Sunday, September 30, 2007

Gov. Jeb Bush wants $75-million for start-ups

Here's someone serious about stimulating entrepreneurship and other knowlege based activities in his state.

Being first to market isn't the only thing, and maybe not even the most important thing

A week or so ago someone said to me, "We have to be first to market, because others are already working on this idea." That was a flashback to the late 1990s, during the hay day of the technology bubble, when you couldn't have a conversation without someone breathlessly saying they would make a gazillion dollars because they had a first mover advantage.

NetBank in Atlanta was one of the first online banking companies. They were first to market. Recently they were closed after intervention from the US Office of Thrift Supervision and the Federal Deposit Insurance Corporation.

Being first to market is important. But it's not the only thing. And it may not be the most important thing.

I had a client at KPMG back in the 1980s, TelMan, that was one of the first companies to begin selling long distance services after AT&T was deregulated. (That's where Leighton Cubbage cut his teeth, for those of you who know Leighton.) But TelMan leadership knew that their first mover advantage wasn't a sustainable advantage, so they designed the company from the beginning to sell. They started in 1984, went public in 1986, and sold to SouthernNet in 1986 for a couple of hundred million dollars. There you go.

To have a sustainable advantage, like a Swamp Fox you need to be creating an entirely new value chain targeted at customers not well served by the market leaders. The are several signs to look for that you are hiking on the right trail.

The target customers probably are on the low end of an existing market, so it looks too small and unprofitable for the market leader to bother with. Think about how Bentonville looked from the top of the Sears Tower in Chicago in the late 1960s, when Sears was focused on affluent, suburban markets where the end of growth couldn't be seen. Do it right like Sam Walton did, and when you finally hit the radar screen of the market leader you have a lean, mean channel developed serving what now everyone understands is a large market. The market leader goes from looking potent and agile to slow and lumbering. Happens all the time. Ask Sears and Lord Cornwallis.

Another sign that you are creating distinctive value is that your competition is an indirect alternative. We've discussed here before about how Henry Ford competed with faster horses, not other manufacturers of expensive luxury cars, and Southwest Airlines competed with people driving their cars, not other airlines with expensive hub systems.

The final sign that you're creating a sustainable advantage is that you are empowering people in your value chain to generate revenue that weren't before. Angioplasty wasn't commercialized by heart surgeons. They saw it as an inferior clinical (and oh by the way less profitable) alternative to open heart surgery. Cardiologists enthusiastically commercialized angioplasty because it was an entirely new revenue stream to them (and of course in their professional opinion it was a superior solution in most cases to heart surgery.)

NetBank was a first mover in the world of online banking a decade ago. They didn't create distinctive value that market leaders couldn't ultimately co-opt. And they didn't have the insight to sell out when they were hot and could.

So now they have the ignominious fate of TechCrunch formally announcing them part of their Deadpool.

If you repeat a myth often enough, it is still a myth

Recently the 2006 National Assessment of Education Progress was released, and the public education establishment has been promoting that in the fourth and eighth grades South Carolina is a little below average, not last, in the country.

But they also insist on propagating the myth that, as was reported in the Greenville News, "NAEP scores are often considered a far more accurate representation of student achievement than the SAT. State-by-state comparisons on the SAT are unfair because of the large disparity in the number of students who take the test in each state."

That SC's SAT scores are low because a large number of students take the test is the myth that just won't go away because the public education establishment doesn't want it to go away. The reality is, the better educated the typical SC student’s parents are, the further his SAT scores trail his peers nationally.

That myths like this take on a life of their own and impact public perceptions regardless of what the facts actually are is the reason I reacted so strongly last week to the perception that the Riley Institute study reported, "South Carolinians across the state largely agree about how to improve our schools." The last election for Superintendent of Education was decided by a few hundred votes between opponents who had radically different views for fixing education. That there is a strong consensus about what to do to fix public education just isn't so.

We need recognize that some progress has been made in public education in recent years. We also need to recognize that there are deep and fundamental problems that incremental changes won't fix.

Saturday, September 29, 2007

The perks of being in the "media": I wonder if there will be a tasting

Media Access to Regional Moonshine Investigation Training

On Thursday, Sept. 27, 2007, the media will be granted access to a unique moonshine investigations training. The seemingly lost and historical crime of making and distributing untaxed liquor continues to exist in the southeast region of the United States. Although law enforcement priorities have shifted throughout the years, "bootleggers" typically profit by operating outside of this regulated industry, posing significant health risks to those who consume their product. As a result, a new generation of law enforcement officials must be trained on the techniques of identifying, seizing and destroying the tools of the moonshine trade.

WHO: Georgia Department of Revenue (Alcohol and Tobacco Division), the Rabun County Sheriff's Office are co-sponsors of the training, with instructors from ATF and the U.S. Department of Treasury Alcohol and Tobacco Tax and Trade Bureau.

WHAT: Media will have access to instructors, agency representatives and the on-site moonshine training venue (to include a tour and demonstration of an operating, backwoods "still," tactical raid training and the live destruction of a working still by use of explosives).

WHEN: Thursday, Sept. 27, 2007 at 9:30 a.m.

WHERE: The Rabun County Detention Center, 175 Boen Creek Road, Tiger, GA 30576. There will be a staging area for the media at the detention center, where they will be escorted to the training site.

URGENT: You must confirm attendance today, Sept. 26, and also confirm directions to ensure timely arrival. Please be advised that cell phone coverage at venue may not be available for all service providers.

CONTACT: Marc Jackson of the Bureau of Alcohol, Tobacco, Firearms and Explosives, +1-404-886-8096.

/PRNewswire-USNewswire -- Sept. 26/

First Call Analyst:
FCMN Contact:

Source: Bureau of Alcohol, Tobacco, Firearms and Explosives

Web Site:

Tuesday, September 25, 2007

What does "accountable to the public" mean?

In recent weeks, Secretary Jim Rex has toured the state promoting innovation in public education, but he specifically opposes schools that are not "accountable to the public, which is a cornerstone of the public school system.”

"Accountable to the public" doesn't mean accountable to parents and students, or even employers who ultimately employ the public schools' product, but it means being accountable to arbitrary standards imposed by the Legislature and the SC Department of Education. That will ensure "innovative" schools will have to look pretty much like public schools today.

That's what happens anytime the market leader can define what "innovation" looks like. If I had asked Bi Lo if I could build an Earth Fare store across the street, Bi Lo would have assured me that they had an organic isle to serve those customers, the market couldn't support an organic store, and an organic store would only take resources away from improving the existing grocery store in the area. Because being "accountable to the public" meant being accountable to customers, we built the stores anyway and most were very successful. Go figure. How could Bi Lo have been so wrong?

The wagons are being circled around the status quo. The Riley Institute's recent survey is being touted by the SC Department of Education as finding a "broad base support for improving South Carolina’s public education system." At least in one case, a public school superintendent told the Riley Institute that we need to "implode the current system at its core and start over." Secretary Rex didn't hear voices like those “in concluding, "These results are reassuring. They confirm what we’ve been saying all along. There is consensus in South Carolina for improving public education and moving our schools forward"

They real problem with true innovation in education is that schools outside the existing system will take resources away from improving the existing public schools. I hope Jim Rex and his team are successful, but to get the quantum leap in improvement in education we need they need to think less like Bi Lo and more like Earth Fare.

Riley Institute reports a consensus: Was I part of the same study?

The Riley Institute promoted the results of a recent study of public education:

Researchers were surprised not only at the high degree of agreement on what should be done but also at the passion for education reform expressed by the superintendents, principals, teachers, school board members, students, parents and business leaders who participated.
Here's how I reported at the time on my experience in a group session of the Riley Institute project.

Saturday I was in a seminar organized by Furman's Richard Riley Institute, and a superintendent of a school district in South Carolina said we need to "implode the current system at its core and start over." This wasn't some radical Republican politician running for office who knows nothing about education. This was a public school district superintendent in the trenches every day trying to educate students. In the room were six other public school teachers and one superintendent, and they all agreed. There is tremendous, pent up entrepreneurial energy in principals and teachers in South Carolina who understand what the problems are and desperately want to take ownership of and accountability for creative solutions.
I ws stunned to read that the Riley Institute reported there was a strong consensus. Maybe I participated in a different study than they reported on.

Mustard N’ Relish: Tart, and Definitely Chunky

You have to appreciate a firm with a Swamp Foxy name like Mustard N’ Relish Marketing Communications.

One of the principals describes himself as "tart, and definitely chunky." I resemble that remark :)

Wednesday, September 12, 2007

Google giving away $10 million for plug-in hybrids

RechargeIT is a initiative that aims to reduce CO2 emissions, cut oil use and stabilize the electrical grid by accelerating the adoption of plug-in hybrid electric vehicles and vehicle-to-grid technology.

I know, some of you don't believe in the long tail of knowledge...

but for the rest of us, this is pretty cool.

Wikipedia had its 2 millionth English language article written.

Hydrogen, smydrogen

Try saltwater

Courtesy of ET@OC

Monday, September 10, 2007

Dilbert Does Web 2.0

Go here to see full size comic.

Today's Dilbert Comic
OK, maybe only my friends at Orange Coat even came close to thinking this is funny.

Sunday, September 09, 2007

Oh my! Motorcycles?

If you have not been to the BMW Performance Center in Spartanburg, you need to go. It is a blast. They recently announced that in addition to cars, they now have a BMW Motorcycle Rider Training program.

I had to smile when I read that the program has "exercises including braking technique." The last time I was there, the instructor told me to accelerate an M Series BMW in the straight away and then put the brake to the floor and trust the vehicle. Well of course I didn't. Where else can you put a $120,000 vehicle in the tall grass, then get out and hand them the keys and go home!

But motorcycles? Whew. It costs $650 per day for participants renting a BMW motorcycle. But that's not the cost I'm worried about. How long is it going to take the heal? I'm not as young as I used to be :-)

There need to be more programs like this supporting innovation in education

Innovation in education is our only really hope for the quantum leap in improvement that we need. There needs to be more programs like this that promote the best in innovative thinking in education.

Here's the ING Unsung Heroes(R) Awards Program Grand Prize Winner:
The technology used in “Write On!” is designed to give the children leverage to express their creativity. Each student will learn that they are bigger than their circumstances and that their ideas have the power to create wealth.
Now that's powerful.