Market Like an Engineer

It seems that every time I attend a presentation, usually at a conference, given by a Googler, it starts with the disclaimer "I am not a marketing person...". The narrative from there can devolve into a rif against the evils of sales and marketing people and the comparative virtues of engineers. Despite the hyperbole, they do have a point. Marketing without good engineering is just snake oil sales.

Here are three virtues of engineering that I appreciate the most:

1. Desire to build a better mouse trap: Good engineers want to be useful and solve problems. Engineers don't want to work on something that is not really a problem, or that is invented just to serve some other purpose.


2. Disdain for waste or duplication of effort: Engineers want to share their work so those that come after them can build on top of their efforts instead of wasting effort relearning what has already been learned by someone else. While this does not always result in good documentation, it does produce a collaborative atmosphere with vibrant knowledge sharing.


3. Thirst for customer feedback: Engineers want to know as much as possible about the customer experience using their product. If you give engineers a choice between the good news (compliments) and the bad news (criticisms) they will take the bad news because it will help make the product better.

These traits are encouraged in engineering departments because most engineering departments are set up like academic institutions where sharing knowledge is rewarded and failures are celebrated as long as there is strong thinking behind them.

Marketing people that think like engineers apply these same virtues to their objectives. They want to get their product into the hands of people that can use it, they don't hoard data, and they want to know the real numbers.

The people running marketing departments need to think about how to create an environment that encourages marketers to market like engineers.

The Fremium Highway Is Changing Your Town

When I started my company in the mid 90s one of the big consulting firms wanted to charge me $83,000 to design a process for selecting a PBX/ACD for the call center.  They seemed to think it was business as usual, so I guess some companies actually paid them to do things like that.  The implication was that the cost to run the selection process would be an even bigger number, but I never learned the details because I was already out the door.

Now I can just go to RingCentral.com and sign up for a free trial and be on my way.  No money to the consultants, no million dollar hardware purchase, no multi year maintenance contacts, no waiting six months through an expensive implementation process to see if it will work at all.  We have come a long way in 15 years.

It seems that just about everyone is offering a free service as an enticement to check out their stuff.  In some cases it is for a limited time and others limited functionality, but getting the technology needed to start a new company or start a new project is cheaper and easier than ever.

So now what is that channel partner's (the consultant) role in the marketplace? They probably still get big companies to pay big money to design processes and implement them, but it is clear that they are not as essential to the selling process.  The new Fremium model is an interstate highway right past their town.  Cars may can get off and buy stuff, but they don't have to slow down.

Companies are finding expense reports showing purchases at amazon.com that are not books.  Their employees found the line at the IT department for a new server to be too long, so they just went to AWS and rented one.  Where is the channel in that purchase?  The cars on that highway didn't even need to stop for gas.

Heroes in a Complicated World

You see, its complicated.  We live in complicated times.  Even simple solutions like: use less oil, evoke a tangled web of implications and polarized constituencies.  As the mountain of data available to us grows exponentially, and the tools to analyze it repeatedly double in capability, the complexity we face only gets, well, more complicated.

In these complicated times, the value of the story teller is going up.  Boy do we need people who can weave together compelling narratives from the chaos of our world.

 

Last week I was lucky enough to meet a handful of storytelling heroes.  People who have dedicated their lives to sifting through the human experience to craft stories that grab us, convey understanding and compel us to do something.  These people are documentary film makers. Here are some great ones you should check out:

• Chris Jordan went to the middle of the Pacific ocean to photograph the Pacific Gyre.  That island of floating garbage that we have all read about but have never seen.  It turns out we have not seen it because it defies the camera.  The waste is in small pieces, and spread widely enough that it cannot be seen by a person or a camera.  It can however be seen in the stomachs of sea birds dying on Midway island.  Check out the trailer for Chris Jordan's new project Midway.
• Louie Psihoyos went to Japan to see dophins slaughtered and their mercury laden meat fed to school children.  His creation, The Cove, won an Academy Award and cut the dolphin death rate in half.
• Chris Paine took on both Detroit and Washington with his 2 movie series: Who Killed the Electric Car and The Revenge of the Electric Car. Now he has created a web site to counter the spin about the environment in the media.  It is called CounterSpill and there you can see a living archive of 100 years of environmental events.
• James Balog installed 31 cameras to capture the slow motion death of glaciers in "Chasing Ice".  He also has published an excellent string of books.
• Peter Byck created Carbon Nation, the movie billed as "the climate change solutions movie that doesn't even care if you believe in climate change.

We live in a world where heroes are rare.  We have made Warren Buffet, Lloyd Blankfein and Mark Zuckerberg our heroes because we just don't know where to look for the real heroes.  The next time you find yourself frustrated by the state of things in the world, give some of your time or money to your favorite documentary film maker.  It will feel great and who knows what will come of it!

Google becomes Microsoft as Microsoft becomes IBM

There was a good article in the NY Times business section today about Google.  Mostly about how Google is growing up.  It reminded me of talk around Microsoft at the peak of its ride.  At that time, the last thing Microsoft wanted to do was to become IBM.  But they have.  IBM has done an amazing job of reinventing itself as a consulting company, and Microsoft has taken over as the legacy systems company.

Google meanwhile, is under increasing pressure from governments about its monopoly power, and use of customer information.  All of the sudden, Google is spending just as much time and energy dealing with the government as Microsoft did with the Justice Department in its day.  Actually, IBM had that same problem too.  

So the pattern is:

1. Old monopolist gets pounded by the government
2. New entrant uses the opening to build a new monopoly
3. New company is the darling of everyone (and stock goes to $600)
4. New company becomes old monopolist
5. Go to step 1

Also, today I started a new page where I am tracking the new tech bubble.  Check it out here.

The Cloud is Out of Our Control

Anyone familiar with network diagrams knows that the cloud symbol is used to refer to the things outside of the control of the network owner. In the old days it meant our network connects to the Internet here, or connects to the telephone network here.

Wait, that is still what it means!  By this definition we have had cloud computing since the 50s. What is the big deal about all of this “Cloud Computing” then?

True to the definition, we are shifting more computing from inside our networks to the part of the diagram depicted by the cloud – the part out of our control.

Web email (gMail, Hotmail…) was the first mainstream application of this, but network administrators know that the migration to the cloud started well before that with security services, enhanced phone services, distributed computing grids.  And everyone else is watching as we are now getting cool cloud apps like Dropbox, Evernote, Google Docs, and Office 365.

So are we just back to timesharing the VAX? Well, no.

Yes MS Azure, AWS, Google App Engine, OpenStack, and the dozens of other offerings do look a lot like mainframe timesharing with one big exception – the new cloud services talk to things inside your network, and talk to each other.

All of this talking is done with Application Programming Interfaces (“APIs”).  These are instruction sets that enable people or computers to interact with systems, without being in the system. 

We will all be hearing a lot about APIs in the weeks ahead because how they are used and who owns them is the center of the currently front page lawsuit between Google and Oracle. 

Did You Know that Netflix Runs on AWS?

CloudFair 2012 ended yesterday and I was lucky enough to see about a dozen of the presentations.  It was a good show with many well thought out pitches. Some were more educational, some more evangelical, some fell flat. 

I find it interesting to find the theme in any convention.  Here is what emerged for me during CloudFair 2012:

1. The Cloud is Real:  It scales, it is cheaper, it slices, it dices.
2. IT Departments are Dinosaurs:  Some presenters tried to defend IT departments by explaining why they are in a tough spot. But everyone agreed that IT departments are in the way.
3. Some Cool App Runs on our Stuff:  Google had the royal wedding, AWS has Netflix, Everybody has a validating customer.  If you doubt it, here is a juicy chart about traffic or here is a customer quote about how we saved the day.

Who attends these conferences?  The premise is that the audience is the potential customer.   Which could be either the IT Department or the end user inside a business.  If not that maybe channel partners that already work with the potential customer.   The potential customer is the IT department.  How it got to be cool to blast the customer is beyond me.  Last I checked, the IT department still had the budget.

Walks Like a Bubble, Talks Like a Bubble

Just weeks ago there was a steady stream of posts and articles saying we are not in another bubble. Since the Facebook/Instagram deal those voices are much harder to hear. Sure there have been those defending the deal as rational, but really. Instagram worth more than the NY Times? News momentum needs a trigger event, and the Instagram moment may be just the thing to reverse the news momentum and change the story.  Now we are in another tech bubble. So, when will the bubble burst? My guess is 2014 and here are my reasons:

1. Too much money looking for a home: The fundamental problem that caused the mortgage bubble still exists. The world is awash with cash because central banks have been trying to stimulate growth and there is no inflation in sight. The excess cash problem did not get solved with the mortgage crash. In fact it got worse because all of the money that came out of the mortgage market is still looking for a home, and it has been flowing into tech. At the same time, the cost to start up a tech company has dropped. So when Facebook goes public, the market will willingly value it at over $100 billion -- even though the CEO can operate without any board oversight.
2. Not much "whole new world" talk yet: The end of each bubble cycle is marked by some desperate arguments that we are in a new world (this time because of the rise of mobile) and that the people that say gravity still exists just don't "get it". I bet these arguments will become central to the news coverage of the bubble this year. 
3. It always takes longer than we think: The smart people that knew the mortgage market was a bubble, knew it in 2004. The end did not come for four more years. This one will probably seem like it is inflating forever.

It is true that smartphones are a revolution in tech. It is also true that it will accelerate the pace that new users can be brought into the market. But hey, it was also cool when the Americas were discovered or electricity was invented. Those bubbles burst and this one will too.

Selling to Enterprise; or the Shadow Enterprise

Everyone agrees that IT at the enterprise level is messed up.  Here at CloudFair it is just an excepted fact.  The are those that think the Cloud will save us and we just don't have to think about the Enterprise anymore.  That would be nice, but most people realize that Enterprise IT will be here next year, and some of them realize that it will probably not be much different than it was last year.  

This thought tracks along with a post from famed VC Ben Horowitz:  Meet the New Enterprise, Same as the Old Enterprise. So what should channel partners do today to span the widening gap between new technologies and Enterprise IT.

1. Skip the hyperbole: talking about the end of the world as we know it is tiresome
2. Realize your value: wide gap = big opportunity, where do you fit?
3. Find your voice: the new entrants have done a great job at this, so can channel partners
4. Find like minded clients:  there are so many potential clients that qualifying becomes the key.  

As an industry, we need to think differently about channel partner attributes.  The badges of yesterday (gold status; certifications) will fade and new  badges (success cases and competencies) will rise.  Newer still will be complete end runs around old thinking. When the environment gets confused and uncertain, decisions slow down (or stop).  

The enterprise sales landscape is littered with stalled sales cycles that can be tracked back to the uncertainty associate with the changing IT environment.  Salesforce.com has benefited from the stalled CRM environment.  Salesforece.com may soon become a casualty of this very phenomenon.  Most companies buy Salesforece.com because they just cannot bring themselves to buy a big CRM ($ millions, years...) projects, but must do something, so they buy salesforce.com by the seat by the month.  Then Twitter comes along and enterprise IT really does not like it, so it they buy Chatter.

By some measures, half of all big IT initiatives (and that is big in terms of dollars and time) never even make it to launch. 

Add to all of this the growing trend of shadow IT in big enterprises and it is clear that we live in interesting times.  

Tale of Two Conferences

I was fortunate enough to attend two Cloud Computing conferences today.  They were right next door to each other in Seattle, one at the Sheraton (CloudFair2012) and the other at the Convention Center (Cloud Intelligence Conference).  It was an interesting study in the current state of tech marketing because the CloudFair was dominated by Google and the Could Intelligence Conference by Microsoft.  While it is not really fair to make a full comparison because I could only attend part of each (the CloudFair is in the workshop day of a three day conference and the Cloud Intelligence Conference was only a one day thing), it was a great way to see the contrast between how Google and Microsoft reach out to their markets differently.

The experience reminded me of the great exchange between Bill Gates and Steve Jobs at the All Things D conference in 2007 where Walt Mossberg asked them what they appreciated most about each other and Steve said that he admired Bills ability to partner, and Bill said he wished he had Steve’s sense of style.  Two great companies, two completely different approaches.  The same can be said for Google and Microsoft.  Microsoft still knows partners and Google’s “style” is to turn as many of its engineers into marketers as possible.

Microsoft Knows Partners

At the Cloud Intelligence Conference, the speakers were mostly talking about Microsoft Azure and Office 365, and most of the speakers were not from Microsoft, but partners of Microsoft that help Microsoft customers run their Microsoft products.  These partners are formidable companies in themselves, and some have products that integrate closely with Microsoft’s offerings.  The speakers were talented, had a great deal to contribute and were not just pitching their own services.  Since just about every company has Microsoft in its IT infrastructure somewhere, it is a given that the audience were already Microsoft customers.  The presenters took advantage of this fact and were helping Microsoft customers see what was on the way to them from the mothership.  The negative of this approach was that the audience did not feel that they were getting the inside view into Microsoft, and there was a bit of a theme of ‘yes we are keeping up with the cool kids’.  Neither of these is going to push customers off of a platform already through their organizations.

Google Is Not Evil and Engineers are Not Marketers

Google as a company defines itself by declaring what it is not (evil) and continues that method with Google engineers declaring they are engineers and not marketers.  These guys were great speakers, very knowledgeable, easy to listen to, and clearly passionate about Google products.  In addition, and in contrast to Microsoft, they did a good job of letting the audience get a sense for the inside Google perspective.  Developers do like that kind of thing a lot.  The talks were clearly aimed right at the users with no reference to partners or how a partner could use this technology to take better care of its clients.  It is very possible that there were partners in the audience that were going to do just that.  It was interesting that the Google guys were both published authors and took the opportunity to plug their books.  I suppose this could be a result of Google’s culture of academia (where college professors are always writing and plugging their books).  It was a bit ironic however, because they did say they were not going to try to sell the audience anything, well except their books.

Great change only happens when innovation makes things 10 times better.  Clearly the tools available to businesses through the cloud are at least 10 times better, so this is going to be a time of great change and it is hard not to be excited about it.  It will be interesting to continue to observe these two great companies build their tools and their markets.  Along the way Microsoft will surprise everyone and innovate, and Google may even surprise themselves and do some marketing.

Making Victims As Opportunity Slips Away

Imagine a father and son talking about a poor report card.  The son says the teacher doesn't like him.  The father says that is just not fair.  So the son doesn't learn and improve from the report card experience and the next report card is worse.  The teacher or the system is blamed again and soon the son drops out.  

This scenario is repeated many times in our education system.  In our state about 1 in 4 students that start high school never finish.  I propose that a meaningful number don't finish because of this negative reinforcement loop.  Clearly, even if the father is right and the teacher has treated the student unfairly, the victim is the student.  We cannot blame this failure on the student.  By the time we get done with that he has already dropped out and is well on his way to a low income future.

Michael Lewis wrote a book a few years back about how this can happen at the other end of the economic spectrum.  He went back to his privileged New Orleans high school to interview the baseball coach, because, like many coaches, this one was tough on the kids.  In the 70's, when Michael Lewis was there, that was how it worked, these days, the parents were trying to have the coach removed.

If they could not get the coach removed, these lawyers and doctors wanted to intimidate the coach into telling their sons that they were better athletes than they were.  They wanted the coach to give more playing time, not run the guys so hard, you know the drill.

Those student athletes are the victims just like the high school drop outs.  Sure those rich kids are probably going to be just fine, but think of the missed opportunity for life shaping lessons.

Lawyers are particularly good at making victims like this.  In the now famous McDonald's vs Liebeck case, where Liebeck was awarded over $3 million to compensate for burns she suffered when she spilled her coffee in her lap.  I think it is a shame that she was burned by her coffee spill.  However, the real damage came later when she was persuaded to sue McDonalds.  The case went on for two and a half years, and then was negotiated down after the award to something less than $600,000.  Sure that is a lot of money, but Leibeck was 79 years old at the time of the incident.  She came to believe that she was a victim and she turned two or three years of her life over to that way of thinking.  

Imagine all of the people that choose to enter into the aggravation of such a fight and lose years of their lives and in the end, many don't even win any money!

Next lawyers will be telling their sons not to worry about their schoolwork because they can just sue the school instead.  

Here is the book Coach by Michael Lewis should you be interested in reading it.

Under the Cover of Darkness

People will do the darndest things when they think no one is watching.  Just think Tom Cruise in that scene from Risky Business.  Michael Lewis wrote a whole book about the crazy antics of people when ushered unsupervised into a dark room full of money (Boomerang).  

Operating in the light of day however is a whole different thing as we found out with all of those cables exposed by Bradley Manning and Wikileaks.  What a surprise it must have been for all of those people that thought they could do whatever they wanted and no one would find out.  I think it is safe to say that no matter your politics, those cables cut deeply into the public opinion of the people sending them.

Under the cover of darkness, people convince themselves that they are right even while pursuing the most evil schemes.  I think this contributes to the negative opinion of lawyers -- who are always trying to make things even darker with confidential deals.  This is getting harder and harder to do in the age of the web and the resulting free flow of information.  Just look at the hole AT&T is digging for itself on the whole unlimited bandwidth business.

I admit that evil is a strong word for anything having to do with AT&T's billing practices.  Unnecessary too because there are so many examples of people behaving in truly evil ways.  The governments of North Korea, China, Syria, Egypt, Pakistan, and just about all of the rest of the middle east, most of Africa, and Russia depend heavily on the cover of darkness when they do what they do to the people they oppress.

Whether or not you agree with the intentions of the Kony 2012 campaign, anyone shining a light on bad behavior is doing good work.  (here is a post about Bono's reaction to Kony 2012).

When I was in middle school, my family hosted two young men that had escaped from Uganda.  They lived with us for a while as they were getting back on their feet after having run for their lives from Idi Amin's police.  Ironically, they escaped under the cover of darkness.

Choosing Happiness

One of the most difficult things about being a generally happy person is deciding what to do when encountering unhappy people.  This is not to be confused with encountering unfortunate people, because I have met many unfortunate people that are happy.  I do not believe that happiness is the result of good fortune.

It does not help that happy people often say they are lucky.  Which makes everyone else think that those people became happy because they had good fortune.  I submit that those people are happy because they choose to be happy.  I bet they made that choice long before encountered their good fortune.

Once someone has chosen to be unhappy, everything else flows from that decision, and all of their energy is invested in making others unhappy too.  The only way to help an unhappy person is to convince them that their happiness is their own responsibility.  Frankly, I have really never succeeded in doing so.  So I do what I can to be around unhappy people as little as possilbe.

I spend a significant amount of my time and whatever money I can afford helping unfortunate people.  It is very rewarding.  I have to conciously work to make sure I don't mix up the unfortunate and the unhappy, because it is only natural to want to help the unhappy people too.  It just cannot be done and it takes energy away from what good I can do for the unfortunate.

One HP is a lofty goal for the new CEO

From one end of the financial spectrum to another... HP had its annual meeting last week where Meg Whitman introduced her plan to combine the PC and Imaging divisions.  HP has been through a great deal in the past 10 years and getting back to stable ground is not going to be quick or easy.  And it does not seem like the press is going to give the new CEO much latitude.  Here are a few of the headlines:

MarketWatch:  H-P’s latest move draws skepticism

WSJ:  CEO Whitman Tells H-P’s Workers ‘Everything Is on Table’ in Overhaul

Reuters:  HP creates PC-printing power, Wall St waits and sees

This is in the context of their ongoing "One HP" initiative, which strives to unify a company that has been operating as fragments for decades.  In recent years growth by acquisition is one of the few things that the many HP CEOs have agreed on.  The HP acquisitions page on Wikipedia tells the whole story.  The revenue and head count growth is dramatic.

Whitman is right to identify the disparate nature of the company as a big problem.  Employees that joined the company over a decade and three CEOs ago still refer to themselves as Compaq people.  Same with employees from 3 Com, 3 Par, Mercury Interactive, EDS, and most recently the employees from the $11 billion acquisition of Autonomy last year.

The list has so many multi billion dollar deals on it that it seems unlikely that one company could be made of the resulting tangled mess. The aim behind combining the PC and Imaging divisions is more likely to convince the employees in the PC division that the persisting story about a spin off is not going to happen and that they should get back to work.

We all remember how big the Compaq deal was when it was announced.  I had forgotten that there were 53 other deals in that decade!  The company grew from 100,000 employees to over 300,000.  Nothing is impossible, but making One HP out of this will be quite a challenge. 

Apple Gets 100% of its Profits from Channel Partners

Yesterday I proposed that some higher than expected percentage of Apple’s sales came from channel partners.  Today I propose that it is possible that 100% of Apple’s profit was actually paid by the resellers.  Here is my math based on Apple’s 2011 annual report:

 

Looking at iPhone sales alone – event though this under appreciates iPad sales through the carriers, and sales of other products through BestBuy and Walmart.  Apple sold 72 million iPhones in 2011 for total revenue of $47 Billion – 43% of all Apple revenue.  Last month the Wall Street Journal reported that US Carriers pay Apple an average subsidy of $400 per iPhone. 

Apple generated an average of $650 in revenue per iPhone – the channel partner is paying 61% of the purchase price of the device!  If this is true, Apple received $28 billion from its channel partners in iPhone subsidies – more than all of Apple’s profits for the year.

True, Apple can and does in some cases sell the iPhone without any subsidy.  But sales would be much less (like the WSJ reported in countries where the subsidy is not customary), and pricing would be under much more pressure.

Apple should be commended here – taking an industry where it is common to pay partners to sell for you and turn it into a situation where partners are paying more than half of the cost of product.

Can you imagine going into a car dealer and only paying 39% of the cost of the car, because the car dealer paid the rest to the manufacturer – all for a two year service contact! 

Every computer / phone / tablet maker out there wants a deal like this.  The question is, are the carriers going to keep doing it?

Apple Crushes It With Help from the Channel

Apple has widely been perceived as a company that operates outside of the reseller channel.  Its stores and web site sell directly to their customers and they have achieved meteoric growth without the help of the third parties that make the rest of the technology industry function.  The prevailing belief in the industry is that there is no way to get to such a large market without the aid of channel partners -- that number in the hundreds of thousands. 

The launch of the iPad gives us a good backdrop to examine if this is really true.  Does Apple sell directly to customers or through the channel?  Is there anything to learn from the recent success of Apple?  I propose that Apple sells through the channel and there are some specific things that can be learned.

First, Apple has an awesome web site and some 300 or so stores that generate an average of $50 million in revenue per store.  Apple generates more revenue per square foot than any other retailer – actually twice that of Tiffanies - the next most productive retailer.  Despite this incredible performance, in 2011 Apple generated 15% of its revenue through its stores, it pales in comparison to revenue generated by iPhone sales of 45% -- three times that of its stores.

iPhones are sold by Apples new channel partners – the wireless carriers.  If you add this to the sales by Apple’s other partners:  BestBuy (1,000 stores) and Walmart (2,500 stores) and it is starting to look like a significant portion of Apple’s incredible growth is fueled by its channel partners.

Apple 2011 Annual Report

Apple Wins Again as the World Moves to Tablets

Last week Apple championed the post PC era with the launch of the iPad Third Generation.  HP shot back that the PC is not dead.  I think both views can exist at the same time.  

Anyone who has found themselves in the role of family tech support person has been wishing for the post PC era for a long time.  In fact, most PC users have used remarkably few features of the PC.  Word processing, email, the web, and maybe a spreadsheet.  They don't care about where their files are located, how the machine works or stays healthy, have never installed anything, or backed anything up.  They are just not interested in the PC at all.  As soon as these people got smart phones their PCs go days or weeks without being touched.  Some overwhelmingly large percentage are these non PC users -- and for them the PC was a necessary evil -- they just wanted to send the email.  So Apple is right.

Anyone needing to connect to a corporate network, or that uses databases, or that builds things (web pages, databases, programs), is going to need a PC and because they are the type of person that loves new technoligy they are probably going to want a tablet too.  So HP is right.

According to Gartner, there were 93 million PCs shipped in Q4 of 2011.  According to Apple, they shipped 15 million iPads in Q4 of 2011.  They were just shy of HPs share (17 million) of the PC market.

Up until now, the iPad has been an extension of the users technology portfolio.  From now on, the number of users with just an iPad (or other tablet) is going to go up fast.  So Apple is going to win big and if Microsoft can get to the party with Windows 8, Microsoft will win big too.  The people selling PCs like HP and Dell are going to see their marketplace rotate significantly -- and probably decline.  All HP and Dell need to do is come to market with amazing Windows 8 tablets later this year.

It is going to be interesting.

Peace Gets My Vote

Every day the front page of the newspaper is dominated by campaign news or Iran/War news or both – and the election is still 8 months away!  I don’t know who I am voting for yet.  You may recall that Obama was the first Democrat I ever voted for.  I can say that a very large part of my decision, possibly the entire decision, will be based on the chances that the candidate will be able to keep us from entering yet another war.  Just about everyone seems to want to start another war in the middle east – so it is going to take some kind of a (enter favorite adjective here – strong, smart, resolute…) president to keep us out of the war.  It seems silly to make an argument against war, but if I have to I would say war is bad because people die and we spend our time and energy focused on the war and not on other problems at home – oh yeah, and it makes most everyone in the world hate us.

There are plenty of ‘people’ (I use the air quotes here because we now consider corporations as people) that feel it is in their best interest to start another war.  Here is my list of those beating the war drum:

1. Politicians:  Sure seems patriotic to be over the top for the war
2. Israelis:  It is clearly in their interest for the USA to fight the war for them
3. Bomb Makers:  Anyone who makes a profit from war would clearly want war
4. Newspapers:  Nothing like a good war to drive up interest in the news
5. Anyone who hates the USA:  What better way to drive support for your anti USA organization (al-Qaeda) than to get the USA to drop a bunch of bombs (hopefully on the neighbors, but really, anywhere will do)

In what is a historic irony, our military is not all that wild about starting another war.  Normally, the US military would be leading the charge for war, but maybe lately those guys have seen too many brave young people march to their death for no reason and they now think the promotions and unlimited budgets are being paid for with too precious a currency.

So that is my measure.  The candidate that convinces me that he will do his best to keep us out of war will win my vote.

For those of you that think the threat of Iran getting nukes justifies war, The Economist recently did this piece that does a very good job of outlining the argument against going to war to prevent Iran from getting the bomb.

For those of you that think we should pre-emptively defend Israel, try this one from CNN.

For those of you that want a general background, try this one from The American Interest.

My Reading List: 2011

I got into a conversation about the books I read last year recently and that has inspired me to make a list.  So here you go:  The books I read last year. 

Actual Printed Books

1. Fear and Loathing in Las Vegas by Hunter S. Thompson
2. Hell’s Angels by Hunter S. Thompson
3. Fear and Loathing:  On the Campaign Trail ’72

These books were not available on Audible or the Kindle otherwise I would have bought them digitally.  They are all interesting reads and in particular, the volume about the election of Richard Nixon was a great reminder that politics is not more screwed up now than it ever was.

Kindle eBooks

1. Triple by Ken Follett:  A great story about how Israel may have gotten the bomb in the 70s.
2. Lie Down with Lions by Ken Follett:  If you want to understand what conditions are like in Afghanistan – this is a good way to do it.
3. One Click: Jeff Bezos and the Rise of Amazon.com by Richard Brandt:  Short because the story is still being written, but good background if you are planning on meeting Bezos.
4. Steve Jobs by Walter Isaacson:  My review here.  No question the most inspiring book I read.  Made me want to be "insanely great" too.
5. Public Parts by Jeff Jarvis:  OK book by the author of “What Would Google Do?” – which was better
6. Paradise by Larry McMurtry:  Re-read this one, a great autobiographical story about a trip to the south pacific.
7. Reamde by Neal Stephenson:  A real page turner and good way to get the feel for China.  Like many of his books, it is long and may not have needed to be.
8. The Garden of Eden by Ernsest Hemingway:  Another re-read.  This is one of the better posthumously published works. 
9. The fortune ant the Bottom of the Pyramid by CK Prahalad:  Did not make it all of the way through this book, but a good reminder of how big the rest of the world is.
10. In the Plex by Steven Levy:  A great look what everyone means when they say Google is “engineering driven”.
11. Unconditional Parenting by Alfie Kohn:  A wonderful book about how to constructively encourage your kids to do great things.
12. Ender’s Game by Orson Scott Card:  Classic sci fi that I should have read a long time ago.
13. The Frugal Superpower by Michael Madelbaum:  This is a must read for anyone who thinks we are at a crossroads.
14. Common as Air by Hyde Lewis:  In the same vein as Free by Chris Anderson.  Essentially a primer to the new economy.
15. Changing the game by David Edery: A good manual showing how to adapt computer gaming concepts to the real world. 
16. The New Language of Marketing 2.0 by Sandy Carter:  Sandy Carter is a Maven at IBM and this book shows how big companies are looking at new media.
17. Microsoft 2.0 by Mary Jo Foley:  Mary Jo Foley follows Microsoft for ZDnet and this book lists some of her thoughts about how Microsoft could/should reinvent itself
18. You are not a Gadget by Jaron Lanier:  One of our renaissance men gives a look into the good and the dangerous about the digital age. 
19. Work Hard. Be Nice. By Jay Mathews:  A must read for anyone thinking about our education system with a focus on the incredible work by KIPP.

Audio Books

1. The Marriage Plot by Jeffrey Eugenides:  Another good novel by the author of Middlesex.  Great images, not really uplifting.
2. The Beautiful and Damned by F. Scott Fitzgerald:  Thought it would be fun to have this classic on audio.
3. The Great Gatsby by F. Scott Fitzgerald : ditto
4. The Diamond as Big as the Ritz by F. Scott Fitzgerald: ditto – what a story this one is too.  If you have never read it – invest the hour.
5. I Live in the Future and Here is How it Works by Nick Bilton:  The title is arrogant, but the book is really quite good.
6. Macrowikinomics by Don Tapscott and Anthony D Williams:  I loved the first book, this one I only got half way through.
7. Boomerang by Michael Lewis:  Of course my favorite book of the year is by Michael Lewis.  All of the episodes were great but I found the Iceland part to be the best.  My review here.
8. The Information by James Gleick:  Quite dry, but if you are interested data, databases, privacy, new media – it is worth the effort to read this one.
9. Bossypants by Tina Fey:  As my sister says, every so often you need some candy.  This is right up there with Born Standing Up.
10. The Greater Journey by David McCullough: I love David McCullough, I think my life is too complicated to take the time to really think about Americans in Paris 150 years ago.
11. On China by Henry Kissinger:  Boy did this guy take good notes!  A great reference book and it is not too hard to see around the bigger than life ego.
12. The Social Animal by David Brooks:  I generally like David Brooks on the NewsHour and in his column more than in his books.  This one is good, but the fictionalization just did not work.  He sure has read a lot of brain science stuff though!  My review here.
13. Dangerously Funny by David Bianculli:  A super story about the Smothers Brothers 3 years on CBS and all of the battles – if you are into the late 60s early 70s part of our history – this is a really good book.
14. The Clockwork Universe by Edward Dolnick:  Who knew the history of calculus could be so interesting.  I have probably talked about this book more than just about any other book I read in 2011 – well, except maybe Boomerang.
15. How the West Was Lost by Dambisa Moyo:  I did not make it more than a quarter into this.  By then she had made her point and it did not seem like continuing was going to bring any greater insights.
16. All the Devils are Here by Bethany McLean and Joe Nocera:  Good fodder for the fire of the financial crisis and those who caused it (us!).
17. Griftopia by Matt Taibbi:  Great book about how Wall Street is sucking the life out of our country.  No problem figuring out where the author stands.  

So there you have it.  39 books, 3 printed, and the rest about evenly split betweent the Kindle and Audible.   There were about 10 other books that I bought but did not read including some manuals that I just looked stuff up in.  I did not think a book should count if I did not take the time to get at least a quarter of the way through it.  There were two books that I got on Audible and the Kindle.  I did not list those twice, but that is an interesting study on whether these digital books are going to increase book sales or not.  I would much rather pay $10 each for an audio book and ebook (for a total of $20) instead of $20 for one printed hardback.  

Now if Amazon could just figure out how to sync them so when I open my Kindle it goes right to where I left off in my car on the audio book -- that would be amazing.

Doctors Paid to Make You Sick

The 800,000 physicians in the US comprise a large and intensely managed partner program for the drug companies.  We are about to find out how intensely managed as the Affordable Health Care Act (AHCA aka Obamacare) now requires the drug companies to disclose how much they pay your doctor to prescribe drugs to you.  It should not be a surprise that the drug companies pay doctors quite a bit, and those payments change doctor behavior.  So it should be no surprise to find that some people may be diagnosed with ailments they don’t actually have -- so the doctor can prescribe the pills and get the money.

Sales managers know that salespeople are “coin operated”.  Better performance from salespeople is purchased with commission plans that compensate for more sales, more upsells, more referrals, more attached sales, more anything.  Since our business is technology sales, and specifically channel partner programs, we think a lot about how to properly incent our client’s partners to sell more.  We have seen this produce intended (improved sales) and unintended (systemic cheating) outcomes.  Broadly speaking, generalized incentives are better than highly specific incentives when it comes to getting a constructive result.  Sure if you have to move one product by the end of the quarter and you don’t care about the long term effects – a specific incentive will do the job.  But if you want customers satisfied and loyal for the long term, working with partners to grow their business for the long term is better than quick hits.

Over incenting salespeople in technology might result in a consumer or company with an overly large hard disk or a bigger video card or a router with enough capacity for 10 years of growth.  Over incenting doctors might result in a generation of kids on Ritalin, parents on anti depressants, and in the worst case, deaths.  Here is more reading on the subject should you be interested:

• On The Media:  Great overview segment from yesterday’s show.
• ProPublica:  Building a database of the payments to doctors.
• NY Times:  Article on the subject
• 2009 Report to Congress on Physicians’ financial relationships
• NY Review of Books:  The Epidemic of Mental Illness
• Medicine.Net:  10 most prescribed drugs
• IMS Institute for Healthcare and Informatics:  The Use of Medicines in the United States

Update one week later:  Great article in the NY Times today about the 3 million children on Ritalin -- and how there is not evidence that it helps!

Golden Opportunity for Microsoft

Microsoft recently reported that the Defense Department repels 250,000 attacks on its networks – every hour.  I suspect that Microsoft has more experience with hostilities in cyberspace than any other company.  I do not know of a published list of the biggest targets for hackers, but the US Government has got to be close to the top of the list, financial institutions are probably next, big companies like GE and P&G and GM have got to be up there too.  Literally every enterprise customer of Microsoft spends a great deal of time and money dealing with these attacks.  I also do not know how much of their budget is actually paid to Microsoft, but with the cloud offerings MSFT is now selling to big enterprises – the number must be growing.

It does seem like Microsoft badly wants to be a consumer focused company.  There is a security need at the consumer level too.  Our citizens may not have the designs of weapons, or the controls to the predator drones behind their personal firewalls, but knowing that half of all credit cards have been compromised by cyber attacks is enough to make the point that consumers have things to protect too.  Once again, Microsoft has more technical expertise and experience data on the consumer attacks than any other company. 

But… Does anyone really want to talk about security?  It does sound a lot like that annual call from the insurance agent who wants to talk about how to increase, well, his commission. 

The changes that Google made last week to further personalize search could be the opening that Microsoft needs to get the conversation going.  Google is increasingly showing you just you want to see – even if some of what you get in your search results comes from things you own – like pictures on Picasa web.  Desktop search never worked for Google or for Microsoft, but as more content migrates to the cloud, we can expect to see our personal, not public, items mixed in with public search results.  We cannot expect Google to be so foolish as to put Gmail into the personal search results, but Google+ posts are sometimes public and sometimes personal.  If these latest changes are meant to push Facebook and Twitter to make their content available for searching, and Google is successful, the line will go too far towards the personal end and consumers will be more than a little upset when their private Facebook posts are next to Wikipedia entries in the search results.

Microsoft could be the safe place to get search of private emails, documents, and photos.  I have Copernic Desktop Search installed on my Windows 7 machine and it is amazingly good.  And I am quite sure that neither Google or Microsoft or anyone else is building an index of my stuff on their servers.  I would trust Microsoft to do this work and the only reason I have a non-Microsoft product doing this is because even after hours of trying, I could never get the desktop search index to work on Windows 7.

My dream, and I suspect the dream of many other consumers, would be to have a company I trust, deploy a capable private search tool, and do it in a way that protects me from the outside (desktop search and security) and then take it to the next level – making all of my private stuff available across all of my devices, all while maintaining my security.