DEC: company long gone, but Corporate Philosophy very much alive

DEC Corporate Philosophy

I worked for Digital Equipment for 17 years. Having done my A-Level project implementing a subset of the Joss language interpreter in PDP-8 PAL-III assembler at Grammar School, I left on a Friday and started at Digital the very next Monday. I ended up running their UK Software Products Group, the source of around one third of the UK subsidiaries profits.

This was the place where you were trusted “to do the right thing” and “to seek forgiveness, not permission”. We even had a Field Service Engineer in Welwyn told to get a part over from Galway Manufacturing to fix a fault in a customers downed DECsystem-10 as quickly as possible, “whatever it takes” said his manager. He chartered a plane, and when his boss found out, he just quoted the “seek forgiveness” line – which was an edict we had from Jean-Claude Peterschmitt, who ran the whole of Europe for the Company.

My Division also had a written policy that said we should always look after current customers before starting to chase new ones. Not to mention that the Salesfolks were not commissioned, so their honesty shone through and we got far more than our fair share of evangelistic senior customers.

Above all, we were taught to throw responsibility to our teams, and to help them grow. And to value honesty above all else, with no retribution if anything screwed up. If it did, it was probably my fault along the way anyway, so a good learning experience.

These traits last with me to this day. I’ve had many fantastic employees, and have pride in what virtually all of them have achieved – be they from my time at Digital, Metrologie, Demon Internet, BT, Trafficmaster, CCD or Computacenter.

Introduction to Bitcoin

BitCoin Coin

Bitcoin appears in the news often these days. I’ve found two resources that give an excellent overview of what it’s all about.

The Book

One is a self published Kindle book by David Seaman (not the ex-Arsenal goalkeeper) that – when I bought it – was 27 pages long and £2.51 to buy. As an aside, isn’t it great that publishing economics are such that you can buy a concise book with no useless “filler” to unnecessarily increase it’s page count? The book is:

A Talk

Alternatively, if you prefer to listen – particularly if you have a long train or car journey, I recommend one of the recent John Gruber Podcasts, entitled “Mind of a Gambler”. That’s not in itself a reference to Bitcoin, as he and guest Glenn Fleishman spent the first segment of the show talking about the game of Jeopardy, and then the best strategy when playing BlackJack. That included the findings of an IBM statistician (proven by getting a computer to play millions of games under different player strategies) that you should fold your hand as soon as you get two cards adding up to 12 or above, ie: not to twist if there’s any chance that the next card you twist could make you exceed 21. While it looks odd to quit so early to other human players, it is in fact the strategy that maximises your income on the table. But I digress.

The whole John Gruber “The Talk Show – Mind of a Gambler” (Show number 74) podcast can found at: http://www.muleradio.net/thetalkshow/74/. His guest is Glenn Fleishman, who has written articles for several publications, including The Economist, on the subject of BitCoin. The whole Podcast is 2 hours 24 minutes long, but the part pertinent to Bitcoin is between 26:28 to 1:55:22 – so about 90 minutes long.

Alternatively, if you prefer talks with pertinent slides as a subject expert goes along, there is a good YouTube video that summarised Bitcoin to students at Stanford University, given by one of their Chinese Alumni, Bobby C Lee. You can watch the presentation here; it’s under 75 minutes long and is an excellent summary.

Open Minded Governments (Seriously!)

It’s been really surprising to find how open minded some government institutions are about Bitcoin and other similar “Crypto” currencies – particularly in the USA and in China. A total polar opposite to the norms of the sensationalist tabloid press (who, at this time, are unusually quiet).

How it works

The central tenet of these currencies is that your “cash value” is stored as sophisticated, long number which only you can transact.

When you want to transfer any value to another party, you have to sign the transaction with a long private alphanumeric key (known only to you!), and details of that cash movement is recorded onto a transaction ledger. The main innovation with Bitcoin is that the ledger is viewable by anyone, and copies of it are distributed over many, many computers all over the Internet.

Once a cash transaction is made, many other computers do a complex piece of maths to keep guessing a checksum, which when one somewhere in the world successfully matches, is written back into the ledger to lock the transaction in the transaction history. This result is then written back to all the various distributed copies of the ledger, and the winner of the “be first to complete the checksum” lottery is awarded 25 BitCoins as a prize. This is what “Mining for Bitcoins” is.

The piece of the ledger currently under construction is called “the blockchain”.

Limited Reserves

There are two subsidiary characteristics of Bitcoin. One is that they’ll only every be circa 21 million bit coins minted. This is just like gold bars when major currencies were backed by country gold reserves. At one point, a UK pound or a US dollar was indicative of a share of the gold in the UK Treasury (for GB Pounds) or Ford Knox (for US Dollars). However, a more recent move was to disassociate currencies from underlying gold reserves, giving Governments to print as much money as they wanted with a value based on “trust” rather than a share of the underlying gold reserves. This has enabled successive governments to, in effect, keep devaluing their own currencies (aka “quantitative easing”), which economists have mixed views about. Some even point to what happened to the Roman Empire when such a long term devaluation strategy went to extremes. Bitcoin, by its very nature, cannot be manipulated in the same way; it is a return to the financial discipline of the Gold Standard.

“Mining” Arms Race

The other characteristic is that the processing power needed to enter the lottery to help confirm the validity of Bitcoin transactions in the current distributed public ledger “block chain” – termed “mining” – is getting ever more mathematically complex. What used to take a home PC, escalated into using the Graphics Co-Processors (which are 100’s of times faster at the calculations needed), and to running specialised “mining” computers based on ASICs (Application Specific Integrated Circuits). And people with their own specialised mining hardware started assembling themselves into co-ordinated groups (like lottery syndicates) to increase the chances of winning the blockchain lottery, even if they ended up with a small share of the 25 bitcoins on offer each time their team won.

Personal Security

From a security point of view, your Public Key is something you have to be absolutely inane to keep to yourself and no-one else. If someone else knows it, they can sign off cash transactions as if it were you. Some of the scare stories are where online wallet sites had poor security and leaked this – which is disastrous. You are heavily encouraged to keep your key offline and only to use it when you sign a transaction.

Anonymity – and concerns that go with it

One of the appeals of Bitcoin and other similar crypto currencies is that they are effectively cash, but the only public record is of transactions – not of the assets you may have associated with your private key. This has led to some concern that people can, on the one hand, claim absolute poverty, and in the next minute, throw a significant size transaction. Traditionally, there is no mapping from the owner of a public key to the real person sitting behind that ID – and hence a concern that Bitcoin could be used for illegal purposes.

A Proposal

Simon Wardley made some very valid points on his Bits & Pieces Blog yesterday (entitled “How to fix Bitcoin“) that suggested Governments should enforce a register of who physically sits behind each public key, so then their transactions would expose who they are, and who are they paying. The Chinese Government already enforce this type of registration. Given the transaction ledger is open to all, you could then ensure appropriate tax treatment; on the downside, there is then extreme transparency – anyone can see how much money you receive, how much you pay and the parties at either end of each cash move.

Gaps at the moment

While the desire is valid, I suspect a lot will depend on the veracity of Governments to monitor the creation of virtual tax entities (I think they call them Trusts, or Companies!) and to be able to routinely unwrap who the ultimate beneficiaries of trade with each are. This is a total mess in the world already, but with vested interests at all levels trying to keep the lid on what could be a sizable can of (taxes due) worms between various tax jurisdictions. The alternative is to dispense with monetary movement taxes altogether, but I suspect Simon is totally correct that the result of doing this would not be welcome by society as a whole (you’d then be taxing people on land and assets instead – and leaving insufficient funds to pay for what benefits the population at large).

The other effect is that you can see the amounts, sender and receiver metadata, but you can’t see what was physically traded in the exchange. Only the money values. However, that is why HM Customs and Excise have the powers they currently enjoy for our mutual good – the ability to go look wherever they need to without obstruction in anyones books should they suspect anything untoward exists.

No Transaction Charges!

For the time being, there are lots of positives being discussed by experts, and the market in Bitcoins (and other crypto currencies) is unregulated. You can set up an account on an exchange like Coinbase (in San Francisco, funded by VC Andreessen Horowitz) and set up a trading account to receive Bitcoins area. Effectively a Merchant account but with zero transaction charges.

The downside at the moment is that our current UK Government have hooked onto some nefarious sensationalist media claims that Bitcoin is used to trade in illegal goods, and were indicating that sites that include “Pay with Bitcoin” links as part of their “sites to blacklist” efforts with UK ISPs. Even though I have a Coinbase account set up, i’ve been reticent to put this payment option on my company web site (to pay £360 to pay for a website, at whatever the current GBP/BTC exchange rate is) for that reason alone so far.

I’m sure it will change in time when we have someone in Government with the appropriate cluestick back in the saddle.

Bright Future

For the future, if Bitcoin is to achieve the transaction volumes that Visa or Mastercard manage, the blockchains will need to grow sinificantly in size and some other approaches needed to get the transaction authorisation time down (currently it can take 10+ minutes for a Bitcoin transaction to be notified as being confirmed as complete). We’ll also likely see the unit of value drop by two orders of magnitude to be more representative of a unit of cash useful in people’s lives.

However, early days, interesting alternative approaches on the table and i’m sure an evolution into our ability to realise the potential of a crypto currency in the long term future. At that point, transferring monetary value will be as easy as sending an email – to anyone, worldwide.

Did you know 2.8% of your customers are dead?

Gravestone saying "Rest in Peace"

Those are the exact words I mentioned to the CEO of a B2C company – where customers were paying monthly subscription fees. Unfortunately, his immediate question back was “Okay, but how many of those are on Direct Debit?”. I think my reaction to his interest in the number of people paying for his service, but not using it, was one where I thought he’d do damage to his brand than earn him extra profits.

It’s long been an accepted view that Marketing in IT circles is often considered a set of “hail Mary” throws to attract new potential customers, with little of the precision of folks who have that title in Fast Moving Consumer Goods (FMCG) companies. I’ve sat in meetings with a roomful of IT reseller “Marketing” folks to find I was the only company present doing systematic testing to find out what works, what didn’t and to use this learning to continuously improve. More a case of “getting the letter out” and losing the ability to learn anything; surely much better to send two different wordings out, to see which one pulled better – at the very least.

I’m reminded of one person I met who worked in the field for a Chocolate vendor, and like all his industry colleagues, could relate to 1/10 of one percent shifts in his market share in the retail outlets he supplied through. He was expected to have an action plan in place if anything slipped a little, or to do more of anything that slightly increased his share. One day, fed up selling Chocolate bars, he decided to move to a company selling software to large IBM computer installations.

He walked in to see his new boss, and made the fundamental mistake of asking what his software products market share was in IBM Mainframe installations working in the Finance Industry and in the counties of Avon and Somerset. His new boss looked at him as if he’d arrived from the Planet Zog, and told him just to get on the road and sell something. He ended up thinking this was dumb, and set up his own company to fix the gap.

He elected to start sending out questionnaires to all the large IBM customer sites in the UK (there were, at the time, some 1,000-1,500 of them), getting a telesales team to help profile each site, and to reflect the use of hardware and software products in each. Then sent out a quarterly summary, segmented by industry, of what everyones peers were using – so the survey participants saw value in knowing what their peers in like organisations were doing. He subsequently extended  the scope to cover other vendors, and gradually picked up a thorough profile of some 30,000 installations, covering over 80% of Enterprise IT spend in the country.

At that point, he had an ever-evolving database of all mix of hardware and software in each, coupled with all the senior decision makers details, and even the names of IT projects both planned and underway in each. The last time I had a meeting with him, he could aim me into the best 5-10 prospects for my IT products and services that aligned with what my ideal customer would look like (in terms of associated prerequisite products they were already running) – with a single rifle shot – allowing sales focus and without spreading sales effort over many unproductive lead follow-ups. Marketing (and Sales) Gold. Expensive to use, by worth every penny.

He subsequently sold his company and the database to Ziff Davis, then to Harte Hanks – the same folks who compile the list of dead people (from published UK Death Certificates) that was part of the profiling exercise I undertook and that I mentioned above. They then sold the same Database assets and it’s regular surveys to the company where it resides today.

Apart from that data, there are a number of other useful sources you can draw on. I once managed to persuade MySQL (before Sun, long before Oracle, ownership) to get their customers profiled, just by relating postcodes we deduced from sampling contact addresses and/or the same from location information on their web sites. It turned out that 26% of their base existed in System Integrators, Web Development and Software companies, while the remaining 74% was flat as a pancake over 300 other SIC codes. Very difficult to target as a whole unless you had the full list of customers – which only they did! There are also various mailing lists, MeetUps, forums and resources like GitHub where you can get a view of where specific developer skills are active.

All very basic compared to Consumer Marketing, where armed with a name, a date of birth and/or a postcode, you can deduce a pretty compelling picture of what your B2C customer looks like, family make-up, what they read and their relative wealth. When I was at Demon Internet (first UK Internet Service Provider), we could even spot one segment of very heavy users that, back in 1997, turned out to be 16-19 year olds living in crowded accommodation, playing online games and with no parental supervision of the associated phone costs. We also had the benefit of one external consultant who was adept at summarising 550 pages of BMRB Internet Survey number tables, producing an actionable and succinct 3-5 pages of A4 trends to ride on.

Today, with even the most expensive mobile smartphones starting to commoditise – and vendors looking to emphasize even the smallest differentiation now – I wasn’t too surprised that Samsung in the USA have today landed an ex-VP of Proctor & Gamble to head their Marketing Efforts going forward.

With that, the IT industry has now come full circle – and FMCG class Marketing skills will start to become ever more important in our midst.

 

The “M” in MOOC shouldn’t stand for “Maddening”

Mad man pulling his hair out in Frustration

There was a post in Read/Write yesterday entitled “I failed my online course – but learned a lot about Education”: full story here. The short version is that on her Massive Open Online Course, the instructor had delegated out the marking of essays to fellow students on the course, 4/5 of which had unjustifiably marked an essay of hers below the pass mark. With that, the chance of completing the course successfully evaporated, and she left it.

Talking to companies that run these courses to over a thousand (sometimes over 100,000) participants, she cites a statistic that only 6.8% of those registering make it through to the end of the course. That said, my own personal exposure to these things comes down to a number of factors:

  1. If the course is inexpensive or free, there will be a significant drop between the number of registrants and the number of people who even invoke the first lesson. Charges (or availability of an otherwise unobtainable useful skill) will dictate a position in each persons time priorities.
  2. The course must go through a worked example of a task before expecting participants to have the skills to complete a test.
  3. Subjective or Ambiguous answers demotivate people and should be avoided at all costs. Further, course professors or assistants should be active on associated forums to ensure students aren’t frustrated by omissions in the course material. You keep students engaged and have some pointers on how to improve the course next time it’s run.
  4. Above all, participants need to have a sense that they are learning something which they can later apply, and any tests that prove that do add weight to their willingness to plough on.
  5. The final test is meaty, aspirational (at least when the course has started) and proves that the certificate at the end is a worthwhile accomplishment to be personally proud of, and for your peers to respect.

I did two courses on MongoDB a year ago, one “MongoDB for Python Programmers”, the other “MongoDB for DBAs” (that’s Database Administrators for those not familiar with the acronym). Their churn waterfall looked to be much less dramatic than the 6.8% completion rate reported in the post; they started with 6,600 and 6,400 registrants respectively in the courses I participated in, and appear to get completion rates in the scale of 19-24% from then and ever since. Hence a lot of people out there with skills to evangelise and use their software.

The only time any of the above hit me was on Week 2 of the Programmers course, which said on the prerequisites that you didn’t need to have experience in Python to complete the course – given it is easy to learn. In the event, we were asked to write a Python program from scratch to perform some queries on a provided dataset – but before any code that did any interaction with a MongoDB database had been shown.

Besides building loop constructs in Python, the biggest gap was how the namespace of variables in Python mapped onto field names within MongoDB. After several frustrating hours, I put an appeal on the course forum for just one small example that showed how things interacted – and duly received a small example the next morning. Armed with that, I wrote my code, found it came out with one of the multiple choice answers, and all done.

I ended up getting 100% passes with distinction in both courses, and could routinely show a database built, sharded and replicated across several running instances on my Mac. The very sort of thing you’d have to provide in a work setting, having had zero experience of NoSQL databases when the course had started 7 weeks earlier. If you are interested in how they set their courses up, there’s plenty of meat to chew at their Education Blog.

MongoDB for Developers Course CertificateMongoDB for DBAs Course Certificate

I did register for a Mobile Web Engineering Course with iversity but gave that up 2 weeks in. This was the first course i’d attended where fellow students marked my work (and me them – had to mark 7 other students work each week). The downfall there was vague questions on exercises that weren’t covered in the course materials, and where nuances were only outlined in lectures given in German. Having found fellow students were virtually universally confused, an absence of explanation from the course professors or assistants to our cries for guidance, and everyone appearing to spend inordinate, frustrating hours trying to reverse engineer what the answers requested should look like, I started thinking. What have I learnt so far?

Answer: How to deploy a virtual machine on my Mac. How to get German language Firefox running in English. What a basic HTML5/Css3 mobile template looked like. And that i’d spent 6 hours or so getting frustrated trying to reverse engineer the JavaScript calls from a German language Courseware Authoring System, without any idea of what level of detail from the function calling hierarchy was needed for a correct answer in our test. In summary, a lot of work that reading a book could have covered in the first few pages. With that, I completed my assignment that week as best I could, marked the 7 other students as per my commitments that week, and once done, deregistered from the course. I’ve bought some O’Reilly books instead to cover Mobile App Development, so am sure i’ll have a body of expertise to build from soon.

Next week I will be starting the Google “Making Sense of Data” course which looks very impressive and should improve some of analytics and display skills. Really looking forward to it. And given the right content, well engineered like the MongoDB courses, i’m sure Massively Open Online Courses will continue to enhance the skills of people, like me, who are keen to keep learning.

Giving Kids (and Parents) the Greatest Gift of All

One thing you learn very quickly is that if you have a decision makers spouse, or children, engaged in any purchase decision, they carry a disproportionately huge degree of influence. At Digital in 1984, Mike Tait (who previously ran Commodores PC operation in the UK) bought on John Mitchell to run Dealer Sales Incentives; besides a misspent youth serving beer in a Munich Hofbrauhaus, he’d run Sales Incentives for Olympia Typewriters. I think he’d largely given up on their attempt in the PC market (Olympia’s machine was called “the People”), and his last exercise at the previous company was offering a special green model to Irish dealers, which he told them (with a straight face) was to be called “the Little People”.

He concocted a “points make prizes” campaign, which we were to announce in a nationwide 5 minute slot on TV-AM, to be aired at 7:25am precisely. While we had many of the 120 PC Dealers bought their staff in early especially to watch that broadcast, TV-AM duly screened it 20 minutes early – and refused, despite my managements very fast and vocal protests, to repeat it at the agreed time. Having pee’d off the whole channel, John nevertheless ensured that the “PC sales make points make prizes” campaign gift catalogue got sent to every participants home address. We had plentiful (positive – for us) feedback that suggested salesfolks were getting impaled on questions on how many Digital PCs had been sold on their return home, be it from their spouses and (where present) kids.

Fast forward to my time at Demon, where I got several opportunities to follow my boss, Sales & Marketing Director David Furniss, into unfamiliar but mind changing meetings. One to meet some management in an office opposite Harrods to agree outline terms for Demon to be shirt sponsor for Fulham Football Club, which we then did for three years. Another was to meet a team of people in an office above shops at the intersection of Regents Street and Oxford Street, London, to fund a campaign to promote Demon Internet in secondary schools up and down the country.

The company we met were experts at taking a brand product family and building course curriculum material for school teachers to reuse in class. So, a Sun Cream supplier could sponsor a class on Skin Cancer, and folks would know how to protect themselves in summer months. An electric razor company could sponsor packaging design in Art (and found that 14-15 year olds were very loyal to their brand when they bought their first razors – normally as presents for whoever they were dating!). A Computer Supplier could do some ICT work and sponsor “Computers for Schools” (which is what they did for Asda – ahead of Tesco doing a similar effort). David told me that one of his friends had done such a campaign for Microsoft, and he had done one while he worked at Compaq – and the brand recognition of both had major jumps in familiarity as a result.

We did one for Demon (project led from start to end by one of my staff – Wendy Sidaway), focussing on ICT teachers and giving a professionally produced course curriculum around “The Internet”. Besides the Demon branding on all the posters, course materials, teaching guides and homework sheets, we paid for a competition open to all students – and to their schools. Students would build an idea for a web site and say what they’d promote. Prize has one of the new candy-coloured Apple iMacs plus software and printer for the three top entries, and 5 iMacs for the school of the eventual winner. The take-up of the (free to the schools) materials and participation in the competition was unbelievably high – well over 80% of all the secondary schools in the country took it up. Brand recognition for Demon went off the dial, and our new per-customer acquisition costs kept to around 16% of that of our benchmark competitors. Total cost (in 1998) was circa £50,000 for the work and around £10,000 in prizes.

Fast forward to 2014, and I hear various proposals from the Government to fund the provision of Independent Financial Advisors to ensure people are getting good deals out of the Pension Industry, variously for selection of pensions and for Annuity providers. In reality, the education needed to pick a pension fund to invest throughout your working career(s) should be a simple three box flowchart. It’s even explained in one paragraph in Scott Adams “The Dilbert Principle”. Paraphrased:

  1. Management charges for an “active” or “managed” fund do not give better rewards than a monkey picking your stocks despite their disproportionately large charges. If the choices include either of these terms, move on and disregard the allure of thinking the high charges will buy you any advantage; the opposite is true.
  2. History (and this includes all the stock market crashes along the way) says that the consistently best performance is to bet on all the horses, aka putting your funds in an Stock/Equities index tracker. The charges should not exceed 0.5% of your fund value. Highest returns normally come where the funds are accumulating (ie: any dividends paid are used to buy more units of the index tracker shares automatically).
  3. Once you get within 10 years of retirement, you may normally expect to step the mix of the fund you’ve built up from being 100% equities to be a mix of equities plus a more predictable (but much poorer returns) proportion of government debt (aka Bonds).
  4. Steps 1-3 will give you the biggest snowballed returns with which you can live, or at your option, to buy an annuity after your retirement. If you do choose to buy an annuity (a company will take your fund and agree to pay you a specific weekly/monthly pension for the remainder of your life – but swallow any money left at that point), it’s good business sense to shop around. Don’t just accept the first offer you get. And if your fund is healthy, you may have enough to live off without having to buy an annuity – and your dependents can get the funds left over, less capital gains tax, after you pass away.

So, with that, if the government ensures consistency in the way charges are published, annuities can be compared simply, and draw down options are presented, then the job is done, with no IFAs needing to be retained in order to explain how to navigate around companies giving poorer value.

However, what about children? That’s where “The Richest Man in Babylon” comes in. Originally prepared in the 1920’s as Insurance Industry Pamphlets to explain good financial practice, it got consolidated into a book. If a child makes it through to the end, they’ll learn all the core financial skills: budgeting, saving, avoiding scams, picking domain experts, structure of business models, the futility of games (read: lotteries) and above all, the art of snowballing. That of your money parenting interest, and the accumulating interest’s children, grandchildren, etc building up your personal wealth.

The book is not expensive, and you can even download the full audiobook from YouTube – either nearly four hours in one take, or in 17 individual chapters worth.

That said, it should be a simple job to spend around £100,000 to encode that into a modern version suitable for inclusion in every school curriculum. That would be a gift to all the children in the country unparalleled by any government in our history.

Bill Gates, Compaq Plus and some new thing called Windows

Apple Lisa MouseMicrosoft MouseVisiCorp VisiOn Mouse

Back in 1983, I worked in Digital’s UK PC Dealer Team, where I was the sole presales technical guy helping to grow Rainbow PC sales through the PC Dealer Channel. Around 120 independent dealers, many of whom had a background in selling Commodore, Apple and miscellaneous CP/M based machines to consumers and businesses. As the second largest computer manufacturer in the world, everyone (including ourselves) expected the PC market to become an IBM vs DEC battle ground.

We had seen the launch of the Apple Lisa, a machine that scared everybody. While most of the vendors saw the windowing system and thought Apple would eat us alive, consumers got equally scared of the $10,000 price tag. However, it set in train an arms race to provide an equivalent for other PC vendors.

The authors of Visicalc (the first and most popular spreadsheet) started engineering a Windowing system called “Visi-On”, another called Quarterdeck a system called “DesQ” that could work out of the box with existing applications, and there was a rumoured response on the way from Microsoft.

In May, we had a visit from Phil Sutcliffe and his US CEO, Bill Gates, who carried in a Compaq Plus (IBM compatible as large and heavy as a portable sewing machine) and set it up to give a demo to around 20 of us around a conference room table. Two of the DEC VIPs were stuck in a board meeting upstairs, so we all sat around the table like lemons, waiting for their arrival, Gates included. I couldn’t help myself, so I turned to him and said: “I notice you have two buttons on your Mouse there. The Apple Lisa has one, and the Visi-On mouse has three. I’m curious, why did Microsoft pick two?”.

With that, he spent a good ten minutes relating a thorough drains up of his thought process, which included many examples of areas that really sucked when using both the Lisa and in VisiOn. Extremely thorough, well thought through, and left an impression of “Wow”. The sort you walk away with if you ever meet someone who turns into a walking encyclopedia.

When the VIPs arrived, the first thing he said as he shook their hand was “When are you going to drop CP/M and move to DOS?”. A reference to Digitals then preferred OS, given it already ran thousands of applications and was an on-ramp to Concurrent CP/M, which allowed you to hop and skip between 5 running full-screen applications. That done, he then gave a demo of a new product called “Windows” that Microsoft were at that point building.

He left with some degree of frustration at not persuading the senior folks to switch immediately. Phil told me afterwards that when he got back to David Fraser, then Microsoft UK General Manager, he told him “There was only one guy in that room who knew what he was talking about – hire him”. At the time, there were few UK employees – about 10 or so if I recall. I was duly invited for interview, spoke to David Fraser and International VP Scott Oki, but ended up declining the move.

The one thing that’s always struck me ever since is how asking a good question often has a much bigger impact than knowing the answers. It’s usually a sign of good management if staff are aimed at audacious goals, and questioned about detail rather than having it prescribed to them.

About 4 weeks in after I was first handed DECdirect Software to start, I got invited to a chat with Peter Herke – the General Manager of the DECdirect Catalogue operation at that point. He had a reputation of chewing out senior people who didn’t know every detail of the business they are running (in fact, for junior people, he just asks a few pointed questions and asked them to come back with the answers when they were to hand – people learnt to keep the finger on the pulse very quickly).

I spent the whole evening before thoroughly remembering every statistic and every detail of the emergent business, from helicopter view to the smallest thing. When I got to his office, I sat down, he closed the door and just said “Are you enjoying it so far?”. That completely threw me. I recall saying “Well, it feels like i’m sitting in an aircraft cockpit, and I can see all the dials moving. I’m at the stage of watching them all, trying to work out which are the important ones”. I then took him through what I was doing, what the challenges were and how I was addressing them. At the end, he asked when I was expecting to launch to the outside world, and told me that it was my call, and not to do it until it felt right. To me. He just wanted me to have $35 million revenue in the bag 11 months later, and apart from that, it was my ship to pilot. And to ask him for help and advice if I needed it along the way.

Big team effort (8 telesellers I shared, 2 tech support, 1 logistics person and me), but we launched 3 months later, flew past the $35 million target well ahead of fiscal end of year, and in fact hit $100m within 18 months – at over 89% gross margin.

Just goes to show what people can achieve if given the latitude to grow, and just having good questions asked of them to help them steer themselves along the way. I’ve treated every employee i’ve had since like that – and have been proud of the results every time.

What do you call a good version of “scarred for life”?

Pricing for Results Front Cover

There was an experiment some time ago where Students of a University were asked which lecturers had the most profound effect on their learning experience – 10 years after they’d left higher education. The names cited were rarely the ones that earnt the most, nor recognised for that achievement. I think I can relate to this in a couple of ways.

One from my education at Theale Grammar School – situated in the village of Theale, just west of Reading, who’s previous status as the half way stopping point on the two day London to Bath Stagecoach run blessed it with more pubs per head of population than any other village in the country. These days they call that route the A4, supplanted in most use by the M4 motorway in 1971 or so. I recall four morning assemblies of the hundreds served in my 7 years there (more detail in the footnotes if those are of any interest).

Secondly, while employed in my 17 years at Digital, I was blessed with many experiences that have had a material effect on several businesses since. The one standout has got to be two days spent in the company of John Winkler, who Paul Mears retained to take 30 of us through the art of Pricing; we did this in the surroundings of Newbury Racecourse in (I believe) 1992.

The first day ended with an overnight exercise to come up with a list of ways we could treble our retained profits based on learnings so far. Instead of going straight home, I took a detour back into my office in DECpark Reading, sat in front of my 19″ VAXstation, and started hacking around our recent sales transactions. Got home late, but was armed brimming with ideas for Day 2. Looked like countless ways of doing it.

Next day everyone gave their ideas, had some training on how to negotiate pricing, and were given guidance on how to behave in a price war. With that, the course finished, we thanked John and disappeared away into the night, armed with the training notes.

Fast forward to when I worked for IT Distributor Metrologie. They had bought Olivetti Software Distribution a year or so earlier, and moved their staff into the HQ office in High Wycombe. They were, at that point, one of Microsofts five distributors in the UK, all of whom were conscious of the vendors desire to reduce their Distributor line up. The guy brought in to run the Microsoft Business elected to leave, and in January 1997, Metrologie got slapped with what’s termed a “Productivity Improvement Plan”; basic Microsoft parlance for the path to the Firing Squad. Well, that’s what the Directors knew – I wasn’t told.

I was asked to park my other work and to go fix the Microsoft Business, and given a Purchasing Person who had ambitions to be a Product Manager, plus one buyer. We were doing around £1 million per month, 60% of the business through Dixons Stores Group, and (like most Microsoft distributors) tracking along at 1% gross margin.

The first few days were me just asking questions of reseller staff who bought Microsoft products from several distributors. Distribution staff turnover, lack of consistent/knowledgeable licensing expertise and price inconsistency across several phone calls were consistent concerns. We also had the concern of having one very large customer, who consumed peoples time like no tomorrow and had a few unfortunate ways of doing business:

  • obeying edicts from the top not to pay suppliers to agreed terms at certain points
  • routinely doing “reverse ram raids” at the Warehouse door, sending 40 ton trucks full of returned products for credit close to the end of a trading month
  • bad mouthing our performance in pursuit of a goal to trade directly with the vendor

We employed the learnings from John Winklers Course – in particular the guidelines of how to behave in a price war – and it worked with a vengeance. While the DSG business didn’t grow, the overall business went from £1m/month to £5/month in four months, and at doubled margins. Due to the dynamics of how a Distribution business works, and major suppliers being very strict on payment terms, I learnt how “overtrading” feels at close range. But at that point, i’d been headhunted for a role at Demon Internet, but extended my notice by 4 weeks in an attempt to avert the Firing Squad which i’d since learnt about on the journey. We already found we weren’t being invited to Microsoft Social Events that our status should have conferred on us.

I went into a meeting at Microsoft with my Chairman and the Group Marketing Director from France; their body language going into the meeting was all wrong, and we were told that despite our recent performance, that Microsoft were going to lose us as a Distributor. We lodged an appeal, and I left to my new role in Demon Internet; Product Manager Tracy left shortly afterward to a Software Business Manager role at reseller BSG, doubling her salary in the four months we’d worked together. A week in, I got a phone call from my immediate ex-boss, Bob Grindley, to be told that the Microsoft Contract had in fact been retained.

I learnt one set of very useful guidelines on how to measure and improve any business from our then Microsoft Account Manager, Edward Hyde, early in my time in that role – the core ones I still use to this day. That apart, the work on pricing I learnt from John Winkler made a material difference; I can think of no other reason that it took 4 months to grow the business 5x in revenue and 2x in margin in the middle of a 5-way price war.

The dirty secret is that the 2-day course is condensed into a paperback book entitled “Pricing for Results” by John Winkler himself. Now out of print, but if you’re quick, available for the princely sum of 1p plus postage from several third party sellers on Amazon. A real steal. Or you can hire me to assist with any business improvement project!

Pricing for Result - Back Cover Text

Footnote: John Winkler still appears to be running his Pricing Courses: www.winklers.co.uk/business

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Always be Testing – or how to enrich an adversary

Sarah Palin with her mouth wide open

I get a weekly update feed from Quora on subjects that may pique my interest. One of them this week was a question posed about “What are the most unexpected things people have learned from A/B Tests”. That may sound as interesting as watching wet paint dry, but it was answered by Dan Siroker, an ex Google employee, who related his experience of raising money for Barack Obama during the run-up to his first Presidency term. It’s an hour long talk he gave at Stanford, albeit he finishes the formal part of the presentation (and opens the floor for questions) at around 35 mins in. The main “wow” surprise for me is about half way in.

If you have a spare hour, I commend a full viewing of this 60 minute video.

If you don’t, he gives some text book examples of trying different web page backgrounds, and different wording on web page buttons, to pull the most people to give their email addresses, and to donate to the Obama campaign. Combinations they tested ended up being 40% more effective than their initial assumptions of what they thought would have worked best.

They also found that they needed to post different wordings, based on where viewers were in their engagement process with the campaign. New visitors to the site, repeat visitors who’d previously left their email address but not donated, and repeat visitors who’d already donated, responded differently to different approaches to get them to donate (or donate again). And conscious that the could insult or be too pushy for asking previous donators for a fixed sum of money, they simply suggested the very same sum that the person had donated the first time around, something that maximised contributions.

Having built up an email database – which they reckoned their approaches had given them an extra 4 million names by doing efficient testing – a golden opportunity came up. Sarah Palin, the then Republican Vice Presidential candidate, gave a speech at the Republican Convention (which millions watched live) that tried to trivialise Obama as an inexperienced small-town Mayor who had yet to get to grips with what “responsibility” was. The Obama campaign management peeled off an email which they sent to their database, drawing attention to the negative stance and to request people show their distaste of “Out of Touch Politicians” by donating to the Obama campaign. In one day, an extra $10 million of contributions rolled in.

The video of Palin and the text on the letter are around 30 minutes into that video.

I think there is one message there for people who run negative campaigns, be it in politics or in business; not a good idea. And particularly so if your intended target have the resources to magnify the stupidity of you engaging in such practices. Better to sell your own positives, without being seen to try chopping the legs off folks you’re competing with.

There is another more subtle message to many folks (with the word “Marketing” in their job title) i’ve met down the years who think it’s a good idea to throw marketing campaigns into the ether without integrating any test to measure success, nor to learn something new every time. There is a reason why seminal works like Kotler “Principles of Marketing” or Drayton Birds “Commonsense Direct and Digital Marketing” each have several chapters on Testing. To leave that out, and deny yourself the ability to learn and improve, is the sign of an amateur.

Footnote: The presenter Dan Siroker can be found at email: dan@siroker.com, Twitter: @dsiroker. Dan is the Co-founder of company Optimizely that does the heavy lifting on learning from A/B tests on web sites.

Stand back! I’ve done the Free Online Course

596px-Google's_Lexus_RX_450h_Self-Driving_Car

In California, Google run a fleet of driverless Toyota Prius, Lexus RX450h and Audi TT cars. Laws are such that you do need a driver behind the wheel “just in case”, but they’ve done (by April 2013) over 435,000 self driven miles without a single accident to date. Even doing impressive things (if you have a spare 3 minutes, i’d encourage you to watch this video).

Peter Norvig and Sebastian Thrun are two Stanford professors heavily involved at that project at Google. In 2011 and alongside their work at Google, they opened their “Introduction to Artificial Intelligence” course at Stanford University for free – online – to anyone in the world who wanted to complete it. Over 100,000 subscribed, and with it started the Massive Open Online Course (MOOC) industry.

MongoDB used the same structure of online teaching to offer two free courses last year, nominally training people who wanted to program and administer databases using their market leading MongoDB NoSQL database. Armed only with my MacBook Air on my dining table, I joined over 6,600 other hopefuls to do their free, 7 week long, 10 hours/week M101P: MongoDB for Developers course. This included examples in Python, which we learned as part of the syllabus. I also joined over 6,400 other students doing the equivalent M102: MongoDB for DBAs course.

You learn from short videos with frequent knowledge test quizzes each week, up to 10 hours per week per course, but in start/stop gaps around your other work/personal commitments. You then have a set of homework exercises to run on your own machine, which have to be completed and answers posted on their portal within a week of issue. New videos are released every Tuesday morning at 4am UK time, and the matching homework is to be in within a week. At the very end, Week 7, you have a final summary and a final 10 or 11 final exam questions to answer that week.

There is plenty of help on hand from the instructors and a small number of teaching assistants on each courses forum, though many of the queries are answered by fellow students.

Some weeks, it was mad. I was sitting there on my dining room table, five weeks in, with a database split over three different replica sets and multiple shards, all running on my MacBook Air and running very impressively. I just sat there shaking my head at the affront of having the full complexity of the thing I built running in front of me. This from having no experience of MongoDB, JSON syntax, Python code, or of JavaScript at all when I started the course.

I was delighted to have finished both courses with 100% ratings — something achieved by 2.2% of the intake of the programming course, and 5.1% for the DBAs. The company, after 7 weeks, had an extra 9,000 or so professional advocates who’ve passed their exams since they started the previous year (this was the second time they’d been run). I was duly certified:

MongoDB for Developers Course Certificate MongoDB for DBAs Course Certificate

The product itself is very, very impressive, built to scale out as your needs grow. I was no less impressed with the execution of this training on the edX platform, as described eloquently by VP Education Andrew Erlichson on their blog at the time. Anyone looking to do the same courses I did (and now more) can find them at https://education.mongodb.com/

This year, I’ve decided to improve my ability to sift data from databases and to present it in compelling ways. I dislike tables of numbers, even throwing my wife’s heart monitor readings onto a Google Sheets graph for her doctor – not least to show her anxiety of having readings taken calmed back to normality close to the end of the sampling period, something not immediately apparent from the raw data:

Jane Blood Pressure Chart

I’ve been doing similar but business orientated things in Tableau Desktop Professional for over 5 years (exposing underlying trends, sometimes leading to spectacular business results), but I’ve no doubt I’ll learn new and useful techniques with a fresh perspective from Google and the tools they use. To this end, i’ve registered on their free Making Sense of Data online course and am ready to go (part time!) from March 18th until April 4th.

There are plenty of other courses available on a wide range of topics, most free, some with nominal subscription charges. Go have a gander at what’s available at:

So, lots to pique anyones interests, and to keep learning. Which courses are you going to do this year?