The designs range from the batshit-crazy (but, yes, I want one):

to the *cough* aspirational:

to the only-slightly-bizarre:

to the really rather useful. (The Big Thunder is intended for farmers, who might need to work a hundred meters away from wherever they left their phone, rather than teenagers on the bus, I’m hoping).

There is also a semi serious point here.

One of the big ideas raised is that these crazy phones just don’t appear in the West. Manufacturing is so expensive here that only big, serious players can get started. However, in China, these devices can be built to order in tiny batches for a little as $40 a unit; and then sold for $150.

Innovation in product design is really expensive here in the West, and so a lot of would-be inventors have turned to the Web instead as a platform for their creativity. Hence the whole Web 2.0 thing has been a magnet for startups. In China, though, as mad as some of these products may appear, they reflect a raw creativity and inventiveness that we just don’t see here when it comes to the design of electronic devices. Many of these models will, of course, sink without a trace. But how much higher are their chances of coming up with a formula that genuinely catches people’s imagination and meets needs that no-one anticipated? The people behind these phones are rightly described as “hacker entrepreneurs”: next Dysons of the world.

This is not to write off Western phone designers, of course. Our phones are — on almost all measures — ‘better’ than these devices. But the products we have demanded and the market we’re in make this spirit of carefree, creative experimentation (without a care for focus groups, brand continuity or err… electrocution hazards) unlikely to happen very frequently.

(via. Mobile Monday)

Notice anything unusual compared to the normal Nokia/Blackberry fare?

Answer below — but have a close look and a guess first…

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10 points if you spotted it’s got an A-Z keyboard rather than QWERTY. “Who would do a stupid thing like that?” you might ask.

Well, you’d do it if you were creating mobiles for an audience that had never used a typewriter, let alone a PC, like ermm… the 500mn Indian users that still haven’t got a mobile but will probably get one in the next few years. (India already has half a billion mobile users, btw).

Remember, there’s nothing natural or clever about the QWERTY key arrangement. It was supposedly invented to stop users of manual typewriters from mashing up their striking bits (name?) if they became too proficient. Apparently, though, that’s an Urban Myth. Nonetheless, anyone who types will have become used to doing so with a QWERTY layout and find that layout most convenient and easy to get to grips with if they get a button-based mobile. That’s not going to be the case if you live in rural areas in India.

In developing countries, it’s very often mobile-first. Before PCs, or typewriters or televisions or any of the historical progression we’re conditioned by in the West. If it was the first time you ever saw a keyboard — and, quite possibly — you were learning to read at the same time as using your mobile, wouldn’t an A-Z layout work better for you?

Lava’s site is here. You’ll also notice a lot of dual-SIM phones. Different operators offer different rates depending on the type of call and time of day. The cost-conscious with no intention of taking on a contract could make good use of that sort of adaptability. In situations where very impoverished people are involved, then it also allows people — even different families — to share one mobile phone.

We make a lot of assumptions, don’t we, about what is ‘best’ for interfaces to hardware and software? Personally, I wouldn’t be surprised if there were more A-Z phones in the worldwide market than QWERTY phones before the end of next year.

(via Unwired View)

So I met this guy called Max in the pub – he’s a pal of some long-time cronies from the now-somewhat-dormant UK laptop business ACi.

Max suffers from hayfever – he’s known as ‘snotty Max’ in some circles. He’s tried all the drugs and cures you’ve ever heard of – as you would if your nickname was ‘snotty Max’.

Anyway, he came across the recommendation of rubbing Vaseline around your nostrils. It sort-of worked. But it smelled nasty and was all greasy, as you’d expect. Max, being the sort of person he is, wasn’t prepared to settle for ‘sort-of’.

The next bit is kind-of surprising. He started messing about in his kitchen to see what he could add to or change in the ingredients or process to improve the effectiveness and experience. And he came up with something that he reckons works. “I could sell that,” he decided and turned it into a product called HayMax (geddit?). He started visiting retailers – and he’s a pretty compelling guy – so he brought home orders regularly for 10–20 pots. They had to work double-time in the kitchen at nights to keep up the supply. Word-of-mouth was filling up as much demand as he could supply.

Then, after a lot of hard work, he got enquiries from a couple of large chains. Waitrose were interested; they’d do a trial. And then the first big order came through for 20,000 units. So Max had to get a dedicated factory/lab going pdq, which he did.

All this time, Max has been buying media in relevant press – at cut-price, last-minute rates. Having met him, I can believe that Max gets the best rates in the industry. But there’s a little bit of a brick wall. They got this video ad shot:

…but they couldn’t afford to put it on TV, anywhere that mattered.

So he’s sending the link out to everyone he meets, hoping social media can trump TV when it comes to results. Can it? And what should he do next to achieve his goal of world hayfever domination?

image credit: Smelter Mountain

Updated: with added factual accuracy.

If you look back a couple of years, nobody really expected that social games, like Farmville, Mafia Wars and Texas Hold’Em Poker, would be a particularly powerful force in social media. How wrong we were. Compare the stats in the graph below to any site you work for or deal with:

If that wasn’t horrible enough, you might like to think about their *minute* ongoing maintenance, development and content-production costs. To torture you a little more, their users might be seeing paid-for brand messages or, more likely, paying for imaginary goods that help them ‘advance’ towards infinity a little faster.

In the meantime, free-for-basic-use social network platform Ning is in the doldrums and cutting its free service. Not enough people were that bothered, it emerges, to get the extras that paying a pittance would allow.

Two-thirds of the traffic to Facebook is actually going to games within that site, according to a participant at a recent conference. The table above shows that Farmville has 73mn active users who check in at least monthly; more recently, it’s been estimated at 80mn users, with 30mn of those using the application every day. At this rate of growth, those February statistics are already very much out-of-date. Zynga, the company that produces the three games I’ve mentioned, will make over $100mn dollars revenue this year, thanks to micro-payments from players seeking faster success or a winning edge over online opponents.

Perhaps perversely, Zynga is now in a good position to offer Facebook advice on creating a business that actually makes money:

Facebook’s biggest partner had a suggestion for the adolescent social network: figure out what it wants to be when it grows up.

“Facebook is at a crossroads,” said Zynga CEO Mark Pincus. “They have to decide whether its more important to be the web’s social platform, to make their social plumbing pervasive,” presumably through an expansion of more open technologies and communications infrastructure such as Facebook Connect. It’s sort of like being the plumber for the online world.”

None of this was predicted by anyone supposedly in-the-know. Social media pundits got it wrong for a few reasons:

• Games are consistently viewed as childish and irrelevant by ‘serious’ media pundits and analysts.
• To be fair, that’s also true of their audiences. Serious media professionals don’t want to hear it. Games are juvenile and not worthy of consideration. Full stop.
• While brands were keen to create a Facebook presence, their efforts focused on fan-pages and branded widgets that appeared on users’ profiles.

Where’s there’s some hope in all of this for the rest of the media-sphere is the great support it gives to the idea of micropayments as a revenue source. If people are prepared to pay for a pretend-tractor, then surely a two-minute video clip isn’t asking too much?

Again, though, it’s about context. People have been paying 10p for less than two sentences for a long time: because those two sentences are important in the context. While getting that tractor will net you sufficient crops to buy a new make-believe barn right now, the video gets you nothing. Media still needs to work out why it’s valuable in the first place.

picture credit: mnplsbnut

The New York Times reports on how they’ll work, saying:

Starbucks, for instance, often publishes Twitter posts about its promotions, like free pastries. But the messages quickly get lost in the thousands of posts from users who happen to mention meeting at Starbucks.

“When people are searching on Starbucks, what we really want to show them is that something is happening at Starbucks right now, and Promoted Tweets will give us a chance to do that,” said Chris Bruzzo, vice president of brand, content and online at Starbucks.

When a Twitter user searches for a word an advertiser bought, the promoted message will show up at the top of the results, even if it was written much earlier. The posts say they are promoted by the company in small type, and when someone rolls over a promoted post with a cursor, it turns yellow.

According to Techcrunch, they’ll look like this:

You may be feeling somewhat underwhelmed by this news and wondering what all the fuss is about. I can understand why. Twitter Search is only a small part of the service and the use-case of people bothering to search for ‘Starbucks’ before they go for a coffee seems… shall we say… narrow.

On the other hand, people have been wondering how Twitter will manage to pay its way for a long time. Last September, the company accepted $100mn in VC funding, with the total standing at $160mn. That’s a lot of money, especially since, up till now, it only had one source of revenue – license money from allowing Google, Bing and Yahoo to index tweets.

Many of us believed that adverts were coming, though co-founder Biz Stone dismissed the idea last May – a position he has clearly reconsidered. Like a lot of Web 2.0-style sites, it has had no real problems with traffic since it started to hit the mainstream at the beginning of 2009: it records around 20mn unique visitors to twitter.com every month. Nor does it seem to have a lot of outgoings: no content producers; not much in the way of marketing; text messages only, so low bandwidth costs-per-user (compared to, say, YouTube). For some reason, it has a whopping 140 employees – well, I suppose they had to do something with all that money.

The move to advertising on Twitter is bound to upset some people: users who don’t like ads; twitter-advertising agencies like TweetUp (rather inauspiciously launched last week); social media agencies who’ve delved heavily into how to get links spread organically (what’s the point, if you can just pay for placement?) It may also be bad news for some of the 3rd party applications developers. If you were Twitter, and you wanted people to see adverts, would you give third-parties free access to your search capabilities? I’m not sure I would. In moves that look a lot like an attempt to control users’ experience of the service, the company has recently released its own Blackberry client, effectively burying rivals like Ubertwitter and Twixtreme. It bought the developers of the most popular iPhone client, Tweetie, last week. The makers of desktop Twitter clients like Tweetdeck must be in a strange place right now, waiting for either the rug to be pulled from under their feet or a very welcome phone call from Biz Stone.

I’d like to go back to the “users who don’t like ads” who may well be upset by this development, because I think it is significant. Twitter is quite clearly nervous about this. In the New York Times story, the company says it will withdraw adverts that people don’t respond to:

Twitter will measure what it calls resonance, which takes into account nine factors, including the number of people who saw the post, the number of people who replied to it or passed it on to their followers, and the number of people who clicked on links.

If a post does not reach a certain resonance score, Twitter will no longer show it as a promoted post.

You can’t really imagine a television company doing that, can you? There are a couple of reasons why. First, advertising on TV is an established practice, whereas Twitter is adding a layer of interruption to a previously unblemished space. Second, TV is a broadcast medium – we consume it – whereas Twitter is a communications platform – we make and interact with it. People don’t like or respond to advertising mixed with their communications. Look at the failure of Blyk, who offered free mobile phone calls in return for receiving adverts: people hated it so much that not even a free phone account was sufficient enticement. That’s why Twitter is not (yet) inserting paid placements into the message stream, only on the search results.

For me, then, advertising isn’t going to recoup $160mn – let alone an attractive exit for investors – very quickly: I’d suggest that charging for premium services would be a good start though. What sort of premium services? Well, maybe something like

• Enhanced search – find the originators and the influential passers-on of messages; sort by domain authority; sort by number of followers; sort by Klout.
• Charge for verification of accounts.
• Charge for brand-cleansing e.g. unofficial accounts; satirical accounts.
• Charge for SMS use: they don’t have a traffic problem, so why not?
• Enhanced tools for finding authorities.
• Management tools – find dropped followers; measure the impact of tweets.
• An ad-free version.
• Charge for better/cooler-looking profile pages – more links; layout control; give users ability to place their own ads.

I got the ten-minute version of his work. For your convenience, here’s a two minute version, covering some of the figures that might be surprising or interesting to readers of this blog.

Q: How big is mobile?

A: Very big.

The population of the world is 6.8bn. There are 4.6bn mobile phone subscriptions. That’s 700,000 more than there are FM radios; three times as many as there are TV sets; four times as many as there are land line phones or PCs; five times the number of cars in the world.

In the Industrialised World, the penetration rate is 133%. In other words, a third of us have two mobile subscriptions.

In the Emerging World, representing 4/5 of the world’s population, the penetration rate is 56%. Not so high, but mobiles nonetheless account for more than double the number of radios; five times the number of televisions; six times the number of PCs. Ahonen states that mobile is the first media in the emerging world; it’s the “only medium able to reach half of the population”.

Q: What makes the most money?

A: Contracts and access, of course, and then voice calls.

Voice revenues – worth $615bn in 2009 and growing.

Messaging (SMS & MMS) is worth $153bn, and also growing. MMS – which I still consider quite niche and unused – was worth $29bn in 2009.

Q: And the mobile internet?

A: It’s growing fast, but even the largest parts of this area don’t do half of the business that ‘lowly’ MMS does.

Mobile data services are worth $98bn in total. The largest segments of this are video ($14bn), music and ringtones ($13.9bn) and video games ($11.6bn). These revenues are growing at 15–25% year-on-year.

The fastest-growing segments of the data market are mobile learning and search, each of which has grown over 200% in the last year. Mobile advertising and marketing is finally starting to happen, too, grossing $5.9bn last year, up 85% on 2008.

Mobile social networking is the fourth biggest earner overall in data, worth $10.3bn in 2009.

Q: Should I make an iPhone app for my publication/brand?

A: If you are looking for reach, no: you should make a Nokia app. Even better, Java or (best) an SMS or WAP-based service.

Overall, Nokia has 38% of mobile device market share. Samsung has 20% and LG 10%. The fourth and fifth place are taken by SonyEricsson and Motorola.

If you restrict the sample to smartphones, Nokia is again way out front with 39% market share. Then it’s RIM (Blackberry) with 21%. Apple has 15% and HTC (Android) just 5%.

Smartphones represent only 13% of the mobile device market. On the other hand, 95% of phones can do WAP and every phone can now do SMS. Over 90% of phones are capable of 2.5G or faster transmission speeds now, so this isn’t the WAP you remember from the nineties. 53% of the phones in use world-wide can do Java apps.

Picture credit: RoamMobility

PS: Tomi has given me permission to pass on the full data he sent me via email, so leave a comment if you’d like this.

Note that this isn’t the same as digital maoism. Reznor and the rest are still focused on making music and being rock stars, not selling T-shirts and so forth. Masnick also makes the point that getting all the extra “business” stuff done is a useful job for an agent or even a label, and might help justify their existence.

Like other media owners, computer games publishers have a hard time with piracy and other unauthorised distribution. You know this is true because you were a teenager once yourself and you copied disks and downloaded cracks. In my case, it was copying cassette tapes of Spectrum games. It’s really quite a big problem: 2DBoy, the publishers of indie puzzle game World of Goo, had a built-in mechanism for tracking every copy of the game in circulation. They discovered that 90% of those copies were unauthorised, and that’s discounting any versions whose distributors had found a way to circumvent the tracking. While that doesn’t mean that game publishers only get 10% of the revenue they would in a world without piracy, I think we’re likely to agree that it’s probably a fair chunk.

Distribution

When Dragon Age came out, I had several options for getting hold of it.

I could go to a shop

• advantages: I get a box, a disc and a printed manual.
• disadvantages: I have to go to the shop. I might scratch or lose the disks. I have to put the disk in the machine to play. Costs £40.

Or I could buy it through a digital distribution service like Steam (it’s like iTunes for games, basically).

• advantages: I get it right now; Steam looks after the installation and any patches; can’t lose or scratch the disk.
• disadvantage: need to be connected to the Net to play; no printed manual; costs £40.

Or I could download an illegal, cracked copy through PirateBay or similar.

• advantages: I get it right now. No need to jump through copy protection hoops. Costs nothing.
• disadvantages: err… might get caught.

So, the method that earns EA no money is, in many respects, the most convenient. They should probably try to dissuade me from doing that somehow. Here’s what they’ve done and what they might have done.

Digital-Rights Management

Games publishers have traditionally responded to the threat of unauthorised copying by introducing more and more sophisticated forms of copy protection and DRM. You have to have the DVD in your drive to start the game. The game requires you to enter a unique serial number. It might check this number against an internal algorithm. More recently, it’s likely to check the number against a database on the publisher’s server – a key that’s used more than a few times will be blacklisted. It might check that key every time you play. Dragon Age employs all these methods. But it doesn’t really work very well as a means of protection.

First, it’s a pain in the neck for legitimate customers. Why should I have to go hunting through my discs every time I want to play the game? What’s with this trillion-character serial number? Hang on, my Internet connection is a bit flakey – what do you mean I can’t play? These methods aren’t just inconvenient; they are also disrespectful. They treat paying customers like potential criminals.

Second, the pirates appear to be really rather good at thwarting copy protection. Cracks to make a game playable without any of the above are easily obtained. So it turns out that the only people who are inconvenienced are genuine customers. Nice work!

Score: 1/5

Enrich the Genuine Copies

In recent years, the idea of giving ‘extras’ to paying customers has gone by the board somewhat. I recall buying games in the nineties that came with 2–3 different manuals, a map of the in-game world, a poster, occasionally novelties like a metal figurine or a sound track disk. Nowadays, games come in DVD-style boxes and so the possibilities for novelties are rather limited.

Nonetheless, EA have actually done quite well with Dragon Age on this score. Rather than physical extras, they come in a virtual form. My box came with a coupon with two extra serial numbers I could enter into the game. These added new content to the game: a couple of extra adventures and unique items and powers to make my character stronger.

I had to register my game with the publisher in order to unlock this content and so there’s no way for pirates to get hold of it. I really like this idea: the illegal copy is impoverished while legitimate buyers are rewarded. And thinking about gamer psychology, I believe it acts as a strong motivation to get the real thing. Those using unauthorised versions will know that their character isn’t as strong and hasn’t got the same resources as those belonging to users who bought it. Gamers hate having a ‘lame’ character.

Unfortunately, Bioware slightly botched the execution. Using the premium content requires the game to check in with the server every time it is run, spoiling the experience for those with a flakey internet connection or wanting to play the game on the move.

On a more positive note, the title is being actively maintained by the developers. Two patches have already been released with a third in the works. Once again, it’s unlikely pirates will be able to use these, again making their copies inferior.

Score: 3/5

Sell a Platform

But EA did more with add-on idea than simply providing bonuses for registered customers. It has built Dragon Age as a platform as well as a game. You can go onto the site and purchase Bioware points to spend on extra chunks of content, such as the Return to Ostagar expansion. Again, you need to be registered to buy and use this content, which once again devalues the pirated releases. Since the game’s launch, there’s only been one piece of additional content to purchase, with a further expansion due in March.

The developers also released a toolset for the game allowing users to create their own tweaks and content for the game that can be distributed and installed in a similar fashion to the official add-ons.

Score 4/5

Build Community

The toolkit is just a small part of the ways that the publishers have attempted to foster a community around the game. Registering the game automatically creates a MySpace-style profile page for every user which automatically records achievements within the game and your character’s progress. You can add comments and screengrabs, and the site comes with the normal tools to twitter/facebook/tell others about what you’ve managed to achieve.

While I think this is useful for games, it’s not especially so in this case. Dragon Age is a resolutely single-player game so there is no particular reason why anyone should be remotely interested in another player’s progress, unlike, say, multiplayer games like World of Warcraft or Eve Online. Oh well – I’ll still give points for good intentions.

Score 2.5/5

Conclusions

A mixed score overall, then, with overly zealous DRM casting a shadow over some more insightful ideas to make piracy a poor option for users. Nonetheless, it appears to have been relatively palatable to users, with over 3.2mn copies shipped by the beginning of February. At £40 a unit, not including any after-sales of extra content, that equals um… squillions in revenue.

The key to good practice here is giving customers more than they expected, rewarding their patronage, hooking them in as they experience the game and up-selling them with extra content to extend the experience. These sorts of ideas might easily be applied to other media forms, such as a music CD or a magazine subscription. If I pay, give me more, exclusive extras that add a lot more value to the legitimate edition than the unauthorised copies. Make it easy for me to use it as a want to. As we all know, the bits and bytes of any digital product can and will be copied by people who are determined to do so. However, if you make those ones and zeroes just a fraction of the whole product experience, then there is still a business in making media.

This is a slim volume – 162 pages which includes a lot of pictures, in the form of greyscale screengrabs. It currently costs just £7.99 on Amazon UK, though it’s £15.99 if you buy it in a shop. The book is aimed at both senior executives thinking about what a company’s strategy ought to be for a blog and those tasked with managing the execution. It would also be useful for sole-owners and small businesses looking to expand their online offering, though the text assumes that you’re part of a larger organisation.

It’s well-written and contains lots of examples. Unusually for a book about the Internet, it’s also pretty-much up-to-date, appearing to have been finished late last Autumn. The case-studies, while uniformly North American, are mainly fresh and the authors aren’t afraid of criticising companies and organisations whose blogging strategies seem to have gone awry. The information and advice it gives is sound and practical and is careful to remain focused on meeting business objectives like more sales, better customer relations and reduced support costs.

So an overall recommendation from me, if you are interested in the idea of having a blog for your business but are not entirely sure why or how to start. But I do have a caveat…

The book is trying to do two things at once: provide a strategic direction and management information for corporate blogging and give a practical guide to choosing platforms, deciding policies and creating content. It’s already really thin, so this means that it doesn’t provide much detail on any particular aspect. For example, it talks about some of the pros and cons between different platforms such as Moveable Type and WordPress, and hosted solutions such as WordPress.com, blogger and typepad. But since it can only spend 50 words on any particular platform, and there’s a redundant half-page picture of each of these, you’re left with ‘there are lots of different platforms, each of which have some advantages’ as the overall message. There’s also some misinformation in this section, such as: “[because it owns the platform] Google place[s] Blogger blogs higher in Google search results.” See, for example, Andy Beard countering this. The sections on business strategy are similarly starved of detail or any theoretical underpinning for some of the assertions made.

In fairness, most business books are a bit like this: thin. They aim to give executives enough information to make some reasonable decisions, but not so much that they get bogged down in the minutiae or put off by the bulk. IMHO, though, readers would have been better served by choosing between two books: one for executives about strategy and one for the person managing the blog.

To give you an overview, this is my two-minute version of the book:

Ch1: blogs are a rising media force and they can bring customers and potential customers to your website. Also good for search.

Ch2: get people to read your blog through integrated marketing, tools like RSS, other social media platforms and by providing useful information and good service.

Ch3: there are lots of different types of blog – so choose one that best serves your business. It might end up being a tumble-log or podcast, for example.

Ch4: be useful to your readers and responsive to comments. Take comments on board and deal with criticism fairly and calmly.

Ch5: use your business’ expertise to find topics to write about. And why you might want an internal blog for staff as well.

Ch6: get people who are enthusiastic about the subject matter to do the content. This will probably involve the Marketing department, but also others like R&D and freelancers. Make it sound authentic.

Ch7: get eyeballs [sic] for your blog with good writing and content, a readable design, SEO and conventional marketing techniques.

Ch8: getting multimedia content onto your blog isn’t that hard. You can use other people’s – if you get permission or it’s CC licensed – or you can create your own. [This chapter is one that particularly suffers from the word limits: making a podcast – get audacity – open source music here – put it up on iTunes.]

Ch9: get ready for the future by using semantic features and maybe mash-ups. Oh, and mobile. Oops — we’ve run out of words.

The second book is Tris Hussey’s Create Your Own Blog. It’s a bit thicker, so expect that review in a week or so.

Via Stuart Bruce, I found this funny clip in which social media marketing guru David Meerman Scott lambasts client-side marketing managers for continually asking about the ROI of social media projects.

His point is that marketers don’t know the ROI of traditional forms of advertising like billboards and 30-second TV slots, so why is it such a stumbling block when it comes to social? It’s nonsense, he says. Often, the objection is really that people don’t like doing new things.

Bruce rightly points out that social media people have been guilty of muddying the waters by equating ROI with an increase in page views, twitter followers and whatnot. While those things might be the objectives of a particular campaign, they’re not the same as return on investment. ROI is just about money:

In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or net income/loss. The money invested may be referred to as the asset, capital, principal, or the cost basis of the investment. ROI is usually expressed as a percentage rather than a fraction. (wikipedia)

I’m sympathetic to these arguments. The objectives of social media campaigns can be as broad as increased awareness, employee retention, customer satisfaction and R&D. They are rarely just about flogging more stuff. It’s not like some coupon campaign where you can add up the number of coupons redeemed to see how much it was worth.

But there’s a problem. And that problem’s name is The Grumpy FD. Because he turns round and says:

Hang on, sunbeam. If you can’t calculate a monetary value for all these social shenanigans, then why am I going to sign-off your invoices? Furthermore, I note that you’re charging me £150 an hour. So you have already put a value on these activities, not to mention all the other costs you’re incurring in terms of my staff’s time. Where is my £300 an hour that I should get from employing you?

If you stick to your guns and insist that ‘it’s all about the love, man’, then the conversation could end quite briskly.

I’m not terribly experienced in these things, but there are certainly better solutions.

I think you need to unpick what you’re doing a little more carefully. Everything you’re doing has to result in increased profitability, otherwise the Grumpy FD isn’t going to pay your invoices. The difficulty is in obtaining the proof and putting a precise value on it.

Ultimately, a lot of the time, the information that you’d need to calculate the Rate of Return is too difficult to obtain — or won’t be available within a sensible time period. I think the main thing to do is to get the GFD to agree to some conservative estimates.

Let’s say you agree with a client to look into a new project. You’re planning to set up an online, but private, staff ideas forum, with the aims of improving the firm’s service offering. Something like Dell Ideastorm but internal (you can buy solutions off the shelf for this).

To work out how much that’s worth, you’re going to need to guesstimate some things:

• How much time people will spend on the forum and the value of that time.
• Likelihood of anyone having a good idea over an agreed period of time.
• Likelihood of that idea being workable.
• Value of that improvement to your service.
• How much you’re going to charge for implementation and training.
• Potential reduced R&D costs.

The added benefit of improved staff morale, recruitment and retention probably exists and has value, but I think it should be left out of your sums. It’s a gift, rather than the objective the GFD is paying for. Also, although the product ought to have lasting value, stick to an agreed time frame for measurement. A set period is part of the definition of what constitutes a project. If things get sticky, you might remind the GFD, however, that his ROI is going to recur long after you’ve disappeared on your micro-scooter.

My point is that every investment in anything is an educated guess. You don’t know whether the price of gold will boom or bust, but before you invest, you’re going to do some research and some sums and arrive at a probability of each of those two outcomes. If your chances look good, then, depending on your level of risk aversion, you’ll take a punt.

What people won’t do — least of all the GFD — is invest in ‘this thing’ you’ve just found on the Internet that may or may not be successful and you haven’t got any more information to inform a decision.

photo credit: Iscan