Nov 17

So $3MM worth of iPhones were just stolen from a Belgian warehouse. The burglars apparently dropped in through a hole in the roof that was cut directly above where the goods were stored. They succeeded in getting away with the merchandise but given the precision of the location of the hole, it almost certainly narrows the list of possible suspects to those who had inside info on where the phones were stored. What should the robbers have done differently?

Answer: Cut holes in other places of the roof and tamper with windows and doors in surrounding areas to seed misleading evidence indicating that they were outsiders who cased the warehouse before discovering the iPhones.

Granted, they may have been pressed for time in their escape but by failing to apply disinformation they’ve decreased the pool of suspects and therefore increased the likelihood that they’ll be caught. So what relevance does this have to business?

The business case for disinformation

magicianHatIf you’re in a highly competitive space and you know you have competitors monitoring your activities, you’re likely making maneuvers that inadvertently telegraph your intentions. Public activities like domain registrations, trademark applications, patent filings and job postings can be spliced together to produce a picture of what you’re up to. The obvious recommendation is to conceal what can be concealed. But for those things which simply can’t be concealed due to their nature you can at least apply some creative slight of hand to obscure things.

Apple supposedly used a tactic dubbed the “canary trap” back in ’07 in which they selectively leaked false information via various channels to discover the internal mole that was the source for one of those Mac rumor blogs. There are digital rights management systems that use synonym substitution to create unique, slightly-altered versions of content. When false rumors are leaked via these documents they can be traced back to the source. Companies that have a crucial patent filing will often bury it in a haystack of red herring filings to obscure the move. And of course who can forget the famous heist sequence from Thomas Crown Affair in which individuals wearing identical outfits criss-crossed throughout the New York museum overwhelming authorities with suspects and eluding capture.

One of my favorite examples of disinformation was from Neal Stephenson’s book “Cryptonomicon.” The book covers – among other things – the story of how the German Enigma Code was cracked in WWI. Once the Allies had the ability to decipher Axis transmissions, a good deal of energy was expended responding to the intercepts in a way that concealed the fact they had actually cracked the code. They would have to stage a plausible scenario in which a Allied ship or plane would “stumble upon” a German U-boat that was discovered via a transmission. There was also a ploy in which they planted false information on the body of a deceased Allied officer and strategically placed it so that it washed up on the shore of the enemy to be discovered and assumed legitimate.

Other war time examples of disinformation are the numerous deceptions of the British officer Jasper Maskelyne. He made jeeps look like tanks, created the illusion of a battleship on the Thames and cloaked the entire city of Alexandria, Egypt from German bombers by building a small scale replica nearby, cutting the power to the real city at night and illuminating the replica. He would then dig fake craters and paint fake building damage in the night and to give German reconnaissance false assurance their attacks had succeeded.

The point of all this is that we are often so focused on improving the clarity of our message for potential customers that we neglect to take simple steps to obscure our movements from competitors.

What are some more examples of well-executed disinformation campaigns?

Aug 07

Here’s an idea for a service I would use if it existed. First let me give the backstory.

I’m about 1/3rd of the way through a book on improving conversions through landing page optimization. So far it’s been focused on demonstrating the importance of this practice by showing how minor improvements in conversion can have multiplier effects on profits. While I understand the strategy of firmly embedding the “why” in readers first this isn’t what I’m seeking from the book.

Skimming ahead through the remaining chapters I’ve noticed it’s almost entirely text with no pictures of landing pages. On a subject that is so visually-oriented as this I want to see:

  • screenshots of landing pages
  • real data from A/B and multivariate testing
  • hypotheses on what changes are expected improve conversion and why
  • more pics showing the evolution of these pages
  • analysis of resultant data confirming or disproving the hypotheses

Basically I don’t want theory, I want empirical data from experience and it appears I’m out of luck for getting that in this book.

This void got me thinking that there is an opportunity for someone to write that book. But then the more I stewed on it, the more it became clear that the real opportunity isn’t for another landing page book at all (that’s thinking way too small). The opportunity is this:

Create a member’s only site that consists of user-submitted info on what works. Whether it’s landing page optimizations, changes to product packaging, homepage design, business model tweaks, marketing strategies – whatever. The point is that the content would be the pure extract that comes from iterating on one’s business and improving it. And for the revenue model: the buy-in to be a member is either to earn access by uploading one’s own lessons or to purchase access.

In the same way that The Funded had a service whereby entrepreneurs could gain access to review others’ term sheets by uploading their own term sheet, this service would build its own content out over time. As the repository of lessons grows more valuable, some percentage of people would choose to purchase access to get the information either out of lack of experience or lack of time. They would trade money for both.

I believe The Experts Exchange site had a similar model for gaining access to a bank of technical questions and answers. The distinction here is that this service would be based around insights. There would need to be a way to peer-rate the value of the lessons submitted. The more valuable the lessons, the more privileges they earned you. There would be some kind of credit system where credits could be purchased or earned via submitting valuable insights. The challenge would be in seeding it with enough useful insights to attract initial participation from smart people.

One of the most enjoyable aspects of our business is the discovery & experimentation of coming up with ideas, testing them, iterating and finding out what works. We learn a ton from working in our own little petri dish but imagine if it were possible to barter these insights to buy into a larger body of shared knowledge across other petri dishes? This service would be worth it for the value of those insights alone but think about the other byproducts:

  • having input from other smart people to sanity check your efforts
  • making personal connections with other entrepreneurs through constructive interaction
  • exposure to funding sources in a setting where they can see how you think and operate
  • an objective measure of the value of your input

Thoughts? Who wants to go out and build this?

Jun 08

phoneoperators
Think about jobs that even just ten years ago were fundamentally different.

Travel agents. I’m looking at you and then at sites like Orbitz, Kayak, Expedia, Priceline and Tripit and wondering about the viability of your profession. Is there still room in this world for your career and if so, how must it morph to continue? Remember back in the day it used to require proficiency with the SABRE booking system? Your travel agent would call you and say “I can save you $20 if you’re willing to go an hour earlier and do a stop in Newark.” How times have changed… Today your average 12-yr-old child armed with a web browser can deliver a better travel service.

How about arial photography? It used to cost big bucks to pay a pilot to in a cessna to fly over a site with a high-quality camera and snap a few photos. Now you stitch a few screen grabs together from Google Earth and you have a higher res image in five minutes time without leaving your computer.

What about realtors? I realize this one might draw criticism from those who have invested the time to get a real estate license but seriously. It made sense as a profession before we had sites like Zillow and Realtor.com with the whole MLS exposed via the Web but how is this still a viable profession?

Car salesmen? You can go to cars.com and have a window into the Reynolds & Reynolds inventory systems of every dealership within a 50mi radius of your zipcode, sortable by make, model, year and color. You can grab the VIN’s of your top 5 prospects and five minutes later have CARFAX reports on each vehicle. Go to LendingTree.com and have 5 offers for financing. Sell your vehicle via eBay in 3 days and walk onto the dealership knowing exactly what price you’re going to pay for the car you found. The car salesman’s duties are reduced to essentially a greeter. And yet somehow there’s still guys in ties drinking coffee and shooting the breeze out there waiting to pounce when you drive into a dealership…

So let’s not dis on all these professions- they were viable and noble at one point. What do we need to do to morph each of these roles to make them important, indeed essential again? What traits will never go out of style?

  • Travel Agent: get to know me, go find and research non-mainstream, undiscovered travel destinations and play matchmaker. Monitor deal anomalies for hotel and travel fares to these places and drop me a thoughtful note with a travel recommendation. In fact, monitor any one of my various social media channels to know when I need to take a vacation and then suggest it ;-)
  • Arial photographer: This one’s tough because this service truly has been obviated for all but niche needs like photographing classified areas or getting super hi-res images. Pilot: provided you still want to fly, consider partnering up with other pilots and make a business like Dayjet whereby you pair up strangers looking to travel short distances and deliver affordable, ad hoc charter flights. (okay that’s a bit of a stretch- what else could former arial photographers do?)
  • Realtor: Get intimate knowledge of neighborhoods, school systems, pricing trends. Don’t recommend specific houses- send me Zillow searches referenced in Google Docs and complete with your notes. Listen to my goals, know my budget constraints and advise me on home purchasing heuristics I should be thinking about. Make sure I’m not making a mistake in neighborhood selection given foreclosure trends.
  • Car salesman: Forget all “4-square” negotiating tactics because the price is no longer negotiable. Rather than be an expert on every car of a certain make, limit yourself to a class of vehicle and know all makes and models within that class. Make yourself a recommendation expert across makes- an advocate for the buyer. Learn my needs, constraints, etc and help me pick the right vehicle. I’ll pay you to plug and chug on eBay, Cars.com, Craigslist and Carfax to get me the best deal. Advise me on vehicle selection and then do the legwork of actual acquisition so I don’t have to.

*BONUS Profession: Personal Internet Sherpa – there’s still a portion of the population that either refuses to use the Internet, or more likely, doesn’t know all the tricks. How about marketing yourself the person who can avail yourself weekly to understand their imminent challenges and put your knowledge of the various services to work helping them save money. Take a commission on the money you save them.

The takeaways here:
Some things will always be valued: personal treatment, understanding customer needs more thoroughly, having mastery over a problem domain and being able to match their unique likes more closely with the available options. Save me time and money, substantiate it and I’ll pay you commission on that savings.

Disrupted professions don’t evaporate, they morph to continue to yield value in the changed environment. People cling to what was once familiar but the real answer is to think from the perspective of the customers, deliver value and charge for a proportionate amount of the value delivered.

Can you think of other lessons here? What are some other jobs I missed that have become antiquated and are in need of fundamental rethinking?

Mar 22

Here’s an idea for a service that someone should build (if it doesn’t exist already):

For the utilities that offer various plans for subscribers (mobile phone carriers, cable companies, satellite tv, power, etc) and create a system that monitors your usage and automatically switches you over to the most optimal plan for your needs.

I recently realized I was getting hit with $30 extra in fees each month on my cell phone bill because I was sending more text messages than my plan permitted. It took me almost a year to realize this though because once I chose the plan originally, I forgot about it and just paid it each month. The carriers could already dynamically move customers to the service plan that served them best but they make way too much money by relying upon people’s inefficiency. There has to be an opportunity here for a service that quietly has your back and ensures that you’re subscribed on all your utilities with the most rational plans.

Make it a free service and charge a fee as a percentage of the money it saves folks. Once it knows about your usage patterns and properly recommends the right plan, an enhancement could be recommendations for other ways to save (ie. “you appear to be renting more than 5 movies a month via iTunes, have you considered a Netflix subscription?”).

Anyone see a flaw with such a service? Does it already exist? If not, build it and I can guarantee that Mint.com would acquire and add it to their offering once it works.

Oct 22

Friday night it was merely an idea. By Sunday night it was a prototype. And by Tuesday afternoon it was on the homepage of TechCrunch. How did we do it with Reserve Chute?

This was a perfect storm where an old idea whose time had come collided with a group of capable, motivated people with the right skills in the right environment punctuated with just the right amount of Zoolander.

People using SaaS applications love the convenience but face the possibility of losing access to their data -whether it be caused by the company going out of business overnight, hard drives and backups failing or simply by their internet connection being interrupted. Users want the peace of mind knowing that they have a local copy of their data and they want a brain-dead-simple way to achieve this for all their online applications. The tool we created this weekend offers this capability and makes it possible for any contributor to add extend the system and add hooks to make it work with new services.

While the demo we showed on Sunday night is not publicly available yet, our small but stalwart group is already plotting a series of Wednesday night hack sessions at Gangplank to advance the project to a shippable first version targeted for release sometime around the Holidays. For now, if you use any web-based services and want to be able to automatically store a unified, local copy of your data across all your applications, sign up for the beta and be among the first to try out Reserve Chute!

Other noteworthy projects that sprang to life this weekend:

  • Twitteratr
  • MyShelterHelper
  • And on another note, if you’re in Phoenix this evening come out to my talk on startup lessons at the Club eFactory in north Phoenix.

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    P.S. And yes that is a Karate Kid Cobra Kai t-shirt I’m wearing. Sweep the LEG!

    Oct 03

    Startup Weekend will be in Phoenix two weeks from tonight. This is a 2.5 day affair where strangers of different disciplines come together to build and launch a real product in a weekend. I attended the one in San Francisco back in November and wrote up some thoughts on that event. If you’ve considered starting your own business or just want a chance to meet and work with smart local people to build something real, you will not want to miss this.

    The event starts at 6pm on Friday the 17th and will be held at the new Gangplank office at 325 E Elliot Road Suite 34 (SE Corner Elliot/Arizona Avenue). Tickets are $40 and cover food and overhead for the event. You can get them online here and see product ideas that have been proposed so far here.

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