Exactly How Old IS Dirt?

Here is a party game to play for my birthday. Yesterday my age was a prime number. Now you can create an equation for my new age using the numbers 2, 3, and 4.

Hint 1: I am not 432; not even in dog years.

Hint 2: I am not 14 (3x4+2); though some previous posts may have you wondering...

Leave your guess in the comments; the lower the number the higher my praise of your acumen will be! ;-)

Meanwhile, here is a party favor for you in the spirit of the day. Enjoy!

Photo courtesy of foundphotoslj

posted by Mike at 6:19 AM 10 comments


Who Will Be the Li and Fung of IT Outsourcing?

Have you ever heard of Li and Fung? Are you wearing clothes right now? If so, it's a pretty good bet that one or more pieces came through Li and Fung's supply chain. In the worldwide garment business, Li and Fung is the 800 lb gorilla, and they are light-years ahead of their competitors.

A few years back I did some work with a major clothing company here in the states, and learned about the garment industry supply chain. A couple generations ago the U.S. had a thriving garment manufacturing industry. But that was virtually wiped out by manufacturers seeking cheaper labor in other countries. China and India were the first countries to benefit from these moves, but many other countries in southeast asia, the middle east, and even the Carribean basin have textile manufacturing plants. At first, many of the major garment companies tried a vertical integration approach, where they owned all the pieces of the supply chain. This ultimately proved uncompetitive, since new factories with superior cost and capability were constantly springing up.

Enter Li and Fung, who made the following pitch to the garment companies:
We have thousands of partners in our supply chain that can meet any level of quality you desire. You give us the specs for a manufacturing run, and we'll find the best suppliers at the best price and guarantee the quality of the merchandise. Even better, if you are flexible with the designs (e.g., button shape), we will work with our suppliers to create more economical alternatives for your consideration. Even including our fee, the price will be lower than you will get in-house or from anyone else.
And they consistently delivered on their promise. The China Apprentice has a must read profile on the firm. Excerpt:
So what gives L&F their advantage in supply chain management? The Li and Fung Research Center explains that the company has seven principles forming the pillars of supply chain management. The research group says the key is that the “supply chain must be flexible, agile, cost-effective and responsive. Nowadays it is more common for companies to collaborate in a global context where each of them focuses on its core competency and outsource the rest.” L&F has taken its core competency to the extreme by perfecting the science (and art) of outsourcing. The company follows the following principles to assure it stays at the leading edge of supply chain management theory and practice.
• Be customer-centric and market demand driven;
• Focus on one’s core competency and outsource non-core activities, in order to develop a positioning in the supply chain;
• Develop a close, risk- and profit-sharing relationship with business partners;
• Design, implement, evaluate and continuously improve the work flow, physical flow, information flow and cash flow in the supply chain;
• Adopt information technology to optimize the operation of the supply chain;
• Shorten production lead time and delivery cycles; and
• Lower costs in sourcing, warehousing and transportation

Read the whole thing!

So what does this have to do with I.T. outsourcing? The New York Times today ran a story titled Outsourcing Works, So India Is Exporting Jobs. It turns out that the same pattern of labor arbitrage that hit the garment industry decades ago is repeating itself in the I.T. outsourcing industry. And it looks like the major Indian outsourcing firms are leading the way. Today they are taking the approach of building their own centers in various geographies. Who will be the first to take the Li and Fung approach, and when? From the NYT article, it looks like Infosys Technologies is leading the current trend, but no major player seems to be focusing on the partnering model yet. Maybe Li and Fung should get into outsourcing....

Photo of silk factory in Uzbekistan courtesy of upyernoz at Flickr

posted by Mike at 12:24 PM 4 comments


Fireside Chat with Lisa Haneberg

What do a mastodon hunter and a manager have in common? Chat with Mike DeWitt.

Last week I had the distinct pleasure of speaking with author and management consultant Lisa Haneberg as part of her Fireside Chat series of podcasts. We talked about business acumen in the context of liver transplant clinics and, yes, mastodon hunting, among other things. Luckily for me, Lisa is an excellent interviewer and was able to tease some cogent thoughts out of me! I would say it was definitely a productively irreverent conversation. Join us for a few laughs a thought-provoking discussion of how to build business acumen (we disturbingly came to the conclusion that it wasn't by listening to podcasts and reading blogs).

You can listen via the Web Player, or download the mp3 version for offline listening. I'd love to hear any feedback you have.

Thanks again, Lisa, for a great conversation!

posted by Mike at 7:21 AM 0 comments


Archimedes and Web 2.0

2,000 years ago Archimedes famously quipped “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world”. Theoretically, he was right, but practically it remains impossible to this day. Where would the fulcrum rest? What material would we use to create a lever that stretched to another star system?

Many social networking applications suffer from the same “theoretically great, but practically daunting” problem. In these applications, the fulcrum is a critical mass of participants eager and ready to contribute, and the lever is the compelling experience offered by the system (a combination of content and functionality).

Neighborhoods, from Point2 Technologies, is one such application. Point2’s NLS is a prominent nationwide listing service for real estate professionals. In 2006 they undertook the effort to organize a database of neighborhoods that included not just cities and zip codes, but actual subdivision names. This database allows a Neighborhoods user to specify their city and state/province and see a listing of all Facebook users in their neighborhood (this is a great feature). You can also see people in adjoining neighborhoods, your entire city, and other neighborhoods and cities as well!

For each neighborhood, there is a listing of neighbors and friends, as well as areas to for descriptions, photos, a wall and the NLS listings for the neighborhood. This would allow for people thinking about moving to an area to get information about it, and for residents to keep in touch in a single network. That all makes sense, right?

But there’s a problem. Two, actually. The fulcrum and the lever. Right now there are about 25,000 Neighbors on the app. I live in Scottsdale, AZ; population 242,000. You can see from the view above, the total number of neighbors is 62. There are 214 neighborhoods listed under Scottsdale in Neighborhoods. That’s 4 neighborhoods per neighbor. You will also notice in the picture that there is no information whatsoever filled in about our city. Hmm. Let’s try Phoenix, population: 1.5 million. One ‘About’ and two wall items from a single neighbor on the same day in early August. Chicago (with 3668 neighbors)? One wall enty. If I’m not here for the real estate listings, there’s nothing going on.

Who exactly is supposed to be that “critical mass” of early users? I’m pretty sure Point2 figured that it would be their larger core audience, real estate folks, but they are conspicuous in their absence. Realtors are missing out on a real opportunity to seed the content for the neighborhoods they work.

Which brings us to the second problem. As mentioned above, there’s virtually no content out in the system today. And even if there were content, an About box, a general Wall, and a block of photos doesn’t seem to make for a thriving community. Finding neighbors and then creating a regular Facebook group would offer us all a lot more.

I can imagine an application like this with 500,000 members as part of thriving communities sharing all kinds of information in several media – the web2.0 idyll. I just can’t imagine that application being Neighborhoods given its current status. No fulcrum; no lever.

I wrote this review for FaceReviews.com, but I must admit to being influenced by my old friend Mike Feinstein (VC par excellence), and to Clayton Christensen.

In the original FaceReviews post, I didn't offer suggestions for how to fix the problem. What would you do?

The answer was blatantly obvious to me, and to Bryan.

So let's role play. You're a company that has created a competitor to the almighty Multiple Listing Service (MLS). You've fought them in the courts. You've fought them in the minds of real estate agents. And you've thrived.

One day one of your developers walks into the Marketing department and says: "You know, Facebook is really hot right now and we could pound out a Facebook app in a weekend if you provided the Amp and pizza."

Yeah, baby!

And they all lived happily ever after, except for one detail. Social networks require a network of people wanting to network. How many people are going to sit down at their computer and ask "I wonder if there are any facebook applications that can connect me to my neighbors?"

Zero. Okay, eight. But that's not critical mass, even in one neighborhood.

So if you're Point2's now-embarrassed marketing exec, what should you do?

Ask yourself the following series of questions:

1) Who would benefit from making this a vibrant network (and who do I have a strong relationship with)?

Um. Real estate agents. How would they benefit? Oh, let's say that Agent X puts up a bunch of great information on the neighborhood and its goings-on, demonstrating their superior knowledge of what's going on. Do you think that will generate any extra business for Agent X?

Is the pope Catholic?

2) Do real estate agents have networks that might benefit from such an app?

Are the first two intials of the person buried in Grant's Tomb 'U.S.'?

3) Do real estate agents want to build interactive networks?

Will the sun rise in the east tomorrow?

4) Will real estate agents pay to grow their networks?

Point2 knows the answer to that question. So why aren't they screaming at their premium agents to jump all over this opportunity?

Why aren't you? It's wide open...

posted by Mike at 9:56 PM 3 comments


Spooky Action Predicts - A Bit of Sports Prognostication

A friend of mine from Milwaukee writes:
OK, prediction time:

1) What will happen with NL Central – name the top three teams at the end of the season.
2) How will the Badgers do this year?
3) This isn’t even worth asking – how will the Pack do?

It's almost time for another installment of "Wrath of the Football Gods", isn't it?

Geez, try asking me for stock tips next time. That'd be easier.

NL Central - top three teams at the end of the season will be the top three today. The other three are nowhere near as strong. As for the final standings, based on schedule the Cubs should be able to cruise to the title. They have one series with the Cards, but other than that it's a steady diet of NL Central bottom-feeders and Carmelite nuns. Somebody up there likes Lou Piniella! The Cards have a tougher schedule, because they're at AZ this weekend (in a tight pennant race with SD), and have to play the Cubs and Brewers. The Brewers' schedule is no easier. The last homestand vs. St. Louis and then San Diego will either break them or galvanize them for a great playoff run! My gut reaction is that the Cubs will take the division and that the second place team in the NL West will get the wild card.

I watched the Badger game on Saturday. They will be able to score on everybody. The defense looked porous at times; that will be the big concern. They should cruise until November, when they get Ohio State and Michigan back-to-back, but how long has it been since they played in November with that much on the line? I believe they will win the Big Ten. Whether they end up in Glendale or Pasadena, who knows? Even if they slip somewhere during the regular season, they'll finish ranked in the top ten and their bowl game will be played in 2008.

Your last question is the true head scratcher. After watching the third quarter of last night's game, I don't think it much matters who wins the NFC North, or the NFC title itself. The real super bowl will be the AFC Championship game! That said, the NFC North is ALWAYS up for grabs. Bob McGinn's article where he quotes non-NFC-North scouts resonates with me. Except for how good everyone thinks the Bears are. I think the Pack's thrashing of the Bears at the end of the season was no fluke. Everyone thinks the Bears' defense is so good, but the Packers and Colts spanked them pretty good, and New Orleans should have as well. I think last night's game showed just how weak the Saints really are - and they're one of the prime contenders for the NFC title! Unfortunately, I can't see how Ted Thompson could have done LESS to help the Packers improve! He does seem hell-bent on making Favre do it all by himself. The scheduling gods were not kind to the Pack, either. September could be as unkind as last year, but I believe that the Packers will end the season at 10-6 or 9-7. Week 2 vs. the Giants will tell the story. Unfortunately for the good folks of Wisconsin, the curse is still in force because Harlan is still at the helm; no playoff victories again this season, though they might get to play in the postseason.

So there you have it. Call your bookie and get those favorable early rates!

posted by Mike at 6:50 AM 4 comments


The Key to 'The Secret' in One Picture

Via Lileks:

posted by Mike at 7:11 AM 1 comments