This book summary and review of Viral Loop was prepared by Candace Hampton while a General Management student in the College of Business at Southeastern Louisiana University.
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RefBan
Thursday, September 30, 2010
Summary and Review of The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki
This book summary and review of The Art of the Start was prepared by John J. Nugent IV while a Management and Accounting student in the College of Business at Southeastern Louisiana University.
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Eureka!: A One Paragraph Explanation of the Last Decade in the World of B2B Exchanges...and an Ignition Strategy for Success
Image via WikipediaI'm sure you've had those "Eureka" moments on the web when you ran across the article that explained everything. Well, as head of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), mine came in my email this morning. I was forwarded this article from a friend at a client firm, and initially, I wondered about it since the title didn't quite fit the scope of my "Google Alerts." The article on "Why Even Great Payments Ideas Crash and Burn" was written by David S. Evans, and you can read the entire article from pymnts.com by clicking on the link below:
In this article, Evans frames his thesis around the release of the movie about the early days of Facebook, "The Social Network" (OK, we both know a thing or two about search engine optimization now!). Yes, you can see the trailer below:
OK, the real point of Evans' article was this - every entrepreneur who has succeeded in the tech field - from Mark Zuckerberg to Bill Gates - was not the only one with "the" great idea. Others were in competition with them, like the hundreds of folks trying to develop and hawk operating systems, but it was Bill Gates and Microsoft that emerged with the dominant platform. Why? here's the genius moment! Evans observed that:
"Entrepreneurs with 'great ideas' for multi-sided platforms routinely fail because they haven't figured out how to reach critical mass.
And yes, solving the problem of getting to critical mass, the "chicken or the egg," or as Evans framed it in an earlier article an "Ignition Strategy" (Read it at http://www.pymnts.com/why-every-payments-product-needs-an-ignition-strategy/) is the key to success.
Now as you know, I've been tracking, researching, consulting, teaching in the area of B2B exchanges and reverse auction marketplaces for a decade. I wrote what is still one of the most cited reports on B2B exchanges ("The Auction Model" - http://www.businessofgovernment.org/report/auction-model-how-public-sector-can-leverage-power-e-commerce-through-dynamic-pricing). However, Evans concisely summed-up this decade of the rise, fall, and plateauing of the exchange marketplace in a single paragraph, writing:
The B2B exchanges that sprouted up by the hundreds in the late 1990s and underwent mass extinction in the early 2000s are the other interesting example of failed ignition strategies. The B2B proposition sounded like a great idea: provide buyers and sellers a convenient internet-based place to find each other and transact. The entrepreneurs behind these exchanges almost all failed to work through a sensible ignition strategy for reaching critical mass. An exchange can attract sellers only if there are enough buyers to do business with and can attract buyers only there are enough sellers to do business with. Critical mass refers to having enough buyers and sellers to satisfy each other's needs. Otherwise the market is "too thin" and not enough value is generated. This sounds simple but in fact in practice it is hard to get sellers to sign on to an exchange: these exchanges emphasized the use of auction methods to get the best price for buyers, but for sellers, that meant getting their prices competed down. The few surviving B2B transaction networks eventually discovered that they had to bring suppliers on for free at least initially. Most learned that lesson way to late. The failures had adopted the wet match approach to ignition: open the platform and assume that people will come.
So, in a nutshell, to succeed in this marketplace, as companies like FedBid (http://www.fedbid.com/) are doing today, while the hundreds of other exchanges have fallen by the wayside, it is due to the fact that they are not falling into the "Field of Dreams" trap ("If you build it, he will come").
The leaders in B2B today are creating value by opening up the marketplace, not charging admission up front. In doing so, they are following the path other tech firms have followed in having the best ignition strategy to get to critical mass - and beyond - to create value for both sides of the marketplace.
David
P.S. And BTW, "The Social Network" is getting great reviews! See:
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The Receivables Exchange: An Auction Success Story from New Orleans
Image by ~vivian~ via FlickrHave you heard of the Receivables Exchange? It has a very innovative business model that is garnering the start-up from New Orleans a great deal of well-deserved media attention. The firm just won a Technology Innovation Award from The Wall Street Journal. You can read the full story at the link below:
http://online.wsj.com/article/SB10001424052748703904304575497473735761294.html
You can watch a CNBC interview with founder Nic Perkin below:
As well as a local (WWL-TV) interview with the company's executives below (more detail than the CNBC story!):
and view a corporate demo of how the company's receivables marketplace works below:
http://www.receivablesxchange.com/how_it_works/demo_video.html
Congrats to the company, and check them out for your own business! Glad to have them here in New Orleans!
David
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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Wednesday, September 29, 2010
The Think Tank: Richard St. John's "8 Secrets of Success"
Image by Gulltaggen via FlickrOK, last of the "think tank" presentations. This is the shortest, but I think that perhaps you will find it to be the most valuable. It is a Ted Talk from Richard St. John's, who presents his "8 Secrets of Success" in 3 and a half minutes! Watch below:
And comment here on the blog - look forward to the conversation!
David
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Just One More Day Left to Vote for My Proposal - Reverse Energy - in the GE Challenge!
Image via CrunchBaseOK, now's the time to help! Just one more day left to vote for my proposal in the GE Challenge! Here's the direct link to vote in the contest (just takes a minute to register and vote in the contest):http://challenge.ecomagination.com/ct/ct_a_view_idea.bix?c=ideas&idea_id=01B1F540-EAF5-4E54-ADF0-E9422A269A64&sms_ss=twitter
Please forward this on to your friends - real and virtual - this is a great idea that GE has for crowdsourcing potential solutions to promote clean energy and energy savings! I appreciate each and every one of you who will help by voting (and spreading the word) as the contest ends Thursday night!
Thanks, Thanks, Thanks!
David
P.S. And for some background, here's the press release from Southeastern Louisiana University's Public Information Office:
Competitive purchasing of energy could apply to individuals, groups
Contact: Rene Abadie
9/27/10
HAMMOND – A method of purchasing energy that has resulted in millions of dollars in savings by large companies and municipalities could be adapted for individual and neighborhood use with consequent reductions in energy costs, according to an expert in the field.
Reverse auctions, in which large purchasers of power match their energy consumption needs with supplier capacity, are not just creating energy cost savings but also encouraging smarter energy production and allocation on the grid, explained David Wyld, Maurin Professor of Management at Southeastern Louisiana University.
“In deregulated environments – such as in Texas and a number of East Coast states – consumers are not limited to usual local provider but are able to purchase from a number of sources, along the lines of the deregulated telephone industry,” said Wyld. “In those environments, reverse energy would help consumers save on their energy bills and ‘go green’ in the process.”
Wyld’s proposal to develop an e-marketplace for consumers has been entered in the GE Ecomagination Challenge (www.challenge.ecomagination.com/ideas), which runs through the end of September. The challenge is seeking innovative ideas in smart energy generation and usage. Winning projects will be funded with a total of $200 million in capital. GE is using online votes to help determine the ideas that will move forward to become finalists for seed funding. Wyld is seeking votes on his “Reverse Energy” proposal from individuals and groups who support the concept at http://bit.ly/dcm5xw.
“One thing that is certain today is that for all the abundance of energy resources we have, there is a great deal of improvement in how we allocate, distribute, buy and sell electricity,” said Wyld, who serves as the director of the Reverse Auction Research Center. “With the advent of electrical deregulation in an increasing number of states, Louisiana not being one of them, and the newfound capability for businesses and consumers to actually return energy to the grid, the marketplace is ripe for a competitive bidding approach to bring real time supply and demand efficiency to the energy marketplace.”
Wyld’s proposal would be to develop an exchange site that would bring real time efficiencies to the energy market. It would be a competitive bidding exchange where individual consumers and groups of residents in an area could post their energy requirements and have rival energy providers compete for their business.
“In this environment, big utility firms would compete with both companies and individuals who would be returning excess energy capacity to the grid to supply the energy needs of individual consumers,” he explained.
Through a reverse auction process, consumers – acting individually or in concert with others in their area – would post their energy buying requirements on the exchange, he said. The pre-qualified utility companies and alternative energy providers would be able to bid for the business.
Wyld said reverse energy has the promise of incentivizing green energy procurement and bringing the benefits of competitive bidding to individuals and consumer groups.
“It’s an appropriate solution to give consumers power to choose their energy providers and for electrical power providers to compete to make green energy more available and more affordable for the growing numbers of consumers who find themselves with the right to choose their energy providers.”
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The Think Tank: Seth Godin on "This is broken"
Image via WikipediaSeth Godin at Gel 2006 from Gel Conference on Vimeo.
Look forward to the discussion here on the blog!
David
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The Think Tank: Scott Belsky on "How To Avoid The Idea Generation Trap"
Image by magerleagues via FlickrHere's a great video from another "big idea" site that I really love and one that you should bookmark and check for good, fresh thinking on business, technology, and creativity - The 99% - (http://the99percent.com/). In this video below, Scott Belsky, CEO and Founder of Behance, speaks about "How To Avoid The Idea Generation Trap":
Interesting stuff - look forward to the discussion!
David
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The Think Tank: Chris Anderson on How web video powers global innovation
Image via WikipediaHere's another great Ted talk (what a great resource - check the collection of these at http://www.ted.com/ - and bookmark and visit this site often). This Ted talk is from Chris Anderson, the author of Free (and a number of other fine works). It is entitled "How web video powers global innovation," and it talks about crowdsourcing and the power of the Internet to accelerate innovation. Watch by clicking below:
Interesting stuff - look forward to the discussion!
David
Sunday, September 26, 2010
Defining the Concept: The Chartered Institute of Purchasing & Supply Offers Its Definition of What a Reverse Auction Is
Well, here is the definition of what constitutes a reverse auction from The Chartered Institute of Purchasing & Supply. CIPS defines it in the following manner:
Reverse auctions
The opposite of the usual kind of auction in which potential buyers compete to bid the price up. In a reverse auction, which has come into its own with the Internet, suppliers bid the price down.
David
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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Top Ten Management on SWOT (Strengths, Weaknesses, Opportunities, and Threats ) Analysis: An Overview of a How to Develop a Plan for Organizational Success
This overview of SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis was prepared by Caroline Coats while a marketing major in the College of Business at Southeastern Louisiana University.
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Saturday, September 25, 2010
University of Alberta Research into Using Reverse Auctions to Better Allocate Funding for Wetlands Restoration
Image via WikipediaHere at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), we want to update you on the latest academic investigations into the use of reverse auctions in all fields.
This is a very interesting piece of research, wherein a University of Alberta graduate student, Katherine Packman, has recently published her thesis on using reverse auctions in the public sector for wetlands restoration funding allocation decisions.
You can read the abstract of her thesis ("Investigation of Reverse Auctions for Wetland Restoration in Manitoba") by clicking on the link below:
Union Uses "Reverse Auction" as Fighting Words
Image by Getty Images via @daylifeHey, here at the RARC, we're following the latest news and trends in all uses of reverse auctions (and the terminology of it as well). Well, here's a new one out of Wales. The union for auto workers at TRW Automotive is using "reverse auctioning" in an accusatory (and pejorative) way - alleging that management is having its plants engage in a "reverse auction" on lowering costs to determine which one(s) to close. You can read the details here below:
BBC News - Union talks on Resolven car plant closure
"Derek Vaughan, Labour MEP for Wales, and a former leader of Neath Port Talbot council, said he was shocked by management "tactics" at TRW.
He accused TRW of holding a "reverse auction" among its plants in Europe to find out which staff would take the biggest cuts."
Now, not saying we haven't seen this kind of action done before - but a unique twist to use the "reverse auction" label in such a way.
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Friday, September 24, 2010
Beware the $31.47 iPad
Now, as head of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), I've been picking-up the fact that there is a whole a lot of confusion out there as to what is - and is not - a "reverse auction." Philip Elmer-DeWitt, writing for Fortune, attacked the matter head-on in his article, "Beware the $31.47 iPad," which you can read below:
Beware the $31.47 iPad - Apple 2.0 - Fortune Tech
DeWitt echoes what I've been seeing out there on the Interweb - that there are many firms out there - like Dubli (and yes, mentioning them here will drive up my traffic and comment counts!) and other "auction" sites (call them "penny auctions" or "pay-per-bid" sites) that are not reverse auctions at all. I'll withhold my judgment on their legitimacy, but suffice it to say, as DeWitt put it: "If it looks too good to be true, that's because it is!"
Wednesday, September 22, 2010
Top Ten Management on Resource-based Strategies of The Firm: An Overview of Efficient Investment of Resources
This overview of the concept of Resource-Based Strategies of the Firm was prepared by Thomas Casselberry while a Finance major in the College of Business at Southeastern Louisiana University.
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Top Ten Management on Strengths, Weaknesses, Threats, and Opportunities Analysis: An Overview on How to Capitalize on Your Strengths and Eliminate Your Weaknesses
This overview of the concept of SWOT (Strengths, Weaknesses, Threats, and Opportunities) Analysis was prepared by Chamekia Jefferson while a Business Management major in the College of Business at Southeastern Louisiana University.
Read more:
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Testimony of POGO Scott Amey before the Congressional Oversight Hearing on Treasury’s Use of Emergency Contracting Authority
Very interesting testimony from Scott Amey, who is the General Counsel for the The Project On Government Oversight (POGO) (http://www.pogo.org/). in a hearing before the Congressional Oversight Committee on the on Treasury’s Use of Emergency Contracting Authority, Mr. Amey called for increased competition -real competition - in federal contracting, specifically calling for greater utilization of reverse auctions, testifying that:
To better evaluate goods and services, and to get the best value for taxpayers, the government must encourage genuine competition. At first glance, it may seem that federal agencies frequently award contracts competitively, but the definition of “competitive” includes limited competition and one-bid offers. Consequently, to accurately track or evaluate competition, the definition of “competitive bidding” should be revised to apply only to contracts on which more than one bid was received.
In addition to redefining competition, federal agencies must:
- Reverse the philosophy of quantity over quality. Acquisition is now about speed, making competition a burden; this is a recipe for waste, fraud, and abuse.
- Debundle contract requirements in order to invite more contractors to the table. Contracts that lump together multiple goods and services exclude smaller businesses that could successfully provide one good or service, but are incapable of managing massive multi-part contracts. Breaking apart multi-supply or -service contracts reduces the multiple layers of subcontracting which can drive up costs while adding little value.
- Ensure that waivers of competition requirements for task and delivery orders issued under multiple-award contracts or the federal supply schedule program are granted infrequently.
- Increase emphasis on sealed bidding to receive the lowest prices.
- Use reverse auctions more frequently. In a Department of Energy reverse auction for pagers, two companies submitted initial bids for $43 and $51 per pager. At the close of bidding, the government awarded the contract at the price of $38 per pager.
Why is competition in contracting important? In a nutshell, genuine competition between contractors means the government gets the best quality goods and services at the best price. Competition also prevents waste, fraud, and abuse because contractors know they must perform at a high level or risk being replaced.
You can read the full testimony at POGO's website:
Testimony of POGO's Scott Amey before the Congressional Oversight Hearing on Treasury’s Use of Emergency Contracting Authority
President Obama and Jeff Zients, who is the Federal Chief Performance Officer, have emphasized the reforming contracting is a major priority and that reverse auctions will play a critical role to introduce savings and transparency into procurement processes, you can expect to see a real trend toward far greater use of competitive bidding in the very near future (See http://wyld-about-technology.blogspot.com/2010/09/president-obama-priorities-procurement.html). We here at the Reverse Auction Research Center will be monitoring the situation and provide you with the latest news from all the cabinet agencies strategies to make increased use of reverse auctions.
President Obama and Jeff Zients, who is the Federal Chief Performance Officer, have emphasized the reforming contracting is a major priority and that reverse auctions will play a critical role to introduce savings and transparency into procurement processes, you can expect to see a real trend toward far greater use of competitive bidding in the very near future (See http://wyld-about-technology.blogspot.com/2010/09/president-obama-priorities-procurement.html). We here at the Reverse Auction Research Center will be monitoring the situation and provide you with the latest news from all the cabinet agencies strategies to make increased use of reverse auctions.
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