My Ten Favorite Tweets – Week Ending 041009

From the home office off the coast of Somalia…

#1: “Never call yourself an expert. Let others think and talk about you as an expert.” http://bit.ly/1yBftl by @centernetworks

#2: RT @dhinchcliffe: Top Five Innovation Killers http://bit.ly/2abnVG Also, #6 – Inability to tap into existing innovation sources

#3: A very interesting read, a useful perspective: Social Architecture http://bit.ly/qynjR #e2.0

#4: @kentnewsome Vista ribbons are almost like re-arranging the keyboard away from qwerty.

#5: Fallout from Twimailer failing to support its emails…I stopped getting both follow and DM notifications. Recommend quitting Twimailer now!

#6: My colleague confirms the social media “dead zone”. He said server traffic at Friendster used to plummet between 12 – 6 pm PT.

#7: Finding myself starting to use Google Tasks more. Biggest hurdle is making it part of my daily routine. It’s happening though.

#8: Marketers’ use of social media, in preferred order: Twitter, blogs, LinkedIn, Facebook http://bit.ly/sH3P

#9: You know those 404 pages that display when a web page isn’t found? They should all be this good: http://bit.ly/2iytO2 (via @mattcutts)

#10: Want more followers? I imagine there are tweets guaranteed to get new followers. Try: “I need some help with social media.”

Think Companies Can Do More with Ideas? Me Too – I’m Joining Spigit

spigitlogo

I start a new job today, and I’m quite excited about it. I’ve joined Spigit as  the Director of Marketing and Online Communications.

Now it’s possible you might be saying…”Spigit? Never heard of them.” Well, let me help you there.

Spigit provides idea management software for the enterprise in three modules:

Anyone is free to add any idea that occurs to them, and others can view, rate, and suggest changes to an idea. Ideas are categorized. The platform includes blogs and discussion forums to refine and clarify ideas.

The Spigit platform incorporates game theory into the process of identifying promising ideas and individuals who are good at seeing them. People can “invest” in ideas they believe in. If the company picks up the idea, everyone who invested in the idea earns incentive rewards.

As one finds with enterprise requirements, it includes role-based stages through which an idea must be approved. This process of graduation allows the top ideas by category to emerge.

A recent write-up on TechCrunchIT noted that  Spigit has lined up a number of significant customers, including IBM, Sun Microsystems, Intel, WebEx, Walmart, Sam’s Club, and Southwest Airlines.

Market’s View

Gartner: This past December, Gartner’s Anthony Bradley wrote up his thoughts about Spigit. He noted five key points:

  1. Spigit is a great example of the evolution of the social software market from best of breed tools to social software suites to technologies addressing horizontal business needs (idea management and prediction markets in Spigit’s case).
  2. Spigit exemplifies the need for some technology structure to enable community emergence. Spigit is rich with functionality (e.g. structure)  specifically targeted at mining the community for innovative ideas and then empowering that community to advance those ideas.
  3. It is clear when examining Spigit that significant effort has gone into designing an experience tailored to idea management. It is quite detailed in the intricacies of facilitating an idea marketplace. This is not something the usual enterprise could or would want to build into a general purpose suite.
  4. Spigit heavily employs gaming theory to make the experience fun. I see more and more gaming theory applied to enterprise 2.0 implementations to enhance community participation. All enterprises implementing E2.0 should strive to make a participants experience as fun as possible.
  5. A focus on analytics is also a critical capability. Growing, nurturing, and guiding the productivity of a community is no trivial exercise and it is important to have the tools to know how the community is functioning and where it needs help.

BearingPoint: Nate Nash of consulting firm BearingPoint has written about Spigit. Nash noted that his “consulting tires have really been rotated by one of the sponsors, Spigit.” Here’s the one-sentence version of his view of Spigit

Simply put, Spigit allows you to tune the impending barrage of systematized social interactions toward the vetting and implementation of innovative ideas.

TechWeb: On its Internet Evolution site, TechWeb recently wrote a great article Can Enterprise Social Networking Pay Off? The post included this customer’s quote about Spigit:

Another [Spigit] event for store managers focused on cutting costs and improving customer service. One idea from that event will save the company $8 million. “IT and senior VPs ask how we measure ROI for Spigit,” the director says. With numbers like that, the answer is easy.

A Few Personal Thoughts

Everyone has ideas. Everyone. The hardest part for employees is finding an engaged venue to air those ideas, get feedback and see them catch on if they have merit. Think about your own work. How easy is it to float ideas and get discussions going on them? Providing a defined location where ideas are expected to be added, found and advanced strikes me as a great use of social software. Spigit starts with a clearly defined use case and value proposition.

Another thing I like about Spigit is that anyone can participate in this social software initiative. My previous work at BEA Systems and Connectbeam focused on the knowledge worker, which is a consistent theme in the industry. Note how Dion Hinchcliffe describes Enterprise 2.0 in a recent article:

The Enterprise 2.0 story is primarily aimed at knowledge workers engaged in complex, collaborative projects which have had few effective software tools until recently, in other words strategic business activities.

But with idea management, anybody can have flashes of insight or creative solutions to everyday problems. The R&D group. Field consultants. The facilities manager. An hourly employee working the floor.

I really like that the addressable market for Spigit includes not just knowledge workers, but employees from throughout the company.

I’m also finding that Spigit is relatively unknown in the Enterprise 2.0 world at large. Indeed, Spigit doesn’t really go up against IBM, Microsoft SharePoint, Jive Software, SocialText and other more well-known collaboration vendors. Instead, you’ll find it mentioned alongside Salesforce Ideas, Imaginatik and Brightidea. This informs some of my work ahead.

Commute

If you’re not familiar with the Bay Area, Pleasanton is a bit of a haul from my home in San Francisco. Here’s a map that shows the commute:

bart-map

The nice thing is that  I’ll be able to take BART to work. And I will use that hour-long commute to get things done. Now if only BART would hurry up with installing wifi throughout the system. In the meantime, I’ll look at an EVDO card or the iPhone 3G tether.

Feel free to reach out to me if you’re interested in hearing more about Spigit.

Strategic Intuition: The Innovation of Flickr and Twitter

At the Defrag conference last November, all attendees received a copy of Strategic Intuition by Columbia professor William Duggan. It’s taken me a while to get around to it, but I am really enjoying this book.

So what is strategic intuition? It’s the process that leads to that flash of insight that hits you upside the head. Here’s how Duggan describes that:

It’s an open secret that good ideas come to you as flashes of insight, often when you don’t expect them. It’s probably happened to you – in the shower, or stepping onto a train, or stuck in traffic, falling asleep, swimming, or brushing your teeth in the morning.

Suddenly it hits you. It all comes together in your mind. You connect the dots. It can be one big “Aha!” or a series of smaller ones that together show you the way ahead. The fog clears and you see what to do. It seems so obvious. A moment before you had no idea. Now you do.

Professor Duggan’s work relates to the processes that lead up to that “aha!” moment. Yes, it turns out there’s a lot that happens before we’re struck with such blinding insights. And this research leads to some intriguing ways to think about pursuing innovation.

The book is chock full of perspectives from different fields that relate to his core premise of strategic intuition. If you read the book, you’ll get them all. Two that most interested me were:

  1. European military strategists: von Clausewitz vs. Jomini
  2. Ancient Asian philosophy: Dharma and Karma

I’m not passionate about either of those topics, yet when you read how Duggan relates them to the ways in which people innovate, they become quite compelling.

von Clausewitz vs. Jomini

I’m not going to bore you with details of the military strategy treatises of von Clausewitz and Jomini. Suffice to say that both are influential to this day in terms of their thinking about conducting military campaigns. Duggan distinguishes the two of them this way:

von Clausewitz focuses on considering the conditions at hand, having one’s mind open to new alternatives and pulling together disparate elements from previous experience to address battlefield situations. Jomini argues for establishing the objective clearly, setting a plan of attack and organizing everything centered around the plan of attack.

From Duggan’s perspective, von Clausewitz’s approach is more in-line with creativity and inspired ideas. This is the important part – that the best ideas cannot be willed into existence. Rather, they occur naturally as a result of combining previous experience and knowledge.

von Clausewitz’s work included four principles related to coup d’ oeil, French for a strike of the eye, a glance. Duggan relies heavily on these four principles throughout the book:

  1. Examples from history. The point here is that there is a wealth of relevant information from the past that is useful for the future. Our minds actually access this information subconsciously.
  2. Presence of mind. As Duggan writes, “You clear your mind of all expectations and previous ideas of what you might do or even what your goal is.” This mental state is important for developing new ideas.
  3. The flash of insight itself. This is something you’ll know. You “see” an idea clearly, one that wasn’t there minutes ago. It probably consumes you for a while. It’s a good thing.
  4. Resolution. It’s one thing to have a great idea. It’s another to execute on it. You have to be ready to follow through on what strategic intuition has given you.

Duggan relates these lessons to Napoleon’s success as a military commander. He later relates them to Bill Gates with Microsoft, and Sergei Brin and Larry Page with Google.

Let’s turn to the Asian philosophy.

Dharma and Karma

I’ve never really studied what karma is about. My level of understanding could be tied to a bumper sticker that says “My karma ran over your dogma” and karma points on Plurk.

Yet Duggan does a masterful job of taking the reader through some basic information about the Asian philosophies of Hindu, Buddhist and Tao. He ultimately settles on the philosophies of Dharma and Karma:

  • Dharma: Your own set of thoughts and actions. These are in your control.
  • Karma: The set of circumstances which you are presented. These are outside your control.

This is where Duggan has a bit of his own flash of insight. He relates the concepts of Dharma and Karma to von Clausewitz’s coup d’ oeil. He references this quote by Napoleon, who was more von Clausewitz than Jomini:

I never truly was my own master but was always ruled by circumstances.

In the Buddhist sense, you “go with the flow” instead of “get what you want”. In both Western and Eastern culture, there is a mysticism or religious aspect to this idea. I don’t think you need to to be particularly spiritual to understand this. We understand that there are circumstances every day that (i) affect us; and (ii)  are outside our control.

Putting This into Practice

In reading this, you can’t help but note the serendipity of the whole thing. There are a set of circumstances that will affect outcomes, and you can’t control them. You will experience flashes of insight, but only based on the prior experiences and knowledge that you happen to have.

It’s here where you really do need to be comfortable with this situation, where Eastern philosophy is useful.  The biggest lesson I take from Duggan’s book is the “presence of mind” principle. The willingness to consider a change in circumstances and see alternatives based on prior ideas that have worked.

The hard part is to drop the well-though out plans you may have for achieving some objective. If you’re seeing success with a plan, then by all means see it through. If you’re not, is it only a problem of poor execution? Or is there something else that should be tried, an idea that emerges from something that is working? Especially in a corporate environment, the ability to just drop a project plan is hard. But empowering employees to follow “what works” relative to a given set of circumstances can be particularly valuable.

Let’s see how this applies to two well-known companies in the sociasl media space, Flickr and Twitter.

Flickr: Leveraging What Works

How many people know that Flickr got its start in a massively multiplayer online game? A company called Ludicorp offered this game, which didn’t really take off in usage. But as a part of that game, a Ludicorp engineer created a tool to upload and share photos on a public page. That particular tool got more response than the game itself did. Ludicorp’s Caterina Fake knew she had something of interest on her hands. She scrapped the online game, and pursued the online photo sharing idea.

Here’s where you really need to consider von Clausewitz vs. Jomini. The Jomini style of strategy would have had Fake continue to push on the multiplayer online game. She had a defined objective, and she had to pursue it come hell or high water.

The von Clausewitz and Dharma/Karma perspectives argue that Fake was being given a great gift. Some small piece in all that Ludicorp work was resonating, it just wasn’t the part they had anticipated. Fake had the presence of mind to recognize this, and to pursue the new idea where it took her.

Twitter: Combining What Works

Interestingly, the roots of Twitter go all the way back to the year 2000. As Steve Parks documents, Jack Dorsey was starting a business at the tail end of the 1990s’ dot com boom. He started a company to dispatch couriers, taxis and emergency services through the web. At the same time, he was an early user of the new LiveJournal blogging service. You can also see that he was aware of AOL’s Instant Messenger application for chatting with friends.

As Dorsey tells it:

One night in July of that year I had an idea to make a more “live” LiveJournal. Real-time, up-to-date, from the road. Akin to updating your AIM status from wherever you are, and sharing it.

He carried this idea around for the next five years, until he had a chance to put it in place as the company for which he worked in 2006, Odeo, was flagging. His idea was coded by Odeo engineers, and Twitter was born.

Professor Duggan places a great emphasis in his book on combining ideas, experience and knowledge from different realms to create something new and compelling. These previous ideas, combined and applied to a new situation, are the fuel for the flash of insight. In von Clausewitz’s approach, these are the “examples from history”.

Look at the influences of Dorsey before he came up with the idea for Twitter in 2000:

  • The need to share statuses easily with multiple people for his dispatch service
  • The self-expression provided by LiveJournal
  • The real-time communication of IM

With these influences, he conceived of Twitter. And look how it came about: “one night in July”. He can remember the specific circumstances and timing when the flash of insight hit him.

What It Means for You and Me

It would be wrong to assume that setting an objective is not relevant in this process. In reading this blog post, it’s possible that one could come away with the thought that you just kind of wait until a flash of insight hits you.

It’s important to distinguish between having an objective, and being unyielding in pursuing the plan to achieve it. It’s another to have an objective, and to have the flexibility to change the plan or even the objective.

I also believe these flashes of insight only come when you’re focused on something. Focus is the catalyst for our minds to piece together different experiences and knowledge, and gives a channel for where insight can emerge.

Personally, I won’t stop establishing objectives and planning for them. But this book has been influential to me in having “presence of mind” in pursuit of these objectives.

*****

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My Ten Favorite Tweets – Week Ending 022709

From the home office in Denver, Colorado…

#1: Please, I don’t want your automated DMs after I follow you. This practice needs to stop. I never click your links, it’s just spam.

#2: To all you social media whales doing the mass unfollow routine, I say: “Go ahead, make my day.” Got my unfollow trigger finger ready.

#3: Reading @loic post about the realities of following thousands http://bit.ly/CR6A9 Future = Dunbar’s Number + @replies + keyword tracking?

#4: Yammer rolls out new features: lifestreaming a la FriendFeed, and DM like Twitter. VentureBeat: http://bit.ly/qamnq

#5: “Discovering problems actually requires as much creativity as discovering solutions” The Myths of Innovation, Scott Berkun

#6: Innovation myth inside companies: “if the idea were any good, the people at the top would have thought of it already.” http://bit.ly/CfPgl

#7: FriendFeed guys have created the FriendFeed Therapy Room, featuring Eliza http://bit.ly/LseaI See if you can get past her therapist tenacity

#8: Do you suppose accident rates are down in California now that we’ve banned cell phones in the car? Do you feel safer?

#9: My favorite Jelly Belly beans: 1. coffee 2. watermelon. My 4.y.o. son Harrison: smelly skunk (betcha didn’t know about that one). You?

#10: Driving down 101, behind this car. Smelled an odd sweet odor that I recognized. Pass the car minutes later, sure enough dude had a fat one.

Your Brainstorming Sessions Suck? Four Drivers of Success and Where the Web Helps

Freshview

photo credit: Freshview

ReadWriteWeb’s Bernard Lunn penned a piece recently, How Can Web Tech Help Enterprises with Innovation Management? The post argues that Innovation 3.0 will include a large dollop of external idea generation via social media. And companies are hungry for it:

There is no more important an issue on the agenda of top management than driving innovation.

Bernard’s point about the hunger for innovation is right. It’s always been an imperative, but the ease with which companies can come from anywhere to disrupt markets has raised the importance of new ideas.

While his post focuses on externally sourced ideas, I’d like to talk about what’s happening inside organizations. Specifically, I’m talking brainstorming. Those “have-the-potential-to-be-fun” meetings with your colleagues to work on the next generation of your companies products and services. But they’re not always fun are they?

Turns out there are some new services that can improve the way companies’ employees generate top-notch ideas. Before hitting those, there’s an intriguing study by some INSEAD and University of Pennsylvania researchers that sheds light on where brainstorming can be improved.

The Four Drivers of the Best Ideas

In Idea Generation and the Quality of the Best Idea, the academics examine the different processes that  lead to the best ideas (not just good ones) being generated and selected in brainstorming.

Their hypotheses are interesting. Here are the four drivers for getting the best ideas from brainstorming:

  1. The sheer volume of ideas generated
  2. Average quality of all ideas generated by brainstorming
  3. The amount of variance in the quality of generated ideas
  4. Ability to evaluate what the best ideas are

These are covered below, including which styles of brainstorming are better. Before that though, here’s a little more on how these academics arrived at their conclusions.

First, they studied existing literature. A must for any researcher. They then created their own field study, using Wharton students in brainstorming experiments. Now whether that fairly models company brainstorming…let’s see what they found, eh?

Two styles of brainstorming were analyzed:

two-methods-for-brainstorming

Hybrid: Individuals went through their own personal brainstorming exercise, then met as a team and generating more ideas.

Team: All idea generated occurred in a group setting.

Turns out, it makes a difference which brainstorming style is used. This is discussed below.

Volume of Ideas Generated

This one ranks up there with motherhood and apple pie. The more ideas you generate, the higher probability you have of generating outstanding ideas.

On this metric, the Hybrid approach is much more productive. When individuals sit down and come up with ideas by themselves, they produce more ideas than what a group typically generates. The primary difference in quantity of ideas generated is termed “production blocking”. Production blocking is the inability to generate ideas when others in the team are speaking.

Important to note here is that there is a time restriction in this metric. As in, “# ideas per hour” type of a metric. The more time given to a brainstorming session, the less difference there is in quantity of ideas generated between the two brainstorming styles.

Average Quality of Ideas

This one is little less intuitive. The Hybrid process generates ideas of higher average quality than does the team process. I can’t say what I expected, but hearing this was a bit surprising.

Seemingly, the ability of the group to refine an idea generated during brainstorming would ultimately raise the overall quality. But it seems that individuals have pretty good internal regulators. I’d guess we actively suppress the worst of the ideas, or those that we’re not so sure about.

Thus we raise the overall quality. But in doing so, do individuals snuff out potentially high value ideas?

Variance in the Quality of Ideas

This is the one that will probably surprise you. To get the highest ranked, the best ideas, you want a higher variance in the quality of ideas generated. That means more really crappy ideas, along with some truly inspired ideas. In terms of a statistical distribution, think of it as more ideas extending to the extreme left and right tails of a population quality.

Turns out, Team has the edge here over the Hybrid approach. As the study authors say, “we believe there is more potential for both breakdown and collaborative success in teams then in individual idea generation.”

What an interesting statement! On the downside, the variance comes from poor group dynamics inside that brainstorming conference room. Have you ever been in that situation? I have. A bunch of elephants coming together into a room, with existing political connections, and the result is a really bad session with few ideas of middlin’ quality. Because of these qualities, some idea gains currency among the group, and discussing that idea becomes the theme of the meeting.

And it feels like you just wasted an hour or two. Frustrating.

But Team brainstorming also has its high points. When the team comes together without agenda, and brings a serendipitous variety of viewpoints. People feed off one another, and imperfections in one idea are overcome with different thinking from someone else’s idea. These brainstorming sessions are gold, and incredibly valuable when they happen.

One thing to take away from this. When considering brainstorming in your workplace, have an honest assessment about your company’s culture. Can people really come in and have an idea jam? Or will things inevitably get mired in the same old agendas and relationships to reduce brainstorming effectiveness?

Evaluation of Ideas

This is the final step, and it’s where a lot of brainstorming sessions fall short. How good is the team in evaluating the quality of the ideas generated? According to the research of the academics, the Team approach is less effective in evaluating idea quality than the Hybrid approach.

To ascertain the “true” quality of ideas in the Wharton student experiments, the researchers had an independent panel of people rate the ideas that came out of the brainstorming sessions. They then compared these independent ratings to the self-evaluated ratings of the different teams.

This quote from the paper actually made me laugh a little:

We find that the ranks obtained in the Team process have no correlation with the panel ratings whereas for the Hybrid process they exhibit a significant positive correlation.

No correlation for how the Team approach evaluated the ideas. My fellow workers of the world, does that ring a little true to you? The researchers ascribe this finding as supporting “the theory that in a team, ownership of ideas, social pressures, team dynamics and interaction of different personalities limit objectivity and the ability to discern quality.”

In the Hybrid process, there were actually two idea rating events: individuals rated their own self-generated ideas, and the team evaluated its ideas. The researchers found that the individuals rating their own ideas was the primary reason for the correlation of self-evaluated ratings’ high correlation with the panel ratings.

Turns out we’re pretty good at discerning idea quality when we’re free from the group setting. Even for our own ideas.

Implication for Using the Web to Improve Innovation

The academics findings lead them to this conclusion:

These results suggest that it would be best to employ team processes in the idea generation stage and then use an independent individual evaluation process.

I’m going to disagree somewhat with the first part of that statement. I’d say a mix of individual and team processes is best. Inside an organization, there will be plenty of times where you as an individual will have an idea. Some of those individually-generated ideas will be top-notch. And there will be times where a Team approach will be employeec. See what ideas come from those sessions. As I said before, just be mindful of your existing company culture in term of the quality of ideas that come from these sessions.

The second part of the reseachers’ conclusion is where Enterprise 2.0 comes in. Once ideas are generated – whether individually or in a Team process – they need to go through an evaluation process. Google employs a form of this with its internal prediction markets.

There are a couple companies out there who are working in part of the Enterprise 2.0 space:

Spigit: Spigit provides InnovationSpigit, which has a prediction market orientation to evaluating ideas.

BrightIdea: Brightidea provides Pipeline, which has a project management orientation to idea management.

There may other companies out there as well. The point is to recognize that we employees are imperfect.  Increasing the visibility and accessibility of ideas and independent evaluations is a great way to bring structure and a diversity of opinions to bear on ideas. Remember, companies are hungry for innovation.

*****

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The Migration of Web Techniques to In-Store Retail Practices

Via ralphbijker on Flickr

Via ralphbijker on Flickr

Think about the companies doing the most technologically advanced stuff. Amazon. Google.

Grocery stores.

Say what…? The place where oranges sit in piles in the produce section. Boxes of cereal lines the aisles. The frigid ice cream aisle.

Well, they’re not in the league of Google and Amazon. But grocers are more than those aisles of food and ceilings of fluorescent lights you see. Two trends in the industry borrow heavily from the advancements on the Web:

  1. Website optimization
  2. Recommendations

I’m not talking about monitors with web pages inside stores. I mean the shopping experience has been affected by these developments. Here’s how.

Website Optimization => Store Layout and Merchandising

E-commerce sites live and die by their conversion rates. A key piece of the conversion rate puzzle is effective navigation and presentation of items to site visitors. One company that helps with that is  Tealeaf, which records and analyzes visitor behavior to help site owners optimize conversions and return visits.

In a physical space, you can’t record people’s clicks and actions. Or can you?

As reported in a recent Economist article, retailers are starting to video record shoppers’ behavior in the aisles. For instance, here’s how one supermarket used technology provided VideoMining to understand visitor behavior in its juice section:

Another study in a supermarket some 12% of people spent 90 seconds looking at juices, studying the labels but not selecting any. In supermarket decision-making time, that is forever. This implies that shoppers are very interested in juices as a healthy alternative to carbonated drinks, but are not sure which to buy. So there is a lot of scope for persuasion.

These are exactly the kind of metrics that e-commerce sites track to improve their conversion rates. Use of cameras in-store to do the same thing is analogous to tracking visitors to your website.

Personalized Recommendations

Amazon.com really led the movement to provide effective recommendations to existing customers. One report I’ve seen says that Amazon derives 35% of its sales from these recommendations. Amazon’s recommendations are generated from your shopping history, compared to others via collaborative filtering. The success of these recommendations has inspired others to build recommendation engine services, including Aggregate Knowledge, Baynote, MyBuys, RichRelevance and others.

The same thing is happening in-store as well. You know that loyalty card you present to your grocer to get discounts? It’s used to record your shopping history. Historically, grocers have done little with that information. It was more of a device to keep you coming back to the store.

But in the past few years, grocers have been getting hip to the idea that their customers’ shopping history can be used to personalize the shopping experience.

Once, I was product manager for just such a system, called SmartShop. Pay By Touch’s SmartShop used a Bayesian model to compare your purchases against those of other shoppers, and determine whether you exhibited stronger or weaker preferences for a category or product than the overall average. A set of 10 personalized item discounts were then selected for you based on your specific purchase preferences.

On a website, returning customers are presented with a set of recommendations as they shop. In-store, what’s the analog? Kiosks. Kiosks are the in-store interaction basis with customers. SmartShop notified you of discounts via a print-out from a kiosk at the front of the store. This was key – get you the discounts right at the point of decision, when you’re shopping. Not unlike e-commerce recommendations.

Prior to Pay By Touch’s demise, SmartShop was getting good traction among grocers, who were looking for ways to increase basket size, increase loyalty and differentiate themselves. And it wasn’t just SmartShop. Price Chopper and Ukrops use a recommendation system from Entry Point Communications. UK-based Tesco is the granddaddy of personalized recommendations, provided through Dunnhumby.

Teaching Old Dogs New Tricks

While e-commerce benefits from being all-digital and various identification mechanisms, grocery historically lacked these. But that’s changing. Retailer have picked up the best practices of their online brethren. Things are now much more measurable and personalization is no longer the province of the online players.

Looking forward to grocers introducing Twitter into the shopping experience…

*****

For reference, here’s a white paper I wrote about SmartShop when I was at Pay By Touch:

*****

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My Ten Favorite Tweets – Week Ending 112108

From the home office in Manila, Philippines…

#1: “If a mind is always open, it never finishes anything. If it’s always closed, it never starts.” – Scott Berkun, The Myths of Innovation

#2: @pico On FriendFeed? Attention on FriendFeed (for non A-Listers) is driven by: being interactive + decent-to-great content.

#3: Observation: E2.0 crowd is much more active on Twitter than FriendFeed: (1) established connections, (2) conversations, (3) broadcast.

#4: @pico It’s kind of a parallel to enterprise 2.0 in general. E2.0 tracks what happens in Web 2.0, with a 2 year delay. Web 2.0 is the filter.

#5: Just showed my colleague how I’ve got my FriendFeed Enterprise 2.0 List up on my monitor via real-time. His reaction? “Gotta show me how!”

#6: Reading: Why doesn’t anyone care about HP? http://bit.ly/16dEB

#7: @jeffmann The Gartner MQ for social software available in full without registration here: http://bit.ly/gs6dH

#8: Preso best practice = mostly pix, few words. Great for in-person presentations. But Slideshare versions lose context w/ single word slides.

#9: Wow, now my LinkedIn profile is pimped out with my blog posts and Slideshare. Really, really cool what LinkedIn is doing.

#10: RT @THE_REAL_SHAQ Sittin next to steve nash, tryna get hi to join twitter >> Twitter’s viral nature is everywhere…

*****

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Would Twitter Have Emerged If Current Pessimistic Attitudes Were Around Last Year?

Although well-used by many and even relied upon by some, Twitter has yet to turn on a revenue model. It’s not like the company would lose users, if it set up a minor advertising strategy as a test; people want to see the company make some money. Please, Twitter, turn on the revenue before it’s too late.

Rafe Needleman, 11 troubled Web companies: The next Kozmos?

We’re all watching, rather helplessly, what is happening to the global economy right now. It appears we’re in for a chilly period economically. Click here for a Twitter search on recession.

And there’s no shortage of advice on how to handle the upcoming winter. The most talked-about advice came from legendary venture capital firm Sequoia, who put their thoughts into a presentation. This slide describes their advice to their portfolio start-ups:

The above slide is the equivalent of a cold splash of water in the face. The general theme seems to be: cut back on experimentation and things that take a while to mature.

Later on slide 53, Sequoia includes this advice, which I have seen in many other pieces:

Become cash flow positive as soon as possible

Cash flow positive, cash flow positive…always good advice. And here are the two levers affecting cash flow position:

  1. Increase revenues
  2. Cut costs

But that advice seems to be for companies that have a specific profile. I think the approach for entrepreneurs is a little more nuanced.

What a Start-up Needs to Do Depends on Its Maturity

The graph below graphs the two levels affecting cash flow, and considers the distance between a company’s revenues and its costs.

I put this graph together because I think it’s too simplistic to say, “cut costs”. Cutting costs is advice that applies to companies along all levels of maturity in down economic times. But for many companies, that’s not enough. If the distance between sales and costs is too great, there’s no way to cut costs to preserve the company. The focus of the entrepreneurs needs to be on raising equity, not doing more with less. If there’s a good base of revenues and a decent post-financial crisis pipeline, the focus is on closing deals, not cutting costs. “Deals” meaning partner deals in a consumer web app, client deals for an enterprise app.

There are promising companies that do not yet have the topline revenue nailed down right now. Per the Sequoia note, these companies need to cut back on experimentation. Yet, we hear this sort of thing a lot:

The Great Tech Bust of Ought Two gave us 37Signals, Flickr, and del.icio.us

But…aren’t those examples of experimentation? For instance, Flickr didn’t start out life as a social photo sharing service. It was an experimental feature for an online gaming service called Game Neverending by Ludicorp. The “feature” of photo sharing didn’t have a revenue model, and I’m going to guess it wasn’t the core strategy discussed at Ludicorp board meetings.

Not surprisingly, there are plenty of mixed messages out there: “Cut back and focus on what’s core!” “Great innovation emerges from economic downturns!”

Would We Have Twitter If the Economic Slowdown Was in 2007?

I put together a two graphs of Twitter’s traffic, as tracked by Google Trends. The top graph is Twitter’s traffic during 2007. The bottom graph is Twitter’s traffic overall from 2007 until today.

Assume today’s chilled economic outlook was in effect at this time last year. If a VC was making decisions about companies in its portfolio, how would Twitter fare? The 2007 numbers show a service without a real growth trend. And Twitter still doesn’t have a revenue model.

Using Sequoia’s advice…Twitter would be dead.

But look at Twitter’s numbers starting in April 2008. The network effects have kicked in, Twitter is getting press everywhere, CNN is even using it. Per Rafe’s post cited at the top, an ad revenue model certainly seems doable and promising based on its metrics.

However, I’m not convinced Twitter would survive under today’s dire outlook for start-ups. It’d be a  victim of the “throw the baby out with the bath water” mentality we’re seeing right now. And wouldn’t that have been a mistake.

Let’s hope some sense of proportionality and a longer term view kicks in soon.

*****

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Yelp Is Putting Zagat into the “Innovator’s Dilemma” Headlock

In The Innovator’s Dilemma, author Clayton Christensen describes how new technologies emerge to take over markets. Initially, companies roll out products that serve the low-end of the market. They offer something cheaper and less functional than the product that currently dominates a market.

After establishing a toehold in a niche, a company expands the capabilities of its product until its features start to “bump up” against those of the incumbent vendors. The incumbents, the original “innovators”, find themselves fighting at the lower margin end of their business. Tired of spending resources to protect low margin sales, they take themselves further up the functionality ladder, where they can charge a premium.

Eventually, they run out of room at the top of the market. And the scrappy, less functional competitor has taken over the remaining market. This is shown graphically below:

In the recent New York Times article, How Many Reviewers Should Be in the Kitchen, Randall Stross looks at how Yelp is eating away at Zagat’s business model. Zagat publishes the very successful Zagat Guides. Zagat’s reviewers give the low-down on restaurants in cities around the world: price, quality, service.

I remember from my banking days that these were hit. And they cost money as well. Zagat has done well charging for their guides.

Yelp is the Web 2.0 site where everyday people rate their experiences with all sorts of services, restaurants included. Typical of these user-generated content sites, the quality of Yelp reviews was uneven early on. But it was a quick way to see what someone thought of a place before you went.

Well Yelp has gotten bigger and better. The site now has an army of reviewers. And power users with a flair for good reviews earn Yelp Elite status (my brother-in-law is one of them).

Yelp started out pretty low-end, as most Web 2.0 companies do. But it appears that Yelp is now migrating upmarket in terms of quality. It’s starting to bump up against market leader Zagat.

Here’s how Stross describes it in the New York Times:

Fortunately, the sites that welcome customer reviews have evolved significantly. One of the best, Yelp, has replaced the cult of the anonymous amateur with a design that highlights the judgments of the exceptional few. These dedicated reviewers produce work that, in quantity and quality, increasingly approaches that of their professional forebears, and they are willing to divulge personal information about themselves.

Because of Zagat’s 30-year history of subscriptions, the company’s mindset is one of actually making money via subscriptions, and that has served it well. The reluctance to give up something that’s generating real sales with real profits is understandable, but risks Zagat losing market share.

I don’t have a crystal ball, but there’s enough history where companies that you might have said, “Oh, they’ll never overtake so-an-so” end up doing just that. It’s not an overnight thing, it takes years. But it’s a real phenomenon.

Michelin Guides next?

*****

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How Enterprise 2.0 Fosters Innovation: Stop Groupthink

I’ve had a chance to read some interesting research about innovation. In this case, whether more quality ideas emerge…

  • When people are in group sessions; or
  • Thinking independently

The background of this research ties into a well-known corporate activity: group meetings. I imagine most of us go through the ritual team meetings. Team meetings are good for a lot of things, but innovation may not be their highest and best use.

Turns out, research says that companies would be better off if employees had a way of coming up with ideas on their own, not in group meetings.

Here are three separate findings:

Via Marc Andreessen’s blog, the findings of researchers as related by Frans Johansson in The Medici Effect:

Via MSNBC, the findings as reported in the Journal of Consumer Research.

Via MIT Sloan Management Review, research published by INSEAD Business School

These observations about brainstorming ring true to me. I’ve been in enough meetings to know that strong personalities and prior relationships can hold sway over a group. The quote above by the Indiana University associate professor describes a dynamic I’ve seen time and again. An idea suggested early in the session gets traction, and becomes the focal point of the brainstorming. At some point, groupthink takes over. Maybe it’s exhaustion, maybe it’s an inability to focus on the other ideas anymore.

Yes, good ideas can emerge. But often, the whole exercise feels forced, and in my personal experience, employees don’t expect much from these meetings. Particularly if they’re run by outside consultants.

It Turns Out Group Brainstorming Does Have Its Attractions

The INSEAD paper referenced above does have some good news about group meetings. The paper studied two types of brainstorming groups:

  1. The traditional model, assembling a group of people.
  2. The other group took a “hybrid” approach, working on ideas by themselves before coming together to share their thinking.

The quote I selected above is from the research. But the study also has this to say about the two types of brainstorming:

Which technique yielded the best ideas? Strictly speaking, the traditional brainstorming groups consistently came up with the very best idea — and the very worst one, too. In other words, the quality of their results varied much more than those that came out of the hybrid groups that combined individual and group idea generation. However, the hybrid groups produced more ideas that were, on average, of higher quality. Nonetheless “for the very best idea, you need to have a pure brainstorming group,” notes Girotra. “Random interactions are likely to produce better-quality ideas.”

A few thoughts from that quote. One, the best idea can emerge from the group brainstorming, but I suspect it takes a truly motivated group. People need to come to meetings energized, ready to participate in a rapid-fire exchange of ideas and counter-arguments. In my experience, most meetings aren’t like that.

Also, how does that research that both the best and worst ideas emerge from group brainstorming play out there? Who doesn’t want the best ideas to emerge, but are you ready to put up with the worst ones too? Is there an argument for maintaining a larger number of ideas that are consistently above average?

Why can’t we get the best of both worlds? I want a higher quantity of good ideas, and I want the best ideas to emerge. While avoiding the worst ideas, if possible.

Enterprise 2.0: Hybrid Between Individualism and Group Dynamics

The graphic below describes the way Enterprise 2.0 captures the advantages of both brainstorming styles, group and hybrid:

Source Ideas: In the model above, the bottom level speaks to the core driver of Web 2.0: user-generated content. In this case, employee-generated ideas. Applying the familiar design and functionality of the consumer web (e.g. Twitter, Flickr, FriendFeed, WordPress, etc.) allows the easy creation of ideas.

Filter Ideas: Something I’ve learned by participating in social media is that your peers are amazing filters. Find a group of people with common interests – but with different opinions – and you’d be amazed at how the most useful stuff floats to the top. Happens in blogging, photos, videos, tweets etc.

Execute Ideas: After all this idea creation and filtering is done, the ideas need to be executed. Here’s where the group dynamic becomes a huge plus. Most ideas in a corporate setting will touch a number of areas, and the group makes it happen.

The key to getting the best of both worlds – more ideas of better quality, identification of the top ideas – is to create a culture where ideas are rapidly created and evaluated, while also letting advocates gestate their ideas to fix areas of weakness.

The ‘Source Ideas’ part of the model speaks to the best of brainstorming as researchers have found, in the above quotes. In my own experience, it’s hard to find those channels for new ideas, either fully baked or based on a hunch. You’d typically have to email someone, or call a meeting with several folks. Coming up with new ideas is challenging enough…you then have to go through workplace Olympics to see an idea get discussed and considered.

‘Filter Ideas’ gets to the heart of what makes group brainstorming powerful, when it works. The rapid creation and analysis of ideas helps everyone. Different points of view, people seeing unique opportunities with an idea or recognizing weaknesses…all are vital to the corporate innovation process. Currently, this can only happen in a group setting, but the group brainstorming dynamics have to be “right”.

Enterprise 2.0 has this figured out. Ideas are easily created and shared. Proponents and opponents can develop analyses of ideas. Simple commenting is very powerful, while longer form blogging can lay down foundational elements. Proposed ideas and discussions live longer than the one hour everyone is together in a conference room.

I know this, because I see it everyday in places like FriendFeed, blogs and Twitter. The diverse opinions, knowledge, creativity and world views result in some really good ideas and perspectives.

I’m not prescribing the particular technology to capture the best of individual and group brainstorming. There are different ways to approach that. What matters is letting the employees try this out for themselves.

Groupthink has its place. A unified group taking on the challenges of the market is vital. But groupthink should kick in after the innovation processes have occurred. First, a healthy scrum of ideas, ultimately filtered to the ones that a company will execute. Then everyone working together with a common sense of purpose.

A utopian vision? Perhaps. But like all stretch goals…if you get halfway to them, you’ve accomplished a lot.

*****

If you want an easy way to stay on top of Enterprise 2.0, I invite you to join the Enterprise 2.0 Room on FriendFeed. The room takes feeds for Enterprise 2.0-related items on Twitter, Del.icio.us and SlideShare. To see this room, click here: http://friendfeed.com/rooms/enterprise-2-0

*****

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Knowledge & Innovation: The Journey Is as Valuable as the Destination

I don’t know about you, but I’ve had a pretty traditional background in terms of product management. I was an assistant buyer for a retail chain, I marketed as an investment banker, and I’ve had over seven years in the software world. From that work, I’ve gotten a good feel for the process that occurs in producing an end result.

  1. Start with the idea
  2. Bounce it off your boss and peers
  3. Write it up
  4. Email it around
  5. Sit down with people
  6. Re-work the idea
  7. Produce the final version (PRD, white paper, pitch deck, etc.)

For most of us, step 7 is the prize, the definition of what’s valuable. All else is a pain in the ass.

But having spent some time on FriendFeed, I’m starting to recognize the value of steps 2 – 6. The conversations and debates to get from Point A to Point B are actually incredibly valuable.

The problem isn’t the work of getting from Point A to Point B. The problem is the methods we typically have inside the workplace. I suspect few corporate cultures are set up to make the journey as rewarding as the end result.

What do I mean exactly? Well, take the iteration process for a given initiative. You send an email, get single replies back from several folks. You sit in a meeting, and there’s this vague group meeting dynamic where someone with the most passion (right or wrong) ends up controlling the meeting vibe. Maybe you do a series of one-on-ones.

The problem with these methods is that the conversations are limited. Debates take the form of comparing the feedback of different people. I know this. I’ve lived it. You ever try to coordinate the Outlook Calendars of various people? In a series of meetings? It’s a nightmare.

So what has FriendFeed taught me? That there is a way to improve this process. That the journey to  Point B can actually be fun and engaging. And that it has value. Companies should take heed.

Here’s what I would love to see. Companies adopt ways to enable asynchronous conversations around ideas that are searchable, engaging and radiate greater benefits than just producing a final result. Wikis are good, but they too often have an emphasis on maintaining versions of documents. They lack the vital conversations that go into the various versions of a document.

What are the benefits of companies than can figure this out? Plenty! Here are three that come to mind:

  • Context for the end product
  • Other ideas come out of the process
  • Deeper understanding of others’ views and knowledge

Let me break these down a bit more.

Context for the End Product

When consuming the content after it is completed, all someone knows is what they read. Not that there’s anything wrong with that. The document says that System A will do Action 3 after receiving Data #. It’s a straightforward recitation of what people are supposed to know.

But if you have context for why things are spelled out the way they are, I argue you’ve got much more informed workers.

I’m personally not satisfied with only reading something. I always want to know why something ended up the way it did. Especially when you’re reading something new, that background is vital context.

But too often, all workers have is the end product. Which means they end up with half the story, and not enough background to really grok the content.

Other Ideas Come Out of the Process

A rich conversation and debate around ideas and projects can become an innovation jam. As people jump in the fray to discuss something, inevitably other tangential ideas come flying out.

In an earlier post FriendFeed ‘Likes’ Compatibility Index, good discussion erupted out on FriendFeed (here, here). If that post was Point A, I’ve already written about Point B, which was an app built by felix to automatically calculate your likes compatibility index.

But there was another idea thrown off from the discussions: how well represented are women on FriendFeed and social media? Mark Trapp wrote Friendfeed Like Factor and the Gender Divide which put some numbers and thoughts to this question. Which got its own discussion going.

I’m quite sure an energetic conversation by engaged employees has the same effect – unplanned ideas come out of them.

Spread some innovation jam.

Deeper Understanding of Others’ Views and Knowledge

It’s funny to say, but I feel like I have a better read on some folks through FriendFeed than I did on people with whom I actually worked.

Why? Because work in some companies is fairly isolated. You may trade some emails, do some calls and attend status meetings. But the fertile soil of engagement is lacking. Aside from missing the benefits described above, employees miss the opportunity to learn more about one another.

Why does this matter? The better you understand your colleagues, the easier your job becomes. People develop instinctive ways of working, and a shorthand language built from prior interactions emerges. Long time employees do this, but it takes while. And new employees have to pick up the signals as best they can.

What I like about this approach is that employee social networks just emerge naturally via the interactions. A more formal social network approach isn’t needed.

Gimme Some FriendFeed Inside the Enterprise

If I could get a FriendFeed-like experience inside a company, I’d be thrilled. For all the reasons stated above. Plus it would just be fun.

I’ve said before that FriendFeed is a social network built around ideas. And the typical work for a lot of folks is also around ideas. Seems like there’s potential.

There would need to be some new features to make it the experience more pertinent to work versus play. But that’s a follow-up post.

Final Thoughts

As stated earlier, I’d like to see companies adopt ways to enable asynchronous conversations around ideas that are searchable, engaging and radiate greater benefits. Things like wikis are a good start as collaboration vehicles, but they lack the interaction aspect that has emerged as the killer feature of social media.

The nice thing is that new start-ups are popping up all the time. I look forward to seeing the ones that take in the next wave of innovation.

I’m @bhc3 on Twitter.

Fostering Innovation: Lots of Little Fires or One Inferno?

An area that I find really interesting is role that social media can play in improving innovation. Before the advent of social media applications, innovation needed two primary drivers:

  1. Someone with the passion and time to see it through
  2. The luck that someone’s offline social sphere picked up on an idea and helped spread it

Today, innovation can occur much more easily than before, courtesy of social media. An idea can be disseminated and discussed far beyond (i) the originating person’s social sphere; and (ii) their level of energy to pursue it.

Which brings me back to the ongoing discussion about distributed conversations. Is innovation the product of lots of little conversational fires or one raging talk inferno? The answer is ‘both’, but I think people have undervalued the potential in lots of little fires.

The Myth of the Iconic Genius

Recently, Malcolm Gladwell wrote a great article for The New Yorker, In the Air – Who says big ideas are rare? The piece examines the history of innovation, with Alexander Graham Bell’s role in inventing the telephone as a case study. Turns out Bell wasn’t the only one working on the telephone. Elisha Gray also had a working telephone at the same time. As Gladwell describes it, this is but one example of what science historians call “multiples” – cases of simultaneous invention by completely independent persons. It happened in calculus, evolution, decimal fractions, and many, many other fields.

After discussing the findings of two researchers, Gladwell puts context to the common occurrence of “multiples” in history:

For Ogburn and Thomas, the sheer number of multiples could mean only one thing: scientific discoveries must, in some sense, be inevitable. They must be in the air, products of the intellectual climate of a specific time and place.

In other words, it’s a fallacy to think that innovation only channels through one singular genius. Which brings us back to this idea that distributed conversations are a bad thing.

The Value of Lots of Little Fires

Lets use innovation inside the enterprise as an example. An employee comes up with an idea. Not a perfect idea, perhaps not a fully formed idea. But an idea that’s got some shine to it. I hope that sounds plausible to you if you work inside a corporation. It rings true to me.

Assume the company has a good platform for this employee to propagate it. She blogs the idea on some internal web application. Other people pick up on the idea. Now stop here for second.

If her idea is to gain traction, what makes the most sense? Employees from other departments, divisions, countries all interacting with this person they don’t know? Or employees thinking through the idea with their own social circle?

I argue that employees should be free to discuss the idea how they want and with whom they want. Why? It goes back to the observation of Ogburn and Thomas – invention is often the product of current broader thinking and prior discoveries. Inside a company, this likely means an emerging issue or opportunity that employees are starting to sense.

Little fires become big fires because they burn areas that are dry and ready to ignite. In the same way, letting employees hold their own conversations is a great way to find those patches of dry tinder that are ready for your idea. Some conversations will snuff out due to lack of good kindling. But other conversations will grow as the sparks from the originating fire find lots of wood to burn.

And that’s the importance of distributed conversations. You never know from where the energy and support for your idea is going to come.

Don’t Underestimate the Value and Motivations of People

So little conversational fires are important for building a buzz inside your company. What else do they do?

  • Provide different perspectives from outside your sphere
  • Motivate employees to care about your idea

In our company example, lets say the originator of the idea is in Field Operations. She knows the customers well and has a good sense of what they’re feeling. So she writes up her idea in a blog post.

But her idea would affect a lot of different groups: product, operations, development, finance, marketing, sales, etc. Each of these departments will have a unique understanding of the idea’s requirements. Would you force all of these different perspectives through that one blog? Of course not.

Stepping outside the employee motif for a second, I think it’s important to understand that people have different experiences, interests and talents. And they have their existing peers with whom they talk. When it comes to discussing a newly presented idea, it’s unnatural to force them to abandon these existing connections and prior conversations. If that means the originating author has to chase down the conversation, so be it.

Stepping back into the employee motif, the other value of little fires is the motivational aspect. If you want an idea to take hold, you have to relinquish some control of it. If you don’t don’t, you’re going to run right into a wall of indifference.

This sounds bad to say – aren’t employees only interested in the greater company good? Maybe. But lets not make that the only basis for the success of an idea. Acknowledge that people work hard and have ambitions. The little fires of distributed conversations give them ownership of the idea within their particular social sphere. They can point out the flaws, come up with improvements and relate the idea to previous thinking.

Forcing everyone back through the originating blog post loses this dynamic, and you’ve just killed the personal motivation of some people to participate.

But Isn’t This All Messy?

Yes. It is.

Proper recognition for the idea will be an issue. Going back to Malcolm Gladwell’s article, he lists a number of people who came up with an idea at the same time as more famous inventors and discoverers. But they didn’t become household names (e.g. Elisha Gray).

Also, as different groups work through an idea, fiefdoms might emerge. Different groups laying claim to having the best vision and plan for the idea. Who’s right and who should drive it forward?

But here’s the good news – the idea got traction. Senior managers are well-paid to figure out the other issues (I’ll pause here for your Dilbert snicker…).

Now if the company’s blogging software is any good, the original author of the idea will be recognized. And more than likely, our heroine was involved in several of the distributed conversations that occurred. She is not divorced from the whole innovation process.

Final Thoughts

Distributed conversations are an important component of gaining traction for innovative ideas. They enable a greater percentage of ideas to come to fruition than in traditional company settings where dialogue is limited to your own social sphere.

I’ve used life inside the enterprise to describe why distributed conversations have value. I think a lot of the same motivations apply out on the world wide web as well. If you’re a blogger and you think you’ve got a good idea or insight, recognize that you most likely were not the only person thinking that way. So don’t be too bothered when little conversational fires start elsewhere – your spark landed in some dry tinder.

Grab some marshmallows and join the fun.

*****

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