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Monday, August 25, 2008

How much abuse should we tolerate from Brands?

Here is another story on Corporations and how brand (mis)manage their followers:
I am a geek, I have an iPhone, and I love Star Wars - a cliche probably.
And when I updated to the iPhone 2.0 software, I was very happy to find this cool PhoneSaber app (one of the best free apps they were offering then from my prospective) that could make the noise of a light saber when I moved my iPhone, as if I was fighting the dark side myself. Except I lost that battle: I had to reset the iPhone and then I discovered that the lawyers from Lucas Film had Apple remove the PhoneSaber app from the Apple Store because it was not an official Star Wars app. So no more showing off in front of my kids, big brother wants me to behave...
Now the official story is that something that looks like PhoneSaber may come back at some point, but how much of a turnoff is this? I am not sure I will be too excited about the Official Guys feeding me their approved soup after I had a taste of something really cool and creative that was free and did not seem to hurt the brand in any way. All of a sudden it feels like I am in a relationship with an abusive master, who takes away what I like only to give it back when he feels like it. How healthy is this?
With more and more user generated content being posted to the web every day, brands should learn to give some freedom to their consumers, so that the creativity that exist is not killed, but rather channeled for the benefit of all. It is ok to create a cool PhoneSaber app, and good for the brand if people like it and spread it around. If the app is free, it seems to me there is more harm done to the brand when you force the removal of the app than by letting it be, something with the enforcement of copyright has gone wrong in this case.
What is sure is that this is just another example of more to come: social media and open source are about people feeding each other stories and applications, and Media will have to evolve if they want to remain relevant. Maybe "Open Characters" and "Open Stories" should the next big things...

Tuesday, August 05, 2008

Another story from the corporate world

I am currently visiting friends in Europe, and just heard another story on how a corporation is a machine without a soul, a train running at full speed on its tracks with nobody driving.

This is the story of a very successful entrepreneur who was looking for a cash out event, pressed by the early investors in the business (the "friends" who need to see a return on their equity at some point).

And it starts with a good event, a very juicy acquisition by a US Public Corporation.

And then after that, nothing is the same anymore...

And the big change really is that the acquired company becomes part of this big machine where nobody is responsible for anything, and nothing can be done without the scrutiny of somebody else, which makes it hard to have any decision taken:

- the board is supposed to drive the company, with the CEO to execute on the plan
- the board is supposed to represent investors


- when investors are a crowd of small stock holders who sometime don't even know they own the stock because it is through a mutual fund, then clearly they are not in charge and who represents them, and how this person was chosen, is anybody's guess. Maybe they represent the larger stock holders, or maybe they are just here because they belong to "the club".
- the board members have director's insurance, so the one thing that is clear is that whatever decision is taken, they are not directly at risk unless they did something really really bad


Back to my entrepreneur who is now a VP in this corporate world:
- he cannot do anything without providing piles of documents that will show that the board members have inquired about the matter,
- and then the real decision in the end comes from the CFO who will confirm whether the ROI can justify the investment,
- and this decision only comes after the lawyers have cleared the matter on the legal side.

What is also clear in the end, is that if anything wrong happens, he will take the blame because whatever he provided will probably be missing a "key" info that would have made the whole difference...

Unfortunately this does not fit the hypergrowth environment that my entrepreneur lives day in day out in his part of the business, and it really makes his life miserable.

And then customers are all confused too, because the deals that could be done before are no longer there: everything has to fit within the very narrow definition of how deals are made with the corporation, because it impacts revenue recognition and should comply with Sarbanes-Oxley. So letters are being sent, trust relationships are being damaged and ultimately the pipeline is being threatened.

At this point, you just hope that what started as a good acquisition is not going to turn into a bad deal because of the blindness of the system.

What's for sure is that whatever happens, nobody will really be responsible:
- the members of the board are doing their job
- the lawyers are doing their jobs
- the CFO is doing his job
- and my newly VPed friend is doing his job as best as he can within this context

If nothing comes out of this new association, everybody can blame somebody else, and the loosers (the stock holders) can only blame themselves for not unloading the stock earlier.

The amazing part after all this is that the system (public equity) still seem to be working from the high level prospective. The train is on track with no conductors, but I guess that as long as people trust that they are going in the right direction then the system holds...

For my part, I will stick to entrepreneurship, and my friend will probably not breathe this corporate air forever :-)