2013 Dec 30

It Is Always About the Profit... but Depends on the Currency

In my last article, I looked at how the attempt to increase profits motivates people. Sometimes it leads to the wrong behaviour, but most of the time, especially in a competitive environment where customers have real choices, it leads to the right behaviour. This is the reason why I so rarely have worked with non-profits; they so often have a strong disincentive to improve. Jeffrey L. Minch, a longtime entrepreneur, CEO, and professional executive coach, pointed out in an extremely insightful comment:

2013 Dec 26

The Profit Motive... Motivates

It is finally happening. American universities and colleges, long an upward funnel of spending, are cutting back. The WSJ reports in its Boxing Day edition that many institutions, facing the inability to raise prices any more - well, they could, but would lose many students - and the decline in state funding, have decide they actually have to make choices. The reason they operated this way was simple: marketing.

2013 Dec 23

It's a Matter of Trust

With due respect to Billy Joel, this article is not about music, but about buying music - or anything else - without getting your credit card information stolen. Over a period of more than two weeks, data thieves stole more than 40 million credit and debit cards from Target stores. Unlike most well-publicized cyberthefts of cards, the thieves apparently did not break into the back-end IT systems and databases of the company and take a big dump of the cards.

2013 Dec 11

AT&T Doth Protest Too Much, Methinks

For years - since the dawn of the American mobile industry - carriers have sold subsidized phones in exchange for multiyear contracts. Instead of paying $500 for a phone, you pay $100 or $200, and commit to staying on their network 2 years. Now, out comes Randall Stephenson, AT&T CEO, and whines, "we cannot afford to subsidize those phones anymore!" Is it possible? Could AT&T be losing money (or at least potential profit) by subsidizing phones?

2013 Dec 10

Feedback is Only Good If You Use It

Why do companies that are good at getting feedback often fail at actually improving? Yesterday, Harvard Business Review published a great article by Rob Markey, where he pointed out five top reasons why companies fail to make good use of the data. The article is short and a good read. Their very first listed reason is a classic scientific method mistake: discover what, ignore why. Here's the problem. If you put in effort to find out how your company is doing, what the customer satisfaction or market acquisition or return customer metrics are, but don't dig deep enough to find why they are that way, you are only halfway there, and arguably worse off.

2013 Dec 4

Making the Right Amount of Investment in Technology

So it happened again. A company underinvested in technology, the numbers looked great for years, and then it came back and bit them in the rear.... hard! RBS (Royal Bank of Scotland), the British bank, had a major failure that left customers unable to access accounts and withdraw cash, and this was less than 18 months after their last such glitch. Unlike most cases, the (newly installed) CEO of RBS, Ross McEwan, came out and openly apologized.

2013 Dec 2

CEOs Must Know Their Products (or, It Isn't Just About Numbers)

Last week, HP announced its fourth-quarter results. Apparently, they were better than expected, but revenue still fell. It says a lot that a company can have falling revenue, and still beat expectations. What does it say about HP when analysts expect revenue to fall even worse than it did?? I particularly liked a quote in Australia's "The Age" on the HP results. "HP, one of the oldest companies in Silicon Valley, was blindsided by advances like smartphones, tablets and cloud computing, all of which have hammered its core businesses.

2013 Nov 29

Trust But Verify... Your Carriers

For a long time, all but the most security-obsessive companies trusted their telecommunications carriers. If you have two data centres, say, one in New York and another in California, you likely need significant reliable connectivity between the two to transfer data, administrative maintenance, backups and other purposes. While minor traffic can go over the Internet, protected by a Virtual Private Network (VPN), for reliable connections you use a dedicated backhaul link, perhaps an older carrier-provided T1 or MPLS.

2013 Nov 27

Making Money in Smartphone Sensors

While there are hundreds of millions of apps that extend the software capabilities of smartphones using whatever hardware already comes shipped with your iPhone or Android, there are thousands more that extend the hardware capabilities of the phone by shipping physical hardware. These hardware extenders provide physical functionality that does not ship on the device, and connect to the phone, usually via Bluetooth, the same way your modern car's audio system (or Apple TV) extends your phone by providing a large microphone and speakers.

2013 Nov 26

Take Risks!

Do entrepreneurs like risk? Are they native risk takers? Popular media says they are; after all, who else is crazy enough to abandon a high-paying job in finance, in consulting, or even in another well-funded startup to go out on their own, especially with an unproven idea? An alternative view says that they are actually risk-averse, but it depends what kind of risk. Entrepreneurs balance the risks of doing a startup with the risks of missing the quickly-passing opportunity.