Andrew Lisy's Blog

It's been a terrible month for user data security. Epsilon and Sony, both high-profile and data-rich companies, have been breached and revealed sensitive personal data to hackers. In Sony's case, the 77 million users affected weren't even notified that their names, addresses and potentially credit card data were compromised until six days after the attack. Many speculate that in the rush to get out new product features, Sony neglected to carefully think through their security model for protecting the valuable user data they they stored. Clearly, the current system of data storage and retrieval is broken. As today's New York Times reports, there is currently no U.S. federal law regulating data theft, penalties, and notification requirements, so states are left to determine their own protocols. Companies have little downside to collecting troves of information, since the penalties for losing it are unclear while the benefits to having it are potentially great. Meanwhile, consumers have little or no control over what happens to the increasing amount of personal information that they give or leave as they interact online and in person with well connected businesses.

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These are the Glengarry leads. And to you, they're gold. And you don't get them. Because to give them to you is just throwing them away. They're for closers.

A few weeks back, Groupon, everyone's favorite startup, offered a nationwide Gap coupon -- $25 for $50 at Gap. By the end of the day, Groupon/Gap had sold over 400,000 of the deals -- over $10 million in discounts to customers purchasing the offer and likely around a 75% discount to Gap stakeholders after Groupon's cut. Based on their latest 10-Q (June 2010), GAP Stores has a gross margin of 42.1% (this is averaged across Gap, Old Navy and Banana Republic). Therefore, every $50 Groupon they sell has a cost to them in the neighborhood of $29 (technically a bit less, since a few costs like rent are fixed but included in the gross margin calculation). After Groupon's cut (assuming 50%), Gap receives $12.50, leaving a shortfall of $16.50. For Gap to break even, every customer entering the store must therefore spend an additional $40 (.421*$40=$16.84). So with the numbers out of the way, how does Gap, or any business, make this deal worthwhile? They key is how much value a company is able to extract out of a customer once they're in the door.

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When an organization is still in the small, startup phase, it's not hard to have employees that each feel like they have a stake in the company and are willing to rally behind it. As the company grows, however, subsequent employees get distanced from management and from company success, so it is easier for them to treat the job less like their own undertaking, and more like a paycheck. Too many employees treating their work as just a job will end up affecting company culture and ultimately, product. Identifying and rewarding torchbearers helps to ensure that the cultural message is effectively conveyed and carried out at all ranks.

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Last week, while I was making sure my privacy settings were fined-tuned after reading all the buzz about
Google Buzz, I stumbled onto a neat feature of Google Accounts that I hadn't seen before. It's called Dashboard, and it's a great concept: most of the information that Google has accumulated about you is collected in one place, and you're given options to manage how you share it all. If you're like me, you have almost a dozen Google services -- Gmail, Picasa, Voice, Reader, Checkout, Alerts, Analytics, etc. Making sure that everything is set up correctly and not inadvertently exposed to the world is an otherwise painful task that is made easy with Dashboard. By scrolling down and glancing at the summaries of your various services, you can make sure that the pictures of Grandma's birthday party aren't visible to the world.

So, despite some other privacy setbacks (but hopefully they have all that worked out with Buzz), I think this is a leap forward for a company to expose the data they have about you and give you choices about what they do with it. Imagine the grocery store doing this with your preferred card or your phone company with the data they collect from your wireless bill (and location data they get from your GPS). It's great when consumers have the choice about how their information is used, and kudos to Google for getting this one right. They still have some work to do given how much info we end up giving them, but definitely a step in the right direction.

The most successful companies are the ones that work every day toward building what I call a "culture of ideas". Google is the prime example of this -- if you work at Google, you're encouraged to spend 20% of your work time on ideas that interest you. Think about this -- Google "loses" one day a week of productivity from their workers while they pursue projects that they find interesting! Dig a little deeper, however, and you'll find that it is anything but losing for Google. In fact,

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As legend has it, the humanities program at MIT was started by an MIT president who quipped "too many MIT graduates end up working for Harvard and Yale graduates". The thinking then, which remains to this day, is that engineering classes make a person narrowly focused whereas humanities classes help a student to see the full picture. Although I can see some truth in this, I would argue that a person is far better equipped to be a great manager having taken engineering than its "softer" alternatives.

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The New York Times today has an article about how YouTube is transforming the nightly news. As more high-quality, user-generated content is uploaded to YouTube by professional news networks, semi-professional hobbyists and amateur aspiring Ron Burgundys, the potential for customized, localized news delivered directly to your computer whenever you want it becomes a reality. Google, which owns YouTube, has already built out Google News to deliver fresh and personalized news that they've harvested from news sites around the web, and YouTube video news is a logical next step.

No doubt, this is great. However, with smaller city newspapers failing across the country and even the venerable Times in trouble, the long-term sustainability of content providers is a serious question. Right now, Google News and YouTube news videos are fueled largely by professional journalism companies that make their money selling advertisements in print and video media. However, as Google steps in and uses the content without providing an adequate revenue stream back to the content creators, the prospects for professional journalism look dim.

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I have a ton of photos that I've taken over the years, and managing them is a constant challenge. Part of the problem is simply the fact that there are so many great things you can do with digital photos -- view them online, make cool photobooks, create collages, order prints, send them to friends and family, etc. There are many different applications that are useful for photos, and while some of them come close to doing it all, there still isn't one solution that works for everything. 

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Of all the recent trends in online computing, the one most game-changing is the trend toward developing platforms and allowing users to build applications on top of them. The greatest example of a platform on the web is Facebook, which started as a simple social network, but by opening up to third party apps, has become the most important web development since Google. Platforms allow downstream developers to wield the entire power of the "parent" to create interesting and valuable applications without requiring massive resources to lay the groundwork for the basic functionality. The reason platforms are so important is that they allow developers to use massive technological leverage. To illustrate this point, lets use the example of Dropbox, an outstanding online backup application.

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I just got off the phone with 1-800-Flowers.com. I had tried to get flowers sent to the hospital yesterday, but they failed to deliver them, so I canceled the order. I called back today to try to re-enter the order with a different address, and finally gave up after speaking to several apathetic employees and getting left on permanent hold. The pivoting issue was a minor one related to a gift code, but their seeming unwillingness to even attempt to solve my problem ultimately caused me to go elsewhere.

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