Saturday, April 01, 2006

You Only Know How Much You Use A Product Until It's Down

I didn't really realize how much I've come to rely on del.icio.us until it went down today. Tagging is so much better than old-fashioned bookmarking, it's not even funny.

What are some products that would disrupt your life if they went down?

Wednesday, March 29, 2006

Pop Culture, Parenting, And The Apocalypse

Pop Culture, Parenting, And The Apocalypse

I read this article in New York Magazine on the new breed of hipster parents with an uneasy mixture of amusement and horror.

For me, everything that is wrong with these people is summed up in the following quote:

“You have to have a little bit of Dora the Explorer in your life,” he says. “But you can do what you can to mute its influence.” Okay. “And there’s no shame, when your kid’s watching a show, and you don’t like it, in telling him it sucks.” Yeah! There’s no—wait. What? “If you start telling him it sucks, maybe he might develop an aesthetic.” Sorry, son. No more Thomas the Tank Engine for you. Thomas sucks. Stop crying. Daddy’s helping you develop an aesthetic. Now Daddy’s going to go put on some thunder music.

But isn’t there something unsavory in the idea of your kid as a kind of tabula rasa for you to overwrite with your tastes? Less a child than a malleable Mini-Me?

“It’s hard to say right now, because most of these kids are between the age of zero and 5,” says Pollack. “So they’re still . . . I don’t want to say accessories, but they’re still moldable. You can still sort of play with them.” Although, if you’re planning to take this parental approach, you’d better make damn sure you’ve got good taste. “I find myself arguing with dads about the music their kids like,” he says. “One guy was telling me his son was really into Wilco. And I was telling him that’s lame. Because Wilco is so over.”

The author of the article calls these people Grups, after the eternally arrested adolescents in a classic Star Trek episode. I call them selfish, self-centered narcissists.

And I should know narcissim, being a card-carrying member of the club.

Trying to make your kids into cool fashion accessories is no better than forcing them to get crew cuts, use Brycreem, and wear suits all the time while listening to Perry Como.

For God's sake, people, let the children be who they want to be. They'll have plenty of time to become consumerist conforming non-conformists when they go to high school!

Monday, March 27, 2006

How Playing Chicken Hurts Your Business

How Playing Chicken Hurts Your Business

As a high-tech marketer, I get a lot of pitches from lead generation companies.

As anyone in the field knows, leads are the lifeblood of a B2B business. Lead generation is always on your mind, and finding programs that work can be one of the most satisfying part of the job.

The problem is that it's hard to know what's going to work in advance. Search engine marketing may work for some, but I've found it unprofitable. I've gotten a lot of mileage out of outbound telemarketing, but other businesses may get better results out of direct mail.

Every business is different.

But what all of us marketers have in common is that we don't have enough money to try everything. Especially as a startup, we need to focus.

Part of that focus is a ruthless willingness to be up front about my skepticism.

Today, I got a cold call/email from a lead generation company that was pitching the usual services. I replied:

"Our general position is that for new programs such as yours, we'd like to figure out a way to structure all fees on a success basis so that we know that we're meeting our cost per lead targets. Is this something you can do for us?"

In response, the CEO of the firm responded:

"We have been down that road before (invested $1M in operations) and in my opinion it is ineffective for both companies. You will never lower your cost of acquiring a new client in this model. There are a host of other issues that we can discuss as well.

Attached is a document that describes our typical engagement: process, pricing and expected ROI."

Let's take a closer look at his two mistakes.

1) He dismisses my desired business model by claiming that it won't work for me. Now this is pretty silly. If I'm paying purely on a per-lead basis, how would I not be able to lower my cost of sales? I'd respect him far more if he simply said, "That's not the way I do business. I find I can't make money that way."

2) He then goes on to compound his error by sending me a form-letter proposal. I can't and won't post the whole thing here, but by providing a pricing and ROI model without ever asking me about my specific needs, he pretty much guarantees that it will seem wrong to me.

What should he have done?

First, he could be honest about his reasons for not wanting to take my proposal. He could say that it was unfair for him to shoulder all the risk, and that it hadn't worked out for him in the past.

Second, he could say something like, "But perhaps if I understand your particular situation, I can come up with a counter-proposal that would address both our needs," and then find out what I actually want.

The fact that he didn't take these simple steps reveals that either he isn't a good salesperson, or he is lazy, and simply takes a spray-and-pray approach to his business development. Neither bodes well for my hiring him to boost my sales!

At the end of the day, the dance between vendor and client is like the old-fashioned game of "Chicken," where two vehicles drive towards each other on a collision course, with the first one to swerve being the loser.

Neither party knows the other well enough to feel comfortable trusting them too much.

Both would prefer that the other incur all the risk--the vendor wants an up front payment, the client wants a purely back-end payment.

Unless one budges, the situation will never end up in a sale.

However, the wise businessman knows that negotiation isn't a simple, zero-sum game. You should try to find ways to bridge that trust gap.

In our case, we recently committed a large amount of money to an outsourced telemarketing firm. They insisted on charging on an hourly basis, and they weren't cheap. But we were willing to give them a shot because someone we trusted a great deal had worked with them and was willing to vouch for them.

By leveraging contacts to bridge the trust gap, they were able to get what they wanted (per hour pricing), while we got what we wanted (the confidence that they would deliver for us). Had we simply stuck to playing chicken, the deal never would have happened, and both parties would have been far worse off.

So when the temptation arises for you to play chicken with your potential clients, remember that negotiation isn't a straight-line affair. Find ways to bridge the trust gap and understand their specific situations, and you just might end up making the sale.

Sunday, March 26, 2006

Is Black Culture Holding Black Men Back?

Is Black Culture Holding Black Men Back?

Professor Orlando Patterson of Harvard University has an interesting op/ed piece in the New York Times this week (courtesy of Ben Casnocha's del.icio.us feed).

In it, he argues that social scientists have failed to come up with effective solutions to the plight of America's black youth, especially young black men, because of an dogmatic unwillingness to look at a group's cultural attributes as a potential cause, preferring the usual explanations of low incomes, joblessness, poor schools, and bad housing.

These explanations, Patterson argues, have been discredited.

What has happened, I think, is that the economic boom years of the 90's and one of the most successful policy initiatives in memory — welfare reform — have made it impossible to ignore the effects of culture. The Clinton administration achieved exactly what policy analysts had long said would pull black men out of their torpor: the economy grew at a rapid pace, providing millions of new jobs at all levels. Yet the jobless black youths simply did not turn up to take them. Instead, the opportunity was seized in large part by immigrants — including many blacks — mainly from Latin America and the Caribbean.

Patterson tackles the reasons why scientists have avoided cultural explanations--the worries that they blame the victim and are deterministic, and the sense that culture cannot be easily changed--and demolishes them.

Indeed, he uses one of my favorite rhetorical techniques, which is to use a counterexample that the expected objectors cannot dismiss without revealing themselves as rank hypocrites:

Third, it is often assumed that cultural patterns cannot change — the old "cake of custom" saw. This too is nonsense. Indeed, cultural patterns are often easier to change than the economic factors favored by policy analysts, and American history offers numerous examples.

My favorite is Jim Crow, that deeply entrenched set of cultural and institutional practices built up over four centuries of racist domination and exclusion of blacks by whites in the South. Nothing could have been more cultural than that. And yet America was able to dismantle the entire system within a single generation, so much so that today blacks are now making a historic migratory shift back to the South, which they find more congenial than the North. (At the same time, economic inequality, which the policy analysts love to discuss, has hardened in the South, like the rest of America.)

While Patterson does not feel he has all the answers (he is arguing, after all, that social scientists need to do research in this area so that they can actually draw some conclusions), he makes the interesting argument that the reason young black males experience many of their problems is because of the mainstream culture which has a strong economic interest in glorifying the "cool" but devastating gangsta culture.

Several years ago, one of my students went back to her high school to find out why it was that almost all the black girls graduated and went to college whereas nearly all the black boys either failed to graduate or did not go on to college. Distressingly, she found that all the black boys knew the consequences of not graduating and going on to college ("We're not stupid!" they told her indignantly).

SO why were they flunking out? Their candid answer was that what sociologists call the "cool-pose culture" of young black men was simply too gratifying to give up. For these young men, it was almost like a drug, hanging out on the street after school, shopping and dressing sharply, sexual conquests, party drugs, hip-hop music and culture, the fact that almost all the superstar athletes and a great many of the nation's best entertainers were black.

Not only was living this subculture immensely fulfilling, the boys said, it also brought them a great deal of respect from white youths. This also explains the otherwise puzzling finding by social psychologists that young black men and women tend to have the highest levels of self-esteem of all ethnic groups, and that their self-image is independent of how badly they were doing in school.

I call this the Dionysian trap for young black men. The important thing to note about the subculture that ensnares them is that it is not disconnected from the mainstream culture. To the contrary, it has powerful support from some of America's largest corporations. Hip-hop, professional basketball and homeboy fashions are as American as cherry pie. Young white Americans are very much into these things, but selectively; they know when it is time to turn off Fifty Cent and get out the SAT prep book.

For young black men, however, that culture is all there is — or so they think. Sadly, their complete engagement in this part of the American cultural mainstream, which they created and which feeds their pride and self-respect, is a major factor in their disconnection from the socioeconomic mainstream.

The irony here is that "the man" is holding black youth down--by glorifying a self-destructive culture which whites then enjoy from a safe distance. I can't help but be reminded of Dave Chappelle's recurring sketches on the dangers of "Keeping it Real," where black men and women ruin their lives in an attempt to "keep it real."

P.S. A final thought: The first thing I did after finishing the article was to look up Professor Patterson's picture to see if he was black, because I knew that if he was white, Harvard was going to fire his ass. What does that say about racism and academia?

P.P.S. A group of black law professors at George Washington University have a group blog, and point out that what Patterson does not do is to tackle the question of what should be done about the issues he identifies. What Professor Adrien Wing points out is how the mainstream media focus almost entirely on athletes and entertainers, rather than the likes of Barack Obama and Colin Powell, or other success stories in business, education, the church, and just plain old ordinary life.

The Housing Crash's Canary In A Coal Mine

The Housing Crash's Canary In A Coal Mine
Ever wonder what a housing crash might look like? Just visit Merced, California.

This LA Times article lays out the bloody facts.

Just 100 miles from Silicon Valley, Merced and other edge cities were booming, thanks to all the folks looking for affordable housing.

Last year, housing prices rose 31%.

This year, sales have dropped through the floor.

"The good times have already ended here, in the same way slamming into a wall reduces your speed. A house will fetch 20% less today than it did last summer, brokers say, assuming it finds a buyer at all."

During the boom, the number of registered real estate brokers shot up from 200 to 1,200. Now?

The only thing worse than the real estate market here is the market for real estate agents. They've been coming down to the Auto Toyz and Auto Store used-car lots looking for work.

"Everyone who applied recently, about eight people, they all were Realtors," said Nico Pineda, who until recently was hiring manager for both lots. "But things were slow for us, so we had to turn them down."

Merced is an extreme case. It's a relatively low-income area. There was enough open space for builders to add over 7,000 homes--in a city of 77,000. And the prices had skyrocketed in the past few years.

Nonetheless, Merced is typical of this boom in a number of ways. One of them is the proliferation of risky adjustable-rate loans.

Before the escalation began, 8 out of 10 home buyers in Merced County got a safe, fixed-rate loan, according to research firm DataQuick Information Systems. As the boom proceeded, interest rates fell, which should have increased the appeal of fixed-rate loans.

Instead, buyers switched to adjustables, which saved them money in the short term at the cost of a riskier future. By last summer, 80% of buyers in Merced got adjustable-rate loans.

This presents an opportunity for mortgage broker David Alan Love. He bought a list of 2,000 people who are late on their mortgage payments by at least 30 days, and he is sending them all a letter. "Home values are coming down," it says. "Call me NOW!!"

Another is rampant speculation. The saddest part of the story may be the tale of woe for this investor:

Liubo Hong, a Silicon Valley engineer, bought a four-bedroom on University Drive in February 2005 for $312,000. He's been trying to sell it since October for $389,500.

In the late '90s, Hong said, "I got caught up in the stock market. I got in near the peak. I wish I had gotten in earlier." He's trying to rectify that mistake with real estate. "The market may get better in the spring," the engineer said with hope in his voice. "Or next year. Or in three to five years."

The leaflet for Hong's home calls it "ideal for investors." But he's receiving only $925 a month in rent, less than his mortgage, and Merced is running low on fools.

Merced may be an extreme case, but every coal mine needs a canary. And the one in this cage just keeled over, dead as a doornail.