People usually overestimate the value of the things they’ll obtain by commuting - more money, more material goods, more prestige - and underestimate the benefit of what they are losing: social connections, hobbies, and health.

37 Signals - The Commuting Paradox

Yes, I recently moved to LA. But my commute is only about 15 minutes in each direction, and I work for a company (Amazon) that actively encourages working from home as much as possible - the new guidelines for developers state that they can do it up to a week a month, typically. As much as I as a manager like talking face-to-face with team members, I’ll trade it any day for happier employees and lower turnover.

(Oh, and if you are or know a great developer in the Seattle, Los Angeles or New York area, let me know - we’re hiring.)

“The project I am working on will be more successful than twitter within a year. When I sell the project for 40 million dollars I will ignore any emails from you begging to be a part of it and will send you a postcard from my yaght (sic). Ciao.”

This piece is brilliant. There are far too many “entrepreneurs” out there that confuse “being enterprising” with “not paying people for their work.” This page made me laugh out loud knowing how many folks (including myself) have had similar experiences when interacting with self-styled Internet entrepreneurs who are completely dependent on others for execution — but can’t afford to pay for it.

To paraphrase the author: Yes. I can write a web site for you in a weekend. But I spent 15 years working on web projects so that I can do that. If you’re not going to pay me to do it, why shouldn’t I just spend the weekend building a site for myself, or learning how to do it better for the folks that do pay me? And how come your time is so valuable that you’re not willing to learn to do it, if your idea is so fantastic?

Don’t get me wrong. I love entrepreneurs and I love when they discuss their projects with me. I’m just annoyed by the guys who think that 90% of the value is coming up with the idea, but at the same time haven’t the slightest idea what execution will actually entail. It’s the other way around: an idea is worth maybe 10-20% at most, and execution (both business and technical) is where you win or lose.

Read It’s like twittter. Except we charge for it.

Since moving to LA, I’ve had to shop for more than the usual quota of household items - towels, sheets, some electronics, etc. I’m an Amazon Prime customer, so a lot of that stuff has been ordered online, but there are some things where I’m still not completely converted to online buying - sheets and towels, for example, still seem like something I want to touch and see in person before buying. But my experience this month may change that. And I don’t think I’m alone.

It’s pretty clear to me that a lot of large chain stores, like Bloomingdale’s, Macy’s, and Best Buy, just don’t understand the new retail reality. Whoever is managing them and setting prices doesn’t understand that they’re being cross shopped with any number of online retailers that can offer similar (and in some cases, superior) service and selection. And they don’t seem to realize that in a world where the friction of cross-shopping has been reduced to nearly zero due to the removal of geographic penalties on shopper movement, pricing strategy has to change, or they risk alienating shoppers permanently.

Let’s be clear: I generally like Best Buy. They’re definitely better than Circuit City ever was. Generally, I’ve found that their pricing and selection on big-ticket items has always been reasonable — maybe not as good as online, but close enough that the immediacy of buying in person made up for it. I’ve generally felt similarly about Bloomingdale’s and Macy’s, although I’m far less likely to ever shop at those stores - shopping Macy’s Herald Square flagship is generally enough to make me want to pull out my hair. But that was just part of the charm of the place.

“I worry that’s going to be the Android community — forever talking about the next year’s batch of phones, because the ones available now just are second-rate.” - John Gruber

From his follow-up to “The Android Opportunity”.

Gruber absolutely hits the nail on the head with his comment that Android hardware designers have to just crush the iPhone in at least one aspect to make a product that has an appeal other than “it’s not an iPhone.” Make it the best cameraphone ever - like the quality of a Canon compact camera with phone functions (including real flash!) Or make it the best gaming device ever - a Nintendo DS with a phone.

(This is an extended version of an email I wrote to one of the local tech mailing lists here in New York, in response to a developer's question. It seemed generally useful enough that I'm reposting it here.)

A very common design problem in web services project these days is the issue of user search. Most web services now involve pools of data that are far too large to be entirely "browseable", even if we're only talking about finding another user on the service. Very quickly you start to see a specification develop of increasing complexity, involving boolean ("AND/OR") concepts, keywords, and all kinds of other demands targeted at extremely precise results tailored very exactly to the knowledge domain or data set. What's the best way to go about building this user experience?

If you own or manage a small-to-medium-sized business with a somewhat web-savvy customer base, you’ve probably already thought about using Twitter to promote your offerings. I’ve talked with a number of small business owners who started Twitter accounts for their companies but were disappointed with the results. Here’s a few suggestions on how to improve your success with Twitter, and some issues you should consider before putting time into Twittering.

Old-school Customer Acquistion in Times Square, originally uploaded by karlo.

(This is a continuation of my series on understanding and analyzing web service and software businesses. If you'd like to start from the beginning, go to part one, "Core Value Proposition.")

User Acquisition

For a web services business, user acquisition is the "input" to the machine you've built by creating appropriate value proposition for users and monetization for the business. I'm covering acquisition last for a number of reasons:

• Without value for users and monetization, how many users you can acquire is irrelevant
• Acquiring traffic is easy, assuming you can spend money on marketing -- it's converting those leads into revenue that can then drive further traffic acquisition that's difficult

(This is a continuation of my series on understanding and analyzing web service and software businesses. If you'd like to start from the beginning, go to part one, "Core Value Proposition.")

Monetization

If you've created a service that has a compelling value proposition, and delivers on that promise for its end users, you've succeeded at the most difficult part of building a growing online business. Turning it into a profitable online business, however, takes more than simply making users happy. You have to find a way to generate revenues from your users that doesn't unnecessarily compromise that core value proposition.

There are two primary ways of generating revenue from an online service:

• Direct service charges
• Advertising revenue

This is an extension of an earlier post, which covered how one goes about calculating customer lifetime value (CLV). In this series, I'll be examining the key levers you use to maximize your business, seen through the perspective of CLV.

In my previous post around customer value, I reduced the CLV equation down to two key components:

• How much profit you make off each transaction with the customer - i.e. monetization
• How many transactions you get with the average customer - essentially, retention

To transition this a bit more to a customer-centric, rather than monetization-centric, view, your typical business has three key components:

1. The core value proposition to customers - what do they expect to get out of interacting with the company, service or product
2. The monetization of that interaction - how does the company make money off of delivering the core value proposition?
3. Customer acquisition - how does the company find and acquire new customers that find its value proposition compelling?

I'd argue that for most web businesses, it's all about these three components. Everything else is a support function. Any successful business will have to necessarily address all three of these, at least implicitly - you may not have an active acquisition strategy, for example, but that just means you're implicitly depending on word of mouth or another passive method. If you don't have a value proposition, well, that's somewhat more troubling.

I'll cover these each in separate posts. I'm going to start with value proposition, because not only is it the heart of the business, but it's also the one component you can't take a passive approach to, whereas there is at least (some) argument that you can leave the mechanics of acquisition or monetization until after you've solved the central value proposition question.

If IBM opens at zero, it loses 652.95 points. So, the DJIA says that IBM has more influence on the index than all the financials, autos, GE and Alcoa combined.

The more I think about this article about the DJIA from The Big Picture, the more it bothers me.

The Dow Jones Industrial Average (DJIA) has always been my least-favorite of the broadly-quoted marked indices, despite being the one that the mainstream media follows most closely. First of all, it's price-weighted -- a relic of the days when the index was calculated by hand rather than computers. If one of the components splits its stock (which should be an entirely inconsequential even from an equity value and market cap perspective), it suddenly has half the weight in the index it did before, simply because it now has half the stock price and twice the shares. Second, the index only has 30 "representative" stocks, and it's not transparent why some companies are included and others are not -- it's not the top 30 largest companies, as some might think.

Now there are number of financial and industrial giants whose stocks have fallen below the $10 minimum that DJIA gives as its guideline for when a component will be replaced. (A $3.50 price for Citigroup means that it has 1/25th the weight of IBM, trading at over $90.) With the financials underweighted in the DJIA but in reality continuing to drag down the markets, the DJIA is now going to increasingly outperform the broad market... and the press will likely continue to report the "Dow" as the gospel for the state of the market until they either focus on this situation, or the index is corrected and fallen angels like Citigroup and GM are kicked out to the curb.