Tuesday, November 29, 2005

Opportunities in Image Search

Below are the first 20 results of a Google Images search for a two-word phrase. What do you think the phrase is?

The answer: “computer salesman” (with the quotes)

I found one result (the Mac OS X guy) reasonable, and another (the woman with the iPod) on the borderline. That’s a 10% hit rate.

Among the other 90% were a wolf, a hydroplaning car, a stick figure, Elizabeth Dole, two books, and a guy standing by a telephone booth. Also present were several cartoons, some of which could be relevant if I wanted cartoons, but I didn’t. (The Advanced Image Search feature did not support filtering-out cartoon images, although adding “-cartoon” to the search got most of them.)

As far as I’m aware, Google Images’ results are primarily based on the text adjacent to the image, as opposed to deep analysis of image content. Thus, if we were to look at each result’s surrounding page, we would probably find something about a computer salesman. In some cases, this approach works—for example, searching “U.S. flag” yields good results. In others, per “computer salesman,” it doesn’t.

Two opportunities here:

  1. Need an instant party game? Have someone search for terms on an image-search site and then, based only on the results, let the audience guess what is being searched. The searcher can give hints like “you’re getting warmer/colder.” For maximum fun, search a word or phrase with largley (but not totally) misleading and surreal results.
  2. There is plenty of room for a better general-purpose image search engine. I say “general purpose” because specialized photo sites already do better by manually attaching keywords or tags to photos. Professional stock-photo sites employ people who do that; photo-sharing sites like Flickr spread the keywording burden among the user base. These efforts lead to better results, but they are limited to a much smaller universe of photos than all public photos Web-wide. So the opportunity is to make image search smarter while keeping the photo universe big.

Tuesday, November 22, 2005

Thinking About Eating

Two recent studies about the psychology of eating highlight the subconscious at work. Here is the first, by a professor at the University of Chicago:

Imagine two servings of ice cream, one featuring a five-ounce cup overfilled with seven ounces, the other a ten-ounce cup filled with only eight ounces. Objectively the under-filled serving is better, because it contains more. But a study conducted by Christopher Hsee found that unless these two servings are presented side by side, the seven-ounce serving is actually considered more valuable. Apparently, people do not base their judgment on the amount of ice cream available, which is difficult to evaluate in isolation. Instead, they rely on an easy-to-evaluate cue: whether the serving is overfilled or under-filled. Overfilling evokes positive feelings while under-filling evokes negative feelings, and these feelings dictate people’s evaluations. (from “More is Not Always Better”)

The second study shows that people think about eating or drinking more in terms of a food unit (I had a soft drink) than a portion size (it’s still a single soft drink, whether it’s in a 12-ounce soft drink or a 24-ounce bottle).

In one of their experiments, researchers at the University of Pennsylvania...

...offered a large mixing bowl of [M&Ms candy] at the front desk of the concierge of an apartment building. Below the bowl hung a sign that read “Eat Your Fill” with “please use the spoon to serve yourself” written underneath.

If presented with a small spoon, most passersby would take a single scoop, even though the sign encouraged them to take more. If given a much larger spoon, the subjects would still take a single scoop, even though that one scoop contained much more candy. The subjects were inadvertently eating twice as much candy when the larger scoop happened to be in the bowl.

“It is more than just people afraid of appearing greedy. They didn’t know they were being observed,” Geier said. “We have a culturally enforced ‘consumption norm,’ which promotes both the tendency to complete eating a unit and the idea that a single unit is the proper amount to eat.” (from “Just How Much Is a Serving of Dip?”)

Monday, November 21, 2005

Windows in the Rearview Mirror

The first few versions of Microsoft Windows are often cited as examples of half-baked software being foisted on the marketplace. As the legend goes, it took Microsoft until version 3.0 to make Windows marginally worthwhile.

So I was intrigued by the following, excerpted from Download Squad’s 20 things you don’t know about Windows 1.0:

After taking a look at a very early pre-release version of Windows in 1983, Byte Magazine declared it a system that would “offer remarkable openness, reconfigurability, and transportability as well as modest hardware requirements and pricing.”

In 1984, PC World said that Windows “provides a simple, powerful, and inexpensive user interface that works with most popular programs. That alone is enough to guarantee consumer support to make it the de facto standard of the personal computer market.”

Shortly after its release, PC Magazine gushed of Windows 1.0: “If you’ve ever complained about DOS and envied those more skillful at reaping its inherent productivity bonuses, Windows is just what you need. It makes dealing with DOS a snap and opens up all sorts of new possibilities. Once you try it, unless you’re already a DOS master, you’ll wonder how you ever got along in DOS without it.”

Do these words stem from the lowered expectations of a DOS-addled world? Are they the product of computer journalists practicing the power of positive thinking? Or was Windows 1.0 not as bad as legend has it?

Sunday, November 20, 2005

Where is the Pets.com of Web 2.0?

The question, “Are we in another bubble?” continues to circulate around the blogosphere. Recent answers are mostly flavors of no (for example, Scoble, Battelle, Malik). So let’s ask the question, what would qualify as a yes?

Measured by the NASDAQ, the first Web bubble really got frothy in 1999 and peaked in early 2000. Around then, a common model for consumer-focused Web start-ups went like this:

  1. Raise tens of millions in venture capital.
  2. Pick something that sounds good with an “e” in front of it or a “.com” after it.
  3. Hand a big chunk of your venture-capital money to Yahoo, AOL, and a few other portals in exchange for traffic; optionally, do a Super Bowl ad or similar big-media spend.
  4. Do an IPO based on your “momentum” from (3).

The bubble part of this arrangement was that the public markets bought it, rewarding now-infamous players with IPOs. With its sock-puppet mascot, Pets.com is perhaps the most memorable example. There were many others.

Fast forward to today. Where is the Pets.com of Web 2.0? I’m not talking about fallen stars; it’s too early for that. I’m asking whether any Web 2.0 company looks like one of the big dot-bombs in bubble mode.

When we see fledgling companies bank wads of venture capital so it can be spent primarily on marketing programs, and when the economics of those marketing programs don’t matter, and when the financial markets hand-out the rewards anyway, then we’ll know to ring the “Bubble 2.0” bell.

Of course, we can argue about other qualifications for a new bubble, but let’s just remember how high the bar was set by Bubble 1.0.

[See also the Bubble Calibration Instrument.]

Thursday, November 17, 2005

By and Largely Smaller

“By and large, we brown-bag it: 44% of Americans bring lunch from home to eat at work.” (Parade magazine, November 13, 2005, page 4)

I was disappointed that this statement did not have an accompanying graphic, so I made one.

Monday, November 14, 2005

The Flaw of Averages

There’s nothing like a life-or-death issue to illustrate an analytical problem:

[A new paper concludes] there are fundamental flaws in the way researchers usually analyze and report the results of medical studies, especially randomized clinical trials that are seen as the “gold standard” method for studying the effectiveness and safety of new treatments....

“Most studies currently emphasize the average risk and average benefit found in the study, but the average trial participant might get much less benefit than average, or even be harmed,” says lead author Rodney Hayward, M.D. “If nine people are in a room with Bill Gates, the average net worth of people in the room will be several billion dollars even if everyone else in the room is in serious debt.”

The authors argue for a more sophisticated form of analysis, risk stratification, which they found in only 4% of papers reviewed from prominent medical journals. To make their point, they cite a major 1993 study that showed the clot-busting drug tPA to be, on average, significantly effective for heart-attack patients.

But when Hayward’s colleague David M. Kent, M.D., M.Sc., now at Tufts University, analyzed the data from this study in a risk-stratified way, he found major differences in effectiveness of tPA. In fact, his analysis shows that 25 percent of the patients in the original study accounted for more than 60 percent of all the benefit in the entire study. Meanwhile, half the patients received little or no benefit — and some had such a high risk of brain bleeding from tPA that there was net harm.

The full write-up about the paper is here. Those who know marketing analytics will recognize that risk stratification is similar to segmentation. Just as smart marketers no longer pursue a singular, average customer, the paper’s authors are urging the medical establishment to be wary of studies about the average patient.

Sunday, November 13, 2005

Follow the Money with “Where Is George”

I received a five-dollar bill with a URL written along the top: www.whereisgeorge.com.

That’s George as in Washington, man on the U.S. one-dollar bill. The site is a collective exercise in tracking individual bills as they circulate. You can enter the serial number and series number of any major U.S. bill.

I did so for the bill with the URL on it. The bill had previously been tracked in Portland, Oregon, 20 days before. It had traveled an average of 25 miles per day.

The Oregonian who entered the bill had a profile. He is the night manager of an inn, and thus sees a lot of new bills. He has entered more than 1,000 bills, with only 8 follow-on hits so far. I’m number nine. The site will automatically notify him of the location I entered for the bill.

Take a look at one of the site’s all-time distance leaders: a bill that as of November 2005 has traveled more than four thousands miles over three years. Starting from the northern tip of Michigan, it went west to Panguitch, Utah, then south to the western tip of Florida, by way of several stops in Texas, Oklahoma, and Louisiana. Having subsequently been tracked in Kentucky and Tennessee, its latest sighting was Dayton, Ohio.

To do my bit for the collective effort, I entered the other two bills in my wallet at the time. Follow the money.

Sunday, November 6, 2005

Frequent Flyer Cards Keep Airlines Alive

On Marginal Revolution (an economics blog), Gary Leff uncorks some eyebrow-raising facts about how “several major airlines have been kept in the air purely to support their underlying credit card business.”

Great post, Gary.

Professional-Services Firms as Sales Channels

It was probably coincidence, but I’ve had a few recent conversations where start-up founders want to use professional-services firms as sales channels. The attraction is obvious: Unknown Start-Up isn’t being taken seriously by Big Company, but what if Unknown Start-Up’s was pitched by Big Company’s existing system integrator (or auditing firm or strategy-consulting firm or ad agency or whatever is appropriate for the start-up’s business)?

While I don’t claim to be an expert, I have some observations from experience. They apparently had value in those conversations, so I figured I would share here.

  1. Working through services firms does not solve your sales problems; it moves them. Where once you had to sell to customers, now you need to sell to services firms. For some companies, it’s a more fruitful path. But don’t kid yourself: You are adding another moving part to your sales machine. At least in the near term, it will require more effort and resources than going direct.
  2. Most services firms are as risk averse as their clients. Training their people to sell your technology, not to mention deploy it, costs firms money. If that investment is necessary just to establish whether clients will bite, why should they do it? They are not like venture capitalists, who can afford to make many losing bets in exchange for a single big winner. They need to keep their people billed-out to clients.
  3. The best entry point is through a professional-services firm’s client. You may not be able to get Big Company to consider your start-up by itself, but can you at least intrigue someone there enough to pass you along to Big Company’s professional-services firm? It’s a night-and-day difference between your asking a professional-services firm to check you out versus one of the firm’s clients asking that you be checked out. The latter can justify internal expenditures in the name of the client relationship; some partners might even get Big Company to pay for a small project, making an evaluation billable. Either way, it breaks through the problem in number 2 above.
  4. Deal with partners, not the firm. Most professional-services firms are partnerships, where the senior members of the firm are partners in ownership. Typically, each of the firm’s clients will have a partner in charge of the relationship. This partner is both chief sales rep and chief gatekeeper for that client. You must convince this person to be your advocate. You will not be successful going around him or her. Less obvious, you won’t be successful going above either. There may be higher-ranking people in the company, but it’s unlikely they will want, or even be able, to push your solution on other partners. Only when you’ve been part of multiple partners’ successes is there a chance for a practice to form around you, and, from there, the sales leverage to emerge.
  5. Don’t give up proximity to the customer. Some partners will want to insulate the customer from you, so the customer only deals with the professional-services provider. This is especially true of advertising and marketing agencies, less so of technical professional-services firms. Don’t let it happen. You want credit and referencability for your part. Also, if things go wrong, you need to know before it’s too late; otherwise, the professional-services team could leave you holding the bag, saying “the technology didn’t work.”

If this all sounds hard, it is. A lot of ingredients must come together the right way, so invest incrementally. After all, your prospective partners will only go deeper based on results; the same should hold true for you too.

Thursday, November 3, 2005

Anchor from the Eye of Destruction

News item, as reported by USA Today:

Aaron Brown, the cerebral anchor once touted as the “voice of CNN,” whom the network recently termed the “ice” to Anderson Cooper’s “fire,” has been sent packing after four years on the air.

Brown’s star has vanished while Cooper’s is rising: The move comes after a year of notable live reports from Cooper on natural-disaster stories — where television news careers are often made — from his searing coverage of January’s Asian tsunami to his recent reports from the path of destruction caused by Hurricane Katrina.

I think this move is only good for a year. By the end of next year’s hurricane season, I predict we’ll see CNN’s Dr. Sanjay Gupta in the big chair. He will eclipse Cooper by delivering 72 hours of continuous solo coverage from an ultralight inside a category 5 hurricane. America will be riveted by this compelling “eye of destruction” viewpoint, as well as the personal drama of Dr. Gupta’s performing elective surgery on himself, in the ultralight amid 170-mph winds, using only a Swiss Army knife and a cosmetics mirror.

Such is the furnace from which the modern anchor is forged.

Wednesday, November 2, 2005

Richard Branson, Analyst

Here is an excerpt from a recent interview with Richard Branson, founder of Virgin Global. Referring to his retail-music business, he basically says that the original concept is running out of gas, that they’re trying to evolve it to the next stage, and that they don’t know if it will work.

Q: You said at the opening of the new store in Los Angeles that you have to adapt to make sure that Virgin stores are here 50 years from now. How do you do that?

A: You really have to be a chameleon to be in the music business, and in any business actually. Nothing lasts forever. What we’re basically trying to be is a lifestyle shop, but very much reflecting the Virgin brand. So we have great books, we’ll have the best films, the best DVDs and lots of nice little touches. We still want to have the broadest range of music, but we can’t survive on music alone. I just don’t think there’s a future, I’m afraid, in that kind of store anymore.

Q: You have closed six stores in the United States and opened one. Any plans to close or open any other stores?

A: We’ve sorted out the loss makers now. If this store [the latest-generation Virgin Megastore, just opened in Los Angeles] works, you know we could do hundreds of them. But we’ve got to still make it work. And this industry is a tough one. Even trying to reinvent yourself is tough. Nothing is guaranteed. It’s a much tougher industry than it was 20 years ago. We’ve invested a lot of money in our music retail company. We’ll give people a big chance to see if they can deliver. And hopefully they will be able to.“

The last paragraph sounds so...realistic. It’s the celebrity CEO as analyst rather than cheerleader. I like it.