Pravin Jain, Part I

Business articles keep popping up in the strangest places. In Clear Cut Future a literary magazine containing short stories, poetry and essays, I found a fascinating article by Pravin Jain, who worked as an EVP at Enron, called Capitalism Inside an Organization.

The Article is an apologia of sorts for the great catastrophe that was Enron. Jain's company, Firstpoint Communications, had been acquired by Enron as they were forming Enron Broadband, and he recalls that when executives from Enron first came up to Portland to meet with him, they gave him the Enron formula for success:

1. It takes just as much energy to chase after rabbits as elephants. Go for the elephants.
2. Don't try to boil the ocean.
3. You eat what you kill.

I recall being fascinated by the originality and pragmatism of these principles. They sounded like something that came out of old hunting tribal cultures. These men came across as so different from typical large-company executives. Physically, they seemed quite restless, obviously not used to sitting in long, drawn-out staff meetings or planning sessions. They reminded me of the hustlers I used to bump into in the streets of Hong Kong or Bombay, always on the lookout for a deal. There was a predatory feel to them, but in a charming sort of way.

Jain goes on to describe the monumental difficulties of the task at hand: changing the energy and telecom industry from a sluggish, moribund monopoly to a fast, aggressive entrepreneurial business. Which is of course where, for better or worse, Enron innovated. Enron was, as has frequently been noted, voted by Fortune Magazine as the World's Most Innovative Company for six years running.

I'll get into the rest of the article in another blog entry.

For you telecom nerds, here's a talk Jain gave on fiberoptics infrastructure builds in foreign countries vs. the US.

RIP Mass Marketing

McDonald's Declares the Death of "Mass Marketing". Their CMO Larry Light describes their new brand strategy as something more akin to "brand journalism" or "brand narrative". Finally, marketers -- not just McDonald's, though they are a bellwether -- are seeing the advantages of telling a more complex "story" over clobbering their customers with the same message in the hopes they'll get it.

AOL and Yahoo abandon their Enterprise IM plans

AOL's move out of enterprise IM underscores the lack of success the company, and its rivals, achieved in luring businesses to pay for software that many workers were already using for free. Available for monthly or annual fees, the enterprise tools typically included features not available in gratis IM software, such as conversation logging, authentication and identity management. AOL representatives said the company had signed up only about 150 companies to pay for AIM Enterprise Gateway.

Crossroads, Granovetter and Pitching Manure

When I linked to the Structural Holes story before, I was thinking of how it relates to a number of different things: how this weblog relates to the other weblogs that I maintain; Granovetter's influential work on the strength of weak ties; Malcolm Gladwell's article, Six Degrees of Lois Weisberg; Malcolm McCullough's talk two years ago at Doors about how ideas (and businesses, societies etc.) flourish where roads and networks cross (from his latest book Digital Ground); a quote I loved when I was 14 and reading a lot of Robert Heinlein ("A human being should be able to change a diaper, plan an invasion, butcher a hog, design a building, write a sonnet, set a bone, comfort the dying, take orders, give orders, solve equations, pitch manure, program a computer, cook a tasty meal, fight efficiently,die gallantly. Specialization is for insects."); how that article (and these assorted references) support my lifelong polymathic world view; and, most egotistically, how I am uniquely positioned at the crossroads of so many different fields, with such a wide range of interests and weak ties into so many different fields (conceptual art, business, mycology, web design, gnosticism, etc.) that holy shit, it is only a matter of time before I find myself ruling the world.

I am only joking of course, but then again, as we know from Freud, there are no jokes.

I am meant to be in Amsterdam taking a vacation from all thought about "business" and turning my attention solely toward "art" but it turns out that is impossible. So I thought I'd mention the links above and that since I've been here I've forayed into bookstores specializing in art books, and emerged with two odd volumes: Margeting by André Plateel, subtitled "Inventing a different Marketing Language", and The Accursed Share, a book of economics by, of all people, Georges Bataille. Excerpts and ideas from these two curious books are soon to follow. From the preface to Margeting:

'Margeting' is based on the words 'marketing' and 'margin'. It is the constant creation of margins in which desire can take shape and marketing can find new avenues for a more appropriate relationship with customers.

Macintosh Product Introduction Plan

I've been reading the Macintosh Product Introduction Plan that Michael linked today. These two passages made me smile:

"Our objective is to understand our competition (IBM)...."

and

"Due to a close working relationship with Microsoft..."

But of course, in 1983, who would have known what the latter was about to do to the former? When IBM and Microsoft were drawing up their licensing agreement, IBM gave away something that appeared to have no value: the right for Microsoft to license their software to other PC makers. At the time there were no other PC makers. But it may have been Apple that opened up the door to those manufacturers by introducing a new product that was successful in competition with IBM, and opening up the competitive field. In their Competitive Analysis on this Product Introduction Plan, they anticipate that one of the ways IBM will challenge the Mac is this:

IBM Attack: Apple once again has come out with a non-standard operating system and no connections to the large base of software already written for MS-DOS and CP/M. It will take quite some time, if ever, for to complete all the required software for Macintosh and right now it has only three applications.

It's interesting how the first sentence has inside it an inkling of how Microsoft will overtake IBM. IBM's "attack" is based on the legacy of MS-DOS, software they did not own. In 1983 were there IBM PC Clone startups? I'd guess that there were, but not big enough to be on Apple's radar. If they had seen them coming that sentence would have read differently. Of course, hindsight is 20/20, and this Product Introduction Plan is nonetheless Kickass with a capital K.

Raise gas prices even more, please!

I'm with Dan on this.

But what I want most of all is for us to use less energy from polluting, non-renewable sources. I want to see us invest in sensible public transportation, conservation and renewable energy.

The best way to make that happen is to raise the price of oil even higher. Then, subsidize the technologies and transportation systems that will help us in a more permanent way.

The stakes transcend the few extra dollars a week in gasoline costs.

Why is Fisher so quiet all of a sudden?

We heard from Draper today, why not Jurvetson?

Microsoft is like a global monoculture and therefore subject to catastrophic collapse. The pace at which viruses and worms spread is outstanding.

I haven't had a virus in my Mac for 10 years. No one writes applications for the Mac, not even viruses, and it's a safer world.

So there's an argument for biodiversity in this economy.

-- Steve Jurvetson, Managing Director of Draper, Fisher & Jurvetson (big Valley VC firm that funded Hotmail and Skype)

I had to smile when I read this. When people are tearing out their hair because a virus has shut down their whole system, lost their email, or emailed porn to their entire client list, I always recommend they go out and get themselves a Mac.

I was reading this article mostly because Stewart recommended I do so, and I recommend you do so too. There are a lot of great ideas, forecasts, and observations there.

Tim Draper: Hotmail as Marketing?

In an article on the Always On Network, Tim Draper lists what he believes are the 3 most important contributions of the internet. He says email, search and -- soon -- internet telephony. Interestingly, he thinks the main benefit of Hotmail for Microsoft was as a marketing tool.

The other thing that Hotmail did is open up a new kind of business, which was in effect free marketing. Hotmail’s marketing budget was almost zero, but it reached 11 million people in 18 months. And it grew from there to (now under Microsoft) 200 million Hotmail users. That’s free marketing for Microsoft. And that’s quite valuable, because marketing tends to be 20% of your sales in most cases. So I’d say that’s the biggest impact.

The first commenter notes that Draper didn't mention IM as one of his top three, and I'd tend to agree there. IM is all but eclipsing email as a form of communication, especially for Generation Y and younger. I too use email as a last resort, or for things such as sending long documents.

Structural holes and productive theft

A couple weeks ago there was an interesting article in the New York Times which I'd meant to link to, but it has expired and is now pay only. Fortunately, it has been posted elsewhere: Where to get a Good Idea? Steal it Outside your Group

Got a good idea? Now think for a moment where you got it. A sudden spark of inspiration? A memory? A dream? Most likely, says Ronald S. Burt, a sociologist at the University of Chicago, it came from someone else who hadn't realized how to use it. "The usual image of creativity is that it's some sort of genetic gift, some heroic act," Mr. Burt said. "But creativity is an import-export game. It's not a creation game."

Mr. Burt has spent most of his career studying how creative, competitive people relate to the rest of the world, and how ideas move from place to place. Often the value of a good idea, he has found, is not in its origin but in its delivery. His observation will undoubtedly resonate with overlooked novelists, garage inventors and forgotten geniuses who pride themselves on their new ideas but aren't successful in getting them noticed. "Tracing the origin of an idea is an interesting academic exercise, but it's largely irrelevant," Mr. Burt said. "The trick is, can you get an idea which is mundane and well known in one place to another place where people would get value out of it."

The Rise of the Mompreneurs

A recent article in Business Week The Rise of the Mompreneurs (free registration required), outlines the ways in which eBay has made it possible for many high-powered women to create businesses for themselves by selling online. The numbers are amazing. More than 430,000 people in the U.S. make a full or part-time living off of eBay, more employees than GE and Proctor & Gamble combined. The most successful businesses are grossing up to $1 million a month. And it turns out that 48% of these business people are women.

As we have seen time and time again, women are looking for a saner work-life balance, and eBay provides the opportunity to manage one's own business from home, on one's own hours, and according to one's own schedule. And some of the very things that "keep women down" in corporate environments, are a boon on eBay:

EBay, experts say, is a welcome, recession-proof option for many women, especially since it makes a virtue of the very traits that are often perceived as weaknesses in Corporate America. Research shows, for example, that women's detail-oriented strengths -- as well as their tendency to bear down and have lunch at their desks -- are impedients to advancement. On eBay, those so-called shortcomings become a competitive advantage, allowing women to provide the kind of high-touch customer service -- the Holy Grail among buyers -- that the big retailers just can't give.

[Cross-posted on Misbehaving.net]

"Search and Destroy" in this week's New Yorker

I generally don't count on The New Yorker to give me business or tech news -- it always seems a year or two behind -- but I always read The Financial Page by James Surowiecki, which follows Talk of the Town. This week it's called "Search and Destroy" and in it he writes about Google-bombing and Google's dependency on the collective intelligence of the web, and the inevitable gaming of the system that takes place when each link is treated as a "vote" for the linked-to site. This is all old news to most of us, but this sentence really struck me:

The more important Google becomes, the harder its job gets, because more and more people find themselves trying to game the system, and wind up undermining it instead.

It's funny. I'd long considered the comment spammers, and link farmers and Google-bombers to be undermining search, but I'd never considered the people and businesses who are defensively engaging the same activities because they have to in order to stay competitive, and how this creates a situation that makes Google results increasingly valueless. And I assume that legitimate businesses engaging in these practices are even more numerous than the "search optimizers". Surowiecki writes:

Google works best when no one knows it's there -- when people are making their own decisions about which sites are useful or good. The more important Google becomes, the harder its job gets, because more and more people find themselves trying to game the system, and wind up undermining it instead. When Google purges dubious Web sites and rejects links from link farms, it is, in a sense, counteracting the consequences of its own success. Collective intelligence relies on a certain degree of innocence. Google is using guile to re-create a guileless world, under the assumption that what we don't know should help us

.