Eight Million Hits For An Ebay Auction?

Well, it's sort of an auction, and a pretty funny read.

Hat Tip: XRLQ

A Pitfall of Working at Home

Alas, I have never had the problem pictured in this very funny Sony Vaio commerical (which is "more or less" work-safe).

(Note: this is the first time I've attempted video on blogger, so let me know if you have problems. It worked okay for me)

How Not To Do a TV Interview

An article over at Slings and Arrows about the Kerry interview and his foot-in-mouth problem reminded me of my "formal" training on how to do a TV interview. It was not a pleasant experience at the time, but it was a great course and it taught me well.

The class was from an outfit called The LeMaster Group, which are specialists in media training and crisis consulting. The class took place in an actual TV studio, and the "scenario" was that I was going to be interviewed about my job for the local morning TV news show. Since there are several people in the class, I waited for my turn in the "green room" (which didn't provide a feed of the other interviews). Once it was my turn, they took me to the studio, which was set up like a morning talk show, complete with lights and a set. The interviewer chatted amiably with me, going over what he was going to ask me while the camera man wired me for sound. I was asked if I was ready. The red light came on and we were rolling.

Then hell broke loose.

The "friendly" interviewer turned into the most hostile, vile reporter you could ever imagine. The pre-interview questions? Yeah, right. Here is an example. At the time, I was working for Texas Instruments, who was footing the bill for this experience:

Reporter: TI has a military division does it not?

Mitch: Uh, yeah, but...

Reporter (cutting me off): So you built the bombs and missiles that killed little children in the Gulf War?

I had about 10 minutes of "questioning" along these lines.

In addition, the interviewer kept pushing the envelope on things I would answer. "Who did you vote for president?" "How much do you make?" When I said that was personal and I would not answer it. He turned nice. The red light on the camera went off. The bright lights were turned off. He put down his mike.

"Come on, Mitch, the camera is off and as a consultant to TI, I'm just wondering how much you make?"

The camera was rolling. My response was recorded.

If the "interview" wasn't humiliating enough, everyone who was taking the class got to watch it in full (although they did turn it off when they did the "off the record" question, which everyone fell for). After "getting our attention" with the interview, the class then went through a series of exercises how to handle hostile interviews, how to handle the press, and showed real-life examples of good and bad interviews from recent events.

The class ended with a final on-camera interview, allowing me to put into practice what I learned as well as redeem myself from the morning disaster. It was a great class. So what did I learn:

1. You are never off the record. Ever. The mike is always on. The camera is always rolling.

2. Never lie to the press. This one should seem obvious, but you would be surprised how often it isn't followed. Why, just look at John Kerry. But you also have the right to not answer a question, which gets to the next point.

3. You have rights as an interviewee. Really. If you are being interviewed, then the press wants to talk to you. Take that opportunity to establish where you are going to be interviewed, when, and how it will be conducted. This also means you give the interview. Instead of having Mike Wallace chase you across a parking lot shouting questions as you run away (you look guilty even if you aren't), tell Mr. Wallace you would be happy to talk to him at your home this weekend. (there are obvious exceptions like if you are the fire chief talking to the news crew on an active inferno, but you can at least position the camera angle so that the fire isn't blazing behind you while you talk).

4. Since you are giving the interview and set the time and place, prepare for it. Come up with 3-4 points you want to get across.

5. Link. This was actually the main theme of the class, and you see it practiced by politicians and business people pretty regularly, even if you might not be aware of it. Linking means you answer the question asked, but you then link your response to one of the points you want to get across.

Reporter: TI has a military division does it not?
Mitch: While TI has a military division, I work in the fastest growing group, building chips for cellphones.

Most politicians are bad linkers, meaning they don't answer the question, but just go to one of their talking points. So if you are going to link, answer the question asked of you first (or demure on the question, but somehow address the question asked).

If you ever get the chance to take a course like this, jump at the opportunity. It gives you some appreciation for being on the other side of the camera as well as makes you more critical of how other people interview. And my take after looking at the recent Bush press conference and the Kerry interview: Bush took the class and Kerry didn't.

An Arab Supporter of Bush and Israel

I just added his her blog, The Daily Spork (Formerly Minorities for Bush), to the right. Here is what heshe has to say:

How could an Arab support Israel? The answer is simple. My dad summed it up the best I think. He said something like this in response to the same question

" Whatever anyone tells you about Islam, it is not a peaceful religion. I was taught in the mosques to hate Jews. I attended rituals where young men would whip their bare backs until some bled to death and ambulances had to come take them away. Everyone is "hate Jews! hate Israel!" Then I came to the US. Here, I was taught that everyone lives side-by-side. It's a culture thing. You would hate Jews too if you had been born in Kabul and raised in Baghdad because that would be all you would ever know. That's all they ever know. That's all they have been taught. "

I remember those words distinctly because I too had asked my dad how come he supported Israel when he was raised Muslim. He gave the above answer, almost word-for-word. It made a lasting impression on me and I never forgot that answer to such a serious question.

For now, we must all join together and hold the homicide bombers in Israel responsible. No matter what happens, detonating a bomb on a school bus is never right.

I'll let Aaron know. I think he'll faint.

Good Economic News for Americans = Bad Political News for Kerry

The interesting thing about the Kerry campaign is that they have to have bad economic conditions for him to have a chance of winning. Fortunately for us, the economy isn't cooperating.

CONSUMERS' CONFIDENCE JUMPED in April amid greater optimism about hiring and improving economic conditions. Sales of existing homes rose 5.7% in March as low interest rates continued to lure buyers. (WSJ link requires paid subscription)

I mean, how is Kerry going to counter this? His main theme has been "job creation", but with unemployment continuing to drop and people more confident about the jobs they have (hence the improvement in consumer confidence), this is starting to sound like the lie that it is.

Netflix Plans: Mail to Internet

In sort of an ongoing Netflix discussion that has been going on this site, I noticed yesterday that Netflix is talking about moving to internet delivery instead of mail delivery. This is one of those goals that "vision CEOs" fling around that the press and analysts eat up, but the poor saps down below have a tough time executing (yeah, I worked in a company with the same dynamics).

Why will this be tough to implement? There are a few things that come to mind:

1. Infrastructure - I have a high-speed DSL line coming into the home - to my PC. I don't watch movies on my PC, I watch them on my TV. How will the movie get from my PC to my TV (or to my set-top box or my Tivo)?

Yes, I can list a bunch of ideas that will make this possible (I would like a wireless connection between my set-top-box/Tivo and my PC), but the fact of the matter is that if Netflix offered the service today, I couldn't use it. And if they required me to buy a few hundred dollars of new equipment, I am not sure I would, which would be true of most the customer base. So from an infrastructure point of view, there is a serious problem to contend with until high-speed access to the TV (direct, through Tivo, or through the set-top-box) is commonplace.

2. Doesn't Own a Critical Piece of the Puzzle - As the article points out, there are several companies looking at this very obvious business model. So if a bunch of companies are going to offer this, who will be the winner?

Netflix's advantage is their customer base, plus the fact that these customers order and manage their account over the internet. Great. But is that enough to win in this business model when there are other critical pieces:

Content (Movies) - There are going to be serious copyright issues once movies start being digitally flung over the internet (look at music as an example). As noted in the article, most of the movie houses are starting or backing competing services for internet delivery, which will put Netflix at a disadvantage.

Equipment - As noted in point one, there needs to be a way to get the movie from the internet to your TV, probably through the set-top box with DVR (the movie would be uploaded onto the DVR/Tivo disk and be ready for viewing). And who provides the vast majority of set-top boxes to consumers? The cable companies! Think they would like to provide internet movie delivery? You wanna bet they are working on it already as a part of the cable package? Satellite service is a little different, but you can bet Rupert's boys are also working on this. If the equipment is provided gratis to customers and the feature as a part of the existing satellite or cable bill, it will be tough for Netflix to displace.

There is a connection between Tivo and Netflix since the Tivo pres is on the Netflix board, but I am not sure this will be enough to overcome the set-top box/cable cabal, which Tivo themselves seem to be leaning towards.

Capital - Netflix is public with a very high riding stock. But they will be entering this market against people with much deeper pockets (as noted in the article).

3. A Ready Business Model - When did you first hear promises about video on demand? I heard this being talked about in the mid 90s and there were at least a dozen attempts by cable companies and start-ups to provide this service on some limited bases. And they all failed.

Video on demand is the same as video rental if the selection is wide enough, is cheap, and if delivery is easy. But no one has made all three possible yet (if you have pay-per-view and Tivo, you have cheap, easy delivery and can watch when you want, but you have a selection problem). Sort of like video phones, it's one of those technologies that consumers want and companies want to provide, but technology bottlenecks have made both services out of reach for the mass market. Faster internet connections and better technology should make both possible in the coming few years, so the trick is to roll it out when it is ready instead of promising big and not being able to deliver.

Guest Response: Business Books

Post-grad roommate Jim penned the following response to my biz book entry below for the comments section, but it is really long enough for its own blog entry. Jim was working on his Masters in Comp Sci at the time I was working on my MBA, but he wised up and later got his own MBA.

Here are my comments on your entries and some I would add:

Competitive Strategy -- Porter's stuff is a good basis, and the five/eight forces model (the number of forces depending which professor you have) is an excellent template

(Mitch: My prof used eight).

The Goal -- A quick read, and the story was very manufactured, with Jonah being the "dues ex machina," but I, too, started looking at things more operationally.

Bill Gates -- I would extend this to anything about management at Microsoft. Their books either convey extremely obvious stuff or are about people tooting their experience when Windows 95 came out.

Who Moved My Cheese -- Someone left their copy in the airplane lavatory and I read it while using the facilities. That should tell you how fluffy the text is. It did make the spoof Who moved my soap: The CEO's Guide to Prison a little funnier, though.


Here are a few others worth reading:

Economy of Errors -- this is a compendium of Andrew Marlett's material on his satirewire web site during the peak of the dot com years and pokes fun at the stupid, excessive things that went on at the time. This is really funny stuff.

A Random Walk Down Wall Street -- a classic for investment and valuation. It complements the Extraordinary Popular Delusions book Director Mitch suggested, but can be used as a basis for thinking of personal investments.

Getting to Yes -- a primer on negotiation.

(Mitch: I nearly put this on my list, along with Effective Negotiating by Karass)

Coopetition -- introduces game theory.

Influence: The Psychology of Persuasion -- our VP bought a copy for everyone and it's fascinating reading because it's what every good salesperson practices unconsciously. Ever wonder why the Hare Krishnas in airports used to offer people flowers? Answer within.

(Mitch: Will add it to my next Amazon purchase. I wait until I have $25 of stuff so I get the free shipping)

Business Books

A fellow Rice grad suggested I blog about the "Best Business Books". At about the same time a new blog appeared (hat tip to Business Pundit) that is all about business books and is even giving away free books if you come up with a cool name for the blog. So it seems time do an entry on this subject.

I don't read a lot of "business books". I find most of them are simply rehashing and repackaging concepts that have been discussed before, or are trying to sell books based on a new buzz phrase ("viral marketing", "guerilla marketing", "paradigm shift", the list is endless). For this reason you will find that my picks lean towards stories about business rather than theoretical or "how to" business books. And I don't include "self help" or motivational books in my picks (Think and Grow Rich, for example, is on a lot of lists).

So my list of "best" business books isn't drawing from a very deep pool and are skewed towards historical story telling, so feedback in the comments if I sorely missed something you like. Note that many of the books on my list were required reading in business school so they may seem a bit dated:

1. The Prize - An outstanding read on the history of the oil business, plus lots of geopolitical discussion (would Japan have won the War in the Pacific if they hadn't missed the oil depot during Pearl Harbor?). Anyone even remotely connected or interested in this industry, or is interested in how oil has shaped and is still shaping world affairs should read this book (there was a PBS series based on this book which was "okay")

2. Liar's Poker - See the dirty side of the bond industry from a jaded, cynical point of view that gives lots of laughs. This was probably one of the most interesting reads I have had in all the classes I have taken. Unfortunately Michael Lewis's later book The New New Thing - about Silicon Valley - was a bit dry.

3. Barbarians at the Gate - Dramatic story of the RJR Nabisco LBO (leveraged buyout for you non-business types). I picked this up again a few years ago and find that it is getting a little dated, but it is still an eye opener on corporate excess, greed and the art of the deal (I hated Ross Johnson after reading this book, although James Gardner made him sympathetic in the HBO movie).

4.Competitive Strategy - The top theoretical book on my list and the basis from which I draw for nearly all my marketing analyses. If you want to do strategic marketing, this is your Bible.

5. Something by Tom Peters - Yeah, I know there are a lot of Tom Peters fans out there, and reading him does pump you up, but if you read one of his books, you pretty much have read them all. I read In Search of Excellence, Thriving on Chaos, and a few others, so just go find the one with the most recent publication date and you'll be okay.

6. The Goal - This is one of those books you read, think "whatever", and move on, but then find yourself thinking about it as certain operational business situations come up.

7. Rites of Passage - Maybe shouldn't be classified as a "business book", but as a "career book". I referred to it before while discussing Headhunters. It has lots of good information for managing your career and dealing with recruiters.

8. Extraordinary Popular Delusions and the Madness of Crowds - You think the Internet Bubble was unique? There was Tulipmania nearly 200 years ago, the South Sea Bubble and dozens of previous instances where speculation drove up assets far beyond what they were worth before crashing down and reeking financial havoc on countries and people. I read this a good 6 years before the internet bubble, and while I was more cautious than many, I still managed to get somewhat singed at the end..

I notice that I don't have Drucker and a few others, so there is a lot "required" reading that I didn't put on this list. In addition I didn't include Wealth of Nations and a few other economic texts since I don't consider them "business" books, as well as a few books sitting on my shelf that are pretty helpful (books on negotiating, doing business in Japan, etc.).

Now for a few business books that will never make my "best" list:

1. Who Moved My Cheese - I spent 10 minutes reading this in a book store (yes, the entire thing) and thought "If this is the best selling business book in America, it's no wonder that over half of new businesses fail." At least I didn't pay anything to read it.

2. Seven Habits - This is a whole cottage industry: Seven Habit of Effective People, Seven Habits of Effective Families, Seven Habits for Teens, you name it. But let's face it, if you want to read this book and don't already have a work ethic in place, you need a lot more help than a book can provide.

3. Anything by Gates - Bold statements of the obvious told in a way that will induce slumber.

4. My Years with General Motors - This is supposed to be one of the business "classics", and even though I find the automotive industry interesting, and admire Sloan as a business person, I found this book unbelievably boring. It figures that it is one of Gate's favorites (it has five stars from eight reviewers at Amazon, so note that I am not in the majority on this one).

GMail: 100 Times the Storage at Less Than Half the Privacy!

Got this message logging into Blogger today:

As an active Blogger user, we would like to invite you to be one of the first to try out Google's new email service, Gmail.

For those of you who aren't familiar with it, Gmail offers users 1 Gigabyte of storage and the service is absolutely free.
So what's the catch?

The catch is Google scans your email for key words and places "contextual ads" on your mail window. For example, your friend writes in an email "let's meet after work for beers", and when you open it, Google scans it, finds "beer" and places an add for Budweiser (shudder) or Sam Adams (mmm) on the right-hand side of your web window.

I really don't care about some computer scanning my emails for key words, but this has gotten a lot of people upset over "privacy issues". In fact, one of our wacko California state senators has gone so far as suggest legislation banning it. This is likely just a publicity play, but a bit ridiculous for a voluntary, free service.

In addition to the massive storage they provide, Google also provides full search capabilities to your email, so if you can't find that email from a few months ago about a certain topic, you just "Google" your email to dig it up.

I think Google entering the email space is great, and I signed up for the beta account (I don't think you can get an account yet if you aren't with Blogger or another Google service). In addition, if their entry into this space forces other free email providers to increase the amount of free storage they provide (listening, Yahoo?), that would be even better.

Changing Brand Dynamics in the Cellphone Industry

What kind of cellphone do you have? A lot of people would say "Sprint" or "Verizon", but those two companies don't make cellphones, they sell cellphone service contracts.

This change in consumer awareness is sending tremors throughout the cellphone industry as noted by an article in Businessweek. Essentially, the power of the "brand" is changing from the cellphone Original Equipment Manufacturer (OEM) such as Nokia, Motorola and Samsung to the distributors (Sprint, Verizon, Singular, etc.). As the leverage of the big-name brands decline, smaller cellphone OEMs such as Lucky Goldstar (LG) and eventually Chinese manufacturers will make inroads into the market. The result will be similar to what happened in the PC market: commoditization of the hardware and manufacturing for basic cellphone units. The effects of these changes are starting to be felt. Just this week cellphone market leader Nokia announced disappointing quarterly results and they are expected to lose between three and five percentage points of market share in 2004.

The commoditization of consumer electronics has been witnessed in other segments: PCs, digital still cameras, MP3 players and scanners. In each of these instances value has to be captured through means such as distribution (Dell in PCs), driving up the technology curve (Canon in digital cameras), styling (Apple in MP3) or embracing commoditization (HP in scanners). The cellphone industry will have to follow suit:

1. Distribution - As the Businessweek article notes, the major cellphone OEMs have taken note of the looming changes in consumer awareness and are becoming more flexible and willing to work with the distributors, who will see their influence continue to increase.

2. Drive for New Features - Standard cellphone designs are available from the chip manufacturers, such as Qualcomm and TI, allowing manufacturing companies without R&D or design (i.e. Chinese companies) to enter the market and compete solely on cost. With all phones at the low end being based on the same design and being sold based only on cost, the OEMs will have to drive more features, many of which can be seen on the market already: built in cameras, Global Positioning Systems (GPS), PDA functionality, internet access, games, etc.

Over time, the "standard" low-end cellphone will keep adding features, meaning the bar will keep being raised on what a "low end" phone is. Qualcomm and TI are already working on base designs that include many of the functions listed above, so OEMs will be driven to keep adding more features and services.

3. Styling - Many observers have already noted that the cellphone has become a fashion accessory for many demographic segments, mainly younger people. Different colors, "swappable" face plates and other features can make a phone a better seller than one with the exact same technical features. Samsung in particular seems to have done a good job in the styling department and this is an area that many of the majors are trying to address.

4. Embrace Commoditization - In order to compete against the upstart Chinese manufacturers such as Ningbo Bird and TCL, the major OEMs already doing things to drive down manufacturing costs. All the top OEMs, including Nokia, Motorola and Samsung already have plants in China and will be increasing production there to service not only international markets, but the quickly growing domestic Chinese market. In addition, most of the top OEMs outsource manufacturing altogether, with Nokia outsourcing 20% of its production and Motorola relying on companies such as Pantech in South Korea for several of its product lines.

I am modeling a lot of this based on what has happened in other consumer electronic segments, but there are some major differences that the cellphone market has that the other segments don't: different standards (GSM, CDMA, etc.), regulatory issues, and even some political issues. Overall, however, I think as this market matures there will be more similarities than differences with the other consumer electronics segments.

Update: Motorola just announced great earnings.. This was a combination of Mot getting their supply chain in order after they publicly stated severe problems late last year, plus Mot getting closer to the carriers since they have recognized where brand loyalty seems to be heading (plus strength in their other divisions, including semiconductor, which they are spinning off later this year).

Economics Versus Marketing at Netflix

My posting on the price increase at Neflix was picked up at Business Pundit, which generated some discussion at Brand Autopsy and Ensight.

Their points are that price increases are inevitable, especially since a business's costs go up each year even if they don't increase capital investment (payroll, insurance, etc.). So raising prices is inevitable.

I agree, but my point in was more a branding issue than an economic one: If Netflix needs to raise prices, they should have done it in a way that would have locked in customers in what is a very new business model.

The business of renting DVDs by mail for a flat fee is fairly new. There is no patent on this business model (a discussion in itself), so Walmart, Blockbuster and other large companies have announced plans to enter this space. There is a good chance that Netflix could be squeezed out (my bet, bought out), or that they will become the "Apple Computer" of this consumer segment: an early pioneer with a small, dedicated fan base, but with market share in the single digits and prices that are higher (I should blog about the same thing happening to Tivo).

I thought a "pay 12 months in advance at the old rate" was a nice way to raise prices while locking in the current customer base. Those who want the old price paid in advance for it - and cash up front to a company is better than a price increase - and those who didn't want the pre-paid service paid a higher monthly price.

When 60 Seems Young

McDonald's chief executive died unexpectedly of heart failure at the age of 60 while at a franchise convention in Orlando. Among the various thoughts going through my head:

Wow, that's not that old!- This thought is probably the combination of my own aging, the fact that both my parents are very much alive at 66, and the American culture's continuing redefinition of "old" as the boomers age and as life expectancy increases. Already we are hearing that "40 is the new 30", and if this is true, 50 is the new 40 and 60 is the new 50. If you are curious, you can get your statistical life expectancy (scroll down to "Longevity Game") to see if you feel 60 is "old" or not . There is also a Death Clock, but I died earlier using this, so I recommend the other one.

This is just like Junkins - I experienced a similar situation on the inside while working at Texas Instruments. Jerry Junkins, our CEO, died at 58 of heart failure on a business trip in Germany. The "unofficial" story circulating in the ranks at the time is that he literally slumped over in the car while being driven to a customer. As the article notes, Jerry didn't have any history of heart problems, so this was a big surprise within the company.

How Will This Effect McDonalds? - Believe it or not, there are whole bodies of research on company performance after high-level executives die in office (PhD candidates in business have to research something). From what I remember, the results of these studies were pretty obvious: it depends if the company has a succession plan in place, which seems the case here. I will say, however, I think TI was an exception. I don't think Engibous, who succeeded Junkins, was the obvious successor (there was something of a power struggle among various factions after Junkins died), but once he was in place, he did a great job of leading TI to divest non-core business and take advantage of the ensuing tech boom in the late 90s.

Well Gaaaauuuuley!

I actually think this was on a few blogs last week, but Rorschach (just back from Japan) forwarded it to me via email and it is pretty funny.

Site Update

Since it's cold and raining outside (this is spring in Southern California?), I thought it would be a good time to sit inside and update the site:

XML Feed - I created this for the Bear Flag League rollup, and once my feed is on there, I will add a sidebar to the site which highlights new BFL entries. Note that this was a major pain to get done since Blogger (aka Google) in all their wisdom now offers only ATOM feeds for its blogs - a non-standard that many roll-ups don't support (apparently there was a whole mini-war on this around the turn of the year). This means that in order to get an RSS 2.0 feed for my site, I had to go to an outside service called Feedburner which translates ATOM to RSS 2.0 (and offers other services as well). It's free - for now anyway - so I'm not complaining too much, but I am still torqued that Blogger can't offer simple RSS 2.0 feeds (yes, I know, I get regular emails from people offering to move me away from Blogger for free, but I think I am in too deep for now...maybe some day).

Link Updates - My BFL links were hopelessly out of date, so you new members should find yourselves there now (and Angry Clam is no longer blogging so removed) . If anyone notes any problems with their link, shoot me an email and I will correct it. Note that I generally cross-link to anyone who links to my site, so if you have a link to here and don't yet have one back, let me know and I will add you to the right.

Misc Other Updates - Various tweaks here and there.

Brand Loyalty Vs. The Wallet

This is a tough one. I recently signed up for Netflix and love the service, even upgrading from a "3-at-a-time" user to the "5-at-a-time" user. I now receive this in my email today:

Dear Mitchell (Note: Only my mother calls me "Mitchell"),

We hope you're enjoying the convenience and selection of Netflix. Our goal has always been to offer a great service at a great price, and we're dedicated to bringing you the largest library of films delivered quickly to your home.

Since launching our service almost four years ago, the subscription rate for the 5-at-a-time program has never changed. We've added more than 20 distribution centers in order to provide one business day delivery to most of our members. We've also expanded our library by thousands of titles and now offer more than 18,000 to choose from. During the four years, improvements such as these, as well as postal rate changes, have increased the cost of doing business.

Beginning June 15, 2004, we will be raising the prices of all our subscription programs. Your plan, the Netflix 5-at-a-time program, will change from $29.95 per month to $33.99 per month.

We believe our service offers an exceptional value and hope you'll continue to enjoy the benefits of Netflix at the new price. We realize that you have many home entertainment choices, and we appreciate your business.


Yours Truly,
The Netflix Team

I understand the need to expand, but to raise prices by more than 10% seems high - it's worse than what cable company does every year! (and as a public company, isn't that what the capital markets are for). And the fact they haven't raised prices in several years is irrelevant to me - I signed up last month and don't care about their price history. I will probably stay with them, but the fact of the matter is that I am now open to changing.

A smart competitor will go out and offer current Netflix users their old price plus three months free - the same sort of things the phone companies do. In reality, the people running the competing offerings probably aren't that smart and will probably do what the airlines do and raise prices by the same amount.

At this point in this new business model, the name of the game is market share and band loyalty - you can do things to raise revenue and margin later. So a better move would have been to "lock in" existing customers with their old prices. New customers wouldn't have felt "screwed" (or technically, price discriminated) since the vast majority wouldn't have known about the price differential. Over time as new users are added, the average revenue from each customer would have gone up and retention would stay high.

Perhaps they ran models on retention versus cost increase and found the trade-offs favored the price increase. With Walmart, Blockbuster and other large companies planning to copy their business model, however, I think they might have thought harder about this move.

Update: An even better move would been to raise prices, but allow old users to lock in old rates if they sign up for 12 months in advance.

Plastic Chips and Paper Disks

I think some of the more fascinating things we are going to experience over the next 5-10 years is the introduction of new types of low-cost, high volume materials for electronics components. Two examples of early stage research were announced yesterday:

New CD/DVD Disk Made of Paper

Researchers Unveil Plastic Semiconductors

There are several benefits these technologies will bring:

1. New Economic Cost Structure - While the variable costs of using paper over plastic for DVDs and using plastic instead silicon are obvious, less obvious are the huge savings in fixed, capital costs. It takes several billion dollars to produce a state-of-the-art silicon fabrication site ("fab"). It is likely that these technologies will dramatically lower the cost to open a plant (not including the basic R&D), changing the economics of the entire industry.

2. New Product Designs - One of the more exciting aspects of these technologies will be the movement away from flat, planar silicon structures to organic, plastic substrates, allowing the creation of curved, see-through, or even "bendable" products.

Actual Examples of See-through and Bendable "Computer Chips"


The most promising product for this technology is a flat-panel screen (or laptop) that you roll up, like a newspaper. Another product I would like to see is one of those displays/monitors on sci-fi shows that are see-through until you turn them on (which will now be possible).

3. Disposable Products - Many people will argue that cellphones, PCs and other electronics are already "disposable", but with the advent of these types of materials, new products and business models that haven't been possible will become economically feasible.

This is in addition to the typical benefits that we already see in the electronics industry: cheaper, smaller and faster.

Back On

Those of you who tried to hit my site from yesterday (April 15) through this morning may have been redirected to a blank web page at "www.bogger.blogspot.com". Google support (remember they own Blogger) apologizes for this problem which resulted from a server change-over (or similar IS speak).

What's Domestic Public Service?

Kerry is promising free college education for students who provide "domestic public service". He never mentions what is meant by this phrase (Picking up garbage along the highway? Screening people at airports?) Note that Military Service ISN'T included since he purposely put "domestic" in phrase, but I assume our military men and women are already covered by the modern version of the GI Bill (I'm too lazy to Google it, so feel free to add any facts in the comment section).

Do we have a shortage of bureaucrats in this country providing services? Is our public payroll short by the 500,000 people Kerry "estimates" would join this plan? Isn't it more likely that we will have half a million college age students loitering around doing nothing for two years until they got their scholarship money? And add on the whole layer of government oversight needed to run the program. And as a democratic proposal, you can bet that serving at a Church or other religious institution won't be acceptable.

How much tuition would be covered? Harvard level? Community college level? It would have to be the same for everyone or it would be unfair. Isn't this whole thing just servitude for people in the lower class who can't afford college outright?

Politicians of all stripes pander to interest groups, but the lack of detail and unanswered questions in this proposal is just ridiculous.

Bombing The Alamo

I haven't seen it, but it isn't exactly a surprise that The Alamo has been officially declared a bomb and could not only hurt Disney's stock, but give Eisner another problem to worry about in keeping his position at the company.

This isn't exactly surprising based on the reviews I have read about the movie and their attempt to "tell the story from all sides" and "examine the shortfalls of the Alamo participants". I hate to give out advice before seeing the movie, but I think this fiasco could have been avoided if the producers had kept a few simple things in mind (Ed: readers should note that while Mitch resides in California, he is a Native Texan). (Mitch: Never ask a man if he's from Texas since if he is, he'll tell you soon enough, and if he isn't, you don't want to embarrass him).

1. "Big H" History - Just like there is "the truth" and "The Truth", there is also "history" and "History". If you're want to make a piece examining the shortfalls of historical characters and view history from the point of view of a dictator, spend a few million bucks and sell it to the Discovery Channel. If you're going to spend $100 million to make a movie to appeal to a mass audience, make the heroes heroic and their cause just and the bad guys obviously evil (Think Gladiator. I'm sure in historical fact that Commodus wasn't that bad a guy). My guess is that the upcoming summer movie Troy will take the typical good guy/bad guy approach and avoid nuances.

2. Texans Take Their History Seriously - There is a built-in audience of 30 million Texans (not including ex-pats) for this film and the producers couldn't even capture their interest. They should note that the entire seventh grade history curriculum in Texas is only Texas history. I had a text book larger than a phone book covering everything from the time God created His favorite place through LBJ (the Bushes weren't yet on the scene), and the Texas War of Independence featured prominently. If a Texan knows nothing else about history, he'll know that Texas is the only state that was it's own Republic (and probably grumble that it should have stayed that way) and the only one that won it's own independence (didn't get no help from the U.S. of A or won as a spoil of war like California).

3. It's Not About Facts, It's About the People - Although Texan's take their history seriously, it isn't mythical. Even three decades ago, Texas History taught that all the Alamo defenders probably didn't all die fighting and that some were thought to have been executed after surrendering. No one believes the "line in the sand" story or that John Wayne's version is historical fact. What Texans are taught is that a handful of men stood up to overwhelming odds and willingly died for what they believed in. Despite whatever faults they had - everyone in Texas at that time was running from something; it was a land of scoundrels - they became more than their collective pasts and died as heroes. Their deaths bought Sam Houston the time he needed to retreat, regroup and eventually defeat, so their deaths made possible what Texas is today.

4. Why Do a Re-make - It wasn't like anyone was sitting around thinking "ya know, I would like to watch The Alamo again, but only if the characters are more sensitive and if it had more from Santa Ana's point of view". A better alternative would be to make a movie about the Alamo where the Alamo and it's main heroes aren't the central element. A good place to start is an outstanding book called The Gates of The Alamo, which tells the story from secondary characters. It has 4.5 of 5 stars from reader reviews on Amazon and I highly recommend it.

I'll see this movie when it's released on DVD (after bombing, in about a month), but if the reviews are any indication of what to expect, I doubt that my advice will change any.

What is it About the Masters?

I'm not an avid golf fan. I play a round from time to time, but really play golf since it is a skill required for where I want to go in my career than a true love of the game itself. I like it okay, but really wish it took a lot less time (golf should be 10 holes and baseball should be six innings, but that's just me).

And I really don't care to watch golf on TV except for the Masters. Every April I watch this tournament and have seen some great game games, the most memorable being when Greg Norman choked on the back nine in '96, Tiger winning his first Masters (not dramatic, but nice to watch) and yesterday's win for Mickelson was fun to watch since he was the "best player never to win a major".

Other golf tournaments have dramatic play, so what is it about the Masters? It's unique history? It's beauty? It definitely has a mystique that other tournaments find hard to match (St. Andrews is probably the only location that can come close).

Even Mrs. Director, who hates golf, wants to go to Augusta one day to watch the tournament, and I'm definitely going to take her up on this particular desire.

Maybe It's Not So Sophomoric

I commented that, although I participate in them, Google bombs are a bit sophomoric; basically a game that bloggers on both sides of the political spectrum play that really doesn't have an affect on political discourse, votes, or anything else. The only ones keeping score are the people who participate.

The latest Google bomb effort to link John Kerry to Waffles made USA Today's political section, so this little game is getting national exposure. The real "winner" in this is the person who started the effort, who got quoted in a national newspaper and will likely have something close to an Instalanch based on the article.

Having a Good Friday?

I have today, Good Friday, off from work. The wife doesn't. And in my history of working, about half my employers have given it as a holiday and the other half didn't. So what's up with this? Here are a few thoughts, all based on observations, but no hard data (so feel free to dispute me in the comments section):

Regional variation - Companies based in the South seem to give it off more than other regions; that whole Bible Belt, Red State/Blue State thing.

Foreign Variation - Asian based companies, including the two I have worked for, seem prone to give it as a holiday. This may be surprising, but keep in mind the very large Christian population in Korea and the fact that Japanese companies, in general, try to keep their foreign workers happy by loading them up with more holidays than many U.S. companies.

Replacement by Non-Religious Holidays - My guess is that some companies wanted to keep constant the number of holidays they gave, and the advent of secular holidays and the wish to deemphasize religious holidays allowed some companies replace Good Friday with MLK Day or another non-denominational day off. In fact, those public schools that give today off usually call it "Spring Weekend" or something else without religious undertones.

Industry Variation - This is where I don't have a feel. I have only worked in tech, which is split. Any observations in other industries?

Update: The Blogosphere is even split: Instapundit is taking today off, but most bloggers seem to be business as usual.

Cellphone Cameras - They're Here, They're Staying

Techdirt links today to several clueless analysts who say that cellphone cameras are just a "fad" or that they should be stomped out (Dvorak is becoming more and more a curmudgeon in his old age). Techdirt (rightly) dismisses these claims, and I am posting here the same comments I left in the Techdirt comment section

These analysts need to get out more as well as look at the history of the digital still camera (DSC), which surpassed film cameras in volume last year. The first DSCs had really poor quality - barely better than toys. Add a learning curve, customer demand and Moore's law and you have great, low cost DSCs on the market today. Same thing is happening to camera phones. Here a few of the camera phone trends:

- 1.3 Megapixel camera phones will be the dominant resolution by numbers sold by the 4Q of this year. In fact, ALL new camera phones by the majors going into production use at LEAST 1.3 megapixels. The only phones with lower resolution are for secondary markets and by the lower tier cellphone manufacturers.

- 2 Megapixel camera phones are already hot items in Japan. Quality on these things is GREAT. The screen swivels back and around so it is pretty close to handling a "real" DSC.

- Market data has worldwide penetration of cameras in cellphones at 25% this year and 33% next year, and it would probably be higher if the supply chain could be managed. Individual cellphone vendors - think the top brands - plan to have as many as 2/3 of the phones they produce to have cameras by the end of this year with no plans to back off that number in 2005, 2006, 2007...in fact it will go up.

- The carriers (Sprint, Verizon, etc.) love them since it raises ARPU - average revenue per user - so are going to eventually give the camera away for free anyway to make more in the monthly statements, which is already pretty much the case in Japan and Korea.

A fad? Just like cellphones themselves are a fad, I guess.

The interesting part will be seeing how all the players in the camera phone supply chain work out and which business models succeed. This is what I am getting paid to do and it is extremely interesting to both watch and participate in.

Outsourcing We Can All Support

I'm agnostic on outsourcing in that it is an economic and business decision best left to individual companies. You know that "freedom" thing we have applies to businesses as well as individuals and the government should butt out or it will just make things worse.

On a personal level, I would prefer that American companies hire fellow 'mericans, but I am not going to get upset or personally malign people who say outsourcing benefits more Americans than its displaces (since it's true). If a company can bend over backwards and structure its business to hire on-shore, great, but if it makes economic sense for that company to hire overseas, I say go for it.

So while in San Francisco last week, I was taking a cab from downtown to SFO and (of course) had a lefty cabbie (whom I will refer to as "LC"). We started talking about outsourcing, and while he was vehemently against it, he thought outsourcing government agencies was a good idea. I thought this was a fun topic to explore, so the two of us - left wing isolationist and right wing free trader - went through the cabinet agencies and discussed what could be outsourced:

Defense, State, Homeland Security - Even Lefty Cabbie felt these were best left stateside. Although many of our men and women in uniform are overseas, they are U.S. citizens and not "outsourced".

Treasury - LC thought we could print our coin and currency overseas to save money. I didn't mention that the U.S. government actually does this for other countries (i.e. we are the "outsourced country" for much of the printing and engraving in the world) since our technology is pretty advanced in this area. There is also the security issue of having the "world currency" printed somewhere else.

Agriculture, Interior, Commerce, Labor - By definition these probably stay state-side, and we both agreed on this (Jim would probably have something to say about outsourcing our park services). Although from an irony standpoint, it would be funny to outsource the Commerce and Labor Departments.

Education - We both agreed this is a pretty worthless bureaucracy. They teach no children. They build no classrooms. Give it to India.

Justice - LC actually didn't have anything bad to say about Ashcroft, but I think he was making sure not to screw his tip. State-side.

Transportation - Even though I loath the person running this, it probably stays here.

Energy - Hell, we already outsource our energy needs. Let's outsource the whole lot of them.

Veterans Affairs - We argued if this was a cabinet level post (I was right - it is), and since our veterans are here, so is this agency.

HHS - To be honest, neither one of us remembered this as a cabinet agency. Since it isn't so important that neither a relatively involved Lefty nor Righty could remember it, let's send it overseas.

HUD - Ditto HHS.

OMB - We didn't remember this one either (it's like HHS and HUD), but I vote for seeing if the Indians can figure out our budget any better than we can.

EPA - I thought this was a full cabinet post, LC thought it was part of Interior. We were both wrong. Like OMB it is a cabinet rank member and he thought should stay here (I thought it should be eliminated, but since I wanted to make it to the airport alive didn't mention this opinion).

Overall, a fun conversation. Just trying to name all the cabinet agencies was half the fun. I gave him a big tip, told him to invest it wisely (hah), and went on my way.

Waffles - It's What's For Breakfast (And Running for President)

Yeah, Google Bombs are sophomoric, but it's a part of the game we play in the blogosphere.

More info on the Waffle Google Bomb. And then there is the Air America thing.

This is getting silly.

The "Uncle" School of Management

My regular readers - if I ever had any - might notice that my blogging has taken a steep downturn lately. This is because my manager is practicing the Uncle Management Method^TM: giving me more and more projects until I yell "uncle!"

I hit that point this week after being assigned yet another project, being loaded to the point that actions are starting to slip through the cracks. In addition, my travel schedule has ramped to 2-3 days a week, and all of this has meant that my blogging career has taken a steep nose dive. When I was first started traveling on this job, I would actually write blogs in the air for later posting, but I don't even have time for that lately.

Not that I am complaining. Being busy and working is much better than sitting and staring out a window all day. I still plan to keep this blog, but it will probably only be a few posts a week until a few of the projects are under control (at which point I will probably get more projects).