Last Friday night we were heading home from visiting some friends in Lanikai. We decided to pull over and walk down to the beach to look for Mars, which is very “close” to earth this month and shining bright in the sky. We were gone no more than 20 minutes, yet in that time the front window of my car was smashed and my purse was stolen. With my iPhone 3GS inside, wallet and credit cards, and a few coupons and lip balm.

Luckily, Shane had his phone on him, so we could call the police and report the incident. I was not freaking out. To many people, the loss of phone and wallet is truly like losing major parts of oneself! To me, it was an opportunity to let technology work for me, and of course, get a new iPhone 4! I could barely wait to get home and start tracking where my phone was IRL (in real life.)

My Tech and Internet Guardian Angels

I had enabled the “Find My Phone” feature that interacts with the GPS on the device. As soon as I got to a computer, (any computer with a web browser would do), I logged in and could see right where my phone was: Kalanianaole Highway near the Circle K/76 Gas Station in Waimanalo. I could then follow it to the back yard of a specific residence. With a Kailua policeman standing over my shoulder, he was calling his counterpart who was knocking on the door of the residence.

At that moment I sent a loud, shrill sound for 2 minutes to my iphone, hoping the officer could hear it, though the phone, as I said, was far in the back yard behind the house. Alas, he could not hear anything, and the person at the door declined any further investigation. So I sent the signal again, only this time it did not go through. So I then issued the command, literally!, to my phone, to “wipe” the entire contents of the phone.

This would preserve all of my personal information and prevent the thief from accessing me. Think for a moment – this is the future we imagined in science fiction, only I am living it now.

My Mobile Me account also lets me sync all of my contacts, calendars, and email via the web, so I could access them from anywhere. This is great if someone steals your computer and your phone! It also restores all of my information to my new phone/computer the instant I plug it in and add my Mobile Me credentials.

American Express Credit Card Registry
I pay $39 a year for this service. In the case of my stolen wallet, all I had to do was call one number at AMEX, and they would cancel all credit cards associated with my social security number (or only a subset if so requested on the phone) “immediately.” The cacth here is that I did have a Visa/debit card from my business checking account in my wallet. They did not find that one, (it “belongs to the business tax id not my personal SSN) and my intuition kicked in after playing on the computer watching my phone roam around Waimanalo. So I called the bank, and sure enough two transactions had just been made at the Circle K/76 Station, one at 11:11 pm and one at 11:16 pm. So now we can connect the “fraudulent use of a credit card” with the time stamp of the phone at the gas station. I am kinda glad now that the card had slipped through the cracks, as it will help the police crack this case more easily! I just know the Kailua cops are going to catch these folks one day soon. No doubt they were frustrated as the other 4 cards they tried to use, failed on them.

My Amex card was delivered by Express Mail and arrived Monday morning (the theft was reported around 10 pm on Friday night.)

iPhone and iTunes: The Secret Sauce
What can I say? These two things are the core of my life, and it is because they work so well that i did not freak out even for a moment over my stolen purse. Once I was able to get a new phone (NOT easy! The island was sold out till I found one at Radio Shack in Kailua – and I did not even know they were sold there!), all I did was plug it into my computer. Instantly, all of my notes, music, text messages, apps, settings, etc. were restored!

Window Replacement
I logged into my Progresive Insurance account to report the incident on Saturday morning. I filled out a simple and smart form. An agent called about 4 hours later and gave me the location of Safelite, where I was able to make an appointment for 3 pm Monday. It took 45 minutes and only cost $168 – about half the retail price courtesy of my Progressive policy. If you read this blog, you know I love being able to do things digitally rather than on the phone.

Drivers License
Tuesday morning at 8 am I was at the WIndward Satellite Office of City Hall for the City and County of Honolulu. This is a gorgeous new-ish facility – especially compared to waiting outside the old one at the police station further down Kamehameha Hwy. Bright, colorful walls with art, and friendly staff. I had my new license in about 5 minutes (and a much better photo if I do say so myself!) Replacement cost: $5.

The bonus here is that since Shane had to drive me, he was able to get his renewed at the same time – and it was due to expire in a few months. It is one of those errands we tend to put off until the last minute, then stress over! Stress: no need.

Oh, and remember I got that new iPhone 4! Thanks to Mike and Pat at the Kailua Radio Shack. When the Apple Stores and the ATT&T stores have no phones, check your local Radio Shack! Five days later, I am back to normal, though I still am looking for a new “wallet” to keep my cards in. Your suggestions welcome!

At this point most writers would lecture you about your back up plans, your due diligence, your responsibility quotient, etc. But I’d rather just inspire you to embrace technology and let it be your slave too!

Aloha,

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Applying the logic of web site structure and internet information architecture to make better savers and investors out of us!

I am fascinated by the intersection of ideas and technology, much like how the Freakonomics guys merge economic data with crime stats and car seat fatalities to shine a brighter light on how we actually behave. Today I learned about some research being done in financial services with the goal of creating incentives for us to be more self-reliant in retirement. Researchers such as John Padgett have demonstrated “increasing autonomy” as a fundamental market behavior going back to the Renaissance in the 1500’s, and I see this as one more step in the development of human consciousness.

In the NYTimes article, Some Novel Ideas for Improving Retirement Income
By Jennifer Saranow Schultz , I really like the third suggestion, Tangible Mental Accounts:

Researchers have also shown that people tend to divide their money into separate mental accounts for various purposes (think travel or dining out) and that earmarking savings to specific goals (college savings, for instance) tends to increase saving rates.

Best of all worlds for me is to have one umbrella account with the “sub-accounts” to be arranged by me and adjusted over time. That way I have the convenience of seeing the bottom line yet the incentive to target savings based on my preferences. Very much like having a blog, where I can see the total number of articles in the admin, and can create my own categories and update them in real time as my interests develop.

The article also suggested being able to have different investment strategies for different goals – much like you could put more risk into a less important goals in hopes of getting lucky but not devastated if you don’t reach it. And use a secure, safe strategy to cover those “must-haves” for the imagined future.

We could also experiment with a type of tagging – one of the many useful tools that the internet has given us. Instead of filing a piece of information in one folder, it can now be in one main folder, tagged with descriptive keywords so that we can easily find it later. Tagging money in selected accounts might also help us feel more connected to our savings and therefore be more active in the process. What I am getting at is there is a logic already in place that could be applied to investing with great results and without having to completely re-invent something.

Hat tip to George Lowenstein, professor of economics and psychology at Carnegie Mellon University, for thinking along these lines. I so appreciate all the great minds and programmers who are working on our behalf all day every day. While there is plenty of so-called bad news, I tend to see enormous positive trends and the ones that rely on self-reliance are some of the most interesting. What about you?

Photo Credit: Ed Yourdon, on Flickr; she looks to me like a very self-reliant, autonomous woman!

Aloha,

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When I am doing social web training these days, at least once or twice an hour I implement what I call “Rox’s 180 Rule.” It is very simple, though not always comfortable to implement. As people and companies are learning how to participate on social networks, deciding what sorts of content to create, or even how to set pricing for web-based services, they initially experience that nervous pit in the stomach that comes from a lack of knowledge in the space. Travelers know this angst well – will I be scammed by unscrupulous merchants and fall into a tourist trap?

Most companies tend to move into research mode at this point and seek out what others are doing or attempt to guess what others would want. They find safety in being a copycat, even though that cuts off a key source of creativity right at the beginning: your own experience and understanding. The faster life moves, the less I rely on formal research. It’s something I am exploring in my personal life as well.

Instead I often recommend using the 180 Rule. Simply turn the tables and think of yourself as the customer. What would you want? How would you want to be treated? How much information is too little or too much? What would you be willing to pay? What does that road look like from behind your own eyes?

The old hierarchies of the marketplace are gone now. Anyone can be a publisher, a reviewer, even a service provider. No one entity is in charge of your brand. Thanks to blogging and Twitter, even people who have never used your products can have more influence on buying than any other marketing channel! You can use this peership to your advantage though.

Bruce Fisher of Hawaii-Aloha.com runs a highly personalized travel service here in Hawaii and competes very successfully with the mega online travel agencies like Orbitz and Travelocity. Not only does he use internet platforms smartly he also understands the value of providing local and personal service. He gives what he wants to get: live customer service from people who actually live in Hawaii.

Likewise, 37 Signals, a very successful tech company that proves daily you can charge for your web-based apps, implements the 180 rule in their pricing strategies. They do often have the luxury of creating products with little initial competition. But even when entering such competitive spaces as online jobs, they rely on their own perspective: “What would I be willing to pay for this service and believe to be getting a good value?”

I think the side benefit of this 180 rule is that your business more organically attracts the type of customers who are a good fit for the things you are creating and selling. It’s one more aspect of having genuine conversations with the marketplace, starting in your own office and radiating from there.

Life can be this simple. Look at the situation from 180 degrees—not what would they want but what would you want—the next time you feel confused about how to proceed.

Aloha,

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As I have been discussing here in the past few months, the issue of payola, pay-per-post, freebies, and other incentives by marketers to entice blog coverage has come under review of the Federal Trade Commission. They have published new rules covering paid reviews and celebrity endorsements. The vote was 4-0 in favor.

Keep in mind, that just about all of us can be defined as “celebrities” when it comes to the internet. (Insert smiley face here.) In case you want to catch up on the back story:
Paid Bloggers Get Google Downgrades
Mahalo Mr. Solis (for talking about blogger payola)
Social Media Ethics: A Glossary

From the FTC Filing:

The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act. The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

I’ve posted a link to the actual filing after the jump so you can read it for yourself.

It will no doubt be a challenge to enforce this but the FTC recognizes what many of my blogger associates resist: that receiving compensation does affect coverage. At the very least, without compensation or freebies there is far less likelihood that said blogger would be paying attention to said marketer. And in today’s Attention Economy, attention is a most valuable commodity.

I am all for co-creative collaborations between brands and bloggers. I have a long record of encouraging brands to work with new media creators for the better bang for their buck than with traditional media. But we’ve got to stop thinking that just because many of us brought ourselves up by our boot straps, that we are somehow immune to influence. If anything, all of our free contributions to brand awareness makes us more vulnerable to seeking compensation and creating blurred lines of coverage IMO.

View the FTC legal filing on Scribd. I think it is up to both bloggers and marketers to develop their policies and share them publicly as applicable. What do you think?

Aloha,

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Many thanks to the Pacific Business News and the Star Bulletin for covering the recent So Much More Hawaii fam tour with mainland bloggers. I started this writing as a comment on PBN, but I have a rule that when my comments exceed two paragraphs, I move the conversation over to my blog for clarity and for support. (Plus, the Star Bulletin did not allow comments on Ms. Schaefer’s article and PBN does not allow links in their comments – both of which limit the conversation and tend to make me a little grumpy.) As I understand it, this blogger trip is not the first time Hawaii tourism has paid for blogger fam trips – though it is the first official blogger tour and significant campaign of which I am aware. Paying people to come here and write about us has its own issues that I addressed here and here.

Measuring Social Media Campaigns
I agree with Derek (a commenter on PBN) on the point that internet-based marketing campaigns can be far more measurable (and accurate and targeted) than traditional print, radio, and tv-based initiatives. He was responding to this item in the PBN article:

It is difficult to measure the effectiveness of online marketing, but Lu said it may be beyond calculation.

A lot can be measured ex post facto but some of the more critical elements require set-up in advance, not least of which is doing some baseline measurements “in the space” to compare pre and post data. The better social web monitoring services also cost real money, in addition to the time it takes to set them up.

The Hidden Costs of Social Media Campaigns
I am really proud of Christine’s persistence and the state’s willingness to dip their toes in the water. The additional collaborators (hotels, Hawaiian Airlines, Avis & the bloggers) all gave from their pockets to support Hawaii tourism – of which they are a vital part. This was a low-risk venture and hopefully a terrific learning opportunity for people new to social web marketing. This model may not be replicable or scalable though. My concern is that since it was done on the fly (and on the cheap), it may be hard to truly get a sense of what is possible on the social web.

Nonetheless we produced Podcamp Hawaii last year on the fly and on the cheap with outstanding results! (It’s how Christine Lu came to meet Nathan Kam who represents HVCB and David Uchiyama of HTA.) We had over 400 live attendees, thousands more who joined us via live video stream from around the world, and our “tag” – the short label referring to our event (#pch08) – was the #1 trending topic on Twitter for a day (in the world!) and #2 on Flickr (in the world!). We made a huge dent and had people all around the world dreaming about being in Hawaii. We had the support of HVCB, the HCC and many other local businesses. We gave them each a custom landing page on our site – a place to talk directly to our audience – and hundreds of additional blog posts, twitter messages, videos, live stream banner ads, etc.

There is no Podcamp Hawaii 2009 though – despite the hugely positive response. It’s a lot of work for a group of volunteers. I personally logged over 200 hours of my time producing the event – 100% volunteer for this community service. The tools are often free, but the time commitment is substantial with social media.

It is an age old dilemma – people want to try “new” things with very little investment. If it’s successful, it is part luck and part skill. If it’s not, pessimists think they prevail when in fact not enough was invested to make a dent. Remember, blogging has been around for 10 years now; CNN uses the same software Christine used to build the blog; etc. In reality, these are not “new” technologies.

We Are Beginning to Understand the Value of Online Networks
The Harvard Business Review has been covering the social web for years now. I tripped across this article from 2001 (!) today, pointing out the exponential value that is accrued within self-organizing, peer-to-peer online networks. Author David Reed, who called them “GFN’s” for group-forming networks, actually began his research in 1997 and states:

I’ve been studying GFNs for the last four years and have come to realize that they require a whole new way of measuring network value. Indeed, I think companies that can capitalize on the power of GFNs will gain the strongest competitive advantages that the Internet has to offer.

Caveat: I know Christine Lu and several of the bloggers personally and have been trying to persuade various tourism entities to learn more about the social web, Here’s just one recent example. The interactive web is not easy to understand from the outside, just like most foreign cultures. In this “place” there are people issues as well as software and technology issues, thus making “understanding” a daunting task to be sure. OTOH (on the other hand) it is a very open, embracing environment though and “newbies” are always welcome!

Want to Learn More?
Our local chapter of the global Social Media Club meets once a month and our meetings are free, open to anyone, and feature informative speakers and excellent networking. Our next event is Friday, June 12th at the ING DIRECT Cafe in Waikiki. Come join us, and learn why the Club’s tagline is, “If you get it, share it.” This month’s topic is “Online Reputation Management.”

Shane and I are also launching KnowHow Café – a place to learn more about the social web, online productivity, audio and video podcasting, blogging, Twitter, and more. Join our email list to be notified of upcoming online and live, in-person classes. Use the promo code “bfs” to help us know where you heard about us. We are mid-way through a six week course called “Getting Started on the Social Web.” I’ll be posting more about that in the coming week, time permitting! Once again, time is a critical resource on the social web.

With Aloha,

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I read today in Business Week that Google is getting increasingly sophisticated about tracking blog content that is somehow linked to compensation, alongside a discussion of pending rules from the Federal Trade Commission to cover paid product/service reviews in blog posts. 

A couple of years ago this really hit the fan with one of the first “official” PayPerPost blogging services launched. Bloggers who had earned a decent or better Page Rank saw their status tank to zero once Google realized they were being being paid for certain posts by advertisers.

To its credit, Google also penalized its own Japan division who used the pay per post tactic in an attempt to compete against Yahoo.

Bloggers who are compensated can use the “nofollow” tag within their outbound links to keep those links from being tagged by Google as paid content. I wonder how many bloggers and paying advertisers address this detail specified in their contracts? I love the convenience of logging in to my blog and finding links bout us – so I can go and thank them! The nofollow may well make that harder, but then again, if you are under contract I think it’s the buyer’s responsibility to track the postings of the paid blogger.

With perfect timing, the Social Media Club Question of the Week  (#SMCQ10) has been about “Free Content.” This goes hand-in-hand with the problem of paying people to talk about you. 

The early citizens of the internet have been providing free content of varying value (some of incredible value to be sure) without compensation. “Bloggers” and “Coders” are actually penalized the more popular they become, as they still have to pay for the web servers who connect all those readers/listeners/viewers to their content. Web users have become increasingly more savvy to advertising, and banner ads rarely compensate for the costs much less the value on certain blogs.

I think we are at one of those very klunky places in the transition from an old system, an old ethic, an old set of practices (largely defined by what was mechanically possible) and all new ones. In any transition there are going to be those who hang on to the old, as old is somehow always better in their minds. And of course there are the early adopters who favor the new just as strongly. 

This is further complicated by all of the psycho-emotional issues around “value” and around “what does it cost me.” It’s well established that people do not make rational or logical decisions when in purchase mode. I have a hard time with that as I personally do not like a lot of the gamesmanship that makes up so much of the sales process. I love the social web as it celebrates truth and transparency, as compared to truthiness and manipulative tactics. I am also very supportive of people doing what works for them – the crowds be damned. That means of course if you are someone who likes to kink things, you have the right to do that.

As awkward as things are right now, I think we are moving toward a marketplace where buyers and sellers have more even footing and therefore more responsibility and options. Readers can vet the bloggers to find out if they are paid or not for their reviews – though it should be much easier IMO. There are bloggers who think they are so independent, that they are not influenced. But hello, the very fact someone gave you something, is what started this discussion, now isn’t it? That’s worth sharing too – it only enhances your independent reputation for people like me.

I would prefer that companies who want to get in front of a blogger’s hard-earned audience, consider a more neutral and background NPR-style of true support, ongoing support, rather than a short term “we’ll wine and dine you to talk nice about us then c ya later.” That is largely self-serving (which I know, is not a bad thing per se) but it does not promote the long term sustainability of that high quality blogger. We all benefit from the independent blogger being able to keep telling it like it is – serving up not just the truth but the wide range of stories and connections and insights to her/his readers.

If the truth is getting harder to hide (because so many are recording and tracking so much) then surely truth as a strategy is becoming more efficient, if not yet more appealing.

Aloha,

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And do it all in less than 2 months.

“Whaaat?” you say. That’s right. This is another example of the power of the social web, of leveraging your network, of the network effect, of doing good and doing well, and so many other 21st century concepts made possible by the internet combined with intrinsic human traits. It’s also trust on the part of vendors, and it gets energy from the “bird in the hand is worth two in a bush” fact of life.

Rox’s Free Advice Sidebar:
If you are in the music industry, this describes an opportunity waiting to be seized. What if a publisher/distributor like Mountain Apple Company set up a site like this and offered something new and special every day/week? It would be a great way to get more people listening to Hawaiian music. It just takes a modern web developer and one or two people who really get social media.

If you are in the travel industry, what a great time to bundle deals like this! If Hawaii companies could collaborate on a similar site, and offer new bundles each month – I think this would improve the collective bottom line. And think of how much it would get people thinking and talking and dreaming about a visit to our piece of paradise.

What:
MacHeist is a software bundler web site. They aggregate different applications from third party vendors into a package and sell the bundle at a discounted price, an old business practice familiar to many of us. People love discounts, so they buy the bundles, even if they might not want or use everything in it, but because the things they do want are cheaper than list price. Each software vendor benefits from added exposure and added sales.

How:

• MacHeist recently bundled $980.70 worth of applications (13) for $39. The offer was good for 14 days tho pre-event publicity began about 6 weeks out.
  When you purchase a bundle, you immediately receive an email with download links and valid serial numbers for 10 of the 13 apps.


• When 400K was raised for charity, the 11th app was “unlocked”. When $500K was raised for charity, the last 2 apps were unlocked and available for download with a valid serial number.
  25% of all sales goes to charities that you can select during checkout: a specific charity or evenly divided among them all.
• When you buy a bundle and create an account, you are given a unique link. You can then share this link. Based on your friends’ purchases, you are entitled to two additional free apps, nothing more. The same offer was available to any of your friends who buy the bundle.


• MacHeist posted an announcement video on You Tube to help spread the word. Others can then embed that video on their blog pages and web sites.


• The program launched on Fri Feb 6th. On Feb 13th the official “mission” began. The bundle itself was announced on March 25th. The purchase offer expires tonight, on April 6th.

Results:
With one day left, they have raised over $628K for charity, sold 66,300 bundles, and earned over $2.6M in sales. (And the numbers are growing as I click submit on this blog post!)

In Case You Have Questions Like These in Your Mind:

“What’s in it for MacHeist?”
They have a very simple business model. They have a beautifully designed site to manage (the unique user pages are all automated) and they get to help promote others, give money to charity, have fun, and make money themselves. People over 30 listen up: this is the way people like to build companies now. On the fly, dynamic, collaborative, and internet-based.

“How do they do this without advertising?”
They have built a brand that people love. Their fans are rewarded for playing with them, aka “buying the bundles.” Their fans are further rewarded by telling their friends. This is the network effect. And they and their fans use social web tools like YouTube, Twitter, and communities to spread the word. They have even automated the ability to post your link to Twitter, which scores you two more free applications valued at $60.00!

“Isn’t this just a pyramid scheme?”
Not one bit. First, each buyer is getting an incredible deal. Second, each buyer generally wants to share these great deals with their friends. Third, you only can earn a max of two free apps, so there is no incentive to keep trying to push sales beyond your organic network. Fourth, the same offer is available to every buyer.

“What does fun have to do with it?”
Surprisingly, I think it is one of the key ingredients. The heist has elements of secrecy, of milestones, of rewards, of rewards for your friends, and the excitement of an auction. Sales are accelerating incredibly as we approach the last few hours of this offer. They even generously feature their buyers back on their site. If you follow them on Twitter and use the auto-tweet announcement after you have purchased, your face will show up on the live updating page. That’s just cool, and fun, and generous – more attributes of 21st century web-based enterprise.

Want More?
Mac Update Promo does this every day for a single product by offering 30-50% off on a single pice of software. It is similar to what Target does with their weekly circular. It’s just that a third party is doing the work building the customer base and sharing it with new companies. They send daily emails and we, as a small business, buy a lot of our software here at prices that might normally be available only to large bulk purchasers. This is great for nonprofits and entrepreneurs. And you know, business doesn’t always have to be just about the Benjamin’s.

As always, thanks for spending time here with us. I hope you’ll share your opinions in the comments.

Aloha,

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I started this discussion on this post and once I got into a lengthy reply to the comments, I realized there is more to be explored.

You may want to read Part 1 and the associated comments here.

The more I have been thinking about this, the more I want to see companies explore user-generated pricing. In the beginning, I suspect very few would pay and those who do would pay less not more. But once there were leaders who were willing to pay and explain why, it may pave the way for others to follow suit without feeling hosed.

I have this sense that people would be happier paying when they can set the price. But as soon as I write this, I think of clients who make boatloads off our consulting and support, and who have no interest in paying even a tiny percentage of their revenue to us – revenue earned from things we built for them.

So maybe there is some gradual way to introduce this concept, and maybe it is actually a way to attract different types of customer relationships – where we discuss the many iterations of “value” up front and agree to how we would each like to receive and reward value in the relationship.

What has not been specifically addressed though was suggested in the comments (want vs need) is business vs pleasure use. Traditionally, people charge businesses more because there is a profit-making agenda on the table. Airlines, hotels, and rental car agencies charge a lot more for weekdays than weekends, as they have a captive customer for one and they know that companies are theoretically making money off of their use of said services. And because there are others like me who want to change the hard line between work and fun.

Weekenders however, are theoretically there “just for fun” – so this costs less? This is making less sense to me though once I look at everything as an exchange of value and once I realize many of us will pay a lot more for things we truly love that have nothing to do with our jobs! Just because it is for business, does that mean it should cost more? And does the “costing more” taint the transaction? And how does a business recoup the costs it has to develop and maintain its products and services?

What do you think? How do we take the bitterness factor out of paying for things we like? Are people more generous or greedy? What risks would you take with new pricing strategies?

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Chris Anderson has added his voice to the many discussions of how the internet economy which is all about the free is facing cash shortages and reality checks as the economy tanks. He is optimistic that free will survive, yet not by itself. Just as Bernie Madoff’s run came to end, just as the lousy mortgages finally ran out of buyers, I too think the “everything must be free” mindset is ready for an upgrade. It’s not an all or nothing proposition – though I do think it is useful for those of who do appreciate value in the marketplace to speak up.

What about the oldest trick in the book: actually charging people for your goods and services? This is where the real innovation will flourish in a down economy. It’s now time for entrepreneurs to innovate, not just with new products, but new business models.

At least our darling software developers are creating things of wonder and efficiency and playfulness, and not robbing us in our sleep. But they too will have bills to pay as we consumers greedily consume all that we can byte while dreamy-eyed investors who have amnesia from the last bubble bursting still pony up the cash to run server farms.

Obama is asking each of us to step forward and take responsibility for how we affect change in our hearts and minds, our communities, our nation. It seems to me we also have the opportunity to mature in our understanding of energy transactions. To want to actually give back to a developer who has created something of value. To stop feeling one-down because we paid for something even if a poorer quality version is available at no charge.

Increasingly, I see this happening. (But then again I am an optimist so I seek out signals that support ideas I believe in.) As of today, about 43% of the respondents to Guy Kawasaki’s survey question, “What Would You Pay to Use Twitter?” would be willing to pay $5-$20 a month. You can folow the ongoing discussion about this topic on twitter directly, where many actually are willing to pay for this service.

Personally, I am flabbergasted that so many people would refuse to pay for Twitter, and so many services. I just don’t get it. I can see free trial periods. I can see free accounts with limits on followers/friends or # of tweets per month. I can see pro-rated accounts. I can see free accounts for non-profits. But all free all the time? I just cannot make sense of that yet.

I am blogging about this to put forth my wish that we as a consumerist collective continue to dismantle the chains of the old top-down commerce systems. However I don’t want us to end there – with a big pile of rubble that you can pick through for free, though sure there is treasure in that trash.

I really want to see innovative ways of sharing all the forms of value – attention, time, money, love – becoming more balanced and more granular in their transactions. I don’t see a whole lot of buzz and excitement around creating new business models the way there is around creating new iPhone apps. So this is one topic I am meditating on this year. Because as Thomas Friedman says about the economic crisis, “The fact that there is no single pill doesn’t mean there’s nothing to be done.”

I think it will take a combination of:

• Software tools (we are still waiting for more ubiquitous micropayment tools like Apple has built for the iTunes Music Store)


• Mind-shift in buyers (“No, paying for something does not mean you are always getting screwed.”)


• New business structures (“Where/What is the true value of what I am offering and how much is it worth?”) together with the next generation of business.

We have gone from buy-sell to buy-sell-share-steal. How much are you willing to change your buying-selling-sharing-stealing habits to create a broader base of sustainable wealth for companies and the individuals who both create them and use their products?

I am very willing, just not anywhere near as clear just yet as to how. So I leave with one of my current favorite Einstein quotes:

No problem can be solved from the same level of consciousness that created it.

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I love thinking forward, and being an ENTJ, can imagine all sorts of possibilities that others not only do not see, but when presented with them, say, “Hogwash!” Nonetheless, I have for better and for worse been an early adopter, in the vanguard, ahead of my time (choose your phraseology) most of my life.

So I was very curious when I read this article by Don Reisinger of cnet: If it can’t find a solution, Google should kill YouTube. Thanks to my colleague Heath Parks for pointing me to this post.

He was discussing this quote from Google CEO Eric Schmidt, gave to Ken Auletta and posted in the New Yorker, discussing the struggle Google is having making money off their $1.65B purchase of YouTube.

The goal for YouTube is to build a tremendous community….In the case of YouTube we might be wrong. We have enough leverage that we have the leverage of time. We can invest for scale and not have to make money right now, he said. Hopefully our system and judgment is good enough if something is not going to pay out, we can change it.

What matters is can Google continue to make money, and if it can’t how does it reconcile what it owes its shareholders vs. what the marketplace of millions is demanding?

Schmidt goes on to say:

There is a tremendous amount of use of social networks…the traffic is phenomenal…and there will be advertising products in that context…it’s taken longer for the industry to find those devices but they are clearly there….Our primary success was in the direct marketing piece that is quite measurable and tactical. The mobile case is just an extension of that. As mobile devices get more powerful you can do click to play ads. Mobile devices will be able to do powerful narratives…cameras, GPS…it will tell you need new pants.

It remains to be seen how much advertising in how many places people will be willing to tolerate for free content. Movie theaters added it, and attendance continues to decline year after year though video rentals and ticket price increases are keeping that industry afloat.

Many professional early adopters blog regularly about people’s willingness to pay for ad-free and premium services. But there’s a catch right – because it is the smarter richer people (who would pay) that advertisers generally want to reach, so there is a built-in catch 22 for startups who are creating their business models. There may not be enough paying customers whereas advertisers still seem willing to spend. Read the comments on this post to see the skepticism people hold for how many would actually signup to pay. As a result, companies (like Twitter) appear to be dragging their feet on implementing for-fee channels. We don’t get much chance to either test this or build this over time.

Right now there is fascination and wonder in having these wide open spaces where anything goes and anyone can show up. Advertising per se certainly is facing as large a challenge as Detroit’s auto industry. It’s tough to see the gates unlocked and people running all over the field; making cars in Japan, Germany, and now India that are good enough or better than most. To see people telling each other what to buy and where to buy it instead of being captives of marketplace manipulation.

Schmidt says, Frankly, the free service model with free advertising is still the best model. Do you agree? I think younger people are seeing through advertising and we have a revolt of some sort in the making. They may be wiring their brains to ignore it more than ever, while others may be forming a basis for radical rejection of the manipulation of advertising, along the lines of the 60’s radical rejection of the Vietnam War.

Check out this 10th Grade Project on Persuasion or Manipulation: Thinking About Advertising

Would not Google be a great company (who has the brains and the cash) to start building some innovative business models that allow people to pay for improved user experience? Might the early adopters then be able to help shape a new economy? Might we actually develop beyond the lowest common denominators of free, advertising-sponsored and advertising-despised models of transacting with each other?

Calling all forward thinkers to weigh in on this with me.

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