Customer retention 101

I've never written a blog post extolling a service provider. So far. Today that changes, and with good reason.

I've always been a big fan of Starwood. They maintain great properties, have a fantastic loyalty program and I've always had a great experience with their staff. So I was surprised recently when a charge showed up on my credit card for a stay I had cancelled. I called them. They have real people picking up the phone when you call. No waiting, no clicking through annoying menus, or sitting at my desk going "agent, agent, agent" until the voice recognition software finally cuts through my accent to figure out what I'm saying.

The person on the phone was polite, and promised to contact the property right away. Sure enough, late the same night (11.30PM or so), I received an email from the property giving me details on why I was charged. It appears they never received notice of my online cancellation. I wrote a return email saying that yes, I had made the reservation and cancelled it online and no, I didn't have a confirmation number to share with him. A reply quickly came back that said "You don't need to give us any more information. We'll reverse the charge, and credit your card immediately." Two days later, the refund showed up on my card. That was it.

Two emails, no need for "supporting evidence" to back up my claim, no fuss, and a refund that showed up promptly. Is anyone surprised that I'm more loyal to Starwood than ever?

On international aid

In which we choose not to rant.

So today I had this conversation about "getting involved" with non-profits that do work in India. Most of them, even today, focus on aid. This is the Bono+Jeffrey Sachs model, where the coffers of wealthy nations are opened up to end poverty in poor countries. There's a debate raging about whether this model works or not.

I believe that applying the "rising tide raises all boats" philosophy makes a much bigger difference to a country's economic development than handouts. Here are a few experts on the topic:

First, Kenyan economist James Shikwanti to the G8.

Next, a Nigerian finance minister:



Lastly, George Ayittey, Ghanaian economist:



What's true for Africa is true for everywhere else. Stop sending aid, unless it's for disaster relief. Instead, invest.

Commercializing technology

In which we ponder the gulf between technology and product

I was having a conversation this morning with a friend who mentioned a startup he knew of. The company has developed a new technology that converts biomass into fuel (don't ask me how, I don't know the details yet). A similar company in Eastern Europe has been successful, so the investors believe that given the right GTM (go to market) strategy, this company could be a commercial success. The problem? The technology they have today needs economy of scale i.e., it needs to process a LOT of biomass to make fuel, and this means you get a BIG machine that costs a lot of money. The investors are interested in affordability i.e., make me a small machine that one family can buy and use. Result: a startup team that is focused on the cool new widget they invented, and potential investors who are (rightly) worried about commercial viability.

As a thought exercise, let's see how this might play out.

This is not an unusual situation. In fact, you see it in Silicon Valley about a dozen times a day. Startups are almost always about cool technology. They're not thinking about commercialization i.e., making money. At some point, the startup team realizes (or the investors help them realize) that money needs to be made. How? You can go both ways: you can take a product and build a business around it, or you can identify a market need and adapt your product to it. Which approach is better? That depends on your particular situation. A machine that converts biomass into fuel can be either (1) a small gizmo that you sell to every farmer in India for very little money or (2) a fairly large installation that is sold to large farms, co-operative societies or even joint families and villages. (I'm over-simplifying here. Obviously, there is a spectrum between these options and the final product can be anywhere on that spectrum).

In (1), you want a truly retail product that can be manufactured, shipped, marketed, sold and supported at pretty thin margins. In this case, your "big money" is going to have to come from scale. Assuming, of course, that you make that commitment to go out and sell the thing by the tens of millions. If you're trying to cover a country like India with a small retail product that will be sold to farmers, what should you worry about? You should worry about being able to find and reach that customer base. You should worry about the logistics of getting your product from manufacturing to customer. You should worry about how this product is going to be maintained and serviced. And how you're going to do all this at very low cost per device. Is the retail product going to be robust enough that you expect a very low failure rate? Is it simple enough to repair that every village cycle shop guy can repair it and you don't need to worry about building a service organization?

In (2), you have a little more wiggle room. Each installed product has to be profitable on its own: so you need fairly hefty margins (remember that you're factoring in the cost of getting it there, setting it up and probably servicing it too). Now you're less worried about finding new customers and more about scaling carefully and maintaining your customer base. What is the lifetime of this product? How long before you have to replace it? How often do you have to service it? Do you price lifetime service into the installation or do you take the product + service fee pricing route?

Neither case gives you easy problems to solve. These are fairly standard business principles. The trick is to remember these and apply them rigorously when you're looking at that shiny new gadget that's _just_ short of where you need it to be for the business model to work.

Dealing with competition

What should a company do when beseiged by competition?

First, is the competition really offering the same thing? Are online news sites and blogs providing the same service as the NY Times? No. If the NY Times prints (or puts it on the digital paper) it, it must be true. And it must be important. No one, with the possible exception of the BBC, can claim that kind of authority.

So the question becomes, Are you focusing on your strengths? If you're the NY Times, why are you trying to be the fastest to publish news about an upcoming book? In that field, you have a million competitors, including the publisher who probably has a blog anyway. Shouldn't you be focusing on publishing an authoritative review of the book? I would definitely spend more time reading that review than I would reading an "article" about the book launch.

Lastly, what else can you do that's unique to you? If the NYTimes offered a list of 20 books to read this month, or plays to watch this week, or countries to visit this year, I'd probably listen. I'd definitely listen if they were able to tell me which charities are actually operating on the ground in Myanmar and would benefit most from my donation. Because they are the only ones who can.

Who cares about your product?

These are the days of online advertising, and ad-funded online business models. In the midst of all this excitement, how does a traditional marketer think about advertising and marketing? Who should a product be marketed to? And how?

Seth Godin, whose blog I read regularly, speaks at TED back in 2003. The subject is, if anything, more relevant today, especially if you're in the Silicon Valley echo chamber. I recommend watching it. And do check out Seth's blog as well.

It's Christmas already?!

On Ask Metafilter, somebody asked a brilliant question: "What single book is the best introduction to your field for laypeople?"

People in all sorts of fields answered. Then the link got passed around, and it landed in my feed reader this morning. I checked out the link, saw that people in EE were recommending "Art of Electronics" and CS people were recommending the Wizard Book. I am now reassured. All the recommended books are going on my reading list, and this should keep me busy for the rest of the year. Yes!

Check out the full list.

When is democracy a threat to culture?

The last Shangri-La, Bhutan. The country is taking its first very hesitant steps into democracy. The monarch recently dragged the country kicking and screaming into the 20th century - they will continue to be in a bit of a time warp, even with democracy and the advent of television. The people are not sure democracy is a good thing, and the recent changes have left them uneasy. They worry that their way of life is being threatened. After all, government policy has been guided by Gross National Happiness for the last century or so.

Props to Current TV and Christof Putzel for doing this piece.



I'm hopefully back after the unintentional blogging break. The last month has been busy work-wise, but also S and I have been looking for a new place to live. Happily, we have now found said place, but the always untantalizing task of moving still remains.

On modern marriage

First, The Cato Institute publishes this issue on marriage. Do read, in particular, Stephanie Coontz's lead essay on the history of marriage.

Then comes this reaction essay reframing the history of marriage in economic terms. The authors then try to (briefly) address some of today's hot-button political issues.

For example: Divorce rates are climbing! False. They have, in fact, been falling in the US, and the authors present a logical economic explanation. If you buy this argument, you can also see why in societies that are in earlier stages of economic empowerment, it is reasonable to expect this pattern to repeat.

Why do I read blogs?

Blogs are a great way to exchange views with others whose opinions I respect. I can find out what they are thinking, maybe leave a comment or two or (this happens rarely) write a post in response to something I read.

But equally importantly, a daily dose of well-written blogs has the advantage that they refer to other material - often something well worth reading that I wouldn't have found on my own. Here's a sample of what I read today because someone else thought it was worth writing about.

• Presentation Zen. Garr Reynolds on presentation lessons from recent TED talks
• Dean Kamen shows off the Luke arm at TED
• How Green Was My Valley. Glenn Kelman, founder of Redfin and resident of Seattle, criticizes Silicon Valley
• An Outsider's Flawed View of Silicon Valley. Michael Arrington of TechCrunch responds to Kelman
• Free Speech and Radical Islam. Very thoughtful op-ed piece on WSJ.
• Six Principles for Making New Things. Paul Graham.

On hungering for books

We live in a world where "busy" is arguably the most commonly used word. We spend hours at work. We spend hours in meetings and on email. We spend hours watching TV, or reading blogs or just surfing the net. We spend hours in bars, busy in meaningless conversation with people we will likely never meet again. We barely have time to acknowledge the existence of a world around us, let alone live in it.

There is another world where people desperately struggle for an education, for access to books. In that world, education is more important than food. Here, in the words of someone far more eloquent than I, is an introduction to that world.

Doris Lessing's Nobel lecture.

The long tail of technology

The editor of WIRED magazine talks about the long tail of technology. Briefly, his point is that every major technology goes through four stages in its life cycle:

• Price falls below a critical amount
• Adoption gets to critical mass
• Replacement of another (previous incumbent) technology
• Price approaches "free"

This talk is from 2004. Four years later, it is interesting to sit back and see how many of the trends he pointed out in this talk fulfilled their potential in the interim. Accuracy of prediction nothwithstanding, the "stages" he outlines in this talk is a useful takeaway.

In which we see a sailboat

In the month of November last year, this vessel sailed on Lake Llanquihue at the foot of volcano Osorno.

The fog and the setting conspired to evoke thoughts of the Marie Celeste, which excited considerable comment a little over a century ago. The facts of that case can be found here.

The secret history of Silicon Valley

The credit crunch explained...

...in plain and simple English.

Climate change meets free enterprise

This is what I love about free enterprise.

Pop!Tech and EBay just launched a new initiative. You can now go to an online store (here), estimate your carbon footprint and buy credits to offset it. You can choose how much of your footprint to offset. Credits that you buy get distributed between 3 Green projects currently underway in various corners of the world.

Pop!Tech just made it to the (extremely short) list of conferences I want to attend.

Institutionalized nonspecificity

Or How I try to explain to people what I do (and usually fail)
.....................................................................................

Them: I'm a sales manager at Widget Corporation (or Professor of History at Doomsbury University or in fact, any title where you can tell what the job is). How about you?

Me: (slightly embarassed) Uh..I'm a consultant.

The polite audience nods sagely before letting a slightly confused expression show. Others, they simply move on to the next question.

Them: What kind of consultant?

Me: (knowing that this is not going to make things better) Strategy consultant, actually. You know, we typically work with senior management at companies on large strategic issues.

Everyone realizes at this point that things are clear as mud, and the topic is dying. The more determined audience, in an effort to prove their determination, ask for examples. This is almost always a dead-end because management consultants typically won't give out specific examples.

The more creative audience decides to ask for my job title (or, politely, for a business card). And there, in bold print on the business card, it says...

Them:...Oh, so you are an Associate...

I wince, and wait for it. We both know they are thinking of the Associate at Bloomingdale's who helped them find the nice pashmina for Grandma.

Them:..which means..?

Me: It's kind of like a manager. That means I'm usually in charge of solving one particular problem, and sometimes I also have people working for me.

Them: oh. ok.

Silence. Then we move on.

Further thoughts on climate change

I just had to post this article. It is always a pleasure to encounter clearly articulated, internally consistent thoughts.

Best sentence: "...military intelligence bears the same relationship to intelligence as military music does to music."

Excerpt: " My first heresy says that all the fuss about global warming is grossly exaggerated. Here I am opposing the holy brotherhood of climate model experts and the crowd of deluded citizens who believe the numbers predicted by the computer models. Of course, they say, I have no degree in meteorology and I am therefore not qualified to speak. But I have studied the climate models and I know what they can do. The models solve the equations of fluid dynamics, and they do a very good job of describing the fluid motions of the atmosphere and the oceans. They do a very poor job of describing the clouds, the dust, the chemistry and the biology of fields and farms and forests. They do not begin to describe the real world that we live in. The real world is muddy and messy and full of things that we do not yet understand. It is much easier for a scientist to sit in an air-conditioned building and run computer models, than to put on winter clothes and measure what is really happening outside in the swamps and the clouds. That is why the climate model experts end up believing their own models."

Climate change: are we going to make it?

A few weeks ago, I flipped through Al Gore's book. Summary: the prognosis is not good. We're in a *lot* of trouble, and we'd better do something about climate change. Quickly.

Since then, I've been reading about the impact of climate change on our world. The Green movement is gathering steam, and more and more companies are jumping on the bandwagon. Is that going to be enough, though?

John Doerr doesn't think so.

More fascinating stuff

The journey of mankind. Click here.

Note: Still on my history binge, will be back with posts soon. In the meantime, wouldn't it be fascinating if the information above could be combined with a language history of the world? Anyone know a website that does that?

Escape to the Eiger

Hinterstoisser Traverse. Swallow's Nest. Death Bivouac. Traverse of the Gods. Higher, past these hazards, the White Spider awaits the next climber. This is one of the most feared faces in the world, the North Face of the Eiger. Considered unclimbable for a century, it holds a very special place in climbing lore.

I saw it for the first time exactly a year ago. Directly below the North Wall stand the four or five buildings that make up the village of Kleine Scheidegg. One of these buildings is the Restaurant Eigernordwand (literally, Eiger North Wall), while another is the grand old Scheidegg Hotel. Once upon a time, a telescope sitting on the patio of the restaurant was the only relatively reliable way to keep track of climbers on the Face. Sitting on that patio, reading White Spider and seeing that Face looming over me every time I looked up, is one of the most unforgettable experiences I've ever had. A great memory and to me, one that would not have been possible without "being there" reading.

If you're a "being there" reader, please leave a comment and share your stories.

More reading: Guardian's Great Escapes, Part 1, Guardian's Great Escapes, Part 2.

Related posts: White Spider.