Survivor Bias – the danger of learning the wrong lessons

How the wrong lessons can be learned from listening to the winners

A recent blog post by Chris Guillebeau on his terrrific Art of Non-Conformity site looked at the value of qualifications.

Chris’ post is a great read and it’s obviously worked for him, though we always should keep in mind with these stories that we’re reading about someone who has managed to make it work.

We all have a lot to learn from Chris and other success stories however the winners’ tales are only half the story; that for every success who dropped out, started a business or travelled the world and did well there are many more who – for whatever reason – didn’t.

That’s part of the equation of risk, that for every success there are failures. For risking failure, the successes are rewarded – despite the best efforts of our political and corporate leaders to engineer away the risks and leave only the rewards for those best connected or placed to take them.

For every winner, it’s also worthwhile listening to those who didn’t quite succeed. The lessons from “failure” are probably stronger and just as enlightening.

Taking a jump, quitting your job, starting a business, becoming a freelancer or travelling the world isn’t for everybody. Many of us are happy staying in the cubicle or the workshop or the village and leading a comfortable, secure and safe life.

Societies need a balance of the risk taking adventurers and the anchors of solid, secure working people. Neither is wrong, neither is bad and a balance of the two is essential for a healthy, prosperous and sustainable society.

It’s not to say we shouldn’t take risks, just understand the dangers are there and your appetite for living with uncertainty before making a big step into business, travel or whatever it is where you see the opportunity.

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The mobile payments revolution

Paying bills through a smartphone is going to radically change how we do business

Ten years ago when I was running a computer support business we spent a lot of time trying to find an mobile payment service for our on-site technicians to process payments.

At the time there were plenty of options but they were all expensive, asking 6% in merchant fees at a time when our bank merchant facility charged us 2.75% to accept Mastercard, Visa and Bankcard. Interestingly, the cut the mobile providers wanted to take which was the same commission as American Express and Diners Club.

We’d long before decided Diners and Amex were too expensive and it was easy to make the same decision about mobile payments. The technicians were given a manual card swipe to carry around and they phoned through authorisations. It was messy and time consuming but a lot cheaper than the then high tech alternatives.

Given that history, I was keen to get along to the Australian Information Industry Association’s “Mobile Payments – Cooperate, Collaborate, or Abdicate” breakfast panel held in Sydney last week to see what has changed in the mobile payments space.

The rise of smartphones – and the developing SoLoMo trend among consumers which brings together social, local and mobile technologies – should have meant the era of online payments should have arrived and it’s puzzling why it hasn’t happened.

It isn’t for a shortage of operators; one of the panel members, Oliver Weidlich of Sydney’s Mobile Experience mentioned a number of the services such as Square, developed by one of Twitter’s founders that are changing mobile payment overseas.

Interestingly it was the audience questions that gave the answers to why online payments haven’t taken off in Australia. The key question from the floor was “which authority handles disputes should a phone be lost or stolen”.

As a customer, one hopes it’s the bank that takes responsibility as the idea of a telco – particularly their mobile phone divisions with their attitude towards billing customers – having control over your credit card or bank account would make most consumers’ blood run cold.

The point was well made though as it saw the panel’s bank, telco and credit card representatives all ruminating over the question of ‘who owns the customer’.

Oddly, while they argue about whose property the customer is, all of them may lose out. While services like Square and built in payment features on social media and mobile apps such as Foursquare or Red Laser may take a slice of the market, there is a bigger competitor already making huge inroads.

The day before the AIIA event, Internet payment giant PayPal announced a series of deals with various group buying sites and online applications. Their press release pointed out PayPal’s mobile payments, or mCommerce as they call it, is growing at over 400% a year

While it might not be correct to say PayPal were the elephant in the room at the online payments breakfast, it isn’t unfair to say Big Ears was just outside scoffing the morning tea while the incumbents argued about who would have first dibs on clipping the tickets of both merchants and customers.

It’s too early to say the banks, or the telcos, have lost the market but players like PayPal, Google with their wallet service and possibly even Apple – should a Near Field Communication (NFC) equipped iPhone appear in the near future – are going to make the mobile payment sector far more interesting and competitive.

For businesses, we need to keep a close eye on the mobile payments market as it is promising to offer a lot more options in banking and transactions that what we’ve been used to in recent years. The days of 6% merchant fees are well and truly over.

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Digital art is more than iPod wielding basket weavers

What is the future for the arts in the digital economy?

This is a transcript of the digital arts opening keynote for the Digital Culture Public Sphere conference discussing the Australian government’s cultural strategy.

Thank you Senator Lundy. A little bit more about me, as well as being a writer and broadcaster on change I spent 18 months with the NSW Department of Trade & Investment setting up the Digital Sydney project.

Digital Sydneyis a program designed to raise the profile of Sydney as an international centre of the digital media industry.

One of the problems with Digital Sydney was that it was very inner Sydney centric and this is a perennial question we face as to where does Australian culture, and art, spring from? The first idea I’d like to throw to the room is that ‘digital’ frees us from many narrow geographic boundaries.

When we add the term ‘digital’ we hit another problem, that almost every aspect of our lives – be it in art, business or our personal lives – is being affected in some way by the Internet and digitalisation. In reality all art is becoming ‘digital’ in one way or another.

As broadband becomes more pervasive, particularly as the National Broadband Network is rolled out, we’ll see art and the creative industries become even more digitised.

In many ways we are today at the point in history not too dissimilar to that our great grandparents found themselves a hundred years ago. In 1911, our forebears couldn’t imagine the massive changes the century ahead would bring and we’re in a similar position in the first decades of the digital century.

The first half of the Twentieth Century saw radio start a cultural shift which was accelerated in the second half as television radically changed and redefined our culture. Today the Internet is doing exactly the same in ways none of us quite understand.

Given the massive disruption and technical advances we’re going through we need to be cautious about being too prescriptive as we can’t foresee many of the new technologies that will become normal to us over the next decade.

This provides a challenge for government agencies supporting the arts as the established gatekeepers such as galleries, production studios and regional organisations become less relevant as the means of distribution evolve and become easier to access.

We’re already seeing the traditional model of government support to big producers; be they factories, movie producers or games studios suffering as economic adjustment undermines many of their business model. The old economic development models are becoming irrelevant as history overtakes them.

It may well be that the role of governments over the next decade is to create a framework that allows new mediums, creation tools and distribution channels to develop.

One area we should be careful of when looking at the digital future of the arts is not to follow the UK’s Digital Economy Act where the protection of existing rights holders took precedence over the creative process.

It is important that governments create legislative frameworks that balance the rights of all stakeholders, consumers and new content creators with the objective of encouraging new works and innovations to evolve.

In an Australian context we need to acknowledge and develop our diverse population and the opportunities this presents. Our indigenous and immigrant communities with their artistic and cultural traditions give our national economy advantages that many other countries lack, this is one thing I regret I wasn’t able to push more in my role with the NSW government.

Education is another critical area, this isn’t just in the arts but right across Australian society and industry as new entrants into the workplace are expected to spring forth with the skills making them as productive as experienced workers, this is clearly a flawed idea, particularly when many of the tools business expects students to be skilled in weren’t invented when the students started their studies.

Over the next decade we’ll also have to confront one of the great Twentieth Century conceits; that artists are a separate breed from scientists, Engineers and business people.

Prior to the beginning of the last Century it was accepted a tradesman or inventor could also be an artist and this damaging idea of silos between creative and so called ‘real’ industries, suited only to a brief period of our mass industrial development, will have to forgotten. This will be a challenge to our governments, educators and training providers.

The digital arts are not about iPad wielding basket weavers, they about giving today’s workforce the creative tools and flexible, imaginative thinking to meet the challenges our mature, high cost workforce faces in a world where the economic rules are changing as fast as our technology.

We have a great opportunity at events like today to determine how we as a nation will benefit from the next decade’s new technologies that will change our arts communities and society in general.

The great challenge to policy makers will be dealing with the rapidly changing and evolving world that the digital economy has bought in the arts, in business and in society in general.

Today I’m sure we can bring together ideas on how we, and our governments, can meet these challenges.

Thank you very much Senator Lundy, Minister Crean and Pia Waugh for giving the community an opportunity to contribute to the development of this valuable policy.

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Price points

Amazon’s new range of Kindle e-book readers illustrate how important price points are to winning consumer confidence.

It’s no coincidence Amazon’s media release announcing the new range of Kindle e-book readers was headlined introducing the All-New Kindle Family: Four New Kindles, Four Amazing Price Points.

The $79 price for the base model has authors excited, and quite rightly too as this will guarantee sales of the e-readers and spur sales of e-books.

Once a product’s perceived as being affordable by the market, sales take off. The classic is Josiah Wedgwood selling bone china at prices affordable to the 18th Century English working classes. The basic product was similar in all but the decoration to the ornate wares Wedgwood sold to Europe’s royal families and the then new methods of mass production guaranteed a quality product to all customers.

Just over a century later, Henry Ford did a similar thing with the motor car, meeting the price points that made the horseless carriage accessible to the middle classes in early 20th Century United States.

In more recent times we’ve seen similar trends happen; the under $2,000 personal computer in the 1990s, the sub $500 netbook in 2008 and the affordable smart phones of recent years.

We can add broadband Internet and budget airlines as other examples of how demand has exploded when the cost has dropped below a certain price point.

As technology becomes affordable, we use more of it. A point that’s often lost monopolists and established players in industries.

This is the real opportunity Amazon are now offering with the cheap Kindles and we’ll see e-books boom as people are prepared to make a small investment in the devices.

Almost certainly this will open new markets and unforeseen opportunities for entrepreneurs and writers. The resulting pressures on competitors like the Apple iPad and the various Windows or Android tablet devices should increase innovation as well.

In our own businesses we need to ask what those price points are and what is stopping us from meeting them. As other price busters have shown, if you can meet these price points, the riches are there for the taking.

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Is the social media business model dying?

Have the social media companies reached their peak?

Is the social media business model dead?

The frenzied rush to release new features such as Facebook’s latest changes, along with Google’s updates to their Plus platform, may be the first indication the big social media business model is broken.

Driving the adoption of social media services has been the value they add to people’s lives; MySpace was a great place to share interests like bands and music, Facebook’s is to hear what was happening with their families and friends, LinkedIn is for displaying our professional background and Twitter keeps track on what’s happening in the world.

Now the social media services want to be something else, Facebook wants to become “a platform for human storytelling” where you’ll share your story with friends and friends of friends (not to mention the friends of your mad cousin in Milwaukee) while Google+ wants to become an “identity service”.

The fundamental problem for social media services is their sky high valuations require them squeezing more information and value out of time poor users by adding the features on other platforms; so Facebook tries to become Twitter while Google+ desperately tries to ape Facebook and Quora.

Adopting other services’ features is not necessarily what the users want or need; you may be happy to follow a Reuters or New York Times journalist on Twitter for breaking news but you, and them, are probably not particularly keen on being Facebook friends or professionally associated on LinkedIn.

If it turns out we don’t want to share a timeline of our lives with the entire world but just know how our relatives or old school friends in another city are doing, then the underpinnings of the social media giants value may not be worth the billions of dollars we currently believe.

This isn’t to say social media services themselves aren’t going away, it could just be that the grandiose dreams of the online tycoons where they become an identity service or a mini-Internet are just a classic case of overreach.

For Google and Salesforce, whose core businesses aren’t in social media, this could be merely an expensive distraction, but for those businesses like Facebook it could be that Myspace’s failure was the indicator that making money out of people’s friendships isn’t quite the money maker some people think.

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Is the PC dead?

Has the personal computer era come to an end?

The Personal Computer may not be dead, but Microsoft are still going to be challenged in a world where consumer and business buying behaviour has changed.

Last week Frank X. Shaw, Vice President of Corporate Communications at Microsoft, pondered the question of whether the Personal Computer era is over

Given the PCs importance to Microsoft’s business it wasn’t surprising that Frank decided it’s not, declaring the personal computer barely middle aged at 30 and ready to take up snowboarding.

Leaving the image of using a Windows Vista equipped laptop as a snowboard aside, the question for many businesses and households is should they buy a personal computer, either as a desktop or portable, in an era where smartphones and tablet computers like the iPad are becoming common? This is even more pronounced given the low cost of ownership for a smartphone or tablet.

The first thing is to consider is can the non-PC devices do what PC can?

For most people the answer is “yes”, particularly given most users are accessing cloud based and social media platforms that run on any web browser. However many prefer to have the options to connect keyboards, printers and scanners, which is expensive and clunky with tablets and smartphones.

While many users could do most of their tasks on a tablet or smart phone, many prefer the utility and expansion options of desktop and portable PCs not to mention using a keyboard and mouse, although the latter points may change as the current generations give way to workers and computer users more used to touch screens as an input device.

The cost of ownership is always a killer and the traditional rule of thumb that the purchase price of computer only represents a third of its cost over the device’s life has become skewed as PC prices have dropped along with other costs like Internet access and expensive printer consumables have increased.

For PCs, the problem is tablets and smartphones have far fewer of the ancillary costs like anti virus software and apps through iTunes, Android or Windows Marketplaces tend to be either free or substantially cheaper than their personal computer counterparts, which skews decisions towards buying a tablet.

Those apps however tend to be far more lightweight than the equivalent PC counterparts and tablets or smartphones don’t have the editing capabilities found on personal computers.

Probably the biggest win for PCs however is that smartphones and tablets are still designed to be tethered to a PC or laptop. While a user can get away with a mobile device that never connects to a computer, they’ll almost be certainly missing out on a lot of the device’s functionality.

So the PC isn’t dead yet, its role in the home and office is evolving and this is recognised by most businesses and consumers as they tend to be buying them to complement desktop and laptop computers.

For Microsoft this is not necessarily good news as the PC sales model is broken.

Until the mid-2000s, most corporate and home users replaced their PCs every five years and this was reflected in Microsoft’s product roadmaps.

The overdue arrival of Microsoft Vista in early 2007 changed this as not only was the product late, it was also bad and customers stayed away.

As a result customers have now learned that they don’t have to upgrade every few years and today nearly half of Microsoft’s customers are still using Windows XP, a ten year old operating system.

So for Microsoft, the good news is the PC is not dead in an era of cloud computing and social media, but making money out of it is becoming harder.

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The corporates are getting social media and local search

Small business’ head start over corporations in using social media and local search is over, it’s time to get serious.

Shopping centre owner Westfield’s announcement this week that they’ll be offering Facebook Check-in Deals  at their local malls shows the corporate sector is beginning to rise to the challenges of the social, local and mobile driven marketplace. Smaller businesses need to be taking notice.

Consumer behaviour is changing quickly as the SoLoMo revolution, a term invented by investor John Doerr, sees customers bringing together social media and local search on their mobile phones and iPads. That presents a lot of opportunities for savvy marketers and business owners.

In the early days of mobile commerce we saw the idea of local, mobile based marketing being SMS based along the lines of nearby vending machines texting you on a hot day to say “hey, I have cold drinks” on a hot day.

Thankfully for our sanity that concept never really took off and it’s taken the arrival of social media services and smartphones for this type of marketing to become feasible.

Social media services also have the advantage that messages, particularly those appearing on a user’s Facebook wall, come from trusted sources, further increasing the credibility of a message.

How the check-in deals work is a shopper checks into their local shopping mall which triggers messages there are deals available at stores in the centre. If the customer takes an offer, a “Like” appears on their Facebook wall.

All of the customer’s friends then see the hot deal and that encourages them to visit the store and shopping centre. In this respect it’s similar to the social media aspect of group buying services, another area that Facebook have entered and which will almost certainly be integrated into this the Check-In Deals program.

There are some issues with this for both the merchant and the consumer. The most obvious are the privacy and identity issues of the customer as social media sites work harder than ever to find angles on using our private information.

For businesses, there’s the risk of being held hostage by Facebook and Westfield. Both organisations are well known for their strict terms and control of tenants and users, so having your business’ long term interests may not be served by being locked onto their platforms.

Driving traffic to your website is the key objective of a social media presence, so the website has to tie into the proprietary social media, local search, group buying and whatever channels you’re using to promote your business online.

What this emphasises is the importance of smaller businesses getting their local search listings working on services like True Local, Google and Facebook Places to compete on this platform against the big boys who are now making aggressive moves into the social and local services.

The clear message from Westfield’s partnership is that corporate Australia is now beginning to understand how social media, e-commerce and online concepts like group buying fit into their businesses.

Smaller businesses had a head start with online media as the larger corporations struggled to understand the new services. Now that advantage is gone, it’s time to make sure you’re getting local services right.

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