investiledysfunction

David Hasselhoff has started a social network.  I will let those words sink in for a bit before I move on….

Okay here goes.

He talks about it on his website.  In Brilliont’s Top 10 Un-Commandments of Innovation, we talk about things corporations should not do as they go after innovation.  Without the authority to do so, I’m adding an 11th.

11th Un-Commandment of Innovation - If David Hasselhoff is doing it, it’s time to think of something else.

When growing up, I was a fan of Knight Rider, but is this is a sign that this whole social networking thing is going just a bit too far?  On his website, Hasselhoff (herein referred to as The Hoff) writes about Hoffspace as follows.  I’m unable to detect irony in any of the below so I assume he is serious.

In my travels round the world I have always been surprised that no matter where I go people recognize and know me, from Europe, Australia and India to the Philippines and the Zulu Nation in South Africa. This got me thinking… I realized that while two people from two entirely different countries and backgrounds may seem to have nothing in common, the only thing they might have in common is me… So I decided to start a network where people from across the world might come together and get a conversation started over me. Where it will lead, I don’t know but the world would be a better place if everyone talked a little more to each other…

So here is HoffSpace. There are videos and photos of the adventures of my life (THAT NO ONE ELSE GETS TO SEE) and also from the lives of other members. Read the discussions or start a forum on a topic that interests you. Check out Hoff TV, where I go live often. Chat with other members from around the world and make friends. Design your own home page. Add music and share your lives with others. Send me the weird, wonderful and wacky things that are happening in your life. Tell me the stories of how you are making a difference in your life and, if you need my help, ask… One man or woman CAN make a difference…

That not crazy enough for you?  Well, as of today, there are 14,217 members of Hoffspace.  Facebook, MySpace and LinkedIn needn’t worry.  That is 14,216 more than I would have expected, but who knew?

In all seriousness, perhaps the craziest part of all this is that The Hoff’s social network will likely do better than many of the new half-brained ones being launched today dubbing themselves the next Facebook, LinkedIn, MySpace.  (Read my colleague’s post on one such perpetrator, TalkBizNow by clicking here).  That said, the verdict is out on whether even these big boys of social networking really have a business.

While it won’t be valued at billions of dollars, HoffSpace will allow rabid fans of The Hoff to follow him in his exploits and let him sell more t-shirts, shot glasses, autographed pics and other assorted items to his fanbase.  The Hoff has this base and has actually figured out a way to tap into it.  Other social networks which are emerging don’t have this base and because of the network effects required for a social network, they will likely crash and burn quicker than you can say Baywatch.

For corporations, what does The Hoff’s emergence on the social networking scene really mean?  The one thing I’d take away from this is that before some innovation consultant tells you to start a social network for your customers or employees, ensure your customers or employees are engaged and care enough about you to join your social network.   In essence, does your company pass The Hoff test which is “Could you realistically get 14,217 people to your company’s social network interacting on a regular basis and doing something meaningful which strengthens your relationship with them?”  If you’re not sure or the answer is no, move on to another, better idea and leave the social networking to Facebook, LinkedIn and The Hoff.

Walking in the city today and noticed one of the best (or maybe worst) examples of accidental branding I’ve seen in a long time.  This one was a clothing retailer.  I’ve just included the picture of the store’s name below as I’m sure those of you who are fashion conscious will definitely want to check this store out.

I’d previously written about Time Warner Cable in a prior post (see Time Warner Cable - A Rant on Why I Don’t Like Monopolies) .  In that, I talked about how customer lifetime value doesn’t matter to a monopoly like Time Warner in NYC because in a monopoly, the customer is stuck with you for a lifetime.

Today, I’ll describe (in much less detail) how the matter ended.  Spoiler alert:  Time Warner’s performance got worse (if that is possible).

With my last bill not reflecting the credits it should have received, I called Time Warner over lunch to just inform them of my prior conversations and to get the credit I’d previously been told I’d get.

The summary of my conversation is that Time Warner informed me I wouldn’t get the credits I’d originally been told I’d receive because of Time Warner policy and that the prior customer service representative misspoke.  While I explained that TWC’s policies nor representative misstatements are not my problem, it was to no avail.

The beauty of this situation still remains that I have no choice but to stick with Time Warner Cable.  So once again, monopolies are great (for the company).  It also makes me look forward to the day when I can use the internet as my television.

More generally, this is worth noting for businesses that can lose customers (unlike TWC).  Organic growth is often best enhanced by maintaining existing customers and cross-selling them on new services and products instead of just aiming to acquire new customers.

I’d previously written about “Pay As You Go Models” and said, half-jokingly, that the idea could be applied to airline passengers where they could be charged based on their weight.  Forbes Magazine quantified the extra cost of big passengers which I wanted to share.  The impact is 176.4 million gallons of fuel which costs $538 million. Although they’d never do this, for an industry which is hemorrhaging money, every penny and pound helps.

I mentioned the bbq I went to this past weekend in a prior post, but I forgot to post a great image I captured when we were leaving.  It is one of NYC’s famous hot dog stands being hitched up to the owner’s BMW as he closes up shop for the day.  You have to love NYC.

The idea of customer lifetime value shows that retaining an existing customer is often more profitable than acquiring a new customer.  The math and the logic make a lot of sense unless of course you are a monopoly.  When you are a monopoly, you needn’t worry about retention since your customer is an indentured servant.

Manhattanites know a lot about monopolies or in some instances strong oligopolies.  My least favorite monopolist entity in NYC is Time Warner Cable.  Unfortunately, I’ve had to be tethered to them for the last 8 years.  TWC and I have a thoroughly dysfunctional and abusive relationship where the victim of the abuse is me.  And yet I still keep going back (monopoly).  If I had a choice, I’d have left some time ago for greener pastures but such is life as DirecTV, Dish and others are not viable options (monopoly).

My latest example of TWC’s abuse started this past Sunday when my home internet connection went down.  This is not ideal.  Here is a synopsis of my conversations with them.  (note:  somewhat lengthy)

Sunday afternoon

Fast forward to today, Thursday, July 17th.

4:50pm - Tech arrives cheery/happy with no mention of being late.

4:52pm

They gave me a free month of cable TV but that is pathetic compensation for the nearly 6 hours of my life I will never get back that have been wasted on TWC not to mention the followup calls I will likely make to get requisite credits.

There is not one element of this experience that endears me to TWC.  But given history, I’ll look forward to a repeat of this in about 6 months.  And the customer abuse continues…

Till next time.

Multiple choice question.

Times are tough and your organization is feeling the pinch.  What should you do?

1. Restructure & reorganize - The street likes cost cutting.  Let’s do that.
2. Blame it on headwinds - With high oil prices, credit issues, commodity prices spiking and the housing downturn, let’s just tell folks we’re facing headwinds and chalk up poor performance to that.
3. Talk to a corporate psychic - Since I’m not sure what is going to happen, let’s talk to someone who does.
4. Invest in growth - While everyone else is freaking out, let’s cut non-strategic expenses so we can invest more in growth (marketing, R&D, innovation, etc) and then we’ll be sitting pretty when things turn.

1 and 2 are pretty conventional and strikingly ineffective and/or signs of poor management.  4 makes a lot of sense.  And surprisingly 3 is becoming an increasingly popular option for corporations to call when they need some help.  Scary, huh?

As Newsweek reports, “When business people need a crystal ball, they turn to consultant Laura Day, the ‘intuitionist’.”  So I’m not sure what an intuitionist is.  It’s probably similar to calling a magician an illusionist, but given the hokey image of psychics, the rebranding makes sense.  It does scare me that “psychic advisers are crossing over into the world of business” as Newsweek reports.

Has it really come to this?   What happened to old fashioned good management, e.g., picking the right places to allocate resources, hiring the best people, eliminating unproductive complexity, etc? Guess we can add psychics to the list of corporate elixirs.

For those who are interested, Brilliont has just started a Tarot Card reading service that helps you determine which businesses and products you should invest in based on input from the spirits.  Contact us if interested.

CFO Magazine’s May 2008 print issue had a blurb entitled “Political Spending Boosts ROE?” (online the title is a bit better). Basically, 3 business school professors looked at political contributions over a 25-year period and found that an average annual contribution of $23,471 correlated with a $157 million boost in annual compounded returns.

While I’m sure presidential and congressional candidates love statistics like this, this is patently inane as a method to boost ROE. Correlation does not equal causation folks and no matter how impressive statistical window dressing is, it doesn’t mean that you do X action and will get Y result.

I read of another great correlation recently that said that fat people are stupid (I can’t make stuff like this up - look here).

But please be careful when you read about correlations. If you really believe that political spending does boost your company’s ROE, I wanted to share another study that was recently released that said giving money to Anand Sanwal will make you more attractive and add 20 years to your life. For those wanting to send checks, email me and I’ll send you my address.

I’d previously written that honesty is not always the best policy and mentioned the case of Dov Charney, CEO of American Apparel, who called his company’s CFO, Ken Cieply, a “complete loser”.

Well, it seems things soured after the comment with Mr. Cieply stepping down from the CFO post of American Apparel on Friday, May 23. Good luck to Dov in finding a new CFO.