Tech IT Easy » psychology

Summary of visit to Silicon Valley

Kari Silvennoinen — Mon, 20 Jul 2009 06:10:01 +0000

Last February, I was in Silicon Valley for a week thanks to a course I was taking. Here’s a summary of what happened there.

UC Berkeley: Center for new Music and Audio Technologies.

Prof. David Wessel showed us a new instrument that was basically 32 touchpads. Each was connected to a sample loop and the x- and y-axis and pressure modified that loop. It was an interesting idea, because it didn’t look like just pushing buttons to make sound.

Fail whale at LHS

UCB: Raymond Yee, “Mixing and Re-mixing Information”

A lecture from a course on web mashups. Yee has written the book, Pro Web 2.0 Mashups. The students need to plan and work on a mashup project. There were lots of interesting ideas, but I was worried that most of them were remixing for remixing’s sake and didn’t add value along the way.

Lawrence Hall of Science

Our contact at UC Berkeley had warned this place was mostly for children, and sure enough, this is a place to avoid unless you’re 7 years or less. Almost as complete waste of time as our Google visit.

We had also pizza available for but no-one from UC Berkeley came (we were too scary). Except one guy, whose name I forget. But he took some of us for drinks downtown, so that was great.

Digital Chocolate / Trip Hawkins

Hawkins really loved "Bowling alone"

Trip Hawkins talked a lot about how leverage is the key to successful business and what are the differences between the supply chain in when he was at EA and in operator-controlled world of mobile gaming. He told how he built EA so that it was NFL who wanted them to use their brand, not the other way around. This is why he sees that his competitors who just put out license games based on movies will ultimately be driven off the market, because they do not control the IP.

He thinks that the iPhone is the coolest thing in all time and how the rest don’t get it: “If you’ve played around with Storm or Android you know, wow, these suck”. In his view, the others had focused in Features (“What it is”) and not on Advantages (“What it does”) and not at all at Benefits (“Who cares?”).

Digital Chocolate’s game development doesn’t depend on the device, because they change all the time and they can publish all their games in every device. This is the only way to make the business work in the mobile space. Hawkins doesn’t see that there will be any standardization, because that would move the leverage away from mobile operators to handset manufacturers.

He also believes that the social starving that began around 1950′s because of TV is the reason people are so keen on the social gaming and internet services and is the driver for “omnimedia”. His suggested reading are The Innvator’s Solution and Bowling Alone. Even in the old days, he didn’t see gaming as waste of time. When playing, he said that “I was thinking, learning and motivated”.

He recommended that we try Tower Bloxx, their Facebook game. I was a bit disappointed, the game itself isn’t that bad if you want to kill time, but it is really spammy. Not only is more screen real estate spent on questionable ads than on the game, not only does it notify your timeline every time you play the game, not only the “social aspect” is just a high score table of your friends, but it also spams your friends every time you play to add the game. Not exactly what I’d expect from the guy who’s partly responsible for the great games EA pushed out in the early days. I asked why is it that as a former hardcore gamer, the only interesting game I played last year was World of Goo. In his opinion this down to how big corporations work and can’t innovate. If Tower Bloxx is Digital Chocolate’s answer to this, I don’t think it’s just big corporations.

Sun Microsystems / Mårten Mickos

FAQ: "If heating is a problem, why is it black?"

We were given the tour at Sun’s Executive Briefing Center. They showed the SunRays and other stuff and it was pretty nice to see up close the Black Box.

Afterwards, Mickos gave us a presentation about open source development and MySQL. He said that MySQL is like “New Orleans” of web apps in that if you want to control an important river, you need to control the important cities and this was the reason Sun acquired them. He also anticipated the question about superiority of Postgres, which is probably asked from him all the time. “When I joined MySQL, Postgres was better. Some say it still is. But who cares?”

He also started a discussion about “Why are web companies so closed?” – a poke directed among others Google, who benefit a lot from GPL software, but due to a loophole in the agreement can get away without publishing their improvements because the software isn’t redistributed. This is what he calls the hypocrisy of open source: “People just want to get stuff for free”.

Like Hawkins, he said that the most important thing for startup business is category-leadership. One advice he gave for Finnish start-ups was “not to be Finnish”: MySQL didn’t have sales offices in Nordics, only in the US. Other thing was that if something sounds good in Finland, it takes 10-15 years for until it’s widely accepted as a good thing, so don’t go to market too early. “There’s still time to make a Google-killer”, he said.

This was one of the best sessions we had, not only because Mickos isn’t there anymore and looks like Sun won’t be either but also because we got vodka and swag. You could see there was an economic crisis, because elsewhere we didn’t get anything.

Nexit Ventures / Michel Wendell

Wendell, from Nexit Ventures, a VC firm interested in Nordic IT startups, told how the VC market works and what kind of mistakes Finnish companies usually make. He told how he ended up in the business of helping Nordic companies make it in the US. Being a VC has lot to do with knowing people.

Lots of interesting discussion, but it was late in the evening and it’s pretty hard to upstage either Hawkins or Mickos.

IDEO

We got a standard theme park tour at IDEO. If you have seen the documentaries on TV or at YouTube, there’s not much to see. I was surprised that they actually avoid any systematic or analytical approach to design and focus more on a holistic, iterative and therefore probably pretty expensive (to the client) approach. As a case study they presented Nokia N-Gage platform they did concept work for. A surprising choice, because not only being old was also a spectacular flop. I guess they thought that being from Finland and the course given by ex-CTO of Nokia, we’d be interested in Nokia or something. If we were, we probably didn’t need to come all the way to Palo Alto for that.

Stanford University / VHIL

At Stanford, we got a nice presentation from Jeremy Bailenson from Virtual Human Interaction Lab. He was talking about the Proteus Effect, or how avatars change humans and their behaviour. For example, even though Blizzard has nothing in World of Warcraft code that gives advantage to taller avatars, they nevertheless level up faster than shorter ones. Also, taller avatars get better results in the Ultimatum Game, the real world height of the human is irrelevant. As I’m interested in behavioral decision making, it was nice to see that it might be possible to do empirical studies in virtual worlds, where we can control many variables that social sciences haven’t been in the real world.

Nokia Research Center at Palo Alto

First NDA of the tour. They showed us some research projects they were working on and had the worst slides of the tour. Most of us came out there frightened how out of touch Nokia can be.

Stanford University / Entrepreneurship Week / “Next Big Thing” Panel

Tim Draper, Tony Perkins and Michael Moe talked mostly about Twitter and iPhone and how making revenue is irrelevant. Draper really loves the free trade. Apparently ad-supported business model is the next big thing.

These guys were either drunk or lived in a bubble of their own. Probably both.

IBM Almaden Research Center / Ray Strong

There's pr0n in it, I'm sure.

Strong talked about how IBM tries to predict the future. First of all, the Almaden Research Center looks like a super-villain’s secret lair from Bond movies (it didn’t help that the guy we met had a Bond-esque name). Forget Google, this is the place to visit. There was the world’s first hard drive in the lobby, which was a nice monument to how long IBM has been in the game.

The main thing Strong told was that it isn’t possible to predict technology in to deep future, only in to the business horizon of up to 5 years. This is what they told to an unnamed government agency that wanted them to do so. As government usually gets what it wants, IBM decided to find a way to do it. They brought in people from academy, futurologists and social scientists. Their approach is half scenarios and half technology landscapes, but their ideation emphasizes backcasting from deep future (>50 years) using trends that can be with high probability assumed to continue.

One problem with scenarios has been that it’s really hard to transform them into strategic actions a company should take. IBM tries to close this gap between scenario planning and strategy by using what they call signposts. These signposts are future events that are both recognizable (when they happen) and actionable.

Strong also talked about how predicting future, it’s important to stay in the qualitative side of things, not only because quantitative side of things usually doesn’t work and might be harmful because of the tendency to use numbers to calculate expected values or other figures, even though they are full of uncertainty and can be harmful.

This was by far the best visit during the tour.

Google

NDA. It was a standard theme park tour. It was pretty clear that Google is exactly as “open” as SEC demands it to be, not an inch more. I guess many for many of us the myth of Google was totally burst.

To be fair, this was the only place where our contact wasn’t executive level so we might have gotten a better experience with a more suitable contact. Even though our host was great and all that, he probably wasn’t the right one for our group.

HP Labs

Runner-up in best architecture for a research lab.

NDA, but they mostly showed published academic research about nanophotovoltaics or something to that end. Our guess is that they didn’t want to tell us anything but out of courtesy showed something. When they talked about things I could understand, they talked about MagCloud and how HP is transforming from a printer and computer company into printing and computing company.

Next day, couple of us went to see the garage (more like a shack) Hewlett and Packard started from and what is considered as the “Birthplace of Silicon Valley”. Not much to see, but at least it had some historical value.

Unlike

How, if You Want to “Crowd-Source,” You Need to Keep Your Questions as Simple & Stupid as Possible

Vincent van Wylick — Thu, 09 Jul 2009 13:22:53 +0000

I once asked a friend how one of my clients should improve their sales technique for a technical product, knowing that his company is very successful at what it does. He, himself a “sales engineer” (i.e. a technical sales guy), found the question very difficult to answer.

I had to reshape the question to “so, how do you guys sell your technical products?” And then he was able, with full vigour, to tell me how they do it. It should be mentioned that market plays a strong role here; my friend works in a very niche business, while my client suffers from powerful competition.

I’m starting to loose my naiveté, as far as crowd-sourcing is concerned. This easy-to-communicate world we live in, sometimes makes me forget that, just because we can ask, doesn’t necessarily mean that we should. Technology may have changed, but people’s brains, psychology, and business principles have not, at least not at that rate.

My general stance these days is that, no matter what context you talk in with people, you should always assume a complete lack of imagination. Instead, by either spelling it out, or better, by asking the best interview-question in the world “tell me about YOU!,” and then extracting what you need from that, is much more effective.

It’s as Jeremy advised me to blog when I started here, Keep It Simple & Stupid (K.I.S.S.). Even though I have ignored that lesson at times, it’s a good one to follow in this all-too-unsimple world.

Apart from crowd-sourcing, the same, incidentally, applies to:

selling people stuff: spell them out exactly how your product/service benefits them!
applying for a job: spell them out exactly how you will make them money!
and everything else.

Want to make the world a better place? K.I.S.S. it!

Vincent

Unlike

Briefly, on the value of Recaps

Vincent van Wylick — Thu, 02 Jul 2009 18:41:36 +0000

Looking back at your own writing is hard. It made me take a day’s break (that and lack of sleep) and wonder about whether life (on Tech IT Easy) was worth continuing. It made me question my ability to maintain this blog. Etc. etc. Recaps = hard. You get the idea.

But the other thing I noticed with June’s Recap (and noticed before on my recaps for S+FnR, but forgot), is that it enables you to draw a thread between your thoughts. Blogging every day means that, often, you don’t have the time to reflect much on what you wrote about before. But subconsciously you do, of course, and I like how I was able to relate different topics to each other. The same applies, incidentally, to living too hard…

The opposite of blogging too much is blogging too little, of course. That’s when you start thinking too much and don’t realise that people will have forgotten your one (imagined) bad post by the time you post the next one, and the next, and the next… So, dormant bloggers, get blogging!

That’s it really. Too short and introspective to post on TIE?
Vincent
(Picture courtesy of www.bennettlakehouse.com)

Unlike

Thoughts on the work-life balance

Vincent van Wylick — Wed, 15 Apr 2009 19:07:14 +0000

Rule 101 of blogging: Never write about how you’re planning to lead your life. In my experience, this process of externalising your thoughts, as opposed to internalising them, often leads to people shoving it away from their minds. So, rather than going to deeply into the sh^t that I have to deal with myself, and which would be entirely boring to you, I’ll go across some ‘influences’ for my thinking on work-life balance.

An attractive woman on a plane once told me that life is a like a bunch of rooms in a house (no, not a box of chocolates), each representing one area in your life and each to be kept separate and clean, in order to have a fulfilling life. Since she was beautiful and because it made sense, I try to follow this philosophy as much as possible, with both successes and failures to show for it.

The one book which has been most influential in my approach towards work is called “The Now Habit” by Neil Fiore. It introduced me to a concept called ‘the Unschedule,’ which basically means that you plan your work around set routines, rather than planning routines around work (which always ends up coming first place). If there’s one complication with this ‘un-scheduling’ approach, it’s this concept of “the economy as a machine,” which always has to keep on turning and turning, making human workers nothing more than replaceable parts in that machine. I think there’s something principally wrong and outdated about this idea, a relic from the industrial age, and will make it my life-mission to change it… at least for myself (if successful, I’ll write a book).

The second book [which I haven't read, but am planning to] is called “the 4-Hour Workweek,” by Tim Ferris, which introduces us to the concept of “personal task outsourcing,” as opposed to outsourcing on an organisational scale. The perhaps third book is “The E-Myth Revisited,” by Michael Gerber, which I’ve written about extensively before, and which deals with developing a type of franchising approach regarding the starting and running of companies. I’m strongly for the idea of dedicating a set amount of my income towards personal assistants, because I think it will allow for more brain-work, which is also better paid, and the whole reason why people go to college, to use their brains.

If there’s a recurring theme to all of these approaches, it’s that they require a clear understanding of one’s capabilities, non-capabilities, and the strength of character to say “yes” and “no” to things. Many self-help books teach you about [identifying] the first two, but can’t help you much about the third. I think I’ll leave it with the stance that I think that the best decisions are made when people are well-slept, well-fed, well-exercised, and made happy by other unmentioned activities. You can read books all you want, but if you don’t maintain those basic ingredients to life, no methodology will ever work that well.

End of thought for today. I’d love to hear yours on what has been influential on your [path towards] work-life balance.

Vincent

Unlike

Thoughts on pricing (yourself, products, and services)

Vincent van Wylick — Sat, 14 Mar 2009 10:27:43 +0000

Just finished a project, which gives me a few days to reflect, work on my personal business-plan, aka career philosophy, and write blog posts about pricing and stuff. A few months ago, I purchased the second edition of the book “The Strategy and Tactics of Pricing.” It’s a really good read, though also a complex one—I’m on page 80 of 450, and I started reading in December! That said, having been exposed to setting my own prices for the services I provide, also taught me a thing or two already.

Understanding pricing really means two things: understanding the numbers and understanding the psychology behind why people are willing to charge or pay x amount for something. The difficulty is mainly that information is incomplete. I can’t judge 100% what contextual factor made a customer decide to go the other way, or why the competition charges 3 x less than my product. At the same time, this fuzziness also means that pricing is not just a matter for the “finance guys,” it’s a matter of doing your homework, experimenting, and some instinct.

Pricing itself is a subject that is actually relevant to everyone [I'm excluding millionaires here, though they may consider the price of their yachts and Rolls Royce's sometime]. It’s something that matters when pricing yourself (what is a fair wage or fee for people to pay you?); when pricing products and services; and when considering paying for products and services (why does a certain price seem to high or like a good buy?).

Pricing yourself

According to my nice bible on consulting, there are three main ways that I can set my own prices. I can work on an hourly / weekly / monthly / etc. fee, I can charge a single fee for the whole project, and I can be paid for reserved time [aka, I set aside x amount of days per month for client y]. Consultants typically charge a lot and that is not for arrogance reasons. Rather, one factor is the amount of risk that you incur. By committing to one client, who may only need you for an undetermined amount of time, you risk forgoing other income. Hence you charge more per project. Something like reserved time over a longer period of time would be less risky, hence you can charge less for that.

Of course, it’s also a matter of what value you bring to the table, which is really a two-edged sword: is the value that you bring, the skill-sets that you have acquired (and which cost you money to acquire)? Or is it the value that your client attributes to it? It is always the latter, though if that value is lower than what it costs to produce it, you’re making a loss and should rethink your business.

Similarly, it should optimally be so that when you apply for a job, you have an estimate of the financial value that you bring to the company. This isn’t always made clear, often you have a salary-indication showing what you are worth to them, but your value-contribution may very likely be higher (or lower) than what is expected. Negotiating in such a situation requires sufficient knowledge about that value—yours and theirs.

Pricing products and services

The mechanics of pricing here is much the same, though perhaps simpler to understand. At least, from a cost-perspective, which should be just a matter of adding up the ingredients and the (wo)man-hours. But cost in itself does not tell you enough. For one, there are economies of scope and scale. Second, there are avoidable costs. And third, we live in a era where the cost of (re)production can often be minimal [I should note at this point, that the edition of the book that I bought is from 199X; a 4th edition came out in 2005, which, I imagine, approaches the digital economy more].

And of course there is also the matter of the competition (cost-based pricing only works well in monopolistic situations—”it costs what it costs, what are you going to do about it, punk?”) and, again, the value that the customer places on your product. But this kind of interplay can be really complex and is exactly why I decided to read this book.

A note on the avoidable costs part. Recently, I was looking for a laptop-bag and came across what I thought was a great deal. Everywhere I looked the bag cost €40. But one place had it for €25. Without thinking I added it into my basket [this is e-commerce] and wanted to order it. Until I saw that sending it would cost €20 [other's charged €5], bringing it to the same sum. This was actually a coincidence, as they charged €20 for sending other products as well. Why does one company charge much more than others for sending materials, but less for the materials itself? My acquired wisdom taught me that this is because it encourages people to buy lots of products at once. Because people buy a lot, the store has to store less inventory over time, which represents a saving that it can translate into the cost of its products.

The inventory cost is an avoidable cost that you, as a store, can tweak up, down, or away. Just like you can outsource certain parts of your operation, etc. etc., you can make decisions on an organisational level which will have an effect on your costs. And because your costs don’t matter to your customer, the value that he attributes to your product does, you have to change your costs and margins to match that picture. Did that make sense? I had to re-read that part of the book a few times to get it myself, sort of.

The price that you and I are willing to pay

While marketeers would like you to think that this is all a psychology game, it is in fact still a psychology + numbers game at this stage. When my income is low, making a purchase that consumes a large percentage of it, will make me very price-sensitive and vice versa. If I use an app that saves me x amount of time [allowing me to earn more money], then that app has a certain value to me relative to that.

But there are psychological aspects as well. My Mac, for example: I know it saves me time to do what I do (=financial value). But I also feel good about being on a Mac (=psychological value). Or the digital SLR I am planning to buy. I briefly browsed the second-hand market, but abandoned the idea because I value the security of buying a new product. My expertise in cameras is too low to place my faith in a second-hand camera, even if it is half price. Had the new Mac not come out recently, I would’ve probably bought a second-hand one, because I know about 10 different tests to make sure that it’s ok. The product’s reputation is a factor, but so is the customer’s expertise.

Setting a price is a matter of what value it has for a customer—real and imagined—and good marketeers can position their products wisely to convince customers of that.

Final thoughts

Don’t worry! Tech it Easy won’t become a pricing-orientated blog anytime soon. As interesting as it can be, it doesn’t quite hit that mainstream nerve, I don’t think. For me, it is just another puzzle to solve on the big canvas that is life. And perhaps, I made you curious about it also? If so, give me a buzz in the comments or send me a mail. As I’m here to learn, I’d love to discuss any questions you may have about this!

Vincent

Unlike