Friday, August 26, 2011

Facebook Marketing and Hurricane Irene

As Hurricane Irene sweeps up the East Coast, the only thing you think of all the losses and damage it would cause. There are friends, relatives and business that will be affected by this once in a lifetime natural disaster. Well... not everyone is thinking that way...

Check out these 2 businesses, they've seized the moment using Facebook:

With CJ Construction, you can get a pre-Hurricane damage assessment and prepare your home. Afterwards, you would be first in line for a repair.

Rick Tucker Construction will take care of your post Irene demolition needs.

Who says that construction is behind the times in social media?

Of all the businesses, CVS is doing this most tastefully, by discussing how people should get their pharmacy refills and how they are stocking up the best they can. They acknowledge that many of the stores will be closed because of evacuation procedures.

In the comments to the post, there is a very favorable response from people appreciating the notice or discussing how CVS steps up in the community during these situations. You would think there might be some backlash given the press releases about how CVS is ready, but by engaging with their users, people are responding positively. On the other hand, competitor Rite Aid has normal promotions, but no acknowledgement of Irene that matches its press releases.

Even in a natural disaster like Hurricane Irene, companies can be opportunistic in Facebook marketing just like the construction companies. At least they are making themselves available. In the case of CVS, they are leveraging their brand to create greater levels of engagement.

Position2 Brand Monitor was used to cull through the displayed Facebook posts.

Wednesday, July 27, 2011

Hey Congress! Stop Messing Around!

As I watch the Dow drop another 200 points today, I've gone from amused to very concerned. In the last few days that's 400 points. Every day, there's more back and forth - Boehner this, Cantor that, Obama Grand Bargain, etc. It's one thing to discuss a long term solution to a financial deficit issues, but it's quite another to renege on America's financial obligations.

For a while it was sport watching the House get up into a lather over a crisis they created. Most House Republicans voted on extending the debt ceiling every year as they cut taxes while spending more on wars, the prescription drug benefit and general discretionary spending on their districts. Democrats have been spending as well, but they are not creating a crisis over the debt ceiling. They are willing to approve the increase straight up.

People seem to think that not increasing the debt ceiling will stop "excess" spending. They have been misinformed. The President cannot unilaterally impose cuts in spending. Nor can Congress. That "excess" is our defense and our grandparents Social Security check. It all stops when the government loses the ability to finances its obligations.

This is an artificial crisis that is impacting people perceptions of US creditworthiness and ability of politicians to solve problems. The budget has already been voted on by both sides. In fact, they committed to a payroll tax cut, Bush tax extensions, and unemployment extensions that increased the deficit by over $600 billion/year. Where were those deficit complaints at that time? If the US cannot pay what it has committed to pay, why would you put your money here? It's like taking a loan out on your car, then saying that you are not going to pay for it afterwards and expecting to get a new loan on your house in the future. You will have to pay next time - just a lot more because you've increased risk of default to the creditor.

Already, this is having an impact as long term bond rates are going up and the insurance on American debt has risen. This is a tax on all of us as mortgages, credit card rates and car loan rates have the Treasury bond rate as it's basis. All business decisions use have risk hurdle rates based on the risk free rate - US Treasury bonds. If rates rise or changes from AAA to AA+, that's a huge issue.

Do we want another day where the Dow drops 700 points like we had in 2008? This would hurt all of our portfolios and pensions. It takes money out of our pockets. It increases the tendency to put money into cash or gold rather than invest in stocks or start-ups. I'm wondering whether I should just go to cash because the acrimony is disconcerting.

Businesses thrive when there's certainty and consistency. When the rules of the game are not clear, people are more reluctant to invest. The budget crisis, backsliding on financial and environment rules, and the artificial debt crisis doing their damage. The risk premium is increasing. While that may reduce Obama's chances of winning re-election, it helps no one. It may boomerang.

Everyone who looks at spending and tax revenue knows that spending increases and entitlement growth will have to slow and taxes will have to go up for everyone. There's no free ride here. I'd love to see both sides release their versions of a balanced budget by 2020. It's doable if our legislators have courage (go Coburn!). Work on it for the next budget cycle. But don't screw up the economy today.

Friday, May 13, 2011

TiEcon 2011: Touching the Entrepreneurial Sun

Every year, The Indus Entrepreneur (TiE) throws the largest entrepreneurial conference of the world, TiEcon. Though the membership is primarily of Indian descent, the event is open to all. It brings great entrepreneurs, VCs, inspiring keynote speakers and aspiring entrepreneurs together to learn and network with each other. I like to go every year because it's my chance to touch the entrepreneurial sun and remember why I've spent so much of my career in starting and building companies.

Sometimes, you get down on yourself because the process is always a lot longer and harder than you originally thought. The process of creating a new company, a new product, a new brand and a strong culture is always is always easier on paper than reality. The world is skeptical of what you are building because invariably you are going against the existing order. You have to be able to handle far more no's than yes' while keeping your confidence at an unshakable level.

Today helped me reconnect with that energy and spirit. I really enjoyed the keynotes. Steve Case was great not only because of his amazing and well-known AOL experience, but more because of what he is doing to further entrepreneurship through StartUp America. The organization is trying to replicate the Silicon Valley entrepreneurial infrastructure and ecosystem all around the country. New companies that have created all the new jobs in the US over the last 20 years. Large companies have been static or declining, so it's important to harness American creativity to build the next Google, Facebook or Genentech.

Dr. David Ferrucci of IBM presented a detailed account of the Watson project where they built a computer system to beat Jeopardy Master Champions. I liked how they structured the problem and measured success. They knew this would come in iterations, however each iteration had to be designed in a modular fashion that had sufficient headroom to improve with experience. Given our efforts to improve sentiment analysis with Position2 Brand Monitor, I could appreciate the difficulties that the IBM team had in trying to parse wide-ranging yet unstructured Jeopardy answers and quickly come up with the right answer. Natural Language Processing (NLP) is a hard problem to solve especially with analogies and allusions. Given the brevity of Jeopardy answers, it's like reading a tweet and understanding that "bad" sometimes is actually positive. Given the long tail of subjects, building a recognition engine that understands language and responds quickly not only is cool, but has a wide range of applications from medicine to education to... yes... call centers.

The capstone keynote was Vinod Khosla, the entrepreneurial maven who not only got Sun off the ground but built so many successful firms at Kleiner Perkins and now his own fund. He discussed his research on the energy transformation. The experts are wrong, as Vinod offered years of expert forecasts that were completely wrong - as much as 5x for the price of oil. The world has a situation where 5.5 billion people want to live and consume like 500 million. China's oil consumption is expected to grow gradually, but if it follows Japan's or S. Korea's growth curve, oil consumption will be 3-4x today within a couple of decades. However, Khosla believes that oil prices will drop dramatically. He also believe as will electricity use will drop steeply as well. This will be done in a way that is not government support dependent. His thesis is based on the black swan theory where discontinuities are the norm rather than what typical probabilities represent. Linear thinking doesn't work for him - it's about exponents and discontinuities cause by new technologies and steep cuts in price. I took some notes on interesting energy companies in his deck:

Kior - renewable, biofuel based oil that is less expensive than fossil oil
Ecomotor - an engine platform that double gas mileage
Ciris - driving methane from coal mines done with mining
Calera - converting CO2 emissions from power plants into mineral products
Soraa - 80% more efficient light that pays for itself in year 1
Lightsail - using compressed air storage to triple electric grid capacity

Then there was some company that would make sugar from pine chips reducing the vast amount of corn production used primarily for high fructose corn syrup and animal feed.

Khosla's belief is that technology innovation would rise to the challenge of energy, food and natural resource demand. After listening to him, some of the concern about $150 oil diminishes, because people will find a way to develop cheap energy. These technologies need to win in an unsubsidized market which can do to energy like Carnegie did to steel (cut the cost by 80%).

As exciting as Khosla was, I enjoyed seeing some of the TiE50 winners in social media and mobile. Each firm had a different story, but they all had really unique ways of looking at the world. They had an intensity and energy that was contagious. Even the VC panel on social media indicated to me that we were on the right track of mining social media data to create actionable insights and engagement for brands. The key was to listen to people, learn from their ideas, but remember that you need to follow the beat of your own drum.

I came away this Friday at TiEcon 2011 energized about the great things that entrepreneurs can do. It was fun to reconnect with many of the volunteers that put together this special event that highlights how people can go outside themselves and change the world in a positive way that also builds wealth. It's not a zero sum game. I'm sure my team is ready for the many new ideas I will hit them with on how to leverage our social media technology for growing brands, especially ones on reducing friction.

Onwards to tomorrow, where I'm taking Arjun to expose him to this special Silicon Valley world.

Sunday, January 02, 2011

Dan the Tow Truck Man

There I was in town called American Canyon with my broken down Bimmer. The 10 year old 328i served me well but broke a belt and overheated about 70 miles from home. God knows how much this was going to cost - $500, $1,000, who knows with these cars. I was coming back from our Position2 Holiday party that Noelle so thoughtfully arranged up in Napa. After panicking about how I'd get my car fixed so far away from home, I got some help from AAA in the form of an extended towing upgrade. I just had to sit in a tow truck for a couple of hours, but at least I'd get it done with the mechanic I know.

That's how I met Dan. He was an old man, probably in his 50's, though he looked in his 60's after years of hard work. One of those salt of the earth kind of guys, he had a mustache on his white weathered face and some spots on the sides of his jaws - either missing teeth or gaps. I thought I'd be spending some time with a classic blue collar guy. I brought some business magazine in case I'd get bored. When he started with, "You know, I never thought I'd drive a tow truck for 15 years," I thought I'd be listening to a tale of woe of someone who has been screwed over for this reason or by that person.

It would be the little guy against the world deal. After touring the Chandon sparkling winery and eating a sumptuous meal Mustard's in Yountville, I guess I deserved some balance. Little did I know, I'd come away absolutely inspired.

Dan started in with telling me that he was a tow truck mechanic before driving trucks. He had made a lot of mistakes in his life, before he settled on this job. The tow business is 24 hours on call. The pay is not particularly great, but it's consistent. Cars always broke down for one reason or another. With the right company, work would be steady. One thing Dan always did was take advice from his father, a man who started and owned his steel fabrication business. He told Dan to never spend more than you take in. It's better to be able to pay for a car that was functional over one where you had to overextend yourself. The same thing for your house. Get a 30 year fixed loan and do not take equity out like the neighbors. Because of those decisions, Dan worked hard but could provide for his 3 kids.

So that's an easy opening. 3 kids? I have 4, so we had something to talk about. Little did I know that I'd have more fun listening to the story about his 3. So I asked, "How old?"

"3 boys - 2 that are 18 and one that's 15," said Dan.

"Oh, so you had twins."

Not really, 1 of his 2 were adopted. I asked when he adopted him. Dan told me when he was 15. Apparently, his oldest son and the boy were best friends. His father was a rapper who decided with his wife to start touring locally. They apparently got caught up in the fast life and forgot about their son. The boy called Dan's son from a hotel room where he was left all alone and asked if he could stay with Dan's family. Most might take him in for a little while, but Dan really cared for the kid. Dan decided to not only take him in, but let the boy's family know that they would have to give him custody. Dan would adopt him. He knew how important it was for a boy to have a strong father figure and didn't want this boy messed up.

It turns out that his new son loves to read, gets good grades and is looking at various colleges for scholarship opportunities. His oldest son is a top AAU basketball player and is being recruited by various colleges. Dan is pushing him to go to the best academic one. In my conversation, Dad never once differentiated the boys - they were all his sons.

So here's a guy who single-handedly raised 3 boys. They are all college bound - full of hope for the future. Later I found out he has a daughter from another marriage who has 7 grandkids. It turns out she has a good guy she's married to and Dan brings the whole group together to play basketball together.

Dan may have made some mistakes, but he's done something amazing. He not only provided for his family without taking anything but advice from his successful father, but he also took another kid in. He didn't just think about himself. He felt for others. Dan doesn't make a lot by any standard, but he not only lived within his means, he made a little extra and still brought up a whole family. He wasn't resentful. He was optimistic. Dan liked how he could work at night, so he could spend his days with the boys.

After Dan dropped me off on Alma in Palo Alto, we shook hands and he said goodbye with a smile. He offered to drive me home, but I was meeting my wife at the Medical Center because my youngest was in urgent care over a tough fever. While my car might cost a few hundred dollars, I came away thankful for the experience - the inspiration of spending a couple of hours with Dan the Tow Truck Man.