Useless Businesses and the Damage Done

Umair Haque, Director of Havas Media Lab, and one of my favorite troublemakers.  His recent article, titled Is Your Business Useless?, provides a great framework for thinking about the value of organizations and enterprises of all sizes. Good reading for people considering new ventures. As Guy Kawasaki says, “Tell me how you make meaning in the world?” It takes about as much effort, capital, life force, and other resources to start a business that has no social value as it does to start one that has piles of it. The ones that are imbued with real social benefit can operate on much less capital and return far more “value” to all concerned – investors, workers, and customers.  Too often, when we make economic calculations, we fail to recognize forms of value other than cash, but these other value measures tend to have a far greater impact on decisions than purely economic decisions.

Capitalism is a completely sustainable and efficient system if certain orders and rules are maintained. Specifically:

  1. The information to make informed economic decisions must be available to all decision makers. That means you and I can easily determine whether some transaction makes sense for us.
  2. Treasure must follow value. That means that the more value you create, the more resources you have.

Regulations have tried to safeguard these principles, but, as the banking crisis has illustrated, a global, complex economy makes policing much more difficult. But regulation shouldn’t be about puritanical right and wrong, but about applying the constraints that keep the economic engine growing at a sustainable rate – maintaining the bonds between value and money.

My family comes from Quakers, so I tend to seek out the simple truths. In the long run, nothing that anyone can do creates value at the rate that we saw the economy rise over the last decade.  If you look at the economic cycle from this perspective, all of the crashes were predictable. Regulation policy should really constantly be looking at the top ten places where money is being made and slow it down – not to punish success but to maintain an environment where success is sustainable and where there is some economic justice – where value and treasure move together. Ultimately, windfall profits always suggest an inefficiency in the economic feedback system and pure arbitrage should be minimized as it puts real value creation at risk.

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How to hire a small staff

Jim Collins has offered me no end of simple ways to describe complex issues to my consulting clients.  His book are full of solid wisdom. I’m sure his next book will be no different, but for the moment I’m all about this article in the NYT about his methods.  Genius – especially his hiring protocol.

Spend more time finding and selecting people. Learn about what makes someone successful in your organization. Get to the point where you can write it down and revise as needed.

90% of management is in the hire.

T-Shirt Maker’s Style, Drawn From Web Users

Crowdsourcing
My favorite business models right now are the ones that really focus on a limited set of operations, chosen for a unique aggregating of external resources. That may be hard to visualize, initially, but this article from the Washington Post describes the phenomenon very well, including how technology has made it all that much more effective and agile.

It is relatively well known that GE, under Jack Welch and otherwise, has institutionalized the practice of outsourcing those operations that are not core to their offering. This changes constantly, based partly on what services are available or the logistics of accessing them or many other factors.

With consumer products, the engaged opinion of consumers should always be part of the product life-cycle. The internet provides nearly infinite opportunity to facilitate opinions from as diverse a consumer base as you wish to contact. There is no longer an excuse not to test market a product, or atleast aspects of a prouct, before burning resources on manufacturing or procurement. I have yet to come upon an example where consumers were engaged for their opinions and it backfired entirely. You may not want to publicize all your internet opinions because, honestly, some people are just crazy. Some demographic groups have crazy opinions that only get more balkanized by the oppurtunity to bash something (mob mentality translates all too well to the internet).

Read the article…

New Products (Like the iPhone): Announce Early or Go for the Surprise Rollout?

I love when I find a resource that distills a common strategic question down to a few simple calculations. This article on doesn’t quite get to the paint-by-numbers status, but it does lay out a clear set of topics to consider when thinking about your product launch.

Vaporware or surprise attack?

So often your fortunes are dominated by thigs you cannot control, having a checklist of things that you can clearly make some predictions around should help minimize risks and allow you to make a decision with confidence.

Click here to see this article.