Friday, February 29, 2008

What career should you choose?

Serious advice. Obviously you won't get that from me. But how about from one of the most respected economists in the world? It may sound like a made up name, but Dr Hal Varian has had a long career in both business and academia, and he suggested this answer at the Freakonomics site:

If you are looking for a career where your services will be in high demand, you should find something where you provide a scarce, complementary service to something that is getting ubiquitous and cheap. So what’s getting ubiquitous and cheap? Data. And what is complementary to data? Analysis. So my recommendation is to take lots of courses about how to manipulate and analyze data: databases, machine learning, econometrics, statistics, visualization, and so on.

Unfortunately, that description does not match any of my top five jobs. Fortunately, it all sounds very familiar.

PS Unsurprisingly, Hal Varian now works for Google.

Thursday, February 28, 2008

The Perfect Recruitment Process?

I am only an advisor to the client, but I am aware of their difficulties in recruiting suitably skilled staff. When doing any recruitment, whenever you can't find the "right" candidate, you always need to ask if you are doing something fundamentally wrong, if you need to tighten or relax the criteria.

I know that the client was looking to fill a contract vacancy last year, and they utilised a recruitment agency to advertise the position and pre-screen the candidates. Sixteen people passed these initial tests. In a nonexistent ideal world, every one of those candidates would be perfect for the role. But that is only ideal for the employer. It is not necessarily ideal for a society to be in a situation where fifteen candidates are all equally capable of the job, invest equal time and effort and are equally disappointed by the outcome.

But as a practical target, if you are looking to judge if your criteria were too strict or too lax, if about half of the applications are rejected at each stage of the process, then you shouldn't be going too far wrong.

Let us look at historical (hypothetical) example. Out of those sixteen pre-screened candidate CVs, eight were considered suitable for interview. Of those eight, after initial phone discussion about the logistics of the position, four actually turned up for interview. Of those four, two were offered the position. Of those two, one accepted it.

So I conclude that, in this case, the client was doing things about right. I only wish they would do things more quickly.

Wednesday, February 27, 2008

The Physics of Violence

This subject still troubles me. Because as the days pass, the country seems to be moving from a desire to stamp out [sic] this type of incident to a sort of resigned acceptance that these things happen in football. They do. But they should not.

I tend not to post pictures on this site, but you can look here for the money shot.

Now of course I am not saying that Taylor meant to snap Eduardo's leg and possibly end his career. True he did not "go in with both feet", the oversimplified litmus test for footballers' assessment of intent. But he did mean to strike with his studs first in the general direction of his opponent's leg at sufficient velocity to smash through human bone.

Forces, levers, pivots. The result was inevitable.

Tuesday, February 26, 2008

American Inventor

I just watched the first programme in a series called American Inventor. Well, it was the first of the second series - either the first series was not shown in the UK or it just passed me by.

The thing that amuses me is that the publicity for this show seemed to imply that it was a "serious" entrepreneurial programme, something like the BBC 's Dragon's Den. But despite the presence on the panel of Peter Jones, the self-proclaimed business tycoon, as the show progressed I realised that it was actually much closer in spirit to another show, American Idol. And only at the end credits did I spot the explicit reference to Simon Cowell.

The BBC show tries desperately to be a serious business programme. It even has the BBC economics editor as presenter. Yet sometimes I dislike its approach, as described in an earlier post. So despite the tacky gameshow format, in some ways the American show is more honest entertainment. There is much less of the collusion, negotiation, bullying, and psychological pressure that is evident in the den. Yes those things are interesting, but we see them in work every day anyway - we don't need them on television too.

Monday, February 25, 2008

Marketing Maths Money

I quoted about organ donors from the Data Strategy editorial only a few days ago, but the cover story from this month's issue has an equally relevant message: Clients, suppliers and agencies are crying out for data analysts and database managers, but the small number of recruits available is a growing problem for employers.

There is a very obvious first cause for this. Again quoting directly from the printed article: the number of students taking A Level Maths fell by nearly 40 per cent between 1989 and 2002. This was against a backdrop of a 15 per cent overall rise in the number of A Levels being taken.

As a fairly new and emerging industry, the employment market for these people should be fairly flexible. There is an obvious requirement for these skills, in fact the writing here always seems to return to the same theme of the need for better targeting, better measurement, and also the the growing requirement for increased statistical analysis as a compensating factor for increased data protection.

But these same skills are also in demand in the slightly stratospheric world of financial risk analysis and hedge fund management. Understandably, many maths graduates are drawn to the City to manipulate and model with numbers that are even further removed from the real world of people and commodities. It could be argued that there is a case for outsourcing of this analysis, but that is easier said than done, and at least in the marketing arena there is huge added value in knowing the local market as well as the local model. This again suggests that more skilled graduates are needed here.

So there should be a natural tendency for prices (salaries and contract rates) to rise to match the increased demand. If this does not happen, then it is hard to see how employers can complain about insufficient supply. And over time we should even see a regression of graduates back to the more "difficult" subjects.

There are alternatives. Perhaps the government will submit to industry demands for more professional immigration. Perhaps more jobs will be outsourced despite their practical difficulties. Or perhaps we will learn to value scientific skills before we become a nation of hairdressers, TV producers, insurance salesmen, personnel officers, security guards, management consultants, telephone sanitizers and tired bloggers.

Sunday, February 24, 2008


Before a return to serious issue tomorrow, another brief comment on yesterday's Premiership matches. Yesterday, I sympathised with Arsenal FC. They were genuinely unlucky. Or in the eyes of the "true fan", they were cheated out of a deserved win by incompetent or biased refereeing.

To some observers, Liverpool were lucky yesterday. They won 3-2. However, I was expecting that Mr Lineker would bring up a specific point on Match of the Day, he did not, so I mention it here:

When Fernando Torres capitalised on the poor defensive header to score the first goal, in addition to the invariably quoted qualities of pace, awareness and cool-headedness of top strikers, there were three outstanding attributes displayed that were even more unusual:

1. He gambled. Gary Lineker is one of the few analysts who regularly talks about this. But Torres hung back behind the defender just on the slight chance that he would fumble his back pass. He did not "track back". Most of the time those gambles are wasted. But the best strikers gamble most.

2. He was tripped in the penalty area while rounding the goalkeeper. But he did not fall down, despite the obvious foul. A specialist striker would never give up a chance of goal to a specialist penalty taker.

3. As he was preparing to shoot, another striker was running in behind with a better angle. But as with Michael Owen getting in front on Paul Scholes after rounding the Argentine defence in 1998, having done the hard work, there was no way he would pass on the scoring opportunity.

Selfish? Probably. Also the best centre forward I have seen in a long time. Well played Fernando.

Saturday, February 23, 2008

Break a Leg

Both my dad and my brother have performed on stage many times. That is not just amateur dramatics, my dad is a member of Equity and is off filming something in Wales next week. Within theatrical circles, I have heard the phrase "break a leg" used as an expression of support before a show.

Even the most casual perusal of this blog will make clear my opinion on such superstitions. I'll just say that they deserve as much respect as religions.

But I appreciate some human psychology. If a dumbo actor thinks carrying around a little lucky feather makes him perform better, then he is likely to perform better with it. If someone feels better after being wished good fortune, I will wish them good fortune.

I'm getting up early to play football tomorrow. And over the years I have witnessed the genuine breaking of legs right in front of me many times, and I can still recall the sight and sound of a snapping limb. For all of Sky's sensationalist coverage of the Premier League, I am pleased they did not replay the Eduardo incident today. Though even news programmes have now shown it.

So I have never used that phrase. And I never will. Is that superstition?

Friday, February 22, 2008

Painting the Forth Bridge

I have crossed the legendary Forth bridge, and I know of the story:

So much steel is involved in the 1.5-mile long rail bridge over the Firth of Forth that, the legend goes, by the time the painters finish, they need to start over again at the other end.

But I was always skeptical of that ... that would mean nothing large can ever be completely painted. Which is rubbish. If you want something finished earlier, you usually just need more money or more effort thrown at it.

In fact, for a large static structure, it seems to make perfect sense to employ just the right number of workers so that the rate of paint application is equal to the rate of paint degradation. Any more workers, and the "burn rate" is higher than it needs to be.

However, according to the Reuters news report, Balfour Beatty has been paid 74 million pounds to complete the job by 2012. You thought your house painters charged a lot. The job started in 2002, and the new coating lasts 20 years. So in 2022 the whole thing starts again. And the legend lives on.

Thursday, February 21, 2008

Holy Cash Cow

It is usually considered humiliating for a person to be sold off like a piece of meat. For privileged football stars and unprivileged technology contractors, this usually tends to happen only at the conclusion of contracts. And even then, the transactions are usually conducted privately, the commodity is allowed some opportunity to negotiate a personal rate, though the buyer has the upper hand with the opportunity to walk away and leave the seller with nothing.

Over in India, they have not turned to capitalism in a half-hearted manner. The players in the Indian Premier League were simply sold off at auction, all at once, a single day's bidding. The cricketer who was bought is contractually obliged to play for the buyer for three years for the auction price.

But we shouldn't pity them too much. A million dollars a year for playing a handful of short games. That's preity nice by anyone's standards.

Wednesday, February 20, 2008

Productivity, Sex, Kids

OK, time to get accusations of sexism and anti-family bias. Yesterday's headline from the British Psychology Digest had the simple headline:

Childless Women Are The Most Productive

While you pause on that headline, also take into account that there were broadly four groups being compared:
- Women with school-age children
- Women without school-age children
- Men with school-age children
- Men without school-age children

The article was peer-reviewed research in the Journal of Vocational Behaviour. Abstract here.

The study seems quite explicit that women without school-age children are more productive than those with them. The BPS summary suggests this is due to "domestic responsibilities" though of course it presents this as explanation not as endorsement.

The study also seems explicit that men without school-age children are less productive than those with them. It suggests that this result is explained by the stereotype of "breadwinners", where increased family responsibilities required the men to work longer hours to earn more.

But that last line hints at the misleading nature of the headline. By productivity, the study measured it simply by counting billable hours. More hours worked equals more productivity. Perhaps true for lawyers in Canada, but is that generally true in the workplace?

And another implicit message in the headline. Free of childcare responsibility, women are more "productive" than men?

Tuesday, February 19, 2008


At the time of the original Northern Rock crisis, I diverted from usual blog subjects to politics just because the hype and public opinion and even the news were so divorced from economic reality. That time has come around again.

After much consideration, the treasury has decided to reject the option of selling out to one of the interested parties, it has also rejected the idea of letting the bank collapse into bankruptcy, and has instead decided to nationalise it.

And for taking this decision, nothing but opprobrium.

Fair enough, the result will be risk to the taxpayer, loss of shareholder value and possible loss of jobs. All points accepted.

Yet in analogy with marketing, the absolute result is possibly less relevant than the comparative result. What were the alternatives? It is well documented that even the sale to the bidding consortium necessitated huge taxpayer guarantees. In fact, those guarantees were what prevented the sale. Also the offered price was less than the compensation expected from the government, so the shareholders also benefit from the nationalisation. The third option, liquidation, would have even more drastic effects on shareholder value and on jobs, and the government would still have been left with huge liabilities.

So really, at this moment in time, was there any need for the sudden outburst of anti-government vitriol? Only if you have an anti-government agenda anyway.

Monday, February 18, 2008

Social Notworking Sites

As we try to develop more effective and better targeted advertising, the "social networking" sites leap out as the new frontier. Yes there is a ready-made self-defined expression of particular individual likes and dislikes. But two questions, both mentioned here recently, mitigate the potential benefit:
  1. Do we have permission to use the data?
  2. Will your target actually notice the ads?
So relating the two questions we have a third, even if they notice, will they be positively inclined to follow through?

Regardless of whether they are useful for marketers, the question remains about whether they are of net benefit to society as a whole. The legendary Freakonomics blog asks

Two little words — “social networking” — have become a giant buzzphrase over the past couple of years, what with the worldwide march of Facebook and headline-ready stories about Web-assisted suicides. So what’s the net effect of social networking?

However, the sort of people who tend to be asked those questions, the self-proclaimed and industry-acclaimed gurus of the new world economy, they are surely those who who would tend to say the potential benefits outweigh the costs. I would agree.

But I still think the "site of the month" (last year MySpace, this year Facebook, next year LinkedIn, whatever) has very risky growth potential. Perhaps the future could be in individually hosted personally tailored networked sites. A bit like this one.

Sunday, February 17, 2008

Who checks your adverts?

I listened to a couple of senior marketers from Google last week. Their themes were consistent, how the developing models behind concepts such as AdWords were changing the nature of the industry. They quoted an old marketing favourite: "I know half of my advertising is wasted," John Wanamaker famously said; "I just don't know which half."

And senior management at Google are not the only people to use that and similar quotes as a sign of the changing times. I often say it too. The work-related portions of this blog constantly suggest the identical message - modern marketing should be measurable, we should know which half works.

However, yes you should learn the results, but you may not like what what you learn. The Virtual Economics site provides an excellent summary of the potentially uncomfortable results. I won't repeat everything here.

But as I see it - in the TV advertising world, those who you would most like to target with adverts for the funky new gadgets that you are trying to sell are precisely the people who are most likely to have the PVR that lets you skim past all the ads.

And even in the new web world, where these stats are more easily measurable, for example by WebTrends or Sophus3 or a myriad of other companies, still less than 1% of visitors to a site in a month click on an ad. Easy stats. Given enough visitors, still maybe ok.

But who are these visitors? I will quote directly from the first reference to the original AOL survey that I can find: Not surprisingly, they look at sweepstakes far more than any other kind of content. Yes, these are the same people that tend to open direct mail and love to talk to telemarketers.

And three conclusions about these visitors drawn from the survey here:
  • More representative of lower income households than the average user.
  • Less educated than the average user (or from less-educated environments in the case of minors).
  • More likely to live outside of the major metro regions.
Are these the people who you most "want" to click on your banners?

Saturday, February 16, 2008

Celsius 233

I am sadly ignorant of much "serious" literature, and I only mention this for the ethical interest rather than the literary one.

But according to the famous Tom Stoppard in the Times, regarding an unpublished work that an author wanted burned after his death, there is a very simple answer: It’s perfectly straightforward: Nabokov wanted it burnt, so burn it.

That is probably the majority opinion. But this blog does not follow the majority. Tyler Cowen at Marginal Revolution offers a very different view. Dead people don't count in the social welfare function.

That is true. The degree to which we respect historical legacies is a decision for those who are currently alive. The question remains: do future people count in the social welfare function?

Friday, February 15, 2008


Some great news. According to a front page story on the BBC today, a British man has smashed the record for cycling round the world.

I used to ride daily in my college days, so I can trivialise a couple of the supposedly noteworthy highlights. He was knocked off his bike in the American state of Louisiana by an elderly motorist who drove through a red light. Well I was knocked off my bike by a red bus that cut a corner. And Mr Beaumont, who is originally from Bridge of Cally in Perthshire but now lives in Newburgh, also had his wallet and camera stolen from a motel. Across so many motels in so many third world countries, Pakistan, Malaysia, America, that isn't too surprising.

Seriously, it is a very impressive achievement. But I am still skeptical of one thing. Because look at the map. Obviously he didn't cycle all the way around the world. I would more impressed if somebody did, swapping between racing bike and mountain bike and pedalo depending on terrain. But it seems fair game to take a boat across the oceans in these events. Even then, he didn't always take the minimal route across the ocean, that would have involved the Bering Strait.

So he didn't really cycle around the earth. He cycled across twenty countries. Still damn impressive.

Thursday, February 14, 2008

Take my organs, send me emails

This month's editorial in Data Strategy starts with the simple sentence: "Gordon Brown supports opt-out".

The magazine is presumably supported by the direct marketing industry. Clearly, from an industry perspective, the larger the potential market then the more opportunity for marketers. A voluntary "opt-in" principle reduces the target size. So the magazine's encouragement of a default marketing-accepting position is perfectly understandable.

I'm reading from the printed copy in front of me, so apologies for limited direct quotation, but the deliberately provocative opening of the editorial was actually referring to the government suggestions towards implied consent for organ donation, and then compares that with the increasing permission-based requirements for marketing communication.

The common view on marketing strategy is quite clear: targeted communication is good, junk mail is bad. The editor's view on this is also quite clear, and he does not try to mislead the reader about the PM's views on the matter. I actually doubt that his view differs from the common one.

But the editorial also raises an interesting point: "In the legal world, precedent is all. So establishing an operating principle of opt-out can be taken as useful support if a new debate arises around data and permissions".

So presumed consent for organ donation might lead to presumed consent for direct mail?

Wednesday, February 13, 2008

Spirited away

I spotted this story in the local newspaper yesterday. Now it seems that the world has caught up, it is national news. I will name and shame.

Some batty fruitcake of a woman (Sabrina Fallon) heard odd noises in her loft and called in the council to investigate. The council called in a lying fraudster (Suzanne Hadwin) who put down some salt and claimed to "exorcise" the spirit.

The council paid the con artist. The council spokesman (Andrew Burnip) defended the decision. If you live in Durham, those are your taxes being stolen.

Tuesday, February 12, 2008

Technology for Marketing

Today I paused from daily project estimation to look further ahead.

The over-riding theme of the new media gurus is the racing pace of opportunity, the relentless surge of ever faster processing and ever bigger databases. Goodbye to the old snail's pace of Moore's law - doubling every 18 months. While the number of worldwide web users grows even faster, the network also becomes even more of a collaborative medium, so the number of content suppliers is growing faster still. And that content becomes ever richer with information. Within a few years, some believe that the volume of captured measurable usable information will be doubling every few days.

Meanwhile, in another strand of technology for marketing, we need more and more powerful algorithms to analyse all this data. All the ancient laws of CRM are being re-written. An oft-quoted ideal is to go back to the personal relationship of the local corner shop but with ultimate choice and flexibility. All that personal data, we just need to learn to use it in the way that best satisfies the customer.

So far so predictable.

But there is a parallel development, something that is not so welcome to the marketer. Something that is just glossed over by the futurologists. It is true that we are getting more types of information, but at the same time we are getting more careful about how it is used. Thanks to the legacy of the junk mailers and spammers and ID fraudsters, the customer is understandably cautious about leaving identifiable data. Marketing did jump ahead on the coat-tails of speeding technology, but legislators are catching up.

Meanwhile the organisations that are collecting the data are changing all the time - every year there seems to be a new social networking site of the moment. So the sources of data are becoming more fragmented too.

This still means that there is new opportunity. But it is a different sort of challenge. We need to be more sophisticated in our marketing. More careful with use and audit of data. Where we do not have all the personal information that we would like, we need to make greater use of probabilities and control groups and statistical models. It needs a new type of marketing. Maybe a new type of marketer.

Monday, February 11, 2008

Another paradox?

I don't really encourage debate here. I want to make you consider a different point of view, but do not want to have a serious argument.

So I never tend to end posts with a question along the lines of "what do you think?"

But the main reason that I don't end my notes with a question is only the same reason that the following of a link is always optional and not the reason for the post. That is, however short, every post should be an independent cohesive article in itself, it should not need either an internal diversion or an external answer to make it complete.

So each post should be self-sufficient without a comment. However, not only would I like more people to read this, but I also genuinely want to get your comments. Hmmm.

Sunday, February 10, 2008

Estimating Project Delivery Time

I have spent a lot of my working life doing IT Project Estimation and IT Project Proposals, it is not the most interesting subject in the world, but it is important, and I touched upon it in an earlier post.

I could throw in a few key words used to manage the estimation, words like originality, uncertainty, statistics, experience, reductionism, but it would need thick volumes to explain them properly. What is interesting is why people keep getting their estimates wrong.

It is obvious that people tend to over-estimate their own abilities. That is such basic human nature and so well-documented that we may as well just call it fact.

But many people, even educated ones, seem to have trouble with simple extrapolation, even for things as commonplace as car journeys. The British Psychology Society just published a simple study that asked:

for both pairs, just make an intuitive judgement about which jump in speed will make the largest difference to your time of arrival (i.e. save the most time):
a)Travelling at 50km/h instead of 40km/h.
b)Travelling at 130km/h instead of 80km/h.

a)Travelling at 50km/h instead of 30km/h.
b)Travelling at 130km/h instead of 60km/h.
If you're like most of the participants in Svenson's study, you will have assumed that option (b) in both pairs is the most time saving.

That guess is simply wrong. In each case, option (a) saves more time. However far the journey.

Saturday, February 09, 2008

Share ya' laws

A regular theme of this blog is an objective view of marketing hype, or indeed of any hype, but the principle remains that something is only worth noting here if the view here differs from the common view.

The common view at the moment, front page news across Britain, is that the Archbishop of Canterbury has said something really stupid, that he recommended that particular communities should be allowed to use Sharia law as an alternative to British law for certain types of case. He did not say that. Read his actual words. But even those who quote his actual words seem to be drawing another conclusion from them, that although he did not recommend it, he thought that this was inevitable. No, he did not say that either.

My view on this is simple - no religious law has any place in a modern state. However a fair analysis of the Archbishop's actual words is provided at the Language Log, I have neither the time nor space to replicate the linguistic analysis here, but I will repeat just two conclusions from it:

One that I agree with: Dr Williams is a gentle, learned, brilliant, scholarly man, and a bit of a public relations doofus.

And one that I don't: Someone duller, more political, less original, and less intelligent must be found for that job.

Friday, February 08, 2008

American Football and Cricket History

I prescribe targeted marketing. I live in a transatlantic world. A few days ago I hinted at the biggest event in the "football" calendar, but I know that the terms used in "American" football mean nothing to most Europeans. I often mention cricket, but that means nothing to most Americans - and also to most Europeans. So this is going to be understood by a very small intersection indeed:

Superbowl - In football, a big game. In cricket, Shane Warne to Mike Gatting, setting the tone for a decade of Ashes dominance

Tight End - In football, offensive journeyman. In cricket, Glenn McGrath bowing a consistent line to keep the score down at one end, while Brett Lee attacks the other

Wide Receiver - In football, the guy who tries to run behind the defense and catch the forward pass. In cricket, standing behind the stumps to Steve Harmison on the first day of an away series

Time Out - In football, enough time for a few extra commercials. In cricket, enough time for a decent break, say 40 minutes for lunch, 20 minutes for tea

Touch Down - In football, possession in the opposing end zone. In cricket, Ricky Ponting claiming a disputed catch. Sorry.

Thursday, February 07, 2008

... of the god in the night-time

As you would expect from the Economist, yesterday's article was almost completely positive and optimistic, saying how globalisation, technology and free trade were making the world so much better. And it suggested that the curious incidence of little current news from many regions that previously had bloody conflicts was because those regions were now free and stable.

However, there was one standout exception to the general increase in security and stability. Quoting directly:

A big exception to the rule of declining political violence is the rise of terrorism. Despite claims to the contrary by the Bush administration, the number of international terrorist incidents has risen since September 11th 2001, after a decade of decline. The number of deaths from terrorist acts has climbed almost everywhere. Yet this picture of worldwide growth is misleading. While it is true that Asia, Latin America and Europe have all experienced more terrorist attacks than before, they are still rare. Since 2001, the Middle East has suffered more violence and fatalities than the rest of the world put together.

So the Middle East brings you Abraham, Jesus and Mohammed, and this is how you behave?

Meanwhile, as millions of Americans were voting in Democratic and Republican primary elections on Super Tuesday, many southern states experienced the worst tornadoes for decades. Many people died. The religious loonies are always quick to blame any catastrophe in New Orleans or California as God's vengeance upon immoral lifestyles, yet it seems that the most religious parts of the nation are those that are most affected by these natural disasters. Is it that the prayers of the supposedly faithful increased the likelihood of natural disaster there, or did the prayers make no difference whatsoever?

The curious incident of the dog in the night-time was that the dog did nothing.

Wednesday, February 06, 2008

The curious incident ...

Before yesterday's diversion around the super bowl, I was discussing the impact of technology, how this was creating an environment where many commodities were becoming "free". This still allows profit if you can find ways to create generative value, a strong concept that is broadly a re-branding of our "old" individualised marketing principles.

Unsurprisingly, the Economist seems to think these principles are pervasive and persuasive, global and inevitable. The magazine does not publish the names of individual journalists on articles, but a certain undercover economist is a strong suspect. Anyway, the article argues that despite the current credit crunch and fears of western recession, the people of the world have never had it so good.

Three main reasons were given, primarily affecting the emerging markets: social changes, globalisation, reduced wars. And the three were somewhat tied together by two factors: technology and free markets. The article admitted, even highlighted, the rise in economic inequality also associated with those two factors.

I particularly liked one phrase mentioned in passing. The title of this post. Countries like Nepal have dropped out of the news. The article notes this as a good thing.

But in the midst of the positive news, there were a few glaring exceptions - countries and regions that were failing badly. The article did not bark out a link between them. Tomorrow I will turn it completely around to demonstrate one ...

Tuesday, February 05, 2008

The Souper Bowl

The last couple of notes, by the standards of this blog, were both fairly long and serious economic pieces. Today a quick sporting diversion.

Generally I think that balls should be round. However this weekend there was a fairly significant match involving an oval ball.

I live and work in a new england town. And although not especially fervent, to some extent I am a patriot. Our team has been arguably the best in the world within the last few years. According to all pre-match predictions, we should have won comfortably. But the opposition were giants. They were looking doomed at the interval but fought back brilliantly. When the final score was touched down after the long play it was thoroughly deserved, despite the wails from the locals around here. Well done to the underdogs. You merited the win and I was delighted with the result.

Anyone who thinks I am talking about "American" Football is on the wrong continent.

Monday, February 04, 2008

Everything is free - profit from it

I have been involved with Interactive Consumer Marketing and Customer Relationship Management since long before those terms existed, at least in common usage. I could write books about this subject, if you add up my writing around this area over the years then I already have.

Of course I am still looking for ways to enhance, refine and develop these concepts, to push it to its boundaries. And I was pointed towards an article that does just that.

Kevin Kelly is the author of New Rules for the New Economy. He started by looking at the proliferation of websites that were virtually (or literally) giving away their products. You know there are thousands of examples today, from Sun to Google, but as a business model it almost turned traditional micro-economic models upside down.

The proposition relies on the older concept of economies of scale and also on the newer concept of network growth effects, where pushing your product into the market has a substantial positive value on the value of your products that are already in the market. That is evident not just in the obvious world of compatible software solutions, but even in physical products such as mobile phones - again the value of the individual item to the consumer increases with the number of compatible products also out there.

Now he has pushed the envelope. He has suggested that basic price of everything is moving towards zero, everything is becoming free. If a product or service is to be worth paying for, then it must have "generative value".

A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing can not be copied, cloned, faked, replicated, counterfeited, or reproduced. It is generated uniquely, in place, over time.

The analysis is sound and the insight is excellent. Broadly speaking it is the same message that proponents of CRM have been pushing for years, but as I stated at the start, he has pushed the envelope. In fact, the article appeared to have a focus on suppliers of software and services, but to me exactly the same principles apply to any commodity product. Wait long enough, other people will be able to build it cheaper than you. You need to make your product unique.

However there was one point that was glossed over. The article clearly refers only to products that can be copied, although Kelly's optimistic tone seemed to generalise that to everything. He talks of a world where not just manufactured products but even food and other essentials are free and unlimited. That is not true. For those basic commodities, for unpolluted water, for personal space, for that genuine experience of nature and history that ties us to our past, there is only a limited supply. The marginal cost for these items does not tend to zero. But it should.

Sunday, February 03, 2008

Rewarding Mediocrity

Tim Harford, the undercover FT economist, recently wrote an article for Forbes with the same title as this post. Forbes magazine is a collection of glossy advertisements interspersed with the odd article defending the lifestyles of those who look at the glossy ads.

The article has some very good points. The basic argument is a Forbes-friendly line that government handouts are bad. That is what you would expect him to say. The main reason is because the handouts tend to go to the most mature, bloated, consolidated industries, not to the developing emergent industries that need the most encouragement. But this was not a simple regression-to-the-mean argument.

The subtle point is that because the most bloated industries are the most mature, they are already the most consolidated and have already built up the highest barriers to entry. However, whereas small startups in biotechnology may be the ones with the most potential for government kickstarts, there is less incentive for the individual entrepreneur to lobby for industry assistance. By contrast, in mature markets, industry assistance is almost inevitably targeted to those who organise the lobby.

All that does not necessarily justify the catastrophic destruction of "uneconomic" communities, as seemed to be deliberate policy in Thatcherite times. Neither does it necessarily eliminate the possibility of supporting key strategic interests to reduce unmanaged risk, for example to maintain basic self-sufficiency in basic foods to avoid being "held-hostage" by monopoly suppliers. Tim should have noted these mitigations. But the basic point remains, those who shout loudest for handouts may be those who least deserve them.

Saturday, February 02, 2008

Miles Away

I am not going to write an obituary for Miles Kington. Although I should. This after all was the guy who "wished his obituary to begin with a series of utterly false statements".

But he managed to do every day for many decades what I struggle to do for just a day - to write an original topical witty grammatically perfect concise funny article and deliver it to a rigid journalistic schedule. If only this blog was like that.

So instead I will just recall his poetic advice to anyone in this field:

You can say all you like
About science and art
But if nobody's listening
It's not worth a fart.
You can utter pure wisdom
On art and on science
But none of it works
If you haven't got clients.

And the moral of the tale, The Leaf on the Tree:

Get a life. And leave it gracefully, when the time comes.

Friday, February 01, 2008

My Religious Space

I am skeptical of all publicity campaigns, even those largely populated by skeptics.

I used to have a MySpace page. In fact I still do, but I have not updated it for many months. Over the last few days there has been a bit of a stir in the online world about the apparent deletion of that site's "Atheist and Agnostic Group", largely due to complaints from people who find atheism offensive. The complainers also presumably find other "religions" offensive.

I was not a member of the group. In fact I am not a member of any atheist or agnostic group, unless you count the entire human race as a group. Anyway, everybody is somewhat atheist or agnostic really, even the most deluded religious devotee does not believe in the sacred revelations of most of the gods that have been acclaimed by humanity.

As a peripheral point, I don't think this apparent censorship is an excuse to move to Facebook or Orkut or whatever happens to be the next social networking site of the day. The reason that Myspace is losing share is because of its ugly, noisy, cluttered bug-ridden interface, not the fact that it is owned by the Murdoch Media Machine. It is true that News Corp follows a broadly conservative agenda, but there is still a fair degree of diverse opinion there, at least in its UK operations.

But their main agenda is profit. So I find it very difficult to comprehend how the owners of a commercial networking site can deliberately choose to antagonise tens of thousands of members. I know they are outnumbered by the religious majority, but it is still a substantial chunk of annoyed revenue. A group of concerned christians can easily control a local community, keeping jobs and opportunities only to the chosen believers, but it is much more difficult to control a global web.

In this case, the group organiser's account was hacked and the group disabled, but the delays in reinstatement may possibly be due to incompetence and lethargy rather than malice. Surely no social networking executive is going to be so bigoted or so stupid as to deliberately engineer this mess?