MicroSkype – $8 Billion Later

Last week when all the rumours about a bidding war for Skype between giants Facebook and Google were flying around the web, I, like many people, was envisioning a Skype module built into Facebook in order to enhance their existing (and rather rudimentary) chat application. The marketer in me was also salivating over the prospect of being able to add web video ads via the Facebook ads platform- my firm has been producing web video for some time, and has been chomping at the bit to get those opportunities integrated into the social media world in a seamless manner.

Microsoft really came out of the blue with the purchase deal for Skype. Very few analysts were dropping the M-word in the discussion of rumours about a private purchase of Skype. The $8 billion dollar deal may or may not be high- the end value of Skype now really depends on what Microsoft does with it in the long run- if Microsoft can turn it into a revenue powerhouse as a standalone product, or integrate the technology and infrastructure into other products, $8 billion may turn out to be a bargain. One thing’s for sure, the price tag Microsoft paid will inevitably cause the analysts who were highly critical of eBay’s $2.6 billion dollar purchase of Skype a few years ago to stop and ponder (I admit that I was a bit skeptical about it at the time, but my view softened when Skype was spun out of eBay and flourished on its own- clearly a good team and solid vision were part of the value).

The real strength of this deal for Microsoft was in the strategic move, however. By purchasing Skype, Microsoft can integrate its technology into the Windows Phone 7 OS. Normally, I’d say ‘So what?’ but in this case, the move comes after the announcement of Microsoft’s strategic partnership with Nokia (Nokia has all but dropped its Symbian OS- all Nokia smartphones will ship with Windows Phone 7 beginning next year). In North America, Nokia’s share of the handset market is pretty dismal (they’ve been all but shut out in the past few years by RIM, Apple, and the Android-backed HTC); but Nokia does still have a sizable market share in Eurasia and developing markets (though Samsung recently overtook Nokia in western Europe as the number one seller of handsets). If Microsoft had attempted to integrate Skype into Windows Phone 7 without the Nokia partnership in place, it may have faced significant backlash from carriers worried about declining airtime revenues due to Skype (especially in advanced markets, where WiFi hotspots are everywhere). As the handset market current stands, any carrier could drop a handset running Windows Phone 7 without adverse effect on its revenues- but dropping the entire line of Nokia phones would be more problematic (though Microsoft may still face some resistance if they proceed with this tactic).

Only time will tell whether or not this deal can improve Microsoft’s less than encouraging performance in the wireless device market. And though the deal may have been a solid strategic move for CEO Steve Ballmer, there are still some challenges on the horizon re: integrating the two corporate cultures- Microsoft’s is notoriously difficult to integrate into for outsiders in mid-level and higher executive positions; a fact that even Nokia’s Canadian-born CEO would surely admit to if asked (before taking the helm of Nokia, he was a senior-level ‘imported’ executive at Microsoft).

And what will happen to the core Skype product (the web-based software version that boasts 137 million active users)? In the short-term, probably not much. Though the core product offering doesn’t generate a lot of revenue (comparatively speaking), Microsoft would be foolish to risk alienating a user base that is now wary of their freebie videochat fun being taken away. If the core Skype product remains intact over the next year, it’s likely that we’ll see the introduction of web-video based advertisements before and after users engage in Skype chat sessions (Microsoft has invested a lot of capital into its Bing ad network over the last eighteen months, which has an integrated high quality video-based advertising feature).

That alone might be enough for me to take a closer look at media buys on the Bing network (in the past, I’ve heavily favoured Google and social media platforms for client campaigns).


Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.

Sustainability and The Tragedy of the Commons

Well, it’s been a busy couple of weeks. I moved into a quaint little neighbourhood in the Village of Ashburnham (colloquially known as East City – though I plan to call it ‘The Village’ and start a trend). Everything across the bridge is cozy and quiet, quite a difference from the hustle and bustle of the downtown core that I used to call home. In my two short weeks here, I’ve noticed that everyone in The Village has a dog. Or rather, that there are approximately 3.2 dogs per household in this part of town (the addition of a two year old Siberian Husky to my household has us under the average- but two dogs is still enough fur for one house, methinks).

In the ten days without cable and internet here, I managed to start and finish Andrew Heintzman’s The New Entrepreneurs: Building a Green Economy for the Future. It was a gift from a colleague last Christmas, and to be honest, I wasn’t entirely sure about the message of the book. I’ve found that environmentalism and ‘green’ messages in the past have been quite unrealistic- in the sense that reconciling these messages with the nature of consumerism and the mores of our society is, at best, extremely difficult. At worst, we’re closer to ‘snowball’s chance in hell’ territory.

But I was pleasantly surprised with Heintzman’s work. Here, we have a venture capitalist and entrepreneur who not only discusses environmental sustainability, but rationalizes it within the framework of the market-based economy and western capitalism. This line of thought is relatively new in business circles. Not original of course, some of the ideas have been around for a century (Heintzman discusses them in that context)- but what’s new here is that the ‘greening’ of business has begun to make its way into mainstream circles. I’d certainly count myself among the new wave of entrepreneurs who have made social responsibility and sustainability a core practice- very rarely does my work for clients not include aspects which address sustainability in one form or another.

What struck me the most about Heintzman’s work is the part which discussed the old economic theory The Tragedy of the Commons (the mere name of it shook some mental cobwebs off an old macroeconomics lecture I attended during my post-secondary studies). Sounds a bit like something that Shakespeare would have written at London-upon-Thames.

In a nutshell, this theory suggests that when resources are plentiful, humans tend to overuse them to the point of decline and collapse. In Canada, think water (we water our lawns several times a week in the summer- this is unheard of in the Middle East), lumber (many of us cut a tree down and stick presents under it once a year- a practice that would evoke shock and awe in Africa), and oil (how many of us drive to the corner store for milk, when a five minute walk would carry us there?). In essence, the Tragedy of the Commons suggests that the overuse of these plentiful resources ultimately continues until the system which generates the resources in question collapses.

Cue dramatic music here.

You can actually see this theory in practice within the billing of electricity and utilities for residential properties. In particular, how utilities are priced for the occupants. For instance- when renting a house or apartment, would-be tenants can comb the market and select a unit where utilities are either included, or cost extra. Within inclusive utilities arrangements, the rent tends to be higher- but the tenant never has to pay for an expensive electricity bill where all the lights or the oven get left on accidentally or carelessly. For anyone who’s rented an inclusive unit, think back to your electricity usage habits… I’ll bet that you weren’t that conscious of lights being on during the day, or the TV/radio left on when you took the dog for a walk, or the computer being left on when you weren’t using it.

Naturally, these consumption habits tend to change when the occupants of a unit become responsible for paying any electricity costs that they incur. When the true costs of consumption are passed on to the end user, efficiency and conservation tend to rise quite dramatically. For instance, many consumers were and are quite angry, now that Ontario Hydro is pursuing a ‘time of day’ pricing model across the board. Electricity use during peak hours now costs significantly more than usage during off-peak hours- thus, price to the end consumer using resources inefficiently has, and will, increase substantially. But, there’s an upside to this- with the increase in the cost of this resource, demand for energy efficient technologies will increase… thus spurring the free market mechanism (read: entrepreneurs) to spit out solutions (think- programmable water heater, lights that automatically shut off when you leave the room, ‘smart’ power bars for entertainment units that automatically shut off the power when you hit the appropriate button on your remote- thereby eliminating the ‘phantom’ power drain of electronics). Energy-efficient technologies only become important when consumers want them, and consumers only tend to want them when the normal costs of energy increase, thus decreasing their personal resources disproportionately (less cash in the wallet).

Perhaps this is the new environmentalism. Conserving resources because of increasing cost- not because it’s the ‘right’ thing to do. Regardless of your take on the ‘green’ movement, it’s tough not to see that cost is a near-universal motivator for change (no pun intended). Even though it will be difficult for some to modify their habits of consumption, the big picture of our society will look much better for it in the years to come.

The Future of Web Development

The speed and pace with which the web design industry evolves is absolutely blistering.

Think about it for a second.

The internet became mainstream in Canada circa 1994 (only fifteen-ish years ago). At that time, people were coding the web in HTML 2.0 (the initial draft standard for HTML had been completed mid-1993). In fifteen years, the web has evolved from that simple interface through to the recently-released HTML 5.0, which includes GPS tagging support and a host of other features- as well as design staples like AJAX, JAVA, Flash, Whosits and Watchamadingers. Okay the last two aren’t really languages at all- I’m not a web design guy, I’m a marketer… and I can poke fun at my own limitations.

The point is, in fifteen years the web has evolved from an electronic version of a photocopier into a robust network which enables mass communication undrempt of in the wildest of Orwellian fantasies, eCommerce solutions that connect global markets at the consumer level, realtime analytics and equity trading, and social media platforms which allow people from different cultures and geographic areas to come together in ways that weren’t even thought of five years ago.

Because of this rapid evolution, web developers are under constant pressure to stay current on trends and languages at a pace that’s unheard of in other industries. Imagine telling a line worker in an automotive assembly plant that he or she had to learn to use a completely new machine, with completely different mechanics, every month. Imaging telling a firefighter that the department would be adopting a radically different fire hose multiple times a year… that took a hundred hours of retraining to be able to use. I’m sure you can think up a multitude of additional examples.

So the question is… where is web development headed? That future isn’t crystal clear by any means. Fortunately, I’m lucky enough to work with some extremely talented web and database design people at one of my other enterprises, Klever, which owns the real estate marketing brand NewNeighbours. My experience with those folks tells me two things…

1. There’s massive opportunity for freelance web developers to design templated and self-serve solutions that enable web-savvy consumers and business owners to self-manage their online assets. Blogging solutions like WordPress and Joomla are feeding this design model in a big way- in fact, secondary markets have sprung up in response to a need for high quality design templates compatible with WordPress (mojo-themes.com is one of my favourites).

2. The future is mobile. In the US, 47 million people access the web from their internet- enabled smartphone every day.

Sorry web guys, it looks like you’re going to have some more learning to do.

OPEC’s Worst Nightmare

There’s a lot of talk about Electric Vehicles out there. People seem to be split into two camps: on one side, we have the people who snicker and point at electric vehicles and compare them to golf carts. And in the other camp, we have the people who are taking a serious look at EVs due to the combination of supply contraction and robust growth in global demand for petroleum (read: really high gasoline prices).

In this debate, it’s important to remember that the electric vehicle is relatively new technology to the mass market (GM had a working production prototype called the EV-1, which was scrapped in 1999). The early internal combustion vehicles weren’t much to shake a stick at- and in fact, the Ford Model T was incredibly prone to poor performance and breakdown issues (not to mention bad hair- early models weren’t enclosed). As such, it’s important to view EVs through that lens- new technology that will improve with time.

That’s not to say that EVs aren’t worthy of purchase today. With the Chevy Volt and Nissan LEAF going on sale in select Canadian markets this summer, there isn’t a lot of user feedback available yet (aside from the blogosphere and the auto reviewers, that is). The US’ EPA has released efficiency results for both vehicles, and the data is quite promising.

Nissan LEAF

Range: 117km (using the LA4 “real world” rest protocol)

Energy Consumption: 34 kWh per 161km (about 99 mpg when compared to a traditional internal combustion, or ICE, engine)

Cost per kilometer: 1.08 cents

This tells us that the Nissan LEAF uses about 0.211 kWh per kilometer driven. Armed with that data, you can expect to expend about 25 kWh over the full range of the car (an estimate, of course- actual performance will vary depending on driving habits and climate conditions just like with gasoline powered vehicles). If you plug in your EV to charge during off-peak hours (in Ontario, between 9pm and 7am), you’ll pay around $1.28 to recharge the battery fully. Even if you need to recharge the battery fully every day, that’s only $40 a month. I bet filling up your gas tank costs a lot more.

Chevy Volt

Range: 56km (again using the LA4 test protocol in battery-only mode)

Energy Consumption: 36 kWh per 161 km (about 93 mpg when compared to a traditional ICE)

Cost per kilometer: 1.14 cents (in electric-only mode)

So, the Volt uses about 0.223 kWh per kilometer driven. In other words, you can expect to use around 12.5 kWh over the entire range of the car- which is about half that of the LEAF in electric-only mode (the Volt switches to a gasoline-powered backup generator when the battery starts to run low; and the total range of the car averages 610 km). Charging the battery fully on the Volt (in Ontario) would cost about $0.64, assuming you only charged it during off-peak hours.

The economics of running these two cars on battery power alone are very comparable. Both are much, much more affordable than gasoline-powered cars at current fuel prices. In fact, the price of gasoline would have to fall to 15.6 cents per litre for a car getting 30 mpg fuel efficiency to match the cost efficiency of operating the Nissan LEAF – and that’s only considering the price of moving the respective vehicles from place to place. With an electric vehicle, the cost of routine maintenance is much lower as the wear and tear is miniscule compared to that of a traditional ICE vehicle (an electric engine has about 5 moving parts, whereas an internal combustion engine has several hundred).

The sticker price on current EVs is somewhat higher than their ICE powered counterparts – the Canadian MSRP for the Volt starts around $41,000, with the LEAF weighing in at just under $39,000. Though, the higher purchase price is offset over the life of the vehicle by the higher operating efficiency. For instance, an electric vehicle owner who drives 15 000 km in a year will save around $1,250 in fuel over the driver of a 30 mpg ICE-powered vehicle at current prices. Additionally, analysis conducted by Nissan suggests that the average driver will also save $400 annually in maintenance costs. Assuming a 15 year operational life cycle, the electric vehicle owner would have an extra $5,000 in the bank over the owner of a traditional gasoline powered car (perhaps even more- combustion engines tend to require more frequent maintenance and repair as they near the end of the operational life cycle).

So, who’s getting in line to buy an electric car this summer? Obviously, they’re not for everyone. With such a small range, people who commute long distances (or weekend cottagers) aren’t likely to hurry to purchase the Nissan LEAF. Clearly, this is where the design team at GM scores a big win with the Volt – the gasoline powered backup generator extends the range of the vehicle to nearly that of a traditional ICE-powered subcompact.

And for the people who giggle about electric cars… a 2011 Chevy Volt has 273 lb/ft of torque in electric only mode- more than double the 123 lb/ft of the similarly-sized Chevy Cruze. Hold on to your hat when you hit the pedal.


Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.

Marketing and Brand Messaging

I’ve seen some really offbeat messaging in marketing campaigns, and I’ve also seen some fantastic messaging that perfectly conveys ideas and perceptions which contribute positively to brand equity.

Porter Air is an example of the good. Brand messaging is executed flawlessly by Porter’s creative agency (Winkreative) virtually every time. In fact, I’ve never seen a Porter ad that isn’t great, from an execution and messaging standpoint. You’d think that the cartoon raccoon would come across a bit childishly and devalue the brand- but, the elements of elegance used in combination with the cartoon raccoon lend creative balance to the ads. Whether or not the cartoon raccoon is for you is mostly a matter of preference- but you can’t dispute that Porter campaigns convey a sense of ease, calm, and cosmopolitanism with using Porter’s services. That’s a powerfully appealing message (especially to those who have suffered a righteous, unashamed screwing from the entrenched airlines).

On the flip side, some ad campaigns make you scratch your head. A recent TV spot for the Lexus CT Hybrid comes to mind. There are a few fundamental problems with the ad campaign. Though the content is a bit jarring due to the CGI used in the constant scene changes, the deeper issue is poorly executed brand and product messaging. What the commercial is trying to convey without actually saying it is that the viewer can safely change their perception of hybrid cars from clunky fuel sippers to high-performance joymachines… now that the 2011 Lexus CT Hybrid is here. That message is buried far too deeply for the average consumer to grasp with the TV ad format though (few people truly engage with TV adverts and pick them apart to find meaning- most simply watch and forget, or go to the kitchen for a snack).

Additionally, the impact statement is contradictory. At the end of the commercial, the narrator says ‘Welcome to the darker side of green.’ It’s unclear what that statement is supposed to mean. Perceptually, ‘dark’ is most often associated with negativity, evil, terror, or general badness. Yet, the green movement is generally accepted as a positive by consumers. So, is the Lexus CT Hybrid a bad part of a good thing? Not great messaging. I suspect that the true intent behind the impact statement is something along the lines of ‘your hybrid can be edgy and badass if it’s a Lexus.’

The lesson to be learned? Put some serious thought into what your advertising is saying to consumers. Not only what’s being spoken, but what’s being communicated visually and conceptually.


Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.

AT&T Purchases T-Mobile USA for US$39 Billion

Earlier this afternoon, AT&T and Deutsche Telekom AG announced that AT&T will be purchasing T-Mobile USA in a US$ 39 billion deal that includes both cash and stock. Undoubtedly, there will be lots of talk about how the deal improves profitability for AT&T, as well as service and access to advanced technologies for the customers of both telecom firms (T-Mobile has been plugging its 4G network upgrades for several months now). The board of directors for both AT&T and Deutsche Telekom approved the deal, which is sure to make for some happy shareholders if the stock portion of the deal includes a premium (AT&T’s 52-week share price ranges from C$23.44 to C$29.66, while Deutsche Telekom’s ranges from about C$11.88 to C$14.85).

But all of the happy talk, hype, and political discussion (in an acquisition of this size, the regulators are certain to chip in a word or two on the deal) obscures an interesting facet of this acquisition that probably won’t be looked at by many.

Over the past six months, T-Mobile has been really sticking it to AT&T (and more recently, Verizon) in their marketing campaign to co-promote their 4G network and the Google MyTouch handset. From a creative standpoint, the ads aren’t terribly original- very reminiscent of Apple’s “I’m a Mac” campaign that ran from 2006-2009. But the message is pretty clear.

In Q4 2010, T-Mobile added 1% to its service-based revenues (US$4.69 billion total), an additional one million customers, and became the United States’ largest 4G-capable network (as reported by Businesswire on 25 February, 2011). When you post milestones like that in a single fiscal quarter, the big dogs sit up and take notice.

Which brings us to corporate competition 101: if you can’t beat ’em, buy ’em.

T-Mobile MyTouch Ads on YouTube:

You’ll want to watch these sooner, rather than later. They were originally posted to T-Mobile’s YouTube account and needless to say, they aren’t very flattering to AT&T. I’d imagine that the powers that be at AT&T Mobile will want them to go away. Like, yesterday.


Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.


Personally, I’m not a big fan of Twitter. For a guy like me, it’s just a huge time suck that I don’t really want to have to keep up with (speaking from the standpoint of my personal life).

But the marketer in me sees it as another weapon in the arsenal that’s required to engage in a meaningful brand dialogue circa 2k11. So, I’ve taken it upon myself to not only follow the developments of Twitter and advise clients on how it can best fit into their social media marketing strategy… but to also start Tweeting on behalf of the firm.

Incidentally, I learned (via Twitter) tonight that the past-tense of ‘Tweet’ is ‘Twote’.

In a sentence…. ‘my dear followers were so kind about yesterday’s Tweets, that they in turn Twote of them in their own Tweets.’

Confused? Don’t blame you. That sentence is kind of like trying to understand a triple negative when the speaker is stringing the words together in Cockney. Underwater.

As I start to actually use Twitter, my thoughts turn to the online businesses that don’t actually have a brick and mortar location and an established customer base. Using Twitter alone to market your business is kind of like tossing a pot of cooked spaghetti at the wall and waiting to see what sticks. Then again, I suppose that all marketing essentially boils down to that… (no pun intended).

The point of the story is that Twitter has its place in your overall marketing umbrella (it’s a great way for executives or other senior managers to add brand equity by adding a personal face to your organization). BUT, Twitter is just one piece of the puzzle. It would be silly to count on it solely for marketing success.


Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.

Profit $haring

The hippies have taken over the loft, someone call McCarthy!

The term ‘profit sharing’ keeps most old school capitalists up at night. After all, most business owners sink their time, effort, and money into a new venture in order to generate wealth. Plain and simple. Aren’t employees already receiving a salary? And benefits? And isn’t that enough?

Maybe, maybe not. The competition to attract and retain not only top talent, but also capable employees is rapidly heating up. During a project for one of our clients which involved restructuring a business unit in preparation to spin it off into a separate entity, I had the profit-sharing discussion with the owner. Traditional thinking holds that an owner who engages in profit sharing has a few screws loose. And certainly at first, this particular business owner thought that I had a few screws loose for even suggesting that profit sharing be a part of the new entity’s operating plan.

But there’s a method to the madness in this case. And it boils down to the scarcity of top talent in areas adjacent to the GTA. Toronto is in essence a massive vortex, sucking all of the top (and often, mediocre) talent from the areas which surround it. Because the GTA is home to a plethora of mid and large cap corporations, the invested capital within Toronto is very high. With high investments in capital come increased investments in people, who ultimately are the ones that protect and grow pools of capital. As any small business owner intuitively knows; the Googles, McDonalds’, Hewlett-Packards’ and Coca-Colas of the world have training and recruiting budgets alone that completely dwarf the entire operating budget of even the most successful SME.

Of course, if you want to retain an essential employee you can always throw a higher salary their way. But with this strategy, the threat still exists that a large cap MNC with deep pockets will just top your offer and lure that key employee away. When employees aren’t engaged or emotionally invested, there’s little incentive to stick around other than the paycheque. This is where profit sharing can play a key role in the growth and success of an SME. Employees who are part owners are engaged and motivated in a way that even the best fringe benefits package simply can’t create. Not only does this tie the employee directly into the health of your bottom line, it also gets employees thinking like managers- about how they can increase productivity and profitability. After all, they’re incentivized to do so- the bigger the bottom line of the firm, the bigger their profit sharing bonus.

If this is the case, why don’t large corporations just set up profit sharing plans too? Some do. But, corporations are owned by shareholder groups- in the case of publicly traded corporations, there are often thousands of shareholders. Convincing these investors, whose sole motivations are often an increase in share price and/or the regular issuance of dividends, is difficult. If you owned a thousand shares in Company XYZ, would you be so quick to vote yes to a profit-sharing proposal that would immediately eat up 10-15% of your short-term profits? (remember that speculative investors are only interested in holding a company’s equity until the share price jumps enough that they can turn a quick profit by selling their shares on the stock exchange) A simple scenario, granted, but to the average investor this is an important consideration.

To the hardcore capitalist who’s made it this far without having a stroke- there’s actually a profit incentive to assign a fixed percentage of your net profits to a profit sharing plan. If you assign 10% of your net profits to a profit sharing plan, there’s a very real likelihood that the growth on your 90% of the pie which can be attributed to enhanced employee engagement and motivation will actually be bigger than the original 10% which you ceded. It’s just like investing in the business by buying a new piece of equipment which enhances productivity- except with profit sharing, you’re investing in your people’s productivity. And ultimately, they’re the ones making you the money.

The Behaviour Modification Properties of Social Media

Sounds very Orwellian, doesn’t it?

I just read an article on Mashable about the upcoming release of Foursquare 3.0.  In the past, I’ve dismissed Foursquare as a rather childish social media service, only hitting the social proof concept in a very fringe manner that’s not really all that useful for marketing purposes. Foursquare 3.0 will change that- the new features described in the article strengthen the service’s use of social proof, while adding some valuable tools for merchants and people like me (slightly off the wall marketing types).

It got me thinking.  Social Media potentially has the power to modify behaviour- so that the individual acts more in a fashion aligned with the group mind mentality.  What I’d never considered before is that this is the true root of the social proof concept.  With digital convergence and mobile social media applications for smartphones growing steadily, the social media landscape is moving heavily to the mobile sphere (does anyone still use Twitter from a desktop pc?)

Traditionally I’ve shunned using location-based social media checkin services like Foursquare and more recently, Facebook Places. I don’t want people knowing where I am or where I’ve been, that’s just creepy right?  My mindset is shifting though- I can see the value from a marketing standpoint in these types of services. I suspect that when Foursquare 3.0 launches, I’ll begin using it- if only to evaluate how it can be leveraged for the benefit of my clients.

Which brings me to the behaviour-modification potential of social media. If I know that my BlackBerry is deviously and unashamedly recording and broadcasting the places where I stop in to the social media world, will I be more mindful of where I go and when? Not that I have a whole lot of perceptive closet skeletons to start with. But, what about the guy who’s married and has a couple of kids? What would his wife say if his Foursquare account logged a visit to Moe’s Tavern at 7:02pm instead of being home for dinner? Alternatively, what would the jealous husband say if his wife’s account logged a 2pm visit to ‘Richard’s Place’ (But honey, it’s a corner bistro on 3rd and Main…)?

With the technology to make this kind of Orwellian tracking commonplace in smartphones today (find a phone without one, or even two GPS units- I dare you), these services can quickly become ubiquitous. Consumers have the choice to either adopt them or leave them. Personally, I didn’t see any value in adopting them before. But with the new merchant tools integrated into Foursquare’s upcoming 3.0 launch… there’s more incentive for consumer adoption of the service (for instance, a business can run a deal where a customer/Foursquare user gets a ‘reward’ in the form of free product, samples, or discounts if that user AND a certain number of his or her friends checks into the business within a set period of time). That’s a powerful incentive for adoption, particularly among the under-30 crowd (which research has shown to be high adopters of social media services, and woefully unconcerned about privacy or protection of personal information).

Location-based social media services just might keep us all more honest. But where’s the fun in that?


Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.

Competition… Period?

As entrepreneurs, directors, CEOs, and managers, we have an ingrained notion that cash is king and competition is the lifeblood of the free market.

I won’t argue those points, not one bit.  Cash IS king, and competition IS the lifeblood of the free market.

But, competition is taken a bit too seriously by many of us in the business world.  To the point of blindness, even.  If you assume that competition is the only way to carry on business, then you’ll naturally be blind to some intriguing opportunities that may pop up.

In the late 1990’s and early 00’s, there was this really interesting, cool new corporate buzzword that was thrown around quite haphazardly, and often without even a true understanding of what it really was…

… Synergy.

The Human Resources types and outside training consultants are still quite fond of it.  Which is understandable, because the word fits very neatly into what they do.  Synergy is essentially a symbiosis of sorts, but without the vital necessity and neediness that goes along with a true biological symbiosis.

Personally, I prefer the term ‘collaboration’ to describe this mindset that isn’t contradictory to competition, but meshes quite nicely with the principle in general.  Sure, you can’t just wake up one morning and think Today, I’m going to call up my biggest competitor and offer them a favourable merger deal.  That would be silly.  Perhaps even insane, if not well thought out.  But being open to professional collaboration with competitors and organizations in related industries can have surprisingly pleasant results.  If we look at basic economic theory, we know that resources of time, money, and materials are finite (unless you’ve been living under a rock, or with Paris Hilton, you already instinctively knew this).  Every organization (even the RIMs, Coca-Cola’s, and Microsoft’s) has a piece of the complete economic pie.  To gain a bigger piece of the pie, someone else has to lose market share… or have some of their pie gobbled up.  That’s where the nature of competition comes into play in the business world.

But, if an opportunity arises where two organizations can pool their resources and enhance their own product mixes and/or serve their customers better, why wouldn’t you as a manager pursue that opportunity? In fact, it would be a fiduciary irresponsibility of you not to- since enhanced product mix and customer service more often than not translates into a healthier bottom line.

Personally, I believe that the future of western business may just be in coming together instead of going twelve rounds in the ring with your competitors- especially in light of the insane (though perhaps unsustainable, but that’s a topic for another day) economic growth and enhanced global competitiveness from emerging economies in South East Asia.

2,500 years ago, the philosophic general Sun Tzu wrote that the greatest victories are those in which you turn an enemy into a friend without firing a single arrow.  Sage advice.  There’s a reason that his words are still floating around today.