Management at Sleepy’s

Seth Godin has this story to tell about a mattress store chain:

It’s a post about the phone on the Sleepy’s salesman’s desk. Our sales guy, who was outstanding by the way, explained that all 400 stores in the chain are owned by one guy, and that the instructions are clear: if there’s anything in the store, anything important, that’s broken and not fixed within 72 hours (including policies, prices, inventory, whatever), his job is to pick up the phone and dial 300.

And Harry Acker, the owner, the billionaire, answers. “This is Harry.” And you tell him and he fixes it.

Mobile Web Communities

Dana Blankenhorn writes:

Over time, the mobile Internet will become more-and-more like the laptop Internet. But right now the economics are quite different. It’s time to take advantage of this.

No one has yet succeeded in this, but here’s the trick.

1. Create a vertical community on the Web, database-driven, filled with interaction, free but requesting PII (personally identifiable information).
2. Deliver mobile services aimed at that community, advertised on the Web site (and elsewhere online).

This is not an easy dollar. It takes an immense amount of free content to build a community, along with software that scales this intimacy, that enables people to create their own worlds based on the free content. Only after you’ve engaged in such a world will you gladly pay to put parts of it in your hand.

What you need to do, first, is to gain a solid relationship with mobile carriers. This is not easy to do. It’s a high hurdle to jump. It’s a barrier to competition. You need to practically guarantee volume. That’s the only way to get your costs down to the point where the mobile business becomes profitable.

Sunil Mittal Talk at IBM

Irving Wladawsky-Berger writes about a talk given by Bharti’s Sunil Mittal at an IBM Business Leadership Forum:

Sunil Mittal, Bharti’s Chairman and Group Managing Director talked about the major challenges Bharti has faced over the last few years as India navigates some turbulent waters. He explained that, with India’s annual per capita income only a bit over $600, cellular phone service has to be provided for the Indian market at a very low price, around 2 cents a minute or less. The only way to provide telecom services so inexpensively and run a profitable business is to take advantage of Indias large population and economic growth, scaling up the business rapidly by adding many new customers every month.

To do this, Sunil Mittal had to develop a radically innovative business model: focus only on the customers and outsource just about everything else. In other words, put all the energy of the business into attracting, supporting and retaining customers and accept the fact that pretty much everything else has been commoditized and should be outsourced, including managing all the IT equipment and the network. He said there was a lot of resistance to this strategy. People were calling him from around the world saying that IT and the network were the heart of a telecom company. You cannot give your heart away and then run a business, they said to him.

Mittal begged to differ, saying the customer, not the technology, was at the heart of his business and then proceeded to implement the strategy. He further confounded everyone by not picking Indian companies as his outsourcing partners, choosing instead IBM to run IT and Nokia and Ericsson to run the network, because he wanted highly experienced, international companies that could keep up with the torrid pace of Bhartis growth. Today, Bharti is one of the top five companies in India, and Mittals vision for it is to be Indias most admired brand by 2010.

City Wi-Fi Network Costs

Business 2.0 writes in an article about Earthlink:

Keith Dalrymple, an analyst at investment bank New York Global Securities, estimates that citywide Wi-Fi networks will cost about $100,000 a square mile to build, which means EarthLink could blanket a city like San Francisco for about $5 million. “Wi-Fi is a very cheap way to get into network ownership,” he said.

Japan Mobile Market

Wap Review has a good overview of the phones and new services.

3G seems to be taking Japan by storm. In wandering around the city, I saw many of the latest 3G handsets in use. One of the most popular seemed to be NEC’s Linux based N902i on the DoCoMo FOMA network. The selling point of this phone is the 2MP camera with image stabilization and auto focus, but the nicest part for me was the Netfront browser on the 2.5 inch, 240 x 345 (dubbed QVGA+TM) TFT screen with 262,144 colors. The N902i also has an MP3 player with equalizer, a PDF viewer, support for the Japanese i-Appli Java standard for games and applications and it does OTA MP3 downloads and uses a mini-SD for storage.

YouTube and Clip Culture

The Economist writes about YouTube’s phenomenal success with video on the Internet:

In December people were uploading 8,000 clips a day, and watching 3m a day. This month they were uploading 35,000 a day and watching 40m a day. With such amazing growthalmost all by word of mouth, e-mail and hyperlinkYouTube already has four times the traffic of Google Video, the online video market of the world’s largest search-engine firm, and the nearest thing to a rival.

The success of YouTube points to another development. People are spending an average of 15 minutes on the site during each visit, enough to view several short, funny clips. This is because they are using YouTube for little breaks during a dull workday. And it is a lean-forward experience, as people sit in front of computer screens. This clip culture, as Mr Hurley calls it, is quite different from the lean-back experience of enjoying a half-hour show while reclining on the sofa.

How to Evangelise a Blog

Guy Kawasaki suggests a plan. Among the ideas:

1. Think book not diary. First, a bit of philosophy: my suggestion is that you think of your blog as a “product.” A good analogy is the difference between a diary and a book. When you write a diary, it contains your spontaneous thoughts and feelings. You have no plans for others to read it. By contrast, if you write a book, from day one you should be thinking about spreading the word about it. If you want to evangelize your blog, then think book not diary and market the heck out of it.

VC Deal Pricing

VC Confidential digs deeper:

The venture business is driven off of multiples. Early stage VC’s target 10x return of capital and expansion/late stage investors target 3-5x. Why 10x…seems a bit usurious? The classic venture portfolio looks like this. Of ten deals done:
— 4 crater
— 2 are breakeven +/- a little
— 3 are 2-5x capital
— 1 is 8-10x

So, as a VC, you hope that all 10 deals will be the next Microsoft, but reality sets in at the first board meeting. You need to target 10x for your winners in order to pay for the losses elsewhere.

VCs will then try to estimate a) what they think the company might be worth if successful in 3-5 years and b) how much more capital will be needed. In a simple case, lets assume that the company is worth $100m in 4 years and will not take additional capital. Using the 10x rule, the VC will price the deal so that post-$ valuation of the deal is $10m. If the company is raising $2M and adds $1M worth of options to its pool, the VC will pay $7M pre-$.

Maps and Directions

The New Yorker writes about the “the science of driving directions.”

Navigation is big business these days. Web sites that offer maps and directions, such as MapQuest and Google Earth, are growing more sophisticated; global-positioning satellite technology and the in-car navigation systems that rely on it, such as General Motorss OnStar and Hertzs NeverLost, are becoming ubiquitous. Geographic Information Systems, or G.I.S., may be the plastics of our time. Its not hard to envision the demise of the paper road map, in a generation or two, because a map, for all its charms, is really a smorgasbord of chance information, most of it useless. Who cares where Buffalo is, if youre trying to get to Coxsackie? Most people just want to be told where to turn.

TECH TALK: Revolution on the Roads: Random Thoughts

As I look back on my two Surat trips, there are some other thoughts that come to mind. For one, we definitely need to inculcate road sense among our drivers. Slow traffic needs to keep to the left. It is incredibly frustrating to see the right lane blocked with a slow moving vehicle which refuses to shift to the left!

Also, the octroi check posts are becoming huge bottlenecks. Besides being huge corruption joints, they slow traffic to a crawl around them as trucks have to go through those points and long queues form. The One India concept needs to be extended so that these checkposts are abolished and there is free flow across states and cities.

Urgent attention needs to be paid to city roads and infrastructure. That remains the most frustrating part of the experience. In Surat, I saw a key flyover on the Ring Road built barely a few years ago closed in one of the directions for resurfacing. We need to build roads that last. We need to make rapid investments in improving city roads. Whether it is bridges across the sea in Mumbai or double-decker roads, decisions need to be made fast and complemented with speedy construction.

There is a need for alerts on traffic conditions. Everyone has a mobile phone. So, is there a way one can subscribe to traffic alerts for the road one is traveling on? We really need to create a decentralised system that enables person-to-person updates (via a central server). This way, one knows what to expect ahead on the road (high traffic, accident) so one can then make alternative decisions.

The signage need to be a lot better. For example, there is a turn off the highway one needs to make to get to Surat. The visibility of that information needs to be made better for first-time travellers. We also need to get better maps which are updated rapidly given the new construction that is being built. Also, how about integrating GPS into vehicles in India leapfrogging the rest of the world? In short, we need to use the emerging technologies to build a much better information and alerts system.

Another stupid system that needs rethinking is that of collecting tolls. These points and there are about five or six en route to Surat need to be made much more efficient. Perhaps, the EZ-Pass system from the US can be introduced in India. More importantly, we should collect double the toll in one direction and eliminate the toll booths in the other direction. Look at New York City, for example. In the short term, this may encourage travelers to look at alternative routes to save toll in the direction where the booths are, but they will quickly realize the futility of that given also that there really arent too many alternative routes!

It would be nice to ensure that all inter-city roads constructed have three lanes in each direction rather than two. This will ensure much faster driving times and make it much safer also.

We also need to promote the use of hybrid cars so as to optimise energy consumption. We cannot stop people from traveling by cars if anything, this will increase. But we can definitely work on promoting fuel efficiency.

In summary, roads in India are changing and so will our travel habits. By thinking a little about the future and adopting best practices from other parts of the world, we can make the experience much more pleasant.

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Skype as the Future of the Connectivity

Bob Frankston writes:

The more important result is to understand Skype’s Edge-connectivity. It’s an example of how communities can stay connected independent on the accidental properties of the Internet and the gatekeepers. Because the relationships are maintained at the edge mobility is fundamental. You don’t need the network to do meshing when the applications maintain their own relationships. Meshing then becomes a low level technique for pooling routers rather than a way to make applications mobile.

This edge approach can also allow the Internet itself to be simplified since the IP address can be used to facilitate routing rather than being overly constrained by having to also serve the role of stable (and dynamic) identifier. Since the identifiers are stable you don’t need a mechanism like the DNS to provide stability. Unlike the DNS, the Skype directory is a directory though it also maps identifiers into handles to facilitate rendezvous.

A more general implementation would distribute this mapping. If the applications themselves are able to participate in finding dynamic paths we can start to move beyond the current Internet’s single omniscient backbone that interconnects local LANs. The applications would find a path through a network consisting of way stations. Unlike a router a way station can be a visible transit point or an invisible. We see this kind of choice in airline flights. A flight might have a single identifier that allows one to be indifferent to the path or the user can choose explicit routing or a combination of the two.

Trends Underlying Enterprise 2.0

[via Ross Mayfield] Andrew McAfee writes:

Why is Enterprise 2.0 is an appealing reality now? Its not because of any recent technology breakthrough. Blogs, wikis, and RSS have been brewing since the 1990s, and folksonomies and AJAX since the early years of this decade. Is it just that technologists and entrepreneurs needed a bit of time to absorb all of elements and combine them into useful tools? Thats certainly part of the story, but focusing only on technology components risks missing the forest for the trees.

In particular, it misses three broad and converging trends, all of them concerning the changing relationship between those who offer technologies and those who use them. The trends are:

– Simple, Free Platforms for Self-Expression
– Emergent Structures, Rather than Imposed Ones
– Order from Chaos

Digital Wal-Marts

Tom Foremski writes:

Are Google, Yahoo, Ebay , Amazon (and maybe MSFT and Craig’s List too) becoming the Wal-Marts of the digital age? It’s an important question as they roll out more of their “local” products and fight for the next big market – local advertisers.

But as with Wal-Mart – smaller, local web sites will find it increasingly harder to compete with these giants because of their scale: their e-commerce platform, products, and services.

And as with Wal-Mart, money will be drained from local communities to the coffers of faraway companies rather than circulating in the community. This will become more of an issue as online commerce grows from its still very small share, less than 10 per cent, of overall commerce.

And as with Wal-Mart, these companies are increasing their use of overseas producers (software developers in India and China) which competes with US developers.

Advertising in Context

Fred Wilson writes:

Contextual advertising is when the ads are targeted against specific content.

Behavioral advertising is when the ads are targeted against a specific person who has exhibited a certain behavior.

Contextual advertising is content-based advertising.

Behavioral advertising is people-based advertising.

They are both effective and I believe they result in more relevant advertising which benefits the consumer.

I also believe that we are just seeing the beginning of how powerful these targeting techniques can be.

Mozes and SMS

TechCrunch writes:

Mozes is a Palo Alto based startup founded by Dorrian Porter that is tapping into the U.S. SMS (phone text) market.

It allows you to do all sorts of things via sms. Hear a song on the radio that you like and want to bookmark? Text the radio station (ie, KROQ) to 66937 (which translates to Mozes). Mozes will note the time and station name and bookmark the song title in your Mozes page (and sms you the song information). Meet someone who has a Mozes keyword? SMS their Mozes keyword to 66937 and store whatever personal information theyve elected to share. And online advertisers can use a Mozes keyword to give you more information on the product.

TECH TALK: Revolution on the Roads: Mobile Lifestyle

Stops are inevitable when driving long distances. In the past, the choice was limited to petrol pumps and nondescript restaurants whose toilets one shuddered to visit. All of this changed when we stopped by a Reliance petrol pump en route to Surat. That is the shape of things to come.

Built over a large area, the Reliance petrol and diesel outlets also have what they call an A1 Plaza. These plazas (and I stopped by one in each direction) are inviting and clean. They have a standardised food menu, with plenty of seating space. The food service was quick, and the quality decent. The toilets are absolutely clean. There are signs for the various facilities available. There are even some beds for resting. DishTV plays out in the background. Overall, it has been very well planned and executed. On the return journey, I found myself looking for the Reliance outlet to fill both petrol and the stomach!

The Reliance outlets are not that frequent en route. But what I can already see happening is that competition from them will force the others to upgrade facilities. This will make travelling and stopping a pleasant experience.

The other interesting change has been the availability of the mobile data infrastructure. I have been saying for some time that Indias mobile data infrastructure is amongst the best in the world. Even though the operators are focused on getting new customers for their voice and SMS plans, the reality is that they have built extremely good data networks also. I used my mobile with Hutchs GPRS service en route and got very good response time all along the way in a car moving for the most part at over 100 kmph. It was a reinforcement of what I noticed when I travelled through Rajasthan.

Taken together, the combination of good cars and highways, along with improved stopover points and ubiquitous connectivity, is going to start bringing a change in travel attitudes in India. I think people will be more open to taking weekend outings armed with the Outlook Travel Guides exploring new places in the vicinity. Already, Lonavala and Pune are but short drives from Mumbai. Mahabaleshwar is becoming ever closer with the improving road. A journey which used to take the better part of a day (Mumbai to Mahabaleshwar) can now be done in less than half the time. With increasing air connectivity to a greater number of places, the number of destinations which can be reached in 4-5 hours is increasingly rapidly.

This mobile lifestyle will also enable a discovery of India. There was a time when it used to be so much cheaper and better to travel to destinations outside India. Part of the allure was shopping. Now, with the mall mania reaching epic proportions in India, even that is less of a reason to venture beyond Indian shores. Our own country, which once had become alien to us, is now becoming much more accessible and inviting.

Tomorrow: Random Thoughts

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Virtual Life

Business Week writes:

Second Life is one of the many so-called massively multiplayer online games that are booming in popularity these days. Because thousands of people can play at once, they’re fundamentally different from traditional computer games in which one or two people play on one PC. In these games, typified by the current No. 1 seller, World of Warcraft, from Vivendi Universal’s (V ) Blizzard Entertainment unit, players are actors such as warriors, miners, or hunters in an endless medieval-style quest for virtual gold and power.

All told, at least 10 million people pay $15 and up a month to play these games, and maybe 20 million more log in once in a while. Some players call World of Warcraft “the new golf,” as young colleagues and business partners gather online to slay orcs instead of gathering on the green to hack away at little white balls. Says eBay Inc. founder and Chairman Pierre M. Omidyar, whose investing group, Omidyar Network, is a Linden Lab backer: “This generation that grew up on video games is blurring the lines between games and real life.”

China View

Brad Feld has a post from “a close friend of mine is spending a year traveling around with world with his wife and 11 year old daughter.”

China is wild – definitely glad I came so I never have to come back.

It is so polluted in the air that I feel like I’m sucking on an exhaust pipe while in a middle of a sand storm. Beijing gets these sand storms off the gobi since all the forests have been cut down and everything is covered in a layer of dust that just won’t go away – add in coal burning power plants, no emissions on cars and 15 million people and you simply can’t breathe. So after 4 days in the capital we went to Xi’an (the ancient capital now 5.4 million people) and its just the same – you can’t tell if its day or night – it’s almost comical, but sad.

Prices are at both extremes – for western brand stuff in legitimate stores its 40% more than the states – everywhere else its cheaper (and there is no shame in selling whatever brand will make them money). I think communism works well for the Chinese – there are so many people if they had too much freedom I’m sure there would be greater civil unrest.

Hey 1.3 billion people can do a lot of stuff – but you’ve got to take care of 1.3 billion people and that’s not gonna be easy – I don’t think China has it in the bag to dominate the global economy in 50 years – plus they might have a peasant revolt in the meantime…

Mobile Internet

Tomi Ahonen writes:

Growth of the PC based internet is slowing down. Growth of the mobile phone based internet is accelerating. Only 41% of all internet access is by people who only access by PC. Already 25% of all internet access is only by mobile phone. Soon more people will access by mobile than PC. How soon? By 2008.

What will this mean to the internet industry? The mobile phone can replicate all services that the traditional PC based internet can do. Yes, the screen is smaller, but that is no absolute obstacle. But everything else we had on the web, including its interactivity, is also available on the mobile phone.