Maximum Freud

Posted by admin on May 19th, 2010

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A few thoughts on “Maximum Freud”

In 1972, I was young engineering student at South Dakota State University in Brookings, SD. One of the first courses I was required to take was a short-course on slide rules. For those of you who don’t know what a slide rule is – first came the abacus, then came the slide rule, and then came the calculator.

This was a time when the real “cool geeks” on campus walked around proudly displaying their black carrying case for their slide rule that was attached to their belt. Brainiacs on parade, a way of telling the world how smart they were.

Early calculators were first showing their face around 1970, but in 1972 they were still pretty expensive. I remember arguing with my teacher about whether or not the slide rule course was necessary and his response was that “all engineers need to know how to run the slide rule.” Tough to argue with that logic.

But of course his thinking was wrong. Even though I took the course and passed it with flying colors, I’ve never used a slide rule in doing engineering work. Engineers at Hewlett Packard and Texas Instruments who were working on next generation calculators at the time would have laughed at my teacher’s assertion that slide rules were always going to be the centerpiece of the engineer’s tool chest.

Clearly this period of time was the end of an era. It was the end of the slide rule era and the beginning of the calculator era.

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business trends, historical perspective, powerful idea, prediction, technology trends 1 Comment »

Addressing the Problem of Addresses

Posted by admin on May 3rd, 2010

Address 567

When Hurricane Katrina hit the city of New Orleans the US Post Office was faced with a major dilemma. For countless centuries, the modus operandi for the post office was to deliver mail to a location, and the individuals who lived at that location would stop by and pick up their mail. But during the hurricane, the floods had destroyed all of the “locations”.
Normally, if a location has been destroyed, the post office will simply put a forwarding address into the system and the mail will reroute to the new location. However, there was nothing normal about the Katrina disaster, and countless thousands of people were suddenly placed in limbo, transported to cities across the country, some to live in the new city permanently, others to continue on a nomadic journey that would find them living in as many as 10-15 different locations over the course of the coming years.
Katrina victims and the people trying to reach them by mail faced a significant delay, at best, as their mail was either held up in the post office of origin or sent to a succession of temporary addresses. At worst, many letters became permanently lost as the legacy systems inside the U.S. Postal Service tried desperately to adapt to some rather extraordinary circumstances.
This disaster brought home the fundamental problems associated with delivering to a ‘location’ rather than delivering to a ‘person’.
The average person in the US will move 16 times over the course of their lifetime, roughly once every five years. In any given year, approximately 20% of the population will change the place they call home.
Complicating the problem further, the average teenager today will hold 11 different jobs by the time they are 30, and with work becoming more project-based, that number is sure to climb.
Over the past decade the telephone industry began going through a similar transformation. In the early 1990 the vast majority of phone lines went to a location. Today, the vast majority of phones sold are going to individuals with little regard to their ‘location’.
Similarly, in 1995 the vast majority of all email addresses were for location-based computers. You had to be using a specific machine to get your emails. Today, the email systems have been adapted so people can receive their email where ever they may be.
All of the more recent communications technologies, such as text messaging, Facebook, and Twitter, have adopted the policy of sending information to the individual as opposed to a location.
While it is true that in some cases we want things delivered to a business at a specific location, such as parts for a manufacturing operation or books for a school, our current systems don’t allow for the separation of individuals and locations. Consider the following scenarios.
• Scenario #1: In the military, soldiers can’t wait for the next letter from back home. Because of the sensitivity of their position many don’t have access to cell phones, and being mobile, moving from base to base, the delivery of letters becomes a logistics nightmare.
• Scenario #2: The number of telecommuters have grown rapidly over the past decade and in many companies, over 30% of the workforce now works from home. In the past it was easy to send a letter to a person at the company’s main address. With employees scattered across several continents, the problem with tracking all these addresses continues to escalate.
• Scenario #3:  One of the past guests on the David Letterman Show was Dean Kamazes, an ultra-marathoner who runs 200-300 miles at a time. During the interview, Letterman asked Dean how he managed to eat while he was running. His answer was that he used a cell phone to call a pizza delivery shop and had the driver meet him at a location he planned to be at 30 minutes later. In this case, the pizza was being delivered to a future location.
It is easy to make the assertion that the postal system is stuck in the past. However, there is a big difference between the delivery of a physical item and the delivery of digital item. Rest assured, the postal system is not alone. FedEx, UPS, and local courier services are all heavily immersed in the delivery of physical items to a physical location.
The world of addressing has become a growing source of friction, slowing the connection between buyers and sellers. Most people know how difficult it is to receive a “signature required” package through FedEx or UPS. Wouldn’t it be nice to have the item delivered directly to you, no matter where you happen to be?
So, is it possible to create a technology for the U.S. Postal Service, FedEx, and UPS that will enable them to switch from static location-based addresses to dynamic, ever-changing personal addresses? More importantly, if someone invents the technology, will any of the delivery services implement it?
The starting and ending nodes of our connected world are often major disconnect points. The efficiencies we have come to expect in the online world simply don’t translate well into our current systems in the off-line world.
So where do we go from here? What are the systems we need to create to solve these problems? The answer to these questions is a system that will redefine our future.

When Hurricane Katrina hit the city of New Orleans the US Post Office was faced with a major dilemma. For countless centuries, the modus operandi for the post office was to deliver mail to a location, and the individuals who lived at that location would stop by and pick up their mail. But following the hurricane, the floods had destroyed all of the “locations”.

Normally, if a location has been destroyed, the post office will simply put a forwarding address into the system and the mail will reroute to the new location. However, there was nothing normal about the Katrina disaster, and countless thousands of people were suddenly placed in limbo, transported to cities across the country, some to live in the new city permanently, others to continue on a nomadic journey that would find them living in as many as 10-15 different locations over the course of the coming years.

Read the rest of this entry »

business trends, historical perspective, new strategy, powerful idea 3 Comments »

Systems Thinking and the Future of Education

Posted by admin on April 27th, 2010

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Short video clip on “Systems Thinking”
recorded at the Plan Fort Collins event on March 3, 2010

A recent article in iLibrarian explained it this way.

Online education seems set on its course to overtake traditional colleges within the next few decades, especially as our society becomes ever more dependent on the internet to get our work done.  Thomas Frey, an expert on online education, compares our growing reliance on the education system to the reliance of ancient Romans on their numeric system.  He indicates that much like the Romans, we have become increasingly reliant on our education system which is meant to pass on information from one generation to the next, hesitant to any change that may occur (explaining the rough transition to online education).

historical perspective, powerful idea, prediction, technology trends No Comments »

Competing for Status

Posted by admin on April 10th, 2010

8 status symbol 684

Competing for Status
32 accomplishments that will give you the influence of a college degree
“Does being smarter make you happier?”
This was the question I posed to the audience at a recent DaVinci Institute event, hoping to gauge their reaction.
I found it fascinating to watch this very conflicted group of amazingly bright people as they struggled to put their thoughts into words. In the end, the answers, which varied tremendously, seemed to fall mostly into the category of “No, but…..”
A natural follow-on question would be, “Okay, so what constitutes being smart?”
Ignoring College
Last week it was announced that Han Han, a Chinese professional rally driver, best-selling author and China’s most popular blogger, has been nominated as one of the 100 most influential people in the world by Time magazine. He is also a person who never graduated from college.
Han Han has taken his place among the likes of Bill Gates, Tom Hanks, Madonna, Steve Jobs, Mark Zuckerberg, Michael Dell, Paul Allen, Ben Stiller, Brad Pitt, George Clooney, Matt Damon, and Sean Combs as some of the smartest and most influential people in the world, none of whom have ever graduated from college.
Over the years, college degrees have evolved into a significant status symbol, one of the world’s most recognizable symbols for being smart. A college degree is a definable accomplishment requiring years of study, so there is some validity to the notion that people who graduate from college, on average, are indeed smarter than the average non-degree holder.
However, it is also clear that some of the world’s most successful people took a different path and never bothered with finishing college. In fact, few people know, or care, that the sheepskin is missing from their walls. They have achieved status in other ways.
Logically then, if you are a talented person and haven’t had the time, money, or opportunity to go to college, are there some legitimate substitutes for status that the rest of the world will consider to be of equal or greater value?
College leaders have done a tremendous job of cementing the value of a college education into the minds of virtually everyone.
If you asked a cross-section of business leaders, “What other accomplishments would you consider to be as important as a college degree?” chances are they will struggle to give you an answer that doesn’t have a college education somewhere in the background.
But many options do exist.
A Status Symbol under Attack
In one of my recent papers, The Future of Colleges & Universities:  Blueprint for a Revolution, I talked about how colleges were on the verge of being attacked, and one of the areas they will be attacked on is the areas of “status.” College degrees are important but new status symbols are beginning to emerge that compete directly with the inherent status of a degree.
Until recently, colleges have primarily faced competition from other colleges. Even though they will debate the value of one college degree over another, they remain unified in their support of higher education.
Today, there are many status symbols that compete with college degrees, and in the future there will be many more.
Royalty, such as the King and Queen of a country, is a great status symbol that comes with tremendous privilege, but it is not an accomplishment. People are born into it.
A Nobel Prize is also a remarkable status symbol, but it generally requires one or many college degrees somewhere in the person’s background.
So what kind of accomplishments are accessible to most people that could be construed by a potential employer, business colleague, or acquaintance as being the equivalent to a college degree, or for that matter, even better?
To answer this, I’ve decided to break this discussion into four categories:
1. Components of Equivalency (equal to a course or multiple courses)
2. Equivalent to a College Degree
3. Better than a College Degree
4. Future Status Symbols
Even though we are discussing alternatives to going to college it doesn’t mean that there is no learning involved. Quite the contrary. Learning becomes an essential ingredient in virtually every path to success, but in some cases, far less formalized.
The following examples are simply intended to expand your awareness of literally thousands of options that currently exist.
Components of Equivalency
Much like taking a series of courses that stack up and form the basis for a college degree, a series of smaller achievements can easily be used to form an equivalent status.
1. Certificate Programs – Most certificate programs are intended to either replace or supplement existing degree programs. The weight of this accomplishment varies tremendously with the institution that is granting it.
2. Certification – Certifications, such as Microsoft, Cisco, or Oracle Certification, have become a very popular way to bestow credentials.
3. Apprenticeship – The age old process of working for years under the tutelage of a master craftsman is still alive and well in some industries.
4. Foreign Travel – With foreign travel becoming increasingly common, it tends to hold less value today than in the past, but is still recognized as a significant achievement.
5. Own a Patent – Becoming a patent holder is also less rare in today’s world than in the past, but is still regarded as a noteworthy accomplishment.
6. Produce an Event – Events range from small to huge. But a successful event, no matter the size, has the ability to position you in a way that will cause others to take notice.
7. Memberships – Status by association. The credibility of an association adds to the credibility of you as an individual.
8. Starting a Business – Launching a business is a significant learning experience regardless of how successful it becomes. It also adds a new dimension to the identity of the founder.
Equivalent to a College Degree
College degrees are viewed as a significant personal accomplishment sustained over a longer period of time. Similarly any accomplishment competing for that kind of status needs to convey a similar sustained effort. Here are a few examples:
1. Published a Book – If a major publisher gives the green light to publish your book, their endorsement brings with it considerable esteem.
2. Produce a Documentary – There is something noble and noteworthy about producing a documentary that puts documentarians into a class of their own.
3. Foreign Travel with a Cause – Whether you’re working with Engineers Without Borders creating bridges or water systems for desolate villages or working with Teachers without Borders and teaching young people a much needed craft, foreign travel that is tied to a cause carries far more weight than travel alone.
4. Serve on a City Council – Local elections have a way of validating your status in the community and serves as a wonderful learning experience.
5. Commissioned Artwork – Artwork is only as important as the artist who tells the story. Commissioned art brings with it a rare position of honor.
6. Become an Expert – Brendon Burchard, Founder of the Experts Academy, has defined 10 key elements that qualify someone as being an expert. Most people can achieve the ranks of “expert” once they understand the process.
7. Creating a High-Traffic Website – The size of your digital footprint is directly proportional to your online status.
8. Dog Breeder – This is an example of a well-recognized industry specific title that virtually everyone recognizes as important. Dog breeders hold prominence in social circles far removed from that of the pet-owner community.
Better than College
It is a fine line between status symbols that are the equivalent to college and those that are considered better than college. Here are a few that fall into the better-than-college territory:
1. Become Famous – Whether you become famous as an actor or actress, writer, cartoonist, artist, columnist, movie director, or fashion designer, fame is a rare privilege bestowed on the limited few.
2. Prestigious Awards – Granting awards is a time-honored tradition, but over the years, only a few awards have risen to the top. These awards bestow tremendous privilege on the recipients.
3. Elected to a Higher Office – When people vote someone into office, it’s a unique and powerful way of telling the world they are important.
4. Build a Financial Empire – There are many ways to build a personal fortune, but only a limited few who actually figure it out. People who have amassed a financial empire command tremendous respect.
5. Building a Business Empire – Building a business empire is like playing the game of chess without the rules. It is a game of skill, timing, determination, and chance that only the exceptional few have mastered.
6. Game Designer – Much like movie producers, game designers are relegated to the lofty ranks of royalty in the emerging kingdom of the pixel elite.
7. Successful Inventor – Becoming successful as an inventor is far different than what Hollywood would have you believe. It requires mastering many complicated skills. Successful inventors are part business people, part visionaries, part opportunists, and a big part lucky.
8. Create/Manage a Fund – Those who are placed in a position of “trust” and granted the role of gatekeeper to the money, tend to command special respect among the general public.
Future Status Symbols
When systems and technologies evolve, so do the opportunities. Each change in these areas comes with a need for next-generation rockstars. Here are a few possibilities.
1. The Outlier Label – As Malcom Gladwell so aptly described in his book The Outliers, any person who dedicates over 10,000 hours of their life to a particular skill or profession moves into the elite ranks of revered master or expert. The dedication and proficiency exuded by an “outlier” is far beyond that of the vast majority of degree holders.
2. Owner of a Unique Data Feed – Information is still powerful and having access to a novel and unique data feed will grant you unusual clout and status in the future.
3. Global System Architect – We are transitioning from national systems to global systems and one of the coolest monikers in the future will be that of a Global System Architect.
4. “Disturbance-in-the-Force” Web Presence – Having a significant online presence is one thing, but causing the center of gravity to shift among the digital natives, with the introduction of a new organic business model, will grant you unusual preeminence in the online world.
5. Clone Designer – “I need a clone.” As time constraints begin to overwhelm much of the world’s population, the pent-up demand for clones can be felt almost everywhere. Uniquely positioned at the apex of this soon-to-be emerging industry will be the clone designers.
6. Launch a Network – Networks have far reaching influence and come in a variety of shapes and sizes. Whether it’s a communications network, a professional network, or a social network, the founder of a network is also the heart and soul of its significance.
7. Launch the “You Inc.” Brand – You are your own brand. When you, as a brand, become a household name, many new doors will open for you.
8. Founder of a Movement – With every movement comes a certain nobility and distinction that helps circumvent the traditional path to success.
The Seeds of Competition
After listing all of these ways to gain status without going to college it occurred to me that I’ve only tangentially discussed the competing forms of status that will be putting colleges on the defensive.
Status ends up being a culmination of who you are, not how much you know. While the experience of going to college can be quite valuable, so can other experiences. Competition will come in the form of competing experiences, and going beyond the experience itself, and translating it into significant accomplishments.
Successful people don’t have jobs, they have a calling. Each accomplishment stems from a passion and drive that is uniquely their own, not from a requirement that someone else dictates. Competing experiences will be designed to nurture the budding talents in people and give them ownership of the path they choose to take.
We are entering the age of hyper-individuality, and the path to each person’s most significant accomplishments will demand a hyper-individualized approach. Competition will be framed to fit around the wants, needs, and desires of that specific individual at that specific moment in time.
In the end, it will be far less about the path and far more about the results.
By Thomas Frey

32 accomplishments that will give you the influence of a college degree

“Does being smarter make you happier?”

This was the question I posed to the audience at a recent DaVinci Institute event, hoping to gauge their reaction.

I found it fascinating to watch this very conflicted group of amazingly bright people as they struggled to put their thoughts into words. In the end, the answers, which varied tremendously, seemed to fall mostly into the category of “No, but…..”

A natural follow-on question would be, “Okay, so what constitutes being smart?”

Read the rest of this entry »

historical perspective, new strategy, powerful idea, social trends 8 Comments »

Ghost Towns of the Internet

Posted by admin on March 27th, 2010
Ghost Towns of the Internet
When today’s data goldmines becomes tomorrow’s data carcasses
In 1859 the tiny community of Tin Cup, Colorado got its first taste of gold fever. A tiny amount of gold was all it took for prospectors to start poking around with hopes of striking it rich. Twenty years later they landed their first major strike and rumors of the find spread across the country.
By 1900, the once insignificant mountain settlement had mushroomed into a bustling gold town with over 2,000 people. But in a short time the mines were exhausted, the people left, and the post office closed its doors in 1918. Today, the only remnants of this once thriving community are a few abandon buildings and a couple signs along the road.
Ghost towns are a rich part of world history. There are literally thousands of examples of these now-irrelevant pin pricks on a map. Overnight sensations quickly became a distant memory in the years that followed.
Is the Internet today really that much different than the gold rush stories of the late 1800s?
For ghost towns, the reasons behind their demise vary tremendously. Pripyat, a small town in northern Ukraine, reached a population of 50,000 before the Chernobyl Nuclear Power disaster. Today, it is glowing with abandonment.
Jonestown, Guyana was founded as both a “socialist paradise” and a “sanctuary” from media scrutiny by cult leader Rev Jim Jones. After reaching a population of nearly 1,000 people, the entire population participated in a mass suicide, causing it to become little more than an entry in the why-in-the-hell-did-they-listen-to-him history books.
These, of course, are unusual examples. But the world is filled with unusual examples. A disaster is still a disaster no matter how unusual the circumstances may be.
Will the digital ruins of today’s Internet ever compare to the physical ruins of Ancient Greece or Ancient Rome? Will anyone even know they existed?
Ghost Brands
In 1962, Woolco began a 20 year rollercoaster ride through retail history. At its peak the Woolco name was a powerful force in the marketplace, with hundreds of big box stores in the U.S., Canada, and Great Britain employing tens of thousands of people. Today the name hardly merits a mention in history books.
In the 1970s, IBM’s Selectric Typewriter had established itself as a critical cornerstone of office activity. But when computers arrived in the 1980, typewriters began to disappear and now the Selectric brand is little more than a museum piece.
In 1999 some of the top Internet properties were Lycos, Xoom, Excite, AltaVista, and GeoCities. Each of them were attracting millions of web visitors each month, competing head to head with companies like Microsoft, Yahoo, and Amazon. Today each exists in name only, resting quietly in the shadow of its former existence.
Organic Content Creation
As we entered the 2000s, many companies began to focus on organic content creation with customer doing most of the heavy lifting when it comes to the time and labor used to build a primo web property.
As a result of this trend, data has been accumulating so fast that companies are investing heavily in server capacity to accommodate customer demand. While the exact numbers are being closely guarded, here are some notable data points to consider:
• Google is rumored to manage over one million servers in its various data centers around the globe. Google’s data capacity for its search, YouTube, G-Mail, and other data-heavy services is said to be over twice the size of its competitors – Microsoft, Amazon, Apple, Yahoo, and IBM.
• Microsoft’s newest data center in Chicago has been architected around installing entire containers filled with servers. Each container holds over 2,000 servers and can be installed in less than eight hours.
• Amazon currently runs the world’s largest online store and one of the world’s largest cloud computing operations.
• IBM currently operates eight million square feet of data center space on six continents.
• EDS is now managing over 380,000 servers in 180 data centers.
• Facebook’s data centers store more than 40 billion photos, and users upload 40 million new photos each day – about 2,000 photos every second.
• The Tokyo Data Center serves as Japan’s Internet backbone. Japan claims it to be the largest data center in the world
• IDC is predicting that the cost of powering data centers around the world will reach $40 billion annually by 2012. How long before that number doubles, triples, or quadruples?
The difference today between the ghost towns of the Wild West and the brand names of the 70s is the speed with which changes are happening.
Organic growth often leads to organic abandonment. Is the speed with which they arrive a predictor of the speed with which they will leave?
Future Ruins Viewed as a Digital Past
As we look at the next generation of the Internet, watching carefully as it unfolds, we cannot help but be struck by how quickly it has infiltrated our lives and how much of our attention it currently commands.
Much like the physical structures in our cities that form along the horizons of our urban landscapes, the data structures inside today’s data giants represent some of mankind’s most remarkable feats. True, they exist only as a digital compliment to the bricks and steel of physical buildings, but they hold within them vital clues about who we are, what we find valuable, and our drives and passions for forging ahead.
So what will happen to the likes of these ground-losing giants?
• Second Life – Less than 3 years ago this one time buzz-dominator of the virtual world’s industry was the darling of media discussions, but has now been relegated to competing for mindshare with lesser contenders like video games and social media.
• MySpace – People have rapidly shifted from the chaotic page-building systems on MySpace to the cleaner look and interface on Facebook. How long before some new contender arrives and begin to steal market share from both?
• Plaxo – Starting off as a constantly updating business card service, Plaxo has lost ground to other mindshare grabbers like LinkedIn and Twitter.
• Monster.COM – Monster suffered a 33% decline in revenues in 2009 compared to 2008 as the bad economy and lack of jobs drove many would be customers to CraigsList and other contenders.
• Friendster – An early pioneer in social media, Friendster has lost its footing and remains a distant memory among the historians for social media.
• PhotoBucket – Riding on the coattails of MySpace, this one-time darling of the photo hosting world has lost ground to companies like Flickr and Picassa.
Certainly each of the companies has the potential to breathe new life into their business and add buoyancy to their sinking ship. But even the best business managers can only hold things together for a while.
Life expectancy for modern day businesses, even the remarkable ones, is measured in decades, not centuries.
Are today’s success stories nothing more than a prelude to tomorrow’s disaster stories?
The digital world as it exists today contains the keys to humanity, the raw essence of personhood, and in the long run, the future of our children’s children.
More important than the decaying wood and weed infested streets of physical ghost towns, what will happen to the data reserves and important scraps of our civilization that can be instantly erased with the flip of a switch rather than the erosion of time?
These are all hard questions without good answers. But rest assured, the ghost town era of the Internet is coming, and for some, it has already arrived.

Ghost Towns 676

When today’s data goldmines becomes tomorrow’s data carcasses

In 1859 the tiny community of Tin Cup, Colorado got its first taste of gold fever. A tiny amount of gold was all it took for prospectors to start poking around with hopes of striking it rich. Twenty years later they landed their first major strike and rumors of the find spread across the country.

By 1900, the once insignificant mountain settlement had mushroomed into a bustling gold town with over 2,000 people. But in a short time the mines were exhausted, the people left, and the post office closed its doors in 1918. Today, the only remnants of this once thriving community are a few abandon buildings and a couple signs along the road.

Ghost towns are a rich part of world history. There are literally thousands of examples of these now-irrelevant pin pricks on a map. Overnight sensations quickly became a distant memory in the years that followed.

Is the Internet today really that much different than the gold rush stories of the late 1800s?

Read the rest of this entry »

business trends, future scenario, historical perspective, prediction, scary future, technology trends 6 Comments »

The Day that Google Died

Posted by admin on February 22nd, 2010

The Day that Google Died 831

It was a frenzy of activity as workers scurried from office to office, making their final checks, gathering books, papers, and personal belongings. Many were still stunned over the announcement that Google was closing its doors. The final minutes before the deadline were reserved for tearful hugs and remorseful goodbyes, but for the people of the world these brief moments of stunned silence would soon be replaced with long term anger and outrage.

A mere three weeks earlier this one-time tiny search engine company that overnight had grown into a goliath on Wall Street had appeared to be an invincible force on the global business stage. But now after wave upon wave of well-orchestrated attacks, the giant corporation had fallen to its knees, and in true medieval form, endured the equivalent of a public beheading of its data, its once stellar revenue streams, and its corporate integrity.

Teams of their best data-smiths and strategy people worked around the clock to plug the holes in their sinking ship, but were woefully unprepared for this kind of assault. After weeks of sleepless nights, witnessing one crippling blow after another, a grim new reality began to take hold. In the end, all data had become mangled to the point where it was irretrievable, and all backup systems suffering a similar fate.

TV cameras from around the world watched in horror as a single hand reached up and turned off the final power switch.

With the power turned off, an eerie silence filled the room.

The former giant of global business had breathed its last breath. This was the day that Google died.

Read the rest of this entry »

business trends, future scenario, scary future, technology trends 13 Comments »

The Great Bank & Credit Card Backlash

Posted by admin on February 8th, 2010
The Great Bank & Credit Card Backlash
The pungent odor of corruption is offending more than few nostrils
Recent attempts by Congress and the Federal Reserve Board to curb the excessive fees being charged by credit cards, banks, and finance companies have resulted in a punitive industry response with interest rates and fees climbing in almost every category. This action has resulted in nothing short of a full-scale revolt by a victimized-feeling public.
Consumers are slamming on the brakes. Revolving credit — largely made up of credit card debt — fell by nearly 20% in November, the largest drop on record, according to the Federal Reserve. Through October, the number of new credit card accounts dropped 46% from October 2008, according to Equifax.
“Washington doesn’t get it,” says a DaVinci Institute researcher who asked to remain anonymous. “People now view banking and credit cards as some of the most corrupt industries on the planet. The length to which they are willing to abuse their own customer base to improve profits is astonishing, and congress has been condoning this practice for years.”
The smoldering flames of animosity behind the credit card backlash are being fueled in part by an equally malicious banking industry. Controversial banking fees have fattened banks’ bottom lines at the expense of our most vulnerable consumers.
At first glance, the arrangement posed by banks seems reasonable enough: Overdraw your account, and the bank will cover the transaction — for a fee. Problem is, consumers don’t get a choice in what transactions get covered and how the fees get assessed. In recent years, as bankers have begun to drool over how lucrative these fees can be, they’ve devised even sneakier ways for consumers to overdraw their accounts, to the tune of $36.7 billion in revenue last year.
Banks have done this by covering debit card transactions as small as $1 and charging a fee as high as $39. Some also charge fees before consumers are overdraw by deducting a purchase when it’s made, instead of when it clears. The timing trick alone has been worth billions. And they’ve nefariously learned to order transactions from highest to lowest dollar amount, emptying consumers’ accounts quicker and trigging more overdrafts.
On average, consumers will pay a fee of $26.68 every time they overdraw their account, according to data from Moebs Services, an economic research firm. That means that if consumers overdraw their account by $100, they’d pay an annual percentage rate (APR) of 696%, if the credit is paid back in two weeks.
Another casualty of this war is declining credit scores. From the 3rd quarter of 2006 to the 2nd quarter of 2009, the number of consumers considered “deep subprime,” with such low credit scores they qualify for credit only at steep interest rates, if at all, rose from 34.4 million to 39.8 million, according to Experian.
While lending companies are quick to say they have no incentive to lower credit scores, they indeed do. Lower credit scores mean higher interest rates and potentially higher fees.
As the burden of repayment climbs, higher risk individuals paying a higher interest rate will have a higher default rate. Higher payments increase the likelihood of failure. It becomes a self-fulfilling prophecy, where an industry can point and say, “I told you so.”
Yes, the interest rates, overdrafts, and declining credit scores are fueling calls to reform the entire industry. But banks and credit card companies form a powerful lobby, and as distrust over any action taken by Washington grows, and campaign contributions are being dangled by the industry to blunt the outcries for reform, consumers are left with few options and have resorted to taking matters into their own hands.
The backlash is in full swing. Credit cards are being cut up, houses are being walked away from, and the industry is now left holding the bag. In the process, few tears are being shed over industry losses.
So where do we go from here?
Major industry players have set themselves up as easy targets. In the midst of this chaotic backlash lies some tremendous opportunities, and smart entrepreneurs will figure out ways to capitalize on them.
The cornerstones of the next generation financial service industry will be based on attributes like trust, openness, ethics, and credibility. Players that base their company on these founding principles will quickly gain favor among fee-weary consumers.
Long-term winners will forego near-term profits in favor of establishing themselves as a major contender.
Credit cards will be replaced with a variety of easy to use, bank-on-a-chip devices, complete with biometric security and the ability to monitor account activity real-time. Other devices will give consumers real-time access and monitoring of their own credit report.
Look for foreign banks and foreign credit card companies to make a serious play. Some will even come with easy forms for establishing a foreign corporations through which your money can be channeled.
In the end, consumers are okay with paying small fees and service charges. But when customers feel victimized by the companies who have been placed in a position of trust to guard and protect their money, change is inevitable, and it’s happening now.

Credit Card Backlash 782

The smell of corruption is offending more than few nostrils

Recent attempts by Congress and the Federal Reserve Board to curb the excessive fees being charged by credit cards, banks, and finance companies have resulted in a punitive industry response with interest rates and fees climbing in almost every category. This action has resulted in nothing short of a full-scale revolt by a victimized-feeling public.

Consumers are slamming on the brakes. Revolving credit — largely made up of credit card debt — fell by nearly 20% in November, the largest drop on record, according to the Federal Reserve. Through October, the number of new credit card accounts dropped 46% from October 2008, according to Equifax.

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10.) Trends to Watch in 2010 – The Coming Explosion of Single Use Devices

Posted by admin on January 18th, 2010
The Coming Explosion of Single Use Devices
Over the past couple decades the World Wide Web has been growing by leaps and bounds with huge amounts of new data being added on an hour by hour basis. Accessing this information, however, has always required an interface device which has traditionally been the computer. A computer was a computer and for most of us if we had a screen and a keyboard we were good to go.
However, as gamers are quick to attest to, there are huge differences in the gadgets we use to interact with the data, and these gadgets often determines the speed, ease of use, and even our willingness to interact with it.
Until recently, the push among device manufacturers has been to create one awesome super cool piece of equipment that could do everything, although nothing particularly well. That, however, began to change when Amazon and Sony started getting traction with their electronic book readers.
The reason book readers began to catch on was because they provided a better user experience. The way a person reads a book is vastly different than the way they interact with a computer. People who studied the humans-to-book interface realized that generic computers provided a rather poor book reading experience and that if a specialty device were to be constructed, it would open the doors to very niche marketing opportunities that were currently getting lost in all the noise of Web.
They concluded that the optimal book interface would have to be a book reader with a paper-like reading surface that allowed people to read for long periods of time while lying in bed or sitting on a plane without the slightest hint of eye strain. It needed to have wireless download capabilities, batteries that last as long as the person doing the reading, the flexibility of changing font sizes, making notes, marking up the pages, and saving the changes for later access. It had to be light and portable, and to really make serious inroads, it had to be less expensive than a computer.
With Amazon’s success in selling the Kindle, others have been quick to jump onboard with their own book reader products. Recently my wife Deb and I visited several dozen of the companies who were launching new book reading gadgets at the Consumer Electronics Show (CES) in Las Vegas. (Notes on these companies below)
What’s most important to understand here is that Amazon didn’t just create an opening for book readers. They proved a market for many other single use devices, provided they have a superior interface than multi-use devices.
With this idea in mind, I began to think through the world of possibilities, speculating on the next big idea for single use devices, and what the applications might be. I’m sure I’m only scratching the surface, but here are a few ideas that came to mind:
• Airline Booker: Travelers in airports have a tough time accessing the Web. Currently it is very difficult to use an iPhone or Blackberry to surf the web and make an airline reservation and airports tend to be a rather unfriendly setting for someone sporting a laptop. The trend here will be toward branded airline bookers with names like Travelocity, Orbitz, and Expedia taking the lead. Individual airlines like Southwest, United, and British Airways will be quick to follow, with some offering free devices to their “gold club” members.
• Day-Trader Portfolio Manager: People who have money to invest are often too busy to sit behind a computer monitoring the minute by minute changes in a stock. They need a device that is lightweight and portable with super fast access to specific pieces of data. Perhaps what’s most critically important is a feeling of control where the user has the feeling that they are in command of any given situation. Again, look for branded devices to surface with names like Ameritrade, E*Trade, and Charles Schwab.
• Courseware Taker: Students immersed in online education know the current limitations of sitting behind a computer all day. And the people creating the courses know all the limitations of channeling a learnable experience through the Internet. People who carefully study the student-learning interface will quickly find hundreds if not thousands of ways to improve upon it. These improvements will then manifest themselves into a device that is lightweight, portable, and inexpensive, with book-reader screens and audio-video capabilities that allows students to do all the things they like to do on the side.
• Health Checkers: Our ability to understand the inner workings of our bodies is creating a greater need to monitor and manage certain conditions. Athletes in training, people with restrictive diets, and those with diabetes, heart problems, and other reoccurring conditions are all seeking more timely information as well as access to solutions, experts, and the location of nearby medical facilities should problems occur. As a way to extend their brand, look for HMOs and insurance companies to put their name on these devices to create a branded health experience. Future heath care companies will be judged by the devices they offer to their customers.
• Facebooker:  Many social networkers don’t want to be left out of a conversation, not even for a little bit. Devices for managing multiple accounts, allowing for quick audio and video segments to be both produced and reviewed, may unlock even larger audiences. Although some believe the world revolves around Facebook, the interface will also need to accommodate other social networking platforms like MySpace, Twitter, LinkedIn, YouTube, and much more.
• Buyer-Seller Device:  People who engage in online auctions know the importance of a timely bid. Others who are involved in buying and selling products online have an ongoing need to stay plugged in to the marketplace. As a way to separate themselves from the free services like Caigslist, look for Amazon and eBay to take the lead on this one.
Certainly there have been many single use devices in the past like pocket games, address books, and music players that have failed to get much traction. The difference here is the level of sophistication and the deep understanding of user interaction.
The advantage of a single use device is that it is less complicated, and far less distracting. It caters to the specific needs of an individual and helps focus their attention with a superior operator experience.
I should make one clarification though. Certain kinds of data require a unique and different interface. While I have been referring to them as single use devices, they can in fact be multiuse devices based on a newly established interface. The inputs and outputs will start out as industry specific applications, but additional applications may give end users far more latitude.
At CES it was very easy to imagine how existing components like keyboards, screens, and touchpads could be combined to make an entirely new device. Whether it has a flexible screen, head-mounted displays, flip-down lenses, or embedded Pico projectors, or the user requires a touch screen, gesture controls, or sensory monitoring components, the advantage will go to people who best understand the specific user interface.
In the end, the best device will be the one that is invisible to the user, an imperceptible doorway between the user and what they are hoping to accomplish. Final results far outweigh the look and feel of the metal and plastic clenched between one’s fingers, but we have a few more evolutionary steps before the physical interface goes away.

Amazon Kindle 762

In the end, its less about the device and much more about the interface

Over the past couple decades the World Wide Web has been growing by leaps and bounds with huge amounts of new data being added on an hour by hour basis. Accessing this information, however, has always required an interface device which has traditionally been the computer. A computer was a computer and for most of us if we had a screen and a keyboard we were good to go.

However, as gamers are quick to attest to, there are huge differences in the gadgets we use to interact with the data, and these gadgets often determines the speed, ease of use, and even our willingness to interact with it.

Until recently, the push among device manufacturers has been to create one awesome super cool piece of equipment that could do everything, although nothing particularly well. That, however, began to change when Amazon and Sony started getting traction with their electronic book readers.

The reason book readers began to catch on was because they provided a better user experience. The way a person reads a book is vastly different than the way they interact with a computer. People who studied the humans-to-book interface realized that generic computers provided a rather poor book reading experience and that if a specialty device were to be constructed, it would open the doors to very niche marketing opportunities that were currently getting lost in all the noise of Web.

Read the rest of this entry »

business trends, future scenario, new strategy, powerful idea, prediction, technology trends 1 Comment »

9.) Trends to Watch in 2010 – TV-Internet Convergence

Posted by admin on December 31st, 2009
TV-Internet Convergence
Virtually everywhere you look there are video screens. You see them in bars, on elevators, in the back of taxis, and on airplanes. Even most cell phones have now have video screens. Some are connected to the Internet and others are connected to cable television.
In the future, people will look back at this time and see it as very confusing. Corporate turf battles have slowed the promise of the everything display where all content is available through all screens. And in many cases the public wasn’t ready to make the leap. All of that is about to change.
Cable TV companies and the major television networks are not going to like the years ahead as their market shares of the video content world begin to dwindle.
Until now, consumers have felt ill prepared to deal with the dizzying array of options when they enter an electronics store and manufacturers have interpreted that confusion as a marketplace not ready to make the switch.
Greg Belloni at Sony says, “Our stance is that consumers don’t want an Internet-like experience with their TVs, and we’re really not focused on bringing anything other than Internet video or widgets to our sets right now.” A widget is an industry term for narrow channels of Internet programming like YouTube or Hulu.
Bob Scaglione, Senior VP of Marketing at the Sharp voiced a similar comment. “I don’t think that consumers are yet ready to access all content on the Internet on their TV. For now, it’s more important to deliver content consumers want on a TV and let them do their browsing on a PC.”
Industry analysts also make the point that watching television is an entertainment activity where people lean back in their couch and disengage. Browsing the Internet, as the thinking goes, is a more immersive, lean forward activity, where the brain is in both output and input mode.
However, that argument has already been disproved with the iPhone, a do-everything device that has met with raging success.
Most of the problems leading up to the convergence have centered around the design of the interface. Consumers have become well-versed in working with browsers and surfing the Internet. And most have logged time working with game controllers found in the likes of Wii and Xbox. But they feel like they took a step back in time when they try to work the cable TV controls to access a television show or movie.
The Consumer Electronics Show next week in Las Vegas will feature TVs with direct Internet connectivity, or with on-screen access to content sites such as YouTube, Blockbuster and Netflix. As online video becomes intermingled with the living-room TV experience, a new consumer-friendly television interface will emerge, and downloading and streaming content services will take on a major role in the home entertainment ecosystem.
Here are some of the key data points to consider:
• The FCC recently announced it is moving forward with plans that will ensure broadband Internet access is available to virtually all households.
• Computers have penetrated 74% of American homes, but televisions are in 99% of all homes. Adding Internet to television will improve market penetration of the web by 25%.
• A recent survey by Deloitte showed that 65% of Internet users want online content available on their televisions with the younger generations pushing the hardest to switch.
• In Sao Paulo, a consortium of university researchers is nearly finished with a five-year digital TV project that promises to bring low-cost, high-quality broadcasts and TV-internet convergence to 50 million Brazilian households.
• In October, Intel announced its own TV-centric SoC (system-on-chip) chip, and other semiconductor designers and manufacturers are following close behind.
With the economy showing signs of improvement, and people have already started to wash their hands to rid themselves of the past decade, the consumer marketplace is preparing for some long overdue changes.
PREDICTIONS:
• Within 5 years, over 95% of all new televisions will be broadband Internet compatible.
• Within 10 years, cable television set top boxes will no longer exist.
OPPORTUNITIES:
If Apple were to start manufacturing their own televisions, they would quickly dominate the consumer TV marketplace because they know how to build an interface. Significant opportunities will be found in the design and implementation of next generation interfaces.
Video search technologies continue to be an area ripe for innovation. So far no one solution has really risen to the level where video search results are comparable to searching text.
Major opportunities can also be found in the aggregation and delivery of video content, and most importantly, the advertising and marketing mechanisms used to monetize the content.

TV-Internet Convergence 575

Virtually everywhere you look there are video screens. You see them in bars and restaurants, on elevators, in the back of taxis, and on airplanes. Even most cell phones have now have video screens. Some are connected to the Internet and others are connected to cable television, two distinctly different uses for what amounts to the same screen technology.

In the future, people will look back at this time and see it as very confusing. Corporate turf battles have slowed the promise of the everything display where all content is available through all screens. And in many cases the public wasn’t ready to make the leap. All of that is about to change.

Cable TV companies and the major television networks are not going to like the years ahead as their market shares of the video content world begin to dwindle.

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business trends, historical perspective, new strategy, prediction, social trends, technology trends 1 Comment »

8.) Trends to Watch in 2010 – Alternatives to Incarceration

Posted by admin on December 30th, 2009
Alternatives to Incarceration – In a country that claims to be the land of the free, the number of people under the control of the U.S. corrections system has exploded over the last 25 years to more than 7.3 million, or 1 in every 31 U.S. adults, according to a report released by the Pew Center on the States. The actual number of people behind bars rose to 2.3 million, nearly five times more than the world’s average.
The U.S. currently boasts the highest rate of incarceration of any country at any time in history. We also have the greatest number of laws of any country at any time in history, laws created by nearly 90,000 separate governmental entities, a spaghetti mess of rules and regulation so complicated that virtually any person can get tripped up. One simple mistake may very well end up with the person being incarcerated, and it goes downhill from there.
Incarceration is a system that breeds failure.
On the prisoner level, an incoming prisoner is instantly immersed in an “us vs. them” mindset as their surrounding community is transformed into the worst of all possible social circles.
On the operational level, success in the prison industry is not measured by how many lives have been improved, but rather on occupancy levels, the number of prison incidents and escape attempts, and how well the budget is managed.
On the justice system level, more prisoners mean more money. Police and court systems improve their standing in the justice community through the sheer volume of cases they handle. They are incentivized to “create more criminals” because more criminals mean more money.
The outrageousness of the overreaching authority called the U.S. justice system can be found in the system itself. There are no checks and balances on the system level for the criminal justice system.
Authorities will be hard pressed to argue that higher incarceration rates are warranted in the U.S. because of an inferior gene pool. They will also be hard pressed to argue that the system works well. A 2002 study survey showed that among nearly 275,000 prisoners released, 67.5% were rearrested within 3 years, and 51.8% went back in prison.
Making matters worse, 35% of the people entering prisons in the U.S. are there for violating parole.
Some minority groups are being particularly hard hit. Jeremy Travis, President of John Jay College of Criminal Justice puts it this way. “On a national level, an African-American man today has a 30 percent lifetime chance of serving at least one year in prison. I would like to be optimistic about the likelihood of reversing this reality and returning to the status quo of 1972, but I think the chances of even getting close to that are slim. I think we have to recognize that we now live—regrettably in my view—in an era of mass incarceration.”
Martin Horn, NY City Corrections Commissioner, voices a similar concern. “We are creating a culture of imprisonment; we are turbo-charging whatever is going wrong in those young people’s lives.”
In addition to the great human toll of incarceration, $68 billion of our taxpayer dollars has been committed to pay for this travesty.
In the past two decades, state general fund spending on corrections increased by more than 300%, outpacing other essential government services like education, transportation, and public assistance.
But things may finally be looking up. We are simply too broke to keep locking people up.
Incarceration rates in 30 states declined last year. Could this be an indication that the $22,000 per year spent on housing prisoners is starting to outweigh the benefit. Fact is that people coming out of the system are worse than when they went in, and virtually all of them will eventually make it back into society.
The U.S. has constructed a massively bureaucratic justice system that feeds off the missteps of its citizens, a system that it can no longer afford. As a result, new systems are coming to light.
Restorative Justice is one such approach where offenders are brought into the same room with the people they harmed and encouraged to take responsibility for their actions. Sometimes they agree to repair or pay for the damage, return stolen money, or perform community service
In Longmont, Colorado, Chief of Police Mike Butler has been a pioneer in Restorative Justice techniques, applying it in more than 1,200 cases with an amazing 90% success rate.
“We work with people before the lawyers get involved and before they enter the courts,” says Butler. “By doing this, we have been able to eliminate most of the costs and give the offenders a reasonable shot at turning their life around.”
These offenders are given a chance to meet with their victims and community members in a respectful process where they can learn the full impact of their crime and agree to repair their harm. On average 90% complete their agreements and are welcomed back to the community. What a different model from “lock ‘em up!”
Restorative Justice is a balance between the rights of offenders and the needs of victims. Perhaps better stated, it is a balance between the need to rehabilitate offenders and the duty to protect the public.
You might think it is dangerous to allow lawbreakers back into the community, yet the opposite appears to be true. The average re-arrest rate for offenders who participate in Longmont’s restorative justice program is 10%.
Compare that to the nearly 70% re-arrest rate for the national penal system. According to participant feedback data, every group engaged in the Longmont program – including victims, offenders, parents and community members – reported over 95% satisfaction with their restorative justice experience.
In restorative justice, because victims are heard and offenders repair the harm of their crime, they become higher functioning citizens able to work and make a contribution to their community, including paying their share of taxes.
So why hasn’t Restorative Justice caught on in a big way yet? It’s because no one stands to profit individually from the switch. Therein lies the crux of the problem.
PREDICTION:
• Even though the signals are weak, the system is too broken to be maintained. Look for the U.S. prison population to decline by over 25% over the next ten years.
• Look for a significant defunding of the justice system and a radically new set of criteria for measuring success.
OPPORTUNITIES:

Restorative Justice 676

In a country that claims to be the land of the free, the number of people under the control of the U.S. corrections system has exploded over the last 25 years to more than 7.3 million, or 1 in every 31 U.S. adults, according to a report released by the Pew Center on the States. The actual number of people behind bars rose to 2.3 million, nearly five times more than the world’s average.

The U.S. currently boasts the highest rate of incarceration of any country at any time in history, a full 25% of the world’s prison population. We also have the greatest number of laws of any country at any time in history, laws created by nearly 90,000 separate governmental entities. This spaghetti mess of rules and regulation is so complicated that virtually any person can get tripped up by them. One simple mistake may very well result in incarceration, and it goes downhill from there.

Read the rest of this entry »

historical perspective, new strategy, people making a difference, powerful idea, social trends 2 Comments »
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