Bailout Blunder

Wow. It only is getting worse. And I do not mean the economy. How poorly can the government screw up the system?

Maybe I am a Libertarian after all, as I am feel some serious cynicism towards the whole debacle.

I will share with you how I got here.

First as the banking system started to implode, rather than letting efficient capital markets *and Darwinism* guide us through the turmoil, we decided the industry was ‘too important’ so the government stepped up to the plate.

Swing and a miss…. Strike One!

If the US is the world proponent of democracy and capitalism, why is it when a company performs poorly, and takes untoward risk, the government rewards that risk…. By buying it out.

Now we have set a dangerous precedent that any industry that feels it is an essential part of the economy can head to the government for a ‘get out of jail’ card when it screws up to the point of collapse. Sweet…. Now those companies can take any absurd risk desired in swinging for the fences for that proverbial home run. The US government has guaranteed them at least a ‘walk’.

Why do you think that the car companies, housing companies, etc are coming, tin cup in hand, to the government’s doorstep asking for their share of the pie…. Heck, some are bold enough to ask for a new pie to be baked.

Second, after the government says ‘no mas’, this past weekend they decide ‘mas’. Citigroup is just too important.

Swing and a miss…. Strike Two!

Amazing that the government turns around that quickly on its own stated policy and will bail out a company if that one company is ‘too important’. Too boot, the government agreed to bear the burden (thanks to you and my tax dollars) 90% of the toxic assets valued at $300B… no not a typo at million… yes billion!

So this means that a) the government WAY undervalued the bailout plan, if one company is 43% of their total plan, and b) if a company can prove that it is vital to the economy, it can break any rules/guidelines the government has set in place.

Hello Wal-Mart, Microsoft, Exxon, and City of New York. Spend any amount you want on any absurd project. Don’t worry. The government has got your back! Want to invest in that first project for life on Pluto (the non-planet, planet)… go ahead. The returns just might be great. If not, you can just offload that project to the US citizenship.

Then just this morning, I see that the US government is announcing a new program today to ‘ease’ credit for things like auto loans and credit card. Hmmm… so we are encouraging people to go MORE into debt that we already are.

Amazing! The middle class American family spends more than it makes…every year. As a population, we are in debt. Now the government wants each person to be able to go more in debt. Wonderful idea. Rather than encourage positive behavior, just throw more fuel on the fire. Why will GM, Ford and Chrysler have to change their strategies and plans, if the government is going to enable consumers to get more bad cash to invest in poorly made vehicles?

Here comes the sinking fastball. Stepping into the pitch… oh, well… they can give themselves a free base. Swing away.

My Issues with Charity

I have a personal issue with charity. Don’t get me wrong. I think they serve a great purpose, and I even sit on the board for a wonderful organization (Wonders and Worries). There are many though that have a fundamental challenge they have yet to address, changing the game to affect the issue they are trying to help.

This is very apparent in charities that address poverty. While I support both of the following, I want to highlight these charities as examples of organizations that can do better.

Mobile Loaves and Fishes

One of the most respected and fundamentally good organizations to help provide food for the homeless. With a fleet of trucks, and hundreds of volunteers, MLFs brings food to the people, where they are in local communities. Yet, is this not just continuing the cycle? What incentive is the organization providing to the people it serves to break the cycle, and help them get jobs, income and the ability to purchase their food? With a steady schedule of handouts, and only verbal encouragement to look for opportunity- my $.02-- not much.

What if MLF had the people it served learn tangible and relevant skills in return for the food? Would that not provide a platform where the skills could be applied productively back into the local community and try to break the cycle? Just an idea.

Coats for Kids

Another worthy cause. Helping provide warm clothing for kids who could not otherwise afford. Again though, is this not just a handout? What incentive does this provide to help the families to change their cycle so that they could afford their own warm clothes in subsequent years?

What if CFK could help parents of kids who benefited learn seamstress skills? They could then help repair/fix clothing for extra money, and provide a bit of incremental income to purchase that jacket next year. Maybe not a big difference, but sometimes a small change is all you need.

These are just two examples of charities that could alter their models a bit and create more demonstrable change in the communities they serve. A couple of examples have been highlighted on Tech Crunch today. Check those out.

Can you think of others in your local community? Reach out to them and offer your thoughts and help. Collectively we can make a difference.

Social Media Construct to Address Poverty

Poverty is a serious issue. It is estimated that 33% of the world’s population live in poverty. 20% are estimated to live in true ‘abject poverty’- meaning always hungry. Not sure what poverty really means? Check out the Wikipedia or dictionary.com definitions. Bottom line, base life sustaining necessities are not adequate.

What is the face of poverty?

• It is the homeless vet on the street corner
• It is the child abandoned in India
• It is the unclothed family in Africa drinking from a puddle in the clay earth
• It is the child that enters the local elementary school each morning with the same set of clothes, because those are the only ones they have
• It is the family living out of their car, and taking scraps from behind restaurants to feed their family
• It is the woman living in the woods, asking for money to feed her baby at the stoplight

How can we make a collective difference?

My posit is that we can look to the same construct so many of us in social media preach:

• First: Connect
• Second: Engage
• Third: Influence (and influence the influencers)

Let’s see how this can work.

Connect:

At the end of the day, we cannot make a difference if we do not first truly understand the nature and magnitude of poverty. This is more than reading the on-line media. This is more than shaking the hand of the guy on the street corner, or worse yet throwing him your spare change.

Remember the old adage, ‘seek first to understand, and then to be understood’. Well, forget the latter, and just seek to understand. Reach out and connect. Spend some time at soup kitchens. Take and hour and visit with the person on the corner. Ask questions, listen, internalize. Do not try to direct or provide answers right then and there. You are not prepared.

Engage:

Engaging first internally (within yourself) is the most important part of the process. It marries the base knowledge you have gained from connecting with your passions. When you find that intersection, you can, and will, make a difference. Doing something because it is politically correct is good, but not sustainable. Doing something because you are passionate about it is sustainable, and provides a greater benefit as your heart and soul are now involved.

Next, engage externally. Link your internally found passion with the community around you. A great example in Austin (my local community) is The Miracle Foundation. Caroline Boudreaux found her inner passion and had engaged with communities in India to help orphaned and hungry children.

This becomes your own personal virtuous cycle.

Influence:

Exerting influence is the tipping point. It provides the catalyst where the impact you make is broader than the brute force you alone affect. Influencing those around you, and having their support causes a synergistic effect, where the ultimate result is greater than the sum of the parts.

The key to successful influence is by connecting and engaging those who are of like mind, and have journeyed through the same process. If they too have experienced that connect/engage process, the community you build will reward handsomely.

Building an Eco-System – Risk of Taking it Too Far

Business around the world has moved in rapid force towards building eco-systems to effectively compete in today’s markets. The smartest of these businesses have conducted serious reviews to identify what their core competencies are, and focus on developing those, while solving everything else in creative manners.

Think about the ‘buzzword bingo’ lingo that references this:

· Asset light business (AMD and Dell with factories, Rackspace and The Planet for IT Hosting)

· API (I know generic, but linking 2 disparate applications and having them play well together so can focus on building only 1)

· Outsourcing (near anything and everything- from call centers to back office support)

· Services Firms (consulting, accounting, finance, advertising, etc)

· Aggregators (E-Bay, Amazon anyone?)

· Wiki/Blog/Communities (social media on the Web is a fundamental way to build an creation and distribution system for information)

Oddly enough when we take a step back, we see how this had affected our personal lives.

We already see such things as:

· Concierge services (your errand runners)

· Pick-up/take-out/delivery (of near anything now from food to clothing)

· Services (accounting, brokerage, cleaning, lawn service)

It is already happening. How much farther will it go? If my core competency is not working out, will someday I be able to contract with someone who is, and get the benefit for myself? Could I contract out my sleep, and still feel rested when someone else much better at sleeping does it for me?

Is this what we mean by building out our personal ecosystem? Or will we take it too far?

Think Beyond 'Outside the Box' with Social Media

Too many times recently I have seen companies embrace social media through their lenses. All too obvious is the company that creates some sort of portal/blog/community/other that is only relevant to their marketing team or IT department.

This is a recipe for disaster. When will we learn.

True success is still in the hands of the customer. Give them the social media they want, on their terms. Monitor it, measure it, follow it, and most of all let the customer ‘own’ it.

It may not be obvious. A ‘soccer mom’ might not want the latest community on keeping a tidy house community from P&G, but she might be interested in how other moms are helping their Girl Scouts sell more cookies. There is potential there. How to bring it to fruition is not easy…. But essential.

A social media concept must bring value to the customer. When it delivers on that value proposition, the community builds, and you have your audience to work with. Key here, audience to ‘work with’.

One final thought, DO NOT just build the audience and then start dumping ads on them. That will work against the ultimate goal.

Economize our Language

In this era of tightening belts and cutting back, I figured I would take a shot at lending a hand. However, I am stuck and need your feedback and assistance

My goal is to help the many citizens of the world who use the Latin alphabet, cutting it down by 4%. If we assume that any given word has six letters, this would create a net 1% savings to the bottom line. That would equate to $40M off Google’s expense line--- for the most recent QUARTER. (If you trust the math, move on. If not feel free to read the text Italics below)

Assumptions:

1. Words average six letters


2. Normal probabilities for a sample and population event


3. Words are independent events of one another

Translation

1. 1 letter from 26 = 4%


2. 6 letters a word from selection of 26 = 23%


3. 23% * 4% = 1% (rounded up)

Where I need you help? I cannot figure out where to cut.

First, there are the essentials I do not believe we can cut. I and A are both words in themselves. They have to stay. With the advent of SMS, U is a word as well. Not that I like this development, but it is here to stay (my 11 year old is even staring to use it in book reports… not good).

Next, I am not sure I could recommend P or Q without the wrath of my mother. I seem to remember having to mind those 2 a whole lot as a small child. So while I am still not sure 30+ years later why, they must have some importance if I was supposed to give them so much attention.

How about some of the vowels? We have that darned 6th one. That wily Y. Why is Y a vowel? It is so sly, the rhythm so dry. Best stop now…. So Y seems pretty essential after all.

There might be something to a vowel, as several countries have limited vowels and long names… Kyrgyzstan for example. If a country can cut down on a vowel, can’t we…. Maybe? But which one- E or O (as we have eliminated A, I, U, and Y now)? A vowel is not looking so good after all.

Z seemed like a logical choice, until I realized the wrath of major pharmaceutical companies everywhere would descend upon me. Zantac, Zofran, Zocor, Zyrtex, Zyban, Zithromax… the list goes on. Pharma also seems to think that X is a power letter as well: Xanax, Xenical, Xyzal, and more. Plus Microsoft and their legal team fresh off their Yahoo drubbing would love to level us to protect their X-Box…. Calling it “Bo” just does not carry the same panache.

I hope that you are staring to understand my dilemma. This is not an easy undertaking. I am not ready to give up hope.

I am trying to help our verbal and written economy. This is where I need your help. What letter would you remove from the alphabet?

Slippery Slope to the Bottom

Interpublic today announced a deal with SocialVibe. Bottom line, this is a BAD idea. Paying consumers to endorse brands and promote to friends is a slippery slope.

On the surface it looks great- winning points to redeem for charitable contributions. Finally liking Madison Avenue and social media. A win for all

I dissent. Take the concept to its logical conclusion. In order to meet the growing demands of its clients (or worse yet- Wall Street) more consumers need to be enticed to promote brands… so what happens?

First is the ‘commoditization’ of the charitable cause. We lose site into making a difference, and contributing to an actual cause. It becomes a media platform to stand on and say, ‘hey look at me’. People can, and will, start syndicating how much of a difference they are making. Yet, beneath the surface it is nothing more than self aggrandizement. In the long run, charitable causes lose communities, as constituents are pulled further from their cause, and not closer to.

Worse yet, SocialVibe and Interpublic start increasing the stakes. They award points that can be redeemed for actual products or services. Then the model falls completely apart, and we get a bunch of ‘brand sell outs’ (I dare not use the more derogatory term) who care nothing about the products they endorse. Soon spam takes on a whole new form as people try to make a few extra dollars using every knows social media tool to promote whatever it is they sign up for to their contact lists.

In either case, brands loose. In both cases the long term sustainability of the model is limited at best. Smart marketers beware.

Then again, I could be wrong. This could be the whole new model. I am not betting my $.02 on it, nor the non-profit on sit on the board for. Their mission is too important.

Listen Before You Leap

Recently I was at a dinner with some friends. Before I knew it I had ‘opened my mouth, and inserted my foot.’ My failure: too much excitement in wanting to jump in and participate in the conversation. The result: strange looks, my backpedaling, and a long recovery to re-engage (thankfully a few more glasses of wine helped ease that transition).

We are on the brink of social media fundamentally driving and affecting the way companies engage with consumers, constituents, and other stakeholders—both on-line and off-line. The buzz is everywhere. The taste is palpable on the lips and tongues of corporate types and start-ups alike. When the economy truly begins its recovery, my prediction is social media will take off, hitting new heights not forecast before.

My fear is companies will pull the ‘Speed of Internet Trigger’ and want to move fast into social media spaces when their budgets permit. My cautions: avoid the damaging harm of trying to move too fast; avoid waiting until budgets free to start you social media planning as it causes a significant increase in risk.

So, what is the solution? My recommendation is that you start listening before you leap. I have blogged in the past about listening to your customers. It is a low cost, low risk way to start truly understanding today, so that you can act intelligently tomorrow. You do not have to act, yet. But when you do, it will be with grace and elegance, as you will better understand how and where to act appropriately.

You cannot smooth over the ‘foot in mouth’ syndrome with your social media efforts with a few extra glasses of wine.

Olympic Boom to Bust

Michael Phelps has made history. 8 Gold medals in 8 events, and the most decorated Olympic athlete the US has ever had. In moves big business.

Numbers are being thrown around now that this could help achieve $30, $50 even $100 million in endorsements for him over his lifetime. He could be the next Tiger or MJ. I dissent.

My prediction is that he may sign a deal or two, but that the results from those deals and fervor over him will fade. The deals will disappear, and he will become another quiet success in the Olympic annals.

Why do I believe this? It comes down to two fundamental challenges. First, swimming is not a sport that is splashed (pun intended) in front of the public all the time. Thus there will be limited exposure of Michael in his element to support a brand. Second, the athlete who endorses a brand has to have charisma. While Michael seems like a nice enough guy, I dare say I have not seen the level of charm and natural ‘chutzpa’ required to really support the numbers being thrown about.

Sorry to be such a naysayer at this time of hype and hysteria. Sometimes someone needs to try and be the realist. Part of the appeal of blogs is being able to stake out a controversial position and defend it- right or wrong.

I may be proven wrong, and hope I am.

800 LB Gorilla Misses the Mark with Apology

Unless you have been under a rock, at the Beijing Olympics, or on a remote island vacation, you have probably heard about the Gmail outage at Google yesterday.

Last night Google updated its blog regarding the outage, and apologized for the incident. While I commend Google for the apology, it left much to be answered, and lacked in nearly all areas of communication.

I am not a PR expert, I am a simple person who expects companies to step up, take ownership and explain things to me--- from my perspective. Google had a grand opportunity, and squandered it with their less than appealing explanation. Here is my $.02 debrief.

Google has always claimed to be open- Where is the transparency?

• What really happened and why?
• Why was the communication not until ‘everything will be back to normal by the time you read this’?
• Why did I have to learn about this through Twitter and follow updates there rather than direct through Google?

Google built its search engine on being simple and clear- Where is that clarity?

• OK, so you fixed ‘it’. What is ‘it’?
• You are ‘updating internal systems and procedures accordingly’. What are those ‘systems and procedures’?

Google raves about its infrastructure and stability- Where is the restoration of that confidence:

• Where any explaination of a root cause analysis?
• What are the steps being taken to ensure that this a) does not repeat itself, and/or b) minimizes the chance of it happening again?

Google does not exist without their customer- Why is this from the Google perspective and not the customer?

• The ‘temporary outage’ seemed to last at least 1 hour, that is an eternity to users
• Why would you get on a blog and apologize and communicate and then go on to say, don’t expect to see that here again?

As my 5th grade teacher used to tell me, ‘A’ for effort, ‘C’ for performance. Too bad we do not get measured on effort.

Dummy It Down

I was catching up today on my stack of Harvard Business Review. The February issue (yes I am a bit behind) has an article, The Biosphere Rules. I would like to share a few nuggets from the article, as it articulates in detail something I Tweeted about in July:

1. There are over 100 elements in the periodic table, and a varying combination
   of ONLY SIX of them comprise over 99% of all living things
2. The earliest multi-celled organisms have spawned between 30 and 100 MILLION
   species today (if you believe in evolution and not creationism)

The author’s position for the article is in reference to sustainable development. While I am all for that, what struck me is this really applies to a multitude of businesses, and ideas. How? Please read on.

Think about Microsoft Windows. How much of the code do you really use, yet how much complexity was built into it? Same story if you run an IT infrastructure… think about your monitoring solution and how bloated it may be.

At my last job, we discovered that while there were over 3,500 potential monitoring alerts, the top 25 comprised 35% of the total possibilities. By the time you hit the top 100 alerts (just 3% of the total) we were well into the top quartile.

If a combination of six elements can create over 30 million (to err on the conservative) species and comprise 99% of all living things, I think we learn from that? Have we gotten too complex for our own good? How can we make things simpler?

Here is a suggestion as a start…. Ask yourself three fundamental questions, as you evaluate tools, companies, partners, applications, etc:

1. Is it useful
2. Is it relevant
3. Is it simple

There is elegance in simplicity.