Business Insight Zone

Last week someone pointed me to X.vu, which promises to be the shortest of the URL shorteners. I was happy to see it, because I shorten a lot of URLs for Twitter, LinkedIn, etc., and because my favorite shortener, IS.gd, has just tripped over into five characters behind the slash. (Like this: http://is.gd/106yp — and yes, this is a Twitter-geek thing.)

X.vu’s tagline is “Because Every Character Counts!” I’m sympathetic, because I can’t believe that people on Twitter are using all kinds of URL shorteners with names like tinyurl.com. I mean, TinyURL runs a good service, but its very name is several characters longer than the absolute minimum, which would seem to contradict the purpose of a URL shortener. X.vu also has an easy one-click way to post a shortened URL to Twitter. Nice.

But X.vu has apparently totally blown its own premise, based on what it puts after the slash. I just went to shorten an address, and got this result:

The service is new enough that, best I can tell, this really is the 1068th address it has shortened. But if it were really designed to make every character count, the new URL would be something like http://x.vu/gd — because it wouldn’t be counting up using only the decimal digits.

How many URLs can you shorten for each character length if you use only the digits 0 through 9?

• 1 character = 10
• 2 characters = 100
• 3 characters = 1,000
• 4 characters = 10,000
• etc.

How many can you shorten for each character length if you use the digits 0 through 9, the lower-case letters a through z, and then the upper-case letters A through Z?

• 1 character = 62
• 2 characters = 3,844
• 3 characters = 238,328
• 4 characters = 14,776,336
• etc.

You see my point, which is hardly arcane given that the other shortening services do this.

The moral of the story: it’s not enough to get a good little property (as the X.vu address is), and it’s not enough to build a nice little tool (which they’ve done). You still need to copy your betters where it makes sense to, and avoid designing anything in an avoidably stupid way.

Malcolm Gladwell is no stranger to the business world by now, what with the huge success of The Tipping Point, Blink, and Outliers. I can only wish that he had spent a little more time in his new piece for The New Yorker spelling out the business implications of his ideas. That’s not a criticism of the piece as it stands, so much as an acknowledgement that the ideas he talks about have enormous impact for the business world.

How David Beats Goliath

Following his typical M.O., Gladwell takes one idea or question — in this case, How do underdogs beat superior opponents? — and applies it across several fields.

He starts with a girls’ basketball team in Redwood City, California, which used a relentless full-court press to beat many teams that had better players and more experience. He extends the basketball lesson by interviewing Rick Pitino, the great college coach whose teams are likewise known for running the press. (Gladwell does not mention that John Wooden, whose record of ten national titles with UCLA remains unrivaled, also used the press.)

Gladwell extends his thesis through other examples, including the biblical story of David and Goliath, a war-games tournament, and T. E. Lawrence’s guerrilla tactics against the Ottoman Army in World War I. The commonalities he finds are that successful underdogs:

• Operate in real time, much faster than the established powers; and
• Replace ability with effort — especially effort targeted at the overdogs’ weakest points.

In basketball terms, the full-court press works so well because it takes good teams out of their zone of strength (executing a half-court offense) and forces them to play in uncomfortable, uncoordinated ways merely to bring the ball down the court at all. Lawrence’s attacks in Arabia worked so well because the tempo and fighting style of the Bedouin fighters he led was so different from the heavily-armed Ottoman troops they came up against. More than that, the Arabs sometimes did their damage without even encountering Ottoman forces — by sabotaging train lines in the middle of nowhere.

Gladwell didn’t mention another connection that I thought he might. When he talked about how Pitino coaches his players to look for and exploit the “rush state” in their opponents, and when he wrote that “David broke the rhythm of the encounter” with Goliath, I thought immediately of John Boyd, the fighter pilot whose work on “O.O.D.A. loops” has been praised by many, including Tom Peters and James Fallows. The acronym stands for “observe, orient, decide, and act,” and Boyd used it as a prescription for jet jocks (and, by extension, fighters of any type) to “get inside” the tempo — the corresponding loop — of an opponent.

Like most of Gladwell’s New Yorker pieces, the article is well worth reading, though I think he overdraws the moral of the story when he writes that

“We tell ourselves that skill is the precious resource and effort is the commodity. It’s the other way around.”

Given the devotion that Gladwell and I share for Anders Ericsson’s work on “deliberate practice” and the enormous effort it requires, I’m all in favor of praising effort at every turn. Too many of us balk at becoming excellent not because we genuinely lack the talent (or because our organizations lack the resources), but because becoming excellent requires a lot of hard, frustrating work.

That said, Gladwell does make the point that excellent basketball teams can beat the full-court press with high skill of their own. Mind you, many excellent teams aren’t prepared to overcome the press, if only because they so seldom face it. What the girls from Redwood City did was to hit their opponents with concentrated effort, precisely aimed at a key point of weakness that very few other teams ever exploited.

Gladwell knows this — indeed, he spells it out — but he sells short the complexity of the idea he’s unspooling when he suggests that skill is the commodity and effort is the precious resource. Routine skill like, say, dribbling a basketball is indeed a commodity, at least among basketball players. And effort is hardly in short supply among the teams that Pitino beats with the full-court press. What’s rare is the combination of skill and effort and discernment shown by Gladwell’s chosen underdogs.

Bear with me, because I don’t mean to come down hard on Gladwell, and this touches on some of the implications of Ericsson’s work that I’ve been trying to sort out.

• Skill is common. Genuine, distinguishing skill is in short supply (just ask any HR manager).
• Hard work is common enough. Yet genuine, obdurate, deliberate hard work to get better is in short supply (ask any sports coach).
• The type of discernment shown by Lawrence in the desert, or by Michael Jordan on the basketball court, or by an entrepreneur like Tony Hsieh of Zappos . . . that’s scarce.

Gladwell has written a fascinating piece on underdogs. Read it. Focus on effort, just as he says. But focus even more on how the right kind of effort multiplies skill . . . when it’s guided by discernment.

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Photo of Vignon’s renowned painting by Ed Uthman, used under a CC-Share Alike license.

Chuck Salter wrote a typically smart take on some of the technological advances in American medicine in this article:

The Doctor of the Future

It’s recommended reading if you care about health care. I’ve met Chuck and admired his work for years, so don’t take what I’m about to say as a criticism of him or his article.

He first points out some of the key problems with medical care in the United States: “Although we have the world’s most expensive health-care system, 24 countries have a longer life expectancy and 34 have a lower infant-mortality rate.” Then he explains how new generations of both doctors and technology are helping to address those problems, and how the “ability to expand and harness knowledge . . . makes cutting-edge information technology such a powerful driver of the emerging health-care revolution.” The article is interesting and well-reported, and it’s not Chuck’s job to go into every aspect of the health care equation in this country — which, you may have noticed, is complicated.

But as you and I think about addressing problems, we ought to be leery of putting too much emphasis on new technology to get us out of old problems. This applies just as well to great big problems like health care and climate change as it does to smaller ones like, oh, declining cash flows or increasing employee turnover in your own business.

Mind you, I like my high tech, and indeed I spent several enjoyable years covering it for Hoover’s, but it’s a trap to focus on technological solutions to the exclusion of behavioral ones.

Here’s what I mean: the advances that Chuck is writing about — things like social media-enabled telemedicine and robot-assisted surgery — clearly can do wonderful things for American medicine. But it wasn’t the absence of these things that led to the problems we face. We’re not 35th in infant mortality because we lack technology or money; we’re 35th because we haven’t behaved as smartly as (at least some of) the 34 countries ahead of us.

If you’re umpteenth in your industry, it’s probably not strictly because your technology is poor. It comes from a thousand little and big things that have compounded together over the years to render the whole less than the sum of its parts — just like the American health-care system.

Now, set aside your pipe dreams of technological fixes. How can you BEHAVE differently this week to put yourself in a better position?

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Photo by kokopinto, used under a Creative Commons license.

Although it’s been many years since Gary Hoover was involved in the operations of this company that bears his name, I like to think his spirit of constant inquiry still infuses what we do here.

Now I’m pleased to report that Gary has bowed to the requests of many friends to start a blog. In his typical style, he’s made it an avenue of exploration and discovery, both in form and content. Gary is one of the most fascinating conversationalists you could ever hope to meet, and you get the same flavor from his writing, which ranges widely over many topics. (That’s him in the picture, amid some of the 50,000 books he owns.)

My advice: give HooversWorld a look.

Is the sun setting on the spirit of the Hewlett-Packard garage?

Yesterday I got to talk a bit with San Jose Mercury News columnist Chris O’Brien about the state of the IPO market and what it means for the culture of innovation in Silicon Valley. He used a couple of quotes from our conversation in this article:

Dwindling public companies means big changes in the valley

. . . The number of public companies in Silicon Valley fell for the eighth consecutive year in 2008, to 261. Forget the inflated dot-com peak of 417 in 2000. It’s also below the 315 the valley had in 1994, when the Mercury News started keeping track.

This is no longer a simple correction following a period of excess. This is now an unmistakable trend that represents the end of an era defined by a grand partnership between Silicon Valley and Wall Street. That alliance fueled a model for funding innovation that became the envy of the world. And now we have to come up with a new one. . . .

The column is well worth a read, and I’m glad I got to talk with O’Brien about his take on the situation in Silicon Valley. Although I’ve never lived there, I feel a connection to the place because I covered the microchip business during my first few years on the Hoover’s staff, and in fact back then I read O’Brien’s newspaper more than any other.

We were talking because O’Brien had read our IPO Scorecard for the first quarter of 2009 — which was, predictably, dismal. Sure, things are bad all over when it comes to IPOs (as we’ve discussed here plenty of times before), but O’Brien has an interesting take on why things are so bad for Silicon Valley.

My sense is that we’re seeing a winnowing period for both IPOs and the venture-capital firms that back them. Over time, the best of both types of company should do fine, but O’Brien is probably right that there’s a fundamental shift underway in the calculus that governed the relationship between Silicon Valley and Wall Street. When he and I were talking about it, I pointed out that the level of IPO activity we’ve come to see as normal has really only been going since the 1990s; now that I think of it, the modern venture-capital business isn’t much older.

What we’ve seen over the past couple of years tells me that the good VCs are willing to put high demands on their startups — nothing arcane, mind you, but the VCs are focused on funding companies with compelling technology, tight operations, and solid financial discipline. The probity of both VCs and startups should give them more flexibility in both the timetables and the avenues they choose for “exit events,” whether that means IPOs, acquisitions by the Ciscos of the world, or other financing options.

Regardless of what the future holds for the VC business for the IPO market (reasonable assumption: more pain before the good times return), I’m confident that something will fuel the process of innovation in American business — and the business of the world.

Hewlett and Packard joined forces in 1938, before the war effort had pulled the United States out of the Depression. They didn’t go public until 1957, but in the meantime they created a lot of value by bringing high-quality electronic equipment to market. Their gear was used for everything from Disney pictures to that same war effort.

The downturn we’re living through is bad, but it’s not as bad as the 1930s, and it seems to me that the force of entrepreneurialism is still strong in the world. Some of it happens within large corporations. Some happens along classic venture-backed lines. Some is bootstrapped.

However it comes to pass, ingenuity will out. The sun may set, but it rises again.

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Related posts:

• Hard Times are Good Times for Business Innovation.
• How much more of the hard times?

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Photo of the garage where Mr. Hewlett and Mr. Packard started their business by Peter Kaminski, used under a Creative Commons license.

Four of the five panelists get their groove on.
The fifth may have been busy wielding the confetti cannon.

My first mistake was failing to post about every SXSW session I attended in real time. Next time I’ll live-blog sessions in progress, then clean them up later.

My second mistake was in ignoring the advice that my friend Kevin Lawver gave during the awesome panel — Rawking SXSW Year Round: Staying Inspired — which closed SXSW for me this year. His advice, and the point of the panel, was to capture that high-energy, high-possibility, let’s-make-something spirit of SXSW and preserve it as we resume our ordinary duties.

Besides dancing, the panel also included mood lighting, theatrical staging, ballistic candy, group therapy, and a high-powered confetti cannon.

When I come back to this post (soon!), I’ll explain more. I didn’t want to make the third mistake of letting it linger in my drafting folder even longer.

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Photo by kellygifford, used under a CC-Share Alike license.

A friend used that acronym — a new one for me — in a Twitter conversation recently. It means:

Learned Something New Today

This could be the mantra for many a successful otaku.

Wait, what? Otaku? LSNT? Is this a jargon lesson, or a business blog? (Quick answer: both!)

Otaku is a Japanese term meaning someone “with obsessive interests, particularly anime, manga, and video games.” A buff, a nut, an XYZ-head.

The Otaku Scientist

I learned about otaku a couple of weeks ago while I was reading through Mark McGuinness’s fabulous series of posts about Charles Darwin’s creative process. Here’s the key bit from the post “Darwin’s Voyage of Discovery”:

Visiting the Darwin exhibition [at the Natural History Museum in London] was a bit like spending time in the company of a charming but obsessive friend. We all know them — people who never shut up about football or cooking, or who reinterpret every conversation in psychological or political terms. They can be fascinating, but you sometimes wish they would change the subject. I got the impression Darwin hardly ever changed the subject. It seemed to be constantly on his mind. Even he found it wearying — while working on his theory of evolution he used to play billiards every evening, in an attempt to ‘drive the horrid species out of my head’.

The Japanese have a word for this kind of obsessive person - ‘otaku‘. It means something like ‘geek’ or ‘nerd’. A classic otaku has an encyclopaedic knowledge of things like manga comics or technology, but you can also be an otaku about any subject. We’ve seen before on the Lateral Action that obsessive behaviour is often critical to creative achievement - whether in Michelangelo’s countless drawings, Brian Wilson’s marathon recording sessions, or Stanley Kubrick’s mind bogglingly detailed research for his films.

Darwin was clearly an evolution otaku. His curiosity about the natural world combined with the questions he had inherited from past thinkers, leading to the habitual observation, questioning and thinking to which he attributed his success. His obsession manifested firstly in the meticulous observation and collection of specimens during the voyage of the Beagle, and later in the endless hours of study and reflection through which he worked out his theory. The fact that he was an otaku meant he persisted when the dabblers gave up.

The Otaku Coach

This reminds me of something I read a while back about the greatest professional (gridiron) football coach of this generation, Bill Belichick:

“Perhaps his most unheralded virtue, but one that explains plenty to me, is his innate curiosity,” [Belichick's friend Rob] Ingraham wrote in an e-mail message. “Bill wants to know what makes things tick, and when applied to his passion for football, this extends to every facet of the game: ‘What makes this blitz work? How do you counter this blitz? How can you disguise this blitz? How can we vary this blitz? Who can I call tonight to talk blitzes with?’

“You get the picture,” Ingraham added. “No stone goes unturned because his curiosity drives him to learn everything he can, which he then absorbs, thinks about, mixes into the boiling pot with the other ingredients and ultimately prepares to dish out on some poor unsuspecting sap. It’s been said that he’s not Mr. X’s and O’s, but rather Mr. A to Z, the complete package. I believe that his curiosity has been the catalyst in bringing all this together. Not unlike some other accomplished gents throughout history!”

Now, I doubt that Belichick will go down in world history like Darwin or Michelangelo, but the theme is the same: he’s an otaku of football, and a lifetime of studying the game hasn’t dimmed his fire to learn yet more about it.

What about you? Are you an otaku for your passions? Are you committed to LSNT — every day?

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Photo by skycaptaintwo, used under a Creative Commons license.

A thought experiment:

What would you do if you could no longer use your main channel of communication to reach your customers?

• If you’re used to selling to them in person, could you do it over the phone in a pinch?
• If the phones in your call centers all went on the blink, would customers have any other way to get your attention? E-mail? IM? Twitter? Facebook?
• If you normally rely on drumming up business with mass advertisements in magazines or television, how would you replace those venues if, say, they became irrelevant?

(It’s with that last question that we leave the world of pure hypothesis and get right down into the messy kitchen of the consumer-goods companies and retailers. There’s water all over the floor.)

Why you should do this thought experiment:

It might help you think your way out of a cul-de-sac.

The easiest thing in the world is to keep doing what you’ve been doing . . . because it’s what you’ve been doing. To scrutinize your behaviors, especially the durable ones, is a hard thing to do. Which is why so many of us avoid it.

So make it safe. Pretend it’s just a thought experiment. Figure out what other channels you could use to put yourself “in harm’s way” with your customer — right out there where they couldn’t help but interact with you and give you their unvarnished opinion.

You might be surprised. You might find that your your emergency backup channel becomes a new express route into your customers’ lives.

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Photo by Lindsey T, used under a Creative Commons license.

(For values of “neat” including “gratifying in a narcissistic way.”)

1. Yesterday, my buddy Aaron Strout — CMO of Austin’s own Powered and the kind respondent to my questions about Yammer — published an interview with me on his blog. So if you want to know (much!) more about my thoughts on social media, head on over.

2. Last night I had a great time talking to some of the worthies from Bootstrap Austin. My presentation was called “You Can Create a Customer Anywhere,” and aimed to apply some timeless ideas about business — in this case, Peter Drucker’s analysis of entrepreneurship — to the “placeless” world of online business. We met at the nifty Conjunctured coworking space in East Austin, which I had never visited before. Good times.

At some point, I’ll likely post the deck from last night’s talk, though I can’t guarantee I’ll give it the full-annotation treatment like I did with last month’s HIMA talk.

And now back to our regularly scheduled less-narcissistic programming . . .

I’m looking for advice. One of my strengths is being full-to-bursting with ideas; it’s also a weakness, though, since there are way too many ideas to ever implement. We’ve touched on this before.

This came to mind again yesterday after reading this post from Jim Storer:

Pulling for You

Jim was looking for ideas for social-media-driven marketing promotions in line with “Join the Fiesta Movement,” which Ford is using to drum up interest in its Fiesta model. In the comments, I wrote this:

What if a bunch of local restaurants put together a sort of group scavenger hunt that led teams of people from one place to the next, sampling some specially-prepared micro-meal? Like a cross between a tasting menu and a pub crawl, with the unusual twist that it would be coordinated between restaurants that might be seen as competing with one another? What if the whole thing were coordinated by tweets?

Now, who knows whether this would work or not? Surely it would work better in a food-crazed town like Austin or San Francisco or New York than it would in Podunk, and surely it would need better organization than it could ever get from me. (I’m long on ideas, short on implementation of fine details.)

But how could this idea be implemented? Who would do it? And more important, how to get the word out — not just about this idea but any idea?

There’s this blog, which has a modest (but growing!) readership. There’s Twitter. There are other social-media outlets. But these venues rely a lot on serendipity, and if the right people from the restaurant business don’t happen across them . . . then what?

Now that I think of it, maybe part of my inspiration comes from the 999 business ideas recently posted on the SAMBA blog. That post had the advantage of a very big megaphone — Seth Godin’s blog — talking about it.

But that’s only one post, like this is only one post. What about all the other little potentially useful ideas that you and I and your neighbor and that smart woman in Purchasing may have? Do they just die on the vine?

So . . . what would YOU do to promote an idea like this?

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Photos: fridge by Kathleen Franklin, megaphone by Michael Douglas Bramwell, both used under Creative Commons license.