BlogSat

The return to New York meant I started catching on my magazine reading this weekend. The first thing that caught my eye was this- Warren Buffett's Berkeshire Hathaway just bought Lubrizol . - Fine, I thought. It probably is a castle, and has a moat . - They bought it for $9.7B. What the?? What the hell does this company do?? Here's Lubrizol 's Wikipedia blurb. .. a provider of specialty chemicals for the transportation, industrial and consumer markets. These products include additives for engine oils and other transportation-related fluids, additives for industrial lubricants and additives for gasoline and diesel fuel. So they're in the business of optimizing the performance of a fuel and/or lubricant. And they were just valued (by Buffett - so someone very smart thinks its can be worth even more) for more than either Twitter or Groupon or both combined (give or take a billion or two; or a rumor or three...whatever your prefer.) I like these intermittent reminders -...

If you're in the Internet space, or care about it, you've likely heard about Digital Sky Technologies , and almost certainly know about Tencent . If you're based in the USA, my guess is its less likely that you've heard of Naspers . That's why this great article in the Economist was an eye-opener. These companies aren't just growing and building an incredible investment portfolio, but are very closely aligned. Here's the article's summary on these firms: "The websites of Digital Sky Technologies (DST) account for more than 70% of page-views on the Russian-language internet. Naspers is Africa’s biggest media group, both offline and online. And Tencent is China’s largest internet company by market capitalisation—and the third-largest in the world." This is great, but here's where things get interesting: "...they are financially intertwined. Naspers owns part of mail.ru and was an early investor in Tencent, of which it now holds 35%. I...

LinkedIn recently did a pretty slick integration with Twitter ... its one of the smartest things they've done in a while. I'm a great example of the kind of user that LinkedIn and possibly Twitter were hoping for. It has me more engaged with my LinkedIn connections and I even had a few people on LinkedIn reach out to me that hadn't in ages because of something I'd tweeted. The integration seems to working to get more LinkedIn users engaged with the site even when they're not looking for a business connection. I think that's the risk of the integration as well though. To grow in terms of users and page views, LinkedIn has added a lot (their app platform, this integration etc.) More than most social networking sites, LinkedIn has to lot to lose because of noise, but I can see why the product team there had no choice to move in this direction. Back in the good old days, LinkedIn was where you had professional contacts (the pitch was Resume 2.0) and Facebook was ...

Woohoo, example of how competition benefits consumers, but also why competing on price is dangerous (especially when you're sitting on piles of cash!) C'mon Walmart! Lower the price one more time! :) From this SeekingAlpha article First blow: (10/14 - in the am) - Wal-mart announces they will offer 10 pre-release hard covers for $10. Walmart.com CEO Raul Vazquez is quoted as saying: "If there's going to be a 'Wal-Mart of the Web', it is going to be Walmart.com. Our goal is to be the biggest and most visited retail Web site." in this WSJ piece. Second blow: (10/14 pm ) - Amazon counters Wal-mart with $10 on each books and of course free shipping for Prime/$25 super saver. Third blow: (10/15 in the am) - Wal-mart lowers prices again to $9 Fourth blow: (10/15 hours later) - Amazon matches the $9 price target.

Below is a brilliant internal presentation from, by and for the folks at Netflix . There's so, so much good stuff on employee rentention and empowerment, managing people, and corporate culture and processes that I just don't want to pick anything out. Culture Read it when you have the chance. Personally, there's a lot I think that Google does right, and a lot that we could do better. More than that, as Google grows I think there's a lot for us (and any company that is growing rapidly) to chew on and make sure we don't get wrong.

Amazon bought Zappos ... Apparently this is a good move. Zappos' interesting hiring practices were pretty interesting for me to read about. There's a Bezos video that I liked, and a letter from the Zappos CEO to his team that I liked even more. However, it was a great section at the end of the letter (pasted below), that sparked off a thought in my head. It surprising because its naturally funny, and consistent with the writer's style. I'd heard a remark at work a little earlier in the week about having a sense of "whimsy" as you designed products and you go about your work. I think its done well really rarely, and as companies become larger, humor and whimsy (in communication and in product design) becomes either discouraged or something attempted to be done my committee (and hence not that funny.) ----------------------------- Q: I'm a business/financial reporter. Can you talk like a banker and use fancy-sounding language that we can print in a b...

There's a great two-part series on ReadWriteWeb on the economics behind the book business. Part 1 Part 2 The author goes over both the current economics and how some future business models might evolve. Its a good read. Most interesting to me was the following information on the distribution of revenue on a book sale (gleaned from this site. ) Some caveats on the analysis done. The first piece seems to have been done on the distribution of costs, but assuming that carries over to the distribution of revenues and profits there's some interesting numbers here: The current distribution on books: Author: 10% (This in fact ranges between 8% and 15%, depending on the author's clout -- e.g. Stephen King does better than most. If the author has an agent, the agent's cut comes out of this. It is indeed tough for new authors.) Publisher: 30% (This ranges between 25% and 32%, again depending on the author's clout -- e.g. their percentage is less with Stephen King because t...

Another reminder that companies don't make decisions. People do... and people are human... and hence idiots. Remember from The Dilbert Principle ,  " Everyone is an idiot, not just the people with low SAT scores. The only differences among us is that we're idiots about different things at different times. No matter how smart you are, you spend much of your day being an idiot. " A couple of days ago, I ended up having a conversation identical to one that I had a few weeks earlier with another person. I can't get into the details and so will abstract. This person was in the position to make a decision; an important one at that... and his decision finally was based on the presentation that he would be able to give to his bosses, instead of the actual results of what he'd do. Just to be clear, this person ...thankfully...didn't work at Google. I've heard the same problem a million times the brand manager who decides to buy advertising in X place instead of...

Most products/services either  save you time help you kill it Its been a way I've amused myself and thought it was pretty obivous. But someone got a kick out of it when I explained it to them a couple of days ago, so here goes...  The argument is broad enough so that with some mental and verbal gymnastics it can be made to apply to anything. Think about it: almost any product or business you use either helps you do things more efficiently or helps you kill time. Cars: save you time TV: helps you kill it Google: saves you time YouTube: helps you kill it In essence, you're job is one of these things: its that simple: you're saving people time or helping them kill it (which is just as important, because life is hard!:)) Of course, its no fun unless you unnecessarily complicate the thought experiment!   Everything that helps you save time can be used to help you waste it Cars:  save you time, except when you're driving to the movies to waste it Google: saves you time, e...

Yet more proof that the Sony-promoted Blu-ray format is winning over HD-DVD . I love seeing stuff like this, mainly because how wrong it proves "consensus." When the DVD format wars started a few years ago, almost everyone I knew was so confident while saying that Sony was going to lose this war, and that Blu-ray was Betamax repeated . I didn't know enough about the area to have a strong opinion one way or the other, but figured that all the blogs, magazines, B-School case studies, etc. couldn't be wrong. But as a friend of mine recently said, "....ecosystems are so complicated, value-chains so complex and different companies execute at such different level and with so much variance that its stupid to be confident in your predictions." I mean even up to a 4 years ago, I heard enough people say: "Its stupid to try to make money from web applications with advertising as the only strategy." Yeah! :)

Making Decisions: I remember my Dad telling me a long, long time ago how much he preferred bosses/executives that took quick decisions, versus ones that dithered. Over the years, I've found that idea drilled into my head repeatedly by managers, professors and from personal observation. It especially resonates now. The most successful organizations are those that are likely to empower the most people to make decisions, and hire people that want to make them. In general, the more decisions that are made the better (i.e. 1 00 quick decisions made with 90 good ones and 10 bad ones are better than just 10 good carefully thought-out good decisions .) Making a lot of decisions is only good, if people are willing to admit that they will sometimes make bad ones and leave room to correct those.

I figured that as I try to navigate my way through the business/management/engineering world, a regular-ish series on what I think works and what doesn't would be interesting....probably more for me to write, than for you to read. :) Hence, installment one of "Busy with Buzzwords" Over-Communicate: This word was mentioned more than a couple of times last week, and a few incidents at work made me realize its value, and its definitely something I need to do more of. I think of it as sharing information, accomplishments and credit with more people than just the strictly necessary inviting feedback and scrutiny from everyone who you think might be able to help (even if you know it'll slow you down) never naturally assuming that people have read either emails you sent out, documents your wrote or presentations you gave, but subtly confirming it. Its a tough line to tread. There's definitely such a thing as over-over-communicating. Overdoing it can actually result i...

Wow, just wow. Why on earth does anyone (except for the investment bankers involved) think this will end well? I really, really feel for Yahoo. I've always thought that it was a pretty great company (great doesn't imply at revenue-generation btw :)) , and would've always been seen as such if it weren't compared to Google. I interviewed at both companies at different points, and somehow I just have a hard time imagining a merger working well culturally, and on the strategy aspect of this....don't even get me started! Yikes! Update: I'd published this a couple of seconds after I heard the news, but took it down when it seemed liked the prudent thing for any Googler to do. Putting it back after being told no one could take anything I said vaguely seriously.

Back from a personally important, eventful and happy vacation. :) But I'll re-start bloggin with a rant! I was really annoyed by the sheer incompetence of the marketing team of a certain large consumer electronics company at CES. Imagine a high-profile presentation, thousands of people watching and you demo your latest technology. The demo is well-choreographed with your CEO on stage and two "users" of your technology talking about how the technology has improved their lives. One "user" shows a video of her infant daughter, talks about her hometown, how the technology is so impressive and has made her world a better place. The "users" are really polished and demo is very clearly canned, but still impressive. Applause all around. If it had ended there, I'd have been fine with it. Except that it didn't. A couple of hours later, I strolled over to the CES booth of the same company to show a demo of one of their technologies to a colleague. I imagi...

A few days ago, I had to explain the difference between 2 technologies to someone. His response at the end was "Isn't that just a little bit better than the first technology though? Why would anyone find that all that useful? No one would be willing to spend more money on that?" I couldn't help feeling that while he had a point, but he was also missing it all together. Isn't innovation often just figuring out how to make things just a little bit better/little bit easier. That "little bit" is sometimes enough (think DVRs replacing the old VCRs leading to the increase in people time-shifting though it was always possible before; think Apple making listening to music easier by intergrating the entire stack though finding music online and putting it on MP3 players was always possible before.) Of course, many times it just isn't enough and thats why so many products don't really catch fire. But the lesson is kinda obvious, if you're short of ideas...

They say "big companies can't move as fast as startups." I've always kinda accepted that, nodding my head whenever "they" said it. Anecdotal evidence and logic seemed to suggest it was true. Also, I suppose being someone who'd only ever been around a startup or two (until now), I was only too happy to agree with the premise. :) But I never really understood exactly why...until now. When people say this about larger companies they seem imply something about the people that work there. They seem to believe that working in a large company seems to make them employees (or attract employees that are) complacent; less hungry... There is no way I'd believe that about anyone at the current place of work. Most people around me are ridiculously, even frighteningly smart, driven and motivated. But now I do have an understanding ....or at least a theory on why despite that, bigger companies will always be at a disadvantage at the pure speed game. I think it bo...

This kind of digressing post is exactly why my productivity can be sub-optimal sometimes. :) Last week, I ended up buying a gift card. For a couple of seconds, the thought crossed my mind, why does a gift card worth $50 cost exactly $50? The convenience of getting a gift card and the flexibility that it gave the recipient was worth something to me and I might be willing to pay a little extra for it. The marginal cost of printing the card (though minimal) did cost the store something, and there was the fixed cost of the infrastructure for the payments. Shouldn't stores then charge more for their gift cards? But then I decided the store could probably charge considerably lesser than $50 for the $50 gift card, but pricing it at $50 still made sense! The best part was the there seem to be so many different reasons for them being able to charge less than the face value of a gift card for it. These were the ones I could come up with right away. Are there any more? Time value of money: ...

As someone who will get a Finance concentration from the Chicago GSB , I've done my fair share of assignments/projects involving valuing companies. ( Note: I'm not claiming expertise, merely experience :)) A number of factors make this complicated ( hence the need to actually learn it, and the excuse to still struggle with it ) but essentially the value of a company is the expected value of its future cash flows. Acquisitions by companies are a simple way to understand not just what a company is valued at, but also a sense of how much revenue it might generate in the future, in a sense how "big" a part of the economy it currently is. I tend to be interested in, and get excited by, tech and media stuff, and tend to focus on reading about these sectors. I've always known at the back of my head that I'm ignoring other sectors that may in fact be much larger, and today was a stark reminder of that. So I've been thinking for the last couple of days: "Goog...