16 December 2010

Leave governments away from the Green negotiations and treaties

Copenhagen, Cancun, Rio, etc are all very nice places to visit and to have a conference about climate change, reducing emissions and going green, but doesn't it sound just like a huge waste of time (and greenhouse emissions by all these planes flying to these conferences) when they never get to a binding agreement to be followed?

Some might argue that it doesn’t, because there is some forward movement and by discussing it, governments start to think about it. This is completely right, but on the other hand, I still find that if we rely on governments (which are protectionists of their own economy by design) we will discuss until we are wearing bathing suits inside a boiling swimming pool until we reach a binding decision.

And for you not to call me an half-assed problem oriented guy, here is my solution: get the biggest companies in the world (that are in one way or another already committed to get green) together and sign binding agreements about reducing emission, not buying from suppliers that don’t follow a certain standard, sharing green technology, etc. This would be a huge PR for those companies who opt in (gaining the consumer good will, thus the money on their wallets) and it could have a domino effect: once the big ones are in, the 2nd bigger ones have to adhere to compete, then the medium companies and finally the smaller enterprises.

Naive plan?

13 December 2010

Gamefying business decisions - now we are talking!

The need to predict the future, as exciting as it sounds, crops up in corporate life in terribly mundane ways. Case in point: large videogame companies need to know where to put their marketing dollars many months before they complete their games. Inevitably, some games will be stinkers, hardly worth the investment of an ad campaign. But how do you know which ones?
Here's how one very large videogame company used to guess the answer: its marketing people would predict the score their games in progress would garner on the website Metacritic, which aggregates game reviews. But why would the marketing people know more than the game's developers?
Three years ago, a startup called Crowdcast suggested a different tactic. Why not take hundreds of your lowliest employees, the ones in the trenches who are actually making and testing these games, and ask them what they think the Metacritic scores will be? Better yet, why not give them each $10,000 in play money and ask them to bet on the outcome? Let them accumulate a pot of pretend wealth if they're right. Turn game marketing prediction into, well, a game.
To the executives' delight, the employees' Metacritic predictions turned out to be 32 percent more accurate. More disturbingly, their accuracy was inversely proportional to their place in the hierarchy. The closer you got to the C-suites, the less of a clue you had—and the lower your pretend wealth in Crowdcast's game.
That embarrassing factoid might explain why this particular videogame company, like many Crowdcast customers, wants such stories to remain anonymous. "It's kind of experimental," explains Mat Fogarty, Crowdcast's sardonic British CEO, "and it may undermine the credibility of their awesome management."
Indeed, anonymity and uncomfortable revelations in the boardroom are Crowdcast's stock-in-trade. The San Francisco startup already boasts clients and partners as diverse as Hallmark, Hershey's, and Harvard Business School. It is built on the back of years of research into how internal prediction markets work. In such a market, managers ask employees questions about the future of their product and let them bet on the answers, without knowing who bet what. The results can be scarily accurate.
In September, Crowdcast ran a prediction market for a large American car company, one that normally runs its designs for new autos through a car clinic—a lengthy and expensive kind of focus group of buyers. Crowdcast's project involved asking engineers and factory supervisors what they thought the outcome of the car clinic would be.
Forty questions were in front of these ground-floor experts at any given time during the market. For example: What percentage of buyers will list this car's dashboard as its most important feature? The trial market was so accurate that the car company will be trying another in January. The auto giant now has a new way to cut costs: use these predictions markets instead of expensive car clinics at least a third of the time.
Crowdcast calls the space it's in "social business intelligence" rather than crowdsourcing. "Within your organization, there are people who know true future outcomes and metrics," says Leslie Fine, Crowdcast's chief scientist. "When is your product going to ship? How well will it do? Normally, crowdsourcing asks for creative content. We're asking for quantitative opinions."
Put that way, it sounds a lot more respectable than "get your employees to play a kind of fantasy football with sales and shipping dates." But make no mistake—that's actually what Crowdcast does. That used to be a hard sell, Fogarty admits: "It seemed weird to be talking about playing games at work and using Monopoly money." 

From MIT's Technology Review.

08 December 2010

Gamefication: it’s time to use in complex gadgets

Not all gadgets are magically intuitive like the Nintendo Wii or an iPhone. Some tend to be rather complex, like for example the DSLR cameras (for the ones not versed into photographer’s jargon: those digital cameras, semi- or professional, with lenses that can be removed and changed and have more regulation possibilities). Today they are made to operate quite automatically (just like a point and shoot – or “normal” digital camera), but if you get a camera like this, HOPEFULLY you want to do more than pointing and shooting.

The thing is: those DSLR cameras are complicated. The interface is not so intuitive. I just got one of these cameras and I spend the night juggling with menus and buttons until I managed to know the basics of operation. And I am not a complete amateur: I used SLRs before and I understand the basics about focus, aperture, shutter speed and such. It took me “only” 3 hours to know the very BASICS, and only because I knew what I was looking for. If you don’t know where to start (most people who never handled a SLR camera), I imagine this would be so frustrating you would actually just use it as a point and shoot camera.

Finally the point of this post: if you use tutorial level game mechanics, you could solve this with a simple CD or website. Imagine you open this camera website and it teaches you step by step how to mount the lenses on the camera and insert the batteries (then it obviously give you some % completion status bar progress). Then it teaches you how to take a point and shoot picture (congrats, you qualified to upload your pictures and participate in this months amateus photo contest). Then how to regulate the shutter to create frozen or movement images (Congrats, you get 10 points to vote in others people’s pictures). Then how to wide or narrow the field of depth. Then timer. Then manual focusing. Then using or not flash. Etc etc etc until you get to the really advanced stuff. Imagine also if you could share your tutorial level first pictures and vote for the best ones of the month and then get some gift! Or even just a badge of honor as good photographer.

Please, gamefy my experience so I can have fun while learning something complicated. Just like a game, teach me the basics and then challenge me bit by bit until I am fairly confident in handling it. When companies which should in theory be full of nerds will use game mechanics instead of 300 page manuals?

07 December 2010

Rework - book review

Rework is a smart book with an uncommon business logic, very little jargon and a lot of personal experience from the founders of 37 Signals. They challenge everything, from the need of being big (they don’t want to be) to doing more than the competition to win market (they preach their products do LESS, so the niche market who wants simpler stuff will choose them).

The book is well written, smart and interesting, but, sincerely, doesn’t quite pack a punch. Lots of good advices and personal sharing is nice, but in the end, it seems it lacks “substance”. Maybe the book is too superficial, I am not quite sure. Probably I am just comparing it with my favorite last books (which were very in depth and useful for me to take action, while this one is interesting, but I don’t see it as so useful).

Or maybe it is just that I am naturally more aligned with a “strange” way of working, like the belief that meetings should only involve the people necessary and should be as short as possible. 

My final comment: for the buzz it received, I was expecting more.

Or am I wrong? Anybody out there that used Rework to fundamentally change the way you/your business work?

03 December 2010

Why Groupon sucks (for businesses)

For the ones out of Earth (or at least out of the net), Groupon is a website that offers local deals for a limited amount of time if a minimum number of people buy it. Example: a burguer restaurant offering 60% of if 100 people buy the discount. There are loads of websites just like Groupon, but this was the first (or the first to become really popular, I am not sure).

While this is cool for customers, it sucks for (most) businesses.

It sucks because if you need to cut prices to get customers, your value proposition is probably not great. There is always someone who can make things cheaper. This leads to the race to the bottom, as very well explained by Seth Godin - a spiral of death.

For most business, the effect of Groupon is: 1 - lots of people come, 2 - you get less profit this time because you sell cheaper than normally, and 3 - they never come back (unless there is a new Groupon offer).

There are only 2 business types that can benefit from Groupon:

Walmart like giants that have enough buck to back their business model of selling cheap stuff to loads of people. (But anyway, if you are a Walmart like giant you don’t need Groupon).

The 2nd type is if your product/service is so awesome (yet maybe unknown/untried) that people would come back to buy more (subscription based definitely is a plus). World of Warcraft, the addictive subscription based online game, is this kind of business (and they used promotions much before Groupon anyway). This businesses of the 2nd type are just like drugs: you give a good deal today, so the customer will pay more later for the same product.

For all the rest of businesses (including you, cheap and unremarkable burger restaurant), Groupon is just a waste of profit masked as a nice cash inflow.

Update: a quote from an article in HBR:
In my study sample of 150 businesses that ran Groupon promotions between June 2009 and August 2010, 42% said they would not run a Groupon promotion again. Their main reasons were that a significant proportion of Groupon redeemers are extremely price sensitive, barely spending beyond a discounted product's face value. Not surprisingly, repeat-purchase rates at full price were also low — just 13% — for these businesses.