Thursday, March 8, 2018

The circle of life - From MTV to YouTube and Sears and Roebuck to Amazon.

MTV was made possible by the advent of cable television, just as YouTube was born out of the Internet. The idea was to show music videos from popular artists. They were like a radio station for videos. But ratings didn’t hold up. They decided to add shows not related to music at all, and some that one could maybe stretch a connection to the music world to, but fewer and fewer actual music videos. It looked like that particular form of entertainment was dead.

Not so fast. Here comes Vevo and YouTube. Now, not only can you watch music videos on your phone, computer, TV, laptop, whatever, but you get to pick the artists, songs, genres, and compile them in playlists with no annoying DJ breaking in to tell you about the time he/she met Beck. Yes you have the occasional commercial, but you have the option of skipping it most of the time, or you can pay a premium and have no commercials at all. Not only did music videos not die, they’re thriving.

Sears and Roebuck was once a place you could go and look at a lot of great products. Some were for sale, but most were on display so that you could evaluate and hopefully order them. They also did catalog sales. They had great products. So much so that people were willing to order them and wait for days or weeks for the product to arrive. They gradually got away from the catalog/showroom model and expanded store floor space to accommodate inventory. They got into the same game as Walmart and Target and took a beating. It remains to be seen if Sears will survive. Their rival in the catalog/showroom retail biz also crashed and burned; Montgomery Wards. The business model just seems obsolete.

But wait, along comes Amazon. Amazon is the ultimate catalog store. Delivery is faster, but the model is much the same, and as Walmart, Amazon, Target and others battle it out, it’s becoming clear that the future of retail is a hybrid that includes a physical showroom/pick up location as well as online catalog of quality products. The catalog/showroom model is not obsolete, in fact, it’s probably the future.

There are other examples. The way Kodak went down in flames you’d think nobody takes pictures any more. Nothing could be further from he truth. So where did these companies take a wrong turn? I believe a key factor is consumer choice.

Behavior studies have shown that people don’t like to be restricted (most people I should say). When presented with limitation, they tend to push back against it. In the case of MTV, yes they offered music videos of all genres, but you didn’t get to pick the time, the genre or the video. You had to watch what they were playing. When a model came along that allowed the user to choose, people flocked to it. In the case of Sears, bringing inventory into physical stores necessitates limiting choice. It’s also expensive when you’re selling large, heavy items like appliances and tools. Online retailers can offer a huge selection of products from countless different companies. They can ship to your house or to a store for pick up. Consumers can’t get enough of it. Kodak was very late to the game in digital imaging. People love taking and sharing pictures, but evidently, that’s not how Kodak defined their business. They thought they were in the film and camera business. Oops.

The take away is that people’s interests haven’t changed so much as the products and services available to address them has. As a business owner or manager, stay alert to new choices in the market. Pay attention to your competitors. Don’t get defensive, get inquisitive. Is there a different, better way to provide what you provide? Are you sure you’re clear about what it is you provide? Why do customers come to you? How can you do it better? If you don’t find the answers to these questions, somebody else will. Viva la market.

Tuesday, October 10, 2017

The AI Revolution is coming, and it's going to be cool.

You've probably heard the dire warnings about Aritificial Intelligence displacing a lot of jobs or even taking over the world.

AI is going to cause market disruption, as it introduces amazing new levers of productivity and saves countless man hours of labor. That doesn't mean opportunities for employment and entrepreneurship are going to dry up. In fact, it's more likely they'll multiply.

AI will allow your devices to update and optimize themselves, without the need for additional software, patches or even a connection to the Internet. Your phone's operating system, for example, may be the same as everyone else's when it leaves the factory. But after a short time of use, it will adjust to any issues that specifically come up for you as you use it. It will optimize itself based on the way you use it. It will identify and take out malware on its own. Of course you can always reset to factory defaults, but in the meantime, your phone's operating system will be unique, just like you.
There could also be software forums that are actual software forums, literally. You would opt in to a cloud based service and your devices software could share information and experiences with similar software that may have encountered similar issues with more or less success. They could exchange bits of software like bacteria exchange genetic information.  Yes, your devices software could have their own social pages.

That's just scratching the surface. It will get even weirder, I'm sure. But is it anything to worry about? On the contrary. It's something to get excited about. Computers can process massive amounts of data in short periods of time. They can do so objectively, without rest or emotion, and they can compare results of processes to set goals, then make adjustments according to whether the most recent operation was more or less successful than the one before. Calculations and problem solving in areas that can be boiled down to math problems is an area that humans will not be able to beat computers at, and that's okay.

Computers and smart devices execute for the user. It is the user that defines the task and sets the parameters (defines what success means). You'll want to set the bar ridiculously high. If your device actually meets your goal, it'll stop improving, so you want to make the target impossibly ideal, or very close. What you can do that your device cannot is change the goals, add goals, subtract goals or tasks, redefine what success means in one area or another, and you don't have to have a rational explanation for any of it. Your device exists to help you get what you want. Your role is to figure out what you want.

We can make highly intelligent machines, but we cannot give them free will. Will they ever develop free will? I don't know, but free will is more than looking human and mimicking human body language and voice inflection. You'll know it's time to worry when your autonomous transportation pod decides it doesn't want to cart you around anymore, runs away from home and gets a job delivering oranges cross country for the black market. Unless/until that happens, it may be time to start thinking along the lines of "If I didn't have to do anything, what would I do?" That's the real promise of AI. Bring it on!

Monday, March 23, 2015

Are you Feeling Under Appreciated?

It’s a common ailment that afflicts employees and self-employed business owners alike. You feel like your boss or your customers don’t appreciate your hard work and effort enough. It can cause one to become resentful, bitter, angry, stressed out. Don’t ignore it. Fix it.

Now if you’re making good money and you’re still feeling under appreciated, you’ve got a different issue. But for most, under appreciated means under compensated. The thing that makes you bitter, resentful, stressed out, is the idea of having to ask for more money, or a promotion, or having to explain that you raised your rates/prices to a regular customer. Those feelings are as normal as they are counter-productive.

“But they should see how hard I’m working. I shouldn’t have to ask.” Take it up with the Master of the Universe next time you see him/her. In the meantime, deal with reality. If you want more compensation, you’re going to have to ask for it. I know that’s much easier said than done, especially if you’re not accustomed to it. Don’t be afraid to practice on a friend or family member or even in front of a mirror.

It’s only really tough the first time. It get’s easier. After all, you’re only asking for what you believe is fair. That’s quite reasonable. Of course you’ll meet resistance. Nobody wants to pay more, but if you’re dealing with reasonable people, you can usually reach a reasonable solution. If you don’t,  start shopping around (caveat: don’t lay down ultimatums like “I’ll quit” unless you are thoroughly ready to do just that). I can’t guarantee that your boss will give you a raise when you ask for it, but I can guarantee they’ll start thinking about it as soon as you ask for it, and in most cases, if you don’t ask, they’re going to be very comfortable assuming you’re fine with what you’re getting.

As for the business owner, if you’re working all day, every day and still not making what you think you should, you’re probably under-priced. Think of the area where you feel most “under appreciated” and look at what you’re charging vs what it might cost elsewhere. Maybe you have room to raise your price/rates but you’re worried about losing customers. Well, think about who you might lose. You might lose the customers who expect you to knock yourself out at below market rates. So what? Good riddance. You’ll find that losing those kinds of customers frees up your time and attention for good customers that don’t expect you to work for free.

The important thing to note is that negative emotions like anger, bitterness, resentment, anxiety, stress, frustration, serve no useful long-term purpose. For the very short term, they can be red flags that something is out of whack in your environment. Tend to it. Wallowing in negative emotion is a productivity killer. Sitting around moping about being under appreciated can be a financial death spiral. Turn the negative into a positive. Write down all the reasons that you can justify better compensation, get excited about receiving it and go make it happen.

Sunday, February 22, 2015

The “both sides” trap

How many times have you heard news organizations say they’re giving you “both sides” of a story? Or heard them introduce a second guest as “here to present the other side”? That’s good right? That’s fair and balanced. Wrong. It’s a trap.

It’s a trap because it leads you to believe that there are only two sides. There’s the side defined and forwarded by one major political party, and the side defined and promoted by the other major political party. That’s it. You are not to consider anything else, or if you do, it should at least be something between those two positions. Nothing outside is even worthy of entertaining.

This view serves the parties and their friends and financiers quite well. Everyone else…not so much. Not only are there just two sides to any given issue, according to most news outlets, the only issues worth discussing are those put forth by the two major parties. If you do bring up another issue, you should at least discuss it in the context of how it might affect each of the two parties. Nothing else matters.

It doesn’t really matter which party you choose. The defenders of the status quo are just as happy to have you love Party A and hate Party B as they are the reverse. As long as you conform to the two points of view system, the game still works.

How do you know if you’ve fallen into the trap? Do you discuss issues or parties?  When you argue politics are you talking about the proper role of government in a given situation, or are you talking about politicians? Are you able to have a discussion about politics and/or world events without invoking the words "liberal", "conservative" or referencing a political party or politician? When you post an idea or statement that you agree with does it tend to have a picture of a politician attached to it? Do you take headlines and hearsay as fact when they conform to the “our guys good, your guys bad” scenario or do you actually do objective research before repeating accusations and stereotypes?

If you find you have fallen into the trap, take heart. There is a cure. Think for yourself. It’s really that simple. Remember, nobody on this planet has any more an idea what the heck we’re all doing here than you do. The smartest, richest, most popular people on Earth are every bit as clueless as you are. Naturally they behave as if they're on a higher plane of enlightenment. That illusion keeps them fat and happy. You don’t need them to tell you how to be, who to be or what to think. Think and do for yourself, but not because I said so. You’ll have to get there on your own. 

Friday, December 26, 2014

The real impact of The Interview

I’ve known that one could rent movies from YouTube, Google and Xbox for a while now, but I’ve never had cause to try them, until Wednesday.

Normally, a big name movie will run its course in theaters and then make its way to on-demand cable, Netflix, Red Box and the like. I had always thought of Google and Youtube’s video services as places to go for old stuff if you can’t find it anywhere else, or funny home made clips. But when the big movie theater companies refused to run The Interview as planned on Christmas Day, they may have put a spotlight on their more convenient, less expensive competition.

SONY announced that due to threats from hackers and the government of North Korea, they would allow theaters to opt out of their obligation to show the movie as scheduled on December 25th. It had been scheduled to open on about 3,000 screens nationwide. They all took SONY up on the offer and cancelled the showings. It looked like the movie may never be released. Then some independent movie houses stepped up. The first to announce they’d be showing the movie was the Alamo Draft House in Colorado. A few hours later, SONY announced it would make the movie available to Google Play, YouTube and Xbox Video for streaming. Other independent movie houses came on board and ultimately the movie actually found it’s way to the public a day earlier than planned, and although it only played on a few hundred theater screens nationwide, the independent movie houses were sold out and likely will be, at least through the weekend.

This was a double gift for both online streaming services and the independent theaters. The movie got an enormous amount of free press by igniting an international debate over hacking and freedom of expression. Many people are motivated to watch it simply because someone has tried to stop them from doing so. And by taking themselves out of the game, the major movie houses made the independents and online streaming the exclusive venues for people who wanted to see it.

So on Christmas Eve, I went to Google Play on my Samsung Note II, rented the movie and streamed it to my TV using the Chromecast. I was not alone. It was the biggest seller for both YouTube and Google Play that day. Now that I’ve used the service once, I’m far more likely to do so in the future. I don’t know how many movies will be released directly to such a service, but even as a standard rental, it’s not a bad deal. For $5.99 you can watch it as many times as you want in a 48 hour period (we watched it again when my son came over the next day). If you’d like to buy a movie from one of these services, it’s stored in the Cloud, so you don’t have to keep track of a DVD or Blu Ray disc and you can pull it up anywhere you have access to the Internet.

Streaming movies was well on its way, with or without The Interview and the controversy surrounding it. But the episode surely accelerated the roll out. I don’t expect brick and mortar theaters to go away, but I’d bet they’re going to have to step up their game again. The big theater companies don’t have as much clout as they may have thought. Studios and consumers have real alternatives. Even within the streaming movie space, Google, YouTube and Xbox have raised their profile against Netflix and iTunes (who did not run the movie). It will be interesting to see who adapts to the changing market place the best. Who will be the next Netflix and who will be the next Blockbuster? Viva la competition!

Friday, December 19, 2014

All “rewards” programs are not created equal

I was in a store the other day, making what I thought was an $8.99 purchase, according to my quick look at the sign on the shelf. When I got to the register I was surprised to see it ring up at over $15. I thought the clerk had made a mistake. “Oh, that’s the rewards program price.” he said “Do you want to sign up. It only takes a minute.” I was agitate, in a hurry, and really didn’t like the idea although I wasn’t exactly sure why at the time. I paid the $15+ and vowed to shop elsewhere in the future. 

So what’s the big deal? Lots of companies have “rewards” programs. It helps them offer you products you like and you get great deals right? No, not really. I don’t believe that an almost $6 difference in a $15 product is the difference between a normal mark up and a sale. Obviously you are paying a steep penalty for not participating in their data collection program. That’s what bothered me about it. It’s not really a reward. It’s extortion. 

Not every “rewards” program works this way. For example, I can swipe my Lowes card or not. It doesn’t change the price of anything. It just records my purchase to the benefit of both Lowes and myself. They get information on customer habits. I don’t have to worry about finding a receipt if I should have to return something. Better still, if I decide not to use the card one time, or I forgot it, or it just slips my mind, I don’t get reamed. Auto Zone has a similar program, although after several purchases over $20 you do get a coupon or discount. Office Max’s card also does not make you pay a jacked up price for not having one, but you will get lots of email offers if you do have one.

I’m not really swayed by the discounts and rewards because ultimately, they’ll get what they need to get. You lower the price on this, raise the price on that. You can’t sell dimes for five cents each and make it up in volume. It’s a head game. I know it’s an effective head game, but I prefer the honest approach. Give me you best deal. If you need more information, we can work something out that doesn’t piss me off.