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"Great visionaries have turned products and problems into basic human needs.” - Steven Blank, Startup Advisor & Guru

Sunday
May202012

Brave New World

On my way to Los Angeles, aboard the latest Boeing 777, I came across some cool/catchy developments that I was so completely unaware of! I saw the audio books as a part of the entertainment on my own personal screens along with the latest and the greatest movies and television programming. I bet the days are not far when I would be able to get any movie and any TV show ever produced right on my flight around the world. Next, as I was sifting through the programming, I stumbled upon an episode of a British documentary called ‘Brave New World’ (apparently inspired from an old novel by Aldous Huxley). What was kind of uncanny was me stumbling upon this show right after having experienced some neat entertainment features around my seat. So that got me thinking even more ....

First story of this documentary was about data mining – It mentioned the name “Reality Mining”. It is not news to anyone that the our internet searches, our e-mails, and text messages are stored and systematically ‘mined’ for information. With GPS within our cell phone, the companies are now tracking what we do, where we go, who we call – all the time – along with a precise time-stamp and geo-location. Case in point, I've been noticing how Google's GMAIL ads/deals and Google+ content are getting more and more precise/personalized by the day. It's fascinating but also very dangerous. There are moral implications as some entities may choose to use them for malicious purposes. Its close to what I noted in my book review of THE NUMERATI. If only we were allowed to own this data trail of ours. And those who wish to exploit the data would need our permission and would pay us for using our data, I would be OK with it. 

Another story in the documentary was about a city called MASDAR city, right out of Abu Dhabi. Here’s a city designed from scratch and is entirely “green”. Costing a few billion dollars, the city has GPS guided electric cars, solar electricity, and wind harvesting. It is entirely self contained organism that houses more than 40,000 people. It just goes to show how disruptive the pace of change has become, where people and firms are accelerating innovation and often leap-frogging prevailing technologies. The documentary also had a story on Neutrinos detection experiments being done around the world but I will leave that for another time.

So what are all these examples/things signalling to us? Look back 20 years and recall what the pace of change was, what the risk levels were, what kind of fears/concerns you had, what the boudnaries were. Now contrast that to today or better, contrast today's environment to what things might be 10-20 years from now. The world and its citizens are taking on bigger and bolder risks, and those are the people who are being rewarded. It just isn't business-as-usual any more!

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Friday
Apr272012

We are all Marketers

The proliferation and pervasiveness of social and digital media is expanding our role well beyond the traditional boundaries of a consumer and into that of a marketer.

We weren’t like this before. As consumers, we used to invest a lot of time in the category/brand before making a purchase decision and very little after that. Social media has flipped that over 180 degrees. We now spend relatively little time making the purchase decision but invest a significant amount of time talking about/up the experience after having purchased the product/service.

Here are some of the things we are doing post-purchase –

  1. We are discussing the experience we have had or are having with the product/service – The good, the bad, and the ugly!
  2. We are influencing the decision patterns and consumption behaviors of our friends, family, and colleagues
  3. We are influencing the way brands treat us as consumers and are giving them a whole new way to connect with us
  4. We are showing suppliers and distributors new ways to meet our needs
  5. We are influencing how brands design and build their products and services
  6. We are keeping the brands honest and showing them who really is in-charge here!

Social media has turned the tables on traditional marketing and the consumers are providing a very valuable benefit to the organizations in terms of “Earned Media”. That is correct - if the brands are doing right by the consumer, they will earn the consumer’s respect/admiration and the consumer will generate more buzz than what the firm’s money can possibly buy!

So what is your firm’s social strategy? How are you making that connection with the consumer? What are you learning and more importantly, how are you bring those learnings into your operations?

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Tuesday
Apr032012

The Squeeze is On

On what? On the Manufacturing sector. The US once used to be the manufacturing powerhouse, churning out widgets and gadgets like nobody’s business. But those days are long gone, thanks to globalization and democratization of capital, research/innovation, and technology. Along with that, the thing that is most out of whack in the US is the overall cost structure and wages/benefits. All that is changing as firms go through some tough restructuring of their business operations and attempt to squeeze every last bit of efficiency from their supply chain.

Amazon just bought Kiva Systems, a firm that helps automate operations within the warehouse and distribution centers. Caterpillar, Dow, and Corning are looking at ways to further automate their manufacturing lines and reduce dependency on humans by moving to smarter, more resilient machines and computers. Target is worried about the “showrooming” phenomenon and is asking its suppliers to make products that are more price-competitive. The likes of HP, Xerox, Sony, etc. are giving their products/services a very serious look as they attempt to rationalize and align to the digital/mobile/local economy. Ford, GM, and Chrysler have completely transformed their operations, from the top floor to the shop floor, and restructured their contracts with unions and staff.

What are the implications of these corporate transformations? Doing more with less, just-in-time inventory, mass customization, automation, computerization, strategic sourcing, and shorter product lifecycles are the themes of the new economy. These are the strategies that firms are pursuing to improve product quality and pricing, in order to be competitive with the rest of the world. The people that are the most hurt by these changes are the workers on the factory and warehouse floors. Most of them are just not equipped with the skills and capabilities that are being demanded by the transformed firms. In order for them to have a chance in this new setup, they’ve got to bring a lot more to the table than just hands and feet. You have to be a quick study, be adept with computers, have a keen eye for quality, and be a contributor to continuous process improvement. And you have to be ready to do all that for lower wages and fewer benefits. Oouuch!!

Some will say that this is not fair but others will say that these are things that were way overdue. Americans have long enjoyed a level of prosperity that is unseen in the rest of the world. This was a correction that had to happen at some point, one way or another. Technology has been the biggest disruptor (i.e. leveler of the playing field) here but let me tell you, technology will get America out of this hole! Staying at the bleeding edge of this digital era and finding ways to harvest emerging technologies in unimaginable ways are what will help US keep the leader position and demand/earn the price premium that comes with it.

The above is easier said than done. Where do we get all the smart people to work these opportunities? Do we spend on building the much needed innovation infrastructure or do we fund social (unemployment, healthcare, etc.) causes? How do we get the younger generation to pursue STEM disciplines which are the DNA of the digital economy? Got ideas? Share them!

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Wednesday
Mar142012

A Pot calling the Kettle Black

Read an article in NY times recently - Why I Am Leaving Goldman Sachs - Its from Greg Smith, (now former) Executive Director at Goldman Sachs and head of the United States equity derivatives business in Europe, the Middle East and Africa. Mr. Smith is mad about policies within his company and how it is treating their own clients – calling them names such as ‘muppets’ – hence he is resigning from Goldman in disgust. My first thought when I read this article was – Wow, here’s another proof that, we, the investors (or consumers) are really getting taken for a big ride (my first clue came when I read about the Enron executives talking on phone about ripping off poor grandmothers in California) – and then, I thought, here’s a ‘pot calling the kettle black’. 

I have come to a realization that all of these guys who manage our money and energy are crooked to the core. All they care about is how they can make more money for themselves – let the citizens of this great country go to hell. They amply demonstrated that during the housing bubble (thanks to Mr. Alan Greenspan), then TARP (thanks to Mr. Henry Paulson), and finally the unjust war in Iraq (thanks to Mr. George W. Bush). We, the taxpayers, are now left holding the bag while these thieves (and their cohorts at places such as Goldman and Haliburton – to just name a few) have stolen all of tax-payer’s (our) money and, in most likelihood, planning their next move. Speaking of next moves, why the hell am I paying $4+ for a gallon of gasoline while we have conquered Iraq, liberated it, and can get that oil flowing freely in case Iran tries something fancy? I smell a rat there too. But I would refrain from “conspiracy theories” on this blog. 

We should also not forget that the poor and weak have historically ALWAYS suffered at the hands of rich and powerful. After the fall of Greeko-Roman civilizations, the role of populous in making decisions about themselves have constantly eroded until recently in twentieth century. So, with the current social and political layout, I personally believe that our society is more or less trying to re-arrange to the framework of medieval times where the checks and balances are eroded to the point where, the rich and the powerful can manipulate the poor through fear (remember Cheney and his famous dialogue – "If you don’t elect us then the chances of us getting bombed again are high.") and deceptions (examples listed above). I’m not trying to argue class-warfare here but only writing the way I see it. 

So, what can we do about it? Where is the root cause of this problem and how can we fix it? As I wrote before, the higher educational institutes are already mandating courses on Ethics and Morality. That does not seem to have much impact yet. I believe the problem is rooted deeper. This “all for me and my compadre and none for you all” is rooted somewhere fundamental in the way we have laid out the social structure. Some checks and balances are definitely missing. 

Any ideas????

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Monday
Mar052012

Thinking Fast and Slow (A Book Review)

Love it love it love it. I love this book not because the author is a Nobel Lauriate in his field of research, not even because he has quoted my other favorite author Nassim Taleb (read my book review of Nassim's excellent book - The black Swan)  several times and not even for the fact that he made a joke of books such as “Good to Great” (I reviewed the sequel to this book - How the mighty fall?) and hated them for exact reasons that I did. I love this book because the author very clearly outlines the MOST IMPORTANT of all the concepts related to Irrationality of Human brain – its functionality, its model, along with biases that we suffer in a daily basis. This is my subject of interest and I have been looking for a great book that can give the 20,000 ft view of this world just so I can scope it. This book gave me just that … Many thanks to the author!!

The author describes how the human brain is NOT exactly a rational machine that can make best decisions solely based on the available information. The human mind is EMOTIONAL and these emotions cause all of us to make irrational decisions. One example that I often quote myself is – I'm still holding the some banking sector stocks as they plummeted from the sky. Why? I can’t explain it. I’m just committed in this investment. This book also explains shortcomings of a human mind for us to be aware of; there is seldom one that can completely eliminate them and become more like Mr. Spock on the Star Trek. 

To start with, the author first describes the two-system model of human brain – System 1 (the one that thinks fast) and System 2 (the one that thinks slow). He gives example such as – multiply 5 times 10. The answer just pops in your head – That’s system 1 at work. Now try 123 times 56 – Well now you would have to get the slower System 2 involved. There are numerous brain teasers that the author throws at you to prove the two system model. And then he explains the interactions between the two models. And ultimately, links almost all known mind biases to these system models. Following are just a few some of the phenomenon that author tries to explain – 

  • Not invented here syndrome
  • Greater fool theory
  • Sunk cost effect
  • Inability of our mind to intuitively grasp statistics
  • Group Think
  • Herd Mentality

What I thought missing from the book was – how to train system 1 and system 2 for minimization of the biases in our mind. With that insight this would have been equivalent to Holy Gita to me … 

So, now let me ask you this – Is the stock market a complete farce? Is the foundation of the stock market completely based on incongruity of the human decision-making? Once you read this book – it may open your mind in ways that’ll amaze you. 

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