Posts about Book

Small is the new big: HR department

Last month, I wrote that small is the new big. More demonstration of it: eBay is fast becoming one of the largest employers in America. Of course, it hardly employs anyone, but it enables a lot of people to employ themselves and run their own businesses: 724,000 people are using it as their full- or part-time employment, up 68 percent from a year go; another 1.5 million use it to supplement their income. Walmart is America’s largest employer with 1.1 million workers. Sure, the eBay-self-employed don’t have Walmart’s crappy benefits and uniforms (if eBay were really smart, they’d institute group health insurance!) but all those folks are their own bosses. As industry gets bigger and bigger, small becomes more and more of an economic force.

: See Rex Hammock in the comments on eBay’s power seller health insurance and the regulatory issues around it.

It’s about relationships

The web isn’t about — or just about — content or communication, of course. It’s really about making connections — about, well, links. But to be valued, those links must be organized around trust. In short: It’s about relationships.

The greater the value of the relationship, the greater the value of those who enable those relationships. Those who figure that out succeed (and those who try to impose the old models and relationships fail): Google connects us to information at a low level with sufficient accuracy (we trust it enough) and succeeds thanks to high efficiency and high volume. eBay connects people in transactions at a higher value by creating a system of trust. Whoever uses online functionality to connect, say, employers to the right executives or homebuyers to the right homes — replacing today’s middlemen — can bring even more value.

The first services that come along tend to free up information that used to be controlled by middlemen: It’s what Craig’s List did to classified apartment ads, what SelectQuote did to insurance rates (as Freakonomics points out).

But in certain high-value transactions, no one has quite cracked that next level: using trust to make the right connection efficiently.

Look at jobs. As I’ve said often, the new, inexpensive, efficient marketplaces where buyer and seller meet (Craig’s List and Monster) replacing the old, expensive, inefficient ones (newspaper classifieds) are only a first step, a waystation on the way to a distributed future. Job listings and resumes are now popping up everywhere and anywhere online. So the next services to come along aggregate that (distribution and aggregation is the constant ebb and flow of this new world). Many services are now scraping jobs from any and all sources: Indeed, Simply Hired, Yahoo now, Flipdog was until it was scooped up by Monster, Workzoo still is after being bought by Jobster, and DirectEmployers’ JobCentral has been doing it for sometime (as Stone points out, via Fred).

Makes you think that you need the aggregator of aggregators, eh? But, no, what you need to sift through this, to find value and efficiency, is trust: Relationships. Of course, Linked In wants to do that but I still don’t get the service — that is, I subscribe, but I don’t grok it, because it isn’t efficient for me; it gives me relationships I don’t necessarily care about or that can even be a bother. Look, too, at Ev Williams’ frustration trying to find a service to manage his recruiting. No one has cracked this nut.

This riff is inspired — as much pondering often is — by Umair Hague, who said that scraping jobs is just a first step:

I think the real problem in the jobs vertical is a coordination problem – not a search problem. That is, how do you connect job-seekers and decision-makers economically?

Why do I think this? Think about what headhunters do – it’s equal parts coordination and search. Sure, they have to find the right candidates; but they also have to build relationships with the right decision-makers. So far, the basic model on the Net for jobs has only ever really addressed the first half of this equation. I’ve argued this many times before; archive it if you’re really interested.

Matching jobs and job-seekers is fairly liquid on the net – the relative gap, and where Yahoo could build a strong sustainable advantage fast, is the coordination half of the value prop (which has been ignored for a veeeery long time, most likely because it’s easier to build a few forms, a spider, and a database, than it is to build a whole new innovative coordination model).

LinkedIn, I think, gets this coordination problem, and has a particular take on it, which I think is kind of brittle and rigid (ie, transaction costs for referrals are pretty high, and expected gains aren’t that high on average). If you ask me, the dominant design will be (a lot) more plastic, and it does not have to be centered around ‘link to me’ style social networking (but I can’t say more unfortunately).

The problem is finding the right — the sufficient and efficient — level of trust needed to make the right connection, the appropriate relationship. A service that doesn’t provide enough trust won’t work (in the old world, it was the problem of putting your phone number in the paper to sell a car to people you don’t trust; in the new world, anything you do not trust is spam). But on the other hand, an effort to establish excess trust — to make me friends when all I want to do is complete a transaction (see Tribe or Linked In) — is too much; it’s inefficient.

I’m not sure how to do this in jobs. If I were, I’d create the business and make a damned fortune. I’d start by building on top of the aggregators and help people find the right jobs and get mutual recommendations specific to the task at hand. That’s how headhunters work: When they call me to get names for a search, I take the time to reply because maybe someday they’ll come searching for me. That’s also how it works with friends and colleagues: I will recommend or help the ones I respect and trust and it’s not wholly selfless; someday, maybe they will help me. But the networking is specific to the task at hand; I don’t want to become buddies with all these folks and have to declare myself friends with some ongoing, public obligation (that’s where Linked In stumbles). I want a system that lets me call on them when I need them and rewards me when they need me. I still don’t know how to do that. Umair’s right: That is the real challenge.

So let’s switch to another leg of the classified stool: Real estate. In no sane universe, of course, does a real-estate agent earn 6 percent commission for the services provided. Now Craig’s List and search engines can take away half their job by sharing information and breaking apart the monopolistic trust (in the bad sense of the word) that multiple listings services are: We can find out what’s for sale and how big it is and the price.

But what they don’t do is solve the trust problem: Real estate agents arrange for all those damned strangers to tour my house. At one level, it might be wise for a newspaper or Craig to simply offer a scheduling service (though if they take money from realtors, they are disinclined to do that): They could handle the hassle of matching schedules and then increase the level of trust by verifying the identities of the prospective homebuyers, by requiring and vetting credit-card information, for example. It would take a trusted agent to do that for both sides of the connection. On an even higher level, someone could start a new business that does nothing but arrange and schedule visits and physically accompany buyers on the visits: Say, a bonded moonlighting cop trusted to have my key does this to make sure my house and I are safe but without making any effort to actually sell my house (which he can’t do without a license); I could pay the same person to wait at home for me to let the damned cable guy in. As a homebuyer, I would prefer that to a Realtor: I am armed with all the information I need about the homes — now distributed and aggregated openly — and I don’t have to suffer through a sales guy’s unctuous blather.

Now take this same calculation to other areas.

Take it to cars: Auto web sites give me the information I need about a car; CarsDirect and an Edmunds give me the information I need about pricing. Since all the cars are the same, I really don’t need a trusted agent to sell me one (and I don’t trust him anyway). If federal law would allow it, I’d just buy the car directly from Toyota and buy repair insurance (aka a warranty) and get it repaired wherever I want to by whomever I trust. That’s the way that industry should work; regulation protecting old sales channels prevents it.

Take it to marketing: If you use this medium wisely, you don’t treat it as a medium. You treat everyone you find here as a consumer, as a customer, as a person. You find the people who help you improve your products (alpha consumers); you find the people who help you market your products (influencers); you find the people who help each other with your products (life is customer service); you make good products and get out of the way. If you’re lucky, you don’t advertise. You create a sufficient and trusted relationship with consumers to answer questions and solve problems and keep them coming back. Are you listening, Dell?

And take it to news: The first step is to break up the old, centralized, controlled marketplaces of information and distribute news everywhere (put it online). The next is to aggregate it or help find it (see GoogleNews). The next is to solve the problem of overload and confusion via trust (see blogs). Note that the journalists no longer hold a monopoly on trust (if they ever did); in a distributed/aggregated world, we chose whom to trust.

That is what the internet is about: not just distribution, not just information, not just transactions. It is a web of humans. It is about relationships.

Information + Aggregation / Trust = Relationships

: I STAND CORRECTED: j.d. in the comments shows why I avoided higher math like the plague. What I meant to say is:

(information + aggregation) / trust = relationships

Hating your customers

The AP reports that the number of legal music downloads has tripled in the first half of 2005. I’d say that’s good news. I’d say that’s because, thanks to Apple, the industry finally found a way to help people do what they want to do: listen to music wherever they want. I’d say it indicates that if you give people the chance to do the right thing, they will. I’d say it’s a good sign for humankind.

But the music industry doesn’t say that. The music industry treats its customers like thieves and idiots:

The International Federation of Phonographic Industries… credited the increase to a 13 percent rise in the number of broadband lines installed around the world, along with an industry campaign to both prosecute and educate against illegal downloading.

Dell hell: Seller beware

The age of caveat emptor is over.

Now the time has come when it’s the seller who must beware. Caveat venditor.

A company can no longer get away with consistently offering shoddy products or service or ignoring customers’ concerns and needs.

For now the customers can talk back where they can be heard. Those customers can gang up and share what they know and give their complaints volume. Of course, they can use their reviews and complaints to have a big impact on a company’s reputation and business.

Public relations has to take on a new meaning. It can no longer be about the press and publicity, which just separate companies from the public they are supposed to serve.

Public relations must be about a new relationship with the public, with the public in charge.

: All that is quite obvious to any of us. But it is far from obvious to too many big companies … like Dell.

I tested Dell and they failed. Their customer service mechanism did not recognize a machine and service pattern and customer that were a mess. They didn’t try to fix it.

I could have stayed on the phone for hours and gone up a tier at a time playing the customer having a psycho fit (ask anyone who has heard me go after customer service people who don’t serve: I play the role well).

Instead, I chose to write about the saga here. I chose to elicit the sympathy and conspiracy of fellow pissed-off Dell customers. I chose to see whether Dell is listening.

They are not.

Their media people were not reading the media that matters — media written by their very own customers. This page is already No. 5 in Google under Dell sucks. I gave them time. They failed.

So then I emailed their media department and told them to read this blog. I gave them a cheat sheet. They didn’t. They failed.

Only when I wrote to the Chief Marketing Officer, Michael A. George ([email protected]) did I get a rise out of the company: A very nice (of course) woman named Linda with an accent (Southern… and I don’t mean Bangalore) called to promise to ready the endless email exchange with Dell.

But as we say on the internet: That doesn’t scale. If every dissatisfied customer had to email the Chief Marketing Officer, Michael A. George ([email protected]), he’d never have time to market.

: So here’s where things stand right now. Linda offered scripted apologies (in the same breath that she read the standard notice that the call was being recorded). She didn’t hold onto her arguments about Dell policy on at-home service (when I said that her very own employee admitted that the at-home technician would not bring the parts necessary to fix the machine). She didn’t rise to the legal bait of calling the at-home program “fraudulent” and my complaining about lost work (can you say “compensatory damages”?).

She offered to send me a new machine.

I said I had no faith in Dell, in the quality of its products or its service.

I asked for a refund.

She then offered a full refund.

I said I would decide what to do my early next week.

In the meantime, Apple and PC cultists will battle over the dead body of my Dell.

: You know what: If Dell were really smart, they’d hire me (yes, me) to come to them and teach them about blogs, about how their customers now have a voice; about how their customers are a community — a community often in revolt; about how they could find out what their customers really think; about how they could fix their customers’ problems before they become revolts; about how they could become a better company with the help of their customers.

If they’d only listen.

The little cluetrain that could

Well, I suppose it’s a start. The NY Times today extols the wisdom of consumer-goods advertisers letting their consumers have a role in campaigns and products:

Crest, a division of Procter & Gamble, is asking people to go to the Web to vote for their favorite from a short list of contenders: lemon ice, sweet berry punch or tropica exotica. Samples of the flavors are attached to some Crest products.

Marketing executives say the campaign reflects an increasing interest by companies in involving consumers in their advertising. The trend is another way to break from traditional advertising that viewers increasingly can tune out with TiVo and other digital video recorders. Marketers say the Internet has also made interactive campaigns easier to conduct.

Note that it says they want to involve consumers in their advertising.

I quote Doc Searls in every PowerPoint BlogBoy dance I give [available for hire -advt]:

“Consumer is an industrial-age word, a broadcast-age word. It implies that we are all tied to our chairs, head back, eating ‘content’ and crapping cash.’ “

It’s not about consumers — us — getting involved in the company’s — their — advertising. It’s about companies realizing that they are us and we are them:

I am he as you are he as you are me and we are all together….
I am the walrus, goo goo g’joob.

It’s about companies realizing that we who buy and use these products are in a better position to both market and invent them.

So it’s nice that P&G is letting us vote on a limited set of toothpaste flavors. Really, it is. I’m not being sarcastic, well, not too sarcastic. I guess I feel empowered picking lemon ice (my choice). It is a step in the right direction. But only a step. It’s not a zippy ride on the Cluetrain.

If P&G really had balls, they would have the people create the flavors they want and make the executive decision about which ones to make and then create the marketing campaign about them. If P&G really wanted to succeed, it would give up control to the people they used to call their consumers.

More like this:

Similarly, Staples Inc. is starting its Staples Invention Quest vote Aug. 10. Staples accepted product ideas from customers this spring and said it would award a $25,000 grand prize in September and nine semifinalist prizes of $5,000 – along with possible production deals – for the best inventions, chosen by Staples judges and online voters.

Since the Crest voting began May 2, about 500,000 votes have been cast, said Tonia Elrod, a Crest spokeswoman. Staples, based in Framingham, Mass., received about 12,000 invention proposals this year, up from about 8,300 last year, said Jevin S. Eagle, the senior vice president of Staples Brands.

Another step in the right direction. But if Staples had balls, it would open a forum, wide open, asking office workers the world around to say what products they want and how the products they sell need improvement. Go here and see why you should build a keyboard impervious to crumbs. Build it. Then take a picture of the happy snarfer typing away (a blogger, I have no doubt) as your marketing campaign. He’s not asking for a cut of the profits but it would be the neighborly thing to do.

You have to give up control — really give up control and mean it — to win today.

(And you’ve just witnessed me starting to write that damned book.)