Paul Wallbank – Brilliant Communications

Category: business advice

Eating the Old Man’s lunch
Optus today announced the purchase of restaurant review site Eatability for $6 million.

Eatability is one of the services that’s destroyed the business models of both the phone directory business and that of newspapers.

Thirty years ago the Sydney Morning Herald launched its Good Living section and it became the way people went found where the good places were to eat.

Diners wanting to make a reservation at the hip eating places being reviewed in Good Living picked up the phone book.

Now they do neither, they go to web sites like Eatabilty or Yelp where they get reviews, contact details and everything else they need about the venue.

Which killed the advertising revenues that newspapers and phone directories depended upon.

The sad thing is both the newspapers and Yellow Pages could have owned this space. Citysearch was setup by Fairfax to address the online market and it was sold to Telstra when the newspaper chain struggled to make it work.

Citysearch today languishes neglected and nearly forgotten under the Sensis umbrella. Optus now owning Citysearch’s biggest local competitor which must bring a hollow laugh to those involved in the early days of Fairfax’s digital experiment.

Whether Eatability thrives under Optus remains to be seen, but it illustrates just how incumbent strengths like telephone directories are being eroded in the online world.

Old men have to start moving quickly if they don’t want upstarts eating their lunch.

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July 26, 2012
Being Steve Jobs
Wired Magazine asks is Steve Jobs’ story a cautionary or inspirational tale for entrepreneurs and managers.

It’s always worrying when any one individual is cited as being the role model for business leaders – over the years we’ve seen Jack Welsh, Warren Buffet, Bill Gates and dozens of others lauded as being the perfect CEO.

None has probably lauded more than Steve Jobs, in many ways rightly so given the way he way he steered his business back from disaster and by the time of his death had made Apple the leader in a range of technologies that barely existed a decade earlier.

Despite Steve Jobs’ successes there’s no doubt he was a very difficult man – the stories of his bullying and striking fear into Apple’s staff are legendary and no-one has chosen to contradict them. For many people, he was impossible to work with.

George Bernard Shaw once wrote “the reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.”

No-one would have ever claimed Steve Jobs was a reasonable man.

Steve Jobs was unique – as is Apple, Microsoft, IBM, News Limited, Nestle, Joe’s Pizza Bar and the local plumbing supply shop. Every business is unique and different in it’s own way

For some of those businesses, a manager being an unreasonable asshole like Steve Jobs could be a recipe for success although disaster is probably more likely.

Disaster was the result for most manager and businesses in the 1990s who blindly copied the then eulogized Jack Welsh’s Six Sigma strategies or “Chainsaw Al” Dunlap’s slash and burn philosophies without appreciating the subtle differences between their organisations and GE or Scott Paper.

In business – as in life – there’s no “right way” or “wrong way” and thinking in a “yes” or “no” mindset, doesn’t work in a nuanced, complex world.

The Wired article on Steve Jobs itself falls into this binary thinking in asking readers if they are an “acolyte” or “rejector” of Steve Jobs’ methods. In reality, few people would totally reject every aspect of Jobs’ behaviour but few of us would be capable of totally imitating his behaviour.

Perversely, aping Steve Jobs is probably a career limiting move for managers. As Adam Hartung writes in Forbes Magazine, Steve Jobs couldn’t find a job today and someone with his quest for perfection would struggle with the bureaucracy of a corporation or government agency.

Like our businesses, each of us is unique and here’s a bit of Steve Jobs in all of us – at the same time most of us would also be repelled by many of Steve Jobs’ characteristics.

Simply copying someone else is neglecting our own strengths and acquiring someone else’s weaknesses. Surely it makes more sense to work to our abilities.

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July 24, 2012
Writedowns and triumphalism
The contrast between Microsoft’s and Google’s results released on Thursday attracted a lot of interest – for the first time in twenty years Microsoft posted a quarterly loss with Google’s profits continue to grow.

While there’s no doubt Microsoft are challenged by the effects of their lost decade and bad decisions made in that time, but the business itself is still extremely profitable.

Microsoft’s posted loss is due writing down 6 billion dollars in their aQuantive investment, an attempt to compete with Google in the online ad placement space.

Despite a six billion dollar writedown, Microsoft only posted a 500 million dollar loss showing the business is still making over 5 billion dollars profit each quarter.

Google on the other hand posted a profit of 2.8 billion, up 11% from the same period last year.

But Google also has some nasty writedowns coming in the future – the purchase of Motorola will see some substantial write downs of that 12 billion dollar deal. It’s conceivable that a very big portion of that investment will have to be written off as well.

Right now, Google’s seeing some benefit from the Motorola acquisition as the phone company’s cashflow is covering a decline in online advertising revenue, a threat to Google’s core business.

It’s easy to be triumphant when the headlines proclaim you’re a winner, but it’s often worthwhile looking at the fine print to see the real story.

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July 22, 2012
Outsourcing’s changing face
Outsourcing company freelancer.com regularly releases the fifty fastest moving job descriptions requested by their customers.

This year’s list shows how the online industry is changing – content creation, social media and SEO job requests are all down substantially as users and gatekeepers like Google adapt to the information flood we all have to deal with.

Keeping in mind the market that Freelancer.com caters to small businesses and many of the jobs posted are for fairly small – some would say laughingly tiny and insulting – amounts, it’s probably safe to say we’re looking at the low value end of the market.

Article writing (down 15%), proofreading (5%), blogging (13%) and submission (4%) jobs are probably the cheap and nasty “Demand Media” style of low quality content designed for SEO purposes.

SEO itself is in trouble with jobs in that sector down 7% indicating Google’s Panda and Penguin search engine changes have achieved their objectives of improving search results and knocking out those gaming the system with low quality content.

A similar thing has happened with social media. Facebook is too hard for many businesses and they’re not seeing a return on their substantial time investment.

“Companies in industries from consumer electronics to financial services tell us they’re no longer sure Facebook is the best place to dedicate their social marketing budget—a shocking fact given the site’s dominance among users,” Freelancer quotes Nate Elliott, an analyst at market research firm Forrester.

A bright part in Freelancer’s list is the rise is in open standards as HTML5 starts moving up the list with 20% growth.

“The Internet is becoming more interactive, and the technologies that are winning and will continue to win are open standards like HTML5 and jQuery- to the detriment of the incumbents proprietary technology providers like Adobe and Microsoft,” says Freelancer’s CEO Matt Barrie.

Open standards aren’t winning everywhere though as Apple’s iOS is clearly winning the developer war as iPhone grows by 30% and iPad by 26% compared to Android’s 20%.

Freelancer’s list is an interesting snapshot at where industry demand is right now, what’s we’re starting to see are some of the transition effects working their way through the system. The rise and fall of the social media and SEO specialists being one of those.

The full Freelancer list is below;

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July 20, 2012
Digg and perserverence
A couple of years ago news sharing site Digg was one of the hot properties of the Internet. On the weekend Digg’s remaining online assets were sold for $500,000. So what happened to a service that promised so much?

The short answer is the business was overtaken by other services like Reddit, Facebook and Twitter. Coupled with that, the founders moved onto other projects. Running a business is tough and it’s understandable that founders would move away from an enterprise that doesn’t seem to have an exit.

In many ways this ties into the presentation by Ian Gardiner, Viocorp’s Co-founder and CEO, at Microsoft’s Bizspark APAC conference about perseverance. Where does a business owner draw a line with their startup baby? Should you pivot into another model or just move on from the idea altogether?

None of this is straightforward and the decisions will be different in every business. A local computer guy is going to have different factors to consider to failing doughnut franchise. Equally a fading media company is going to be very different to those confronting a declining department store – despite what the MBAs and management gurus steeped in the 1980s view that “all business is like soap” ideology.

For some like Ian, ‘pivoting’ to a new business model is the answer. At the Microsoft event last week, Sebastien Eskersley-Maslin of Blue Chilli described a participant of his Club Kid Entrepreneur who decided to sell paper airplanes and was so successful they started running out of paper to make new ones.

Faced with a shortage, the young entrepreneur decided to use the remaining planes as a target game – so rather than selling them, he charged a few cents to throw them at targets.

That’s the classic pivot, which the founders of Digg couldn’t execute with their web service.

All isn’t lost for Kevin Rose and the other founders of Digg though, while the headlines read about the $500,000 sale of the remaining assets they overlook that Digg’s other assets sold for sixteen million.

Choosing to persevere with a struggling business is a matter of faith – faith in yourself, the vision and the product you’re selling. It can be tough to let go of something you have so much faith in.

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July 16, 2012