Thoughts From The Cake Scraps

In this post I return to the topic of virtual goods. I have previously written about virtual goods and how I don’t particularly get them. Clearly there are many reasons why a person would buy such a thing, but I thought that Fantasy7 did the best job making an argument that when you buy a virtual good, such as a gift on Facebook, you are really buying an experience for whomever you are buying it for. Fantasy7 did not look at it so much as a gift of property, but a gift of enjoyment to the gift recipient.

This does make sense in a lot of ways, but the financial side of me is not yet done kicking. This time I will stay away from video game objects, virtual gifts, and other such things. I will go after a major market: digital music.

Understand that I don’t have anything against digital music. I love my iPod Shuffle as much as the next person.  I love the ease of use, transfer, and search capabilities of a mp3 library.  My issue is the future.  What happens when you no longer like an artist and you want to get rid of the CD?  There is no garage sale.  Amazon cannot help you. eBay cannot be there for you.  You simply cannot sell the CD when you are done because it is just a file.  Even if you take the money aspect out of this, you cannot share (legally) your music with anybody.  So really when you spend that money, you had better be buying for the experience for the song rather than the song.

But really this is expanding beyond just the music world.  There are audio books, books for a reader like Kindle, entire video games, movies, pictures, etc.  Basically anything that people can figure out how to get on-line, they are putting on the internet.

What does this mean to the world of artistic photography?  Can you really justify paying for an digital copy of a piece or artwork when it takes nothing to create the same thing.  There are no numbered prints; I can just print my own.  The artwork is the artist’s brand and with digital distribution they have no control over their brand.  As for DVDs and CDs, whether you like to admit it or not, there is a certain sense of pride to have a DVD filled wall or shelving unit.

What do you think?  Is the age of Antiques Roadshow dead?  Will there be anything to pass onto the kids for the items I am talking about?  If not, does that say anything about this generation?

This has been a Thought From The Cake Scraps.

This story starts 2 days ago.  I recently had some great things happen at work and so I wanted to celebrate.  I headed over to Walmart (did they drop the dash?), the starting point for any real celebration, and picked up some beers and then headed over to the movie section.

Keep in mind that I have not purchased many moves since my days on eBay when I made buying and reselling a hobby.  I counted on my awesome roommate for movies who had a great collection, Netfix, and newsgroups.  I also don’t really rent movies because I don’t like to pay for something that I don’t have afterwords.  See my post on virtual goods to see if you agree.

Anyway, I was lamenting my purchase of several movies at work when a co-worker informed me that he just found out that there was a Redbox at our local Walgreens.  My response was a woefully uninformed “What the hell is that?”  He explained it to me, gave me a photocopy of some codes he had copied down for a free rental and here is sit less than 24 hours later having already watched 2 movies that I wanted to watch and didn’t spend a dime.

So now that you are this far into the post, you may be wondering what Redbox actually is.  Basically it is a movie vending machine.  Not a new idea, but still awesome because it is a network.  You can return a rented DVD to any Redbox location.  The other point that is puts this from “cool” to “freaking awesome” is the cost.  One dollar a night.  You can’t beat that. Oh wait, except with codes that can be used once per credit/debit card you have.

So I was already sold and then I decided to see if they were on Twitter.  They are.  More awesome.  Can it get better?  Oh yes.  They give out codes for free rentals on Monday.  With all of these codes one has to wonder how the heck they even make money, but I am sure there are a ton of people that never look for codes before buying.  I always do; its just my nature.

I couldn’t help but spread the good word from my Twitter account @TheCakeScraps at which point a friend took the opportunity to point out that @redbox doesn’t have the greatest selection.  I can’t speak to that.  I don’t even know what was released this past week, or any week, because I just look for movies that look interesting.  I admit that there are movies in the case that kind of make me think “who the heck would want that movie.  Some just look like crap and no surprise that imdb.com confirms my suspicions on many of the titles such as Beer For My Horses which is clocking it at a whopping 3.8/10.0.

That said, I would highly recommend that people look into this.  My Redbox is a block away and it takes, literally, 5 minutes to go get a DVD and get back.  I doesn’t have the selection of a Netfilx or local rental store, but the price is right, free DVD codes abound, there are no hours on it – if it is an outside machine – and there is no monthly fee.  Check this service out.

On a side note, and in closing, I want to say that if you work at or own a company that employs a lot of people – such as a manufacturing plant – or in a place that has high traffic you should really look into this.  I was a little disappointed because I found out that I can’t just buy one and make money from it.  I have to own the place that it is going.  Too bad, I would have thrown up some money to put one in somewhere and taken the chance to get some money.

What about you; does this seem like something to look into?  Would you use it or is streaming video coming too fast and Netflix is too big, and who knows what else?

This has been a Thought From The Cake Scraps.

If you have had a chance to look at my About page you know that I can be found on Twitter @TheCakeScraps.  I can’t say that I use Twitter a lot, mostly for small updates and general questions, but I really think that is where the value in Twitter lies.

CommonCraft.com has an interesting video on what Twitter is.  They elect to describe it more as an away message that you would find on Pidgin, AIM or whatever you may use.  This includes updates such as “Going to the game” or “sitting around the house”.

It is true that some people do use it for that, but I tend to think that it actually degrades the service.  In fact, there are occasions where I do not follow people simply because I don’t want to have to wade through endless tweets that I don’t really care about. There was an interesting post on A Thousand Cuts that conveyed a similar thought

On Twitter, many folks share personal details like what’s for dinner, how much they love caffeine or the occasional banter about the Red Sox.  These conversations help us get to know contacts more personally, but can at times be perceived as noise.

Don’t get me wrong, I can enjoy a daily update about what went on or how you are feeling.  What I don’t want is an update every 10 minutes.  I don’t know about you, but I don’t have time to read through all of that crap.

I use Twitter more as a mini-blog.  I think of each tweet as a post rather than an away message.  I like throwing in a link to my latest post.  I like posing a question or thought and getting reactions.  That is what I really love about Twitter.  That is what I have time for.  Follow me on Twitter @TheCakeScraps. You won’t be disappointed you did.

What about you?  How do you think that Twitter should be used?

This has been a Thought From The Cake Scraps.

What is the market doing?  How is my site doing in relation to other sites?  How much time are people spending on my competitors site?  Hitwise can tell you all of this.  The real question is where do you go from there?

It has been my experience that people fall into two categories on this topic.  In the first group are the people who are absolutely convinced that you need to know how your competitors are doing and that Hitwise data is a must.  Residing in the second group are the people that say that the data may be interesting, but “it doesn’t impact what we as a company need to get done.”  It is important to note that the latter group isn’t saying the data is useless, rather it is just not going to impact what the company does.

That is what is said in the meeting.

In practice I have found that the data does impact the business.  People do make decisions on the data – and they should!  Don’t ever believe otherwise.  You have to know what your competitors are doing if you want to position yourself correctly.

Take the simple statistic of traffic to a site.  On one hand it is easy to say that you cannot change the traffic to another person’s site.  The data is not actionable.  Just focus on your own site.  I ask you to look deeper for a moment.

You know that your traffic is down 10% – perhaps you even have an alert set for such dips – but their traffic is down 15% to last year.  You could look at this and think that you are doing better than them.  That is good.  Keep doing what you’re are doing.  Then you look at your ‘competitive set’ a.k.a. a group of sites similar to yours.  Their traffic is down 15% as well.  Still looking pretty good for you.  The danger is thinking just that.

Yes, their traffic is down.  Your traffic is down less.  This is interesting, but you have to look for the real questions.  What are they doing or not doing compared to last year?  What are you doing or not doing compared to them?  This is where the power of the data is; not the data itself but adding that extra dimension.  If you can learn from them as well as yourself you can really help out yourself at a much reduced cost.

I think this brings about the way that the two groups mentioned at the beginning of this post really need to blend.  The first group – Hitwise junkies – are wrong if they are just looking at the data.  There needs to be an additional dimension added to turn the data into information.  The second group – the nay sayers – are also wrong if they see no value in the data.  The right questions have to be asked.  Comparisons can be made, but there needs to be an intent for action behind them.

If this blending can happen and form a third group then real information, not just data, is at your fingertips.  Do you agree?

This has been a Thought From The Cake Scraps.

I may be in the minority or maybe I just don’t have enough money to throw away or maybe I just don’t get it.

Viximo is a purveyor of virtual goods, more commonly called gifts.  While I would not say that they are common on Facebook, Facebook is the largest platform that they exist on (to my knowledge).  To be fair, while I might not think that they are common, Facebook is counting on it for revenue and not in small amounts.  It is estimated at $30 to $40 Million a year.

I don’t know how much Viximo is planning to make but when I first read about them over at TechCrunch I knew they would make money.  To be clear, I still don’t get it.  I know they will make money, and lots of it since their cost is fixed and it does not matter how many of a particular gift they sell, but why do people buy?

The value of something is defined by two things – supply and demand.  There is nothing more to it.  If you had 1 ton of gold and nobody wanted it you may as well have 1 ton of gravel.  In contrast you could have that ton of gravel in a place where no quarry exists and everybody wants it and it could be worth lots.  It is all supply and demand.

How does this relate to virtual goods?  If someone buys a virtual gift who really owns it?  If Facebook goes under – work with me here – where is your virtual gift?  Gone.  Do a google search on what happens to DRM protected music when the issuer goes under.  The sites going under will actually tell you to burn your songs to a CD and rip them back to your hard drive because you can’t transfer them or have the DRM validated after the site shuts down.  Why risk it?

I guess my point is that I understand that it can be fun to give a gift, it doesn’t really make sense.  Just e-mail them some clip art.  The only thing that I think makes sense is the free gifts.  The gifts that are sponsored by a company.  If the company takes its time, makes it clever, and makes it interesting then it can be a great marketing tool and a fantastic way to generate some buzz around the brand.  So it makes sense to a company to pay Facebook to offer their ‘gift’ but can someone explain why I should pay for one?

This has been a Thought From The Cake Scraps.

Despite what you may think about bad publicity it is publicity none the less.  I can’t say that I totally agree that all publicity is good; there can be huge ramifications when something hits the press that is bad for your personal image or brand image.  No question.  That said, some bad publicity can be good because of the old saying: “what doesn’t kill you makes you stronger”.

Apparently the Republican Party of my state did not get that memo and missed that entire chapter on brand management.  Over the past week or two I have received no less than 8 mailings from them – not all of which were unique – and McCain was mentioned once.  Meanwhile all these mailings had told me how Obama is bad because of such and such and “Obama is not who you think he is” and other similar irrelevant remarks.

There was not a single thing that told me McCain’s position on anything.  There were more pictures of Obama – in dark colors and whatnot – then of McCain by about 4 to 1 in Obama’s favor AND I could not read an entire sentence without at least seeing Obama’s name at least once.  Who are these people campaigning for anyway?  At least criticize something that matters instead of some relationship that he may have had or political back scratching that has gone on.  Guess what?  I don’t care and from the questions that people were submitting to the debates – and general reading on the internet – nobody else does either.

Meanwhile, in typical smooth Obama fashion, I got mailings that I could not even tell who they were from on the outside.  It was literally a guide one how to vote.  It told me facts about voting and exactly what I would need to vote and what forms of ID were permissible so make sure I could vote.  The entire outside of the mailing even had my local polling station location printed on the mailing!  The only thing that even told me that it was from Obama is the clever “O” symbol that the campaign uses and a picture of him on the inside.  I can see people keeping that just because it has great information no matter who they are voting for.

Now ask yourself this: which is more powerful for a brand, something that people will read and throw away – even people who support your brand – or something that people are going to keep around no matter if they like your brand or not?  You’d be crazy not to shoot for that latter.  Apparently we now know the mental state of the people running my state’s campaign for McCain.

Know that I do not really favor one candidate over another – and suggest you find the party that is right for you even if it isn’t one of the major ones – but that as far as branding and marketing goes it seems like some of McCain’s supporters missed the boat.

Just like in my previous post I will close with this thought:

Best of luck to all candidates for President and make sure you vote.

This has been a Thought From The Cake Scraps.

If you have never had the chance to check out Seth Godin’s blog, you should.  I really enjoy reading it because of the variety of the topics he covers.  They are usually very interesting and definitive.  He tends not to postulate but rather state things as a fact.  It can be refreshing to read something with such a firm and decisive stance.

All of that said, his most recent post titled How To Lose lacked the quintessential reference that would have given credit where credit is due.  The post is about customers who are looking for something that you don’t have.  Seth has this to say about it:

Instead of feigning ignorance about the whereabouts of your competitors (you really don’t know where other shoe stores are?) and instead of pretending you don’t have a phone book, what would happen if you actually spent that spare minute being incredibly helpful. “Ask for Jimmy! Tell him Sal sent you…”

I totally agree with this.  If you don’t have what they are looking for then tell them where they can find the exact product they are looking for first and then suggest that you also have some fine similar products – if in fact you do.

The reason that I called this post “Calling Out Seth” is because this very principle is illustrated to the extreme in the holiday classic “A Miracle On 34th St”.  In case you don’t remember here is a quick summary from Wikipedia:

Ignoring instructions to steer parents to goods that Macy’s wants to sell, Kris tells one woman shopper to go to another store, Schoenfeld’s, for a fire engine for her son that Macys doesn’t have. She is so impressed, she tells Julian Shellhammer, head of the toy department, that she will become a loyal Macy’s customer. Kris later informs another mother that Macy’s arch-rival, Gimbles, has better skates for her daughter.

The store expands on the marketing concept. Anxious to avoid looking greedy by comparison, Gimbels implements the same referral policy throughout its entire chain, forcing Macy’s and other stores to respond in kind. Eventually, Kris accomplishes the impossible: Mr. Macy shakes hands with Mr. Gimbel.

It is a great concept -if taken to an extreme in the movie – and certainly it can be considered a ‘statesmanly’ thing to do, but not giving credit to such a prominent reference is a small, but important, shortfall of the post.  Moreover, including it would speak so much more directly with the reader because they can instantly relate.

This has been a Thought From The Cake Scraps.

The name that you pick for your product, service, blog, etc. is part of what defines your brand.  If you have read my blog you may remember the post about knowing what you are worth as a brand, but what that post didn’t talk about is the name of the brand.

The name of your brand is the first thing that people associate with a product.  People don’t usually start talking about a product without saying who makes it.  It is a critical element to the story of the product.  The part that boggles my mind is how odd some names are.  The names defy logic.  Take Cuil for instance.  The first clue is that if I say Cuil – said cool – you probably have no idea how to spell it.  If you have to spell your brand name to people I think you substantially decrease the odds of starting a brand.

I have to admit that I even broke my own rule in the first edition of this blog by calling it “Thoughts From Thee Cake Scraps”.  There is a reason that I called it “Thee” but it doesn’t matter.  The reality is that when I was telling people about this blog I would have to say “Thee” and make sure that they doubled up on the “e”.  That is no way to tell people about your new product.

I am sure there are exceptions to this rule, but I am equally sure that many more odd brand names have failed than have made it.  Note that when I say odd I mean how easily you can communicate your brand name.  It doesn’t have to make sense, just make it easy to communicate.

This has been a Thought From The Cake Scraps.

Logitech and Guitar Hero have teamed up to create a $249.99 USD guitar.  Well, actually it is a controller for the PS3 but looks, feels, and sounds like a real guitar.  Except the sounds part.  But it doesn’t click as much as the standard controllers.  That means it is quieter.  Which is basically the same thing as sounding like a real guitar.

For the record, Musician’s Friend has a nice Acoustic/Electric guitar for just $50 more – and some for even less.

So what does this new fangled controller get you?  Well I would suggest you try out the official site but I won’t – hence no link – because it has surprisingly little detail given they are trying to sell a controller that costs more than a XBox 360.  Don’t worry though, Daily Tech has it covered:

Under the fret buttons, Logitech uses the rubber dome technology that makes its line of keyboards so popular and responsive. The rubber dome technology makes the fret buttons quieter, which is a good thing for anyone who has had to cut a night of jamming short because someone was sleeping in the next room and the buttons were too loud.

In addition to the normal fret buttons, the Logitech controller also features a Touch-Sensitive Neck Slider that allows player to hit notes and score points without needing to strum. No wires will tie players down, the controller uses 2.4GHz technology promising a 30-foot range. The guitar itself is powered by a pair of AA batteries.

I am not sure how this thing will sell, but given the popularity of the game it is clear that both Logitech and the Guitar Hero franchise know what they are worth and are not afraid to make a really expensive controller to capitalize one it.  I like that (you still won’t see me buying one).

I guess if you are really into this game this would be a pretty sweet addition to your stage presence.  Just hope you get it as a gift.  I admit, if you don’t look like a tool you would certainly look pretty sweet playing the thing, but only if you are good.  If you are going to own this you have an obligation to the franchise to be really good.  They don’t want a bunch of YouTube videos of people showing of the guitar along with how bad they suck at Guitar Hero.

What say you?  Is this worth it?  Should people just buy a real guitar instead and learn to play that?

This has been a Thought From The Cake Scraps.

eBay is once again changing the way it does business by adding more restrictions to its sellers.  Remember when eBay added in the features that allowed a buyer to rate a seller on several categories?  Well now eBay is using that as a basis to say if sellers can continue to sell.

This excerpt from BizWeek illustrates it quite well:

In a nutshell, eBay wants its sellers to keep a 4.3 or above (out of 5-star) composite average on several metrics on which customers leave feedback. The most controversial is the shipping and handling feedback. A 4 in this metric means “reasonable,” but if a seller starts getting mostly 4s, eventually that will pull her overall rating down below 4.3. If a buyer rates the shipping charges as “neutral” (3) or “unreasonable” (2)—even if that perception is mistaken—the seller’s ratings will plummet and her account can be suspended. Sellers do have 30 days to increase their rating while they’re suspended, but if they’re not selling, it’s obviously tough to get better feedback.

It is clear that eBay really does not want to be in the auction business anymore.  These new rules make it very difficult for sellers, and exceptionally difficult for low volume sellers, to stay compliant.  All it takes is one or two disgruntled buyers and you are screwed.  I am glad that I got out while things were still not all that bad.

These sort of changes make me wonder though.  A business always has to be evolving or they risk being left behind.  You have to find new opportunities or niches to fit in to have growth.  But what if you lose your core competency while doing so?  Are you so focused on growth that you would risk the thing that made you great?

eBay was known as a place for auctions.  That was what they were good at.  As they move toward a model that is now focused on Fixed Prices not auctions, I think they are giving up more than they realize.  It is easy to blame the lower profits on the economy now, but I would think this would be a time for eBay to shine.  People are selling stuff they don’t need and also looking for stuff at a good price.  As eBay continues to make these changes I wonder if the current economic circumstance is clouding eBay’s view of the business model they are chasing after.  Then again, maybe eBay is positioning itself to take on Amazon.  This could get interesting.

This has been a Thought From The Cake Scraps.