Colin Charles Agenda

I just started reading Confessions of an Advertising Man by David Ogilvy of Ogilvy advertising fame. I’m about half way thru it and I think that if you’re in the advertising, media, or the digital/social space, you should definitely read this brilliant book.

He lists four problems that advertising faces, and I highlight excerpts of problem one (highlighting is my own):

The first problem is that manufacturers of package-goods products, which have always been the mainstay of advertising, are now spending twice as much on price-off deals as on advertising. They are buying volume by price discounting, instead of using advertising to build strong brands. Any damn fool can put on a price reduction, but it takes brains and perseverance to create a brand.

Listen to a speech I made in Chicago in 1955:

“The time has come to sound an alarm, to warn manufacturers what is going to happen to their brands if they spend so much on deals that there is no money left for advertising to build their brand. Deals don’t build the kind of indestructible image which is the only thing that can make your brand part of the fabric of life.”

Andrew Ehrenberg of the London Business School has one of the best brains in marketing today. He reports that a cut-price offer can induce people to try a brand, but they return to their habitual brands as if nothing had happened.

Why are so many brand managers addicted to price-cutting deals? Because the people who employ them are only interested in next quarter’s profit. Why? Because they are more concerned with their stock options that the future of their company.

Price-off deals are a drug. Ask a drug-addicted brand manager what happened to his share of the market after the delirium of the deal subsided. He will change the subject. Ask him if the deal increased his profit. Again he will change the subject.

This was David Ogilvy talking about modern group buying sites in 1963.

Yesterday I asked on Twitter: Do you run a restaurant? Have you succeeded in running a group buying deal? Have you seen return customers? Comments like its a scam, anyone that wants a cut price deal is unlikely to return for full price, and even feedback from buyers whom don’t return due to disappointing experiences or how the food just isn’t worth the full price. I had some offline conversations about this and the ones that did return were basically already loyal customers saving money through a deal.

My own thoughts about group buying have been posted before: a Groupon before you close looking at the deal dynamics behind a deal, and some initial thoughts when they first started becoming mainstream.

Via Murdoch’s Pride is America’s Poison:

In the digital era of do-it-yourself news consumption, it is easier than ever to assemble an information diet that simply confirms your prejudices. Traditional news organizations, for all their shortcomings, see it as their mission to provide — and test — the information you need to form intelligent opinions. We aim to challenge lazy assumptions. Fox panders to them.

Brilliant article on ethics and the role media plays. In today’s social world with social feeds, you tend to get news that is influenced by what your friends read (Facebook has several such apps). On Twitter they don’t even necessarily need to be your friends, just people you choose to follow.

In the Malaysian context, this really means you need a balanced news diet. Mainstream media is pro-ruling party, while alternative media tends to be pro-opposition or sometimes have their own agendas. There’s no middle ground in the sea of tabloids.

Its worth noting that I’m no longer on the councils for the Malaysian National Computer Confederation (MNCC) and the Technopreneurs Association of Malaysia (TeAM). For MNCC, it was a retirement at the end of a term, and for TeAM it was a resignation during the term. Yes, both allow you to stick around for 2 years in general. I wish the organizations much luck in their future endeavors. 

Just yesterday, I’m sure many saw Twitter opensourcing their MySQL implementation. It is based on MySQL 5.5 and the code is on Github.

For reference, the database team at Facebook has always been actively blogging, and keeping up their code available on Launchpad. Its worth noting that the implementation there is based on MySQL 5.0.84 and 5.1.

At Twitter, most of everything persistent is stored in MySQL – interest graphs, timelines, user data and those precious tweets themselves! At Facebook, its pretty similar – all user interactions like likes, shares, status updates, requests, etc. are all stored in MySQL (ref).

The media has picked up on it too. A fairly misinformed piece on GigaOm (MySQL has problems focused on Stonebrakers fate worst than death? Pfft. Facebook wants to move its code to github? Read the reasoning — its spam handling on LP.), and a shorter piece on CNET.

Both Twitter and Facebook code trees mention that its what they use in their environments, but it’s not supported in any way, shape or form. Facebook recommends Percona Server or MariaDB. Facebook also has tools like online schema change in the repository, amongst others like prefetching tools written in Python.

I haven’t had the chance to play with the Twitter release yet, but it looks like this can only push Percona Server and MariaDB forward. Based on 5.5, some of these BSD-licensed features can make it in, and some have already made it in I’m sure. And what pushes these servers, will push MySQL forward (see lots of new features in MySQL 5.6).

On a personal note, it is amazing to see some MySQL-alumni push this forward. At Twitter, there’s Jeremy Cole and Davi Arnaut. At Facebook, the team includes Domas Mituzas, Harrison Fisk, Yoshinori Matsunobu, Lachlan Mulcahy. Nothing would be complete without mentioning Mark Callaghan (though not-MySQL alumni, active MySQL community member) who led a MySQL team at Google, and now at Facebook.

I arrived in San Francisco yesterday (Easter Sunday) and my usual shuttle service to Santa Clara had some issues fulfilling my journey (some 1h45m wait). So I took a taxi. As soon as I arrived at my destination, and he knew I was a techie, he said: “Look, a San Francisco startup has this cool device that helps independent entrepreneurs like me accept payments by all kinds of credit cards.”

He didn’t know what the device was called, but I immediately recognised it as the Square app (I’ve recently written about this space). On an Android phone. Found it interesting during tipping: 15%, 20%, or 25%. No option to enter your own choice. Enter your email address for a receipt (there’s also a phone number option, which I am sure I can’t use). Then the taxi driver writes one physically for you as well. I presume the driver gets money in his bank account in a rather short period of time.

How did it use to work? A manual scan on carbon paper with a device the credit card company provided. Probably submit the receipt and get paid within a much longer period of time. Or it used to be plain old cash — most drivers would never accept a card, preferring only cash.

Square uses: CentOS, Puppet, Ruby, Graphite, MySQL, PostgreSQL, Redis. They also build the service on the JVM orchestrating Ruby on Rails, Sinatra, JRuby, MRI and Java. Incidentally, love the way they hire people — tell them what is required of them, then ask them to complete a task/programming example.

Ever since I heard about Square, I was impressed. I was wowed when they used Square to accept payments at WordCampSF 2010 (May 2010). It all just felt right. Swipe the card, email the receipt. The experience felt like making a purchase at an Apple Store with their handheld point-of-sale systems. Square sadly never made it out of the USA and there were rumours that VeriFone and others were going to do similar things. Naysayers claimed security problems (square is magnetic stripe based, rather than chip-based last I used it). Alas, its 2012 and I’ve still not seen anything usable.

So it pleases me to see Swiff in Singapore and the fact that PayPal Here (product page) will also launch in Singapore. Malaysia seems to have SoftSpace. However its April 2012 now and the first reliably available service is Swiff.

Square is upfront with their costs – it basically takes 2.75% of the transaction. That’s considerably higher than the 1.8% charged by Malaysian banks. However it takes away the burden of renting a terminal which can set you back RM130-150/month, with the only option of a refund on that exceeding RM10,000 of transactions per month. And the chances that the terminal accepts “everything” tends to be slim (its usually just Visa/MasterCard). Swiff lacks fixed rates at the moment, and SoftSpace claims to be inundated with queries (but will support more security and have a chip reader).

PayPal might crack this though. They have experience with dealing with banks and banking regulations (Malaysia famously has BAFIA as law). Many tech-savvy people already tend to have a PayPal account (and if they don’t, maybe they’ll start one). They’ve also gone out with a flat 2.7% transaction fee.

I’m looking forward to more competition in this space. It can only lead to lower rates. And with bazaars, conferences, etc. this sort of thing can be very useful.