Weekly Links (Feb.1, 2010)

How to Craft a Killer Elevator Pitch - A very good set of tips for an elevator pitch, a new concept/idea pitch, or most presentations.

Crowdsourcing New Product Ideas (Fred Wilson, A VC- For all the people in class that wanted to bring a new concept to market, but were not exactly sure how to bring the right people, skills, technology together. Fred Wilson introduces Quirky, social product development.

What Makes a Great Teacher (The Atlantic Magazine)- This one is partially for Matt Kirk, but it's helpful for anyone trying to leader a teach via education. Some good tips on matching your style of leadership to proven models to teach and lead people.

Weekly Links (Week of Jan.25, 2010)

This week's links are somewhat Internet-centric, but I've also tried to mix in some interesting ones on leadership, sustainability, quant/statistics and Internet marketing/measurement.

Role Models - (Fred Wilson, A VC Blog, Jan.2010) - I had a conversation with my wife (@GracelyGirl) the other day, as we're starting to see interests from our daughters in various topics. My point to her was if they are interested in things we don't have expertise in (science, art, etc.), we should find someone that can give them guidance and insight. Giving people a role model early in life is so important, especially someone in a nearby age-group, as it helps them understand that their passions and goals are obtainable.

Will the Internet F* with Wall Street? - (Chris Dixon Blog, Jan.2010) - I haven't written about this theme in a little while, so here goes. This article does a nice job of highlighting the difference between doing things differently with technology, and technology being the differentiator to truly disrupt an industry. The article highlights a company called Square (@square), created by the founder of Twitter, which is focused on creating a new way for SMBs and individuals to conduct monetary transactions. Square doesn't disrupt the previous financial industry, but it's thinking like this that could open the doors to new interaction models for the economy.

Will Amazon be the New Wal-Mart? - (GigaOm - Jan.2010) - while companies like WalMart and Best buy have been highlighted for their sustainability initiatives, maybe the company to begin focusing on is Amazon. With Amazon's revenues growing faster than their competitors, should they be driving the next stages of consumer/retail sustainability? Do they have any inherent advantage in this space because they are fundamentally virtual, as opposed to the huge physical footprints of Amazon and Best Buy?

How to Measure the Internet? - For anyone that is getting involved in a business that may drive revenue from online advertising, or will gain share because of online visibility, here are some interesting reads to get a deeper understanding about how the Internet is measure by external agencies. It also highlights how the measurement of the Internet has moved from a sampling-based model to a more direct measurement model.

• Comstore announces new measurement policies for website
  
• Problems with Comstore's measurement methodology
• The details behind the recent fight over Comstore's changes in measurement policies

How to Measure ROI - (Fred Wilson, A VC Blog, Jan.2010) - A quick Entrepreneurial refresher course for anyone starting a business and having to negotiate with investors (Angel, VC, etc.)

Re-examining the Value Chain - Apple Table (The Logical Idea - Jan.2010) - A nice look at how the recently announced Apple iPad show not be evaluated on it's technology, but on it's potential ability to change buying habits of readers of eBooks (or other reading-centric content). A strategic analysis of how it may help or hinder the publishing industry. (note: Some of my pre-announcement and post-announcement thoughts on the iPad)

Some Excellent Entrepreneur Blogs

Here's a few of my favorites. Some business starters, and some business investors:

Fred Wilson (Union Square Ventures) - A VC

Marc Cuban - Blog Maverick

Seth Godin - Blog

Mike Hirshland (Polaris Ventures) - VC Mike

Marc Andreessan - pmarca

Jeff Pulver - Blog

Tim Ferris - Four Hour Work Week

Phil McKinney - Killer Innovations

Andrew Warner - Mixergy

Mark Suster - (GPR Partners) Both Sides of the Table

10 Characteristics of Great Companies and Great Investors

As we start to dive into our Entrepreneurship course, exploring new ventures, I thought these were a couple of great lists for people to review as they think about new ideas or new places to invest money.

• Fred Wilson's 10 Characteristics of Great Companies
• Matt Blumberg's 10 Characteristics of Great Investors

As one of the leading voices in technology and venture capital, Fred's blog (A VC) is a great daily read. Not only does he give great insight into various aspects of the business, but he encourages complete transparency through the comments and on-going discussions. It's an excellent example of realizing that there are 1000s of great ideas out there if you're willing to listen and be open-minded. He also acknowledges that he's been mentored by some of the greats before him, and he encourages giving back to newcomers to the industry.

Making Innovation a Process/Culture within your Company

After 13 months in the program, I'm convinced that experience is the greatest enemy of entrepreneurs. People get comfortable. People change their approach to work/life after one bad experience. People constantly seek balance, or risk mitigation. People get cynical.

This weekend was an interesting microcosm of how E-MBA's see change. It wasn't completely surprising, because the older you get the more data you have to reference, the more past successes you try and emulate.

Dr.Baliga showed us a video (circa 1998) of Gary Hamel giving a presentation at Stanford. The focus of the talk was how business cycles are radically compressing. If companies want to survive they need to stop thinking about innovation as the next great project/product, but rather learn how to make innovation a core part of their business culture. In essence, re-engineer their process for fostering innovation just like they spent the 1970s-1990s re-engineering their operational processes to reduce costs or streamline efficiency.

A couple of quotes from Hamel stood out to me (paraphrased):

• Speaking with a hotel CEO, he asked why they didn't allow people to rent the rooms in a more flexible manner. The CEO responded that Hamel didn't understand the hotel business. Hamel responded, "And that's exactly why I have a valuable viewpoint on this subject". He explained that in this new economy, 90% of all innovation will come from outside your industry. Companies have to be willing to look for non-industry analogies.
• Following up on those comments, which might have been considered a "dumb question", Hamel stated that, "It's only from "dumb" questions that new value will be created. That new rules will be created. And new rules are what allow companies to gain advantage in any industry."

Following the video, the class discussed the concept. Asked for their thoughts, they responded with things like:

• He didn't give out the "how to do it" answers because he's a consultant looking for new business.
• He dismissed operational efficiency, but that's still a valuable way to create better profits for a company.
• I could never go ask my CEO to start a project like the ones he recommends, I'd get ridiculed for going against the grain.

Granted, Hamel did point out that maybe 3% of businesses today (circa 1998, although probably still true today) have the type of culture that he discussed, so it's not surprising that so many people responded with skepticism. Most companies still attempt to compete in a model that defends their existing business, extends their current models, and exploits their past loyalty from customers. People don't comprehend this because they don't believe they have experienced it. But the reality is they have experienced it, just from the other side of the fence. Their company's competition have implemented it in banking, telecommunications, manufacturing, media, consulting and high-tech.

It's difficult to be a mid-level (or even executive-level) manager and listen to people like Hamel speak, because you can see the future and yet it feels so difficult to obtain because of all the change needed (inside your company) to get there. It might impact your current role, it might impact your future salary/bonus, it might impact your status within a group. But more importantly, and this is the difficult concept to grasp, is that it's not a matter of "if" but rather a matter of "when" a lack of action will result in value destruction by your company. It's a near certainty that failing to implement an innovation culture within your company will result in failures on a massive scale. So if people are worried about risk, this isn't the risk to be worried about (it's almost 100% certainty - "no risk"). The risk to manage or exploit is how to become part of the upside when the innovation culture (that you're driving) takes off and your company starts creating new value for your customers.

As Hamel points out, sometimes it's good to take an "outside the company" (or industry) viewpoint on change. Here's a good quote from VC Fred Wilson's most recent blog:

"Bliss McCrum, one of the two VCs who taught me the venture business early in my career always said, 'if you are going to put more money into a company that is not working, make sure to change the strategy, team, or cost structure, or all three'. It's good advice. You will not get a different result doing the same thing."

Making Sense of the Tremendous Growth in China

Towards the end of last year, my team wrote a paper about the tremendous growth in the UAE, analyzing the region as a potential location for Foreign Direct Investment. With oil above $120/barrel and tremendous growth in both India and China, it was fairly easy to see that the UAE was well positioned to become a new powerful economic center between Europe and Asia.

Then the econalypse of 2008/2009 happened and the sands that all that growth was built upon quickly shifted, leaving many of those towering buildings in Dubai empty or partially completed. The center of the world for crane rentals suddenly faced the realization that comes with $40/barrel oil and the interconnectedness of our global economy.

Throughout our visit to China, we were constantly stunned by the pace and scope of growth throughout the country. Every city we visited was filled with cranes and construction crews, often working until well into the night (3am in Shanghai). New freeways, subway systems, waterway tunnels. 50, 100 and 150 story office buildings. High-rise apartments packed densely into every corner of the city. And this wasn't just a building here or a building there, this was the equivalent of 10-12 Winston-Salem's being added in all directions of almost every major city.

During our visit with the CITIC Group, their Chief Economist told us that the State Government had set the mandatory GDP growth rate at 8% in order to sustain the level of employment required to meet their goals and sustain a harmonious society. As I've mentioned before, the Chinese economy is still much smaller than the US, but 8% growth is an enormous number for a country of 1.3B people. Over the past decade, the Chinese economy has averaged between 10-11% growth per year. But given the resetting of the global economy, it's worth examining if this rate of growth is realistically sustainable over the next 5, 10 or 20 years.

So where will all of this growth come from? Let's take a look at a few potential areas of growth, as well as some factors that could limit the growth if not addressed and corrected.

Growth Areas

Demand for Goods, Worldwide - While consumer's bank accounts, 401(k)s and home values have all fallen over the last 12 months, it hard to believe that regions with traditionally strong consumer demand (US, Europe) will stop buying goods. If anything, they will continue to move towards low-cost goods, which can only favor Asian manufacturers and sourcers. When visiting one of the Garmet manufacturers during our trip in Hong Kong, someone asked if they expected many factories to be reopened in the US (or North America) given the stimulus from the US Gov't. The response was that they pay their workers in Mexican plants $13/hr, but pay their workers in Singapore/Taiwan/Malaysia $0.21/hr, so it's hard to make the math of the stimulus work unless people in the US wanted to start paying $200 for a pair of blue jeans. At another factory visit in Xi'an, the Operations Manager told us that more and more factories are moving to the western part of China because the costs in the eastern plants are growing too fast. He said that for every 500 miles they move west (with Xi'an being the western gateway today), their labor costs drop by 50%. And China still has 25% of their population (450M people) living in western providences and areas. Many of those people make less than $5/day, with over 100M making less than $1/day. Those types of numbers say that it will be very difficult for the US to get back any of the jobs that have gone overseas in the last 1-2 decades.


Demand for Goods, Domestically (in China) - The GDP of China has risen from $2/person to $2,300/person over the last 20 years, and is expected to rise to $5-6,000/person in the next 3-5 years. After the economic collapse in 2008, the Chinese government quickly realized that it was too dependent on exports, with only 30-35% of GDP going towards internal consumption. With all the growth and opportunities within China, there is quickly developing a growing middle-class that is seeking additional goods, services and comforts in their lives. Many of the changes in the middle class are trending towards Western ways of consumerism. Just as the middle class became the backbone of growth in the US since WWII, there is an excellent chance that this same growth will happen within China over the next 10-20 years. Ironically, one of the things that many people have identified as coming out of the Tiananmen Square incidents in 1989 is the liberalization of China, which is creating greater economic freedoms from small and medium sized businesses.


Innovation - China graduates 600,000 engineers from university programs per year, while the US only graduates 60,000. Its elementary school children are in classes at least 6 days a week and are typically bilingual at an early school-age. While it's true that the US has been the center of 21st Century Innovation by some standards, others believe that the US stumbled or wasted the past decade and is failing behind in driving innovation in key technology areas. But once again, the massive numbers will drive the need for changes and innovation. Cleaner environmental conditions, renewal energy, greater food production, next-generation mobile communications - all of these challenges will spur innovation internally, and it will be subsidized by the State Government who has declared those all to be challenges that could impede China's sustainable future. Does this mean the US will stop innovating? No. But this should be a wake-up call to the US that our ways of looking at superiority or value-creation may need an overhaul. More and more major companies are locating R&D facilities in China, and it's only a matter of time before the innovation created in those labs spurs local entreprenuers and scientists to go out on their own and create the next Google or Genentech or Toyota or Airbus.

Government Influence - It my seem ironic to think that government influence could drive greater economic growth, but it's very possible that the isolationism and single-party system in China could provide the stability between market cycles to help guide China into areas that will allow it to continue to growth at such a rapid pace. Whether this growth is via tax incentives to critical Chinese industries, or through fiscal policy and stimulus, it's very possible that future growth will drive their political policies more so than in the US where party politics and re-election strategies often have more influence that long-term country growth.

Potential Stumbling Blocks

US Consumer Spending - Just as the Chinese are not going to be able to radically shift their culture to become greater consumers of goods overnight, neither will Americans be able to drastically reduce their addiction to consumption. But there is a possibility that the latest downturn, just like a bad result from a doctor's exam, will provide shock treatment to many Americans and begin a cycle of reduced consumption. The days of the House-as-an-ATM are gone (at least for a while) and many people are out of work, so the cash to spend is just not there. Whether this will change long-term is still to be determined. The possibility of a newfound "Buy American" sentiment could also arise and put a dent in Chinese exports to the US.

Rising Environmental Costs - As we experienced in Beijing, Xi'an, Shanghai and Hong Kong, the skylines of these major cities are badly polluted. With the growing presence of cranes driving new buildings and factories, this challenge will only get worse in the near term. The massive use of coal to power the country leads to polluted water, polluted air, and contributes to the loss of "green" space around the country. Finding alternative energy sources is one challenge facing the government, but also taking on the cost of cleaning their environment to sustain food and life will become an increasing burden. These costs will take away from GDP production.

Product Safety Costs - The recent problems with lead paint on toys shipped to the US highlighted another lack of control that could have a long-term impact on their ability to export. When safety issues directly effect children, the sentiment grows loud to associate "Made in China" with potential harm for children around the world. Trust is a commodity that is not easily replicated or imported, so the Chinese will have to increase their adherence to commonly used guidelines for safety and inspection, adding new costs to their products. These additional costs represent capital that will not be available for GDP production.

Growing Population Costs - Similar to the US, China has an aging challenge with it's population. The greying of their population will increase costs for healthcare, home-care, pharmaceuticals and all other aspects of extended life. How these added costs will be absorbed is still to be determined, since China does not provide a public safety-net similar to the US with Medicare, Medicaid and other programs.

The Laws of Big Numbers - 8% growth (or anything near that level) doesn't happen in developed countries. At some point in the near future, China will begin to face the challenge that all large organizations face, trying to navigate a giant ship in an ever-increase competitive world. Changes won't happen as fast. Competition from outside China will learn from their success and improve on their processes. Countries or businesses considered about the growing might of China may look to hedge their futures with goods and services from elsewhere in Asia, Eastern Europe, Africa or South America.

By no means does this short list of possibilities and challenges tell the whole story of what may happen with Chinese growth over the next couple of decades. The growth China is experiencing today is not only massive on a global scale, but its impact on the rest of the world will resonate for generations to come. Will they be able to sustain it in a way that ultimately creates more value than destruction? We'll have to wait and see. But if they can coordinate their economy in a manner that is anything like we saw at the 2008 Opening Ceremonies, the odds of success are a distinct possibility. It will take Olympic-like precision to get past some of their growth challenges, but whatever happens, the world will be deeply impacted.

Value creation through the dip

Following up on my post yesterday regarding the phases that hype, technology and value-creation go through, I thought it might be useful to dust off the questions I typically use to determine if a new innovation is a fad or if it has a chance to survive long-term. This seems to align to Fred Wilson's take on adoption of new innovations.

1. Can I explain the benefit of the technology (or vision) in 1-2 sentences, or do I need to ramble through some story?

2. If I can explain it in 1-2 sentences, do semi-technical or non-technical people understand it, or at least ask good questions to clarify?

3. If this technology was open-sourced, as opposed to being controlled by a single company (or a small number of companies), are there enough interesting aspects to get communities of developers to engage with it?

4. If it’s not happening already, what is going to be the “ah ha” moment when people will actually start valuing it enough to pay for it, or at least associating valid business models with it? If this is consumer-oriented, why would they include it in their life?

5. If it went away tomorrow, would anyone really miss it within 3-6 months?

"Hacking" Education

Fred Wilson at Union Square has been writing about "Hacking Education" for a few months, under the theme that maybe the same guidelines that drive VCs and Entrepreneurs could be useful to advance the struggling education system in the US. Various events and discussions have spawned from these posts. One from today caught my eye, as Fred looked at turning students into teachers, which is a similar concept to one that I discussed with my team earlier in the year. I haven't been as successful as I hoped in steering people away from a "grades first" approach to a "learning & exploring" first approach, but I am making some progress. Some of the late night weekend discussions have been very interesting lately, especially with the economy forcing people to thinking creatively about their next hustle.

The things that jumped out my about this concept were:

• How much it sounded like my G&T program in 4th and 5th grade, which is probably the most fun I ever had in school and the time when I truly learned how to think creatively....to the point that my group finished 9th in the world in the Olympics of the Mind competition (Michigan State Champions). To Bob Jedd, I am truly grateful for that experience.
• The kids in the example that excelled were the ones that didn't require structure and guidance in their life. Seems to sum up entrepreneurs vs. non-entrepreneurs pretty well.
• It almost completely aligned to the discuss we had in our ITMgm't class last weekend as we discussed Disruptive Technologies. The majority of the class, trained in traditional MBA skills, quickly shifted from disruptive thinking to sustaining thinking without any prompting. Find the structure. Find the well-known.
• When I brought up the idea that "freemium" might be a starting point for MBA programs of the future (ie. the courses are free and the revenues for the school evolve from there), it drew the expected "are you from Mars?" look from Deans of the Winston-Salem and Charlotte programs.

I'll be following Fred's work in this area closely, both because of my secondary interest in teaching as well as my primary goals of providing educational opportunities for my two daughters.

Positive NPV vs. "The Best use of Corporate Capital"..?

Fred Wilson's recent post about Google's VC business highlights a discussion we been having in our FinMgmt course, which overlapped discussions in both ITMgmt and StratMktg. It's one thing for Venture Capital firms to take on the risk associated with start-ups, but well does that risk-management and strategic-planning work for corporations that are trying to identify positive NPV projects to create value? Should you measure activities that attempt to drive Disruptive Technologies in the same way that you measure Sustaining Technologies?

One of the comments highlights an interesting paper from Michael Porter (HBS), who is frequently referenced in our FinMgmt readings:

"A study of the diversification records of 33 large U.S. companies from 1950 to 1986 shows that diversification--whether through acquisition, joint venture, or start-up--generally has not brought the competitive advantages or profitability expected. Portfolio management, restructuring, transferring skills, and sharing activities are four concepts of corporate strategy that companies most commonly use. Portfolio management no longer works very well in the United States because of its highly developed capital market. Restructuring is merely a stopgap measure that will not build shareholder value over the long term because it usually produces an unwieldy conglomerate. Companies have the best chance of being successful at diversification if they capitalize on the existing relationships between business units by having them transfer skills and share activities."

Interesting Business Models & Selling Techniques

While classroom studies are interesting, the real value comes in the translation to real world activities. I periodically go through my list of interesting business models or sales techniques to see how they leverage learnings from the classroom, or break the traditional rules to create new opportunities.

Here's a few that I recently found interesting:

Tats for Tees - Interesting approach to reducing the concerns that people have about spending too much on a "want" (not a need) in a challenging economy.

3/50 Project - Powerful concept; Shared concern for 1000s of people; Explained in a simple way that many people can understand and take action.

Threadless - Redefining how a basic product (T-Shirts) is designed, forecasted, and manufactured. Embracing community on a whole new level.

Etsy - Leveraging the long-tail of the market for hand-made goods. A simple way for companies to get access to a huge market, that previously would have been expensive and cluttered.

How does Twitter make money?

Following up on my previous post about Twitter basics, I thought I'd address another question from class that raised a number of concerns. "How does Twitter make money, and should I trust my information to someone that may not be here in XX months/years?"

Excellent question, and definitely something to be concerned about as you consider new business decisions. I wrote about several ways that Facebook could make money (in addition to advertising) several months ago, because I enjoy using the service and would like to see it continue. Or maybe I'm subconsciously auditioning to be a Product Manager at Facebook...who knows? Either way, it's interesting to look at how these Freemium companies can generate revenue and stay in business.

As of now, Twitter does not have a revenue model. In fact, this has been the center of much speculation amongst the technorati lately. So let's look at the basic ways that Twitter could make money, as well as some additional opportunities for companies to leverage Twitter to drive revenues for themselves.

1. Advertising - This is the simplest to understand. Just like Yahoo! or Google, Twitter could begin to monetize their traffic by placing targeted advertising along side the tweets. And considering the real-time nature of their traffic, this could create new advertising models for companies trying to reach certain demographics.
2. Additional Tweet Space - Tweets are currently confined to 140 characters, a throwback to the days when Tweets were mainly sent via SMS (Text) messaging. But some people and companies struggle to get their message out in this short format. Supporting larger character lengths may be a service that Twitter can monetize.
3. Auctions for "Suggested" listings - This came up recently, as new members often struggle with who to follow.
4. Integrated Services - An example might be something like this: Starbucks sets up a Twitter "watching" service that looks for people complaining about traffic-jams or any other delay. When they see this, they determine where the users are located. Then they send those people a Tweet offering a coupon to the local Starbucks. This is a very basic example, but there are thousands of possibilities for companies that want to come up with creative ways to reach their target audience. Twitter could offer a service for those companies that can't do this themselves (SMB's with limited IT knowledge), or companies that aren't sure of the right way to engage with social communities.
5. Broaden the Scope of the Platform - One of the key elements to any Social Media company or service is a willingness to broaden the usage of the platform. This means that not only could others create monetization opportunities, but you can leverage new opportunities because of the increased breadth. This could mean creating new partnerships to leverage the information in Twitter feeds, or allowing partners to insert themselves into the conversations in new ways.

That's just the tip of the iceberg of ways that Twitter could make money. I'm sure there are dozens more.

There is also the possibility that Twitter will get purchased by one of the major social networks, or by Google.

Twitter is Mainstream - Will this change the Freemium Model?

A classmate, Jim Schweitzer, posted this update to his Facebook page today "CNN likes twitter now too:http://www.cnn.com/2009/TECH/02/12/twitter.shorty.awards/index.html i don't know if it's cool anymore."

For those that haven't heard about Twitter, it's an online "micro-blogging" service that let's people and companies communicate in short, 140 character messages.   People use it for fun to send status messages to friends ("at work but want to meet up at bar for drinks at 7pm") and various companies are starting to use it as a way to communicate with customers or about their current projects.

Twitter is a free service, with over 1,000,000 users.  To run this service, Twitter obviously has to provide massive amounts of computing services (servers, bandwidth, software programming).  So how does it stay in business if it collects no revenue?  Welcome to the "freemium" business model, where the primary goal is to create as many users of your online service as possible, and then figure out how to eventually get at least a small percentage of them to pay for an enhanced version of the service. Or maybe nobody ever pays for the service, because it's subsidized by online ads. 

I bring this up for a couple of reasons:

1. People have become such big fans of Twitter that others are running contests to help Twitter come up with a business model.  Most of these models involve Twitter charging users for some aspect of the service.  
2. With the economy being where it is today, people have less to spend, VCs are funding fewer opportunities, and companies that aren't cash-flow-positive aren't going to survive very long.  This means asking for money will be difficult (from customers or VCs), but it's almost mandatory to survive.  Tough spot to be.
3. For one of my StratMktg Analysis projects, I'm going to explore the Freemium business model and how companies can evolve into hybrid-Freemium or full-paid serivces.  I suspect it's going to be interesting psychological research, since most customers prefer to see prices go down than up.  

The project isn't due until April, so I have a little bit of time, but I'm really looking forward to seeing what ideas may come out of this challenge.  It's not the same problem I recently mentioned with Facebook, but they have similar challenges.  I hope to explore both aspects.  I'll post the results when the paper is finished. 

[UPDATE:  Looks like Twitter just got a bunch more VC money, and hired their first BizDev person.]

Discussion(s) of the Week - Today's Economy and Tomorrow's Economy

Since last fall, the world has been going through various stages of reality checks, depending on your industry or specific company. Whether you were Leiman Bros, or Chrysler, or IBM or Mom & Pop's local diner, the reality of the new economy has hit you in some form or fashion. That reality seemed to be in full effect in class this weekend. Classmates are starting to loose jobs, have plants closed, laying off more people than expected, closing more stores. There was clearly a new level of stress and frustration on their faces this weekend. And as positive as we're all trying to be, I believe it's going to get considerably worse. Worse throughout 2009. Worse continuing into 2010.

I heard a conversation asking the over/under on how many people in class would still be employed at the end of the program. This wasn't a joke.

I heard conversations where people were asking what their management was forecasting for a recovery timeline. None of the people mentioned 2009. At least one mentioned 2011.

There were a few conversations this weekend (some hallway, some classroom) that were very interesting to me (WARNING: If you're looking for sunshine, stop reading now):

1 - For an administration that hit almost entirely home runs during the campaign, there have been a lot of foul balls and missed swings during this first month. But this conversation is not about bashing the new administration, since they walked into a tremendous mess that isn't a short-term fix. The real discussion was about whether or not people believe that these stimulus plans truly address real problems.  For example, if no floor is reached on the price of toxic CDOs, then how are the banks ever going to reach a level where their holding ratios allow them to lend?  Neither TARP nor the proposed Stimulus package seem to address this.  Fred Wilson makes some interesting points today about why this probably shouldn't be a solution the government tries to address my itself.  And how do they expect infrastructure improvements (ie. roads) to create a short-term impact?  Those projects take 5-10yrs, are notoriously over-budget and late.  And where are we going to find all the workers?  In case they haven't noticed, America has become a knowledge worker economy.  

2 - In our OpsMgmt course, we get a daily dose of how America has lost it's way in manufacturing.  One of the questions that is always asked is, "How would you fix this situation?".  In talking to classmate Ric Freeman, we asked ourselves if we had a magic bullet to "fix it", if we'd have the people to drive the fixes.  We've gone at least one generation with American kids not seeing manufacturing (or certain aspects of engineering) as an exciting field of work. They've seen their uncles or fathers lose jobs from that segment, or seen jobs shipped overseas.  So we asked ourselves, what would it take to create that new interest for American students and future generations?  What if the Obama administration decided that there would be one US Automotive company, with the goal to not only create world-class vehicles, but also serve as a beacon for future manufacturing and engineering students?  Would this help?  Would it even be possible considering current wage expectations or forces or competition? This is a difficult problem to comprehend a solution for.  

3 -  During the ITMgm't course, we looked at Merrill Lynch's eTrading platform from 1998 and the challenges they faced with their Financial Consultants (FC) as they moved to electronic trading and the potential changes to fee structures for the FCs.  As we looked at ways to communicate these changes to FCs, and integrate that with the strategy towards online services, someone suggested that maybe the FCs would be willing to take a pay cut to help the overall strength of the firm going forward.  Hmmm...socialism for capitalists?  Interesting.  I bring this up for two reasons:

a - My classmate works in an environment where loyalty to the company is very strong, and this wouldn't be a completely unusual request to workers.  

b - Based on the recent number of layoffs across all industries, I wonder if we're going to have a generation (or multiple generations) of people that have absolutely no trust in their employers and how this will effect managers ability to motivate teamwork in workers.  

More on Bits-Based Production

Yesterday I talked about how I was trying to rationalize the difference between bits vs. atoms based goods, and the associated production, especially as it related to the content of our OpsMgmt course. Today I saw this brief interview, Five Questions with Fred Wilson, where Fred talks about the pressure that bits-based economies will face in 2009. While the bits-based stuff always seems to get headlines about the innovation aspects, Fred does a nice job of highlighting that it ultimately will be about how those industries drive this bits-based functionality into their production systems....for whatever good or service they deliver.

The connections between the two are starting to make alot more sense....

Discussion of the Week - Exponential Times

We had several interesting discussions in class this weekend, but I'll go ahead and pick a discussion from our IT Mgm't course as the introductory "Discussion of the Week" topic.  I actually learned more in the early discussions in the OpsMgm't and StratMktg courses, but I think this discussion had broader relevance to our overall MBA program.

The discussion centered around a snazzy Exponential Times video, looking at the pace at which our world is changing due to this technology they call "the Internet".  Prior to watching the video, we were asked a simple question, "How do you see the trends of the last 10 years continuing (or failing)?"  The responses ranged from Globalization to Big Box Retail to Greater Customization, alot of stuff that you read about in the press on a daily basis.  All good answers, but then we watched the video.  

As a group of (on average) 30-40yr old folks, the immediate response in the room was fairly quiet.  When you're between the Boombers and GenY demographics in the US, and the mass of humanity in both India and China, it's an interesting place to be...to say the least. 

As a group, we face several challenges and opportunities:

• While we're technology literate, we're really the first generation to move through this as a learning curve, not as a part of our DNA (sorry Boomers....you're on the way out, so I'm not counting you anymore)
• We've grown up in a world where companies followed the strategies and models defined in the 20th century.  We learned and been trained in companies that sold locally and regionally, and that survived over many decades.  Our MBA program is somewhat of a bridge between those 20th century models and scratching the surface on 21st century ideas.  

Having lived on Internet time for the past 15 years, I felt comfortable (as much as anyone can be) with the explosiveness of the numbers in the video.  I've lived with growth on that scale for a long time.  What I need to get my head around is the idea that many of the current business models I know will be (or already are) obsolete.  The good news is I have Fred, Seth and Umair to balance my work experience and MBA learnings.

Crowdsourcing for Better Results

I've spoken in the past about how I'd like this blog to be more than just a personal journal, by engaging my classmates in the discussions and comments.  It builds on the ideas highlighted in best-sellers like Wisdom of the Crowds and Wikinomics.   Fred Wilson writes a nice post today about some of his favorite parts of the upcoming book "What Would Google Do?", highlighting how group-based contributions elevated the discussions and learning.  

I'm almost back to real-time for this blog (starting 2nd semester....next week), and now starts the challenge of trying to figure out a way to get a group of people that are already overworked (Professionally & MBA) to share their experience and ideas.  If I do a good job with that challenge, I will have learned a very valuable skill.  If not, this may end up being an 18 month "dear diary".  

Let's hope for the former....

Bullish on 2009

I suppose I couldn't officially consider myself a blogger unless I jump on the bandwagon of making predictions and look forward to 2009. As I stated in an earlier post, I believe that the turmoil that so many companies, markets and countries are dealing with now will begin the spark of great things to take us into the next decade of growth. So the only attitude to take into a period like this is to be positive, show leadership and look for greatness. Some of my favorites echo those sentiments - Fred Wilson, Om Malik and Seth Godin.

As I told my MBA team a few weeks back, "2009 is going to be an interesting year. I'm filling my glass up to at least 3/4 full, regardless of what happens. Too many opportunities ahead."

Happy 2009 to all of you!!

More than a WFU MBA journal

Since I'm still in time-warp mode until January, backfilling a bunch of posts to recap the 1st semester, I'm occasionally going to preview some of the other things that I hope to do with this blog.  If it were just a journal, I doubt anyone would keep reading.  But if I take Seth Godin's advice and create a Tribe, then the possibility exits that we can create interest and expand the conversations we have in Winston-Salem (and Charlotte) each week

1 - "Decision of the Week" - Each week, I will take a recent topic from the Business Press and highlight certain aspects that are worth exploring in more detail.  It may be an executive decision, a competitive market shift, a unique marketing approach, a savvy financial transaction or some other interesting element.  I'll open up the discussion (via blog comments) to my classmates in both the Winston-Salem and Charlotte programs.  We have mechanisms in the program to do this within the context of a class topic, but this should let us explore cross-topic impacts of business decisions, as well as open it to outside input and discussion.

2 - "Discussion of the Week" - This segment allows me to highlight an interest discussion, or person from each weekend's discussions.  These discussions may involve classroom topics, or may center around back-of-the-napkins brainstorming that often leads to great ideas and great companies.  I also hope to highlight some of the gifted personalities from the WFU EXFT2009 class, or across the WFU MBA programs.  

3 - "Connecting the Dots" - Academics are greats, but unless you can tie it to real world activities, it's just learning for learning's sake.  This segment will highlight connections between the topics in class, and real world examples of the concepts in practice.  

4 - "inVinCible Ideas" - What would a MBA program be without the creation of new business models and company ideas?  This segment will spotlight the activities that classmates are exploring and developing as they plan for the next step in their career or life.  VC funding may be required.

[Update - Dec.28, 2008] - The more I think about this, and the more I follow people like Fred Wilson, Umair Haque and the read books like What Would Google Do?, I have to ask myself if the recent worldwide economic crisis doesn't require us to truly think differently about how we conduct business, define government and shape societies.  I don't have a name yet for this segment, but there will definitely be segments where we'll explore this type of thinking, which should be a lot of fun.