Discount travel's missed opportunity

It's not the sites themselves -- for the most past Hotwire, Priceline, etc. do a good job. However, it seems like a memo has gone out to every rental car agency and hotel that sells discounted cars and rooms to these sites to treat people booking via these sites like second-class citizens, which creates enormous badwill. There's a big missed opportunity here.

Let me give you an example: the cheapest rental car I could find for a recent trip of the type I wanted was $98.00 per day, but the price on Hotwire for the same class of car was $28.00 per day. What did I give up for the $28.00? Well, I gave up the convenience of going directly to my car off the bus, potentially getting a nicer vehicle via a free upgrade, and that's about it. What did I get in return? A reminder from the check-in person not less than 3 times that I had rented via Hotwire, a warning that I would be charged $120 for the vehicle if I brought it back even 1 minute after the return time I punched into Hotwire when I rented it (tip: on Hotwire, make your return time the same time as your flight time to ensure this doesn't happen to you), 2 attempts to try and upgrade me to a "premium" vehicle, and a 5 minute lecture on why I should be accepting the insurance because, get this, Hotwire doesn't provide me any protection (I've never had a rental car company offer me any free protection in all of the years that I've been renting cars).

Here's another example: I rented a room from Hotels.com for $98.00 and on the website for the same hotel, rooms were going for $210.00. For this particular hotel chain I happen to have pretty high status, but the person at the desk unapologetically informed me that because I booked with Hotels.com, they would not recognize my status, I would not receive any points for the stay, and I would receive none of the amenities (normally consisting of a couple of bottles of water and a bag of pretzels) that I normally get in my room. The really interesting thing was that their computer system had obviously correlated between my Hotels.com reservation and my chain profile -- I know this because the aforementioned statements were made preemptively before I even asked.

The discount travel sites are not to blame for this behavior, the rental car companies and hotels are. After all, the rental car companies and hotels are the ones giving the inventory to the sites to sell -- goes back to that old saying: "If you don't want them to buy, then don't sell." Unfortunately, the rental car companies and hotel chains are not only allowing this behavior from their employees, but it really appears as though they are encouraging the behavior. However, the end result for someone like me is that when I go to choose a rental car company or hotel chain to affiliate myself with and/or give the majority of my business, I'm not going to choose one that treated me like a criminal for purchasing through a discount travel site.

Of course, the rental car companies and hotels could turn this around. They could view each person that walks in the door as a potential lifetime customer of the brand and treat them as well as a loyal purchaser. Instead of being upset or encouraging their employees to be upset about a customer not booking directly, they could decide not to care what the purchase vector was and simply treat the customer like a customer. One key portion of this to ensure that customers, especially recurring customers, are booking directly would be to give them access to the same rates as the discount travel sites and/or be willing to match the price on the discount travel site (note: the only chain that I've known that will do this is Starwood, but you have to call the 800 number and tell them the price that a discount site is quoting -- in most cases they will match or get very close to the same price).

Remember when loyal customers used to be the most rewarded for their business by receiving the best pricing and service? There needs to be a shift back to these practices.

The potential limitation of Verifone's PayWare Mobile

Verifone's PaywareMobile seems like a great idea. The first question that I had, of course, was whether it works on an iPod Touch. It doesn't. And there's a reason.

In finally getting to someone at a Verifone reseller, I was able to determine that the PayWare mobile application, which takes the data from the swipe unit and transmits it to Verifone actually initiates a call using the voice network -- no GSM chip, no cellular call, so no iPod Touch. Supposedly Verifone is working on a newer version that should be available in the next 6-12 months that uses either cellular or wifi data.

Here's the pricing reality:

• iPhone at $99-$700, depending on which one you choose and the level of subsidy.
• iPhone data plan at $30 per month (required for activation).
• iPhone voice plan (needed for the application to work) of at least $20 per month.
• PayWare sleeve is free (with a 2-year agreement)
• PayWare software is free (from the iTunes App Store)
  
• $19 per month fee (what I was quoted) per sleeve
• $0.25 per transaction (what I was quoted)

Consider this instead:

• iPod Touch at $199 to $499, depending on the one you choose.
• WiFi data is free (assuming that you already have the infrastructure or can hop on free WiFi somewhere)
• Various credit card apps on the iTunes App Store -- $0.99
• Transaction fees -- vary by provider, volume, type of card, and whether or not the card number is typed in or swiped in (1.8%-3.8%)

I'm very interested to see other products, such as the Mophie Marketplace, that allow swipe integration into existing applications that support authorization over the data network instead of initiating a cellular voice network authorization.

This is going to be a war that is unlikely to be won by Verifone if they don't divorce themselves from voice authorization. Furthermore, they're really going to lose if they can't get this working over WiFi because they totally leave out the iPod Touch (and the iPad).

Scorched earth

The policy of scorched earth is an old military tactic that essentially involves destroying anything left in your path that might be useful to the enemy. In the past this was most easily accomplished by burning everything behind your army as you moved forward, hence the "scorched" part of the term.

It always astounds me the companies and individuals employ scorched earth policy when dealing with people that have been fired/let go or being fired or let go respectively. Perhaps it's because I work in entertainment and it seems like such a shallow pool that all of us in entertainment play in: you never know when someone that you employ scorched earth against may be in a position to do harm or good to your career in the future. (my sense is that many industries are just as tightly knit as entertainment, but entertainment is the vast majority of my experience).

In my time I have seen companies ruthlessly enforce non-compete agreements that are so restrictive former employees could not continue to work in the industry; this for people that they laid off, didn't even terminate for cause. Further, I have seen companies initiate lawsuits against former employees (even laid off ones) for violations of non-competes, knowing that they would not win, but wishing to be punitive and cause the employees significant out-of-pocket dollars to defend against them. Note that a number of times I have seen these employees wind up in decision-making positions and either actively or passively ensure that they company that employed scorched earth against them was unable to do business with them or any of their colleagues that were willing to listen.

On the employee side, I have certainly encountered ex-employees that have not had nice things to say about companies or people at companies; pretty normal response and forgivable. However, I have also seen ex-employees that have actively engaged in attempting to overtly disrupt company business operations. In almost every overt case that I have seen, the ex-employee may have been able to cause some short-term pain to the company, but has never succeeded in the long term. Further, I have seen ex-employees employing these tactics blackballed in the industry because word gets around quite quickly about character when an ex-employee attempts to employ scorched earth.

Sure, you can believe that business is war and take some learnings from that, but I do not recommend scorched earth as any sort of sustainable, long-term strategy for businesses or businesspeople.

When life gives you lemons

You can be like MacGyver and use them for battery acid.

You can make lemonade.

You should watch this video just in case you get a lemon delivery.

Link

Book review: Linchpin by Seth Godin

FULL DISCLOSURE: I made a donation to the Acumen Fund to get an advance copy of this book.

FULLER DISCLOSURE: I would have donated twice as much to get it that much sooner because it's that powerful.

This is not a marketing book, though few of Seth's last books really felt that way.

This is a book about becoming indispensable, about becoming a linchpin. However, reading the book is not like reading the map; read the book and become a linchpin-in-training.

In thinking about it, especially because such a large portion of the book is dedicated to gifts, this books is really Godin's gift to anyone that is willing to read, to question themselves, to take the steps to become a linchpin-in-training. As I read through the book, constantly highlighting and dog earring pages, it became clear to me that Godin didn't have to share the information in the book -- he certainly didn't need to share everything in the book. Of course, had he left out any bit of information that he included, then he wouldn't have been practicing what he preached; he wouldn't have given away all of the knowledge that can help you succeed with no expectation of financial gain (sure, he'll make some money from the price of the book and maybe get some speaking engagements, but he could have provided so much less and still had the same outcomes, which makes the book itself a perfect example of the content of the book).

You might be surprised to hear that you'll learn a lot about yourself when reading this book, provided you can beat down the resistance that you may have to doing so. I'll admit that I raced through the book the first time I read it, underlining good quotes and points, but not really applying the knowledge to myself, not engaging the introspection that I should have. So I read it again. Because the resistance was to write a review quickly (which I could have) and not absorb and live the information -- I pushed against the resistance and did it the "hard" way, which ultimately was the more valuable way.

Ultimately this book is about helping you discover the artist that's already inside of you, to create art. As Godin defines it: "Art is a personal gift that changes the recipient. Art is a personal act of courage, something one human does that creates change in the other." This books makes you think about all the ways you can become great at creating art; linchpins, ultimately are artists.

If you're looking for the map on how to do all this stuff, how to be an artist, then, as Godin says: "Here's the truth that you have to wrestle with: the reason that art (writing, engaging, leading, all of it) is valuable is precisely why I can't tell you how to do it. If there were a map, there'd be no art, because art is the act of navigating without a map."

Linchpin will be available on January 26 and presumably will be available in a Kindle version (it will likely show up on Amazon's Kindle site the day of the release).

PS -- my ship date for this review was the end of the day today (January 18): review shipped on time (even though it's not necessarily perfect, I'm done thrashing it).

PPS -- if during reading (or even before reading) you want to give up (or not start), look on page 101 of the hardcopy version; don't be at the confluence.

Apple/Steve Jobs is the . . . of the decade

Steve Jobs: CEO of the Decade

Apple: Brand of the Decade

Apple Inc. Dominates Decade

Can't say that I disagree, but I'm a self-admitted fan of most of the products.

Apple buys Lala

It's been confirmed that Apple has purchased Lala and rumors are flying about why they did that. Lala stores music in the cloud and streams it to a user's computer (kind of reminds me, in a way, of what MP3.com was up to before they got sued); as part of the deal, Apple gets the not only the Lala engineers, but also the founder of the company.

This acquisition is not uncommon for Apple -- they buy a lot of small companies and really never disclose the purpose of the acquisition, though it usually becomes obvious 6-18 months later when the integrated technology gets released as a feature, component, etc. Why is Lala getting so much attention?

I don't mind storing my music locally. Broadband speeds to my house are at the point where it just doesn't take all that long for me to download a track or album from iTunes; storage is cheap and gets continually cheaper, so there's not much overhead in storing it. All of my music gets (and everything else on my computer, for that matter) gets backed up for around $4 per month. My music does not necessarily need to be available to me everywhere -- I've got all the music that I want to listen to on my iPhone (it's still got half of its storage empty) and even more music on my laptop (still 60gb free at last count); I'm not sure that I necessarily need to be able to stream music to my laptop and there are places I want music where there is not an internet connection.

But maybe I'm wrong.

The model of needing to own music is probably fundamentally flawed. Subscribing to music is likely going to need to be the model of the future. All of the platforms that I mentioned above -- my home computer, my laptop, my iPhone -- are all platforms that could receive a stream of music, especially as broadband gets more pervasive, and its probably worthwhile to note that all of my platforms carry that little Apple logo and all my current consumption is through iTunes. I've currently got over 30,000 individual songs in my collection, which is a lot, but will never hold a candle to the over 8 million songs currently available on Lala.

And what about the obscure music that Lala doesn't have? Well, they have their "Music Mover" utility for that. I'm not going to claim that I fully understand the technology behind it, but I'm going to guess that just as MP3.com's (pre-lawsuit) utility used to scan the zero track of a CD for identification information and would match against tracks already in their database to give you a 30 second virtual "upload", the Music Mover probably scans ID3 tags, compares them to music in the database, and gives you access to what is already on the Lala servers, actually uploading only what is not already there. Music Mover solves the problem of what to do my entire music collection that I've already got, which is probably my biggest hesitation of moving to an on-demand, streaming model.

Let's go back for a second to my statement about pervasive broadband because that infrastructure is what will ultimately be the reason that streaming succeeds (or fails). AT&T is the current data provider for iPhones in the United States and we've all seen the "map for that" Verizon ads that contrast high-speed data coverage between their networks. If you're like me, one of my big frustrations with satellite radio is when it doesn't work, which, even on Verizon's network, is still a possibility. With physical audio tracks existing on my laptop, iPhone, etc. it does not matter if the data network is reliable; my limiting factor is simply battery life. The big question/challenge for streaming right now is whether or not the technology is adaptable enough to deal with network outages without me knowing about it.

But then again, maybe Apple is simply after something more simplistic.

Maybe the Lala purchase is just to add additional value to an iTunes store purchase -- buy the track for $0.99 and you can download it, buy it for $1.19 without DRM, or buy it for $1.50 and you can download it and stream it as much as you want on the web.

That sounds pretty boring though.