Paul Wallbank | Paul Wallbank - Communications Professional

On being a hater

A cheap slur hides real problems with online communities and anonymous comments.

The phenomenon of the “Internet hater” has been one of the unfortunate developments of the web.

Just as entry barriers for new businesses are low, so too are the restraints on clueless and anonymous idiots posting comments like “drop ded you faggot” or “hope you get canser bitch” onto web forums and social media pages.

English comedian Isabel Fay has a great rebuttal to the haters with a clip that co-opts some of Britain’s top comics with their experiences.

These haters are sad little people as the BBCs Panorama program found when it tracked down one individual who had posted offensive comments.

We knew Darren Burton of Cardiff, aka Nimrod Severen, would be a pathetic individual. Those who post anonymous, hateful comments are rarely anyone who has anything useful to contribute to society.

Online “haters” are a real problem and cause distress to people who encounter the foul comments these creatures post. However the “haters” tag is increasingly being misused to shut down fair comment and criticism.

Legitimate critics or dissenters from the groupthink and shallow advertorials that increasingly dominate parts of the web will quickly earn the tag “hater” as well.

Every multi level marketing spiv or con merchant with a few followers will quickly throw the term out at anyone who dares criticise their behaviour in the hope of rallying their followers to shout down the dissenters. Usually it works.

If you’re prepared to think outside the group and genuinely challenge those selling old rope as new ideas, let alone expose the hypocrisy of those who claim to open and transparent while hiding their real intentions, then be prepared to wear the tag “hater”.

The only reply is to stand on your beliefs and be prepared to use your real name. The real trolls are scared, frightened creatures – just like many of the useful idiots co-opted by the spin merchants and Internet spivs.

At least “hater” is just a cheap insult and they aren’t coming for dissenters with pitchforks. Yet.

Too much money

Overcapitalisation of a business can be worse than too little money.

Having too little money is the problem for most businesses, for a few though the opposite is the case. Overcapitalisation can be as fatal to a venture as being starved of funds.

In the dot com boom of the late 1990s we saw young companies being swamped with too much money which was squandered on flashy offices, comfortable chairs and expensive executive diversions.

Most of the businesses failed as staff didn’t have to worry about gaining and retaining customers while investors didn’t put pressure on managers or owners to perform.

The hospitality industry is particularly prone to this, with cafe and restaurant owners plunging hundred of thousands – sometimes millions – into expensive fit outs and ridiculously expensive kitchen equipment.

Most of these overcapitalised outlets fail because the owners have spent too much on setting up the business and not enough on staffing or providing for ongoing costs.

We’ve seen in the past few years many celebrity chefs teaming up with flush investors to build expensive restaurants with these ventures rarely ending well.

The story of Justin North’s chain of restaurants going into administration is a classic case of this, as the Australian Financial Review describes it;

The Norths, both in their mid-30s, don’t have a wealthy financial backer. They poured in all the cash they had and sold kitchen equipment and other assets to finance the venture.

Westfield kicked in an undisclosed amount.

Ostrich-skin leather tabletops, hand-printed wallpaper, and a huge custom-designed Fagor induction stove imported from Spain (the first of its kind in Australia) contributed to the huge fit-out cost.

In a statement to employees, the North Group said its “businesses are currently in financial difficulty”.

“The administrators are now in control of the group’s assets and affairs and intend to trade the business in the ordinary course whilst undertaking an urgent review of the financial position and explore various restructuring options,” the statement said.

For much of the Australian hospitality industry, the Norths’ problems are a glimpse of the future – the success of the Australian and Chinese stimulus packages in keeping their respective nations out of the mire the US and Europe indirectly led to a boom in restaurant spending and investment.

We saw that boom manifest itself in the opening of pretentious restaurants and the explosion of food blogs as desperate PRs flogged their clients’ venues to the media.

There’s a lot of journalists and food bloggers who are going to find a welcome improvement in their eating habits as the fine dining market now sorts itself out.

It’s going to be tough for those who’ve invested too much or the smaller suppliers to those restaurants.

An area we should be critical of journalists is with headlines like “Restaurant Group Collapses“. A business going into administration is not “a collapse”, it’s in fact the opposite where the shareholders, directors or creditors seek to find an orderly way out of trading difficulties.

Putting out the word that a business has “collapsed” makes the task of salvaging the enterprise much harder for those working to fix the problems.

The Norths have taken the honourable and sensible option. While putting a business into administration can be a brutal process – particularly for the shareholders, investors and smaller creditors – it at least shows the group’s founders have acknowledged the problems in their businesses and are looking to fix them.

All too often, we ignore the fact our businesses are going broke and don’t take the action needed to save them. Doing it early means less pain for everyone.

Having too much money is often worse than having too little money, although most of us would love to be in the position of having big money backing our ventures.

We often talk about learning from failure and not stigmatising entrepreneurs who’ve given it a go and failed, how we treat Justin and Georgia North will be a good measure of whether we are really an entrepreneurial culture.

Raising venture capital is not the measure of success

Bringing investors on board is an important part of a business’ growth, not the end game.

“Those guys are successful, they’ve raised half a million from investors,” one startup commentator recently said about a business.

Is raising money the benchmark of business success? Surely getting investors on board is part of the journey, not the destination.

Having some investors coming on board means others share the founders’ belief their idea is a viable business and it’s a great ego boost for those working hard to bring the product to market.

That cash also exponentially improves the survival chances of the business – too many promising ventures fail because the founders haven’t enough capital.

While it’s an important milestone in the growth of a business, raising capital is not the end game. Only minds addled by the Silicon Valley kool-aide believe that.

In fact, if you’ve set up a business because you hated working for a boss, you might find your new investors are the toughest task masters you’ve ever worked for.

Good luck.

Triangulating privacy out of our lives

Social media sites will have to deal with increased government regulation.

Lost among the noise of Facebook’s rumoured plans to launch a kids’ network, there’s quiet pressures developing as consumers start to realise the value of their data – the pressure to regulate social media.

In his Rethinking Privacy in an Era of Big Data, New York Times writer Quentin Hardy raises some of the issues about the data which is being collected about us.

One of the big areas is triangulation – building a picture of somebody based upon seemingly unrelated data. Quentin explains it in the example of somebody who might be looking for a job.

There other ways in which we can lose control of our privacy now. By triangulating different sets of data (you are suddenly asking lots of people on LinkedIn for endorsements on you as a worker, and on Foursquare you seem to be checking in at midday near a competitor’s location), people can now conclude things about you (you’re probably interviewing for a job there) that are radically different from either set of public information.

The key word of course is “conclude” – we base an assumption on what we think we know. It could turn out those LinkedIn endorsements could be part of a performance review and the competitor’s location could right next door to a hot new lunch spot.

We should also keep in mind the value of this data is asymmetric as the value of this data to a third party is low, if anything. But to the individual it could mean losing a job and other major consequences.

A good example of this is the story of how a UK hospital trust lost highly sensitive health records of thousands of patients, including those being treated for HIV.

The trust ended up being fined £325,000 but that fine is trivial compared to the massive individual cost from just one of those records being released.

Fines are a lousy way of enforcing privacy anyway, as the financial penalties are just passed onto shareholders or taxpayers.

The only meaningful sanction for failures like the Brighton General Hospital breach are holding individuals, particularly managers, personally responsible.

As we saw in the successive Sony security breaches last year, most organisations aren’t interested in holding their senior managers responsible for even the most egregious data failures.

This failure of the corporate sector to protect consumer data will almost certainly drive calls for government regulation and sanctions.

Microsoft researcher Danah Boyd flags this regulation issue in Quentin Hardy’s New York Times piece, saying “Regulation is coming,” she says. “You may not like it, you may close your eyes and hold your nose, but it is coming.”

Danah also makes an important point that users – particularly kids – have developed tactics to obscure their ‘digital footprints’.

For Danah, and others trying to understand what is happening online, this causes a problem, “When I started doing my fieldwork I could tell you what people were talking about. Now I can’t.”

These tactics of creating dummy social media profiles and using euphemisms are a huge threat to the business plans of social media services and the “identity services” desired by Google’s Eric Schmidt.

As data becomes less reliable, or more difficult to triangulate, the value of it to advertisers falls.

It may well be that regulation of social media and web services ends up not being necessary as users become more net savvy. For medical and other personal data though, it’s clear we have to rethink the way we use and store it.

Facebook’s Childrens Network

Do we need social media networks for children?

The Wall Street Journal reports that Facebook is developing a childrens network to overcome the problem of kids under 13 joining the service.

Underage kids getting on the network is a major problem for the social media service with last year’s Pew Social Media and Young Adult survey finding over half of US children logging onto these sites.

The rule of under 13s joining Facebook or other social media services isn’t one born out altruism – it was born out of the US COPPA law which was enacted at the end of the 1990s to protect young children from inappropriate advertising and data mining.

For Facebook and all the other social media data mining operations the inability to gather information on or advert to minors means they haven’t been interested in investing time or money in developing childrens’ networks.

As social networks become more critical to kids’ social lives, it’s not unexpected that younger children are going online just like their older brothers and sisters and this creates risks for services like Facebook.

To mitigate those risks, it was inevitable that Facebook would have to address the problem with setting up a service aimed at younger kids.

Where the challenge lies for Facebook and parents is encouraging kids to use the younger service. It’s going to have to be compelling for the youngsters to use it in preference to the adult network.

The key there is to get the critical mass of kids onto the service – social media platforms only succeed when users know their peers will be there.

So Facebook are probably going to have to offer most of the features of the main platform, without advertising or some of the more intrusive data mining and games.

It also won’t be possible to exclude adults from the kids network as parents and other relatives want to know what their offspring are doing and being friends with the younger ones is essential so they can see posts and other activity.

Age will also be an issue, it may well turn out that a kids network is more appropriate up to say 15 year olds rather than the current thirteen mandated by COPPA.

Overall, a Facebook Kids Network will be sensible move. The worry for Facebook is that kids might just decide there is more compelling place for their friends and interests.

Disrupting the markets

Mary Meeker’s All Things D tech industry presentation raises some fascinating points.

Generally it’s not a good idea to have nearly a hundred slides in a presentation, but Mary Meeker’s overviews of the tech industry are so rich in data it’s impossible not to spend a weekend looking over the entire sldieshow.

Last week Mary gave her presentation at the All Things Digital conference and as usual she identified a range of trends and issues in the technology industries.

Smartphone upsides

Still the early days of smartphone adoption, with 6 billion mobile phone subscriptions worldwide but only 954 million smartphones activated.

This adoption is driving mobile revenues with income growing at 153% per year. Although as she shows later, this is not necessarily good news for everybody.

Print media’s continued decline

A constant in Mary’s presentations over recent years the key slide in has been ad spend versus usage across various mediums.

In this year’s version we still print still vastly over represented with 25% of US advertising while TV remains static, although Henry Blodget at Business Insider thinks the tipping point might be arriving for broadcasters.

Online’s thin returns

One of the things that really jumps out is how thin onlie revenues really are. In annual terms services like Pandora and Zynga are making between 6 and 25 dollars per active user over a year.

These tiny revenues indicate the problem content creators have in making money on the web, after the gatekeepers like Pandora or Spotify have taken their cut, there isn’t much left to go around.

Facebook and Google are also encountering problems as users move to mobile where revenues are even smaller than those from desktop users. This is constraining both services’ earnings growth.

Disrupting markets and governments

Mary’s presentation goes on to look at the disruption web and mobile technologies are bringing to various markets – it’s a good overview of whats changing right now and the products driving the changes.

It’s not just markets that are being disrupted with Mary also looking the US’s budget position and entitlement culture. This in itself is a massive driver of change which will have a deep effect on our lives regardless of where we live.

Are we in a bubble?

Mary finishes up with a look at whether we’re in a tech bubble or not.

Her view is that we are and we aren’t – there are silly valuations of companies in the private market however the poor performance of tech stocks on the stock market indicate the public aren’t being fooled.

One telling statistic is the only 2% of companies have accounted for nearly all the wealth creation of the 1,720 US tech IPOs between 1980 and 2002. There’s little to indicate much has changed in the decade since.

The optimism in funding new businesses is based in the disruption they are bringing to markets and industries – you only need one eBay or Google in your portfolio and you’re a legend, if not filthy rich.

Both the economic and technological changes are disrupting our own businesses and this is why its worth reading and understanding Mary Meeker’s presentations if only to be prepared for the inevitable changes.

Towards the Zettabyte enterprise

The data explosion is here, are you ready for it?

Toward the Zettabyte Enterprise originally appeared in Smart Company on May 31, 2012

Two hundred years ago, the idea of equivalent power of hundreds of horses in a single machine was unthinkable; then steam engine arrived with what seemed unlimited power and that, followed by electricity and the motor car, changed our society and the way we do business.

Back then it was inconceivable that the average person would have the equivalent of several hundred horses of power in their household, today most of us have that sitting in our driveway.

The same thing is happening with the explosion in data, it’s changing how we work in ways as profound as the steam engine, electricity or the motor car.

A couple of surveys released this week illustrate the how business is changing. The Yellow Social Media Report 2012 and the Cisco VisualNetworking Index both show how business and our customers are adapting to having high speed internet at their fingertips.

The Cisco index illustrates the explosive growth of data across the Internet as more people in Asia and Africa connect to the net while users in developed countries like Australia increase their already heavy usage.

In Australia, Cisco see a sixfold growth in traffic between now and 2016. As the National Broadband Network is rolled out, they see speeds increasing substantially as well, with Australia moving from the back of global speed tables up to the front.

Many people are still struggling with the Megabyte or Gigabyte, but very soon we’re going to have to deal with the Zettabyte – a trillion Gigabytes.

For businesses, this means we’re going to have to deal with even more data, it’s clear our hardware and office equipment aren’t going to deal with the massive traffic increases we’re going to see in the next few years.

Even if we have that equipment, it’s another question whether we have the systems, or intellectual capacity to use it effectively.

The Sensis social media report shows consumers are expecting not just rich data but also 24/7 online services.

A worrying part of the Sensis survey is that businesses aren’t keeping up with these demands; something that jumps out with the survey is that while 79% of big businesses have a social media presence, only 27% of small businesses have bothered setting one up.

Australian small businesses have basically given the turf away to the big end of town.

The real worry with these statistics is that small business just isn’t taking advantage of the tools available to them — not only are they leaving the field open to bigger competitors, but there’s a whole new generation of lean new startups about to grab markets off slow incumbents.

While the big companies are vulnerable, it’s the smaller businesses who are the low hanging, easy to pick fruit. If you’re in a profitable niche segment this is something you’ll need to keep in mind.

In the near future we’ll be dealing with inconceivable amounts of data, the businesses that understand this will thrive while those who don’t probably won’t even understand what has hit them.

Do you want to be the personal lubricant guy?

A reminder why you need to be careful with your Facebook likes.

Nick Bergas is a multimedia producer in Iowa City, but to Facebook he’s a live advertisement for personal lubricant.

As the New York Times reports, last Valentines Day Nick saw an Amazon listing for a 55 gallon drum of personal lubricant, ticked the product’s Facebook “Like” button and added a witty comment to his friends.

Shortly afterwards, Nick’s face started appearing in Facebook sponsored posts for big drums of personal lubricant.

Last year I wrote The Privacy Processors on how Facebook is using our personal data and Nick’s story is a good example of how every like, relationship or comment is potential fodder for Facebook’s marketing platform.

While Nick seems pretty chilled about his Facebook celebrity, for some it might not be so benign.

As we’ve seen for student teachers and others, an innocent or even funny posting may be a problem to those without perspective or a sense of humour.

For Facebook and other social media services, Nick’s story also illustrates a problem – that of “Garbage In, Garbage Out”.

While one of Facebook’s major assets is its huge user database, there’s no guarantee the data is accurate or useful.

Selling Nick’s details to a bulk medical lubricant wholesaler is pretty pointless, but that sort of intelligence is key to the future value of Facebook.

That much of the data gathered is the flaw at the heart of Facebook’s bid data aspirations and Google’s hopes to become an identity engine with Google+.

For us mere individuals, the lesson is we need to be a little bit careful about pressing those “like” buttons; explaining your affinity with bulk lubricants could be a bit tricky with your mum or partner.

Falling Dominos, Fading Businesses

The effects of business failure can be great and personal.

“When the tide goes out, we find out who’s naked” goes the saying – nowhere is this more true than in the engineering and construction industries.

One of the hallmarks of an economy that has passed its peak is the systemic failure of contracting companies.

During a boom, or a steady growth phase of an economy, contracting companies see cashflows increase as more projects come online.

That growth affects contractors in a number of ways – they start getting used to fatter margins and management starts to believe in their own invulnerability.

Blue sky seems to stretch on forever and massive growth rates seem guaranteed far into the future.

As the market matures the sky starts to turn grey as more contractors start fighting for lucrative jobs seeing cost estimates being fudged and dodgy deals done to win jobs.

Those dodgy contracts eventually come in at a loss and management starts desperately winning more projects to cover the losses on earlier work.

And so a spiral begins.

To make matters worse, the more aggressive contractors start buying out smaller competitors.

Often those competitors have similar bad projects on their books and their impressive growth rates are based upon winning jobs they should never have tendered for.

Eventually the spiral ends when the market stalls and there aren’t enough new projects available for the loss making contractors to cover the accumulated losses. Then the failures begin.

Collapses of the Hasties Group, Reed, St Hilliers and other construction and engineering contractors are classic examples of this cycle.

While shareholders and management carry some of the burden, the real pain of failure is felt by the armies of sub-contractors – largely small, family owned businesses – these companies employ.

Most of these subcontractors will not get paid for their outstanding invoices, forcing all of them to cut back their own employment and spending. For some, they will be forced into liquidation as they can’t pay their own bills.

For the families that own those small businesses the financial and emotional pain is real and immediate. Spending stops, debts go unpaid and relationships fail.

In some cases that small bankrupt plumber, bricklayer or concreter finds the stresses of failure too great and a family loses their breadwinner.

This multiplier effect of business failures and redundancies is one of the reasons the real economy is in a much tighter position than Australia’s political, business and media elites can bear to admit.

Another saying is “a recession is when your neighbour loses their job, a depression is when you lose yours.” For most families, the economy has been in recession for three years as they’ve seen friends and relatives accept reduced hours or have contracts terminated.

Much of the commentary about Australians being irrationally pessimistic misses this aspect of our economy. It’s amusing when the smug comments come from financial and economic journalists who don’t seem to have noticed the difficulties their own industry going through.

There’s a lot of naked people treading water at the moment and the tide is heading out. The question for all of is where the deep water is and where the hell did we leave our speedos.

Google merges business with social

What should businesses expect from Google Places being merged with the social Plus platform.

As of today, Google Places is now part of Google Plus with the old accounts being merged into the social media and identity service.

The effect of the merger means listings will now appear with the features of Google Plus added, for US based hospitality businesses, Zagats’ reviews are now also integrated into the results.

For business owners, there’s little change in the administration panel and it appears any accounts that are suspended because of Google’s obscure listing policies remain in limbo.

How the complexities of the Google Places policies mesh with the arcane and arbitrary rules applied to Google Plus identities will be an interesting thing to watch.

One area of concern is that the owner of a Google+ Local listing will need a personal profile – for businesses this means a nominated individual has to run the account. Should that individual leave the business, then there will problems with shifting ownership.

I have some questions in with Google’s PR folk about these aspects of the transition and hopefully we’ll get some more ideas on how to deal with these issues.

While this merger of the two services are to be expected, it’s going to be interesting to see how it evolves. Right now it appears Google have dropped the ball on local with their focus on social and identity management.

The identity management aspect of this integration is the key point as Google’s hope is that individuals will check into and rate businesses which in turn will give them a more complete picture of that person’s habits and preferences.

How that pans out depends on how individuals value their personal information, it may be that once people understand the value of this data they’ll demand more than just the warm feeling of sharing their meal review with a circle of their friends.

Giving a damn

Our works are what we are judged by – not the trinkets we gather.

Twenty years ago a lady unexpectedly passed away leaving her estate to her infant daughter. Included in the estate was a modest apartment in Sydney’s inner western suburbs.

For years, the unit sat on a local real estate manager’s books quietly gathering rental income and growing in value during Sydney’s great property boom.

Eventually the owner of the real estate agency tracked down the infant, now grown up and living in Boston. He’d hired lawyers and private detectives to track her down.

Most of us would have taken the easy course and flicked the property to the public trustee where the property would have quietly languished for years in the tender care of the dusty, but expensive, bureaucrats.

A few criminally minded ones would have sold the property and pocketed the cash, confident that no-one would ever know or care.

But Chris Wilkins decided to do the right thing and found the owner, doing anything else would have been a “heartless alternative.”

Having a heart and giving a damn is what matters.

Whether its in our work, how we deal with other people or the change we make to our society. This is what matters – big bonuses, a flash car, a ministerial position or invites to “insider” conferences are just trinkets for the egos of vain little people.

In an era where shareholder value, triple A credit ratings, executive remuneration and personal entitlements seem to stand above everything else, it’s good to be reminded that most people are doing the right thing by others.

At the end of our lives, we’re judged by our actions. What will you be proud to be judged by?