You see, this is why I love TechCrunch so much. Thanks again to MG Siegler.

http://www.techcrunch.com/2009/06/19/want-a-super-cheap-iphone-3g-s-bing-it/

Have a great weekend!

I totally agree with Seth Godin’s latest post on spending your marketing budget wisely and focusing. I think that this is not unlike risk management in general. Investors, hedge funds, mutual funds have to constantly make decisions about their portfolios. Taking the two extreme cases, if you invest all you have in one stock, you have a chance of winning and a chance of losing. Most likely you will lose. On the other hand, if you spread everything over the Dow or the S&P 500 index, you will probably not lose as much, but also not win. Kind of like roulette. In marketing, however, another element is added. That is competition, which is not a consideration when picking a portfolio strategy (at least according to my meager knowledge in capital markets). When you consider this element as well, it means that you have to pick your battles wisely, and anticipate the actions of your competitors. That’s when some game theory could come into play. But all in all I think that the answer, as usual, lies somewhere in the middle. You have to figure out the right mix of your spend on different marketing channels.

I would compare this tension between focusing and diversifying to a broader discussion between product managers and CEO’s about what products a company should roll out. How to spend their budget on actual product development? Should they cater to the needs of all clients (something marketers would always say a strong yes to – now I am talking about product development, not about marketing spend) or should they focus on one product and learn how to manufacture it as best as they can, and benefit from this constant learning. The larger the diversification in production, the harder it is to react to changes, the harder it is to maintain support of all of your products and the harder it is to gain tacit knowledge in one field. It’s also hard to keep costs down and retain profitability because you are trying to react to everything that’s happening. That’s expensive.

Back to marketing, I agree with focusing, but the answers to these questions are not so simple. As a general guide, the 80-20 rule may be a good place to start. In other words, my verdict is focus, but don’t gamble!

P.S.  If you read this please comment I’d love some feedback so I can improve. Thanks.

This is an FYI post. I thought about sharing my way of using RSS for various purposes that regard to staying informed about market trends or specific companies. I have used this simple method while interning at a cash-strapped company. Early-stage startups or just people with ideas may find this useful.

The gist of this is filtering your RSS feeds. I am assuming you are a user of RSS. If not, and you are reading this blog, then it would probably be a good idea for you to get started. Get the free FeedDemon and start saving time.

Let’s say you have an idea for a product, and you want to see what’s going on with other companies. So you subscribe to an RSS feed of an industry publication. But you want to know only about some specific companies, without having to go through every feed every day.  That’s where you can use Yahoo Pipes. They have a great graphic interface which kind of reminds me of wiring that you would do between modules in a music application. Your pipe should be extremely simple. You fetch a feed or as many feeds as you like with the appropriate module and hook it to a filter containing conditions on what words you want to see in the title, description or author of the feed. The last step is to hook the filter to the feed output. Then all you have to do is run it, and add the feed to your RSS reader. This is virtually creating a feed off of a search engine of a specific site, since sites don’t offer that kind of customization to their RSS feeds. This can be used for many purposes.

Yahoo pipes offers much more functionality, with many different modules and operators that you can run on RSS feeds. For instance there is a pipe marking a ship’s route on a map using the ship’s coordinate feeds and Google maps, and a bunch of neat stuff. There’s a host of user-created examples, with the source piping included to help you understand what’s going on, as well as simple tutorials.

I realize that this is a geeky post, but I wanted to expose something that I found useful. Let me know if you find this useful as well.

So innovation is a very hot subject now. Always was, but now more than ever. Companies are trying to innovate. They are so trying to be ahead and do really cool things, but unfortunately a lot of data shows that it’s just not working. Companies spend more money on R&D but sell less. Why is that? Let me try to make a list. You may find some of it really obvious, but maybe some will be new to you. Anyway, this is my two cents:

1. The crowd became picky, and they expect to get everything for free (how dare they!) – Many great ideas, but it’s one thing to get traction, and another to monetize. YouTube. Hulu. They are really great. No money. You say ads? John Malone (chairman of Liberty Media Corp. – DirecTV, Atlanta Braves and a host of cable channels to name some properties of his giant) says it’s not substantial on a Wall Street Journal interview: “I think that what you’re finding is that advertising is going to be insufficient as a revenue stream to support the breadth and depth of the quality that the public wants to become used to.”

2. Short product life cycle – You know it, I know it. We don’t have to, but we upgrade our mobile device every year or couple of years if you are as slow as I am. In Korea and Japan they upgrade literally every other month. We are at the point that you have to be innovative not in order to get a competitive advantage, but just in order to stay in the game! When I worked for a huge mobile device manufacturer we spewed out 180 models a year. That’s a new device every other day. This includes of course the 3-4 models that get dumped during the development lifecycle of the model that actually makes it to market. Tough baby.

3. Human knowledge base is huge – Gone are the days of Descartes, you know, the philosopher and ah, also the inventor of the Cartesian coordinate system (the simple x vs. y graphs). With today’s knowledge, you have to master something all your life in order to come up with a new invention. And this rarely happens. I mean, it happens all the time, but on a small scale. All the cool gadgets and scientific breakthroughs are built on many tiny cases of amazing innovations. But seriously, when was the last time a single person came up with the lamp, or electricity, or something as big as the steam engine? I told you, innovation is tough.

So what do we do? How does humanity advance in life? This is an interesting question. Well, scientists are always around to find new exciting things. Fortunately, they are not in it for the money. Companies are still investing huge sums in order to stay in the market. Changing and improving products is certainly necessary, but we are at a point where people have seen everything, and it’s very hard to impress them. Innovation today, I believe, lies in delivery, or as they say in marketing, distribution channels.   Two examples that come to mind are Netflix and Dell.

What did Netflix do? They brought the DVD to your home using the US Postal Service. So they took a set of existing technologies (DVD, USPS deliveries and the Internet), and combined them to create a revolutionary business model. You pick your movies online from a very comprehensive selection, and they start coming via the mail. So simple.

Dell, well, they cut out the middle man. They were the first to offer customizable desktops online. You would build your own model, pay and get your computer shipped direct once it’s ready. Oh, this is really good – they get your money before the computer is even made. Wow, talk about keeping low inventories! That was a great model. Now it’s not working so well, because the crowd moved to laptop computers and netbooks and whatever, so now they are coming back to the store because they want to feel their computer before they get it. Dell had to reluctantly bring back the middle man. Maybe they should open their own stores? Hmmm, but then the whole model changes, no more low inventories and cash upfront. Plus, this is not what Dell is supposd to be doing. They are good in assembling machines. Dell just posted a big loss. Innovation is tough.

Bottom line: We have to keep on doing! Keep on innovating. Personally for me, since I haven’t written for a while, and haven’t been following too much of the news lately, it’s been kind of hard to come up with a new post. But this is my own small personal practice in innovation. Step by step. Until next time…

P.S. Many thanks to my buddies Jeff Hui and Udi Schlessinger who urged me to keep writing and not falter in this turbulent hour. This post is dedicated to you guys

Due to some serious personal issues, and my crazy schedule as a management consultanting intern, I haven’t been writing for much longer than I would have liked to (or however you phrase that). So, haven’t been able to conduct the proper research or do the amount of thinking I need to make an entry. Still a very good friend of mine brought to my attention some intereseting stuff on internet culture, which I will write about as soon as I play around with them enough time. Until then.. so long!

Unfortunately sometimes you do things first, but you learn later. In this case, I wrote a comment on TechCrunch’s MG Siegler’s Free to Use. Pay to Play, but now I am realizing that I could do the same in my blog, and employ a trackback. This is just great, because now I have to write new stuff in order for MG to accept my trackback. Well, there is always a first time. I hope you still accept it MG. If you are a beginning blogger like me, and don’t know what a trackback URL is, here’s a great article (there are many out there).

Freemium means that there is a set of features in a product that are free, and when you want to upgrade, or add some premium features, then you have to pay. The easiest example is Gmail. If you go over your ~7Gb of storage you have to pay a fixed amount per year for additional storage.

And now to the subject matter. Mr. Siegler writes accurately about the advantages of the freemium model as was first brought up by Fred Wilson on his blog, I absolutely agree with the article and the advantages of the freemium model. However, this still doesn’t solve the question of the new startups mentioned in the beginning of the article who can’t get positive cash flows. They still have to invest sometimes a lot of money in order to achieve that service/product that will build a huge user base. Yes, a subscription model could always enhance an ad-based model, but how do you get to the point that Siegler is describing, citing Pandora as an example, of being a service with an already huge user base, that can start employing the freemium model?

Moreover, as Yuval Ararat mentions in his blog, he quit last.fm when they started demanding subscription money from him. Same thing happened to me with BSPlayer, when they started making their software shareware. Evidently this model does not always work, and even when you have a big user base it doesn’t necessarily mean that users will stick around if you change the rules. There is a fine line here, and you have to be careful with your demands. If you don’t have any real competitive advantage and there are low switching costs, then virtually nothing prevents your huge user base from becoming very, very tiny.

I haven’t blogged in about a week. I was away on some boot camp for a new job, so I was not in contact with the outside world on a regular basis. I will probably get to write only once a week, but I’ll try to keep up. Still feels great to be back.

As far as blogging goes, I am a noob. But I already feel myself that blogging teaches you many things that will be useful for later. Some examples from my own short-lived blogging experience:

1. Staying up-to-date – This has two parts: feeding your curiosity while managing your time. These clearly contradict. You constantly search for new information, but can’t get off track for too long. When I started posting I started constantly looking for themes for my blog. It became a commitment for me. Like a faithful journalist whose living depends on it, I started looking deeper for more interesting stuff to read on the internet, and attending more events and interesting meetups. Just to get ideas. But be careful,  internet searches can easily throw you off focus. So if you want to stay focused and get things done, you have to remind yourself what you are doing this for. You find a cool subject, you dive into it, digging information conscious of your time constraints. This forces you to learn how to skim a lot of reading material and also know in advance where you are going on the internet in order to get more done with your time. At the end you have your sources of information and you know better how to pick your battles, and this is invaluable.
2. Structuring your thoughts – Internalizing the fact that other people may read your blog makes you think differently. You suddenly gain this “air of reponsibility” in what you put out. So it definitely forces you to think if you have anything to say. Once you find that thing, you take all the analysis you did and structure it into a nice piece.
3. Developing originality and creativity – I’ve been wanting to write for a long time. But I never took the time to do it. I thought that I have nothing original to say to the world, so the blog would be worthless. Adding value does not mean that everything you write or talk about has to reinvent the wheel. You can just start by reacting to some things that you read on other blogs or websites or see in your life. You can share about experiences, or you can just tell your friends about links to cool new things you found out about. That’s what I do mostly in this blog, because other people do it. I realized that you don’t become Einstein or James Brown from day one. It takes time and practice. And I sure love this kind of practice
4. Save, don’t erase – This is actually something I learned from my time as a musician, and not from blogging, but I try to apply it to my posts as well. A friend of mine who is a musical producer would always record tracks, and even though they sounded really bad in the beginning he just saved them. I erased mine, because my sense of self-criticism and shame would not let me keep them even in the drawer! In the meantime I didn’t become a producer, and he went on to produce some acclaimed works and develop his own unmistakable original sound. Since he saved his work, he advanced little by little and learned from his mistakes. Every time he powered on his workstation he would already have something raw to begin with. Something to which he could add or from which he could remove. And he kept on perfecting it iteratively. This also relates to creativity. Yes, it’s true, it takes some talent, but it’s much more of an iterative process. It’s something that you hone by providing your mind with the right environment and the freedom to create. Your field of interest doesn’t really matter, you just get out there, jump in the water – you can always change things later. Companies constantly change their focus and their business models. Managers are not and should not be afraid to make mistakes or come out with a sub-perfect product, that maybe people from the engineering team are not comfortable with. They realize that a statement needs to be made to the outside. There is experience to be gained, and the only way is to learn from mistakes. Don’t be afraid to create something, and just leave it lying out there, until you come back to it the next time.

I am sure that all of these skills will walk with me to the future and will prove themselves useful at some not-so-distant point.

To summarize, blogging gives us a platform to get out there and say something to whoever is willing to hear. It keeps us conscious, and it’s a great practice in creating. If you are intersted and not sure how, or have any questions about any of the technicalities involved, feel free to reach out to me at james at sir-james-a-lot dot com

This is going to be a very short entry. I just wanted to bring to your attention the amazing podcast by NPR, called Planet Money. It’s a daily podcast where they explain, in very simple words, the economy, and what’s going on. I have to admit it, I am an MBA student, but I have no background in finance at all. I am an engineer and a musician. No more no less. I listen to this thing almost daily in order to understand all the stuff my banker peers are talking about in b-school. I strongly recommend listening to this stuff. Nitey nite.

Protein Folding and PS3

There is a project that’s been going on at Stanford for quite a while now, trying to figure out protein folding. Protein folding is the process in which proteins assemble themselves before running important functions. When this process doesn’t work properly, we get all kinds of illnesses, including Alzheimer’s.

So these people at Stanford have a simple client that you can download, and it makes your computer part of a huge supercomputer helping to crunch numbers while it’s idle (I suggest downloading the zip and then running the exe from a local folder).

The cool part is that there is also a client for PS3, so you can help while you’re not playing. You see, video games are not necessarily the source of evil in this world!

Now back to Niko and GTA.

Since Twitter came around, the whole world is crazy about real-time search. A nice article from two days ago on Techcrunch on real-time search benchmarked different services two of them completely new. As Google is trying to move toward searches more synchronized with real-time, it reminds me a little bit of Google and Microsoft in the older days of the start of this century, when Google was just a small search engine, but expanding very quickly to what it is today, and Microsoft as usual, very slow to respond. Google is now trying to respond to Twitter. Being the giant that it is does not necessarily play in its favor. Twitter has a huge advantage over Google in that its infrastructure is made for real-time by the very definition of Tweets. If they are not able to acquire Twitter, maybe they will come up with their own twitting service? Sometimes it’s just better to focus on the one thing that you have going for you though. Just a thought…

Actually with this post I meant to introduce Magma, another aggregator (or “aggravator” as Howard Morgan, a very colorful partner at First Round Capital, calls them) which “aggregates & tracks online videos from the top video hubs & tastemakers.” You could consider it as Twitter search for videos. It presents neat opportunities for marketers and advertisers who want to track trends in what users are watching online (mind you – not only youtube!). At this stage the service is in beta testing, but it’s possible to register and experience it.

The man behind this is Andrew Baron, the founder of Rocketboom, a site I strongly recommend watching. Rocketboom features a daily 3-minute-or-so internet culture news show, with interesting facts. Mr. Baron’s got an interesting blog as well, and this is an excellent post on entrepreneurship.

Last but not least, just a tip for those of you publishing videos, there’s a neat place to publish all at once to 12 sites (again, contrary to just youtube), with a single dashboard to control everything. http://www.tubemogul.com/ 

Ultra-kewl!