August 2006 Archives

This is one of the security questions asked when I registered as a Red Herring member www.redherring.com. Arguably, it's not a great question when it comes to security, (a hell of a lot of people know what the name of my company is) But Man, do I feel great someone asked me that question (and stored it someplace) You know, there's something to be said about a company/group/region that celebrates entrepreneurship. As an entrepreneur, it's impossible not to like such people.

Spiralfrog is a company that offers free downloads of music that are "free" because you have to listen to advertisements. You may not copy the music, so it offers piracy-prevention features to music companies. You also need to visit the site of Spiralfrog once a month; if you don't, the music will be de-activated, and you won't be able to listen to it. The New York Times has an article on this company that's supported by Universal Music Arguably, these are not very draconian measures. Once you get used to doing these, you won't even notice that you're doing them. But how many hoops are you willing to jump through to get to "free" music for the first time.

1. Is this the simplest they could make it?
2. Why restrict copying? If people shared the music with ads inserted in the music, wouldn't that increase the number of ad impressions?
3. With so many web based businesses offering ad supported free content, isn't the customer going to tune out when she or he hears the ad? What about Ad Fatigue?

Tags: Spiralfrog, Universal Music, Ad supported business models

Tom Peters posted this on his blog Depends on What the Meaning of "Is" Is. I responded to the post with my own ideas on re-imagining news shows. So here it is again (with slightly better formatting): Re-imagining Evening News: Using the themes of Analysis, Newsiness, Customisation To begin with there are precedent to Re-imagining this -

1. Periodicals versus newspapers.
2. Bloggers versus periodicals

Newspapers were used in times gone by to "catch up with the latest, that happened the day before". Periodicals were used to crunch that out - analyse it from different angles and offer balanced opinions on both sides. The TV evening news started taking apart the "newsiness" of the morning newspaper. Things that had happened during the day had already been covered in the evening news, so newspapers focused on those items that had occured the night before while giving editorials on issues whose newsiness was lost. CNN and other 24 hour news channels are now doing to the evening news what the evening news did to the morning newspaper. Periodicals stayed the same all through the TV onslaught, since they focused on analysis. The Internet and blogging put paid to that: Now you can get analysis quicker than the periodical. I think this is how the evening news should evolve. It should split into two parts:

1. Part A should be a common program - giving the highlights of the day along with quick analysis. (The BBC morning show where they discuss newspaper articles is a good example)
2. Part B should be a la carte - Depending on the preferences of the viewer, as measured by a TiVO, or some other device, the Part B will contain "newsy and analytical" content that is relevant to the viewer.

It's just a thought, but let me know what you think of it, and how Katie can use her tremendous brand to push such a concept.

This article by Sid Frank (Director, Professional services at Revenue Technologies) is a pretty good read! It was published in the Professional Pricing Society Journal in 2002. Here's a link to that article. The only shortcoming is that you need a lot of previous transactions to use this process. Six Sigma is a statistical process and cases with just a few datapoints cannot be solved using this. Tags: Pricing, Six Sigma, revenue

So they take a pet theory and stretch it like chewing gum. Here's a great example of such wrong thinking: 'Product sabotage' helps consumers by Tim Harford on the BBC website.

I am against this statement of his

"But the really clever tricks are where companies tweak their product line in an attempt to persuade customers to identify whether they are lavish or stingy - the lavish customers are simply turkeys voting for Christmas."

I think tuning a product or service "package" that's a necessary way of making sure that your most precious customers - the ones that pay - see the extra value you deliver. So those customers who pay less get less and those so called "lavish" customers who pay more get more.

Which is absolutely fair.

This also means if a company wanted to give a customer a discount, the most effective way of doing so would be to offer them a higher product spec for the same price. It would be even better if the extra value offered was intangible.

Even intangible value drivers are real. Here are some examples
A "good" doctor
A "friendly" attendant at a restaurant
"Fair-trade" coffee
The list goes on....

And as a pricing consultant, I can confidently advise you and Tim that if you wanted to pay the cheapest for a cup of coffee, you could brew it at home.

Tags: Tim Harford, pricing, product management Trust me I'm an economist

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I got these from Guy Kawasaki's blog, where he previewed a book by Andy Sernovitz, the CEO of the Word of Mouth Marketing Association, called "Word of Mouth Marketing". There are 10 ideas in all at his original post

1. A study by the Verde Group showed that people who heard about a bad shopping experience are less likely to go to the same store than the person who actually had the bad experience.
2. The most powerful word-of-mouth advocates might be the customers who have only done business with you once so far. They are the most excited; repeat customers are probably accustomed to the great product/service and therefore, ironically, less likely to talk about it.
3. Incentives and rewards are likely to reduce word-of-mouth advertising because motivation becomes suspect. You can’t “buy” word-of-mouth advertising.

Now, I'm bootstrapping yet another venture - whose marketing effort (surprise surprise) will be driven by word-of-mouth marketing. Looks like I need to brush up on the stuff again, and buy this book!

I gave a talk on pricing, marketing and in general customer segmentation and satisfaction to a group of professionals at the American German Business Club in Dusseldorf on the 21st of August. Here is the presentation I used there. There are extra notes in the "notes" section of the powerpoint. Tags: AGBC, American German Business Club, improving prices, increasing prices, consulting

Presented at the American German Business Club on 21st August 2006

Looks like Thai kids will learn to "C" faster than others worldwide. Based on this article at ABC News, Thailand hopes to distribute one laptop per child

This program was made possible by Nicholas Negroponte. Here's a link to the program: One Laptop per Child. If possible try and support it.

Will this drive tech entrepreneurship in Thailand?

I certainly hope so. Not only will kids learn computing, they'll teach their parents too, who'll realise that this is an incredibly efficient way to work and do business, and take advantage of it.

Now let's wait for news that someone rolls out a nationwide WiMAX network across Thailand and we'll really get going there..

Tags: thailand, One Laptop per Child, negroponte

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Pepsico has just promoted Indra Nooyi to be the CEO of the company. From what I've heard she's an amazing executive who deserves every accolade bestowed on her. Pepsi is no stranger to India and Indian ways. Way back, Morarji Desai, the then Prime Minister of India decided that paying license fees to Coca Cola and Pepsi for the privilege of drinking carbonated water wasn't such a great idea. He decided to ban Coca Cola in India. Pepsi however did something really smart. They went into a joint venture with the Lehar group, to become Lehar Pepsi. Coca Cola, just went away. For years, Lehar Pepsi took all the profits it could in India, in Coca Cola's absence. There was some terrific competition even here, with Thums up creating a sharper cola that really fit the Indian palate, but even then Lehar Pepsi thrived. In the 90s, barriers against the cola companies were removed, Coca Cola came back, Pepsi bought out Lehar Pepsi. Coca Cola bought out Thums up, and we had our own Cola wars.. Now Pepsi is doing something smarter than all this. An Indian lady as its CEO. Let's see how the world evolves for Pepsi in the future.

Tom Peters has a mantra: Impact is better than longevity. You can see his most recent post on the subject today here: Built To Last. Built For Impact. The thing is - I agree. But I also think that my definition of impact is very different from that of someone else. I define impact as "Value added per unit time" If one added value to an organisation, society, herself or whatever at one point in time, and didn't do any more, the value added by that person per unit time falls. The others in the organisation see her as not having much impact. So you need to keep working harder, re-imagining the world, finding ways & means and influencing people to execute on your imagination. That's how you have impact.

Both I and my girlfriend are highly educated.. but pretty silly. She read a little line in a book called "A million mutinies now" by V.S. Naipaul. There is a situation where one of the characters describes these degrees as BS = Bull Shit MS = More Shit PhD = Piled High and Deep We really laughed out at that, and I wanted to share it with all..