Business Insight Zone

My agenda for today includes a few hours of driving on the stretch of I-35 that connects Austin to Dallas, where I’ll spend the next two days at the Inbound Marketing Summit. (If you’re there, please find me and say hello.)

I’ve been doing more traveling for work lately, experimenting as I go with different approaches to maintaining (or even increasing?) my productivity. But now I want to tap your brains with some informal poll questions so that we all can benefit from our collective experience as business travelers.

So, my hearty road warriors . . .

• How do you stay productive when you’re traveling?
• What pieces of technology do you rely on when you’re traveling?
• What are your key sources of information on the road?
• What types of work can you not do on the road — and what types can you do better on the road?
• How do you evaluate whether a particular piece of business travel is worth it?
• What’s your best advice for someone taking on a lot of business travel?

Please, friends, educate me (and each other!) in the comments thread.

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

My college classmate Michael Webber is now on the faculty of our alma mater, and he’s been writing up a storm over the past few years in support of innovative ideas for the energy future of Texas, the United States, and the world.

In this Texas Monthly article (free registration required), Michael lays out several pro-business, pro-environment, non-Flash-Gordon-esque ideas that could move Texas away from its position as the country’s top contributor to global warming, and make it instead “the leader in reducing air pollution and greenhouse gases.”

Green Star State

What I like so much about the article is that Michael has focused on non-partisan approaches that would use limited government activity (sometimes simply in the form of getting out of the way) to open the door for waves of entrepreneurship — something that Texas has always had in spades, and especially in the energy sector. One passage makes this point especially well:

Contrary to the fears of some politicians, our incipient greenness has not been bad for business. The clean-technology sectors are booming, creating jobs and revenues in many locations that needed them badly. But we’ve barely begun. Texas used its natural gifts to become the leader of the world’s energy industry, and we can once again use them to lead the green energy revolution. Just as we were blessed with the nation’s greatest allocation of oil and gas, we have also been graced with the nation’s greatest collection of renewable resources. Arizona and Nevada have the most sun, the Dakotas have the most wind, and Iowa is the most prominent supplier of corn ethanol. But Texas has the most combined wind, solar, and biomass sources of any state. We can make a lot of money putting these resources and other clean energy capabilities to work.

The piece goes on to give details on everything from underground carbon sequestration to algae-based biofuels. If you have any interest — even a purely commercial, non-environmental interest — in the future of alternative energy, it’s well worth a read.

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Photo by cjc4454, used under a CC-Share Alike license.

Don’t own one, but Amazon’s Kindle certainly seems like a nifty machine (especially when you do things like this with it). But the price tag on the new Kindle aimed at the education market has earned the product plenty of pans in the early going.

Given my earlier views on the subject of dedicated e-book readers versus multipurpose gadgets like the iPhone (see links at the bottom of this post), you won’t be surprised that this item from ZDNet’s Between the Lines blog caught my eye:

• Amazon Kindle’s $489 price tag makes iPod Touch a better buy

The concept of the Kindle is great, but it’s highly limited in certain ways (connectivity, format of books, etc.), it’s expensive, and it doesn’t do nearly as much — or have nearly the storage — of competing products like the iPhone and iTouch.

Will people read books on a handheld electronic device? That question has already been answered with a resounding Yes, and I can’t see that trend doing anything but grow in years to come. But I doubt the Kindle — at least as currently configured and priced — is the platform where very many e-books will be read.

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Related posts:

• iPhones and e-books: sometimes I DO predict the future.
• Is the iPhone the answer for e-books?

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Well, it’s happened at last: sales of Nintendo’s Wii are finally slowing down:

• Bloomberg: Nintendo Forecasts Miss Estimates as Wii Sales Slow

Mind you, the company is still projecting an operating profit of $5 billion for the fiscal year that ends 10 months from now. Not bad for missing estimates in a dismal market.

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Related posts:

• The Nintendo Wii: Hitting its way into the Hall of Fame.
• The Wii little dragon-slayer of the video game industry.

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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.

Here comes the Sun . . . but why?

Yesterday I spent a good chunk of time talking to two of my Hoover’s colleagues — Josh Lower, who has covered Sun Microsystems throughout this decade, and Seth Shafer, who has done the same for Oracle.

Unless you spent the day sequestered in jury duty or something, you’ll know we were talking about Oracle’s proposed acquisition of Sun, which has been all over the business headlines.

Several parts of the deal’s logic seem clear:

• Oracle adds Java and Solaris to its software stable. Check.
• Databases! Get yer databases here! Check.
• Oracle has been great at integrating big acquisitions, as another colleague, Jeff Dorsch, pointed out earlier. Check.
• This moves Oracle beyond “mere” competition with SAP, and puts it right in the data-center wheelhouse of Hewlett-Packard and IBM. Check.

The lingering question for all three of us:

What makes Oracle so sure it can integrate Sun’s hardware units into its own software business?

All of us have been watching the tech sector long enough to understand that “Larry Ellison’s ego” could be a sufficient answer to this question. Still, that would be a pretty scary answer, considering the size of the acquisition.

Seth raised the point that Oracle could come out looking pretty good regardless of what happens with Sun’s hardware units. If they never fit, Oracle can blame the economy — or say that the Sun units were in worse shape than anyone realized, or that Oracle realized they could get more value out of them by selling them to other hardware companies. But if the integration does work, then Ellison looks like a wizard for pulling off something that no one else even imagined.

Or maybe there’s a reason no one else ever imagined it.

Your thoughts?

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Photo by cat’s_101, used under a Creative Commons license.

Stopped by the post office early this morning — why, yes, I was mailing my tax return — and needed a stamp. I even had a pocketful of quarters to make it easier.

See that stamp machine in the picture? They didn’t have one of those. They didn’t have a simple scale, either. They had an Automated Postal Center, which works like an ATM and which, no doubt, is great if you need to mail a pillow or a lawnmower or a bucket of live fish to someplace interesting. Lots of options, is what I’m saying.

Too many options. Menu after menu. Way too much to read and navigate.

• Priority Mail? No.
• Needs insurance? No.
• Anything hazardous in the package? No.
• Irregular shape? No.
• Specifically which zip code is it going to? Shouldn’t matter — it’s just domestic First Class mail . . . but it looks like I have to enter it anyway.
  
• Can it fit a big address label like the one we’re showing you on the screen? No.

Et cetera.

Oh, and my quarters were useless, because the machine doesn’t take cash.

Oh, and I had to buy an extra stamp, because I only needed 59¢ of postage, but the minimum order on the machine is $1.

My complaint isn’t that the thing has so many menus. There will be somebody who does need to ship a balalaika to Kazakhstan, insured, with a computer-printed address label, in the middle of the night — and the APC will be useful to them.

My complaint is that the very first screen didn’t have “Send standard First Class letter” as an option.

One button to push, the machine figures weight and postage, and you’re on your way.

It’s easy to make fun of the Post Office. But now turn your gaze upon yourself: what are you doing that leaves your customers shaking their heads and saying “I just wanted to buy a stamp”?

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Image by lorenzo montagna, used under a Creative Commons license.

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.

Yesterday I quoted this question from a post by Matthew May:

“What is it that our competitors would struggle with if we were to cease?”

Today a colleague and I were talking about this question, and he wondered if I could supply an example of this phenomenon. After some false starts, we settled on one.

A few years ago, Intel bowed out of its long-running “gigahertz war” with AMD. In other words, it stopped marketing its processors based on their top speed. Instead, it began marketing its wares, especially the Centrino package, by emphasizing a combination of powerful capabilities and power-saving design — a ploy which helped to make the Centrino a big winner in laptops.

Although (1) AMD eventually found its footing, and (2) both companies did keep making some improvements to their chips’ top speeds, Intel’s move left AMD in the lurch for a while; the smaller company was forced to adjust its marketing. The “gigglehertz” wars were over, and the old rhetoric of “mine is faster than yours” no longer had traction.

What examples can you offer? When has Company A created problems for Company B by stopping doing something.

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

Consider two old-school titans of American high-tech business — Hewlett-Packard and Motorola.

Imagine that exactly ten years ago, in the run-up of the tech/dot-com boom, you had bought equal amounts of each stock, figuring that both of them would benefit from the burgeoning activity in the tech sector, and that both of them provided you with the sort of “margin of safety” that Warren Buffett has always sought, thanks to their standing in American industry, the strength of their brands, their patent portfolios, etc.

The more dramatic of the two companies in the intervening ten years, I would argue, has been Hewlett-Packard, especially with its 1999 spinoff of Agilent (regarded skeptically by some at the time) and its 2002 acquisition of Compaq (regarded more than skeptically by many at the time). Compared to those moves, and even considering its 2004 spinoff of Freescale Semiconductor, Motorola’s trajectory has been tame.

But disastrous. Compare this 10-year chart of HP . . .

To this 10-year chart of Motorola . . .

This chain of thinking is inspired by this morning’s headlines about Motorola:

• MarketWatch: Motorola to post loss, cut 4,000 jobs: Wireless-phone sales fall even sharper than expected
• Reuters via the IHT: Motorola to cut more jobs as sales decline

It’s time (or past time) to dismember the company. Motorola’s long, distinguished history can’t save it from market irrelevance under its current configuration. What shape it needs to take, I don’t know. But it’s not this.

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Related posts:

• When do you kill a business? (See the last item in the post.)
• Mark Hurd’s 3-minute management clinic.
• Phase A and Phase B.
• Zander’s departure at Motorola.

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