Miles To Go.

Doug Krugman, Greg Matusky, Roo Rogers, (M) and Xin Chung @S2 Learning Even

the woods are lovely, dark and deep
but I have promises to keep
and miles to go before I sleep
miles to go before I sleep

Robert Frost, in a poem of simplicity itself, captures the essence of the foundations of trust: promises kept.

I was at Shared Squared NYC’s monthly learning event last night, where a whole lot of people made good on a whole lot of promises. And there was lots of chatter about trust, as the social networks have spawned so much peer to peer interaction (and the P2P has spawned its share of weird interactions).

In short, the problem that is emerging is that people, for better or worse, form  judgements based upon online information, make promises and commitments, and then are disappointed with the related offline episodes. Happens all the time, across a variety of peer to peer actions. There are a gazillion examples of the difficulties of this toggle, like

• Lady GaGa tickets bought through Craigslist for cash at the last-minute
• A Wimdu rental, where the pics were great, but the pillows just plain smell.
• A RelayRide renter who changes his plans last minute and screws up the rest of your calendar

But the upside of getting trust right in the sharing economy (and in P2P lending, and in dating, etc etc.) is that more trust leads to more and faster transactions and interactions within a community. I think Stephen MR Covey (son of 7 Habits Stephen) had it right quite awhile ago when he wrote The Speed of Trust. You can add his good work to these recent pieces on the subject:

• The Trust Projects recent manifesto…
• Letters and outreach to the community by Scaffold and Legit
• Neal Gorenflo doing everything possible to forward the sharing conversation via shareable (Nice work!)
• Shared Squared finally announcing an event calendar in NYC

But, at some point, in order to truly scale, I really passionately believe the sharing economy must deliver an indicator of trust between the two parties in a transaction increases if not ensures the assets at risk. The only product in the market that is out there, doing it today and in increasing numbers with both communities and users is TrustCloud. (You can claim your TrustCloud here). And yes, I am an investor and have blogged on the topic here, here and here.

Eventually, they will be compelled to ensure trust is sufficient. And just as airbnb has done, others will need to underwrite that risk. People- and perhaps their insurers! – will want better answers to questions like:

• Will my car be returned in good order?
• Will my apartment be sacked while a couchsurfer is there?
• Will my boat he left on the rocks by this drifter that borrowed it?
• Is my daughter safe with this tutor who comes to the house?
• Will I ever see my lawn mower again?
• Will this ride share going to get me to work, or roll me out of the car in Mexico?

And all that attention has forwarded the discussion, but trust is not an absolute from the get go. We as humans observe behavior and actions before trust is earned,  and we frequently reassess trust levels along the way. It can work between online and offline as long as it is observed, recorded and elegantly presented in context.

So, not unlike the man in Frost’s Poem…

The accumulation of recorded behavior, events and affinities that leads to the confidence to exchange something of value, tangible or intangible is IMHO the most accurate and applicable definition of Trust that any P2P marketplace can rely on.  

And this is why, simply, behavior trumps reputation every time.

PS: I’d love to hear what you think of the new TrustCloud. Enter your comments below, or on their site. Mine is above at the top of my blog.

No, they don't.

It’s been said 2012 will be the year of Social Media in Business; for the meta travel site KAYAK, it couldn’t come soon enough.

While some businesses are evolving or even transforming how they buy and sell products, many are fast becoming social businesses. In a Fast Company article by Drew Neisser, “Move Over Social Media; Here Comes Social Business” he explains the reasons why every company should be thinking about becoming a social business. According to Neisser, IBM is moving themselves and their clients “well beyond social media into a new era of collaboration, insight sharing and lead generation it calls social business”.

It only takes one disaster, and the whole company focusses on getting social media right.

So big news this week was KAYAK pulled some ads from TLC recently on a previously under the radar show called “All-American Muslim”. In fact, seems 65 other advertisers have done the same, including Lowes. None cited any reason for pulling ads, and so the logical media man assumes it was for underperformance. Advertisers advertise because they are in business. They want to reach customers and have a finite marketing budget to do it.

KAYAK is a small entrepreneurial company, the type that we need badly in America. Unfortunately, KAYAK’s explanation came out in the form of a (likely) hastily written blog post from the CMO right out of the classic Gas-on-the-fire PR strategy. It starts with a typo (as I often do as well), and rambles just enough to contradict between backing a show for moral reasons and pulling out for performance reasons. I’ve written worse. (full disclosure: I know the CEO and have shared beers on occaision).

Here’s that first post:

We would like to apologize to anyone who was offended by how we handled our decision not to continue advertising on All-American Muslim when it
returns in January. We decided to advertise on it in the first place because we  adamantly support tolerance and diversity. Our 150-person team includes people
from all over the world, and from all walks of life. Our team includes people who are descended from early Europeans who came here escaping religious
intolerance, and newer Americans who include many religions. We get what America is about.

For the record, we didn’t “pull” our ads. Our ads kept running on this program, but we have made the decision not to give TLC more money when the show returns in January.

Unfortunately, this decision comes across as bending to bigotry. It also appears that we did not support people who deserve support as people and as Americans. For that, I am profoundly sorry.

I should have communicated more clearly. We would not want anyone to think that we caved to hatred. I wish I could share some of the emails I’ve received from our team. They are also very unhappy with how I handled this. Please allow me to explain the decision. First, our approach to advertising decisions is to choose advertising based on who watches it, not the political leaning of the program.

When we decided to give our money to TLC for this program, we deemed the show a worthy topic. When we received angry emails regarding our decision to advertise, I looked into the show more thoroughly. The first thing I discovered was that TLC was not upfront with us about the nature of this show. As I said, it’s a worthy topic, but any reasonable person would know that this topic is a particular lightning rod. We believe TLC went out of their way to pick a fight on this, and they didn’t let us know their intentions. That’s not a business practice that generally gets repeat business from us. I also believe that it did this subject a grave disservice. Sadly, TLC is now enjoying the attention from this controversy.

I then checked the Florida Family Association website to see how this was portrayed. Besides the regrettable hatred, I also noticed that we weren’t listed. The email was a template, so people who sent thousands of emails seemed to be unaware they were sending it to us. The amount of vitriol in the emails was saddening, but I didn’t exactly feel pressured (not to mention we wouldn’t bend to such pressure). Many of the emails I’ve received expressing disappointment in our decision have been much more civil, and I applaud you for that.

Lastly, I watched the first two episodes. Mostly, I just thought the show sucked. Based on our dealings with TLC and the simple assessment of the show, I decided we should put our money elsewhere. Apologies again.

- Robert Birge, KAYAK Chief Marketing Officer

But then social and traditional media kicked in, picking apart the post and accusing the company of pandering to religious groups (who pointed out, correctly, the show had no bomb makers). This, to them, implied TLC was going light on Islam and they called for support to be pulled. Meanwhile, support was being pulled, likely for entirely different reasons- economics. But I think the big lesson learned is that businesses are beginning to wade into social media, and they have to get a handle on the tremendous benefits and swift dangers of living in that world. As for KAYAK, the best thing they can do in this Holiday season is to focus. Sure enough, this clarification just came out from CEO Steve Hafner.

This is actually my first blog post ever. Frankly, I wish it was on a different topic.

I want to respond to the questions and comments we’ve been receiving about KAYAK’s advertising on the TLC show “All-American Muslim”. We’re a small company with fewer than 200 employees, and we advertise on a lot of TV shows. We don’t have the resources to vet the content of each show. We also continually adjust our media mix – meaning we start, stop,  and restart advertising on specific shows periodically.

Our decision regarding advertising on All-American Muslim was in no way influenced by demands from third parties such as the FFA. We do try to avoid advertising on shows that may produce controversy, whether we support the content or not. We simply don’t want people to confuse our choice of where we spend our TV dollars with a political or moral agenda. Plus there are plenty of shows that are just as effective from a marketing perspective.

We’re not bigots, and we’re not experts in TV programming. We are trying to make the world’s best travel site. I hope this blog post puts this issue to rest and allows us to get back to work.

Please enjoy the holiday season. Steve Hafner

 Simple, focussed and to the point. Good CEO reaction.

"Play responsibly"

I’ve been trading everyday phone calls and emails with the developer that built our new family home. The experience hasn’t been perfect, from my perspective, but I acknowledge the guy probably has plenty other things going on besides the faulty control panel on my Kohler steambath.

Turns out, I was right.

Seems Brandon won the Connecticut Powerball lottery earlier this month, and it all came out today. For those that don’t know it, our new nhometown of Greenwich does not see a lot of suffering. In fact, if there was ever a town that did not need a lottery winner, that would be ours. If there is an Occupy Greenwich Avenue movement starting soon to decry the inequality of the 1% winning a lottery designed for the 99%, consider this: the town is full of rags to riches stories. It’s just that they usually involve numbers that come through a Bloomberg terminal, not spit out for a dollar at the local BP station. Luck is random, and this proves it, again.

But the BP station is where Brandon and his two boyhood buddies went in equal (I surmise) on a dollar bet that pulled a lump sum of $100,000,000. (Powerball markets it as $254,000,000 but that’s a 30 year payout into a black hole of tax policy no one in or out of Greenwich should take a bet on). I was recently told by an EO leadership swami that you can’t control the world, you can only control how you react to it. This is a good example of that.

He has been sitting on this news for the past three weeks. In the meantime, he has been responsive and professional about the various punchlist fixes he owes at the house. We knock something out every few days. And that says a lot about Brandon; old school, honest and possessing a genuinely good heart. I spend a lot of time thinking about Trust, and have written about the Heuristics of Trust , actually more than once. I’m not sure who bought the ticket, but the fact the three shared it also says a lot about their Huck-Finn like trust dynamic ($.66 would have bought out the others a few weeks back).

Today, they came clean and told the public. They had formed a trust, and will give a large amount to charity. They don’t strike me as the type of guys about to go on a race to the bottom and be deeply in debt 5 years after winning. It will probably not change their lives all that much, but that’s an outside view at this point. All I can say is, it has not changed my friend in the past three weeks.

That is a good story. Good on you mate.

How long can Ben float?

Years ago I got my start on Wall Street and was assigned to read business plans for a tiny investment banking boutique named Beuret & Co. I saw a lot of crap, but nothing near what the deficit “super committee,” must be analysing this week.

I didn’t have any financial background aside from a knack for knowing what added up and what didn’t, in a spooky kind of way. By my own count, people had wheeled in something like 10,000 plans, which I digested and, in many cases called the hapless entrepreneur and told them why it wouldn’t work, IMHO of course. One habit that I had been to take a little 3×5 piece of scrap paper and staple it to the cover of the plan with some basic facts, just to rememebr what plan I was talking about. What industry. Problem and solution. Stage of development. Unique properties. Raise and use of capital. And profit and loss basics. When I was asked about this deal or that, I had a handy reference, but later in life I realized that, once you get it you rarely needed more than those basics. (See my many references to investing like a child). When asked later in life how I came to read plans so quickly and asses a companies prospects in a flash, my only explanation was that when you see 10,000 of anything wrong by process of elimination you begin to know what is right.

Which is why, when I read this balance sheet and income statement on USA Inc. from Mary Meeker at the end of her Mobile Update, I nearly cried.

It came at the end of her regular update on digital media, now done under the auspices of Kleiner Perkins. She has routinely walked through the basics of income, expense, assets ans liabilities much the way I would have done it sitting in my little cubicle on Wall Street. As an American citizen, listening to this deadpan presentation is a must-do.

“By the standards of any public corporation, USA Inc.’s financials are discouraging,” she writes in an introduction to the report. “True, USA Inc. has many fundamental strengths. On an operating basis (excluding Medicare and Medicaid spending and one-time charges, the federal government’s profit and loss statement is solid, with a 4% median net margin over the last 15 years. But cash flow is deep in the red (by almost $1.3 trillion last year, or ~$11,000 per household) and USA Inc.’s net worth is negative and deteriorating. That net
worth figure includes the present value of unfunded entitlement liabilities but  not hard-to-value assets such as natural resources, the power to tax or mint  currency, or what Treasury calls ‘heritage’ or ‘stewardship assets’ like National Parks. Nevertheless, the trends are clear, and critical warning signs are evident in nearly every data point we examine.”

If the United States of America was a start-up, no one would give it any more money. More likely we would just take it out back and shoot it.  Luckily, USA is not a start-up, but unfortunately it still takes a boatload of faith and capital to run the thing. While unlikely to actually go out of business, the cost of keeping the lights on gets higher and higher as the faith goes lower.

This does not bode well for us. But we can do something about it. If we really try.

More likely, it will get kicked to 2012 instead.

Hopes. Dashed.

Ugh.

I grew up in the shadow of PSU, the veritable Emerald City for athletes like me. For my  generation it was hope incarnate; now it’s blown to bits.

Let’s face it, most of us in Western PA were headed for the coal mines or the steel mills, and distinguishing oneself on the gridiron was one way out, longshot but true. (See an early Tom Cruise in All the Right Moves for a taste of what I’m talking about). Every kid on my team knew that Beaver Country, PA produced an incredible number of NFL QB’s, (Namath, Unitas, Marino, Kelly, Hanratty, Blanda, Gannon top the list) and perhaps one of us would have the chance to join them.

I love the quote “Man never forgets where he ran as a boy”. No doubt, this is one reason why.

If we could just get a break we often thought to ourselves, and get noticed at one of the big programs… Hope can be so powerful, but so misleading at times. It was that hope that lured and betrayed young men at Happy Valley. And it was the almost deific influence of one man who allowed people to replace doing what’s right with doing what must be done. Penn State will never be the same, but that’s probably good in the long run.

Greg Matusky covers it perfectly in a larger piece in his Gregarious blog: (his words)

Penn State, like many colleges and universities, has become the ultimate bubble. Where football trumps education. Where binge drinking is celebrated and institutionalized. Where on any given fall Saturday, 100,000 people engage in a false culture of alcohol-fueled friends and good times. It’s where the 84-year-old head coach, who isn’t really coaching, has that fact covered up by assistants. Where students are encouraged to mortgage their futures by taking on mountains of debt. Where too many families part with their lives’ savings to fund educations that employers don’t want, while jobs in engineering and the sciences go begging.

It’s where tuition dollars fund climbing walls. Where free laundry service has more promotional value than a new physics lab. And it’s where  uality is set by a ranking in U.S. News & World Report. In this alternate reality, is it any wonder that a coach, an athletic director, a college president could overlook child abuse to protect one of their own? Two years ago, Chicago Public Radio’s “This American Life” ran a horrifying piece about Penn State and its love of alcohol and abhorrent behavior. When I told my Penn State friends about it, they denied all of it. When now-disgraced former Penn State President Graham Spanier came to power, it was as a reformer. But he soon caved to alumni and  hometown pressure to keep the wine flowing. The party going. In the “This American Life” segment, Spanier almost sounds proud that PSU was named the top party school in America.

Need further proof of just how far colleges have distorted our perceptions? Google “the best college in America.” You get thousands of hits by schools identifying themselves as the best. Google “the worst schools in America,” and you find few lists or reporting. Clearly marketers have swamped objective reporting and commenting when it comes to reviewing colleges and universities. In their world, they are all the best.

But long before Greg’s piece was Peter Thiel who has railed against the Higher Education Bubble for some time now, for reasons outside of sport. But if you tie together his arguments with Greg’s, it becomes more clear.

 …for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

Like any good bubble, this belief– while rooted in truth– gets pushed to unhealthy levels. Thiel talks about consumption masquerading as investment during the housing bubble, as people would take out speculative interest-only loans to get a bigger house with a pool and tell themselves they were being frugal and saving for retirement. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life.  It can lead to an unhealthy sense of entitlement. “It’s what you’ve been told all your life, and it’s how schools rationalize a quarter of a million dollars in debt,” Thiel says.

This bubble was fueled by sport and its spectacle. More specifically, football.

Joe Paterno was the golden goose (some estimate he raised $1,000,000,000 of revenue for PSU in his time there). He spent 60 years doing what was right. He brought dollars to campus, hope to aspiring athletes and their hope-fully promoted coaches, and unfortunately, through an assistant coach to whom he was too loyal, brought young boys into the care of moral monsters. That the whole PSU system was unable to summon the courage to do what must be done- instead of simply what was simply right- is a tragedy.

It may well change higher education forever. It saddens me that so much had to be abused, from young men to good names to hope itself- before real action is taken. I mourn the victims.

Søren Kierkegaard said: Life can only be understood looking backward, but it must be lived going forward.

PT Barnum would have been proud

I was heartbroken this week as news that the wedding of the century lasted 72 days… Actually, what brought tears to my eyes was that the American public took yet another collective step down the ladder in race to the bottom, and this particular bottom is a big one, if that shot from the New York Post isn’t retouched!

How does anyone assemble such a large group of lazy, nihilist, shallow, hopeless aspirationalists and suck them into actually believing that shallow self-absorbed and dumb as a clogheel is any way to go through life (to quote Judge Smails from Bushwood CC). Oh, and all the while selling them products and services that redefine trashy?

1. Turn on a camera I guess.

P.T Barnum may have said “sell to the masses, eat with the classes… the Kardashian Empire has somehow gotten Americans to consume endless hours of totally worthless pettiness, appears to be selling them fairly lame clothing (with what is best described as VS syndrome it looked so good on her…), and almost loading all those follower/purchasers into a ridiculous fee loaded credit card. That was finally pulled, as the smell from the fees and interest must have even penetrated the perfumed confines of the Dash boudoir. It seems no one every got poor underestimating the class of the American people.

So truth be told, I don’t mind Kim. She’s pretty. And she is not the first to run the table in the star-infatuation for profit racket.

Elizabeth Taylor carried that type of fascination factor throughout her live, and was no stranger to quickie marriages and headline grabbing affairs. But she actually DID stuff. Decent movies. Ardent support of AIDS victims. Classy as hell fashion. And articulate positions on a variety of issues that concerned our society. On the other side of the spectrum of nothingness, there is Paris Hilton, who is furious she can’t muscle onto a magazine cover lately, having contributed equally as much to society’s table as Kim, to date.

Kim has become the most extreme symbol, so far, in just how low and desperate America’s aspirations are for something better, and how totally devoid too many Americans are these days of the skills and work ethic required to actually earn any of it. That’s the saddest part of this progression, and it won’t stop until we find something better to do with our time. Like developing a skill, or creating something that benefits society, our community, or just a circle of friends. And it will take tuning the crap out of our lives and getting on with something more rewarding and redeeming.

And what’s next for Kim and the value of the throne as Queen of Nothingness? Perhaps the best answer came during lunch with Sam Zell yesterday while he talked about distressed assets: price is the cure for any perceived defect.

Sponsorship for her next wedding, or a ringside seat at the birth of her as-yet-un-announced secret love baby (no doubt conceived during an yet-to-be announced affair while married to her now belatedly-beloved for 72 days) may well fetch less that $17M. How much less and how quickly her price falls depends on how soon America snaps out of it, and moves on to something with meaning.

I’m counting on that happening, but not fast enough.

The Kardashians next season begins November 27th. Plans for her run for the Senate are as yet un-announced…

Now everyone knows...

It’s been a busy few weeks for Trust.

When Fast Company covered the concept recently, they called it “The Sharing Economy”. Now more light and more capital has begun to flow toward companies that are enabling the peer to peer trading that the web promised long ago. (Isn’t it funny how the web delivers, if you can afford to wait long enough)!

Rachel Botsman coined the term  Collaborative Consumption ( or “CollCons”) and has  written about it in “What’s Mine is Yours” . She’s become a bit of an evangelist for the power of sharing and consuming, peer to peer. Besides getting cred for the concept at TED , she’s been right on top of every move in the CollCons space. Like Getaround winning the battle of Tech Crunch. And Ashton Kutcher investing in AirBnB. Full disclosure: I have an investment in, and a deep belief for, the benefits of  TrustCloud, mentioned below.

So what, if anything, is holding this movement back from breakout growth? Why can a neighbor lean over the fence and ask for something, but the online equivalent results in apprehension?  When you hand the housekeys  to a couchsurfer, leave the kids with the new sitter, or hitch a ride with three total unknowns, it’s not a natural feeling. I’ve written about it in my MadMen post, as well as the downside in my Catfish story. CollCons could be sooooo good if we could only enjoy the benefits of peer to peer –without that dollop of angst in the pit of our stomachs.

The antidote?  Trust. It’s kind of the reverse of the behavior I blogged about in Race to the Bottom. And it’s closer to becoming a reality in the CollCons space.  I’ve determined  six qualities that can be measured and portable (to a variety of sites) and will help achieve the comfort levels needed to scale users and usage.

1. I’m Helpful: I contribute online; so I’ll be considerate and prepared as your host.
2. I’m Local: I grew up or lived here for a while, so I know the best places & activities around.
3. I’m a Connector: I’ve got many local friends, so I can introduce you to interesting folks.
4. I’m Worldly: I’ve travelled a lot, so I know what makes a good host in a variety of cultures.
5. I’m Authentic: I’m open about myself online, so the description about my product (self) is also genuine.
6. I’m Consistent: I’ve got an established history with school & work, so I’m a more responsible.

While some companies in the CollCons community are thinking of ways to develop this algorithm themselves, TrustCloud has begun to test its beta “Trust Indicator” integration in three CollCons leaders. The advantage to using the TrustCloud API is that CollCons brands will have a trust indicator with no development costs, the scores leverage the power of the entire CollCons network, and the scores are portable.  [Unlike eBay Power Scores, with TrustCloud, good behavior on a shared room makes for good ratings in a ride share, etc.]

I’m deeply committed to “trust” in the real world, and I’m excited about its prospects to enable more peer to peer sharing online. But I’m also aware of how online behavior can be gamed and trust abused or never created.   So I’m excited about the day when this artificial drag is finally removed from the CollCons market. Meanwhile, I’m jazzed to help all members work more effectively toward this goal.

There’s been a story circulating among the Funda-gelical crowd that the world is ending on May 21. Sounds about right, based on my week so far.

Anyways, I’ve lived through a few end-of-the-world scenarios [remember Y2K?] and what interests me is the number of ways people come up with businesses to deal with the problem! I’ve heard that people focus best when they are terrorized, (which would explain my ability to make up airtight cover stories, even as my father pulled the Olds ’88 into the gravel driveway). But couple the End of the World with American entrepreneurship and you get brilliant solutions to addressing post-Rapture administrative chores. Here a few of my favorites:

There’s one company that offers to care for the pets of the newly-raptured after they go to heaven…. but please note, “Unfortunately at this time we are not equipped to accommodate all species and must limit our services to dogs, cats, birds, rabbits, and small caged mammals. Please note: we can now offer rescue services for horses, camels, llamas and donkeys in NH,VT, ID and MT”.  Anyways, all caregivers are confirmed atheists, so there is no chance they will be called up when you are. Part with $135 per pet, and you’re covered, not matter what happens. No refunds.

There’s also a handy guide to navigate the post-rapture as well, pulled to gether by Kurt Seland. I looked up Money (there was no section on venture capital: I guess angels take over after the rapture?). Anyways, according to Kurt, hard currency will become obsolete. Currency and coin is expensive to produce, lends itself readily for drug trafficking and, with high tech equipment, is too easily counterfeited. The debit card will become the tool for all personal financial transactions. However, at some point after the rapture, probably right after the two witnesses are killed, everyone will be required to get a mark on their right hand or forehead in order to buy and sell. Do not, do not, do not under any circumstances participate by receiving this mark. All those who receive this mark known as “The Mark of the Beast” are doomed for eternity.

That’s one man’s opinion, anyways. You can probably pick up the book for cheap sometime after May 21st, depending on how things work out.

My point is this (other than getting great SEO on May 21st): people are always coming up with ideas to make a buck. I respect that. See you on the 22nd.

.