Tuesday, May 17, 2011

Internet Driven Improvement of Human Nature

The Internet makes us better. I am serious. You say it makes us stupid? Yes, maybe we tend to be more stupid, our brains get slower and lazier, but anyway at that we become better. The Internet just bites off part of our personality, and we happen to lose not the best part of ourselves.

One of the main impacts of the Internet upon human being is that the Web denudes people of privacy, not totally, but substantially. If you are a hermit, and nobody knows you, and no one has ever contacted with you, then you may keep your privacy, otherwise your appearance in the Internet is just a matter of time. The Internet is open, and it is really populated, so as soon as you appear in it, your privacy begins shrinking like Balzac’s shagreen leather as more and more information about you is posted in the Web.

Each of us wants to look better than –as he/she knows – he/she* really is. It’s so human like! Our combined Internet-images that can be collected from social networks, blogs, forums, and dating sites lack quite a number of rather unpleasant or even ugly traits we own in our off-line lives.

It is well known nowadays that not only our emotions effect our facial expression, but vice versa facial expression effects our emotions: if you are in low spirits, keep smiling, and you are on the way to good mood. It is very similar in the Internet: A human being cannot pretend always, so keeping “good picture” of him for the Web he has to really change himself for better.

If we become better in the Internet, than maybe it is possible to change a business paradigm for a more human like? At least for the Internet business?

As we have found out, people in the Internet tend to be better than outside of it. It means in particular that while doing business in the Internet we do not need to protect ourselves like crazy. We already see definite signs of “another business model” in the Web: I mean freeware and shareware products. More and more often we see button “Donate” at the Web sites of software developers or service providers.

My idea is to move forward - software developer fully focuses on the following business model: he produces software product, makes it available for download without any limitations and places a “Pay” (not “Donate”!) button near “Download”. Details about payment are discussable, for instance there can be combinations of “Pay if you like my software or remove it from your computer” and “I price my software at $ XX, however you may pay as much as you think my software costs”. There should be one indispensable condition: A developer who does business this way shall not earn any money doing business in a common way. So, a visitor who downloads the developer’s software has a clear picture: If the visitor does not pay for a downloaded piece of software, the developer will not have enough money for his life.

Though I believe in humanity firmly, this model still looks rather odd and risky. Who would venture to begin doing business this way? I would suggest young entrepreneurs not burdened with family and with responsibilities to try such a model. Anyway, sooner or later this taraadin** business model will be widely used, and those in the first line usually get great benefits.


* Not to overload this text with he/she, his/her, etc. ratios, I will use just masculine grammar forms below. Feminine grammar forms are certainly meant as well.

** Taraadin (noun) : [tah-rah'den] [arabic] - a happy solution for everyone, a win-win compromise (used primarily in cases where the avoidance of loss of face is important).

Taraadin (Arabic) - Arabic has no word for "compromise" in the sense of reaching an arrangement via struggle and disagreement. But a much happier concept, taraadin, exists in Arabic. It implies a happy solution for everyone, an "I win, you win". It's a way of resolving a problem without anyone losing face.

Thursday, May 12, 2011

Business Model Change Required

Basically business is about exchanging something for something: grain for meet, food for clothes, trinkets for gold or for Manhattan, gold for banknotes, services for money, etc. Simplest possible way of organizing business is implemented in robbery: You save your life for giving to your business partner all valuable things you have with you at the moment you are arranged in this deal. It’s really simple: no printed agreement, no multipage requirements, no long lasting relationships – just a knife or a gun being exposed, and that’s it, deal is done. However, very few of us agree to be involved in such a business, so for centuries people have been designing and implementing more and more detailed and sophisticated means of regulating business relationships. All these rules and requirements about how business should be done, which documents should be singed between parties, what kind of reports should be provided to the state authorities, etc., are intended to make business relationships as safe as possible – safe from fraud, from inadequate behavior, from unjustified risks, etc.

Is it good or bad? It depends. If we compare it to robbery – current mechanisms look very good, but as soon as we recall Enron and Lehman Brothers cases, we understand that all these mechanisms are rather weak.

What’s wrong with rules and regulations? Maybe if we do them stricter and more sophisticated, Enron-like cases will be impossible? No, nobody can guarantee this.

The main obstacle to reshaping current business rules so that they become ideal is the nature of these rules. Let us recall that initially the rules appeared to develop robbery-like and warlike business relationships to make them wider applicable, safer and more effective. We see that from the very beginning business parties were considered enemies, and nothing has changed since then, all the rules still protect parties from each other and society from the parties. This struggling and defensive nature of business relationships prevents us from really improving them.

Times have changed; at least I believe they have. Now there is no need to totally beat down your business partner to gain more profit for yourself. Almost all of us understand now that it is much better to find consensus with business partners and with state authorities to ensure wealthy future for our families. In mathematical terms it means that, considering business relationships a game, we should move from zero-sum to positive-sum paradigm.

Can the Internet help us make steps in this direction? Fortunately yes, it can, and I’ll try to show it in my next post.

Friday, April 29, 2011

The power of “The”

I have never come across any information about how usage of definite article can affect market. At that, such an influence can sometimes become very, very efficient.

Before “The Social Network” movie became an Oscar-winner, there were a lot of social networks across the Internet. Now there exists “The Social Network” – Facebook.com, and when you hear ”social network”, your brain most likely helpfully provides you with a Facebook image. Great win for Facebook and great loss for other social networks, be they competitors of Facebook or not.

Another well-known example of how the definite article can be used, is the brilliant VW logo: “Das Auto”. After such a logo was registered by Volkswagen, all the other car manufacturers should have curtailed their businesses to start manufacturing something else, not cars.

Certainly, just registering your product as “The” product is not enough, first of all you definitely need to have a really good product. However, there are a lot of really good products, and not a few of them happen to become “The” products.

I’m trying to ponder on how to make a product worthy of “The” article.

As we have already noticed, just being good or even perfect does not guarantee to a product “The”-worthiness. Why? Can’t we think up a set of measurable (at least – partly measurable) must have parameters of “The” product? For example, length and height; or speed and fuel consumption; or number of dialog screens and buttons. Looks rather silly, doesn’t it? Unfortunately we cannot measure attraction. VW makes good cars, but they are not the best ones in the world. Nobody deceives himself about that; however “Das Auto” logo applied to VW production looks absolutely fine to us. We accept an image of VW car or of the Facebook social network as “The”-worthy. So, we operate with images rather than with real measurable products.

This way we enter the field of image-thinking (relative information can be found in the Web or in books, for instance: "Overcoming modernity: synchronicity and image-thinking" ). High quality advertising stuff impacts your subliminal consciousness rather than your brain, and it is exactly about effecting humans’ image-thinking.

So, what should we do to implant “The” image of our product into minds of our possible clients? Bad news is: Nobody knows. However, there exists good news also: At least we consider it an issue and we think about it.

To my shame, I have only one idea on the matter. The idea is simple and almost obvious: To make my clients accept “The”-image of my product, I first of all have to think out the concept of the product, to design the product, to develop, to market and to sell it with this “The”-image of the product in my head. Without my own dead certainty that my new product is “The”-worthy, there is no chance to convince somebody of the same.

Any other ideas?

Tuesday, February 1, 2011

(2be OR 2outsource) OR NOT (2be OR 2outsource). That is the question

Fortunately, most often the dilemma does not look like “To outsource or not to be”. However, it easily might sound like “To outsource or not to grow”, and that is a real issue.

Why are we so afraid to outsource software development? Okay, maybe not afraid, let’s say we are cautious and uneasy about outsourcing. Anyway, it does not really matter how we name our feelings that result in avoiding outsourcing. The avoidance matters. Is this avoidance justified or not? Is it right or wrong? Do we lose or win?

To be more specific, let us take a case. Let me be a company owner, and let’s assume my company needs a piece of software to be developed. I do not have available personnel to undertake the development of this software. Maybe I have developers in my staff but all of them are now busy working on other tasks, or maybe I do not have any developers at all, it’s not the point. The point is: I need software to be developed, and I do not have anybody in my staff to do it. What are the options? Obviously, there are two of them: to hire new developer(s) or to outsource this development. To choose a right option I could begin drawing a pros/cons table, but I would rather skip this step because all the pros and cons are evident. All in all my choice depends on how I plan to use the new piece of software:

  1. Either I plan this new software to be in the focus of my business (like I am Microsoft, and the piece of software is a new word processor);
  2. Or this software is not in the focus of my business, and I plan to concentrate on other things: on other software, or on absolutely different things like e-trade, or real estate, or building airplanes.

If I am in the situation #1, I would never outsource this development. If #2 is my situation, than I do not see any fundamental reasons not to outsource.

So, if given just in facts, without any emotions, the decision looks simple and obvious. Why is it not so obvious, when we add emotions, and what are these emotions? I would say the main emotion is fear. You may call it uneasiness, caution or even prudence, but basically it is just fear, just a fear of something new and untested. Not a lot, a usual human fear one experiences times and times during his/her life: while entering school, or joining the university, or attending for new job, or visiting countries different in language and culture, etc. We always are able to overcome this fear of new and untested, so let us do it in this case also.

May I suggest considering an analogous situation. Imagine a gentleman who has never ordered custom tailor made shirts. Always before his mother used to sew his shirts when he was a boy, and then he began buying his shirts in a store as he became older. And now this gentlemen needs to have perfect custom made shirt. I do not know why, maybe for his wedding ceremony, or he is a pianist and he is preparing for his upcoming first concert at Carnegie Hall. It does not matter why, but he understands that he needs a perfect shirt, and he has three options:

  • His mother is still alive, and he can ask her to sew a shirt for him;
  • He can go to a store and buy a best fitting shirt there;
  • He can order a custom made shirt.

First two options are well known and proven, however the gentleman is not sure that choosing one of them he will get the needed result: his mother is rather old, and she does not know much about modern fashion, about styles, trends and so on; as for a store, even in a good one you are not guaranteed to find a shirt that perfectly fits you, that is of a desired color, made of a desired fabric with desired buttons, etc. Thus our gentleman turns to custom made shirts. What about fear? Yes, he is a little bit scared: he has never ordered his shirts at a tailor workshop, and he is not sure whether they would do it perfectly, or maybe they will just waste his money; whether they will be on time for his wedding (concert); whether they will need some excessive boring control from his side. Yes there are concerns, so what? Do these concerns totally stop our gentleman from ordering his shirt? No, why should they! It is quite a standard situation, and he knows what to do: he uses references, word of mouth and generally available information to choose a “right” workshop, a workshop he can trust.

Yes, we’ve found it! Here it is this key word: TRUST. It is trust that makes it possible to overcome fear in such situations of uncertainty and lack of information.

Real confidence can be gained only through real experience, we all know this. So, the more shirts you order at a given workshop, the more experience you have, and this experience defines the level of trust. Moreover, each your next shirt is potentially better because you yourself become more and more experienced in the issues of what to pay attention at, how to manage the interim procedures of measurement and of trying your shirts on, etc.

What about software development outsourcing? Absolutely the same, no difference at all: we are frightened to start due to lack of confidence. So, we need some minimal initial level of trust enough to make a first step, and we can get this initial level by requesting and examining credentials, references, and proven success stories from potential vendors. For instance, as to my taste, I am very fond of a success story of long-term business relationships between my own company and our US customer Better World Books company. For more than 7 years already we are moving forward tohether on developing the Indaba project, and here are some footprints: http://inrecolan.com/ourexperience/successstories/124-1,


http://inrecolan.com/howwework/testimonialsnawards/107-1, http://inrecolan.com/newsnarticles/companynews/269-1 .

Certainly, ordering a piece of software is not absolutely the same as ordering a shirt, so in addition to obtain a definite level of confidence, we also need to pay attention to the specifics of software development. Before starting an outsourced software development, we have to carefully think out all the development processes and to prepare accordingly. It’s not a rocket science, it’s a usual organizational activity that must be done. We need to understand that dealing with outsourced development (either onshore or offshore, no difference) is not the same as dealing with on-site development. In short: we have to have a manager assigned from our side as well as a perfectly organized development and communication processes. To be more specific:

  • depending on the project, there can be used either RUP-like (MSF-like) fully documented methodology or Agile techniques;
  • no doubts that all the developed source code, as well as project data, sketches, drawings, manuals, documents, records, databases, programs, etc., is always owned by customer;
  • repository can be located either at the customer’s or at the vendor’s premises. As for development environment, in addition to development tools there should be utilized version control system and project management tools (for example, SVN and Redmine or maybe other ones: VSS, Mercurial, Git, Microsoft TFS, etc.);
  • reputable vendor should provide full cycle of analysis/development/testing procedures.

This way, after eliminating initial fears, you come to usual professional business relationships, and you are able to utilize software development outsourcing to grow your business.

Wednesday, March 17, 2010

Facing Crisis. Facing About in Business Behavior

What’s good in crisis, it helps us to get rid of unnecessary things, habits and rules. Let’s take an example of common life. For instance, I am used to visit a Starbucks once a day to sit there sipping a coffee and thinking about how to set the world to rights. Now imagine I’ve got a problem that requires all my attention. What about my everyday visits to Starbucks? No doubts, I would totally forget about them, being fully absorbed into solving current issues. Any losses? No, just acquisitions: more time for real life, less blood sugar, and besides readings of the scale become more pleasing. Very similar things happen with business behavior in crisis times: good chance to give up weird unnecessary habits in favor of more real productive work.

One of the questionable things in crisis times becomes competition in its traditional understanding. I have already mentioned strange advertising techniques we use in our battle against competitors. However, although they look really weird, these methods still are among the most harmless and neutral means of struggle. We all are used to consider business as a real battle, with its winners and losers, with acquisitions and toll, with gains and trophies. Thus, “competitor” becomes almost equal to “enemy”, and “win the competition” equates to “beat competitors” or “crush competitors”. The point is: our success is supposed to be success against somebody. Yes, it might be challenging, yes, it might be exciting, however I believe this violent against is a bit excessive even in “normal times”, to say nothing of “crisis times”. Aikido philosophy of harmony is much more natural to my mind: if somebody or something threatens your existence, be able to manage this threat without doing harm to a threatening party.

Human being is a really strange creature: for the most part, in normal calm times we are selfish, aggressive and focused on approbation, but in tough times we strangely become more sensitive, more helpful and more human. Some kind of compensation? Maybe it is; or just result of getting rid of unnecessary things alien to one's nature. Anyhow, my point is that this social shift been projected to business might be of great benefit in this time of crisis and uncertainty.

Businesses are able to help each other. It is undoubtedly true for non-competing businesses, however it remains true for companies working in the same field, i.e. for competitors. We all are aware about lack of clients and lack of projects. If you got to know about some bid for job not fitting your own needs, why not share this information? Possible concerns about strengthening your competitor are out of time, now it is just help. What is good about helping people: it is strongly symmetric relation. If you are helping somebody, others will be helping you. Not exactly as it is understood in math: those helping you might differ from those whom you help yourself, but in general it works.

Got other ideas about applying the humane shift to business? Let’s talk about it and put into practice what we find.

Laozi says in the famous Verse 38 of his Tao Te Ching:







Usually our relationships in business balance at the lowest level between DISORDER and RITUAL. Now we have a chance to upgrade them to MORALITY or, with a bit of luck, even to KINDNESS.

Wednesday, February 17, 2010

Facing Crisis 2. Rules of Promotion

In the context of this narrative it makes sense to divide lifecycle of any company into two types: normal periods of time and crisis time periods, these time spaces changing one another more and more frequently during recent decades.

Promoting its business within normal time periods, a company behaves as usual, and “as usual” means – according to some standard rules. From the very start let us disregard deviations (liars, cheaters, charlatans, etc.) and speak only about companies practicing conscientious approach to business. Thus, I am not discussing business ethics, let’s take it for granted.

We are so accustomed to the rules of promotion in regular business, that strangeness of these rules is not noticed. For instance, the rules make me saying here and there (the more frequent the better) that my company is the best one, that it beats all the competitors in all the main items, that we provide customers with unique services using our unique experience and expertise best available at the market. Quite recognizable, isn’t it? I bet it is. Do I tell the truth? No, certainly not. So, am I lying? I would answer equivocally: all the businesses do so, and I play according to the rules. We all have got accustomed to those rules, though a great number of them are really ridiculous. It is well known, for instance, that different companies while promoting competing products of the same niche use almost the same advertising texts. Moreover, these similar texts are rather stupid very often. The heroes of commercials urge us to speak, for example, to our hair or to dirt on a carpet (“Say NO to dandruff!”, “Say NO to stains!”), and nobody seems to be surprised. Why? – Because nobody really cares: such are the rules, and you are welcome to say any rubbish since nobody really listens to you, and texts in your commercials are just signs that your company exists and is ready to serve its clients.

Thus, a client automatically translates heaps of exaggerations and oddities of your promotional stuff into just a few simple and clear signs, and nothing is lost in this translation. In fact, the resulting signs just define the layer you belong to as a vendor. Every kind of business is naturally subdivided into a few layers each of them containing companies of almost equal qualities and capabilities. Layers differ from each other in “scale”: volume and level of provided services, popularity of brand, annual turnover, etc. So, signs coded in your promos show which layer you belong to. Client reads this information and then decides whether you seem a perfect representative of the layer or not. If yes – good for you, you are chosen! If no – you hardly has a chance to change the client’s mind.

Very simple. Then why do we use so much efforts and money to code our clear signs into bizarre commercials? Such are the rules, the rules for normal periods of time in business lifecycle. What about crisis time periods, should we comply to the same rules? I doubt we really have to. For more details see my next post.

Friday, February 12, 2010

Facing Crisis

One of the most popular subjects in the Web is still the world financial crisis. Quite understandable why: directly or indirectly it affects lives of billions of people. And, no doubt, we are among those billions. Saying “we” I now mean those involved in business, more precisely – into software development business and software development outsourcing.

We observe that the world around us really changes, and the question is, what is the real impact of these massive shifts onto software business?

According to Wikipedia, Seeger, Sellnow and Ulmer give four defining characteristics of crisis. Such an event:

  1. Is unexpected,
  2. Creates uncertainty,
  3. Is seen as a threat to important goals,
  4. Causes need for changes.

Okay, in our everyday life we meet quite a lot of unexpected difficulties that create uncertainty rather often, and we do not call such situations crises, just issues or problems. So, it seems to me that discussing crisis we should focus only on the items #3 and #4: threat to important goals and need for changes.

As for important goals that are threatened, the software business as any other business has the same goal – sustainability, and crisis jeopardizes continuous attainment of this goal. Threat to this goal motivates us to struggle, and here we approach to #4: need for changes.

So, what can we change and how should we do it to fit new reality? Is there anything specific for our business?

Basically, in this context I do not see any dramatic difference between software business and any other business of the – say – rear echelon, not affected by the crisis directly like mortgage companies. All of us suffer because our clients forget about us: they now have a lot of more valuable things to think about, and thus all the additional non first-aid services or products are not asked for.

It looks like clients just vanish. Our services are still of good quality, they are even cheaper than they were yesterday, but nobody shows a bit of desire to buy them. When McDonald’s found itself unable to sell beef-based Big Mac in India, they were in better situation, since Hindu people worshipping cow and thus hating Big Mac, still had money and were eager to buy something from the world-known brand. So, McDonald’s just changed beef for lamb (or for chicken), “Big Mac” for “Maharaja Mac, and – that’s it: clients purchase these new Macs and pay money for them. Somewhat different is now with our clients: they just do not take any notice of us.

What is regular market at non-crisis times? Crowd of clients and crowd of vendors. Clients are interested in being aware of the services and products they might get from the vendors, and in general, clients are ready to purchase some services and products. Vendors also behave in their usual manner jumping up and down on the spot, pushing competitors apart, raising their hands and screaming “Choose me, I obtain perfect skills and expertise!”, or “Choose me, I will do it cheaper!”, or “Choose me, I am guru in PM!”, or “Choose me, I am better educated!”, or whatever else. Now it’s all the same except that almost all clients are absorbed in their own thoughts and do not look at the crowd of vendors at all.

It turns out that habitual jumping, screaming and handing competitors off is not a good idea now. It does not work for this new crisis-affected market. Time to rethink models of behavior? My suggestions for it to follow later, in the next post.