The Crowd and the Small Business

Why not get all those people to help?

Last week, the NYT published a story I wrote about crowdsourcing for their small business section. Sort of a “guide to crowdsourcing for small businesses.”

I’ve been writing about small businesses and entrepreneurs and startups for seemingly ever (beginning with The Industry Standard, I guess), and I just hate the moniker “small business.” It is far, far less exciting than the fast-seeming “startup,” or the Frenchy “entrepreneur.” Sadly, I’ve found most small businesses are exactly that – far less exciting. More conservative, less big-thinking.

For this story, it wasn’t the easiest thing to find small businesses who had tapped the crowd. Big businesses had been more likely to embrace it. They also have the room to take risks, whereas small businesses, I’ll allow, need to weigh the potential benefits of taking certain chances.

But the crowd is exactly that – the chance that delivers the benefit. Huge benefit. Save money, get better results. Why so scary?

A couple of companies talked about how the crowd gave them more options than if they’d gone with one consultant – lots more risk there. A law firm in North Carolina also liked turning his AdWords campaigns over to a crowdsourcing firm that raised the number of keyword campaigns from hundreds to thousands. Good stuff.

The crowd can seem scary, though, because it’s not about simply turning over the keys, it requires managing and guiding their work. Nothing comes free.

To my mind, the only reason for calling oneself “small business” is perhaps for small-business loans and other government money. Certainly, you retain more ownership when you go that route versus venture or angel capital.

Small businesses, ditch “small business” and start thinking “startup.”

Blogging at Fortune Brainstorm Tech

I’m in Aspen for a few days attending the Fortune Brainstorm Tech conference and blogging about it over on Fortune.com. It’s no wonder the three-way punch of Aspen, Fortune and the Aspen Institute is a big draw for some big names. It’s beautiful here, Fortune is ground zero for business analysis, and the Aspen Institute is full of smarties.

Yesterday, covered Activision’s Bobby Kotick and Oracle’s Chuck Phillips, who apparently makes few appearances. I see why: he broke me some news yesterday about the doubling of Oracle’s acquisition budget in the next five years.

Today and tomorrow, more posts on Fortune.com on AT&T CEO Ralph de la Vega, Google guy Nikesh Arora, Motorola CEO Sanjay Jha, and a whole bunch of other folks.

Bonus for me: A reunion of sorts as the Fortune staff on hand include great people I’ve worked with at Portfolio, CNN Money, The Industry Standard, Inc. and crossed paths with in the dot-com boom (and one of them in my book group, the Blank Slate, which I’ll write about in an upcoming post). Good stuff.

Again, Failure – Not Always a Good Thing

The idea that failure is a badge of honor will likely never go away – in the area of romance, Tennyson had a nice way of putting it – but science says it’s not always a good thing.

I wrote earlier about how failing at a startup is a turn-off to investors like my pal Mark, and to managers like me. We’d rather see how someone faced down a failure-inducing challenge and turned it around.

Some folks at MIT and Harvard agree. I think I mentioned their study before, but it has been making the rounds again, and I ran across it on my pal Caroline Waxler’s site LearnVest, which found it on Entrepreneur.com, and it looks like the whole thing was picked up by Business Insider.

This is a good thing.

A key point in these pieces is this: Don’t set out to fail. The brain learns better from success.

I can relate to this very deeply as someone who has twice now started businesses and onto a third (and maybe a fourth). Things don’t always work out (one did, one didn’t-ish). But they don’t get to success without a whole lot of faith and a sharp eye on the prize. The main startup I’m working on now has a lot of risks involved, from the customer angles to the tech and funding angles. It would be easy enough to stomach the risks with a dose of rationalization that, hey, at least it will be a learning experience.

But that would be a load of crap. You gotta set out to succeed. More importantly, frankly, you gotta succeed. The study says our brains only learn from success, not failure. And really, think about it: What’s an entrepreneur without a company under his/her belt? I hear a tree falling in a forest…

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“roadkill” image via estherase under Creative Commons license

Ireland to the World: We Are NOT Greece

For now, you’re not! Just got this defensive email today:

——

Subject: Story idea: Ireland is Not Greece…

From: “xxxx” <xxxx@xxx.com>…Add to Contacts
To: “laura@recessionwire.com” <laura@recessionwire.com>

Laura,

Barry O’Leary, CEO of IDA Ireland, a government agency responsible for inward investment in Ireland, is available for an interview to discuss how Ireland is making difficult choices to improve its financial standing, and is turning out to be in much better shape than Greece and its other EU neighbors.

Barry is available to provide a look at how Ireland is faring and can speak about the future and the ongoing steps to “right the ship.”

It would be my pleasure to arrange an interview.

O’Leary (56) has worked in IDA for over 30 years in most of its business areas, including two periods totaling 15 years in Germany, latterly as Director Europe until 2002. He has been deeply involved in changing the profile and raising the value of Ireland’s inward investments in the past ten years. He has been primarily responsible, since his return to Ireland in 2002, for the successful establishment of Ireland as the leading global location outside the US for biopharmaceuticals. He has also undertaken strategic change and built new strengths in R&D, medical technologies, information and communications technologies (ICT) and other areas. He has led IDA teams that won world-class investments from companies such as Centocor, Cisco, IBM, Intel, Kellogg’s and SAP among many others. In addition to his role in the senior management of IDA, Barry O’Leary is a board member of the Dublin Molecular Medicine Centre and of the Institute of Neuroscience in Trinity College Dublin.

New Blog Host!

Just moved the blog over from Typepad to WordPress, which I have had great experiences with for Recessionwire.com. Expecting the same ultimately, though still have a bunch of sorting out to do, so it’s going to be a bit “Under Construction” for this week until the images get migrated, the post pages get un-bugged, the About copy and other features get updated, a favicon is found and added, a masthead is created (and maybe a new name chosen). Lots to do. See you soon!

New Term: “Tumblr Money” (and How Can I Get Me Some of That?)

This week, Tumblr, the "light" blog-posting service, closed a $5 million C round of funding from previous investors Union Square Ventures and Spark Capital. As Peter Kafka rightly pointed out on MediaMemo, investors don't usually go back in for more unless there has been a demonstrative change (for the positive) in the company's financials – maybe even just revenue growth or an acquisition or new partnership that has a clear path to income.

But Tumblr, as both Gawker and MediaMemo mockingly note, really doesn't have much going in the way of a revenue model, and never has:

Three-year-old Tumblr doesn’t charge its 4.5 million users for the
service. It doesn’t sell advertising on the page views they generate. [MediaMemo]

The company, which is featured on the cover of this week's New York magazine, has just recently said it will start looking to earn money from micropayments by its blog users. Things like virtual goods, and a marketplace for Web designers to sell themes to other Tumblr users.

Kafka was generous to compare the strategy to Zynga, maker of the hated and stupidly profitable Facebook games Mafia Wars and Farmville, and the L.A. Times Tech blog also generously referred to Tumblr’s plans mildly as “off-the-wall” and went on to compare Tumblr to Twitter.

But the bottom line is: The no-revenue-model plan is not dead. (Long live the no-revenue-model plan.) If you can get an audience and a lot of buzz, you can get investors. You built it; they came; and the investors followed. See Google, Facebook, Twitter. And now Tumblr. The only difference with Tumblr is that it doesn't have nearly the scale the other guys do, so a revenue model is almost a moot argument for now. How much can you monetize on a user base of 4.5 million?

All this said, I do fully expect, considering Tumblr's social approach to blogs, that we'll see more interesting stuff coming out of the company. Eventually. And perhaps on a Twitter pace (remember it took four years to get to the point of carrying ads, er, "sponsored tweets").

For now, considering money's being raised on no revenue model and a relatively speaking small user base, let's call it "Tumblr money." It's a version of "dumb money," but more specific, and more Web 3.0. And I think we all deserve to get our hands on some "Tumblr money."

Goldman: Will a Spanking Do It?

Over the weekend, I chatted with a new acquaintance and former Goldman Sachs employee – back-office person, she insisted ($300K back-office person, of course). She had been mulling over the SEC’s charges of fraud against Goldman and wondering what kind of punishment might be fitting for what Paul Krugman has referred to as “looting” behavior. At one point, her 12-year-old son piped up about it, too. So, she discussed with him, what would do the trick, to reprimand as well as correct bad behavior.

“Well, when I spank you,” she said to him, “it’s to teach a lesson. But when I spank you in public, there’s a humiliation factor, too.”

Would a public spanking shame Goldman executives into never being tempted by insider trickery again? Or would a private spanking be sufficient?

I vote for private spanking. But what does that even mean? On Wall Street, where pretty much nothing other than money matters, public admonishment won’t really have any impact. Reputations on Wall Street are built on how clever one can be to grow lots and lots of money. In so many other areas of business, reputation is built on image and the ability to lead, manage, etc. Public opinion matters.

That’s just not the case on Wall Street. The only way to create pain on Wall Street is with restrictions on money. Set executive pay limits, but make sure there aren’t ways around it. Curb bonuses, and know where the loopholes are, and seal them up.

A spanking will do it, sort of. It doesn’t have to be public, and perhaps shouldn’t be; but it does have to get at what’s valued most.

Are Developers the Target of Droid Ads?

"Can a smartphone take on all comers without flinching? It can when it's operating a cargo-bay-ful of apps…that you can run while running other apps," taunts the announcer in "All Comers," one of the latest ads for Droid, the mobile phone from Google. There are no people, only machines, and made-up technologies. It's a teenage boy's fantasy dream.

Verizon has spent $100 million on the creative and media to blanket the universe with such positioning since the fall, and they're pretty inescapable on television, radio, Hulu, etc. Which is why it's somewhat surprising that the target market has seemed to be so narrow.

I'm talking about the robots, the space void, the landscape free of humans, only machines and the cold, empty clicks and whirr of this barren universe. Which mainly appeal to the boys, who don't want an easier-to-use, more instinctual device but a storyline that makes them a character in a futuristic, inter-galactic adventure. And who don't want any girls around. (Watch the ads here.)

It seems like a step back. So much progress has been made in the last two decades to make technology friendlier, easier to use, more intuitive. And this has helped to integrate technology into our lives, create more communication, more community, more opportunities for individuals to be creative, start companies, help companies save money, be more accessible, etc. Making technology easier is not a bad thing.

But if you listen to the Droid ads, it kind of is. The ads are aggressively aimed away from women. They emphasize apps that "pinpoint any location to find the star in the sky above you… and identify planets you're not on." Really? This is an app we need?

Women don't need pink, but they do want accessibility, sociability, utility. The Droid ads use technical language and insider taunts like the one about multi-tasking, which is aimed squarely at the iPhone's inability to multi-task. (You can't, for instance, run your Pandora app and then check your email. It's one or the other. And it's a pain. Thankfully, Apple has announced that the iPhone 4.0 OS, due out in the fall, will finally allow for multi-tasking.) Droids seem to want boys, not girls.

Anyway, lots of people agree that Droid is going heavy on the dudes.

But here's another thought on why: it could be about more than just share of the immediate consumer market: As a friend reminded me, these devices—Droid, iPhone, Pre—live and die on their apps. Just as a computer without any applications is kind of pointless, too. So far, the iPhone leads the pack in apps, with more than 185,000 in its App Store. The Droid counts 38,000, but growing at a clip that's expected to hit 100,000 by end of year. The Pre is not really even worth mentioning, with just 2,169.

So if the apps are the thing, it's obvious why iPhone is king. But if the Droid really begins to capture the imagination of geeky boys—I mean, even those in their 20s and 30s, perhaps nerdy programmer types—well, who's going to win the app race then? If the developers like the Droid, that's where the apps will go. And if there are enough apps that make our lives easier, allow us to be more creative, efficient with our time, connect with others, etc.—no ad will be needed to convince more of us, no matter what gender, that the Droid is the better option. (Especially if the wireless service provider also prevents calls from dropping so frequently, too.)

More: Read the full breakdown on the anti-girls approach from this reader on Contexts.org, here's a part of it:

0:04. The voice over’s question “Should a phone be pretty?” is
visually answered with an effect reminiscent of melting celluloid. The
rupture starts on top of the woman’s head, exploding her “pretty” face.

0:06. Women are beheld as dolls.

0:08. Images appear superimposed over images beneath a verbal
judgment. The beauty queen (fake) made out of plastic (fake) shown on a
television (fake) is definitively stamped “CLUELESS.”

0:10. The commercial erased its first woman by destroying the medium
of her representation (supposedly celluloid). The commercial again
destroys its second “woman” by destroying the medium of her
representation (a television).

0:10 – 0:13. Words across the screen: FAST, RACEHORSE, SCUD. Images:
Lightning, racing horse, ripping off duct tape, SCUD missile.
Combining these motifs into one single image, we see the SCUD missile
flying across the screen with the word RACEHORSE as though it were
written with lightning.

0:14. Droid applications: Reality Browser 2.1, Google Sky Map, Qik,
Mother TED, CardioTrainer, Where. While I doubt that these applications
were developed with the commercial’s themes in mind, their selections
reinforce the messages thus far enforced visually: reality (woman of
burnt celluloid, destroyed television), sky (SCUD missile), quick (FAST,
RACEHORSE), mother (a Freudian slip recognizing the infantile nature
of a power fantasy? ^_~), exercise (beef up for manliness stat +4), and
going places (which SCUD missiles, race horses, and THE MANLIEST OF
MANKIND’S MEN all do).

0:15. Word overlay: DOES. Men do things. Women are pretty and
useless.

Read the rest here.

Early Adopters: Necessary to Whom?

In yesterday's New York Times, Rob Walker wrote about early adopters in his Consumed column about the iPad. My white paper for Ad Age, "Shiny New Things," was at the heart of the piece.

Rob kind of picked apart the concept of early adopters, wondering why anyone would really want to pay top-dollar and endure bugs and glitches in a product that would likely improve and become cheaper to buy:

"What these people are likely to get for their consumption daring is a chance to experience every single glitch or flaw that will be tweaked and patched in the months ahead. Also the guarantee that they're paying full price," he wrote, and added later that early adopters are "willing to take a chance on a product with little market history, which seems tautological."

It's true, early adopters are sort of oddballs – something they even cultivate. But I'll disagree with Rob that their "'status seeking'…is not a trait that's widely admired." Yeah, that's sort of true. Status-seekers are observed as obnoxious and profiled as outsiders. In practice, status seekers are becoming much more rewarded and celebrated. Entire technologies are being built around this group, beginning with Facebook and Twitter. Status seekers on these platforms reap something – status, at the very least, if not sometimes jobs and incomes – from their activity.

So I think he's being a bit overly cynical at the least, and missing the point in general at the most. Early adopters are a necessary part of the consumption process, and not just from a marketer's perspective, as he sort of implies. Later consumers absolutely must observe early adopters as they bungle their way through a product, complaining about it, waxing poetic about it, reporting bugs and glitches, etc. It's part of the product education process. And those early adopters – he's right to point out that they're self-styled – enjoy their influence. Especially when a product hits, they are rewarded for their inside track and knowledge with increased status among peers.

Find Me a Noun That Can’t Be a Verb

Very short post today because of a very sick dog.

Or, should I say, I'm dog-caring today because Maggie's limp isn't going away.

I defy you to name a word that can't somehow be transformed into a verb. It's as though an adjective wouldn't be strong enough, or personal enough, to convey the notion, and that it's much stronger when active, as a verb. It occurs to me that it might be tough to verb-ize a pronoun, but it may still be possible.

Will begin posting a list of noun-to-verb action here as it comes up, or leave in Comments!

4/12/10
Just heard this one: "Vanguarding." Presumably a verbization on the proper noun Vanguard, a mutual funds firm, heard in an ad on NPR. "Are you just investing, or are you Vanguarding?" (Oh, excuse me, I just threw up.)