Experience is less about slick, and more about abstraction. What experience, you may be asking. It seems that increasingly the construct or ideas that we associate with experience has captivated marketers, educators and even policy makers have consciously begun to manipulate us by creating experiences.
My interest in the topic relates to learning. I'm always on the lookout for examples of Frame-stretching ©2011 rk. Examples that demonstrate an effort to move people beyond recognition or understanding and conjure an experience. communicated in the message. I've written about this before. On Adjusting Sensibility blog, the post Challenging the Norm describes the natural process and consequences of frame formation, or the filtering and sorting of sensory input that occurs unconsciously.
Rather than write about the process, I thought I'd share an example communicated via an app new to me, Fotobabble. The value isn't in the application, which adds a voice over to a still photograph, but in the creativity illustrated below.
The message maker of the pink gun asks us to toss aside the routine associations between machismo and guns by making them pink! What an incredibly simple, powerful idea.
How much did your face change its expression when you listened?
Did the image do it alone, or did you need the extra sensory, audio input to follow the suggestion?
At what point, if any, did you feel resistance, or cognitive dissonance? how much further did your imagination take you? Did you conjure up James Bond pulling out his pink pistol to disarm OddJob? or perhaps you created an image of our soldiers running through the streets of Kabul with Pink rifles? Wherever you did go, I merely hope you went somewhere.
This is a simple, but powerful example, of how to help people change their perspective, actually take in an alternative point of view. Taking it in, does not imply endorsement.
If you want to know what it means to evoke an experience, further other people's engagement, or even better, wish to create a shared experience? Then you can appreciate the value Frame-stretching © offers. I'd love to hear your responses to this stimulus.I'd also welcome alternative examples, tricks or tools you find persuasive, or put you off your routine, skip a beat in your thinking....
Tuesday, August 23, 2011
Tuesday, August 16, 2011
Acceleration to nowhere
As I drove up to Kraft headquarters yesterday morning for a meeting, the news was filled with the story of Google buying Motorola Mobile's division.
Google's Stats:
Market Cap: 179.92B. P/E (ttm): 20.10. EPS (ttm): 27.72
Last week, Apple was pushing past Exxon Mobil to become the most valuable company by market capitalization. That happened on Tuesday, with the two companies swapping places several times.
Apple's Stats:
Market Cap: 355.46B. P/E (ttm): 15.17. EPS (ttm): 25.28
Image by tenaciousme via Flickr
Sounded like signs of good news just one week following the averted debt crisis. One week after S&P's unprecedented downgrade of US long term debt tripped off a week of trading frenzy and dominating headlines depicting the total collapse of markets around the globe. But last night, Warren Buffett, the oracle of Omaha, optimistically commented on Charlie Rose that "the U.S. economy may pick up faster than the Federal Reserve expects and that the U.S. and Asia can probably weather the euro-zone debt crisis."
So what's really going on? No one knows. Michael Warlan, a Third Avenue trader who was very busy this past week, asked if he was happy with his trades, replied, "“I’m happy we had a plan in place...." Read more:" http://www.nytimes.com/2011/08/14/business/market-frenzy-from-trading-rooms-to-living-rooms.html?pagewanted=4&src=rechp
In the face of crisis, it's always good to have a plan. Even better have a clear strategy that includes a long term investment in innovation. What's my plan? I don't have the cash that Google has on hand, or Apple for that matter, so I'm betting that these companies are going to continue to deliver for me. But I also depend on social security to be able to fill in my earning gap years, assure me a basic standard of living if more market turmoil continues and my investments turn south. That means our leaders in DC also need a plan. No one finds the political jockeying comforting, which is why Warren Buffet's admonition that he is paying a significantly lower tax rate than his secretary is another wake up call to DC. No class should be more protected than another, no subsidy should be sacred. On the other hand, let's be honest about growth, let's invest in the future wisely.
I need to trust that leaders beyond the CEOs of Google and Apple aren't merely trading on the discontinuities in the market, or the ever shifting political winds. I depend on their ability to create real long term value. Market caps are nice, but Why do these two highly innovative companies trade at valuations higher than most US stocks, yesterday Google closed at $557 and change and Apple at $383 and change? Because the market values not just tangible but intangible assets which innovation bent companies are chock full. By the way, it's also what makes the US Treasury note the most valued safe bet on the planet.
I need to trust that leaders beyond the CEOs of Google and Apple aren't merely trading on the discontinuities in the market, or the ever shifting political winds. I depend on their ability to create real long term value. Market caps are nice, but Why do these two highly innovative companies trade at valuations higher than most US stocks, yesterday Google closed at $557 and change and Apple at $383 and change? Because the market values not just tangible but intangible assets which innovation bent companies are chock full. By the way, it's also what makes the US Treasury note the most valued safe bet on the planet.
Just as the debt ceiling debate was building to its height, Kraft announced that less than a year after its purchase for cash of Cadbury, that it would split into two companies, a US grocery company and Global snack foods.
Market Cap: 61.25B. P/E (ttm): 19.82. EPS (ttm): 1.75
Unlike the technology giants, Kraft took on a debt load, may have overpaid for Cadbury prompting Warren Buffet to question the wisdom of acheiving growth through acquisition. The basic Value proposition was questionable. By contrast, haven't seen any criticism of Google for its purchase.
Unlike the technology giants, Kraft took on a debt load, may have overpaid for Cadbury prompting Warren Buffet to question the wisdom of acheiving growth through acquisition. The basic Value proposition was questionable. By contrast, haven't seen any criticism of Google for its purchase.
The Value of intangible assets
In the midst of all this turmoil, my nephew, the sports writer, sent me this Sports Illustrated article: Game's shifting strategies leaves Beane, sage of Moneyball, behind . I'm not much of a sports fan, but I do enjoy reading Micheal Lewis and I happened to love MoneyBall. At the time of its publication, I was excited by the story of an underdog being able to best baseball statistics to his advantage. Sadly, as the article details, the advantage was not long lived. It seems that Data was winning over story.
In the midst of all this turmoil, my nephew, the sports writer, sent me this Sports Illustrated article: Game's shifting strategies leaves Beane, sage of Moneyball, behind . I'm not much of a sports fan, but I do enjoy reading Micheal Lewis and I happened to love MoneyBall. At the time of its publication, I was excited by the story of an underdog being able to best baseball statistics to his advantage. Sadly, as the article details, the advantage was not long lived. It seems that Data was winning over story.
How long will Apple and Google continue to enjoy their advantage that is rooted in their innovations? Is it the value of their patents that props up their shares or the returns on the realization of technology the patents represent that matters? Maybe it's something else.
"Stories amuse; facts illuminate. Stories divert; facts reveal. Stories are for cover; facts are for real." But Guess what, Pink again "... in the conceptual age, minimizing the importance of story places you in professional and personal peril....with facts widely available and instantly accessible, each one becomes less valuable. What begins to matter more is the ability to place these facts in context and to deliver them with emotional impact...the essence of the aptitude of story___context enriched by emotion. " (p. 103)
HMM...unless you are planning to cash out and live all in one day, long term value is what we depend upon. The advantage Beilly Beane and Jon Podesta had from using new stats disappeared much faster, the story inspires us to keep looking. The larger point that Pink makes however is about making meaning or converting the data into something tangible. The Debt is a fact. Sure, we need to deal with it, but the answer isn't in curbing the underlying value of our collective capabilities and resourcefulness by cutting investments that will deliver long term benefits. Sure money is valuable, but experienced bond traders, like Karissa McDonough recognize something else.
“The U.S. Treasury market remains the safest, largest, most liquid investable asset class in the world.” Governments like China’s,[McDonough] said, would be hard-pressed to find a better alternative.
What props up that value is that intangible also known as good old American Know how, the stuff that Google and Apple have nurtured and fostered inside their organizations. If you plan to stick around in the long term, perhaps following the leadership and mindsets of Google and Apple will help. So will understanding the principles Daniel Pink argues that deliver the original most portable expression of value that exists, believing in the possible.
Sunday, July 17, 2011
Capital markets 2.0
OK, first let me be clear, I was not a finance major.
Much to my later regret, I also skipped accounting altogether. When I completed my MA in public policy at the University of Chicago, I was sent over to the business school where I concentrated in statistics. Thanks to Dr. Miki Gaskow-Green and her patience I ultimately had the opportunity to study with the late Hillel Einhorn. The little finance I did learn was from Harry Watson in the multiple economics courses he taught within the committee on Public Policy.
Much to my later regret, I also skipped accounting altogether. When I completed my MA in public policy at the University of Chicago, I was sent over to the business school where I concentrated in statistics. Thanks to Dr. Miki Gaskow-Green and her patience I ultimately had the opportunity to study with the late Hillel Einhorn. The little finance I did learn was from Harry Watson in the multiple economics courses he taught within the committee on Public Policy.
A few years later, the mid-80s, I gained a new appreciation for finance when tasked to to creating a relationship profitability model for Citibank in the mid 1980s gave me a whole new appreciation for Finance.
Fast forward 25 years, and now I can generally follow the complexity of the financial meltdown, grasp derivatives and other secondary market related activity.
A little tweet I tripped across today, however made me feel a little like Alice chasing the white rabbit down the rabbit hole into Wonderland. It seems that Sarah Lacy has done a very good job of leading me and other more astute financial market observers to a new reality.
In this short series Tech Crunch published in March and April of this year, Sarah articulates several new realities. I started with the third article in the series entitled How we all missed Web2.0s Netscape moment. and wasn't quite sure what and where the real story was but ended up with a whole new understanding of the wider financial markets. For hyperbole I suggest may be we are now in a period of capital markets 2.0. Several things fascinate me about these articles and since I don't have the answers I'm reaching out to you.
What Sarah Lacy noticed and several more astute investment analysts have acknowledged in posted comments, are several macro moves with some interesting, if not serious repercussions.
I scribbled the following observations from reading the third post in her series.
1. If you are going to build a new company, that disrupts an industry use new rules as in metrics to communicate value, don't let the traditional ones define you and your value proposition. This was what Netscape's IPO did and simultaneously changed the laws of gravity around start-ups, particularly when it came to new technologies for which there was no precedent for value. The Market responded learning that in order to go public a startup no longer needed to first be profitable or even have a profit model fully baked. The buzz and promise of the technology to change the status quo was sufficient to attract significant capital.
2. The emergent lessons from the capitalization of Facebook is again game changing. It's current late stage funding is proving that start-ups no longer need to go public in order to:
- Get liquidity for their earlier stage investors;
- Stage a huge marketing event; and
- Have extra cash to acquire competitors and keep growing.
The resulting transformation in the wider public market from Netscape's IPO democratized investments (author's words, not mine). But the capitalization of Facebook represents a complete 180, and a conscious avoidance of standards governing public companies i.e. Sarbanes Oxley and Reg Fair Disclosure--REG FD.
Part Two, really part one
Hooked, by the this analysis, I went back to read the initial start of Sarah's series, Is late stage the new early .
Jason Jones , Founder of High Step capital, commented on Sarah's first post and suggested another avenue for her investigation.
In the 4th quarter of 2010 approximately 40% of private market sales were completed by venture capital. But here is the interesting thing, about 30% of the private market sales were completed by public market investors (asset managers, mutual funds, and hedge funds).
New questions arose for me. With all the money from both Venture capital and public market investors all being sucked into the private market, what does this mean for normal liquidity? what are the repercussions for the bulk of the public companies whose shares are being traded daily?
The second article in the series, Benchmark Capital's Stand didn't measure up to the depth of analysis in the 1st and 3rd. I couldn't help but wonder if the bar for returns set by the tech boom raised the appetite for Venture capital when it spilled over to the street. After all, a rule of thumb for venture style returns are Ten times its invested capital...at least that was Benchmark's expectation. Public companies are beholden to their shareholders and returns are the primary form of accountability, and so it's logical for executive leadership to drive hard to meet near term earnings and focus less on developing longer term value. In contrast it is precisely the focus on long term and investment in time and resources around innovation that private firms are freer to indulge. I mean the obsession with short term performance may have as much to do with fear as it does with a complete misunderstanding of what defines value. Hey if Netscape changed the rules initially and Google also made it clear that it wasn't going to play by the usual standards dictated by the street, Facebook is denying the system the very intell and metrics that move the needles of economic growth. Or does it do something else?
Please help me understand, or speculate along with me the implications of these new investment trends. I had been a pretty firm believer in the financial markets ability to recognize and reward value and equally strong believer in the need for banking reform. Then I read these short articles and realize how much of the picture I had missed in my analysis.
I'm hoping for a clearer followup to appear soon, or counting on others like you to point me to one that I may have missed.
Labels:
business,
investments,
markets,
private capital,
start-ups
Thursday, March 31, 2011
Will you let me be a super hero?
Defense intelligence agency and the U.S. central command in Iraq during its military campaign "iraqi freedom" in April 2003 issued a standard card deck to all personnel. Why?
According to Navy Lt. Cmdr. Jim Brooks, a spokesman for the Defense Intelligence Agency, such playing cards have been used as far back as the Civil War and again in World War II—Army Air Corps decks printed with the silhouettes of German and Japanese fighter aircraft fetch hundreds of dollars today—and in the Korean War. Troops' playing cards depict most wanted help pass the time; but more critically might help a soldier or Marine catch one of the figures.
If the US Defense Intelligence finds merit in games, then it should come as no surprise that others are opening up to the potential of games to help solve serious, real world problems. Meet Jane McGonigal, a fellow at the Institute for the Future and game designer with a PhD from University of California, Berkeley. She recently published a book entitled Reality is Broken. She was a big hit at DICE, the gaming conference, a few years ago which is how she got to TED. If you've got 20 minutes, I encourage you to listen and learn How gaming can make a better world.
Her call to action has raised a lot of knee jerk skepticism, such as that which was published in SLATE Magazine a few days ago by Heather Chaplin and found here: Gamification: Ditching reality for a game isn't as fun as it sounds. mag
Bottom line? In spite of how much games and sports are deeply embedded into our culture, or for that matter globally human cultures; we have insisted on separating them from more essential past times or pursuits. They are entertainment, or escape or for those who are inclined toward leisure, right? A professional athlete may have the luxury of being able to play sports for a living, in which case it may be their day job, but most people still believe that they are lucky enough to get paid to "play."
Play is not what you are supposed to do in school, at work or when solving serious problems, right? Games however have persisted throughout human history precisely because there is some intrinsic value in them that the casual observer often misses. It is precisely this value that McGonigal and others like Jesse Schell from Carnegie Mellon University has written about (see The Art of Game Design: A book of lenses).
The word game and the subject of play rarely, if ever occupy the same pedestal as commerce or religion or other endeavors more central to human existence and survival. As an educator, however, I can appreciate the value of entertainment or as Mary Poppins would say, "just a spoon full of sugar, helps the medicine go down, in a most delightful way." Learning, working or the activities that we believe require focus and attention surprisingly can be enhanced by the use of play.
Games come in a variety of formats and levels of complexity, and mirror the variety of levels and formats of our daily existence. We tend to play in environments with rules both clearly bounded such as the soccer field, the basketball court, the flight simulator, the Monopoly board, the chess board, the casino or increasingly a computer interactive environment. Sure the rules in soccer don't offer any insight to those playing roulette, or basketball's defensive strategy is not very applicable to chess. But then we do not have the same freedom on an airplane as we do in a classroom, or a corporate office boardroom. Each environment has a set of rules dictated by the culture or norm of interaction, just like a game. What makes it more interesting is how often we relish the freedom that comes from changing environments, or even the coccassion in which having experienced a taste we want to try it again. In game play, practice is a given and the more frequently we play or perform the better we get. This is the idea behind homework isn't it? practice for improvement? It's why int he workplace generally speaking, those with more experience are considered more valuable?
When we draw lines to separate play from reality we are merely reinforcing a norm or set of values that are conducive to social society's needs for less intrinsically valued activity. The activity we may value is actually playful, but someone needs to help the children cross with safety or work the register at the Walmart or build the cars, the roads etc. But are the bond traders playing or working? Some work environments are clearly playful or allow us to be the super hero on occassion, like the firefighter who saves the kitty in the tree or rescues the child caught in the burning building.
I don't htink it's crazy to imagine changing the world to make it be the future that we want, rather than the legacy of some outmoded idea of the future? Why for example, if there are patches of vacant land, do we insist the parcels of property and zoning rules remain static to a 19th century notion of the future population density of a city? We need to be more proactive in changing our environments, taking them back. Rebuilding urban farms, that were cleared for a wave of population that has long moved away leaving abandoned properties in their wake. Let's leverage the increasing ease with which we can escape our reality and retreat to game environments to practice and prototype a different world. At the same time help us imagine it and work out the kinks before building the wrong thing.
Scenario planning, and game theory has done a great deal to help insure a brighter future. So, I'm with Jane and Jesse too. I don't want to merely believe, but get the chance to get in a little more practice being super heroes, and then make progress to refashion our real environments to emulate what we find exhilarating in our play spaces. I think we can realize a vastly improved world much faster.
At the state of the Union, the spirit of cooperation resulted in a new seating arrangement. So I'm in favor of sending in some good game designers to help the current elected officials do some game playing together and see whether we might get a little progress on some dead lock issues.
I close with a link to Jesse's 30 minute talk at DICE from two years ago. If you think you can escape the game world? well think again, it's here and it's only going to become more obvious shortly.
Comments? Reactions?
Wednesday, March 23, 2011
Reframing Social policy approaches through a Systems lens
Today I heard someone talk about evidence based decision making in the context of solving social problems. More frequently we hear this term with respect to medicine, in fact Dr. Atul Gawande has widened the understanding of this approach to medical care through his writings. The idea is simple, and uses randomized, controlled studies to evaluate the validity and reliability of clinical research. The best medicine to practice leans heavily on repeatable research that demonstrates its effectiveness. In short, treatment decisions are determined by results proven in multiple settings. Unlike best practices, evidence based decisions should deliver the same results in different settings and establish clearer paths to success. But how can it work on a social problem where it's almost impossible to undertake randomized controlled studies?
Social capital may be the critical ingredient. This vogue term and associated ideas are interspersed with attempts to value social networks and social media's impact. No matter which end of society we occupy, we tend to share a common conception that fundamentally things need fixing. The evidence of what doesn't work in the social sector is often more significant than the public can bear. The Tea Party is not the only one drawing lines in the sand and exclaiming that it's time to stop spending money for things that don't work. We lack clear repeatable evidence to support continuing various entitlement programs will solve the problems they were created to address, then again not funding them may make things that much worse. The growing pressure on public schools and anger about the pensions of public employees is in part a reaction to the fact that not a single school urban school system is a shining success.
Is it because we have set the bar too high? Or best practices don't seem to scale? Or worse, clear repeatable evidence has not been found? Though we know that those who finish school and continue through a post secondary education earn higher wages, that's not the metric for school success being used. The measures often in place are often as transitory as our annual budget commitments . Sure, teachers should be held accountable for the time and materials they share with their students. But if you want schooling to have impact, the Cradle to College Evidence Based Research demonstrated by Geoffrey Canada in the Harlem Children's Zone suggests it takes far more to help the child be ready and able to learn from the teacher. The heavy use of evaluation outcomes by most non-profits and increasingly demanded by funders may be similar in rigor but lack the randomized control aspects of evidence based practices. Both further the commitment to build on what really works. Sadly, it's a difficult model to transport and costly to scale, because it addresses a host of factors that are ancillary but entwined with the system of care that helps a child reap the benefits delivered by quality instruction. Using social capital to create the interconnections and cast the net of evidence capture the effects across a wider support system of services appears to literally lift those born into poverty out and offer them a better future.
Promise neighborhoods hopes to extend the success of the Harlem Children's zone and is part of another growing movement, perhaps less visible and probably less vocal than the Tea Party. It shares some of the features of open source systems, where individuals contribute what they can, when they can and the benefits are shared by everyone. If you have not yet heard or sampled Wikipedia I suggest you take a moment to experience what collective intelligence looks like, what its capable of producing. Is there a clear metric of success? No, rather it's an evolving work. the success is its sustainability and the anchor it has established to support a generation who never experienced an encyclopedia created by "experts." and scholars.
The movement is literally a convergence of cross-sector partners whose individual strengths focus on a shared objective to create collective impact. This is not a zero-sum game but rather an effort to leverage the government's ability to bring together all the system players. Collective Impact borrows from collaboration to create large scale, long term systemic change. Using a common frame and vocabulary individual organizations from academic, business, and philanthropy sectors align their strengths to make a system run better not merely help an individual organization or element within the community succeed.
Today, I tuned into a webcast conference organized by FSG and Stanford Center for Social Innovation Review. The conference entitled Creating Large Scale change examined the phenomenon of Collective Impact and encouraged funders and nonprofits who attended to change their thinking and consider a new paradigm for effecting social change. In my own community of Chicago I'm familiar with the public private partnerships that have long operated in our region to address various issues such as transportation or growth as envisioned by the Burnham Plan. The longstanding recognition of the role of social capital to both sustain and support projects that improve the city reflects the values shared by philanthropy, city government and business.
The efforts of Mayor Daley to extend the planning and visions to make Chicago a green city, promote and build tourism and the city's diverse cultural heritage shyould not be overlooked. But I'm wondering about the possibilities and potential that a different configuration and investment commitment might be able to deliver.
Chicago is the recipient of one of 13 Social Innovation grants that are supporting the commitment to a more system organized approach to community development in 12 community areas that are supported by LISC, the Low Income Support Coalition. What system opportunities might be able to address the issue of crime in certain neighborhoods with disproportionate population of ex-offenders , joblessness, addiction and poor graduation rates. The array of support program and services that trickle down from the federal government into different nonprofit organizations are often compromised rather than providing synergy to change the system. Mounting evidence from academic research, yes the evidence based decision making exists. With leadership and long term commitment perhaps some willing partners will commit to the long term. LISC is a good model and the investment by MacArthur and other partners are now beginning to show promise, furthering the capabilities and building capacity of lead community organizations in these communities to have high quality impact on the residents. There are other signs and other funders who are encouraged to also enter into these long standing commitments and together they may be able to not only change the paradigm but also begin to change the system.
FSG and Stanford hope to make the conference available as a pod cast; but a good place to start might be with Mark Kramer's paper posted here:
Collective Impact (February 15, 2011) | Stanford Social Innovation Review
Balancing on the Edge: Preview "Reframing Social policy approaches through a Systems lens"
Collective Impact, is it the new paradigm, that will help move us past program and organizational investments? Will it help us tackle the wider social issues inherent in the interconnected systems where these problems reside? After listing in on a conference sponsored by Standford Social Science Innovation Review and FSG, I share my thoughts in Balancing on the Edge: "Reframing Social policy approaches through a Systems lens"
Thursday, June 10, 2010
Abstraction not Distraction
What I love about Apple and Steve Jobs is their ongoing ability to tease out subtlety in our affections to reap enormous rewards. This difference between merely exploiting new technical improvements to make an electronics gadget better and leveraging the emotional connections and experiences that the electronic gadget makes simple and possible is how Apple continues to drive demand for its products. Yup, I used the word experience because the easier and faster I get that experience, the happier I am.
Upon reading the comments following a recent Mashable post on yesterday's announcement at Apple's World wide Web Developer's conference, I noticed how neatly they fall into this divide.
Apple Introduces iAds: “Mobile Ads with Emotion”
Yes, no one likes pop-up ads but I interpreted the complaints more as limitations, manifest in their inability to grasp abstraction. Pop-ups are distracting and that's why we tend to get annoyed and ultimately go out of our way to ignore them or change our browser settings to block them. I believe, please correct me if I'm wrong, that the iAds are not serving up pop-ups...instead they are intended to evoke a memory, an emotion or conjure up an experience. Not a distraction, rather an abstraction--defined as:
1. an abstract or general idea or term.
2. the act of considering something as a general quality or characteristic, apart from concrete realities, specific objects, or actual instances.
3. an impractical idea; something visionary and unrealistic.
As MIT Technology review expressed "Ephemeral info-nuggets are the Web's new currency." Apple will once again show us the way.
Upon reading the comments following a recent Mashable post on yesterday's announcement at Apple's World wide Web Developer's conference, I noticed how neatly they fall into this divide.
Apple Introduces iAds: “Mobile Ads with Emotion”
Yes, no one likes pop-up ads but I interpreted the complaints more as limitations, manifest in their inability to grasp abstraction. Pop-ups are distracting and that's why we tend to get annoyed and ultimately go out of our way to ignore them or change our browser settings to block them. I believe, please correct me if I'm wrong, that the iAds are not serving up pop-ups...instead they are intended to evoke a memory, an emotion or conjure up an experience. Not a distraction, rather an abstraction--defined as:
1. an abstract or general idea or term.
2. the act of considering something as a general quality or characteristic, apart from concrete realities, specific objects, or actual instances.
3. an impractical idea; something visionary and unrealistic.
As MIT Technology review expressed "Ephemeral info-nuggets are the Web's new currency." Apple will once again show us the way.
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