Corporate blog nightmare

September 27, 2006

German magazine Der Spiegel reports (site in German) that Siemens CEO Klaus Kleinfeld has been the target of nasty comments by Siemens employees in his own blog. His colleagues find obscene the fact that he has promoted a 30% raise for the company´s main executives. Here are some cool comments on “poor” Kleinfeld (translated from Spiegel´s article):

“Hi Mr. Kleinfeld, I’ve been asking myself for long now where people like you want to lead our society. Always more, more, more…”

“when I tell people where I work, I usually hear the same question: “And when are you going to be fired?”

“From your letter in June, 29th:”We must first make money before we spend it.” So I hope the 30% were already made.”

Hmmm…. It looks like the CEO is going to have a hard time this week. The press can be unforgivable and sometimes employees even more.

Towards zero price

September 22, 2006

Exactly 21 months ago I bought a 512Mb mp3 player from Creative. A nice piece of hardware all blue and shiny. I stepped on an electronics outlet in Lisbon and after a while picked the one I found it more appropriate for jogging. At that time there were no ipod nanos and the Creative Muvo (that was its name) seemed to me just fine. So I happily went on paying 119 euros for it. Fast forward to our present time. Now you can go everywhere in Europe and pay for the same gadget as little as 42,95 euros. Yeah, big deal, so electronics devices get cheaper. Who doesn´t know that?

Well I am less concerned with electronics shrinking prices and more curious about how this low cost frenzy will shape economics and ultimately our very society. If we take my mp3 example, we´ll see that in roughly one and a half year the price dropped circa 60%. This is within the range of what Moore´s law predicts for computers in terms of processing power. Interesting enough we are probably a bit further away in the computer business to reach a saturation point where nobody would need a better computer, as software evolves (some would define evolution as the increase of useless features) it sucks more processing power and we all need upgrades. What about mp3 players? Today I own an Ipod video with 60Gb and even being totally addicted to music, carrying the thing on my way to the University or on trains or in the supermarket, I managed to get mere 17Gb of music after having ripped all my cd collection.

So do we need all this capacity? Are we reaching a point where Wal-Mart will give away free MartPlayers in order to lock customers on its video and music stores? Maybe we should also look at the computer industry in the next years: will Google foundation sponsor free laptops for public schools in emerging countries? Will US$ 100 computers from MIT succeed? 600 euros computers are already all over the place. What about 3 years from now, could we have them for half of the price? And then what?

Perhaps we are not considering the exceptional talent of companies in creating yet another new trend to woo customers. Yeah, probably there will be enough broadband offerings, artificial intelligence software and all sorts of stuff to reinvent prices. Nevertheless industry will have to work harder and harder to keep them afloat. Although as far as everybody knows  there is no free lunch, we might well pretty soon be entering some sort of market that resembles more and more of an “all-you-can-eat” buffet and less the old shopping malls as we know them.

It´s all about commitment

September 20, 2006

Yesterday around 19h@Germany I attended a very interesting skype-meeting with a friend of a friend who has been a software entrepreneur for 15 years now. I didn´t talk much, I kept listening to the man valuable insights on how to lead a global business. He was talking from his office in Israel where most of the software development takes place. They use open source tools to manage their process of building and maintaining systems around the world, including places like Munique, Singapour and Sidney (hmmm pretty cool). In all these places they keep a small sales office to provide support for current clients and increase their customer base. So lesson number one: sales matter… a lot.

(This sales stuff is obvious or at least should be, but it doesn´t seem to exist a consensus about that in many companies I visited.)

Then he carried on lecturing about how they build the company from the beginning without any venture capital for the first 5 years. They worked hard till they signed their first contract 18 months after they had started. Again this seems to go against most of the business articles in fancy magazines around the world. As far as I have been reading the accepted rule of thumb is: build some dirty prototype and go find a venture capitalist. The way these guys went was a bit different: first build a business with a real service and real customers paying real money then find a VC. This seemed to work very well in their case, they even went public when they felt the moment was right.

As for what they are selling, he explained that from the very beginning they picked a niche market where they could avoid the big global players. They decided not to go generics and stuck to their target audience. In doing so, he said, they were able to focus their few resources on a unique service and be as good as they could be. It strikes me that many people just find it easy to do whatever work they can get their hands on, forgetting that in the long run specific skills could guarantee a steady stream of customers whereas if people perceive you as not being good at anything, they will probably hire an expert not you. So here is this guy´s great lesson: commit to your business, don´t be tempted to serve everybody, find a nice point in the business space and stick to it. It´s all about commitment.

All this is not really new, but I think everytime someone with such a background talks, it must be worth taking notes. If only to confirm that what we young wannabe entrepreneurs with less experience think.

Make your bets

September 19, 2006

Techcrunch reports that Pickspal entrepreneurs have found out some remarkable behavior in their community. It seems that a small crowd of users are having a high rate of correct answers in their picks (in a nutshell the site lets you pick from among possible outcomes a sport competition might have). So here is the site´s next deal: they will offer paid premium access to the information that these überexperts are providing. Hmmm… I want to see that. Some comments on this posting points out already to U.S. regulations not allowing this sort of thing, but I am not sure if this kind of regulation would apply to Pickspal.

Now an interesting idea would see this in another highly lucrative domain: how about emulate the site for stock markets experts? That could be just the right thing for guys like me, that lost a few hundreds bucks last time I thought I had come up with a hot stock. Is there any web 2.0 entrepreneur building this already? I wish there was.

Yet another Seth Godin book

September 18, 2006

Small Is the New Big: and 193 Other Riffs, Rants, and Remarkable Business Ideas

Yes, small is beautiful. Thanks to Amazon I just heard from this new new book from former Yahoo employee Seth Godin. It´s basically a compilation of his blog, plus two previously e-books. So it´s probably better just to browse through Godin´s free postings and see his presentations in google videos. At least this time he came up with one interesting idea: if you build it nicely, they will come. So basically he destroys the myths of old mass media, where companies have to buy tons of adds to raise above the clutter. What really matters, according to Seth, is to build something remarkable and then let people talk about it. I wouldn´t advise it as a panacea, but it´s pretty much what´s been going on since someone back in the nineties placed an order in Amazon.com.

I suppose companies cannot and should not forget about their massive budgets for TV, magazines and all this stuff, but it´s about time to consider word-of-mouth and reputation as relevant and as important as big buck campaigns. Well, again this is as old as the invention of the wheel, but as marketers love to reinvent it, it´s just fine to be reminded of.

Worst site ever

September 18, 2006

Congratulations! PC World magazine just pointed MySpace.com the worst site of the whole Universe. See it for yourself.

It´s election season in Brazil and as usual an army of marketing people get together to sell their products: the politicians themselves. Those marketers do anything to position their brands in the consumer´s mind, even if this takes a lot of make up and lying in the process. Candidates are like a brand new pair of sneakers or a diet pill: they must be shiny, they must convince, they must be real. The problem is that some of them give a hard time to all those fancy advertisement guys. They did not do their homework and keep slaves in their farms in the Brazilian countryside or US$ 200 million debts… Hmmm tough, but I am sure all those smart boys from PR, marketing and advertisement will figure out a way to save the day.

What about the people? Well they always can call customer service…

Afterthought: in case you want to have some fun try to use some of these techniques to spot a politician.