How To Buy – Focus on fit, not price

I’ve been helping a friend shop for a new MAC recently. I’ve had MACs and PCs for years. I consider myself pretty knowledgeable about the technology. And I know what I want/need. So it always amazes me that I find the process so painful.

The pain is a function of the fact that I always find myself focusing on the price first and thinking that the more I spend the better off I will be. All this despite the fact that what I need could be handled by a less expensive configuration.

Perhaps consumers and companies are better served by a new shopping experience. One that starts with the evaluation of how well needs and capabilities match. There could be many benefits.

Consumers would be shielded from the illusion that higher prices mean better fit. It would allow consumers to focus on “value” relative to what they need as an individual. Only then would price come into play, to help refine the final buy decision. The consumer would end up with greater clarity as to what they paid for and why.

Companies would be encouraged to better describe the benefit of a capability in plain English. Their customers would be more likely to buy (and pay for) exactly what they need. They would in turn be more satisfied, willing to buy again and willing to recommend the experience to others.

I think it’s a win-win for everyone and for the right products.

DNA today, all other personal information tomorrow?

I recently read about an instance where the courts decided that a company could not patent a person’s DNA on the basis that it is a naturally occurring substance upon which no patentable ingenuity had been applied.

A ruling of this nature has been long awaited, fought for and fretted over. Michael Crichton fans are familiar with the issue as raised in his recent not so fictional work Next.

This got me thinking. What if ownership rights extended to other types of information associated with a person. Although this time not genetic. But personal, private, transactional, financial, etc?

The implications are quite interesting. Below is my take on what such a future might resemble.

Your information creates income.  You now earn an income based on to whom you sell or license your personal information.   You sell your data for a fee to those entities (people, organizations) best positioned to manage it per the terms of your contractual agreement with them. You adjust your fee to account for any risk based on criteria, e.g. the quality of your data, the type of data, it’s intended use, etc.

Privacy improves.  Entities want your data. Since your privacy remains a key concern of yours, entities work extra hard to protect it. You favor entities best equipped at meeting your needs. You reward them by offering better “terms”. And you have legal/contractual recourse should your rights be violated, deliberately or otherwise.

You improve.  Entities want the best data. The better the data the better terms you can negotiate. This means you have an immediate financial incentive to make sure your affairs are in order, as reflected by your information. Another benefit is that having better data puts you in a better position to negotiate a purchase on which that data is based, such as buying a home.

When will people start charging entities for use of their personal information? When will entities start paying for it? What might a market disrupted and transformed in this manner look like?

Only time will tell.

Don’t Stop Believing

I was recently struck by the following New York Times piece, the following excerpt in particular:

“America still has the best innovation culture in the world. But we need better policies to nurture it, better infrastructure to enable it and more open doors to bring others here to try it. Our politics has gotten so impossible lately, too many Americans have stopped dreaming. Not these two. They just never got the word. As Sridhar says: ‘We came to America for the American dream — to do good and to make good.’ “

I hope you find the piece as inspirational and insightful as I did.

March 7, 2010
OP-ED COLUMNIST
Dreaming the Possible Dream

By THOMAS L. FRIEDMAN

The thing I love most about America is that there’s always somebody who doesn’t get the word — somebody who doesn’t understand that in a Great Recession you’re supposed to hunker down, downsize and just hold on for dear life. I have a couple of friends who fit that bill, who think a recession is a dandy time to try to discover better and cheaper ways to do things. They both happen to be Indian-Americans — one a son of the Himalayas, who came to America on a scholarship and went to work for NASA to try to find a way to Mars; the other a son of New Delhi, who came here and found the Sun, Sun Microsystems. Both are serial innovators. Both are now shepherding clean-tech start-ups that have the potential to be disruptive game changers. They don’t know from hunkering down. They just didn’t get the word.
As a result, one has produced a fuel cell that can turn natural gas or natural grass into electricity; the other has a technology that might make coal the cleanest, cheapest energy source by turning its carbon-dioxide emissions into bricks to build your next house. Though our country may be flagging, it’s because of innovators like these that you should never — ever — write us off.

Let me introduce Vinod Khosla and K.R. Sridhar. Khosla, the co-founder of Sun, set out several years ago to fund energy start-ups. His favorite baby right now is a company called Calera, which was begun with the Stanford Professor Brent Constantz, who was studying how corals use CO2 to produce their calcium carbonate bones.

If you combine CO2 with seawater, or any kind of briny water, you produce CaCO3, calcium carbonate. That is not only the stuff of corals. It is also the same white, pasty goop that appears on your shower head from hard (calcium-rich) water. At its demonstration plant near Santa Cruz, Calif., Calera has developed a process that takes CO2 emissions from a coal- or gas-fired power plant and sprays seawater into it and naturally converts most of the CO2 into calcium carbonate, which is then spray-dried into cement or shaped into little pellets that can be used as concrete aggregates for building walls or highways — instead of letting the CO2 emissions go into the atmosphere and produce climate change.

If this can scale, it would eliminate the need for expensive carbon-sequestration facilities planned to be built alongside coal-fired power plants — and it might actually make the heretofore specious notion of “clean coal” a possibility.

In announcing in December an alliance to build more Calera plants, Ian Copeland, president of Bechtel Renewables and New Technology — a tough-minded engineering company — said: “The fundamental chemistry and physics of the Calera process are based on sound scientific principles and its core technology and equipment can be integrated with base power plants very effectively.”

A source says the huge Peabody coal company will announce an investment in Calera next week. “If this works,” said Khosla, “coal-fired power would become more than 100 percent clean. Not only would it not emit any CO2, but by producing clean water and cement as a byproduct it would also be taking all of the CO2 that goes into making those products out of the atmosphere.”

John Doerr, the legendary venture capitalist who financed Sun, once said of Khosla: “The best way to get Vinod to do something is to tell him it is impossible.”

Sridhar’s company, Bloom Energy, was featured last week on CBS’s “60 Minutes.” Several months ago, though, Sridhar took me into the parking lot behind Google’s Silicon Valley headquarters and showed me the inside of one of his Bloom Boxes, the size of a small shipping container. Inside were stacks of solid oxide fuel cells, stored in cylinders, and all kinds of whiz-bang parts that I did not understand.

What I did understand, though, was that Google was already getting part of its clean-energy from these fuel cells — and Wal-Mart, eBay, FedEx and Coca-Cola just announced that they are doing the same. Sridhar, Bloom’s co-founder and C.E.O., said his fuel cells, which can run on natural gas or biogas, can generate electricity at 8 to 10 cents a kilowatt hour, with today’s subsidies. “We know we can bring the price down further,” he said, “so Bloom power will be affordable in every energy-poor country” — Sridhar’s real dream.

Attention: These technologies still have to prove that they are reliable, durable and scalable — and if you Google both, you will find studies saying they are and studies that are skeptical. All I know is this: If we put a simple price on carbon, these new technologies would have a chance to blossom and thousands more would come out of innovators’ garages. America still has the best innovation culture in the world. But we need better policies to nurture it, better infrastructure to enable it and more open doors to bring others here to try it.

Our politics has gotten so impossible lately, too many Americans have stopped dreaming. Not these two. They just never got the word. As Sridhar says: “We came to America for the American dream — to do good and to make good.”

The Imagined Future

By Herve’ Jean-Baptiste

A few months back I decided to rename this blog to better describe the nature of my interests and writings as well as to reclaim the French-Canadian half of my heritage.

L’avenir (or more precisely, dans l’avenir) is French for “In the future”. 

That’s really been the spirit of my writing.  That which speaks to what the future might look like, including the ideas and innovations which define it.

With that in mind I would like to share one of my favorite quotes which is also featured on the home page of my blog.

“Some days when you pick up the newspaper it seems to have been co-written by J. G. Ballard, Isaac Asimov, and Philip K. Dick. Human sexual reproduction without male genetic material, digital viruses, identity theft, robot firefighters and minesweepers, weather control, pharmaceutical mood engineering, rapid species extinction, US Presidents controlled by little boxes mounted between their shoulder blades, air-conditioned empires in the Arabian desert, transnational corporatocracy, reality television—some days it feels as if the imagined future of the mid-twentieth century was a kind of checklist, one from which we have been too busy ticking off items to bother with extending it.

Meanwhile, the dwindling number of items remaining on that list—interplanetary colonization, sentient computers, quasi-immortality of consciousness through brain-download or transplant, a global government (fascist or enlightened)—have been represented and re-represented so many hundreds of times in films, novels and on television that they have come to seem, paradoxically, already attained, already known, lived with, and left behind. Past, in other words.”

-Details Magazine, May 2008, on The Long Now foundation

Welcome to the future.

Another Year In Ideas

One of my favorite things to do during the holidays is to read the New York Time’s annual Year In Ideas.  

It’s a great way to catch up on some of the most interesting ideas across a wide range of topics.  I find that it fuels my innovative spirit all year long. 

I hope you do too.

Merry Christmas and Happy New Year.

In a perpetual state of dissatisfaction

I often find myself in a banking center simultaneously using an ATM and logged into the Mobile Banking application on my iPhone.

I find that I need the combination of the two experiences to achieve my one desired expected must-have experience.    Which means that I am constantly in a state of dissatisfaction with either channel. 

This is problematic for many reasons, two in particular.  First,  there must be millions of others who feel just like me.  Second, these are the primary business to consumer interaction points.   That being said it’s  imperative to create the best possible channel experiences.

The benefits of doing so could be huge.   It could drive satisfaction.  It could cement critical customer relationships.  And for the early-adopter innovators it could mean new unforeseen markets, products, services, customers, revenues, etc.

Buying Cat Food Once A Month

I had an on-line banking “ah ha” moment while buying cat food last week.

I’ve had my cat for 16 years. During that time my cat food buying habits have never changed.  I buy a few cans at a time from the local deli multiple times a week paying upwards of .90 cents a can.  Needless to say this has not been the best use of my time or my money.  So on Sept 1 2009 I decided to buy in bulk for the month at the start of the month.

This actually fits in very nicely into how I otherwise manage my money.   I pay my bills in two “buckets”  “Rents” which are paid on the first of every month.  And “bills” which are paid on the 15^th of every month.  All of this is setup to happen automatically using on line banking software.  Full disclosure: I work for Bank of America and use their on line banking product.  In most cases I schedule recurring payments using on line banking.  But in a few cases I use a merchant’s auto-pay debit service.  In these cases I have configured on line banking so that I can forecast my expenses months out at a time.

So last Saturday I got on my bike destination Petco.  I rode from 114^th  and 8^th to 14^th and Fifth in Manhattan NYC , picked up four cases of catfood for .59 a can, and biked back home.  Along the way I began to think about how I would ideally like to manage this going forward, and integrate with the way I manage my other monthly bills. 

And then it hit me.

What if I could have gone into the on line banking tool and from there setup a “recurring purchase and payment” transaction for 4 cases of cat food from Petco to be paid for and delivered to my house on the first of every month.  No physical travel to Petco.  No need to access the Petco web site, login, fill shopping cart, enter credit card and shipping information, etc.  Just one (more) transaction from within on line banking .   Managed like any other bill payment transaction. With one notable exception – the addition of an order for a specific item.

Now that would be great.

Money – The Great Equalizer

Please see the sidebar on the site’s home page for a song that came to mind while writing this article.

As we sort through the aftermath of financial excess one thing remains front and center in my mind.  It was brought home by a recent news paper article entitled For Annie Leibovitz, a Fuzzy Financial Picture and a quote therein:

“The mind that can take these extraordinary pictures is not necessarily the same mind that is a perfect money manager,” said Graydon Carter, the editor of Vanity Fair.”

Managing money is a skill.  Doing so does not necessarily come naturally.  But it has to be done with some level of proficiency and effectiveness.  No one is immune from this basic human need to “keep what you have”.

Unfortunately “we” make managing money sound scary, daunting and complicated by using words like like “managing” and implying that success requires perfection.

In its most simplest terms, what’s required is simple, easy, friendly, consumable financial literacy training, focussed on the basics, started at a young age, embedded and continually reinforced throughout key points in the consumer saving/spending life-cycle and executed on a global basis.  

Money is often the great divider.  But it is also the great equalizer.   Anyone – indeed the entire globe can be materially, adversely and similarly affected by inattention to the basics.  

We need a find better ways to teach the basics and to ensure the appropriate application thereof.

Heat and Satisfaction

One of the most startling moments to me during the coverage on how countries worldwide dealt with the Swine Flu breakout was the Chinese use of heat sensing technology at airports.

http://www.youtube.com/watch?v=8fgBLU35cM8

This got me to thinking about the wide array of new and emerging “sensing” technologies and the way these technologies are and will be used to drive the future of many businesses including banking.

One of the ways heat sending technology could be used to advance the future of banking is as follows.

Imagine if we could identify heat profiles that correspond to a customer’s satisfaction state and use that to predict and/or influence how they might approach a banking experience to ensure maximum satisfaction from the time the experience starts to the time it ends.  In the case of a branch based experience, from the time they enter until the team they leave. In the case of an online transaction, from the time they start, to the time they finish. And so on.

Imagine if we could measure customer happiness as a function of their heat signature prior to and immediately following a banking experience.

What if we could tell that they arrived happy and left happier – or less happy?

What if we could detect an irate (dare I say heated) customer as they walk in the door and could change their mood before they hit the teller window and/or during their interaction so they leave happier than they were when it all started.

Fun stuff.

The End Of A Love Affair

I have always been an early adopter of and evangelist for on-line banking in all its emerging forms.

 

My love affair started with Prodigy which was one of the first vendors.  Later I moved to Checkfree software.  I was so smitten that I purchased stock in the fledgling company.  I later  became a enamored with Chase Bank’s on-line solution.  And for over a decade I have been an unshakeable admirer of Quicken software.

 

However this past weekend I realized that my love affair with pc-based bill payment software had changed.  You see, it dawned on me that I had not launched or downloaded data into Quicken since the 2008 Christmas holiday.  Over the last 6 months I took a number of steps to simplify my financial life. And without knowing or rather realizing it, I effectively eliminated my need for, interest in and/or dependence on desktop-based bill payment software.   Essentially all my bills are prescheduled either via direct-debit arrangement with the merchant or via on-line scheduled payments using Bank of America’s on-line banking solution.

 

Gone are the days of making sure the Quicken agent on the pc is scheduled to run.  That the software has downloaded the data automatically or having to initialize a manual download.  Worrying that the download occurred without error.  Manually reconciling  transactions.  Ensuring payments are scheduled within the “bill payment window”.  Paying for and upgrading the software.  Dealing with software glitches.  Transferring funds when/if possible.  Backing up the data.  Entering correct merchant addresses and account numbers.  Taking the software and data files with me on business trips just so I can be sure to my bills get paid on time. Keeping the data files in sync.  Dealing with corrupt data files, lost data.  Etc.

 

To be sure I have mixed emotions about the transition.  Old habits Dow hard.  But the liberation is gratifying. I worry less. And in this day and age that’s a relief.

 

Postscript.

 

As I was writing this column one of my favorite songs kept playing over and over. It’s what inspired the title. Which then inspired me to share the following iTunes link with you.  Join me in celebrating a classic artist singing a classic song as we say goodbye to the old and usher in the new.  Please see the corresponding title in the Sidebar to this blog.

 

 

An Idea Whose Time May Have Come: “Buy the Stock”.

Here is an idea whose time may have come.

It’s intended to capitalize on the success of programs like Bank of America’s “Keep The Change”, low stock prices, and the need for capital and liquidity.

Each time you use a foreign ATM and are assessed a transaction fee, said fee would be used to buy a share of stock in your name.

Using Bank of America as an example, each time you use a WAMU or JP Morgan Chase or HSBC or generic “bodega based” ATM (all of which I do routinely because there are too few Bank locations in South Harlem – more on that later), the Bank would credit your brokerage account (held at the Bank) with a corresponding share of Bank stock. 

At current prices a person could amass quite a stockpile, which could (will) increase in value over time, and which the Bank could help store and manage.

On the surface it seems like a “win-win” proposition for everyone.

Banking is about managing a person’s relationship with their money.

I had the pleasure of hearing and meeting Center for Future Banking executive David Carter on Thursday evening March 19^th. 2009. Mr. Carter was the featured speaker at a Bank of America affinity group event in New York City.

 

 

Mr. Carter’s speech was insightful and thought provoking. It had a profound impact on how I think about the future of banking.

 

The business of banking is about managing a person’s relationship with their money. These relationships matter.

 

 

1.     They shape how banking is designed and built. The rise of the ATM is a perfect example. Consumers wanted anytime, anywhere access to their money. As easy as cash (there when you need it). But with lower risk (I only carry what I need).

 

2.     They are unpredictable. The proliferation of bank branches is a perfect example. During the internet boom consumers sought on-line access to everything. Banks obliged with on-line banking services. They went a step further. Believing that brick and mortar experiences were dead Banks began shuttering branches. That was a misfire as evidenced by the number and variety of bank branches that can now be found on any major corner of every major city in the world.

 

 

3.     They are more complex and powerful than before. The number of people continues to grow. The adoption rate of technology we now take for granted like cell phones continues to grow. With that comes a greater level of connectedness which influences how people want to relate to other people, places and things. Including their money.

 

 

4.     They can create new markets, competitors and barriers in an instant. Consider the viral mobile banking craze in Africa which is circumventing traditional banks who are scrambling to remain relevant. Or the rapid growth of prepaid cash cards which are essentially credit-less digital wallets which can be used anywhere.

 

 

The future of banking could mean the end of banking but only as we know it. Hard to imagine. But possible. What were the top three music labels that once dominated production and distribution? Who was Lehman Brothers?

 

The real question is how to ensure we remain relevant. Being attentive to change and being positioned to adapt quickly will be a key success factor. Investing in innovation is a key to being ready.

 

 

What do I now think about when I contemplate the future of banking? Three phrases: Think survival. Be adaptive. Move with a sense of urgency.

 

 

Keep The Change – Help the Nation

This weekend I escaped the orbit of my beloved NYC and spent the weekend with a few friends in PA and DE.  We’re all current or former employees of banks at various levels of seniority, disciplines and/or life stages.  What we share in common is a love of laughter, not taking ourselves too seriously, and brainstorming about what can be done to help others. 

 

With regards to the latter, our conversations invariably include discussions of what banks can do to help the struggling and how we can influence moves in this direction. 

 

One idea from this weekend seemed particularly elegant and simple and builds on the success of existing programs such as Bank of America’s “Keep The Change”.

 

Just imagine IF…

 

·         “Keep the Change” became “Keep The Change – Help the Nation”?

 

·         Bank of America customers could go on line and direct from 0 -100% of the “change” to a community or charity of their choice?

 

·         Receiving organizations were required to report back on funds utilization?

 

·         Customers could track change collected, disbursed and how spent – and do so on-line and in real-time?

 

If you need convincing that the Nation needs help, take a few minutes to watch this 60 Minutes episode: http://www.cbsnews.com/video/watch/?id=4920557n

 

Let’s help the nation. 

 

Right here. 

 

Right now. 

 

One penny at a time. 

Keep The Change – Provide A Meal

While having dinner out with a friend a few weeks back I noticed a postcard on the table which read that by rounding up the check I could donate those funds to Citymeals on wheels.  

Per the Citymeal website, businesses can partner with Citymeals-on-Wheels through a variety of established programs.  Round-Up is a way for New York supermarkets, restaurants, retailers and their customers to raise money for New York’s frail aged.  Customers “round up” their transaction $1, $3, $5 or more to support Citymeals. This easily implemented promotion links your company with our high profile cause.  According to the Citymeals web site, 100% of the gifts to Citymeals-on-Wheels will be used for the preparation and delivery of meals to homebound elderly New Yorkers—not to fundraising or administrative expenses.”

As I read the postcard a stream of questions went through my mind:

• Is this legit?
• How does it work?
• How can i be sure that the 100% of the money is going to be used for it’s stated purpose, etc?

I immediately began to imagine one way in which the concerns might be addressed.

• Imagine if the amount totalling the  round-up amount was a separate card transaction that resulted in funds being deposited into a separate master bank account.
• The charity in whose benefit the account exists would withdraw funds as needed and be required to provide specific details verifying how the funds were used.
• Contributors to the account would be able to log into the account (perhaps using the card they charged the meal to or any card associated with their banking relationships) and view total and detailed contributions to date as well as detailed information on who their and total contributions had been used. 
• The entire ecosystem could be turned into a product, administered and automated by a single financial institution.

How great would it be to a part of something like this? 

I like to call it “Innovation with a Heart.” TM.

The Art of Business Process Management

I’m a sucker for great books.  In particular those that are both sources of knowledge and works of art.   My latest passion is Business Model Generation. 

…A practical, inspiring handbook for anyone striving to improve a business model.  Co-authored by 470 Business Model Canvas practitioners from 45 countries, the book was financed and produced independently of the traditional publishing industry.   – Amazon.com

Authors Alexander Osterwalder and Yves Pigneur use the creative visuals to explain how to break down business models into nine building blocks–elements such as partnerships, revenue streams and key resources–and how to re-imagine them to reflect the changing times. – Enterpreneur Magazine

There are many apsects to BPM that I find intriguing.   At the moment I’m focussed on conceptualizing each process step as a self contained object consisting of attributes that describes it.   For instance, how it  behaves generally or in relation to other steps or other environmental factors such as where used.  

This book is very popular.  I believe it’s in it’s third printing with many backorders. 

Reserve your copy now.