Wednesday, November 28, 2007

Facebook's Impact on Birthdays

I've been experiencing the true power of Facebook today... grillions of happy birthday messages.

Monday, November 26, 2007

Amazon Kindle Magnifies the The Long Tail

One of the reasons that Chris Anderson suggests for Amazon's success was that it's online sales model tapped into the long tail of book demand because it separated the limitations of shelf space from inventory and reduced transaction costs (i.e. sales processes).

In a retail setting floor space is expensive and inventory is inherently limited because shoppers will only buy books that are on display. Furthermore, a customer has to physically walk into a store to make a purchase and up-selling opportunities are narrowly limited to shelf takers and employee recommendations, which touch relatively few customers.

In contrast, has nearly infinite shelf space and dramatically lower cost of inventory because their books are stored in warehouses rather than expensive retail locations. The transaction costs of browsing the web are also much lower than getting up off the couch to walk into a store. Lastly, up-selling mechanisms touch many customers through surprisingly popular recommendation algorithms.

Yet, Kindle takes this to an even further extreme by removing physical media from the process, which virtually eliminates all inventory storage costs and dramatically reduces transaction costs associated with delivery & wait times, which then increases power of impulse buying and the effectiveness of up-selling.

Book Store
Cost of Inventory Printing + Retail Printing + Warehouse Electronic
Cost of Transaction
In Person Web + Shipping

Given this perspective, I think Amazon is making a mistake by keeping the price of Kindle high and the format proprietary. An inexpensive and open electronic book reader would reach an wider audience and unlock more of the long tail, which Amazon is positioned to be the primary beneficiary of. Others, like Jason Epstein, offer some insight into why the costs of Kindle might be so high, but I always contend that pricing should be based on value, not cost and I suspect that his cost assumptions might a little bit high.

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Why am I Wearing a Tie?

It just dawned on me that I should probably get around to changing my profile picture.  In fact, a couple of friends have been bugging me to do this for a while but thats more because they think its a crappy picture.  I kind of like wearing a tie but virtually never wear one to work.  I would almost go so far as to say that ties are actually unwelcome at most startups in Silicon Valley and, moreover, its just not representative of who I am or how I normally present myself.

Its a bit ironic to me that the symbol of success on the East Coast is so rare out here that I'd be willing to bet the there are far more people wearing suits & ties to work in a retail service positions (hotels, Nordstrom, car dealers, etc.) than corporations where the culture expects it.

I do like the weird quality of the photo, but it probably isn't the best way to present myself to potential readers that I've never met either.  Odds are I will either change the photo sometime this week, or forget about it entirely. 

Monday, November 19, 2007

Google: Do All AdWords Customers Hate them?

I can say that I truly detest Google AdWords. Google's search has nearly 3X the margin of Yahoo!, yet they can't seem to get support right. If their product worked well, that would be one thing, but for me, AdWords and Analytics have been pretty flaky.

First they do everything they can to hide the phone number (866-2GOOGLE) and then their army of college intern support reps do an absolutely terrible job of following up. I've literally had conversations that go like this with them:

Me: So you're going to get back in touch about XYZ right?
Google: Yes, definitely.
Me: Well, I hate to tell you this but Google reps never follow up when they say they are going to
Google: Wow, I'm really sorry to hear that. I'll definitely follow up on this issue.
Me: Great, thanks for taking care of this issue for me.

And the results... probably a 10% follow up rate on average. Terrible. Google should be ashamed of themselves.

The other thing that drives me nuts about Google is their ridiculous decision-making method for determining who gets a dedicated account rep. And the irony for me is that after several months of asking for an account rep, they finally gave me one... but thus far my customer support experience has actually worse!

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