Category Archives: Corporate Strategy

What is an Agency’s Role?

First published January 26, 2012 in Mediapost’s Search Insider

Last week, I was talking to someone about what  role a digital agency would play in the future. We went down all the usual paths and came up with the usual answers, but afterward the question still lingered. What is our role in the future? I’m reasonably certain it won’t be the same as our role in the past.

In cases like this, I sometimes find it helpful to do a little linguistic excavation. I’m constantly surprised by how concise and accurate the labels we choose are, if we spend the time to explore their roots and unearth their true meaning.

What then is an “agency”? Well, agency is simply the capacity of an agent to act. It’s the sphere of “action” that surrounds an agent. So, we have to dig a little deeper. What is an “agent”? An agent is one who acts for another, by authority from them.  It seems simple, but is there a fundamental concept here that has gotten fuzzy with time?

In the early history of advertising, agencies were very much aligned with this definition, I think. They carried out the acts of advertising — including creation of the messages, production and placement — at their clients’ behest. The best agencies also contributed by helping clients uncover and communicate core brand values that resonated with an audience.

It was here that the role of the agency started to shift. It had to do with the concept of brand ownership. Somewhere along the line, agents began to believe they owned the brand. And clients seemed willing to abdicate this power to their agents. One agency talks about “360 degree brand stewardship.” It sounds nice, warm and fuzzy, but let’s cut the fat away and get to the bone of this phrase. What does that mean, really?

To “steward” a brand means to care for it and improve it over time. Again, that sounds like a good thing. But I fear that it shifts a fundamental duty into the wrong hands. I believe that “caring” implies ownership, and it can leave a brand in a precarious purgatory, caught between the company itself and its agency. In the days when brands were built largely around media exposure, perhaps it made sense for the fate of that brand to live with the agency. But that’s no longer the case. As Jakob Nielsen has said on at least one occasion, now “brands are built by experience, not exposure.” And the brand experience has to live with the company whose DNA defines the brand. By necessity, they have to be the stewards of their own brand, because so much of what makes that brand lives beyond the reach of an agency.

So if the original definition of an agency is passé, and the role of stewardship has to live with the company, what then do we become? I can hear echoes of “strategic partners” out there as I write. But to me that term has had its essential meaning squeezed out by overuse. I don’t think it captures the essence of what a digital agency should be. “Strategic partners” as a label is like a blanket, covering everything but defining nothing.

When I look at our best relationships with clients, there are three other terms I would use: “catalyst,”  “accelerator” and “guide.”

As a catalyst, we’re there to trigger change, to set off a chain reaction that has the potential to transform an organization.  We can do this by giving clients a vision of what’s possible. As an accelerator, we’re there to remove the roadblocks preventing the transformation. Finally, as a guide, we’re there to provide direction, helping clients a navigate the troubled waters of digital transformation and giving them some idea of what to expect.

Embrace Your Inner “Screw Up”

First published January 19, 2012 in Mediapost’s Search Insider

Humans hate making mistakes. But the fact is, making mistakes is an essential part of being human. Somehow, we have to learn to live on the edge of this paradox. For digital marketers, our entire industry is balanced on this particular precarious precipice.

There are a few rules of thumb to “screwing up” successfully:

You Can Only Learn from Others if You’re in the Middle of the Pack

If you’re a digital marketer, you’ve decided to travel at the head of the herd. Congratulations. But here’s the thing. You’ve volunteered to make mistakes. The mark is on your forehead and it’s your job to poke the bushes and test the waters, flushing out danger for others to take heed of.

Humans have a long history of leveraging the principle of safety in numbers. But in that dynamic, some have to live on the edge and let others learn from their mistakes. The advantage of that position is that you’re also the first to take advantage of the unchartered wins that come from conquering new challenges. The risks are greater, but so are the rewards. If this balance doesn’t appeal to you, move back to center and follow the leaders. Just realize it’s a lot more crowded there, and there might not be enough perks to go around.

The More Unstable the Environment, The More Important it is to Make Mistakes

You don’t need the safety of a herd in safe and stable environments. We call it civilization. It’s on the frontier, where things get precarious, that you need safety in numbers. Ironically, it’s on the frontier where the herd thins out and you often have to go it alone. That really leaves you no choice. There is no beaten path to follow. You’re going to have to be the one that forges it. And that means you’re going to make mistakes. Get used to it. Embrace it. Take solace in the fact that while taking action may cause mistakes, not taking action pretty much guarantees you’ll end up as somebody’s lunch.

If You Can’t Get Comfortable, Get Courageous

I often tell aspiring digital marketers that this is not a comfortable career. If you want security, become an accountant. But if you want a challenge, you’ve found the right niche. Digital marketing takes courage. It means trusting your gut and betting on long shots. It means embracing opportunities without a mound of evidence to rely on. To succeed in this business, first you need passion — but courage runs a close second.

Mistakes = Learning

I don’t know where making mistakes got such a bad rap from, but I shudder to think where humanity would be without them (read Ralph Heath’s excellent book, “Celebrating Failure”). You can’t learn without making mistakes. You can’t gain ground without occasionally falling down. I’ve spent the majority of my life as an entrepreneur, which pretty much means the regular making of mistakes, so perhaps I’ve become used to it.  But I honestly don’t know why screwing up has been stigmatized to the extent it has.

Learn to “Do It Wrong Quickly”

My friend Mike Moran wrote a book a few years ago calling “Do it Wrong Quickly,” which uncovers one of the essential elements of successfully screwing up: to build learning into the process. Understand that failure is an essential part of the equation (especially in digital marketing), and go in using it as an opportunity to learn quickly, adjust and iterate your way to success. By going in anticipating failure, you won’t be surprised when it happens and can quickly move beyond failure to learning and adapting.

Realize You Don’t Have to Be Perfect — You Just Have to be Better than the Other Guy

Finally, this is a game of percentages. If you bump up the level of activity, you’ll make more mistakes, but you’ll also win more battles. You’ll “fail forward” — and soon you’ll be looking at the competition in your rearview mirror.

Embrace Your Inner “Screw-Up”

First published January 19, 2012 in Mediapost’s Search Insider

Humans hate making mistakes. But the fact is, making mistakes is an essential part of being human. Somehow, we have to learn to live on the edge of this paradox. For digital marketers, our entire industry is balanced on this particular precarious precipice.

There are a few rules of thumb to “screwing up” successfully:

You Can Only Learn from Others if You’re in the Middle of the Pack

If you’re a digital marketer, you’ve decided to travel at the head of the herd. Congratulations. But here’s the thing. You’ve volunteered to make mistakes. The mark is on your forehead and it’s your job to poke the bushes and test the waters, flushing out danger for others to take heed of.

Humans have a long history of leveraging the principle of safety in numbers. But in that dynamic, some have to live on the edge and let others learn from their mistakes. The advantage of that position is that you’re also the first to take advantage of the unchartered wins that come from conquering new challenges. The risks are greater, but so are the rewards. If this balance doesn’t appeal to you, move back to center and follow the leaders. Just realize it’s a lot more crowded there, and there might not be enough perks to go around.

The More Unstable the Environment, The More Important it is to Make Mistakes

You don’t need the safety of a herd in safe and stable environments. We call it civilization. It’s on the frontier, where things get precarious, that you need safety in numbers. Ironically, it’s on the frontier where the herd thins out and you often have to go it alone. That really leaves you no choice. There is no beaten path to follow. You’re going to have to be the one that forges it. And that means you’re going to make mistakes. Get used to it. Embrace it. Take solace in the fact that while taking action may cause mistakes, not taking action pretty much guarantees you’ll end up as somebody’s lunch.

If You Can’t Get Comfortable, Get Courageous

I often tell aspiring digital marketers that this is not a comfortable career. If you want security, become an accountant. But if you want a challenge, you’ve found the right niche. Digital marketing takes courage. It means trusting your gut and betting on long shots. It means embracing opportunities without a mound of evidence to rely on. To succeed in this business, first you need passion — but courage runs a close second.

Mistakes = Learning

I don’t know where making mistakes got such a bad rap from, but I shudder to think where humanity would be without them (read Ralph Heath’s excellent book, “Celebrating Failure”). You can’t learn without making mistakes. You can’t gain ground without occasionally falling down. I’ve spent the majority of my life as an entrepreneur, which pretty much means the regular making of mistakes, so perhaps I’ve become used to it.  But I honestly don’t know why screwing up has been stigmatized to the extent it has.

Learn to “Do It Wrong Quickly”

My friend Mike Moran wrote a book a few years ago calling “Do it Wrong Quickly,” which uncovers one of the essential elements of successfully screwing up: to build learning into the process. Understand that failure is an essential part of the equation (especially in digital marketing), and go in using it as an opportunity to learn quickly, adjust and iterate your way to success. By going in anticipating failure, you won’t be surprised when it happens and can quickly move beyond failure to learning and adapting.

Realize You Don’t Have to Be Perfect — You Just Have to be Better than the Other Guy

Finally, this is a game of percentages. If you bump up the level of activity, you’ll make more mistakes, but you’ll also win more battles. You’ll “fail forward” — and soon you’ll be looking at the competition in your rearview mirror.

Look at the Big Picture in 2012

First published December 29, 2011 in Mediapost’s Search Insider

Another year’s pretty much in the can. And because I’m working on idle this week, trying to catch my breath with my family before plunging headlong into 2012, search marketing falls somewhere behind the recent releases on Netflix and trying out the new Wii game on the list of things preoccupying my mind. So, don’t expect any salient and timely search news from me!

When I look back on what has preoccupied me over the last 12 months, I will say that much of it has been spent “stepping back” and trying to look at the bigger picture. As online interactions have taken a bigger and bigger chunk of our lives (you’ll notice that both of the recreational options I mentioned have online components woven into them), trying to understand how our actions play out against a broader online backdrop has been the thing I think about most often.

We digital marketers tend to take that “bigger picture” and break it into pieces, trying to make sense of it by focusing on one small piece. Digital marketing lends itself to this minute focal depth because of the richness of each piece. Even the smallest chunk of an online interaction has a lot to explore, with a corresponding mound of data to analyze. We could spend hours drilling into how people use Linked In, or Twitter, or Google+ or Facebook.  We could dig into the depths of the Panda update or how local results show up on Bing and never come up for air.

But think back to what, at one time, was another holiday season pastime. Some of us remember when we used to get a jigsaw puzzle for Christmas. You’d dump out all 5,000 of those little photographic morsels and then begin to piece it together into a coherent image of something (usually a landscape involving a barn or a covered bridge). Success came not only from examining each piece, but also in using the image on the boxtop to help understand how each piece fit into the bigger picture. Without understanding what that bigger picture was supposed to look like, you could examine each piece until the cows came home (again, often a topic for jigsaw art).

So, much of my 2011 was spent trying to understand what the picture on the top of the puzzle box was supposed to look like. What would ultimately tie all the pieces together?  In physics terms, I guess you could say I’m been looking for the Unified Field Theory of online marketing. And you know what I realized? You won’t find it by focusing on technology, no matter how cool it is. Foursquare marketing or search retargeting or hyperlocal optimization are all just pieces of a much bigger puzzle. The real picture emerges when you look at how people navigate the events of their lives and the decisions they must make. It’s there where the big picture emerges.

A few weeks ago I was speaking to a group of marketers about the emerging role of mobile.  This was no group of digital slouches. They knew their mobile stuff. They had tested various campaign approaches and honed their tactics. But the results were uneven. Some were hits, but more were misses. They knew a lot about the pieces, but didn’t have the boxtop picture to guide them.

My message (for those who know me) was not a surprising one: understand how to leverage mobile by first understanding how people use mobile to do they things they intend to do.  Don’t jump on a QR code campaign simply because you read somewhere that QR codes are a red-hot marketing tool. First see if QR codes fit into the big picture in any possible way. If you do that, you might find that QR codes are a puzzle piece that actually belongs in another box.

After delivering my sermon about the importance of understanding their respective big pictures, I asked my favorite question: “How many of you have done any substantial qualitative research with your customers in the past year?” Not one hand went up. This was a group of puzzle assemblers working without any boxtop picture to guide them.

If you want to sum up my past year and fit it into one final paragraph for 2011, it’s this: Understand your customers! Spend a good part of 2012 digging deep into their decision process and their online paths. Make it personal. Stalk if necessary. Ask questions that start with “why.” Observe. Make notes. Broaden your online reading list to include blogs like Science Daily, Futurity, Neuroscience Marketing and Homo Consumericus. At some point, the bigger picture will begin to emerge. And I bet it will be much more interesting than a landscape with a barn and some cows in it.

In Search of Simplicity

First published December 21, 2011 in Mediapost’s Search Insider

“Simplicity is the ultimate sophistication.”

This quote, from Leonardo da Vinci, was on the original brochure for the Apple II. Throughout his life, Steve Jobs didn’t stray far from this principle. In fact, he was obnoxiously obsessive about it.

When Steve returned to Apple after his 12-year hiatus, he embraced simplicity with a vengeance. While Apple was wondering in the wilderness, they somehow managed to amass no fewer than a dozen different variations of their various computers. All were crappy (and I speak as a former owner of several of them) but at least there were a lot of different varieties of crap to choose from.

One of my favorite passages from Walt Isaacson’s book describes how Jobs quickly pruned the unwieldy product portfolio back down to size: “After a few weeks Jobs finally had enough. ‘Stop!’ he shouted at one big product strategy session. ‘This is crazy.’ He grabbed a magic marker, padded to a whiteboard, and drew a horizontal and vertical line to make a four-squared chart. ‘Here’s what we need,’ he continued. Atop the two columns he wrote ‘Consumer’ and ‘Pro’; he labeled the two rows ‘Desktop’ and ‘Portable.’ Their job, he said, was to make four great products, one for each quadrant.”

The upshot is this. It’s not worth doing something unless you know you can do it really well.  Which brings me to Google.

Google has always embraced the grass roots-definition of innovation. The principle is this: get a bunch of really smart people, let them dream up really smart things, and then figure out a way to monetize it. Google carries it even further. They have recently been on a shopping spree for other companies who are also dreaming up smart things. In theory, it sounds great. There’s only one problem: It lacks simplicity. And, by extension, it lacks focus.

Now, if you refer back to a column I wrote earlier (“Amazon = Evolution, Google = Intelligent Design”) it seems that I’m dancing on both sides of an argument. I don’t see it that way. My point in that column was that you can choose to provide platforms that enable widespread innovation, but it’s difficult to try to own that process entirely within one organization. Platforms enable innovation to play out over a larger stage.

Now, you might say (and I would say the same, being a rabid Darwinist) that nature also lacks simplicity. Evolution certainly didn’t happen through any top-down directive to be number one or number two at anything. Evolution is the biggest ongoing trial and error experiment ever conducted. Google’s approach seems to have much in common with nature in this regard.

But in fact, nature imposes the ultimate simplicity at a later stage, and it does so with relentless cruelty: successful variations survive, and unsuccessful ones die. As mercurial as Jobs was, he doesn’t hold a candle to the whims of ol’ Ma Nature.

In today’s marketplace, there seems to be an urge to try new things just because we can. The barrier to entry is lower than ever, thanks to technology. So we rush opportunity on multiple fronts, hoping one will pay off for us. Companies like Google encourage this by actively enabling their team to dabble in whatever strikes their fancy. I’m not saying this is wrong, but at some point, focus has to be brought into the equation. You need to simplify, prioritize and focus to turn out “insanely great” products. You need not only to be innovative; you also need to be a ruthless pruner of less-than-great ideas. And the culture that fosters collaborative innovation generally has a difficult time arbitrating what survives and what doesn’t. This creates confusion and mixed priorities. It saps away simplicity.

Google’s approach is to extend beta periods indefinitely, hoping that this will weed out the winners from the losers. Eventually, loser products (and there have been many) die under their own inertia. But in the meantime, this extended life-support system drains corporate resources. How many real winners have come out of Google Labs? What is the success rate of Google’s approach to innovation? What would have happened if Google Search weren’t as wildly profitable as it’s been? Would Google still be around?

Walmart vs. Amazon: A Regime Shift in Motion

First published November 17, 2011 in Mediapost’s Search Insider

Financial analysts are not predicting a rosy short-term future for Amazon’s stock price.  Recent blunders with the rollout of new Kindle devices and earnings under increasing pressure have these analysts predicting a shorting of Amazon stock. In all likelihood, Amazon’s share price will tumble.

So why is Walmart so worried about Amazon?

A recent article indicates that Walmart is preparing for what could be the “retail battle of the decade.” When you match the two up on numbers alone, it seems like the “mismatch of the decade.”  Walmart is 10 times the size of Amazon in overall sales. It’s the largest retailer on the planet, by a huge margin. Amazon doesn’t even crack the top 10. In fact, Amazon sits at #44 on the list of global retailers.

But let’s flip the numbers. When it comes to online sales, Amazon outsells Walmart 10 to 1, and its topline growth is 44% while Walmart’s per location sales growth is trapped in the low single digits (if there is growth at all). So, if online retail is a game changer, and if this signals a “regime shift” in the retail landscape, then Walmart is right to worry. In fact, they should be petrified.

The article steps through Walmart’s strategy for ramping up e-commerce, but one line in particular raises a huge red flag: “Walmart would love Amazon’s top-line growth, but isn’t about to settle for its profits.”

Walmart has built its empire on incredibly precise supply chain management, obsessing over the details of physical fulfillment. Company strategists hope to use this to their advantage in their war on Amazon. Fair enough. But when it comes to the tough calls required to fully embrace digital (and they will come), Walmart will be hampered by the need to protect an existing model that relies on bricks and mortar. This mixed set of priorities will virtually ensure Walmart will move slower than Amazon, who has no option but to excel when it comes to e-com. This is a classic “regime shift” scenario, and history is not on Walmart’s side. The fact that its e-com head office is pretty far removed, philosophically and physically, from the head office in Bentonville, Ark. speaks to the challenges that Walmart has ahead of it.

It’s Amazon’s move into CPG that has raised the ire of the giant from Bentonville. Soap, diapers and other consumer staples are the essentials that drive Walmart’s revenues, and these are areas that Amazon is aggressively expanding into. But it’s not just consumer packaged goods that Amazon has set its sights on; it’s also going after the industrial and B2B market. In fact, Amazon is attacking the established marketplace on all fronts, with the full intention of smashing the current model and replacing it with one that takes full advantage of online efficiencies. In short, if we remember the stages of a Kondratieff wave, Amazon is building the foundations of the reconstruction phase.

Amazon’s plans go far beyond the Kindle sales and struggles with profit margins currently beleaguering its stock price. This is a massive long-term play, and one that I would be hesitant to bet against. The act of shopping is about to change forever. In my previous column on this topic, many commented that for some things, the ability to touch and feel a product is essential. That may be true, but there are many, many more things where we could care less about the need for physical evaluation. Also, this divide between online and physical shopping tends to be a shifting one. Things we couldn’t imagine buying sight unseen just a few years ago are now purchased online without a second thought.

I’m not sure what lies ahead for retail in general, or the battle between Walmart and Amazon specifically. But I do know the retail landscape of the future will bear little resemblance to the one we know today. And I also know that the battlefield will be littered with causalities. It’s not beyond reason (or historical evidence) to suspect that the world’s biggest retailer may well be one of them.

The View Above the “Weeds”

First published November 10, 2011 in Mediapost’s Search Insider

Yesterday was not a good day.

It was a day that made me wish I had never gone into this business — a day that made me long for a warm beach and a mai tai. I don’t have these days very often, but yesterday, oh boy, I had it in spades!

I’ve been doing search (yesterday, I used a different, less polite noun) for a long time.  And I have to be honest, some days it feels like a thousand leeches are sucking the blood out of me. Given that, it was impossible to muster up much enthusiasm for the roll out of Google+ Business Pages or the raging controversy of Facebook’s “LikeGate.” Really? Are those the most important things to litter our inboxes with?

On days like yesterday, when I get caught in the weeds of digital marketing (where the blood-sucking leeches tend to hang out) I sometimes lose sight of why I got into this in the first place. This is a revolution. What’s more, it’s a revolution of epic, perhaps unprecedented, proportions. In macro-economic terms, this is what they call a long-wave transition or a Kondratieff wave (named after the Russian economist who first identified it). These cycles, which typically last more than 50 years, see the deconstruction of the current market infrastructure and the reconstruction of a market built on entirely new foundations. They are caused by change factors so massively disruptive, often in the form of technological innovations or global social events (for example, a World War), that it takes decades for their impact to be absorbed and responded to.

The digital revolution is perhaps the biggest Kondratieff wave in history. One could tentatively peg the start of the transition in the early to mid ‘90s with the introduction of the Internet. If this is the case, we’re less than 20 years into the wave, still in the deconstruction phase. To me, that feels about right. If history repeats itself, which it has a tendency of doing; we have yet to get to the messiest part of the transition.

These waves tend to precipitate what’s called a “regime shift.” Here is how the regime shift works. Companies started in the old market paradigm eventually reach a stagnation point. In our particular case, think of the multinational conglomerates built around market necessities such as mass distribution, physical locations, supply-chain logistics, large-scale manufacturing, top-down management and centralized R&D. In this market, bigger was not only better, it was essential to truly succeed. Our Fortune 500 reads like a who’s who of this type of company.  But eventually, the market becomes fully serviced, or even saturated, with the established market contenders, and growth is restricted.

Then, a disruptive change happens and a new opportunity for growth is identified. At first, the full import of the disruption is not fully realized. Speculation and a flood of investment capital can create a market frenzy early in the wave, looking for quick wins from the new opportunities. Think dot-com boom

The issue here is that the full impact of the disruptive change has to be absorbed by society — and that doesn’t happen in a year, or even 10 years. It takes decades for us to integrate it into our lives and social fabric. And so, the early wave market boom inevitably gives way to a collapse. Think dot-com bust.

As the wave progresses, the “regime shift” starts to play out. Established players are still heavily invested in the existing market structure, and although they may realize the potential of the new market, they simply can’t move fast enough to capitalize on it. Case in point, when industrial America became electrified in the late 1800s and early 1900s, the existing regime had factories built around steam power.  Steam-powered factories had a central steam engine that drove all the equipment in the factory through a complex maze of drive shafts and belts. The factories were dirty, dangerous and inefficient. New factories powered by electricity were cleaner, brighter, safer and much more efficient. But even with the obvious benefits of electricity, established manufacturers tried to retrofit their existing factories by jury-rigging electrical motors onto equipment designed to run by steam. They simply had too much invested in the current market infrastructure to shut the doors and walk away. New companies weren’t burdened by this baggage and built factories from scratch to take advantage of electricity. The result? Within a few decades, the old manufacturers had to close their doors, outmaneuvered by newer, more nimble and more efficient competitors.

When I plot our current situation against the timelines of past waves, I believe that given how massive this wave is, it could take longer than 50 years to play out. And, if that’s the case, there is still a lot of deconstruction of the previous marketplace to happen. The good news is, the building of the new market is a period of huge growth and opportunity. There is still a ton of life left in this wave, and we haven’t even realized its full benefits yet.

On days like yesterday, when my to-do list and inbox conspire to burn out what little sanity I have left, I have to step back and realize why I did this. Somehow, way back then, I knew this was going to be important. And yesterday, I had to remind myself just how massively important it is.

Bye Bye Big Box, Hello Digital

First published November 3, 2011 in Mediapost’s Search Insider

My friend Mikey (whom you may remember from the “Mikey Mobile Adoption Test”) and I were recently driving through our hometown, past a long row of new big-box retail locations that have recently sprung up.

I, somewhat exasperatedly, said, “Who the hell is going to buy all this stuff?”

Our town’s population is only 120,000 but we seem to have a huge overcapacity of retail space, with more going up all the time, thanks in part to a development-hungry First Nations band with plenty of available real estate.

Mikey replied, “Well, the town isn’t getting any smaller and people need to shop somewhere.”

That, and a recent article by MediaPost reporter Laurie Sullivan, got me thinking. Do we? I mean, do we need to shop “somewhere,” as in a physical store location?

I paused, and then replied, “I’m not so sure. I buy a lot more things online.”

“Really?”

“Really.”

A few days later, I was in a presentation where someone showed digital marketing growth projections for local advertisers on a slide. The growth over the next few years was relatively moderate: about 5% to 6% year over year. This despite the fact that the current penetration rates were well short of 50%.

Put it all together and I can’t help wondering whether we, collectively, are “sandbagging” our local digital growth potential. Modest growth projections assume fairly linear trends in the future. We use past adoption and extrapolate these into the future. Statistically, it’s probably the rational thing to do, but it doesn’t take into account the possibility of a dramatic shift in behavior. For example, what if we’ve reaching a tipping point where, as Sullivan notes, it’s just a lot easier to shop online than to actually hop in your car, drive across town and then try to navigate through a 25,000-square-foot massive retail location?

That’s the way things tend to go in real life. We don’t incrementally change behaviors, we change en masse. And when we do, we trigger massive waves of change that deconstruct and reconstruct the marketplace. I suspect we’re getting close to that tipping point.

Personally I, like Sullivan, find the physical act of shopping a royal pain in the tuchus.  Recently, my wife and I decided to go buy some coasters, those little squares that go under cups on your coffee table. Indiana Jones has embarked on less daunting quests. When we finally found them I reckon that, accounting for my wife’s and my time at fair market value, those coasters cost somewhere around a thousand dollars. All this for a six-dollar set of coasters that I don’t even particularly like (don’t tell my wife)!

We’re to the point now where shopping should be painless — a search, click and buy, then relax and wait for FedEx to deliver. Even local shopping can become massively more efficient through mobile technology. At some point, we have to realize that going to huge retail stores that are built to maximize per visit sales rather than enable you to find what you’re looking for is a horribly inefficient use of our time. And when we do, the current retail paradigm is flipped on its pointy little head. The net impact? Those modest growth curves suddenly shoot for the sky!

And all those big-box stores that Mikey and I drove by?

Perhaps bowling will make a sudden comeback. I know several great locations for an alley.

Amazon = Evolution, Google = Intelligent Design?

First published October 20, 2011 in Mediapost’s Search Insider

Ironically, the hottest thing on Google+is a rant from a Google Insider about how Google+ is hopelessly limited because Google doesn’t get the importance of platforms.  Steve Yegge goes on at some length (over 4,000 words) contrasting his first six years at Amazon and his last six years at Google.

The media jumped on it, because Yegge spent some of his rant bashing Google+, which is rapidly collecting more holes than Bonnie and Clyde’s ill fated 1934 Ford sedan. But Yegge was simply using Google+ as an example of how badly Google has dropped the ball when it comes to building platforms to support external development. There are many, many things that Google does far better than Amazon (according to Yegge) but building out platforms is not one of them:

“Bezos realized long before the vast majority of Amazonians that Amazon needs to be a platform.”

In contrast, Google tends to keep their code base under internal lock and key to protect their IP. In fact, even their own Chinese developers didn’t have access to Google’s core code, for fear that IP would somehow leak out and end up on a Chinese competitor’s site. A valid concern, to be sure, but that approach runs directly counter to the open environment required to become a platform developer, something that Yegge says almost everyone does better than Google:

“That one last thing that Google doesn’t do well is Platforms. We don’t understand platforms. We don’t ‘get’ platforms.

What, Google+ is a prime example of our complete failure to understand platforms from the very highest levels of executive leadership (hi Larry, Sergey, Eric, Vic, howdy howdy) down to the very lowest leaf workers (hey yo). We all don’t get it.”

What, then, is the advantage of being a platform developer?  For one thing, it leverages the power of Darwinian development. As long as development stays locked behind the corporate firewall, you simply can’t match the innovation that will come from an open ecosystem. This is especially true in a corporate environment where management tends towards micromanagement, true of both Amazon and Google. Bezos and Page both tend to run roughshod over internal developers, dismissing ideas out of hand and turning development into a political minefield. But Steve Bezos realized the limitations of this command and control approach.

“The other big realization he [Bezos] had was that he can’t always build the right thing.”

Every successful species evolves through a long and arduous process of trial and error. Evolution requires sheer volume, leaving the environment to be the eventual judge of success. Bezos has harnessed the same approach for Amazon. Google is instead taking an “intelligent design” approach. Personally, I much prefer Amazon’s odds for success. But they’re not the only one who has embraced Darwinian development.

In exploring the lack of momentum of Google Plus One, you have to compare against Facebook. One thing that Facebook did which helped build incredible momentum was to turn their site into a platform for social networking of all kinds.

“Facebook gets it. That’s what really worries me. That’s what got me off my lazy butt to write this thing.”

In looking at social, Google got that it was important, but what they didn’t get was that communities, whether online or in the real world, develop organically on top of required superstructures. They evolve, they aren’t created.  Facebook understands this, but Google hasn’t quite caught on yet.

“Google+ is a knee-jerk reaction, a study in short-term thinking, predicated on the incorrect notion that Facebook is successful because they built a great product. But that’s not why they are successful. Facebook is successful because they built an entire constellation of products by allowing other people to do the work.”

As luck would have it, Yegge also touched on the topic of last week’s column, the incredible intuition of Steve Jobs. I mentioned that I hadn’t seen the same “magic” in Larry Page. Yegge seems to agree:

“The problem is that we are trying to predict what people want and deliver it for them. You can’t do that. Not really. Not reliably. There have been precious few people in the world, over the entire history of computing, who have been able to do it reliably. Steve Jobs was one of them. We don’t have a Steve Jobs here. I’m sorry, but we don’t.”

Yegge’s post is required reading, because it offers a startlingly frank and transparent view inside Google, and I applaud Google’s courage in allowing it to remain open to the public. What is really fascinating though, is what this means for the future of search and the role of Google in it. Unfortunately, I’m at my maximum word count, so I’ll explore that next week.

Steve, I Wish I Knew You

First published October 13, 2011 in Mediapost’s Search Insider

I wish I had met Steve Jobs.

My heroes from the world of business number exactly two: Walt Disney and Steve Jobs. Walt died when I was 5 years old, so it’s not surprising that our paths never crossed. But theoretically, I could have met Jobs. It was not beyond the realms of possibility. Unfortunately, I never got to meet either of them. And for that, I’m immeasurably saddened.

The thing I admired about both of them goes beyond what I have seen in the recent stream of accolades that has issued forth since last week’s news of Jobs’ passing.

Jobs, and Disney before him, had an amazing ability to know what it was we wanted before we knew it ourselves. It wasn’t business or technical acumen, although both men had it in spades. It was the uncanny ability to ride on the edge of reason and intuition while placing bets on the future, getting it right more often than wrong.

If I knew more about them, I suspect I’d add Henry Ford and Thomas Edison to the list, but the fruit of their labors predates me, so I don’t have the same appreciation for what they did in their lifetimes.

Yes, Jobs (and Disney) shaped huge parts of the world we know today. Yes, our lives have been changed thanks to the mortal time they spent with us. Yes, they had passion. But more than anything, they could reach deep inside themselves, draw a spark of intuition and from it, start a fire in our hearts. That gift comes one in a generation, if we’re lucky. In my lifetime, I’ve only seen it twice.

As smart as Jobs was, he had many contemporary counterparts in the IQ department. Bill Gates and Larry Ellison are no slouches when it comes to mental acuity. More recently, Mark Zuckerberg’s intellect has been lauded on celluloid, no less. And anyone who seems to cross Larry Page’s path is awed by the hammering intensity of his engineering brilliance.

But the genius of Disney and Jobs was of a different sort. It came from being able to take our collective pulse, and somehow knowing what would make it quicken. They could pluck unrealized dreams and transform them into the treasured stuff of our lives.  It was more art than science, more love than logic, more passion than profit. It was, from our awed viewpoint, magic. It seems to me that Bill Gates and Larry Page have little time for magic.

There have certainly been more financially successful companies. Disney was on the edge of the bankruptcy for much of its history. And when Walt did hit a home run, he quickly ploughed his profits back into his next long shot.

Apple wouldn’t be around today if Microsoft hadn’t come to the rescue in 1997 with a $150 million dollar bailout. That amount seems miniscule today next to Apple’s  $370 billion market cap, making it the most valuable tech company in the world (ironically, worth more than half again as much as Microsoft’s $227 billion.)

Jobs and Disney had the ability to create entirely new categories of consumer demand: full-length animated features, theme parks, personal computers, computer animated movies, personal music devices, smartphones and tablet computers. Each of these innovations owed much to the personal vision of the leader.

I’m not sure what Apple’s path will be in the future. I suspect it will bear an eerie similarity to Disney after Walt’s untimely departure in 1966, where management asked the same question about every decision: “What would Walt do?” I have no doubt that the words “What would Steve do?” will be heard often in Cupertino. I’m also sure that it will be some time before we see the likes of another Steve Jobs or Walt Disney.

The gift they had is not often given. I’m just thankful that they both chose to share it.