Owen Brunette

There seems to have been so much hot air as people struggle to understand Freeconomics. The idea that data will be free. Hopefully we are getting to the end of that debate.

Newspapers discovering they can’t charge for their web sites, or for that matter any service now finding itself in data form, is similar to shopping malls discovering they can’t charge an entrance fee for their splendid walled garden. So they make money in other ways. If shopping malls can’t make ends meet they aren’t going to be able to cover their financing with billboard fees so they had better suddenly develop one splendid food court or sell up to somebody with other ideas and move down to Florida.

Likewise the Music industry is discover that their consumers consider charging for copies of music a greater crime than the copying and are refocusing on convenient video delivery and concert performances.

While the incumbents are bound to try to protect their positions increasingly they need to just get on with adapting or cannibalizing themselves into new businesses because there are few people left who believe the arguments of artificial scarcity and want to listen to the sulking about how profitable their business use to be.

IP, Management, Technology freeconomics, freemium

One of the topics that came up in this week’s Thursday Morning Coffee Meetup was the extent to which companies should be following social rather than financial objectives. Most people want to do their bit for society and it seems that possibly the majority of people in the startup community are wanting to adopt a primarily social or charitable focus to their activities. I can’t help worrying that this is not a realistic path for most of the people following it. If one is generating cash then diverting a potentially significant proportion to charity definitely helps us all but trying to factor in social objectives to every business decision leads to some very difficult decision making.

One can barely travel to a client or deliver a product and present it as ecologically sustainable. Even the much heralded virtues of the ingredients of some chunky ice creams are really greening of a product which clogs arteries and even kills off customers. Trying to be truly consistent could lead to some very long office meetings. The effect would tend to be a weight on the ecologically and socially conscious businesses. The more equitable way forward, I would argue, is for people to be better informed to be able to make the decisions they need to make and to be less shy about regulation so that businesses are on a level playing field that takes account of wider social impact. For each company to try to decide this for itself is a less practical solution than the regulation adopted in Europe, Japan and increasingly in China.

The prevailing wish in the discussion this week to have corporations manage the decision is probably in large part an effect of being in US culture where there is minimal regulation, little supervision and a lack of any notion that government should have a more active social role. Or even be effective in general. Corporations seem to be looked to to solve all problems. Our national government spends less than 0.5% of spending on education, less than 1.5% on social programs and a total of 48% of non overhead spending on the military. So the idea that the national government should be taking care of social expenditure, taxing carbon emissions and other destruction often seems foreign. It does seem though that at least the need is being identified, which is a cultural change for the US, if the solution being discussed is still a very different one.

Governance, Management, Society, Technology, Toys, Travels, Uncategorized

I have been trying a Skype collaboration plugin (Which they call an Extra) called Yugma. Of course despite having a good impression of the Skype brand before downloading some potentially time wasting tool I read the user comments.

So the comments were more promising than a competitors where most people were discussing problems trying to uninstall that product, but what really interested me was how high the expectations were in people’s comments of interaction from Skype and the Vendor of the Extra. People expected to be listened to and interacted with. They didn’t expect a faceless corporate stony silence.

They expected the kind of meaningful response that one would want from an account rep in an offline environment. In this case they received it from Yugma in the form of Liz who begins and ends her post with her name. Something which I noticed I reacted positively to.

The need to be aware of and rapidly responsive to customers in all communication channels is so important in today’s customer service. It is so much easier and more cost effective to achieve with web sites and modern communication but sadly so many companies drop the ball and allow the geographic separation to cause them to disregard customers in a way which they never would in person. For customers to love the product and recommend it these communications are so important.

I installed Yugma, the product with better user comments and responsive human customer service. Of course it doesn’t seem to function with the latest version of Skype. It’s difficult to apportion blame but given the comments to this effect and the lack of response from Skype it rather appears that Skype don’t have their act together in managing the versioning of Extra’s from this and other Vendors. Yugma +1, Skype -1. Of course if the app execution worked one could really award some points!

Management customer, service, skype

Just when I thought I had found all the little features of Grand Central, walked the length of the pedestrian tunnels, heard countless references to the secret train line to the Waldorf, pointed out the one dirty roof tile above Michael Jordon’s bar showing the original state of the uncleaned ceiling, learnt to avoid the overpriced pickled herring in the Oyster Bar and found the best time of the week to get a seating area in the Campbel Apartments now I find that there had all this time been not one, but two tennis courts on the roof which were available to the public, at the unfortunate fee of $170 per hour mind you. But hurry the concession is about to close to make room for a staff locker room.

New York, Travels grand central

With all the chatter, twitter, email and popping up nonsense on our screens what we crave is silence, simplicity, blankness. Space for a thought to get executed upon.

We need silence, minimalism, space.

Nothing new here. This is why people craved vacations or libraries before our hyper connected days.  With all the thought candy out there, just a google search away, every momentary pondering has the potential to loose another twenty minutes. Self discipline can prevent that but the elimination of every email, message arrival announcement, anti virus update, weather alert and even network disconnect notice has to be fought for in order to keep focus.

Hopefully product managers can take this on board and start defaulting some of these notifications to off for us, and potentially those of us plagued by Vista will be returned to a more productive life with Windows 7. Or is that just another hope.

Technology gui, notifications, productivity, ui

In the US we have consistently been the largest single country economy and provided a safe place to invest through world wars, cold wars and crises. We are currently home to 14.3 of the 78.3 trillion global GDP (18%). Dwarfing the next largest, Japan with 4.8 Trillion or 6%.

From the initial European settlements in North America forward, development was funded by states and corporations on the understanding that there was opportunity for agriculture, mining and settlement in the US and that what was needed to realize it was inward investment. America grew up, as a result, with a more positive view on credit and continued its growth with continuous net inflows of capital to the current day.

We borrow from the historical sources of Europe but also Japan, Switzerland and now China. At present if we thought about our government’s flows (i.e. excluding private capital) and mapped it down to the level of families, every family in the US has borrowed $3,000 each from five families in China who have worked all hours to produce the resources we wanted. Additionally we also borrowed from the families of Japan etc. This allowed us to finance government spending, agency purchases of mortgages and the life we currently enjoy.

All too much of that money has gone into financing credit for larger homes and larger SUVs and a lower proportion into education, infrastructure or other key elements of a competitive economy. We are now in a position where the tools of advanced manufacturing and management training are available in any region of the world and where capital is fungible and flows to where it can be best used. This has led to greater global growth and a more equitable distribution of opportunity.

With the more level global playing field though, we can no longer assume that the US is the only opportunity for growth or the rightful home of the world’s capital. The financial collapses have a significant impact because when the recovery occurs it is a global financial system made up of global banks from many homes. Global markets will no longer be run by people who grew up with baseball and are only familiar with our culture. As liquidity returns it will flow more equitably to all corners of the world.

The current stimulus plans will inflate the economy and are an important part of moderating unemployment. There are strong grounds beyond economics for wishing to keep unemployment below 20% and avoiding the wrenching pain on the social fabric that high unemployment causes but the stimulus plans will not make us globally competitive in a rapid timeframe.

We will remain a premium economy, as does Europe, with a strong work ethic but not as strong as Asia’s. Asia will become like us but is starting from a base which learnt its attitudes in a very tough world. Our educated people will continue to have expectations of their lifestyle which are different to those of much of the world. As a result we will get a fair allocation of the capital on a recovery but will not return to the world of the 90s let alone the 50s.

We are still the world’s global reserve currency if we don’t cause alarm by searching for excuses as to why we won’t repay our creditors or race headlong into hyper inflation. The level of debt that we have, and are about to incur, is substantial and paying for it will absorb an increasing proportion of Federal tax revenue so we can’t rely on mindless spending as the main solution.

We make up a very flexible, nimble economy, which will be able to adapt far better than many in Western Europe but we need to focus on building our competitive position and setting realistic expectations for our lifestyles going forward. The days of earning $1 and with the help of mortgages, equity credit lines, loans and cards spending our current average of $1.33 on lifestyle are over, if we like it or not.

Finance credit, debt, economy, global

Bloomberg has announced  a series of actions to assist ex-Wall Street executives start businesses:

• Low-cost incubator office space (160 Varick Street, Beginning March 1, from $200 per person per month; 90 John Street that will open in April etc.)
• A NYC angel investment fund: New York City will create several funds totaling between $9 million and $10 million to make angel investments of $20,000 to $250,000 each.
• An annual international financial services business plan competition
• A “VC Connect” online information portal and VC support services
• FastTrac, a business training program to help emerging and existing entrepreneurs.
• JumpStart NYC, a free job training and placement pilot program
• Incentives for financial services companies locating in lower Manhattan
• The city will work with established and developing exchanges like the New York Mercantile Exchange’s Green Exchange and SecondMarket (Carbon credits etc.)
• An international recruitment campaign attracting commercial banks and insurance companies headquartered in China, India and other developing economies.
• Financial Services Advisory Committee to be led by Deputy Mayor Lieber that will meet regularly through 2009 to maintain a dialogue between City Hall and the industry, as well as within the industry.
• Regulatory advocacy: Bloomberg has tasked Deputy Mayor Lieber and EDC President Pinsky to work with the Financial Services Advisory Committee

More details here.

New York bloomberg, nyc, vc