Monthly Archive for July, 2010

My Ideas Love Having Sex

Published
by
Victor Nicollet
on July 30, 2010
in People
. 0 Comments

They’re like that. Blame them. Actually, blame Matt Ridley, who gave a rather interesting 2010 Ted talk titled When ideas have sex. It’s just over fifteen minutes of pure sexy goodness:

To stand on Matt’s shoulders, I would say that as time passes, we are becoming better at sharing and combining ideas.

We improved how the ideas are packaged: that’s our ability to turn complex systems into black boxes. Almost every single thing we use today is a stack of countless layers of abstraction. In the 300 milliseconds this article took to reach your computer, it was encoded as HTML, sent over the HTTP protocol (which enables you to ask for a piece of data and receive it), which in turn is built on top of the TCP protocol (which enables you to communicate data to someone else). And your TCP uses the underlying IP protocol (which enables you to communicate fixed-size data packets to someone else). And IP is just a protocol used by routers to talk to each other, but the actual transmission involves fiber-optic cables at the bottom of the Atlantic ocean, and relays, and error-checking. And there is not a single person on earth who can explain, in detail, what happens at all points during this transmission. Let alone understand the underlying physical properties of the cable and the routers and the processors in the routers and the transistors in those processors.

I know HTML, I kind-of-get HTTP, I understand the basic principles of TCP, I think I heard rumors about IP, and I honestly don’t know how data is actually transmitted over the ocean. Maybe there’s satellites?

We’re not standing on the shoulders of giants anymore. We’ve built a pyramid of midgets, with thousands of layers, and no one has any deep knowledge about more than one or two layers above and below.

And then, we improved how ideas are shared: that’s our ability to hear the ideas of thousands of people within the same week. Homo Erectus didn’t get to meet thousands of people in his entire life. The internet, with the ability for anyone to push their ideas forward for anyone to hear, is helping us.

First, we moved from the “no one talks to strangers” approach to the “one talks to the couple of strangers they meet every month” one when we started trading stuff in early history. Then, missionaries, books, radio and television finally introduced the “a few people speak to a lot of strangers” which, as long as those few people had great and original ideas, was even better. Now, we’re moving to “many people speak to many people“, which is less efficient as a whole for spreading ideas: there are more people talking, but you still only have 24 hours a day to listen to other people, which means the previously well-spread ideas get less audience. Where one church or one radio channel could be heard by everyone, now there are so many sources of information that none can get as many listeners as before.

On the other hand, this many-to-many universe means there’s a lot more potential for two ideas to meet. Instead of having idea A breed with ideas B, C, D; now you have pairings A-B, C-D and E-F. More pairings means more potential for an unexpectedly great outcome. As a society, we don’t need to help good ideas survive—we manage that quite well already. What we need is a way to help more good ideas emerge.

Related Posts

Getting It Right – Less Annoying Software

Published
by
Victor Nicollet
on July 29, 2010
in Strategy
. 4 Comments

If you’ve ever been a teacher, you know what a model pupil looks like. Most of the time, you have the bad pupils—maybe they can’t get it, or maybe they don’t want to get it, so they just annoy the hell out of you. Then, from time to time, you get that really brilliant child who understands everything you say. And points out your mistakes. Sale gosse. And then, there’s the model pupil: he’s smart enough to get along, but not too smart, and he’s polite and always willing trying to please you without getting in the way, and always does everything that’s expected of him just right.

Being a model pupil is at the same time a very obvious characteristic and a very subtle one, because it does not involve doing many things right as much as doing few things wrong. It may take a while to notice the lack of annoyance, the absence of sloppy solutions put together hastily, the missing thousand paper cuts you get when dealing with the non-model version of your pupil. But when you finally notice, you treasure it and admire it.

One such model pupil is Less Annoying Software. It’s an online tool for keeping track of your customers, potential customers, and any interaction you have with them when selling or supporting your product.

lessannoyingI swear, there must be some kind of secret checklist about how to get your online business just damn right that I never heard about. And these guys must have found it and followed it without skipping a single item (including the dreaded «gargle rusty nails» and «seek the holy grail twice» parts). The end result is a customer experience that’s smoother than the smoothest thing you can think of because it’s late and I’m out of clever analogies.

Send out a Clear Message

  • Pick one and own it [says Jason Cohen]. Less Annoying Software picked «Don’t be so annoying» and wrapped the entire company around that message. It’s pretty good news, since they’re going up against SalesForce, and not being annoying is a statement that’s more easily identified with than «Salesforce.com is the enterprise cloud-computing company»
  • Have a good name with an available domain name. Their name is basically a restatement of their core values. You can hear the name and understand that it’s software that’s less annoying, which is quite surprising given that the usual attributes of software are «runs on a computer», «is made by people» and «is annoying». Surprising enough to have me check their web site to determine what kind of software it is. And their domain name is available (admittedly, they didn’t manage to get this right – they should protect their name better).

Establish Online Presence

  • Have a blog. They do. Here. And it’s quite alive too : recently, there have been new posts almost every single day. Nothing like your average corporate blog that gets ten updates and then goes into several years of just existing.
  • Have a blog about something else than yourself. The point being that no one cares about Less Annoying Software enough to subscribe to their blog, or recommend their blog to their friends, or link to their blog from their own blog (I know, I’m special). Tyler King (one of the two founders) writes the blog, and dabbles in things that are relevant to the daily activities of his potential customers—small business owners overwhelmed by the complexity of doing business in the Web 2.0 era.
  • Have a blog with the latest in community-enabling features. You want people to participate. This part would take an entire article to explain correctly, but in short, you need comments (with several ways of logging in : OpenID, Facebook, Twitter and WordPress are great), trackbacks, the Facebook “Like” button, a “Retweet” button (as well as the various “Share” buttons for your typical bookmark sharing sites), an RSS Feed, a Twitter account and an e-mail subscription (I might get around to setting that one up too. One day.)
  • Sign up on blog directories. I found them through Technorati. Sure, signing up there only gets you a small trickle of visitors. But these visitors must be bloggers or near-bloggers, if they’re browsing the low-authority blogs on Technorati in search of a gem—people you want to attract.

Design your Landing Page appropriately

  • Tell people what you are right away. This way, they won’t go away. The Easy Online Customer Management line is a great start. Start organizing your business caught my eye too. It took me a short while to notice the grey text right above the video, though.
  • Provide a quick overview. For the passive viewers, a video does fine because it does not involve the same effort as reading text and doing the 1000-words-to-one-picture conversion in your head. The only issue with the video is that it sounds like a child’s voice, which is not reassuring (a false alarm : you can stalk Tyler King on LinkedIn to find out his actual age, if you want ;) ). Oh, and maybe a few screenshots or a quick scene of entering a contact would have been good too.
  • Provide a hands-on demo. This is great for the active viewers who want to try things out themselves. The Less Annoying Software registration is almost instantaneous – only four moderately invasive fields to fill. And you can even take the guided tour (an in-browser tutorial) without registering. Never ask people to provide you with a credit card when they’re trying your software out—most will recognize it for the filthy scheme that involves waiting for me to forget that you can charge my card, although I don’t use your software. Less Annoying Software clearly state No credit card required and I believe it’s a great move.
  • Customer references are always great. If you have many customers, or several high-profile customers, quote them (using their brand logo if possible). Since Less Annoying Software is pretty young, they don’t have that many customers yet, so a few quotes will do fine. Which reminds me that I should add a quotable sentence in here. So here it comes.

If you were planning on having lunch today, don’t. Spend those $10 on Less Annoying Software instead—the simplest and most elegant piece of customer management software that ever crossed paths with a business owner.

  • Detailed information should be readily available. If people want to dig deeper, don’t get in their way. People care about feature lists (check), pricing (check), who is behind this (check, but close), and contact information (check). In fact, the contact information on Less Annoying Software includes an e-mail, a phone number and a contact form, just like I love them. Glee!

So, is it worth it?

It does, if you’re the right person. I’ll just quote their web site on this:

So if you’re a small business owner, a freelancer, a consultant, or a member of any other small business, Less Annoying Software is for you. We know that you don’t have an I.T. department, so we handle all the setup and hosting for you. We know you’ve got better things to do than worry about your software, so we make things as easy as possible to let you focus on your core business.

I love the software. I won’t use it because I’m an I.T. department all by myself (and a quite efficient one—I always pick up the phone when I call myself), and because I’m very fluent with vTiger, an open source CRM package (for reasons that will become obvious later this year, so stay tuned). But I can recognize its benefits—it covers almost all my typical CRM needs, except maybe for setting reminders at specific times of the day (I can use Google Calendar for that, though).

The software itself was obviously written by someone familiar with modern development techniques. They used FamFamFam icons (a sure sign of someone who has been around on the web development scene), jQuery and jQuery UI, and the server runs PHP. The JavaScript code is pretty clean (although it denotes a lack of knowledge about closures). I’d say the application was written by a competent software developer (I’d estimate it to about three months of work for the application itself).

The web application itself gets an YSlow grade of D, and I have loading times of nearly 3 seconds on most pages, but all of this would be solved by simply 1° adding ETags to the icons and 2° grouping and gzipping together the JavaScript. On the other hand, I’m in France, so your local performance might be higher.

Final words: use it.

Related Posts

StarCraft II : were we wrong all along?

Published
by
Victor Nicollet
on July 28, 2010
in Strategy
. 5 Comments

The original StarCraft game and its Brood War expansion pack were both released in 1998. A possible sequel, StarCraft : Ghost, was announced in 2002 and indefinitely postponed in 2006. StarCraft II itself was announced in 2007 [YouTube] and was released yesterday [YouTube] twelve years after the first episode.

starcraft2_logo

And it worked. Blizzard managed to keep the world buzzing about a product in development for three years. Starcraft II did not reach the top spot in the pre-order charts: it reached the top two spots (#1 for the game and #2 for the Collector’s Edition).

Apple reliably used the same tactic ever since Steve Jobs returned; their earlier products gather a large following, the releases of major features on existing products go dormant for a while, and a strong announcement with flashy teasers is made to build up buzz for several months until a new product, the first of its kind, is finally released.

The same happens in the music industry where early previews of upcoming albums of well-known bands help build interest; this also happens in the movie industry but aside from sequels it’s rare for two movies to share the same cast and director, so the «they did it right before» crowd-gathering effect is not as strong. The reliance on flashy teasers a while before the release to generate buzz remains.

It’s easy to get sequel marketing wrong, though, said Victor, slightly miffed that the top rank on Google for “sequel marketing” does not explain anything about marketing sequels.

First, the entire success of sequel marketing relies on having a gathered fan base that listens to what you say about the original product because it’s passionate about it, and ready to carry that passion over to your new product. The single worst thing you can do is alienate those followers. You have to be cautious. You have to do marketing without that crowd feeling that it’s being marketed to, which is hard. Video game studio 2K went a long way to achieve this when marketing the sequel to their award-winning Bioshock:

Those fans are very sensitive to being marketed to, he stressed, so they created the “Something in the Sea” Web site, which told bits and pieces of a story about the fictional character Mark Meltzer, whose daughter was kidnapped and taken to Rapture.

They showed some of Meltzer’s mail on the latter site, and the first person to send in a letter to his real-life address received back a letter from the character asking for help with deciphering some clues. That prompted an avalanche of mail, Bass said, comparing it to a scene from Miracle on 34th Street.

Genius, I say.

Another problem you can encounter when leveraging your brand is that, while a brand that is too small will have a lot of trouble gathering followers, a brand that is too large will have a lot of trouble pushing out a clear message. The size of the brand being defined as the number of products it covers: Facebook, Blizzard and even Apple are small brands, because they only have a few products: Facebook has three (the main web site, the open graph API, and the advertising business), Blizzard has four (WarCraft, StarCraft, World of Warcraft and Diablo), Apple has four (iPod, iPhone, iPad, and Macs).

Microsoft is such a huge brand (Windows, Office, Visual Studio, Silverlight, Sharepoint Server, Internet Explorer, Azure, Hotmail, Windows Live, DirectX, XNA, X-Box…) that every important announcement about a new Microsoft product is drowned in the sea of announcements for other product lines—effectively forcing Microsoft to use its Microsoft brand to ensure recognition and trust, and rely on the individual product brands to push new iterations (Visual Studio 2010). Hence the trouble of pushing Azure, which falls somewhat outside of the existing brand lines, and a reliance on the early users of the technology (the 2010 partner on the Microsoft Azure platform is Lokad, a young french company founded by Joannès Vermorel, a fellow Normalien).

Adobe has the same issues as Microsoft on a smaller scale (Flash, Photoshop, Illustrator, Acrobat, Reader, Flex, LiveCycle…) and introduces new product lines by inserting them into its extensive creativity pipeline (using Flex instead of Silverlight makes a lot more sense if your company is built around the Adobe Creativity Suite, just like using Silverlight instead of Flex is better if your company is built around Visual Studio, .NET and IIS). It’s not so much eager expectation (I can’t wait for the new Adobe product) as a slippery slope (I guess using Flex makes sense in our situation).

The key is to launch a product that benefits from the name of previous products but does not compete with them. Apple does this by concentrating on the release of new product lines. Sure, the iPhone 4 is good and a lot of iPhone users care about it, but the emphasis was clearly placed on the nearly simultaneous release of the iPad. Blizzard does this by being in the video game business (same franchise, new story, new gameplay, and the fun of discovery) and switching between four successful product lines to leave plenty of time between iterations (12 years between SC and SCII, 6 years between WCII and WC3, 5 years between Diablo and Diablo II).

So, Adobe and Microsoft are stuck in a mire where they do not have the communication leverage to release new product lines like Apple does, and they’re expected to release new versions of their software too often to keep the excitement alive. It’s interesting to see the names of Visual C++ iterations through the ages: they were names Visual C++ N.0 from version 1.0 to version 6.0 (over the course of only five years – given the current release rates, StarCraft 6 should be expected in early 2058), then they noticed the glamour of N.0 was dwindling and released Visual C++ .NET, confusing an entire generation of novice C++ programmers into thinking it did not support non-.NET C++. Since then, they have resorted to a yearly naming scheme like the Office series because having FooBar 2003 in the year 2010 makes you want to upgrade in a way that no Version 10.0 will.

In short:

  • Apple: communicates on new product lines, quietly releases new versions of existing product lines. New product lines garner market attention and improve sales.
  • Blizzard: relies on existing product lines, rarely releases new versions. Infrequent releases and franchise branding garner market attention and improve sales.
  • Microsoft: communicates equally on new product lines and frequently released new versions of existing product lines. Market attention is too diluted for buzz or excitement to grow significantly.

Back to the point. In the web era, online software does not really have versions. You can’t make people pay to use version 2.0 of your web site because everyone expects you to upgrade your web site to version 2.0 for free for everyone. This is fine if you’re Microsoft or Adobe; the subscription-based model means you don’t have to try as hard when releasing new versions, because there’s no version 1.0 competing against your new 2.0 : your subscribers pay you either way. And the Apple strategy becomes even stronger, since there is no longer a constant buzz of new versions being released—all the marketing can concentrate on pushing forward the new product lines, like Facebook did for their Open Graph API.

However, the Blizzard strategy is completely destroyed by this approach. By delivering new updates transparently on a weekly basis, we’re cut off from the possibility of releasing a grandiose new 2.0 version of our software and cashing on the sequel effect.

Your thoughts on this? If Facebook were to release an FB II that you would have to pay for, how would you feel? If you own an online business, how do you handle this?

Unrelated Posts (that you might enjoy anyway)

The Evil Overlord Returns

Published
by
Victor Nicollet
on July 27, 2010
in Random
. 8 Comments

It’s time for another contest. There are no prizes this time, and the general concept is a bit different. If you wish to participate, please write a comment with your answer—they will not be posted until the contest ends on August 5, 2010. Comments containing questions will be published as soon as I can, along with an appropriate answer.

The Problem

Having failed to find the correct warehouse in the previous installment, the Evil Overlord is back with a new plan : he found out that a lamp post on a street corner in Arkansas is somehow imbued with mystical powers that could be harnessed to enslave mankind. Cue maniacal laughter.

However, Empress Bing, from Alpha Centauri, knows about the lamp post too. And she wishes to use it for her own mad schemes. The two masterminds cannot fight each other over the lamp post, because it would attract attention. And neither is willing to let go.

So they decide to randomly pick which one of them gets the lamp post.

You have been selected by the two masterminds to help pick one of them at random. They do not trust you, so you will have to actually prove that the process used to do the picking guarantees that each of them had a 50% chance to be picked. Neither is willing to reveal their location, so you can only communicate through an encrypted text channel — you can’t send them fair coins, dice or quantum states.

The Question

Propose a random selection process and prove why it’s fair. Remember that the two masterminds do not trust anything you say unless it’s purely deductive or they can verify it themselves.

 

Fwoosh!

Published
by
Victor Nicollet
on July 26, 2010
in People
. 4 Comments

I have a fascination with flamethrowers. I’m lazy and I love fire, so anything that can let me burn things without having to stand up will get two thumbs up from me. One of the nice things about World War II is that they actually used flamethrowers on the battlefield.

Remember, back in the 1940s. Guns were scary because you knew they could kill you. Your brain is telling you that people die because of guns, so you’re scared. Artillery and mines are about the same, except for the russian roulette aspect: you know you can be blown to shreds, but that’s your brain talking.

But a flamethrower? You’re scared because you see that it can kill you. It’s your animal instincts. Animals are not afraid of guns, but they are afraid of flamethrowers. Nothing spells death like a fiery orange cloud.

“Yes, you love flamethrowers. Now get to the point”

The point. Right. What did flamethrowers actually not do in World War II ?

Work.

They didn’t work. They’re big, scary, macho killing machines, shinier than an iPhone 4 on your birthday, and they just didn’t work.

Turns out, they have a shorter range than almost every single gun in existence, and they look like giant flashing “shoot me from a distance” signs whenever you use them.

Has this every happened to you? To have that great idea, the one that looks like a real winner, the one that’s sure to work and make you millions? And a short while later, you find out that reality disagrees with your analysis?

Do you have any tips or techniques to avoid spending too much time on a flamethrower idea? Or how to recycle it once it goes bad, so that all the time you spent on it will not be wasted? Or how to actually distort reality into accepting your idea as the great world-changing concept you believe it should be?

Please tell me.

Related Posts Barbecues

Turning recursion into loops

Published
by
Victor Nicollet
on July 23, 2010
in Functional
. 2 Comments

This message is a rehash of an earlier post on Stack Overflow. It’s self-sufficient enough to be featured here, and I like to keep my content where I can see it ;) If you’re not a computer genius, you can wait until next Monday for an article that can be read by standard issue humans.

The premise is to take a standard tree traversal function (which is a recursive algorithm) and implement it without recursion. The recursive version is:

traverse(node):
  if node != None do:
    traverse(node.left)
    print node.value
    traverse(node.right)
  endif

Try doing it on your own, then start reading the solution below once your brain is fried.

The solution

This is a clear case of tail recursion, so you can easily turn it into a while-loop.

traverse(node):
  while node != None do:
    traverse(node.left)
    print node.value
    node = node.right
  endwhile

You’re left with a recursive call. What the recursive call does is push a new context on the stack, run the code from the beginning, then retrieve the context and keep doing what it was doing. So, you create a stack for storage, and a loop that determines, on every iteration, whether we’re in a “first run” situation (non-null node) or a “returning” situation (null node, non-empty stack) and runs the appropriate code:

traverse(node):
  stack = []
  while !empty(stack) || node != None do:
    if node != None do: // this is a normal call, recurse
      push(stack,node)
      node = node.left
    else // we're returning: pop and print the current node
      node = pop(stack)
      print node.value
      node = node.right
    endif
  endwhile

The hard thing to grasp is the “return” part: you have to determine, in your loop, whether the code you’re running is in the “entering the function” situation or in the “returning from a call” situation, and you will have an if/else chain with as many cases as you have non-terminal recursions in your code.

In this specific situation, we’re using the node to keep information about the situation. Another way would be to store that in the stack itself (just like a computer does for recursion). With that technique, the code is less optimal, but easier to follow

traverse(node):
  // entry:
  if node == NULL do return
  traverse(node.left)
  // after-left-traversal:
  print node.value
  traverse(node.right)

traverse(node):
   stack = [node,'entry']
   while !empty(stack) do:
     [node,state] = pop(stack)
     switch state:
       case 'entry':
         if node == None do: break // return
         push(stack,[node,'after-left-traversal']) // store return address
         push(stack,[node.left,'entry']) // recursive call
         break
       case 'after-left-traversal':
         print node.value;
         // tail call : no return address
         push(stack,[node.right,'entry']) // recursive call
      end
    endwhile

What was that SPAM thing, again?

Published
by
Victor Nicollet
on July 22, 2010
in Random
. 5 Comments

I found out this small new blog called Email Marketing City. No comments or trackbacks yet. No “subscriber count” gadget, probably because there are no subscribers yet. I feel like I’m Christopher Colombus discovering new virgin lands for his queen.

Anyway, since I’m a big hater of Email Marketing (especially when I’m on the receiving side), I went straight to “What exactly is Email Marketing” and found the following:

Of course, there are some disadvantages associated with email marketing.

  • SPAM – If your company constantly sends emails over and over again, some people might consider it spam and either personally boycott your company or file a civil complaint.  Obviously, this is not good for any company.

[Victor bangs his head on his desk. Repeatedly. Screaming bloody murder all the time.]

2mza8b8

SPAM has nothing to do with sending email repeatedly. Sure, if you send more mails, it only makes the situation worse. But should you smuggle even a single e-mail into my inbox without my consent, then it’s SPAM, and will be treated as such—with a flamethrower (ah, 2001 goodness).

Now, don’t get the wrong idea : Email Marketing City is quite well-written and provides useful information, especially if you need to do email marketing. In fact, even if you never intend to do email marketing, you should still go over there and read some articles to see what it’s like on the other side of the fence.

Still, they managed through sheer bad luck to poke me in the way nobody should ever poke me. So, back to my frothing-at-the-mouth angry rant…

—

I treat my e-mail as a communication tool. If you want to communicate with me, you can send me an e-mail. No, really, I mean it: just click on victor@nicollet.net and send me that e-mail you’ve been burning to write about how much you hate SPAM ever since it killed your family and your dog.

But communicating with me is not the same as communicating to me. If you send me something, it’s either a response to something I asked for, or something I can respond to.

Rule 1: never send me something with a no-reply@something address, unless I explicitly asked for it.

Seriously, you’re sending me e-mail that I didn’t ask for, but you won’t allow me to send you e-mail in return? An e-mail that spells out “We don’t care about you, just listen to us and buy our stuff” is precisely what you shouldn’t be sending.

—

Sometimes, you will ask me for my e-mail. That’s fine: I usually give it out to people when I need to hear from them. But you should make it extremely clear what you will use that e-mail for. A good example would be the Motley Fool, a financial information website or something like that. They offered to send me a report if I gave them my e-mail, which I did. Since June 25, 2009, I have received 174 different pieces of e-mail from the Motley Fool, and 173 of these were not the report I asked for.

Rule 2: if I give you my e-mail address because I want you to send me X, don’t use it to send me Y.

And, of course, should you give me the choice of receiving more mail from you…

Rule 3: if you have a “don’t send me informational mailings” checkbox and I uncheck it, respect my decision.

Again, an e-mail that spells out “We know you don’t want to receive this, but we sent it anyway because we only care about the money” is not a good message. And I don’t care if you’re Amazon-dot-freaking-com: if this happens even once, my business will be taken elsewhere.

—

The biggest mistake you can make with my address is to hand it out to someone else. There is no worse violation of my trust.

The second biggest mistake you can make is to send me something if you have obtained my address from someone else.

As a simple test, I signed up for a contest on planet 49, a business that revolves around collecting personal information about the contestants and selling their contact information. At no point the sequence did I actually accept to receive promotional information (which, by law, is opt-in on all French web sites). Then I watched as 1194 pieces of promotional e-mail ended up in my inbox from companies like UPS, Honda, easyJet, HSBC and Orange Businnes [sic]. All these companies are now blacklisted: I will only purchase stuff from them as a last resort.

Rule 4: should you ever get your hands on my e-mail, ask yourself whether the mail you send me will be received with feelings of anger and betrayal.

—

I’ve had the opportunity (for lack of a better word) to work for businesses that willingly ignored the first three rules above. I once asked why they’d break rule one—don’t they want to hear back from their customers?

I still remember the senior consultant’s answer on that one…

If we use a real address, it will be spammed by people angry about the mail we send them.

Related (but less angry) Posts

(A silly theory about) Wealth Distribution

Published
by
Victor Nicollet
on July 21, 2010
in Strategy
. 2 Comments

Had there been any newspapers left, their headlines would read «Apocalypse Strikes! Only twenty survivors found on planet.» But there are no newspapers: whatever you need the nineteen others to know, you can actually go and tell them face-to-face.

So, you start creating a society from scratch. You need food, clothes, shelter, sex (let’s not deny it), and an internet connection to check my blog regularly. Trust me, I have a T1 connection in my backyard bunker. Anyway. Intially, everyone is entitled a fair share of resources, but over time people work to provide themselves and others with the basic necessities and trade.

Every day, you go out and spend a little part of your wealth. If you’re rich, you might spend only 4%, but there’s always minimum amount you need to spend to survive, even if you’re dirt poor. Oh, and you only have time to trade with four other people, because otherwise there’s no time for you to actually work on surviving the apocalypse.

This is what the situation looks like: (RSS readers, please visit the page if you don’t see the applet below)

Every line in the histogram represents the wealth amassed by a given person, and below every line is the number of people that trade with that person. Play with it a little bit: the customer graph is randomly generated every time you click the button.

Done? Good. There are several lessons here:

If nobody gives you money, you go bankrupt

This one is pretty obvious. Every time there’s someone with no «customers» they end up running out of money.

You can go along with only a few customers

This one is a little bit more surprising. If you give money to four people, and only two people give you money, how can you survive?

Actually, it’s pretty obvious: if you’re a wage slave right now, you have only one person giving you money, but you spend money on groceries, several utilities, taxes… all that matters is that whatever amount you get from other people is larger than what you spend.

In the simulation, most two-income survivors end up bankrupt because their two customers are poor and therefore don’t spend enough. But sometimes, they manage to latch onto high-spending survivors and earn a decent living as a consequence.

More customers does not imply more wealth

Again, in the simulation, it’s not uncommon to see five-customer survivors become more wealthy than six-customer survivors. In fact, some very lucky three-customer surviors can earn as much as unlucky six-customer survivors. I’ve seen a 5-customer beat an 8-customer once.

This is quite logical: I would rather have one rich customer who pays me €1000 every day, than ten poor customers who only pay me €10 a day.

I guess the main lesson here is, when the Apocalypse comes, make sure you buy my stuff.

Anyway, the above model is extremely simple, and does not take into account charity, families, debt, growth or the fact that there’s a minimum price to buy certain products. Do you think any of these would change the results significantly? I’m really interested in the answer, so please drop by the comments section below.

Related Surviving Posts

Anti-Selection

Published
by
Victor Nicollet
on July 20, 2010
in Strategy
. 1 Comment

Today, you’re a car insurance salesman. You set up shop in a small town with only two car owners. The first one, Charles, is an excellent driver. He has owned a single well-maintained car for 20 years and still has his driver’s license from 25 years ago. Never had an accident. Never had a speeding ticket. The second one, Boris, owns the same car as Charles, because he crashed the previous one into a tree two months ago. He’s had ten accidents so far and lost his license twice.

car-accident

One day, a man comes to buy car insurance. You have no idea whether he is Charles or Boris. What price do you offer?

Tough luck. If the man is Boris and you offer a price that’s fair for Charles, he will gladly accept and collect the insurance when he has an accident next month. A loss for you. If the man is Charles and you offer a price that’s fair for Boris, then he will flatly refuse. A loss for you again.

So, you get a choice between having only Boris as a customer, or having both Charles and Boris as customers but losing money to Boris’ reckless driving.

This is anti-selection : the measure that lets you reduce your losses (increase the cost of insurance) drives the profitable customers away. It’s a pervasive issue for insurance companies, and is the main reason why health insurances require a complete check-up before they let you sign anything : they need to know whether you’re Charles or Boris before they can decide on a price.

So what? Why should you care about the problems of the insurance industry?

You should care because this happens in other businesses as well. Almost every business has profitable customers and non-profitable customers, and should take great care to eliminate the latter to only keep the former.

YouTube is a great example of avoiding anti-selection. Back when it was created, there were several services for storing images and videos online, and all of them had similar concerns about bandwidth and storage space. The standard solution was to cap the bandwidth of individual images: even today, ImageShack will stop displaying an image after it has exceeded its bandwith limit.

YouTube went without any bandwidth limits. It turns out, when you have a public video-sharing website, you want people to know about you, and a video with a million views is a far better way of getting attention than a video with ten views. Had they added bandwidth limits for videos, it would have prevented the popular videos from creating awareness for YouTube, while leaving the least popular videos alone. That’s anti-selection at work : reducing bandwidth costs by eliminating those videos that are the most profitable to them on the long term.

Another classic anti-selection pattern is customer support. Some customers just cost you too much because of the time they spend calling you or returning your products. It’s tempting to hide behind an offshore support center designed to shield you from your customers (I know, it sounds silly).

One month ago, I signed up for a promotional offer: pay €3.15 per month to get two monthly magazines and a nice sign-up gift. They sent me the magazines for the first month, but did not send me the gift or charge my card. No magazines came for the second month.

On their website, the order is still “pending”. I had no idea why, so I went for the “contact” menu entry, which sent me to some kind of FAQ (first mistake). There, I picked “What is the status of my order?” which opened a contact form that was not pre-filled with the contact information of my account (second mistake). I reluctantly filled in the form, noticed there was no “question” field, and waited. The next day, I received an e-mail telling me where I could find my order status back on their web site (third mistake).

So, I’m basically a good customer willing to hand them money every month and their brain-dead customer service forbids me to do so. Nice job, Prisma Presse.

Look at Zappos: they allow anyone to return their shoes for free, for a full refund, no questions asked, up to one year after buying them. They’re begging Boris to abuse the hell out of their return policy! But making Charles happy ultimately brings higher profits than making sure Boris stays away from them. Not to mention the attention they get for being so extreme.

Ask yourself this simple question: who are your Charles customers? Not necessarily those who bring in the most dough, but those who actually help you grow your business through feedback or sponsoring of other customers or saying nice things about you on social media… and who are your Boris customers? Are there so many of them that you need to take action?

Related Posts

July 14, 2010

Published
by
Victor Nicollet
on July 15, 2010
in Random
. 0 Comments

The fourteenth of July is the French national holiday, celebrating the Fête de la Fédération on July 14, 1790.

On the morning of that day, a military parade is held in Paris, consisting of at least 4000 troops on foot, in addition to the cavalry, the armored divisions, the air force and the support personnel.

And there’s a rehearsal the previous day.

This parade is a one-day event that costs 20 man-years.

Remember back in 2003, when they said the Red Had 7.1 Linux distribution was the equivalent of 8000 man-years? If they took all the troops that participate in the military parade, and taught them how to code, and they spent the day writing code instead of walking around in lockstep, it would take them 400 days of collective work to replicate the functionality in that distribution.

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