re-investing their record profits) are now incentivized to look for alternative fuels. Unfortunately they are looking to mining domestic oil shale - rather than renewable sources - but that's free markets for you.

I believe that high oil prices - and they just keep climbing - are the key driver for our free markets to create profitable solutions. Still this will take time. My belief is that this, using free market drivers and American ingenuity, is the key that will solve this problem, forever. Whether or not it's too late, and we've past a tipping point to stop global climate change, is something we won't know for a generation, maybe more. That die is cast.

Lost Commercial Clue - Week 2

Well they're still at it - good for them. The folks at ABC's Lost ran another Hanso Commercial last night on the show, I blogged about the first one here. It happens around the 56 min. mark of the show - both last week and this week. This week the URL is www.letyourcompassguideyou.com and the phone number is 1-877-HANSORG. I suspect that the discussion early in the show between Michael and his son, where he told his Dad to go North, is somehow a clue. If you'll recall, during one of the flashbacks Michael pulled out a compass. I included a screenshot from my TiVo (via my Slingbox) cool eh? Enjoy. This is certainly an inventive and entertaining add on to this addictive show. I applaud the marketers at ABC. Way to go. I don't have time to chase all the clues, but I do enjoy the game.

Follow on: Corporate IT is stifling innovation

Joe Lamantia writes about "the death of Enterprise Software". Why is Enterprise Software dead? From an innovators perspective - why sink years of your life, and millions in investor dollars to build great solutions for buyers who don't want innovations from third parties? Right.

A quote from Joe: "It's no surprise then that 'enterprise software' as it is installed and configured in many large corporations is generally massive, anonymous, byzantine in structure and workings, indifferent or hostile to individual needs, offensively neutured in all aspects of it's user experience, and often changed arbitrarily to align with a power calculus determined by a select few who operate at great remove from the majority of the people who use the environment on a daily basis. After all, that is the nature of communication in many large (and quite a few small and medium sized) corporations."

Right on.

Corporate IT is stifling innovation

“Little men with little minds and little imaginations go through life in little ruts, smugly resisting all changes which would jar their little worlds”

- Zig Ziglar quotes (American motivational Speaker and Author)

This seems the perfect quote, bitter as it is, to describe my encounters with the gatekeepers of technology in American Corporations - Corporate IT staff. I've waited to write about this phenomenon for more than a year since my company was sold - not wanting to simply be squeezing sour grapes. But the time has come - enough time has passed - that I air this grievance. I don't expect it will make any difference - other than to get it off my chest - but here goes.

The gatekeepers, and stiflers of innovation reside within the IT offices of American Corporations. Entrusted with protecting the security of what is, to most senior executives, a dizzying array of technological assets within the Corporation - IT has invented and nurtured internal FUD (Fear, Uncertainty, and Doubt) within their companies as a shield against outside solutions. IT has become lazy, insular, and resistant to innovations which could save millions of dollars for their company - and in the process has harmed shareholder value more than any other single group within Corporate America. It is shameful.

Valuable innovations have been shunned for no good reason. But in the end, innovations have been resisted simply because fear is easy to create. This fear is a shroud that hides the real problem: Laziness. Corporate IT has not been held accountable, has been given free reign to "protect the security of the company", and as a result has become fat, and lazy, costing untold billions of dollars in shareholder value. It has to end.

If IT is the problem, strong senior IT executives are the solution. We must build an environment where change is embraced, even rewarded. Where risk is encouraged - managed, but encouraged. The only way to reward this behavior is to set incentives properly. Those who take no risks must not be rewarded. Incremental change is not enough.

A massive technological shift has happened in the last decade - with stunning economies being achieved through the innovative use of web technologies - but most of these economies have never penetrated Corporate IT. For proof, simply look at the plummeting cost of creating a start-up and the persistent legacy problem in Corporate IT. Why have many of these economies never reached Corporate IT? Fear is easier than risk. IT asks for funding to build the solution, doesn't get it (after all innovation is expensive, and often not best done internally), so IT throws up it's hands and manages the legacy, ad infinitum. Third-party solutions abound at a fraction of the cost, but often are not embraced. It's easier to simply take a paycheck, manage the legacy, and wait for retirement. Shameful.

If you were a CEO, obsessed with shareholder value (which remember is really just shorthand for increased revenue, and decreased cost) and I told you that with the insertion of a software application into your business process, a reduction of 30% in the cost of customer care could be achieved? Now remember, customer care is often the largest single expense item in a Corporate budget - accounting for hundreds of millions of dollars in annual cost for almost all Fortune 500 companies. If you were this CXO what would you say? "How" is what you'd say. So I'd tell you, and let's say that you're convinced. What do you do next? You call in Corporate IT - who understands your technical environments - and ask them to get this going. If you've ever sold entreprise software, you know what happens next.

Nothing.

FUD, and then nothing. The CXO who's sponsoring this initiative comes back into the room, and asks what's the problem? The answer - 'Er, um, well, this solution is 'not how we do it', or is 'too risky', and the blanket indictment - i't's an ASP, and all ASP's are too risky'. Or my favorite,  'it's insecure because it lives outside our firewall'. Firewall has become a catch-all innoculation term that IT uses to wield off innovation. Firewall - it's such a perfect word. Without a firewall, what would happen? Well, the business would burn down right? A fire would start? Seems simple enough. Shameful.

In 6 years, and literally hundreds of sales presentations with American Corporations, I can't tell you how often this scenario has played itself out. I know many entrepreneurs who have solutions to sell to Corporate IT, who find this same problem. They don't speak out for the same reason I didn't. Criticizing the king, the gatekeeper, is likely to get you beheaded, or at least barred from entry. But this king has no clothes. It's shameful, wasteful, expensive, counter-productive, and it needs to stop.

Are you guilty of doing this?

Would you like an ad with your tea?

Every once in awhile a technology comes along that changes everything. Often everyone notices. Think Bell and the phone or Edison and the phonograph. But often no one notices for awhile. The web was this way, and so was blogging. Skeptics thought these were fads that would fade. Instead these technologies have empowered millions and are transforming industries. Tectonically so.

I believe there are many new technologies that posses this transformational power, and the speed of such change is increasing. As I examine various business models in search of my next business I have noticed a trend that I believe posseses this transformational potential. That trend is advertising.

Evolving advertising is playing a role in most industries in some way. Think about it.

- Television was built as a vehicle for ads. TiVo and DVRs in general have threatened that ecosystem and networks react, finally distributing their content online (with unskippable ads) but otherwise free.

- Yahoo! Creates a dominant business model as a portal. Google comes along and steals their market with what? Right a better ad model in the form of AdSense.

- Telcos create an $8B industry in 411 calls fielding millions of calls annually at a cost of $1 - $2 per call. Along comes 1-800-Free411 and shakes up that industry with what? Right an ad model. City? State? Listing? Hear an ad, get your phone number.

And myriad other examples. Can it be long before ad models invade other industries? How about ad-based music? Buy a CD, or download it from iTunes for free with an array of 10 second ads that run for the first 50 plays. After that, no ads. You don't want ads you say? No problem, just pay 99 cents.

You can think of more and better examples right? Write it down. That's the beginning of a business plan.

Lost commercial clues

So did you see the "hint" in a commercial during lost? I did, although I caught it while I was fast-forwarding on my TiVo. Oops, not what was supposed to happen right ABC? I was supposed to actually watch commercials to look for clues. Well I did for a while, but I got bored and started fast-forwarding again.

I saw a "Hanso Foundation" logo flash by, so I stopped and rewound the TiVo. Sure enough, a commercial for the Hanso Foundation - the group that Eko and John (characters on Lost) were just watching a yet another videotape.

The Hanso ad told you to go to www.sublymonal.com - where you can find some cryptic clues, the get taken to the Hanso foundation website - where you have to figure out how to login. Whatever - too cryptic and boring for me. Like some bizarre version of Myst - where you have to figure out clues with almost no idea how. I'm sure it's fun for some but not for me. There was also an 877 number to call - I forget. It was an ad placement opportunity for Monster.com and Verizon Voicemail System. Lots more cryptic voicemail clues - again, whatever. I'll just watch the show...and skip the commercials with my nifty TiVo - thank you very much.

Nice try though ABC - keep at it, something's bound to work. The almost complete silence in the blogosphere on this topic, makes me think that I am not the only one yawning.

TV networks get a clue

Well it finally happened - TV networks have finally gotten a clue. Welcome to the 21st Century guys. Last week ABC took the plunge and started webcasting it's most popular shows online. Anyone with a broadband connection can watch an episode they missed online. The shows have only one, rotating, sponsor with limited commercial breaks - but the breaks cannot be fast-forward through. Good. I'll gladly watch a few short commercials to keep up with a show I missed, and somehow also missed recording on my TiVo.

This week, ABC goes further by embedding clues to the addictive show "Lost" in the commercials that run during the broadcast. Here's a quote on that "duh" move from ABC.

"To find the new adventure, you must watch the show's entire Wednesday episode. TiVo and DVR users be warned: There are clues in the commercials as well. "It's TiVo-proof," Benson said. "We will surprise the audience with where and how things are placed as far as clues and content and information. The whole experience is designed to dig deep and find lots of interesting stuff."

Well it's about time. And not to be too snotty...so "bravo ABC". It's brave to finally move away from what has worked so well for so long. Commercial TV has worked for decades, and it's easy for large companies to keep their heads in the sand.

Being a TiVo owner I don't mind this at all. I'll watch commercials if they're interesting. And especially if they help me figure out what the hell is going on with Michael upon his return to the hatch!! Poor Hurley - so close to some good lovin'.  There's more to do here guys, so keep plugging, innovating, and we'll keep watching.

India and Driving

One of the things India is going to have to address if it is going to become a true global power, is traffic law - and law enforcement in general. If the broken windows theories in Malcolm Gladwell's book Tipping Point are correct, then I would think it follows that the chaos of traffic will eventually slow the progress of the nation.

When I visited India in 2004 I witnessed the aftermath of several head-on collisions - one that happened on the road I was traveling, while I was taking a 15 minute break at a roadside area. It was horrific. We hired a driver while there to take us from Delhi to Rishikesh in the north of the country. It was truly one of the most harrowing experiences of my life - with what felt like a thousand close calls an hour. Awful. This video from YouTube is a microcosm of the complete and utter chaos of Indian streets, and as speeds increase you can only imagine how deadly it can get.

Fantastic Site

I stumbled across a site called TerraPass that really blew me away. By purchasing a so-called TerraPass at a cost equivalent to your car's annual emissions (mine was $150. but most are less), you are guaranteed to reduce Carbon Dioxide emissions elsewhere in the world by that amount. It's a fabulous idea, and I joined. If the US government wants to really do something about Global Warming - mandating this for all US cars - or even just for all SUVs would be a great start. That and funding alternative fuel research and moving toward energy independence is something we must do.

Six Degrees? How about one?

Weird Six Degrees feeling  for me this morning seeing Brad Feld (Colorado) post on his blog about Josh Kopelman (Philadelphia). In the mid-90's I worked for the CTO of Infonautics - a company Josh Kopelman founded. Josh went on to start several other Internet companies, including Half.com, which was underway (albeit in stealth mode) when I left Infonautics in 1999 to start my company, Finali. Brad Feld was one of the VC investors in Finali. As a matter of fact, although we don't know each other well Josh and I exchanged a couple of emails when Finali and Half.com were founded within weeks of one another in 1999.

Weird to see your disconnected past come together like that. Six degrees? How about one?