GeekMBA360

I have been posting very infrequently since May because I started a new job.

I left online advertising and returned to the E-commerce world.

I really enjoy working in the e-commerce world. E-commerce is retail, low margin, and ultra competitive.

But, I like the fact that I’m working with hard, tangible products. I’m actually selling real products.

There is a very clear score card. Good or bad, my performance is measured by well defined metrics. This is so much better than product management – the political nature of product management jobs is suffocating.

I’m glad I’m back to the game. E-commerce is fun.

I heard today that Microsoft had another round of layoff.

I’m not surprised.

I live in Seattle and I’m surrounded by people who work in Microsoft.

In the past 6 years, I knew only two people who told me they love working for Microsoft. I thought they’re either stupid or crazy.

I do have some very intelligent and capable friends who work there. But, they don’t work there because they love Microsoft. They have specific career goals or personal financial goals. Microsoft is stepping stones for them to achieve their goals.

I also met some Microsoft lifers – people who have been there forever. I notice several patterns:

1. they know very little about the world outside Microsoft
2. they think Microsoft is the center of technology universe
3. they know very little about non Microsoft technology
4. some of them are really arrogant for no reason
5. they’re afraid of leaving Microsoft. They’ve developed unhealthy dependency on Microsoft
6. they’re provincial
7. they feel really good about themselves

As a resident of the greater Seattle area and State of Washington, I want to see a stronger and more innovative Microsoft.

I also want to see a stronger Microsoft to put up a tough fight against Google.

Unfortunately, it’s just not happening unless Microsoft

• Cut much more fat
• Fire Steve Ballmer and bring in someone who is a world-class technologist and a world-class manager
• Take a chapter from Jack Welch’s playbook – focus on business lines that it can achieve the #1 position, and get rid of the unprofitable businesses such as Windows Mobile

In the past few weeks, I learned directly and indirectly that several highly successful ad sales guys quitted their display ad sales jobs and switched to different niches of online advertising.

These are sales guys who accounted for 20-40% of their employers’ annual revenue. They were not laid off. In fact, most of them just got promoted recently.

Why did they quit? If you ask them, they probably won’t tell you the real reason. After all, it’s hard to trust what came out of the mouths of ad sales people.

I have a few observations.

Good sales people instinctively smell where the money are. They’re moving to different niches (e.g. mobile advertising, social media such as Facebook and Twitter, gaming, etc.) because they think there are more money to be made there. On the other hand, they feel the upside for them in display ads is becoming increasingly limited.

Currently, there are several hundred of display advertising networks. It’s simply not sustainable. For the last couple of years, some of those companies have grown nicely because display ads were still fairly new to many traditional advertisers. Those advertisers want to give display ads a try.

So, in the past three years, just about every advertiser in the world have tried display ad once, which means they have worked with at least one ad network.

This is why you hear stories about a display ad start-up has grown its revenue by 50%, 100%, or even 200% in one year – they were able to talk to a lot of advertisers because almost every advertiser wants to give display ad a try.

But, what’s next? Those display ad companies have talked to every possible advertiser in the universe in the past years. They’ve run out of new advertisers to talk to. They must retain their existing customers, and get more money out of them.

It’s NOT easy. The problem is that it’s very hard to measure the performance for display ads. Unlike paid search, display ads is very much like a "black hole” in term of having visibility into campaign performance and ROI.

What’s going to happen? Here are my thoughts:

1. It’s unlikely the three big players (Google, Microsoft, Yahoo!) will make any major acquisition of large display ad networks. The big three have already had enough inventory and advertisers base. I don’t see much value for these companies to acquire another display ad network. However, strange things do happen. I wouldn’t be surprised if Steve Ballmer and Microsoft make another dumb move to acquire a display ad network. The same applies to AOL.
2. Small, niche networks with real technology could be acquired at a fairly good price. There are a few ad networks with solid optimization technology. They will be acquired by one of the big players.
3. There will be a lot of consolidations in the industry.
4. Most ad networks will become ad agencies. If you look at below the surface, most ad networks are ad agencies in disguise.
5. Depending on the economy and valuation, some large ad networks might be acquired by large ad agencies. It’s hard for ad agency to acquire technology companies because of valuation. Large, publicly traded ad agencies have low multiples. It’s very expensive for them to acquire technology companies with high multiples. However, if ad networks get desperate to sell, then large ad agencies will be able to buy them at lower valuation, which will make more sense for the ad agency’s shareholders. 

Excellent resources:

• The Online Advertising Playbook: Proven Strategies and Tested Tactics from the Advertising Research Foundation
• Groundswell: Winning in a World Transformed by Social Technologies
• The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly, 2nd Edition

Has any of you done P90X?

I was channel surfing the other day, and saw the P90X infomercial. I have to say it was very well done.

I did a little bit research on P90X. Beach Body, the company that markets P90X, have sold 1.5 million copies of P90X. Each copy of P90X sells for $120 plus shipping. So, P90X is a $100 million+ business.

Wow!

I have to admit that I’m thinking about giving P90X a try. I like it because

1) it provides a structure – exercise and diet plan are clearly laid out for every day during the 90-day program.

2) it has clear goals, commitment, and deadline.

3) it produces great results. I did a search on Youtube, and there are a lot of home videos of people who went through the P90X programs.

My concern for the program is that it’s too intense that might result in over-exercise. I’ve been reading about Evolutionary Fitness and The Primal Blueprint . Mark’s Daily Apple has a very interesting review on P90X and Cross Fit.

Has any of you completed P90X program? I’m curious to hear your perspective on this program.

Last week I came across an interesting article on the chain of events led to General McChrystal’s downfall.

Here is my favorite quote from the article:

As an executive, Obama has little tolerance for what he calls "unforced errors" — mistakes that are entirely preventable. In that regard, McChrystal’s team had committed an unforced error on a major scale and at the most inauspicious time.

“Unforced errors” are no brainers. They are entirely preventable.

“Unforced errors” are shooting ourselves in the foot.

I think many businesses are struggling because they make too many unforced errors. They’re essentially shooting themselves in the foot while their competitors simply execute better.

In your personal life and in your career, have you had too many “unforced errors”? Have you taken action to minimize unforced errors for you and your organization?

Recommended resources:

• Being Wrong: Adventures in the Margin of Error
• Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions
• The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home

A lot of them are super arrogant.

A lot of them are super greedy — they want to make a lot of money as soon as possible.

They’re only interested in "strategy work".

They talk big and think big. But, they cannot execute.

They care more about job titles than job content.

They think they’re analytical because they know how to use excel spreadsheet to build models.

I don’t mean to over generalize. But, a lot of MBAs are like what I’m describing above.

If you’re graduating now from business school, I hope you’ll stay humble, live your values, and be kind to others as you start your first post-MBA job.

If you know someone who is graduating from business school, please pass this blog post to him or her.

I graduated from business school six years ago. I have seen and met plenty of MBAs I didn’t enjoy working. I want to see more humble, hard-working, kind MBAs in the working world.

Peace.

In April I rolled out a new blog design. I sent out a tweet in early April that I was beta testing the new blog design.

I actually spent about 3 months to re-design the blog. Why did it take me so long? I have very little free time. The re-design included changes in front end, back end, as well as database. So, it was a lot of work.

Unfortunately, after two weeks of beta test, I decided to roll back the changes.

Can you guess what is the single biggest reason for my decision to revert back to my old blog design?

During the two weeks of beta test, the conversion for my digital product sales was ZERO. Prior to the redesign, I had pretty healthy conversion rate. The content was the same. The product was the same. But, the change in look and feel had significant impact on how people view the pages, make purchase decisions, and order products.

I went back to my Google Analytics data as well as sales data to understand what had happened. Below are several lessons I learned from my failed blog re-design.

• Keep it simple. My new blog design was very cluttered because I was trying to do too much. My intention was to throw a lot of interesting headlines and content at readers in order to keep them engaged and come back. But, the layout was quite heavy in text and cluttered. It resulted in bad customer experience.
• I didn’t do A/B test for my product sales page. I assumed it should work since I had the same content and check-out process. The only difference was the page layout, format and size of the fonts. Unfortunately, page layout, format and size of the fonts had huge impact on conversion.
• What worked for one blog didn’t necessarily work for another blog. Each blog is different. I modeled my blog re-design after a very successful professional blog. However, what I learned along the way was that blogging is a very authentic activity. It reflects the author’s personality, opinion and style. To be who I’m, I have to design my blog to fit my unique personality, and perspective. There is no common template for successful blog design.
• I didn’t have specific objectives for my blog redesign. My initial motivation was to make my blog look professionals. However, I never defined what it meant by "professional" — I just want to make it feel like professional. It’s funny — I was a product management professional for most of my career, but I didn’t follow my own best practices — i.e. I didn’t have a "Marketing Requirement Document" for my blog re-design.
• Professional look-and-feel is over rated in the blogging world. There are a lot of crappy looking site out there. But, some of them have done incredibly well because they provide genuine, helpful, and engaging content. Blogs are different from mainstream media. People like blogs because they’re real. I was "surprised" to find out that changing the look-and-feel to be more "professional" didn’t help my product sales at all.

What will I do  next? I still want to make another iteration to improve my blogs. Here is what I’m thinking right now.

• Wordpress 3.0 will be released soon. It’s a major upgrade. I will wait until WP 3 to take advantage of many of the new features.
• I plan to remove all of the display ads currently showing on my blog. I had them on my site because I wanted to test different kind of online ad networks (because I used to work in that industry).  But, I really think display ads are distractions. 
• I plan to purchase a premium blog theme. There are tons of free themes, but the quality and support are simply not there. 
• I’ve been playing with a couple of open source software: BuddyPress that turns Wordpress blog into a social network, and ClassiPress that add Classified functionality to a Wordpress blog. Both are very interesting ways to add features to a blog. I’m intrigued by the possibilities.

What suggestions do you have for this blog? I’d love to hear from you.

My goal is to make this blog to become one of the most useful career development resources for professionals at the intersection of technology and business. Let’s work together to get there!

I recently talked to a start-up. This company has been around for a while, but it’s super secretive.

It has a bare bone web site. You can find very little useful information about the company.

Its address is list as a PO BOX number. Their physical address is not available anywhere online.

When I discussed a job offer with them, I asked questions such as "total number of shares outstanding, current valuation of the company, company burn rate, etc.". The answer I got is that "we don’t reveal those information. They’re confidential."

I talked to a few people who are familiar with this company. They told me that this company is secretive to a fault. For any employee to make an external presentation, it has to go through much internal scrutiny. Nobody is allowed to say anything to outside world without permission from the senior management team.

I asked why this company was so secretive — the answer was that they feel that they don’t need to let the whole world to know what they’re doing. They operate in a niche market. They’re the only known player in the niche.

Still, I felt uncomfortable about the super secrecy. It’s not like they’re making a nuclear bomb during World War II.

Are you working for one of those "stealthy mode" start-ups? I haven’t known too many stealthy-mode start-ups become hugely successful.

Ideas is a dime a dozen; execution makes or break a start-up. I like openness.

It’s pathetic.

One friend hasn’t gotten any pay raise for three years. He works for a Fortune 500 company and he had no performance issues.

Most people I knew got 2-5%  annual pay increase in the past couple of years.

Even if you switch jobs, the pay raise is no longer the 10-25% you can normally expect.

My suggestion to you: do NOT bet on salary increase by your employer. It really does not matter. Let’s say you get a 5% increase. How much more money will you get per year? Per month? It’s a pretty small amount.

You need to figure out a way to generate side income — you can give yourselves a much bigger raise, and you’ll diversify your income, which will make you more layoff proof.

I believe everyone should be working on side projects.

Let me tell you: the income I generated from this blog in the past year is more than the raise I got from my previous employer. Plus, this blog itself worth something — if I sell this blog, I can also make some money back. This is the difference between creating asset vs. working for someone.

There are many ways for you to take on side projects to generate second, third, or even fourth stream of income:

• Take on consulting projects in your area of expertise. Nowadays a lot of startups are taking a "lean and mean" approach in building their business. If you have the right skills and experience, they’re willing to pay you for part-time consulting work.
• Teach one or several classes online. There are people who teach several classes online, and make 6-figure annual income. The trick is to teach the same class at several online universities so that you can reuse your course materials, and make yourself more scalable.  If you’re interested in teaching online, you should read Make Money Teaching Online: How to Land Your First Academic Job, Build Credibility, and Earn a Six-Figure Salary
• Start an affiliate marketing business. I worked for one of the largest Affiliate programs in the world, and got to know a few super affiliates. Let me tell you: there are serious money to be made in the affiliate space.  To get started, you might want to check out Super Affiliate Handbook.
• Purchase a franchise. This will cost some money, and you need help from family and friends to help since you still have a full-time job. But, I’ve known people who successfully did this — they held their full time job, and own retail stores through franchise. This could be a cash cow if you pick the right franchise. 
• Become a tutor to help people prepare for SAT/GRE/GMAT/LSAT/other exams. 
• Become a part time MBA admission consultant. A well-known business school admission consultant charges as high as $3,000+ for one school’s application. 
• Start an online retail business on eBay and/or amazon.com Marketplace.
• Write and sell eBooks. If you can pick the right niche and you can provide content that readers cannot find else where, you can make serious money from selling eBooks.
• …
  Take actions now and give yourself a big raise this year.

I recently had an exit interview. I was leaving the company. As part of standard HR practice, the Human Resource Manager met with me for half an hour.

She started the conversation by saying: "Before we talked about the details such as COBRA, your last check, vacation balance, etc, we want to find out why you’re leaving the company. We’re not like our parent’s generation who will stay with the same company for their whole lives. We understand people will change jobs. But, we want to understand why you are leaving so that we can do a better job to retain employees".

I knew I would be asked this question. I had rehearsed my replies before I came to the meeting. I was quite frustrated at certain aspects of my work, and that’s why I was leaving.

However, I did NOT want to burn any bridges. And HR was not the place to express my frustration and speak my mind. To understand the dirty secrets of HR, I highly recommend you to read Corporate Confidential: 50 Secrets Your Company Doesn’t Want You to Know—and What to Do About Them .

So, I replied: "I really enjoyed working at Company X. I’m very grateful for the opportunity I was given. I’m leaving largely due to career development reason. I found an opportunity that allowed me to do something that I was really passionate about. My decision to leave really has more to do with the next opportunity, and has less to do with Company X. I really like everyone here. I’ll remain to be a shareholder."

The HR manager then asked: "We understand that most people leave because of career development reasons. But, there must be some reasons that triggered your decision to leave. What can we do better?"

This was a tricky part — I wanted to provide an honest answer, but again I didn’t want to burn any bridge. So, I framed my answer this way:

"Our Company has been growing for the past couple of years. I’m very fortunate to be part of this growth. As a result, I plan to remain as a stockholder. As a stockholder, based on my understanding of our business model, product, technology, etc., these are the three things that will keep me awake at night." I then listed 3 things that I think the company needs to improve in light of rapid growth and the challenge of scale the business. I focused on describing the challenges, and never mentioned a single person’s name.

The HR manager was satisfied, and went on to explain COBRA, final pay check, etc. to me.

It was an amicable exit interview. I didn’t burn any bridge, but still provided the company some feedback to improve.

How is your exit interview experience? Any story to share? I’d love to hear from you.