Ged Carroll

Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

  • CIC on China’s luxury market

    CIC who provide the IWOM set of reports and flakey tools (think Sysomos, Radian6 or Adobe SocialAnalytics for the mainland Chinese internet eco-system) have come up with an interesting report on online conversations around the Chinese luxury market. CIC is increasingly being integrated with GroupM. It will be interesting to see how CIC copes as China exerts increasing control over social and marketing data access.

    Key take-outs

    • They are motivated to buy luxury goods as a way to ‘show-off’ and most of the online conversations are around this subject. Status itself is a tool designed to engender trust in things like business interactions rather than self actualisation per se
    • The distribution system is complex with overseas purchasing and purchasing agents (presumably to avoid China’s luxury goods tax and for more choice) also a popular subject. For luxury brands it means that Chinese expansion needs to be tapped by also having presence in places like Hong Kong, Japan, Korea, Paris – France and the major cities of the US
    • Real-time reporting of runway shows initiated by the brands doing webcasts has been extended by netizens to their own platforms. Much of the commentary is similar to the social television interactions you used to see on early video platform Joost; and on Twitter during shows like The Apprentice or The Only Way is Essex (TOWIE)
    • Counterfeit – there was a significant group that own both counterfeit and authentic versions of a product because it is ‘interesting to mix and match usage between real and fake’. This is a really interesting brand interaction and raises the question: what if authentic isn’t authentic enough in terms of brand experience? This is something that I could see impacting the likes of Louis Vuitton. Gucci, Chanel and Hermes as they become over-exposed in the marketplace. One of the ways to approach this is to educate consumers on what luxury means: craftsmanship, heritage or being at the forefront of something (which may mean an intersection between streetwear and luxury)

    More related content here. More from CIC here.

  • Optimising for platforms

    Optimising for platforms rather than clients and audiences. Three years ago I taught an interactive marketing module at the business school of a private university in Barcelona. It was a great experience presenting to a number of senior executives and up-and-coming talent from various parts of Spanish industry including advertising and interactive agencies. I ended up learning from them as much as they learned from me.

    One of the attendees talked about listening to what his clients wanted, but that he really focused on building sites that Google wanted him to build; when the client wishes and Google were in conflict, Google won out. At the time the phrase struck me as it illustrated the pinnacle of Google’s power on the internet.

    The internet maybe open, it may be based on standards which means that you can see broadly the same experience across different platforms and browser software; but that’s no good if no one ever sees you site, modern-day equivalent of the classic philosophical question:

    If a tree falls in a forest and no one is around to hear it, does it make a sound?

    However even if you don’t rank highly in Google, it can still be promoted in other ways. The other week I was at a conference when I heard one of the audience as a question about the wisdom of:

    Buiding a business in Mark’s house

    That is building a business on the Facebook eco-system. I was reminded of the earlier discussions I had in Barcelona around the power of Google.

    Facebook wasn’t a new idea, there have been social networks for as long as there has been the commercial internet.

    • The Well
    • AOL in some of its earliest incarnations as a BBS (bulletin board system) for Macintosh computers provided some of the functionality that Facebook pages and groups do now. AOL gave users 2MB to create their own personal presence on the web through a tool called Personal Publisher (it could be found with the keyword PP2 – it wasn’t called search back then) a kind of pre-Geocities.com page that does what your profile on Facebook does now
    • And if you enjoy Zynga’s Farmville or Cityville, these owe a huge debt to Lucasfilm’s Habitat developed by former Yahoo Randy Farmer and sat on the AOL platform some 25 years ago

    Many of the innovations that Facebook has since come out with like email and instant messaging, are features that AOL and others had since the internet first became popular. The contrast between the two is more about scale, whilst AOL was phenomenally popular with 30 million subscribers at its peak (who also paid for line access), and still reaches 112 million unique users on a monthly basis; but it was never omnipotent in the way that Facebook became.

    Facebook has an unsurpassed reach, kind of like a telephone directory for large swathes of the world – a de-facto real identity check. This powerful position is one that Clay Shirky says won’t be changed for the foreseeable future.

    You have to be on Facebook, even if you don’t engage with it (and engagement is something that Facebook seems having issues with for a good while).

    So businesses have gone to the logical step of building their web presence on a platform that they think is most consumers online homebase (as I read it described in Larry Weber’s Everywhere).

    So whilst Facebook may not control as much advertising budget as it likes; it wields a huge amount of consumer power and power over businesses that decide to use the social network as a platform – and that’s not likely to change any time soon.

    There are a number of factors to consider around Facebook:

    • Facebook abuses its position with consumers and I don’t need to discuss it here as it’s been well documented elsewhere already
    • Then there is the impermanence of web APIs, Nick Bradbury wrote a great post about this where he name-checked Facebook’s depreciated FBML, but to be fair, Google and Yahoo! have either changed the terms of APIs to make them less viable or got rid of them completely. So your platform may be here today gone tomorrow. From my experience, at the very least you are subject to browser compatibility problems and relatively high unpredictable down-times
    • It has become a crutch for marketing agencies in the way that the the answer to all consumer marketing used to be the 90-second television advertisement – I am surprised that so many brands are surrendering their reputation to Facebook given the concerns that had been voiced by marketers about Google’s power in recent times

    Marketers would be well advised to take a more pragmatic approach, think about where they are sending their traffic – who ‘owns’ the customer experience and take a portfolio or multi-channel approach to a campaign. More related content here.

    More information:

    Is it possible to replace Facebook? – interesting article by the research and development team at Norwegian state broadcaster NRK

    How Ford Blew It On Facebook | Advertising Age – why drive people via advertising to your Facebook page when you can drive them to your own property?

    The long-term failure of web APIs | Nick Bradbury

  • In The Plex by Steven Levy

    I bought In The Plex automatically because I had previously read and enjoyed Levy’s previous works: Insanely Great, Hackers and Crypto. Given his heritage covering technology companies and personalities as both an author and a journalist, I was curious what he would make of Google.

    The book is expansive and provides a lot of additional colour around Google, some of which I found of interest as I had worked at Yahoo! competing against Google and working with some of the early darlings of the web 2.0 movement – Flickr and Delicious. There were a couple of things that surprised me such as Google’s use of machine learning on areas like translation explained why grammar is still so bad in this area as it needs heuristics that lexicographers could provide similar to that offered by Crystal Semantics.

    Overall it was interesting to see that as with most large organisations Google is not only fallible but run through with realpolitik and a fair bit of serendipity. This contrasts with the external perception of Google as the technological Übermensch. A classic example of this is the series of missteps Google made whilst competing in China, which are documented in the book. From staffing practices, promotional tactics and legal to technology; Google blew it’s chances and Baidu did a better job.

    As an aside it was interesting to note that Google used queries on rival search engines to try and work out how to comply with Chinese government regulations, which is eerily like bad practices that Google accused Bing of last February in ‘hiybbprqag’-gate.

    There is a curious myopia that runs through a lot of later Google product thinking that reminded me of the reality and perceptions that I was aware of existing inside Microsoft from the contact I have had with the organisation through the various different agencies I have worked at. A classic example of this is the Google view of a file-less future, which by implication assumes that people won’t have legacy documents or use services other than the Google cloud. It is a myopia that comes part of arrogance and a patronising attitude towards the consumer that Google always knows best about every aspect of their needs.

    Contrast this with Apple and iTunes. Whilst Apple would like to sell you only content from the iTunes store, it recognises that you will have content from different sources: Amazon MP3s, ripped CDs, podcasts and self-created files that iTunes needs to play nicely with.

    The ‘no files’ approach assumes ubiquitous bandwidth which is likely to be a fiction for a while. (Part of the reason why I am able to write this post is that I was stuck for half-a-day on a train journey to Wales enjoying patchy mobile phone coverage and a wi-fi free environment, which allowed me to focus on reading this book in hardback).  This approach smacks of the old data lock-in that Microsoft used to have with proprietary file formats for its Office documents.

    Levy does a good job pulling all of this together and chronicling Google, but In The Plex fails to cast a critical eye over it all. I suspect that this is because he is too close to the company: the access that he gained enveloped him. Which is a shame as all the experience and insight Levy could bring to the book that would add value to the reader is omitted. Whilst In The Plex is an interesting historical document, it could be so much more. More book reviews can be found here.

  • Carol Bartz + Microsoft Excel

    Carol Bartz

    I started thinking about this post when I was reading Bob Cringely’s excellent analysis of Carol Bartz tenure at Yahoo!. I am not going to add my full analysis here but instead pull on a strand that highlights problems that exist at a number of internet companies and certainly existed at Yahoo! when I was there.
    Yahoo! star
    Part of the thought process that got me on the trail of this post was that it reminded me of the introduction to Cringely’s Accidental Empires book written in the 1991:

    … PCs killed the office typewriter, made most secretaries obsolete, and made it possible for a 27-year-old M.B.A. with a PC, a spreadsheet program, and three pieces of questionable data to talk his bosses into looting the company pension plan and doing a leveraged buy-out.

    Spreadsheets and the business models inside them can be extremely powerful business tools and also weapons of mass destruction.

    Powerful Business Tools

    Firstly about the power of spreadsheets and their models in an internet business. Whilst at Yahoo!, my former colleague Salim used to be able to take the first few months traffic figures for the search business and provide a pretty accurate forecast of what the rest of the year looked like. That could be further extrapolated into reasonable revenue projections based on average conversion rates and cost-per-click values. Pretty handy for a business that relied on the fickle general public.

    Weapons of Mass Destruction

    Efficiency and innovation

    Accounting models are often used to make cuts in terms of manpower. What they fail to do however is ensure that the cuts are sufficiently surgical. This is less of an issue in a conventional manufacturing setting where there is likely to be a degree of redundancy in skills due to process design. Business management theory and analytical tools came out of this industrial age. Software and web services follow much more of an artisan model – great coders like mathematicians can find elegant solutions to problems through intuitive leaps forward.

    Although there is a large amount of outsourcing to cheaper countries, many successful breakout products or features are developed by small teams or even individuals for example:

    • Andy Hertzfield – the MacOS QuickDraw 2D graphics library that has been used for over 25 years and is only now being phased out in the latest versions of OSX
    • Cal Henderson and Stewart Butterfield – Flickr and Glitch
    • Joshua Schachter – Delicious
    • Linus Torvalds – Linux kernel

    However spreadsheet models often don’t recognise who these rock-stars are.

    What this means is that in a time of cuts the very people who could drive the innovation that would fuel future growth are let go or choose to leave because their area has been hacked to pieces. A classic example of this under Carol Bartz was the Flickr team: George Oates was let go and others like Paul Hammond, Seth Fitzsimmons, and Matthew Rothenberg departed.

    Carol Bartz quite rightly once said that ‘you can’t cut yourself to growth‘, but you can’t outsource it in the longer term, you also need the tinkerers and the thinkers in the organisation creating the innovation seed corn to drive that future growth. There doesn’t seem to be a spreadsheet model that takes adequate account of this.

    Niches versus the mainstream

    Back when I worked at Yahoo! there was an inordinate amount of attention paid to the number of unique users that properties got. This is important for a service like search that is universal in its appeal, but a general purpose metric like unique users falls down flat for many other properties that have a specific context around it.

    Let’s look at three examples:

    • In the West, Yahoo! Answers has a substantial user base of unique users, but a quick look at Google Adplanner shows that this user base is skewed to lower socioeconomic groups who are time-rich, but cash poor. This means that it could be hard to sell advertising inventory to many brands and the corresponding cost of inventory is likely to be cheaper
    • Yahoo! image service Flickr, has far less pictures than Facebook; but it is a highly engaged community of people passionate about photography and the creative classes. Facebook is like the digital equivalent of Prontaprint – who used to publish their film envelopes in local newspapers and develop the general public’s holiday snaps. This means you could charge more for the service, which is why Flickr has a freemium offering and come up with creative marketing packages for advertisers
    • Social bookmarking pioneer Delicious was a slow growing property beloved of geeks and the creative classes. Attractive both because  of its audience’s demographics but also the level of insight available from the data that these people provide voluntarily. A creative marketing vehicle similar in nature to Twitter’s promoted tweets has the potential to be a premium-priced product for advertisers

    However using spreadsheet models with metrics that lack distinction Yahoo! Answers looks like a great product whilst Delicious and Flickr look marginal at best. It is no coincidence that Flickr had an outflow of talent under Carol Bartz and Delicious was sold after a protracted period of uncertainty about the service’s future.

    Ultimately tools that can create a flawed understanding can be more damaging than no tools at all. Carol Bartz was brought into cut a business that she didn’t understand that well (it wasn’t anything like her previous roles) and had analytical tools at her disposal that weren’t sufficiently finessed for a modern information economy-based company. You add this to Bartz dogged personality and you can see at least part of the reason by she was not able to turn the company around. More related content can be found here.

    More links

    How not to run Yahoo! – I, Cringely
    Yahoo! Announces Leadership Reorganization – Yahoo!’s official statement

  • Beyond The Crash by Gordon Brown

    On leaving office, Gordon Brown immediately spent a lot of time hammering out a book Beyond The Crash. Unlike Peter Mandelson this wasn’t the Westminster equivalent of a sordid kiss-and-tell exposé or a Tony Blair-esque sales brochure to secure speaking engagements. Instead Brown set out to do what he does best, putting on page deep thought and analysis about the knotty problem of global finances. He did an excellent job of marshaling ideas and sources in the book. His grasp on Asian economics and China in particular is very good. There is a whole section on the Asian crisis of 1998 which is well worth reading on its own.

    In this respect, the Beyond The Crash is a solid piece of work, Brown isn’t as compelling a writer as other economic thinkers that the Labour party has looked to like Will Hutton; but he does a good job at making his ideas and concepts understandable to the average reader.

    Where things go wrong with the book is where Brown tries to humanise his writing. His comments of praise for colleagues and other politicians feels wooden, as if it was written into his book as a postscript. And it is because of this that we see a glimpse of Brown the politician; the polar opposite of his predecessor Tony Blair. Someone who thought at great depth and knew what to do but didn’t have the surface finish.

    If you are prepared to persevere with the book, it is a good read, and is currently for sale in Amazon Marketplace at a massive discount to the cover price. More book reviews here.