Pursuing your online customers, one by one

Fetchback offers on-line retailers a re-targeted model of advertising to bring back lost buyers. It’s propbably the closest call to ergonomic advertising so far. Fetchback bases it’s principles on the fact that over 98% of internet users venture off retail sites without closing purchases. So what it does is chase them around the web after they have abandoned the retailers site without buying, to try to get them focused again and close the purchase.

How does it work? Let’s say I use Google to find a shop where I can purchase gangsta-rap. I find it, but as I navigate it I get distracted by some urgent calls, a Skype window or my doorbell. By the time I return I have too much going on and forget to continue the selection process… Ops! they lost me.

So, later that evening, I am musing over my Facebook profile tagging some friend’s picture, I am relaxed and having fun… Suddenly I see the gangsta-rap ad… Aha! I remember that! I wanted to get something there… let’s see, let’s see…. So there I venture, see some stuff I like, and make a purchase… fetchedback! that’s for sure ;-)

So, I like the principle, it’s very, as I said, ergonomic, (and also rational) and I like the concept: it’s not spam, it’s a friendly reminder. However, it would be nice to know if they will ever be able to figure out if you ventured off because nothing interested you or if you just got distracted… the quality of the conversion rates of their advertisers will tell them soon… Looking forward to see how it evolves!

A no-loyalty content business

People try to make an analogy between newspaper and classifieds. But when it comes to the evolution of newspapers in Internet and the evolution of on-line classifieds, we sometimes forget one major difference: in classifieds, there is not the same brand loyalty as there is in newspapers. Classifieds, from the user perspective, are a tool to an end. Newspapers are an information and opinion space, a subjective and intellectual and ideological factor way beyond purchasing goods is at stake here. Users of classified publications need a marketplace and some tools to best complete an informed transaction. Newspaper reading is a totally different story.

This is why Craig disrupted the industry. This is why employment boards took the lion-share from print media. They give the marketplace and they give the tools to better purchase and make informed decisions in the marketplace.

When we focus so hard on brand, we have a point. If you were the best classifieds editor in print, maybe this will leverage your on-line brand. But wait: what if instead it penalises it? What if instead you are seen as a print monster, slow, not internet oriented and dusty? This is the flip side of the coin that many in the industry struggle with. Re-branding or going vertical or niche is a vogue now and it has worked for many publishers. I wonder what’s the next step after this, and I don’t just mean networks and communities, I wonder what a serious disruption could bring to the scene…

Who’s the female Peter Pan? {+ carbon footprint}

It’s me.

I keep thinking how I can be so lost in space at 35. Interestingly enough, at 35 I am having all the kinds of torments that 25 year olds have (I think). I am having all the fun I should have had back then, and I am asking myself all the questions I should have asked myself and others then.

I have discovered Kant, Mussorgsky’s Godunov, Erica Jong and Carmen MacRae… A bit late for all this, right? It is indeed. But I do not care. I like day dreaming (where possible), but I stopped feeling guilty about it. I started thinking about serious relationships (but not too much, so not too seriously), about loneliness and lifelessness, about not attending to family or to the theatre enough, about travelling as a modus vivendi, about not getting enough fiction in my reading, about not travelling to see lifelong friends, about forgetting the names of the children of my friends, about the virtues of healthy living, about face lines and maturity…

All these issues, the immediate ones (except the all-consuming, all prevailing work & career topic), are making some noise for me. It may all sound very blasé, passé, Bridgetjonesian or just plain prosaic. But this exercise of self-indulgence is sometimes fun. Just for the writing ;-)

And after the spree of s.i prose, here’s some food for thought in the form of a new research paper. It’s for those of us with a guilty conscience about our carbon footprint. Because it seems the EU is still being very shy about in its efforts to cap carbon dioxide emissions from passenger flights. More information at the Tyndall Center for Climate Change Research

Scrum-o-matic and the time box

“Scrum is an agile software development method for project management. It enables the creation of self-organizing teams by encouraging co-location of all team members, and verbal communication across all team members and disciplines that are involved in the project”

A key principle of Scrum is its recognition that fundamentally empirical challenges cannot be addressed successfully in a traditional predictive manner. As such, it adopts an empirical approach – accepting that the problem cannot be fully understood or defined, focusing instead on maximizing the team’s ability to deliver quickly and respond to emerging requirements

The Dad of Scrum (Scrum Daddy…?) reminded me the other day that “everything is happening in a time box”. He has a point. I agree, if you’re working on a product and some part is missing, then… it’s not finished, right?

I like this heavy handed approach to challenging a product and development team: So… only 95% of specifications are done…? It’s incomplete! So… almost all code is written but X or Y function is not tested…? Go back and test! So… you did not reach pass rate in acceptance testing…? WTF are you thinking! (You could go on like this for quite a few iterations and variations therein…).

And he’s right. If it’s not working, documented, tested, reliable, working (again, again, again…), usable (as in: has functions for end users) is understandable… then… It’s just maybe not there yet.

Go back and make it something that can be called a product!

So, with this, Scrum Daddy was hammering some software engineering teams at Google in an on-plex conference. I liked a lot the concept of deliver-ability associated to the whole Scrum thing: in the time box, which is finite, there is a clear deliverable: It’s something that is ready to go and make your company some $$$.

This immediately eliminates incremental crap: you cannot really sell crap (or let’s say dis-functional functional objects ;-) in a sustainable manner. But you can make cross functional teams of real veterans and thinkers in your company, to ensure that at the end of each sprint you have, infact, moved forward.

 

Some clear and resounding comments from Scrum Daddy remained:

1. Velocity under pressure = drop in quality (for the most part)
2. 12-14h days statistically = +60% defects (which, BTW, will double-to-triple the cost of defect management and almost certainly kill the ROI of the product)
3. Over 65% of functionalities delivered and maintained are rarely used (“if at all” amount to 15% of those)

So, now that I got it out of my system, let me just give you the briefing on what Scrum actually is (besides a way to re-start a game of rugby).

Here comes the official list of characteristics of Scrum:

A product backlog of prioritized work to be done

Completion of a fixed set of backlog items in a series of short iterations or sprints

A brief daily meeting or scrum, at which progress is explained, upcoming work is described and impediments are raised

A brief sprint planning session in which the backlog items for the sprint will be defined

A brief sprint retrospective, at which all team members reflect about the past sprint

Great! But who actually does all this? Scrum teams are divided into roles. There are a number of them, but basically 2 groups: Pigs and Chickens

Pigs are committed (as in: pigs are “ham”) to building software regularly and frequently, while everyone else are chickens (as in: chickens lay “eggs”) that are interested in the project but are really irrelevant because if it fails they’re not a pig, that is they weren’t the ones that committed to doing it, their legs will not be roasted! The needs, desires, ideas and influences of the chicken roles are taken into account, but not in any way letting it affect or distort or get in the way of the actual Scrum project.

If you need more detail on the roles which are encompassed by pigs or chickens in Scrum, get the overview to start thinking hyper-productively

Boris Godunov: opera, 4 acts, prologue

This Opera by Modest Mussorgsky (in picture) is one of his few finished and a true masterpiece. It’s based on Alexander Pushkin’s drama of the same title and Nikolai Karamazin’s History of the Russian Empire.

The opera, which I discovered in a record store in Moscow, takes place in 1598-1605 between Russia and Poland.

It’s a tragic story about the regent of young tsar Fyodor, Boris Godunov. He arranges the murder of the half brother and successor to Fydor, Dimitrii, in order to seize power. Upon Boris’ death he declines to take it, but the crowds acclaim him and he takes the throne, albeit riddled with guilt.

In the monastery of Chudov, old monk Pimen is writing a chronicle of Russia and tells his novice, Gregorii, Boris Godunov’s story. Gregorii, to avenge Dimitrii, pretends to be the murdered and escapes to Lithuania with vagabond friars Varlaam and Misail.

Back in the Kremlin Boris is told the story of the pretender and, although he is reassured of Dmitrii’s assassination, falls into hallucinations over the story of Gregorii.

In Poland, Marina, urges Grigorii, her lover, to become the tsar. In the Kromy forest people rally him to Moscow. In the meantime, in Moscow, the boyars hold an emergency meeting: Pimen has been narrating the ongoing madness of Boris, confirmed upon his entrance. Finally it seems he is miraculously cured form hallucinations before the tomb of Dimitrii, where he himself encounters his own death bidding his farewell to his son and saying his prayers for Russia.

I recommend this monumental opera, always in the original Mussorgsky version and libretto.

Helping newspapers go interactive…?

Local advertising is more than 80% of ad sales for newspapers, yet it comprises less than 20% of online advertising sales. This fact is one of the bottom-lines fuelling the activity of the product Adget, offered to publishers by Canadian firm NewspaperDirect to assist in bridging this gap.

 

This new kind of ad allows users of news websites to interact with businesses advertising in them without ever leaving the news site. What Adget is doing is allowing users to perform simple actions to complete a number of operations: make appointments, book a table, request a quote, make a purchase… and all of it without ever leaving the news site. If you just saw the latest SUV model and want to order a test drive with your nearest dealer, this product enables you to do it in a quick a simple manner in the news site.

 It’s an option also for online classifieds, especially for those moving their business from print to web. Much like calling services like the veteran eStara, which puts you in contact with the business without you having to pick up your phone, this enables many different models of contact and keeps the user in the marketplace. So it’s not just a “get called back” option, which is nice. You can book a meeting with a real estate agent, create a full day agenda of visits, plan a brokerage spree with a few financial advisors, shortlist the meetings with car resellers of your choice and many more actions in an intuitive and simple manner and, best of all, without ever leaving the marketplace that’s providing the incremental choice for you to keep increasing your options.

Will be interesting to see where adgets to…

Some stuff on M&A

I read an interesting paper the other day by M&A veterans Terry Gambill and Bill Hodge. It’s quite cool because they address many of the issues related to M&A risk and how when they fail, THEY FAIL, in a simple and pragmatic manner. Here are some of the things I liked most about their paper Legitimate reasons for a business merger include:

Expanding your markets
Acquiring people, systems or processes
Acquiring new products, services or customers and creating opportunities for cross-selling
Achieving economies of scale
Reducing expenses
Acquiring new distribution systems
Eliminating competition (Gosh, I love this one ;-)

Ultimately, however, all legitimate reasons for contemplating an acquisition or merger fall under one all-encompassing: the desire or need for quick and substantial growth.

I am guessing by this they mean that if you’re looking for long-term incremental growth, maybe this is not the right approach….? Any comments?

They then suggest that to tell if an acquisition makes sense for your business, you should ask three simple questions:

What are the different ways I could grow my business?
Could an acquisition help me achieve that growth?
What larger, strategic goals will that growth help me accomplish?

Our experts also recommend a series of questions before any merger and acquisition deal:

1. Will this acquisition increase our profits?
2. Will it improve the balance sheet?
3. Is the risk acceptable?

If you can’t answer “yes” to each question, they suggest, don’t do the deal.

What makes for a good acquisition?

According to Gambill: “Having a solid foundation in place, meaning your people, systems and resources are sufficient to handle integrating another company”. Frankly, after being in operations during a number of acquisitions in my lifetime, I have to say I agree with this statement. If you can’t swallow it, don’t eat it. And add to this the regulars in methodology and planning:

A well-planned merger or acquisition strategy, realistic plans in terms of expectations and time schedules, appropriate price and terms & realistic debt load, clear and well-executed people/transition plans, reasonable additional capital investment requirements, clarity around your expectations for the deal

Formulating a business merger or acquisition strategy requires 4 basic steps:

1. Identify your goals
2. Consider other alternatives
3. Establish key parameters for the deal
4. Create an acquisition criteria sheet

Have inside your company the following pieces “ready” to integrate the merged company:

Adequate computer and information management systems, management teams, financial planning and reporting and human resources

Ask yourself critical questions

Does the company to be acquired clearly fit into my growth strategy? Will the acquisition increase my competitive position or my profits, either through growth in revenues, efficiency gains, breakthroughs in technology or some other quantifiable measure? Will the transition work smoothly? Will the two companies integrate well, physically and culturally? Am I paying the right price? Do I have the right deal structure? Does the present value of the cash I expect to receive from the deal exceed what I will pay for the business? What synergies – either in terms of revenue enhancements or cost reductions – do we intend to achieve? How and when will we achieve them?

And remember that…

The method used by a buyer to value a seller candidate is unique to acquisitions; valuation is seller candidate-specific; price and value are not the same thing

Finally, the experts propose 10 actions that must be followed to smooth the process:

1. Set crystal-clear performance expectations and communicate them to all levels of both organizations
2. Lay out what the transition will look like for everyone
3. Address the WIIFM (what’s in it for me?) factor
4. Create the transition plan before you sign the deal
5. Get involved and be visible
6. Hit the ground running and make quick decisions
7. Don’t confuse cultural differences with politics
8. Avoid unplanned turnover
9. Keep the best of the best
10. Don’t put new people in new jobs

What are the main ingredients of a failed analysis of the deal’s synergies?

Among the most frequent issues our experts suggest elements such as bad chemistry and cultural conflicts, unrealistic expectations and failure to see the potential impact on core business. They include lack of or a poorly implemented transition plan and due diligences that ignore red flags. Surprisingly, they also mention emotional buying and, of course, an unrealistic debt load and the failure to spend money on professionals ;-)

Next time, I will blog more on risk control, negotiation, transition and integration.

The Leisure Measure

In a paper on trends in the consumption of leisure of Americans, Mark Aguiar of the Boston Fed and Erik Hurst of the UC Business School have discovered that people in the US in the last 40 years have gained many hours of leisure time.

The research shows people have now 4-5 extra hours of leisure per week versus 1965, which translates in 5-10 weeks per year based on a 40 hour week. I bet nobody would feel they have gained any down time if you asked working professionals all over the US. 

Interestingly, the International Labour Organisation still supports the supremacy of output per worker in the US as well as their leadership in worked hours versus other industrialised economies.

The ILO report, entitled Key Indicators of the Labour Market (V Edition), indicates that the U.S. still leads the world by far in labour productivity per person employed in 2006 despite a rapid increase of productivity in East Asia where workers now produce twice as much as they did 10 years ago.

What’s more, the report also shows that the productivity gap between the US and most other developed economies continued to widen. The acceleration of productivity growth in the US has outpaced that of many other developed economies: With US$ 63,885 of value added per person employed in 2006, the United States was followed at a considerable distance by Ireland (US$ 55,986), Luxembourg (US$ 55,641), Belgium (US$ 55,235) and France (US$ 54,609).

However, Americans work more hours per year than workers in most other developed economies. This is why, measured as value added per hour worked, Norway has the highest labour productivity level (US$ 37.99), followed by the United States (US$ 35.63) and France (US$ 35.08).

Increase in productivity is mainly the result of firms better combining capital, labour and technology. A lack of investment in people (training and skills) as well as equipment and technology can lead to an underutilization of the labour potential in the world.

In East Asia where productivity levels showed the fastest increase, doubling in ten years, output per worker was up from one-eighth in 1996 to one-fifth of the level found in the industrialized countries in 2006. Meanwhile, in South-East Asia & the Pacific productivity levels were seven times less and in South Asia eight times less than in the industrialized countries, the report reveals.

In the Middle East and Latin America & the Caribbean, the value added per person employed is nearly three times less than it is in the developed economies; in Central & South Eastern Europe (non-EU) & CIS the level is 3.5 times less, and four times less in North Africa. The widest gap is observed in sub-Saharan Africa where the productivity level per person employed is one-twelfth of that of a worker in the industrialized countries.