Tag Archives: Business

The End of Being Organized

Posted on May 17, 2013 | 1 comment

Software is getting better and better at helping manage your life, so that you don’t need stay as organized as you used to. In fact, this article from one tech journalist is even titled “stay disorganized.” In the abstract, this is a good thing. Why should people have to remember stuff, or spend time organizing their lives, when computers can do it for them? Isn’t that one of the reasons we have computers…to do the boring stuff for us? But for people who are really organized, like me, this means that technology is taking away one of our comparative advantages. Historically I have been more productive than average, since I was really organized about my work. Now technology has reduced that advantage.

I think the first step in this direction was when Google introduced Desktop in 2004. It searched your PC much faster than the old Windows Explorer search, so that you could find files (word docs, spreadsheets, etc.) even if you couldn’t remember where you saved them or what you named them. That was awesome, except that I already knew where all my files were, because I was an aggressive user of folders and subfolders (sharp-eyed readers know that I have previously commented on folder people vs. non-folder people). Thanks to Desktop, the five minutes I spent working while someone else was searching for a spreadsheet was reduced to five seconds. My productivity advantage disappeared.

Then Google brought that functionality to email (no folders at all when Gmail launched), again eliminating the advantage of my clever folder systems. And now we are seeing apps that apply that same computerized organization to your entire life. What if you forgot to print a travel itinerary, or even write down your flight number? No problem, Google Now will do all that for you. So much for my advantage of having a detailed itinerary prepared, breezing me to my destination ahead of everyone else. EasilyDo and its competitors will help manage your duplicate contacts, remind you of your mom’s birthday, and even buzz you when you haven’t returned your CEO’s phone call.

For society, this is great, freeing up space in people’s brains to write, or cure cancer, or develop more organizational apps. For me, it’s a disaster. I had one claim to fame – being organized – and now it’s gone. I guess I need to find an old has-been app.

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Native Advertising: Creative is King

Posted on May 6, 2013 | Leave a comment

In the internet media world, “native advertising” is all the rage. Native ads are ads that have enough content to be interesting to readers, and are more organically embedded in the content of the website. In other words, advertorials rather than intrusive banner ads. Some people complain that native advertising breaches the editorial wall, and others say that such breaches are the only way for publishers to make money online. There is truth to both sides of that argument.

But editorial purity is not the point of this post. Instead, I want to focus on how the success of native advertising shows that, yet again, content is king. When you read about how and why native advertising is working (like here and here), you’ll see it constantly described as great content you want to read, as adding value to consumers, etc. Native advertising works to the extent that the content is actually good. Because what consumers care about is content.

Or, in the context of an advertising agency, creative is king. If you want to produce good content, you have to have good creative people doing the producing. I think that the real development here is not native vs. non-native, but rather that marketers and their ad agencies are finally putting serious creativity into online advertising.

Since the beginning of the online era, I’ve felt that the main problem with banner ads was not that they were intrusive, but that they sucked. Nobody put any creativity into them. Partly that was driven by size – there just isn’t enough real estate to do much with them – but partly it’s because online campaigns aren’t the glory campaigns in an agency. TV is where the glory is earned for ad execs. TV commercials win awards and get talked about. Online, on the other hand, is boring. It’s basically direct mail, for god’s sake.

Native ads, however, are larger and have a variety of possible formats. There is room for far more creativity than you have in banners. It’s still not a super bowl TV spot, but it’s a much broader canvas than a banner ad. Moreover, with so much of advertising budgets shifting to online, web advertising is getting more respect within agencies, and so top people are working on the web ads.

Yes, native ads are in the middle of the content, but that isn’t their innovation. Their innovation is in size and flexibility, which enables creativity. Thus, the real key to native is that it gives marketers room to focus on quality. And when quality work is done, people pay attention.

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Reviewers Focus on New Instead of Good

Posted on April 30, 2013 | Leave a comment

Something that I often see happen with professional reviewers is that they get so focused on the details of what they’re reviewing that they can miss the big picture. As they become ever more expert in their field, they tend to get mired in the miniscule differences that only an expert can see. This isn’t necessarily a bad thing – you want your reviewers to know what they’re talking about – but you need to be aware of this possibility and read the reviews accordingly.

For example, in reviews of TVs (not TV shows….actual TVs) you’ll often see reviewers rhapsodically discuss the blackness of the blacks, or maybe discuss in detail the customizable settings 7 layers deep, like this: “I really appreciated that both THX Cinema and THX Bright Room offer basic adjustments.” And for the serious gear-head, that is useful info, but for most of us, we just want to know if the picture is any good.

Similarly, this review of The Avengers discusses “the grinding, hectic emptiness, the bloated cynicism” (lines I wish I wrote, to be honest!) of the film, but not so much its entertainment value. Again, a useful review for the cineaste, but perhaps less valuable to a guy looking for a fun Friday night flick. Of course, you should probably know that a film review in the NY Times is going to trend toward the intellectual and away from the fun.

We saw a similar dynamic in the recent reviews of the new Yahoo weather app. Reviewers loved it, raving about its “modern design” and calling it “stunning.” And it is indeed a lovely app. But is loveliness essential to a weather app? When you say something like this –

Visually rich is a great way to describe the new Yahoo Weather app for the iPhone. It uses Flickr community images to illustrate the weather in glorious, full-screen color rather than a boring table of temperatures with some tired pop-meteorology icons

– aren’t you missing the forest for the trees? Because what most users really want from their weather app is the ability to quickly see the weather forecast, and those “tired” icons do a pretty good job. Look at this photo, from Yahoo’s weather page on the web.

Tired, but very useful

Tired, but very useful

Pretty useful, yes? But the reviewers, so focused on their reviewerly details, have lost sight of what the real goal is, because they so want something to be different, fresh, new. Just like the NY Times wants The Avengers to be other than cynical, while the target audience wants nothing more than cynically formulaic entertainment. So absolutely read reviews, but keep in mind that most reviewers care about different things than you do.

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Technology, Hubris and Lunch

Posted on April 29, 2013 | 1 comment

As you may know, here in Silicon Valley the latest thing is for companies to provide all their employees with free lunches (and often breakfast and dinner too). I think Google was the first to do this, and Facebook followed them, and now even small startups bring in a catered lunch every day, or even hire their own chef. This week the WSJ reported that the IRS is looking into whether this perk should be taxed like most employee perks are. After all, the IRS thinking goes, this is effectively compensation.

I’m no expert on tax law, so I can’t really say whether these lunches should be taxed or not. The way the WSJ laid out the issue, it certainly seems like taxation is the legal path, but the article may have not framed the issue properly.

But one of the arguments that tech companies are making is that the lunches aren’t compensation, but an essential part of the collaborative culture of Silicon Valley. As one tax attorney put it, “there are real benefits for knowledge workers in having unplanned, face to face interaction.” This is complete crap.

Can anyone say with a straight face that it’s essential for an engineer to run into a marketer at Facebook, but that doesn’t matter at Procter & Gamble, or at Caterpillar? That somehow cooperation is more impactful at technology companies than other companies? Sheer idiocy. Having interaction between various constituents of a company is valuable no matter what the company does. To claim that somehow it’s different in Silicon Valley is just the height of hubris.

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Spamming Your Friends on Facebook

Posted on April 12, 2013 | Leave a comment

There are many great things about social media, but there are definitely some pretty crappy elements too.

One of those crappy elements is the tendency of people to use their news feeds to promote their business. You see this on Facebook, LinkedIn, Twitter – someone puts into their feed a blurb about their company or their professional life:

  • My store was just mentioned in People magazine!
  • Vote for my tech company in this best-startup competition
  • Check out my interview on CNN regarding spamming your friends

It takes the self-glorification that already pervades social media – “look how great my life is!” – and adds a professional component. Seeing these items in a friend’s news feed, where I can’t avoid them, is sort of like the friend giving my email address to a spammer, but instead of some stranger peddling me Viagra, it’s my own friend doing the spamming.

When you bring money and career into the news feed glory wall, it commercializes friendships; people are turning friends into customers. And I’m not sure that transformation is reversible. Once you’ve monetized our relationship, can I ever see you as just a friend again?

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How is Foreign Tax Repatriation Different than Immigration Amnesty?

Posted on March 18, 2013 | Leave a comment

As politicians in DC lurch toward some sort of bipartisan approach to immigration, conservatives remain adamant that immigrants currently in the country illegally be given no path to citizenship. These conservatives see no reason to reward lawbreakers with citizenship, and worry about the message that will send to future immigrants: if you come here illegally and stay long enough, you will get away with it. I understand this perspective; amnesty reeks of moral hazard. I think that realistically, we need to find a path anyway – we can’t just deport 11million people, many of them employed and embedded in society. But I do very much appreciate the concerns of conservatives on this issue.

However, at the same time, the same conservatives are calling for a tax holiday that will let US companies repatriate their offshore cash at reduced tax rates. Under current law, companies can keep their overseas profits in low tax countries, but if they try to bring that cash back home, they have to pay higher US taxes. In 2004 companies were granted a one-time holiday, with tax rates reduced to 5 percent, and they took advantage by bringing a ton of dough back into the US. But of course, all this tax amnesty did was encourage companies to keep driving their revenue through offshore tax havens, and then use their lobbyists to push for another tax holiday.

If amnesty creates moral hazard, by encouraging people to do the wrong thing and then be forgiven, why would multinational companies be different than illegal immigrants? Storing your cash offshore is not illegal, while immigrating illegally obviously is, but the motivation component is the exact same: if you believe that amnesty encourages behavior, then you need to apply that theory equally across your policies.

By the way, among the leading rationales advanced for the tax holiday is that companies will invest the repatriated cash in jobs and growth. However, studies of the last holiday showed that companies mostly returned the cash to shareholders. Even the Wall Street Journal says so! Here is a story about how companies play the cash repatriation game, and here is one about how hard corporate lobbyists are pushing for a holiday.

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Why is Health Care So Expensive?

Posted on February 24, 2013 | 2 comments

According to Steven Brill, whose 26,000 word article in Time is getting all kinds of attention, one big factor is price negotiation. An uninsured patient can’t negotiate at all, so they get charged $1.50 for a single Tylenol in a hospital. Insurance companies negotiate on their customers’ behalf, so they get charged less. And Medicare, which is the biggest player of all, negotiates hard — volume discounts and all, just like any big customer anywhere in the world — and thus pays the least for the same products and procedures.

Interestingly, Brill steps away from one obvious solution — have Medicare cover everyone — because he says it will leave doctors underpaid. Felix Salmon takes him to task for this, pointing out that Brill never states what “underpaid” is. Since my greedy doctor post remains my most read and commented of all time, I feel a certain obligation to chime in here. I have never seen any analysis that tries to show what doctors might get paid in an all-Medicare system. Maybe it would be pretty low; if GPs maxed out at $50,000 per year, they probably wouldn’t spend all that money and time at medical school. But maybe doctors would still get paid what they do now, and it would be hospital administrators (whose multi-million dollar salaries are the true villains in Brill’s piece) getting a pay cut. Or maybe it will be CEOs of drug companies getting paid less; who would complain about fewer $78 million severance packages being paid to CEOs?

You can read more commentary regarding Brill’s article here and here.

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Bad Driving, Google Edition

Posted on February 8, 2013 | 1 comment

My series of posts about double parking gets to intersect today with a trend getting some recent publicity: tech companies using private buses to drive their employees from San Francisco down to Silicon Valley.

You can read more about these buses here, here and here. There is a little controversy around these buses: on the one hand, they are clearly more environmentally friendly than having everyone drive their own cars. On the other hand, they are pretty freaking big, and often drive on city streets that aren’t designed for vehicles that large. Moreover, they use stops that are designated for city buses, and then the city buses don’t have room to stop.

Moreover, and this is my pet peeve, they don’t even pull all the way over into those stops. The photo below is of a private bus on Lombard Street, clearly not pulling into its stop and clearly blocking a lane of traffic. I don’t actually know which company’s bus this is; they tend to hide their affiliations, except for the Genentech buses, which are festooned with Genenetech logos, and which often do exactly what is pictured here, in the same exact spot.

Google bus blocking traffic

Google bus blocking traffic

In addition to their clogging up of city streets, I am a little torn on the private buses. I appreciate their greenness, but I wonder if the buses didn’t exist, then maybe a lot of these people would move out of the city and to Silicon Valley, closer to their work. Should we really enable people to live far away, rather than supporting a denser work-home nexus?

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Spending Too Much on Brand Names; BMW, Coach, etc.

Posted on January 23, 2013 | 2 comments

Interesting that it’s a car webzine (thetruthaboutcars.com) that has written the best commentary I’ve seen on the trend of the past few years in which young people have been spending well beyond their means on brand-name cars, purses, clothes and other consumer products. There was a time when buying a BMW, or an Armani suit, or $1,000 purses and shoes, was something done by people in their 40’s and 50’s, who had been well paid for decades. Now 25 year olds PR account executives making $40,000 are buying Jimmy Choos and putting them on their credit cards. Or as the article says, a few years ago “the idea of spending four figures on a handbag when one worked at an entry-level white collar job would have been seen as irresponsible and reckless at worst, crass at best.” The pre-financial crisis debt binge wasn’t just about mortgages. People were overspending on all kinds of goods, and they still are.

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Overseas Cash and Justin Bieber

Posted on December 13, 2012 | Leave a comment

As tax reform is discussed in preparation for our upcoming leap off the fiscal cliff, among the topics has been corporate tax reform, in particular how American companies are taxed on their overseas income. As the system currently works, as long as US companies keep their cash offshore, they don’t have to pay US taxes. Once they bring that money back, it’s a flat 35% tax rate. So, not surprisingly, US companies with multinational operations have a lot of cash stashed overseas. Read all about it here, here, here and here.

The thing is, some of these companies have so much cash overseas, and so little here in the US, that they’re borrowing money to fund their operations here, or to fund dividends and stock buybacks. But they (the companies and the reporters covering this topic) are making it seem like the companies CAN’T bring the money back to America. Let’s be very clear: they CAN bring the money back, it will just cost them 35%.

For example, here is how the WSJ described it:

Each of these companies is grappling with a growing problem that comes from keeping Uncle Sam away from their foreign income: How to round up enough cash in the U.S. to cover items like dividends, share repurchases, debt repayments and pension contributions.

And here is how a CFO described it in the WSJ:

“You end up with the really peculiar result where you are borrowing money in the U.S. while you show cash on the balance sheet that is trapped overseas,” said Bruce Nolop, former chief financial officer of Pitney Bowes and E-Trade Financial and now a director at Marsh & McLennan. “It is a totally inefficient capital structure.”

Now I understand why companies are keeping their cash overseas: it’s their job to minimize taxes. And I can certainly see why they would rather borrow at historically low interest rates (like 5%) than pay a 35%. No complaints from me on either front. But for the companies to act like it’s just impossible for them to bring the cash home annoys me. They choose not to bring the cash home, for good reasons, but if they really wanted to they could. It’s like saying that you can’t get Justin Bieber to play at your daughter’s bat mitzvah. You can, but it’s going to cost you a boatload.

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