Business Quests in the Information Age

Business interest undermined by top execs' self-interest

I remember being taught at my business school how markets had a sort of superior wisdom and why it made sense to manage in the best interest of shareholders. Aside from the fact that I believe in taking into account more factors than just the financial interest of shareholders, it seems that managing in the best interest of a corporation (that is also the best interest of its owners) is not the main objective of many top management teams. Tom Peters has an interesting post about that on his blog and let me quote something that I found striking:

"Over the last five years, INTERPUBLIC GROUP lost about $2 BILLION—and the top five execs were collectively paid $107 million. During the same five years OMNICOM's top five pocketed $111 million—on a profit of $3.2 BILLION."

I believe that the issue of executive pay and performance management are among the hottest topics to be tackled these days. In part the answer lies in proper management of people and talent, which is simply not done today as many HR departments do little more than payroll and low level administrative support. In fact, Tom Peters says that the pay of executive is closely correlated with the size of the organization and not that closely correlated with the business performance of the organization. I guess it is one more argument in favour of breaking the pyramids and bureaucracies and moving towards businesses organized as networks of small interconnected business units, some of those units being potentially one-person companies. Anyhow, this is an extremely interesting topic.

EU court blocks data deal with US

The EU's Court of Justice just cancelled a decision taken in 2004 by the Commission to let US authorities keep personal data of passengers traveling to the US. A defeat for the Commission of the EU, the Court’s decision is a relief for supporters of civil liberties: security does not have to be at the expense of personal freedom and privacy.

From Digg:
The Luxembourg court said there was no legal basis for the EU decision to declare US data protection "adequate".

read more | digg story

First was the business model

Over the past couple of months I came across several articles claiming that there are investors today on the market who are more interested in product features than in a company’s business model. That is tragic.

Perhaps this line of reasoning is why we are seeing (again, as it was the case back in 2000) so many initiatives that are merely nice online tools but not businesses. I was really surprised to discover a number of online todo lists and I am not too sure how these guys are actually going to make money. Ditto for a number of online tools aimed at building the so-called “social Internet”.

A company’s business model is of the essence and it’s worth spending time to define and refine it. It’s the core of business sustainability and no company in the world can afford not to be clear about its business model. And because I now have some experience with entrepreneurs, let me add this: pick one and stick to it. Few things are worse in strategy execution than trying to have two or three business models because you can’t make up your mind.

Odd HTML code due to Jajah's Firefox extension?

While working on a post for my blog, I noticed strange lines of HTML code when using the online editor provided by TypePad. Here’s an example of such odd lines:

<div id="jajahYDiv" style="visibility: hidden;">0</div>

<div id="jajahXDiv" style="visibility: hidden;">0</div>

I decided to open a ticket with TypePad and after I got their answer I uninstalled the Jajah extension. Guess what? The funny lines of code had disappeared, except for a few of the posts of my blog. I wonder what may have caused this and obviously I now feel somewhat less confident in the Firefox extension for Jajah. A pitty because it was quite convenient.

The details of my uninstall, with screen shots are available at the link below.

Smart web marketing: an ounce of practice worth more than tons of theory

As I was reading a piece of news on the site of BBC Newsnight, I noticed a smart marketing trick: the BBC lets you access a specific piece of content under the condition that you as a reader agree to”digg” the article. Suprising and smart method for an established media company.

Digging of course is web-speak; it does not involve any shovels or spades: it merely means that as a reader you somehow “vote” for the article and increase its popularity on a site called Digg that aggregates content from difference sources and allows its users to qualify and comment the articles. Digg is often the source of traffic for a web site as most recommended articles are viewed by Digg’s community and by non-members.

Co-dependents

Very interesting list of lies posted by Guy Kawasaki. Some of them are just the little lies of everyday life, other are the lies of marketers (and yes, as Seth Goding puts it All Marketers Are Liars - great book by the way) and a last group is made of the lies of venture capitalists. In fact when describing lie number 3 ("you need us more than we need you"), Kawasaki is telling a big truth: the relationship between venture capitalists and entrepreneurs who choose to develop their company the Silicon Valley way is one of codependency.

Jamendo at Opensource Day

Jamendo presented at an event devoted to opensource day in Belgium. Here's the account. Jamendo's CEO outlined the trends he and his team are betting on to develop Jamendo and transform the music industry's model by establishing a direct channel between creators of music and their users all over the world:

1. mass amateurism - today as technical means become widely available at an affordable price, the barrier to production is not access to capital or to the people with privileged access to exclusive infrastructures. It's more about talent than about money as the authors of Funky Business would say.
2. networks of activists - citizens are taking a number of things in their own hands to promote open access to content and to fight against artificially imposed scarcity of content.
3. bad guys - established players of the music industry have made a choice to be tought instead of being smart. People react to their violent reaction against open technologies, peer-to-peer networks without discrimination on their legality, user's right to use content they paid for as authorized by law, people's privacy...
4. business logic - the cost of content today is the result of artificially orchestrated scarcity, not that of free market forces. By building a business model on the assumption that we are now in an economy of abundance of content and scarcity of attention, Jamendo has a solution to address the needs of professional users of music.

This space is moving and I think Laurent and Jamendo are on a very interesting track, if I may say so.

552

0

0

VoIP substitution

Because I started my professional life in the GSM industry, working from a very central position in a clearing-house, I have been watching the impacts of the web on the telecoms business with a lot of interest. Judging from my own choices as a consumer (and I do not suggest for a minute these reflect general trends, but then again I must be part of some segment of the market so it may not be that insignificant), I would bet that the impact of VoIP on the traditional telephony businesses is one of enormous substitution; here are a few facts:

1. my telco bill is 80% lower today than it used to be before I started using Skype, while I am definitely spending more time speaking to people on "the phone";
2. in my business I have been speaking Skype-to-Skype and chatting with customers and prospects instead of placing phone calls. In fact, less than 20% of my calls to prospects, customers and business partners are with a traditional phone (my accountant is not online yet, but I am working on it)
3. when travelling abroad, I am now using my mobile phone for less than one call out of three, when a few years back there was no choice. In a recent trip to Luxembourg, I placed all my calls using Jajah with a cost advantage over roaming that I assess to be in the region of 85% to 90% (by the way roaming is a rip-off and it's good the Commission of the EU is working on it IMHO)

Today I came across the intetresting account of a study done in Japan that tends to show that Skype increases consumption of telecoms more than it is a substitute for traditional telco services. I agree with the author of the post that this study is probably missing something important. Indeed prospects are getting darker for traditional telco operators who will be under enormous pressure to review their business model and that heralds a big shake-up of the industry.

178

509

Quote of the day

"Adaptability is not imitation. It means power of resistance and assimilation." - Gandhi

43

623

Plaxo goes VoIP with Jajah

The VoIP space is getting crowded and there will be consolidation with a bloodbath. There are a couple of players I am willing to bet on though and Jajah is certainly one of those. I really like the way these guys are moving and they might just become a most compelling personal communciations center. Next step is to piggy-back on some of Skype's functions like chat and to start addressing the needs of PBX users through tools like Peerio's and we have a big winner.

From Digg:

Plaxo, that company that drove some people nuts with e-mail invitations to its service, is getting on the voice over Internet Protocol bandwagon.

read more | digg story

159

600