Book Review: Remote by Jason Fried and David Heinemeier Hansson

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I’ve long admired Jason Fried and David Heinemeier Hansson of 37signals. Among other accomplishments, Jason and David have created phenomenally useful software for better collaboration and project management (we’ve used Basecamp and Campfire at crowdSPRING for many years).

Jason and David have helped shaped my views on many topics, including remote work. If you haven’t read their blog, Signal v. Noise, I recommend that you do so.

Their prior book, Rework was a collection of short essays focusing on doing less and embracing constraints.

Their latest book, Remote, persuasively argues that companies should not restrict hiring to a small geographic region.

The book is a quick read. When working remotely, I  ride my exercise bike indoors for 75 minutes and use that time to read. I started and finished Remote during one ride last week.

Remote is directed mostly to companies that have rejected or that have only modestly experimented with remote work. Weaving through examples from their own experience with remote employees, and the experience of other big and small companies, Jason and David present  a compelling argument urging companies to ignore geographies and focus on skill and culture-fit instead.

You’ll recall the media storm when Marissa Mayer ended Yahoo’s work-from-home policy. To me and many others, Mayer’s decision seemed incredibly short-sighted. Among other things, Jason and David point out that:

  • work in an office is subject to constant interruptions.
  • commuting wastes a lot of time, energy and natural resources.
  • technology has made remote work functionally similar to being in the office.
  • people collaborate asynchronously and remote work is a perfect complement.
  • requiring office face time is often a red-herring masking deeper workplace problems.

I’m a fan of remote teams. Although we initially hired only in our Chicago office when we started in 2007, we quickly changed course and have, for the past five years, hired people from all over the world. Half of the crowdSPRING team is remote, and even those who work out of our Chicago office sometimes work remotely. By removing geographic constraints, we’ve hired the most qualified people and have made our team much stronger.

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How Empires Fall: The Publicis Omnicom Merger Underscores The Rapid Decay Of The Ad Industry

Publicis Group and Omnicom, two of the world’s biggest ad agencies, have announced a merger to create the world’s biggest advertising group. The companies’ public statements about the merger, and the market dynamics forcing this combination, underscore the rapid decay of the advertising industry. The ad industry is crumbling – the merger is creating little more than a house of cards.

Each company will own a 50 percent stake in the new business, to be known as the Publicis Omnicom Group. The combined entity will have revenues of $23 billion and a market capitalization in excess of $35 billion. According to AdAge, the combined U.S. revenues for the new entity, at $11.4 million, will be twice the nearest competitor, WPP (the current industry leader). Regulators in 46 countries will need to approve this merger.

sidebysidefinancials

According to Publicis CEO Maurice Levy,

The communication and marketing landscape has undergone dramatic changes in recent years including the exponential development of new media giants, the explosion of big data, blurring the roles of all players … John and I have conceived this merger to benefit our clients by bringing together the most comprehensive offering of analogue and digital services.

Omnicom CEO John Wren identifies other benefits:

This combination will enable us to leverage the skill of our exceptionally talented people, our broad public offering, enhanced global footprint, and tremendous roster of global and local clients.

I smell something very foul here.

Rapidly shrinking budgets and more demanding clients are forcing agencies to be more entrepreneurial, more agile, and to offer their services for less money. Yet, at a time when the ad industry is crumbling and agencies are being forced to evolve or die, two of the top market leaders have decided to double-down on history.

What is pushing Publicis and Omnicom to merge?

At the press conference announcing the merger, Publicis CEO Levy said: “this is a new company for a new world.”

Levy’s statement is pure fiction.

The Publicis Omnicom merger creates a new company, but that new company is fundamentally unaware of the new world.

Remember the disastrous merger between AOL and Time Warner? That merger was also spun to the world as a merger of equals. That merger was also intended to benefit clients, to leverage talent, to create a bigger and more sophisticated global footprint, and to achieve cost-savings. It is widely considered to be the worst merger in history.

The Publicis Omnicom merger may be creating a new company, but the merger completely ignores the new world.

The notion that a merger of large organizations is driven by a desire to help clients is misguided. When two leading agencies merge, the list of actual and potential conflicts is enormous. In most professional service industries, such mergers fail. In fact, accoring to Clayton Christensen, et. al. writing in the Harvard Business Review, “study after study puts the failure rate of mergers and acquisitions somewhere between 70% and 90%”. Such high failure rates are not surprising. The combined entity will need to reconcile PepsiCo vs. Coca Cola, AT&T vs. Verizon, and many other large accounts. This merger is not about clients.

Nor is this merger about talent. Is it possible that the separately, the two entities were grossly lacking in talent but combined, they’ll suddenly have a group of “exceptionally talented people” helping to service global and local clients? Is it conceivable that two industry giants, without the merger, would be incapable of servicing the traditional and digital advertising needs of their clients? The claim that this merger is intended to help clients is pure rhetoric.

Nor is this merger about “big data.”According to Forbes, Levy said:

Changing consumer behavior, new talent to emerge, big data explosion, access to new tools – this leads to a powerful new solution for our clients … Our mission together is to create that new center.

The claim that this merger is about big data is a red herring, or even worse, a gross misunderstanding of how big data can be leveraged. Neither Publicis nor Omnicom are technology companies. Merging two holding companies doesn’t create a more sophisticated technology company. At best, the holding companies know how to spell “big data.” The merger will not create another Facebook or Google. Moreover, as Brian Morrissey correctly points out in his look at the winners and losers of Publicis Omnicom, the data belongs to the clients, not the holding companies.

Some have asserted that the merger will allow the combined entity to purchase advertising at cheaper rates. That is untrue. Most  media buys today are auction-based. The merger will do little to impact ad purchase prices (TV might be the sole exception).

The Publicis Omnicom merger isn’t about clients, talent, or “big data”. It’s about one thing: shareholders.

The two companies announced that they expect up to $500 million in cost-savings from the merger. That’s not surprising. We can expect to see layoffs, especially in middle management. With more 130,000 employees between them, there will be plenty of opportunities for cost-savings.

Holding companies are popular in the ad industry because size is believed to reduce cost and redundancy. Many believe that economies of scale increase as the size of the organization increases. But at some point, economies of scale run out.

In fact, I’ve long believed that the holding company structure is holding the entire ad industry back. A few years ago, I asked a question on Quora: “Is the holiding company structure detrimental to the evolution of agencies?”. Ben Kunz, VP of Strategic Planning at Mediaassociates offered his smart perspective:

Not detrimental, just a maturation that slows ideas, in my view.

Holding companies are a normal part of advertising service evolution. Any industry’s new services go through an evolution of innovation, consolidation, and monopolization — think railroads, phone networks, computer operating systems, and today’s social nets (rapidly consolidating into Facebook and Twitter). So agency maturation always ends up in the big players.

The trouble with holding companies that I see is they attract agencies at the mature end of the spectrum who may be furthest away from the innovation fueling new media results. They also have higher cost structures (in my view) since they must draw profits out of the organizations in their tanks. Energy comes from the fringe, and while it’s chaotic, the evolution of new ideas in my mind comes from the Barbarian Groups of the future who break out for a few years to build new techniques, which will later be adopted elsewhere.

(emphasis added).

The Publicis Omnicom merger reveals the short-term, industrial-world thinking of ad industry leaders. It is a fool’s bet.

Book Review: Ctrl Alt Delete, by Mitch Joel

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In the movie The Matrix, the protagonist Neo has a choice: he can swallow a blue pill and remain peacefully asleep and blissfully ignorant, or he can swallow the red pill and embrace the painful truth of reality.

Ctrl Alt Delete, a new book from Mitch Joel, a leading marketing expert who also authors the popular blog Six Pixels of Separation, offers readers a similar choice.

The world has changed in remarkable ways, yet some people have remained blissfully ignorant about those changes. Ctrl Alt Delete focuses on two main themes stemming from those changes: rebooting your business and rebooting your life.

In the first part of the book focusing on rebooting your business, Mitch Joel writes about five key movements that have transformed business, including the convergence of active and passive media and the need to build direct relationships with customers. Among other insights, Joel urges businesses to find ways to be useful. Many businesses, according to Joel, fail to understand that a brand’s utility to a customer is measured at the time the customer has a need.

True utility happens in the moment of need. Not the brand’s moment of need, but the consumer’s moment of need. If you can meet that need when the customer needs it met, you are on to something big.

Joel doesn’t give actionable step-by-step advice about what to do (there are some exceptions, such as a section offering twelve-step advice on starting a blog). Instead, he highlights the key changes that have transformed business and offers a perspective on how you can take advantage of those changes.

In the second part of the book, Joel focuses on rebooting your personal life. Joel talks about how people make career decisions and finds that the most successful people typically have careers that are “squiggly”, not linear. Successful careers are full of pivots, turns, and twists.

Joel urges people to embrace the “squiggle”, rather than avoid it. Joel reminds us that most people pick their career very early in their lives, and often don’t give themselves the opportunity to make a different choice later. Ultimately, poor choices leave many people working on things that they don’t care about.

There is a world of difference between stress that comes from the things you want to do and the stress that comes when you feel like you’re not working on the stuff that matters most to you.

Bottom Line: Ctrl Alt Delete is a good book for anyone struggling with or questioning their business or career. If you’re comfortable punching the clock every day, this book is not for you. If you want to understand the key transformations that make it necessary for most businesses to reboot how they do business, or the insights that can help you become more successful, I recommend you read Ctr Alt Delete.

How to Turn Your Startup Into a Lean, Mean Marketing Machine

Marketing is expensive and often doesn’t work. Yet products and services rarely sell on their own. How can businesses market their products or services without spending a lot of money or time developing comprehensive marketing plans?

The answer lies in a concept called “lean startup”, pioneered by entrepreneur Eric Ries and popularized by professor Steve Blank. Lean startup favors experimentation over planning, feedback from customers over best practices or intuition, and quick iteration over the up-front investment of time and money.

In my latest article for Entrepreneur Magazine, I discuss the three key elements of lean startup and how businesses can apply those elements to market more effectively and efficiently. Read the full article here.

Facebook Is Using Minors To Advertise Alcohol

Social marketing holds lots of potential but also many perils, especially when it involves minors.

This is especially true for alcohol advertising. It is both illegal and improper for a 13 year old to promote Coors Light or a vodka brand in a television commercial or print ad.

But it appears that Facebook is clearly violating state and federal law – and its own policies – by using its rich social graph to promote alcohol advertising, on the Facebook pages of minors.

The fact that this is happening shouldn’t be a surprise to Facebook. They not only have known about it since 2007 when they launched ads – this is exactly what social graph based advertising was supposed to do. Here’s what Facebook’s Mark Zuckerberg said in 2007 when Facebook launched Ads

Facebook Ads represent a completely new way of advertising online. For the last hundred years media has been pushed out to people, but now marketers are going to be a part of the conversation. And they’re going to do this by using the social graph in the same way our users do … Social actions are powerful because they act as trusted referrals and reinforce the fact that people influence people. It’s no longer just about messages that are broadcasted out by companies, but increasingly about information that is shared between friends. So we set out to use these social actions to build a new kind of ad system.

Want proof? Here’s the ad I saw yesterday on my daughter’s Facebook page. My daughter is 13.

 

Crowdsourcing Moved Your Cheese

Over the past three years, I’ve written extensively about my company – crowdSPRING, crowdsourcing and speculative work.

Although the debates about speculative work in the creative industries (especially design) continue, the arguments typically are regurgitated rants that add little to the discussion. One of the latest, from idsn, falls squarely into that group.

As is often the case, the real gems – and real discussion, is in the comments. Sam’s comment from a few days ago reflects my own views on the subject:

I went to RISD and I’m a creative director for a major design firm and have led the creative groups for some of the top agencies in in NY and London and I couldn’t diagree with your article more. It’s such an old fashioned approach! You’re a PC, not a Mac… Crowd sourcing moved your cheese…

Don’t you believe that there will always be a place in the world for talented designers? Because there will! And there will always be a place for agencies and design firms. And there will always be a need for beautiful design.

Your argument, in my opinion, is elitist and lacks an understanding of the age we’re living in. People don’t want “perfect” anymore. We’re not in an age of “high design” or “high art”. We’re in an age of DIY and people want different things — there are as many different needs as there are people and projects. Your argument is the same argument against the SLR (and then digital) camera.”Oh no, photography will be ruined, everything will be crap”… Ok, well not everyone is Richard Avedon, but is he the only one who should be privileged enough to take pictures of his kids? Why should individuals and small companies be held hostage by the cost structure that we designers have set for the industry? What are you afraid of? What right do you have, sitting in your typographically decorated office, have to decide what someone should or shouldn’t use for their logo? And what makes you think that a “designer” just because they have been trained at some school can solve any problem? I can’t tell you how many hot-shot, know-it-all designers I’ve had to pull off a project because they wanted to force their aesthetic on the client without regard for the business problem.

My suggestion to the author — stop worrying about other designers who want to reply to Crowdspring RFPs and focus on your clients. It’s not about you — and it never has been…

What do you think?

How To Pick The Perfect Name For Your Startup

I’m often asked by young entrepreneurs whether it’s important to find a strong name for a new startup.

The name is important, but the process to come up with a unique name can easily distract you. For example, it took us nearly 50 hours to come up with “crowdSPRING” – time that would have been better spent focusing on developing the core business.

If you don’t have time too invest in coming up with a great name for your new company, you can leverage crowdSPRING’s community of more than 87,000 creatives to come up with your company name or a product name.

Whether you work on your own to come up with a name or leverage crowdSPRING’s community, let me offer 10 useful tips that should guide this process:

1. What do you want your company name to convey?

Your company name is an important part of your company’s identity. The name will appear on your business cards, letterhead, website, promotional materials, products, and pretty much everywhere in print to identify your company or your company’s products and/or services.

Service oriented businesses should consider whether it will be easy for their prospective customers to recognize what services the business provides, based on the name of the company (example: Friendly Dog Walkers or Bright Accounting). This is especially important early in the life of your new company, when your brand is not well established and people don’t know who you or your company are.

Businesses located in rural areas and serving rural communities may want to project a smaller, hometown feel with their name. However, businesses planning to focus on bigger markets or bigger customers might want to project a larger, more corporate image with their name.

2. Brainstorm to identify name possibilities.

Start by thinking about words that describe your industry or the products/services you plan to offer. Think about words that describe your competitors and words that describe the differences between your products and services and those of your competitors. Consider too words that describe the benefits of using your products or services. Finally, think about words (and phrases) that evoke the feelings you want your customers to feel when they see your company name.

Tip: while brainstorming, look up Greek and Latin translations of your words – you might find new ideas from doing that exercise. Look at foreign words too (we spent some time with a Swahili dictionary looking for strong names).

3. Short, simple, and easy to write and remember is best (and consider acronyms of the name).

Obscure business names are often difficult to write and even more difficult to remember. This is a problem because for most startups and small businesses, word-of-mouth advertising is the most successful form of marketing. If your customers can’t remember your name or can’t spell it for others, it will make it difficult for them to help promote your business.

Think about the names of companies you admire. They typically have a few things in common: their names are short, simple, easy to write and easy to remember. (Examples: Apple, Google, Virgin, Southwest).

While it might be tempting (some startups think it’s cool to do), avoid using a “K” in place of a “Q” or a “Ph” in place of an “F” when coming up with your company name. Such letter substitutions makes spelling the name very difficult and will only cause confusion.

Also, don’t forget to consider the acronym of your company name (an acronym is composed of the first letter of each word in a phrase). You might not use an acronym, but your customers might refer to your business by an acronym. A name such as Apple Support Services can result in an unfavorable acronym – ASS.

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We’re Living In The Dark Ages Of Social Media

If you believe the media and social media “experts”, we’re living in the Renaissance of social media. Novel and creative campaigns like the recent YouTube campaign from Old Spice purportedly demonstrate the power of social in marketing. Hundreds of thousands of blog posts, articles, and books are written every year about how big and small businesses can leverage social media.

If we all believe it to be true, is it true?

No.

We’re living in the Dark Ages of social media. Here are four reasons why:

we value words over substance: look at the blog posts in your RSS reader or on Twitter. Most of the posts are social media 101 posts offering ten tips to use Facebook and Twitter. Even those basic posts often contain little real substance – most of them reflect the same 10 ideas, regurgitated and republished thousands of times by thousands of bloggers and journalists. There are gems too – but those are rare exceptions.

I’m not suggesting that simple is unimportant. Learning must start somewhere. But simple in social media has become the norm, much like artistic elements in the real Dark Ages reflect use of simple geometric designs and patterns.

we reward complacency: Popular bloggers publish post after post containing basic and uninspiring ideas that get re-tweeted hundreds of times not because the posts are interesting – but because it has become important (both to be social and to increase our followers) to be seen as re-tweeting something written by another person. We do this despite study after study showing that the number of followers doesn’t correspond to influence.

Again, there are exceptions – people who create inspiring, intelligent and thought-provoking content. You know who you are – you don’t need your ego stroked by hundreds of people re-tweeting your posts (although that certainly won’t hurt).

we value harmony over debate: when was the last time you saw two people active in social media disagree about anything? It rarely happens. Why is that?

Perhaps disagreement is rare because social media is, after all, “social”. But when everyone is promoting the same concepts (and content), there’s not much room for disagreement.

More importantly, people fear failure. They’re worried about not getting mentioned in someone else’s blog post. Worried about not being invited to speak at an upcoming conference. Worried that their audience won’t buy their next book about social media. And so they stay clear of disagreement and debate – at the expense of progress and innovation. This fear of failure can be very harmful.

we don’t challenge perspectives and traditions: rather than fight to challenge and change perspectives and traditions, we settle by convincing ourselves that we’re looking at the world through a different prism, when in reality, our perpectives are only marginally different.

For example, when we push the boundaries like David Armano did in his recent post in the Harvard Business Review - Fire Your Marketing Manager and Hire A Community Manager – we miss opportunities. We should stop looking for ways to make social media work for us and our businesses, and instead look for ways that we can work with social media.

Rather than thinking in traditional organizational structures (i.e. which person should be responsible for community management), we should consider how we must change our entire organization to empower our social media activities.

Rather than embedding social media into every customer touchpoint, we should be looking for ways we can change our customer touchpoints to better leverage social media.

But surely the media and all those social media experts can’t be wrong!

They can be wrong. And they are wrong.

Ben Kunz, writing about another subject, explained Folie à deux:

Folie à deux means madness of two — a rare psychiatric syndrome in which a delusional belief, or psychosis, is passed from one person to another. There is a story of a woman named Margaret and her husband Michael who adamantly believed invisible people were living in their house spreading dust. The craziness usually starts with a dominant person, called folie imposée, who begins imposing the delusions on others … until it becomes folie à plusieurs, the madness of many.

There are plenty of reasons to believe that the Renaissance in social media is coming. We’ll have to do better than regurgitated social media 101 posts, if we want it to arrive sooner.

We’re living in the Dark Ages of social media. That’s the truth.

Social Media and Ant Colonies

Dozens of articles are written daily about ways that businesses and individuals can leverage Twitter, Facebook, YouTube, LinkedIn, MySpace, and other social networks. Many of these articles assume that one-size-fits-all when marketing on social networks. But for every individual or company that has successfully marketed on social networks, numerous others fail – even when supported by vast marketing budgets and expensive consultants. For example, Cisco tried to imitate Old Spice’s viral social media campaign and nobody noticed.

Why? And what do ant colonies have to do with social media and social networks?

Ants are fascinating insects. E.O. Wilson and Bert Hölldobler, in their 1991 Pulitzer Winning book The Ants, described an ant colony as a superogranism – a vast social network. The ants in the colony communicate with each other by following chemical trails left by other ants.

(Photo by aristeos)

In one sense, the strategy for success on social networks is not vastly different from the chemical trails that ants leave to guide other ants. Companies can leave digital “trails” by connecting users with each other and by engaging users in a dialogue with and about the brand. Old Spice successfully did this in their recent campaign.

If people were like ants and followed “chemical” trails, it would be easy to predict the success or failure of marketing efforts.

People are not like ants. People aren’t “programmed” to follow digital “trails” in the same way that ants follow the chemical trail left by other ants.

There are vast opportunities on social networks. They don’t all revolve around widgets, fan pages and viral videos. If you’re developing strategies to market on social networks, consider how you can differentiate yourself from others, not just in form, but in substance. Bring something new to the conversation. Find a different way to engage your customers. Develop a unique voice. Challenge yourself and your consultants to build new “trails” – like Old Spice did in their campaign – and not to merely recycle those left by others. Don’t feel compelled to do something merely because others are doing it.

How Often Do You Ask Why?

Why do birds fly? Why is the sky blue? Why do you drive a car? Why do I have to wear shoes? Why do I have to go to bed?

Toddlers are relentless in asking “why?” questions.  The questions are driven by sheer curiosity – they want to know about everything and it’s not unusual to hear dozens of “why” questions from a toddler – even if you think you’ve answered their question.

As toddlers become older, they stop asking “why” questions. They’re not less curious – they just assume, more often than not, that they understand “why”.

We all tend to assume – more often than not – that we understand why something happens. In delivering customer service, for example, many people try to correct a problem but rarely try to understand why the problem occurred. When a piece of code breaks, many developers implement quick fixes but often neglect to ask why the code broke (poor Q/A practices? never worked in the first place?).

Toddlers want to be heard and they want to listen. They often don’t really care that you answer their question – but they do care that you listen and they really care when you engage in a discussion with them. For example, a question: “why is the sky blue” can be answered in different ways. One could say that it’s blue because that’s the way the sky looks during the day. Or, one could take an opportunity and talk about the sky being blue on sunny days, gray on overcast days, and gray/black at night when the sun is sleeping. And sometimes, it’s orange or pink.

This is an important lesson for all of us and one we should not forget, particularly when talking to other people, and for those of us running businesses – when talking with our customers and our employees. We should never forget to ask why. If a customer or employee is unhappy and complains, asking a few “why” questions could uncover deeper problems than merely what appears to be the source for that unhappiness. When we answer questions, we should take the opportunity to explain, to probe further, and where possible, educate (if appropriate).

Our customers, employees and people around us want to know that we care about them and their problems, and that we hear them.

We can learn a lot from toddlers.