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7 Jun

The Internet now has 340 trillion trillion trillion addresses

By David Goldman @CNNMoneyTech June 6, 2012: 9:13 AM ET

The IPv6 launch has expanded the number of Internet addresses to 340 undecillion.

The IPv6 launch has expanded the number of Internet addresses to 340 undecillion.

NEW YORK (CNNMoney) — One of the crucial mechanisms powering the Internet got a giant, years-in-the-making overhaul on Wednesday.

When we say “giant,” we’re not kidding. Silly-sounding huge number alert: The Internet’s address book grew from “just” 4.3 billion unique addresses to 340 undecillion (that’s 340 trillion trillion trillion). That’s a growth factor of 79 octillion (billion billion billion).

If it all goes right, you won’t notice a thing. And that’s the point.

The Internet is running out of addresses, and if nothing were done, you certainly would notice. New devices simply wouldn’t be able to connect.

To prevent that from happening, the Internet Society, a global standards-setting organization with headquarters in Geneva, Switzerland; and Reston, Va., has been working for years to launch a new Internet Protocol (IP) standard called IPv6.

IP is a global communications standard used for linking connected devices together. Every networked device — your PC, smartphone, laptop, tablet and other gizmos — needs a unique IP address.

With IPv6, there are now enough IP combinations for everyone in the world to have a billion billion IP addresses for every second of their life.

That sounds unimaginably vast, but it’s necessary, because the number of connected devices is exploding. By 2016, Cisco (CSCO, Fortune 500) predicts there will be three networked devices per person on earth. We’re not just talking about your smartphone and tablet; your washing machine, wristwatch and car will be connected too. Each of those connected things needs an IP address.

Then there’s all the items that won’t necessarily connect to the Internet themselves, but will be communicating with other wired gadgets. Developers are putting chips into eyeglasses, clothes and pill bottles. Each one of those items needs an IP address as well.

The current IP standard, IPv4, was structured like this: xxx.xxx.xxx.xxx, with each “xxx” able to go from 0 to 255. IPv6 expands that so each “x” can be a 0 through 9 or “a” through “f,” and it’s structured like this: xxxx:xxxx:xxxx:xxxx:xxxx:xxxx:xxxx:xxxx. (Yes, there was an IPv5, but it was a streaming multimedia standard developed in the late 1970s that never really caught on).

The changeover is akin to when the U.S. telephone system handled soaring growth by increasing the digits in each telephone number — except for one crucial difference. While the entire telephone system was upgraded in the 1990s, the Internet will be upgraded gradually.

IPv4 will continue to exist alongside IPv6 for quite some time, just as digital and analog TV were broadcast side-by-side for years.

Though most of the major Internet players will be IPv6 compliant going forward, many routers, devices and operating systems won’t be. For instance, Microsoft (MSFT, Fortune 500) Windows XP, the world’s most-used PC operating system, is not IPv6-compliant.

Just 1% of end users are expected to now be reaching websites using the IPv6 standard. The Internet Society expects that to gradually grow as users update their software and hardware.

Most of the major websites and networks are already participating. More than 2,000 websites, including Google (GOOG, Fortune 500), Facebook (FB), Bing, Yahoo (YHOO, Fortune 500), AOL (AOL) and Netflix (NFLX), as well as a number of network operators such as AT&T (T, Fortune 500), Verizon (VZ, Fortune 500), Comcast (CMCSA) and Time Warner Cable (TWC, Fortune 500), have begun enabling IPv6.

But they’ll all need to continue to support IPv4 until the entire world upgrades. That will take years.

There have been some grumblings about cyberattackers getting ready to pounce on Wednesday, taking advantage of potential holes in a new technology. But a year ago, on June 8, 2011, all those participating networks and sites turned on IPv6 for a day-long test run without a hitch.

They reverted to IPv4 the next day. This time, the change is permanent. It’ll be a slow transition, but it’s a crucial one that will support the Internet’s current rate of expansion far into the future.

First Published: June 6, 2012: 5:13 AM ET

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Peer-to-Peer Job Sites Inspire Micro-Entrepreneurs

12 Feb

By Darren Dahl

Thu Feb 9, 2012 2:32pm EST

(Reuters) – Chris Mok, like many Americans over the past few years, lost his job in the wake of the Great Recession.

While Wok, 46, diligently sent out resumes trying to replace his Macy’s marketing job he lost in 2009, he also kicked in to help his wife, Isha, run Hi’iaka, her Hawaiian-themed florist shop in San Francisco.

It was early last summer, when many florist businesses see a bump in business from graduations, that Wok first heard about a site called Task Rabbit, where people can post jobs of any just about any kind – such as helping with a move, painting a room or even running an errand – or bid to work on a job posted by someone else via computer or on the go with a GPS-enabled smartphone. Mok suggested that his wife try the site out as a way to hire on a few extra hands for the busy season.

His wife’s experience with Task Rabbit went so well that Wok, who hadn’t worked outside of his wife’s business in about nine months, came to a realization: why couldn’t he earn some extra money bidding on jobs himself?

“I hit the ground running and have been working almost seven days a week since July,” says Mok, who now makes about $3,500 a month tackling everything from handyman repairs to hanging whiteboards and assembling Ikea furniture for the burgeoning number of startup companies in his area.

“It feels great to be your own boss and to pick and choose the jobs you take on.”

Unless you have been living under a rock, you know that the hot button political issue these days is the nation’s unemployment rate. In January, the U.S. jobless rate was 8.3 percent, on its way down from last summer’s rate of 9.1 percent.

That’s why the rise of online marketplaces, so-called peer-to-peer job sites like Task Rabbit are so exciting. They promise to generate new employment opportunities, or let just about anyone earn some extra income.

“We’re enabling people to invest in and engage with folks in their community in a way that I think we’ve forgotten,” says Leah Brusque, a former programmer with IBM who founded Task Rabbit in 2008, just as the recession was unfolding. “And we’ve done that by turning them into micro-entrepreneurs.”

Online job sites have been around a while, of course, and even sites like e-lance and oDesk have become viable markets to outsource highly-skilled jobs such as programming, design and writing tasks.

But what makes Task Rabbit and the growing number of others like it such as Coffee & Power and Zaarly different is that their jobs vary widely and often involve face-to-face interactions in the real world. Skillshare, for instance, is a site based in New York City that enables people to teach or attend a class on just about anything. A recent search revealed classes ranging from how to eat healthy or how to crochet an Alpaca rug – not online, but in person.

“We are changing the way people think about doing business with the people around them,” says Bo Fishback, formerly the vice president of entrepreneurship at the Kauffman Foundation, who founded Zaarly in March 2011. “We’re making it possible to ask for and get anything, in real time, from the people around you.

Mechanically, most of these sites work in similar fashion. People can post jobs, or bid on them, while the site handles the payment process – usually taking a small percentage fee of the transaction for itself. Both parties involved in a transaction can then rate each other after the job has been completed. At Task Rabbit, which has some 3,000 registered bidders, some $4 million of activity is reported every month, which, while impressive, is still a sliver of the estimated $473 billion earned by freelancers in 2010.

Those kinds of numbers have given high-profile investors reasons to take notice. Zaarly, for instance, reeled in $1 million from a group of investors that included Ashton Kutcher (while also adding Meg Whitman as a board member). Similarly, Coffee & Power, which was founded by Philip Rosedale, the creator of the virtual online world game SecondLife, recently raised about $1 million from investors like Jeff Bezos.

“Our mission has been to find out how you get people who are interested in working for each other to cluster and find each other in the real world,” says Rosedale, whose business plan combines an online market with currently three physical locations – upscale coffee shops in San Francisco, Santa Monica and, soon, Portland, Oregon – where people can meet and make a deal.

There are, of course, critics who point to the fact that it can be difficult if not impossible for someone to earn a living bidding on $100 jobs. But, if the number of people flocking to these sites to not just bid on jobs but also post them continues, we might just see a change in the concept of what a job is.

“We’re still early in the game, but we think we’re reinventing the concept of how we all go about working,” says Rosedale.

The Greatest Running Shoe Never Sold

23 Jan

BusinessWeek
Features January 12, 2012, 4:30 PM EST
The Greatest Running Shoe Never Sold
How hard is it for an independent inventor to sell an idea to a multinational? Try running a mile in Lenn Hann’s shoes

By Bob Parks

(Corrects the year the sneaker was patented.)

Late one night in August 1997, 54-year-old inventor Lenn Rockford Hann placed two bottles of Gatorade near Concourse F of Chicago O’Hare International Airport, unlaced his sneakers, removed his socks, then dodged curious maintenance workers for two hours while running 13.1 miles on the walkways. His pace surprised him. He was convinced the springy, resilient surface was almost perfect. “My legs felt amazing,” says Hann, a marathoner. “I’ve been chasing a shoe that feels that good ever since.”

For years, Hann had been designing a running shoe that he hoped would give him an edge. After his airport run (in the days of lighter security, naturally), he knew he was on to something, and he became obsessed with O’Hare’s movable sidewalks. Finding a walkway in the midst of repair on a subsequent jog, he jumped into the pit to look at its clockworks. There he found rollers on each side, with nothing holding people up in the middle but the belt’s tension. The next day, Hann called the belt company, Dunlop Conveyor Belting, and learned they were adjusted to 2,500 foot-pounds of force to create the right balance.

Athletic brands spend millions every year trying to build a better sneaker that will propel them to the front of the $6.3 billion running shoe business, one of the biggest and most visible areas of sporting goods, with 11 percent growth in 2011, according to industry analyst SportsOneSource. Nearly all sneakers have a sole that looks like lasagna, composed of layers of rubber, foam, and plastic. The fluffy foam is made from ethylene-vinyl acetate, or EVA, which has its critics: EVA adds weight to shoes, and lab tests show it requires more energy per stride. Running shoe companies have long sought an EVA substitute that absorbs shock but also returns more energy. “Consumers like the cushioned feeling associated with a conventional running shoe,” says Darren Stefanyshyn, a University of Calgary researcher and former chairperson of the Footwear Biomechanics Group. “If you could provide that without using foam, you’d have a winner.”

It took him eleven years, but Hann finally converted his airport research into a breakthrough sneaker patented in 2008, a shoe with an entirely different system to cushion and propel the foot. It quickly attracted the attention of fast-growing athletic brand Under Armour (UA), which spent two years and hundreds of thousands of dollars to develop it as the prospective centerpiece of the company’s first line of footwear. Hann’s shoe was scheduled to launch early this year and was poised to rock the footwear industry, but it never quite made it to market.

Hann is a former software engineer with glasses, short brown hair, a high domed forehead, and ears that stick out like antennae. He is talkative, relentlessly upbeat, and consistently attired in marathon T-shirts. His Volkswagen (VOW:GR) bears the license plate TNASHS, for “tenacious.”

In the years following his midnight airport jog, Hann licensed several inventions—an electronic cat toy among them—that brought him modest income, but the shoe was always his favorite project. He tried many materials before landing on carbon fiber, an ultra-strong substance that holds its shape after years of pounding. He engineered carbon fiber shock absorbers into his shoe to give it cushioning and stability in one mechanism. A hinge in the forefoot provided flexibility.

Three days before the 2002 Chicago Marathon, Hann bought industrial carbon fiber fabric and baked it in his kitchen. Once the fumes dissipated, he cannibalized the uppers of a pair of New Balance 763 running shoes for his proto-types. As he hacked off layers of EVA foam from the sneakers with a table saw, his hand slipped and the blade cut deeply into his thumb, embedding bits of blue foam into the wound. Hann rushed to the emergency room, then assembled the shoes the next day.

Hann believes his prototype was responsible for shaving 17 minutes off his record in the marathon. He immediately made more. A member of his pace group wore them, reporting her legs felt “full of energy.” Kris Hartner, owner of Naperville Running in Naperville, Ill., delivered a tougher critique: “pretty good,” he said, but “a bit slappy.” The transitions between midstance and toe-off were “rough.” A shard of carbon fiber came loose, slicing Hartner’s calf.

All the same, Hartner, who has a master’s in biomechanics, took Hann’s concept seriously. When New Balance owner Jim Davis visited the shop, Hartner said he should check out Hann’s shoes. Hann met with New Balance and secured an investor, who contributed $300,000. Hann and the investor made prototypes in Korea, paid an attorney to patent the shoe, and hired an exercise laboratory to test it. The facility found that runners in Hann’s prototypes consumed an average of 2.2 percent less oxygen. That may not sound like a lot, but it pointed to a significant reduction in energy when running long distances.

When it came time to talk price with New Balance, Hann set his offer sky-high. He says he meant it as a starting point, but company executives closed discussions. Hartner remains a supporter of the shoe, but says Hann blew the negotiation. “He would be way better off with an agent to represent him,” says Hartner. “He’s the inventor-scientist guy, you know it from movies. But in real life they sometimes end up shooting themselves in the foot, and it’s hard to watch. They’re not as good at the people thing.”

Six years later, it appeared Hann might be back in business. Kip Fulks, chief operating officer of Under Armour, learned about Hann’s shoe after the inventor completed a small, exploratory project with the company. Fulks wanted to launch a major sneaker development, and in 2009 he invited Hann to the company’s Baltimore headquarters to negotiate. Since its inception in 1996, Under Armour has come out of nowhere with innovative products like its HeatGear compression shirt to stalk Nike (NKE) and Adidas (ADS:GR). The shirt is a nylon garment that hugs the body, and it has largely replaced heavy cotton tees for athletes. But Nike’s annual revenue is around $20 billion vs. Under Armour’s $1 billion, and to truly challenge its competitors, Under Armour needs footwear. (The company hastily designed trainers in 2009, but the attempt impressed neither consumers nor investors.)

The negotiations between Hann and Under Armour were never smooth, but they seemed headed in the right direction. On one side of the table sat Fulks and his designers. On the other was Hann, his investor, and his attorney. First they hammered out an option agreement, a sort of preamble to a longer-term licensing deal. Hann asked for a monthly option fee, basically an advance on future royalties. After some haggling, Fulks agreed to $8,000 per month, to be shared with Hann’s investor and attorney.

Next, Fulks and Hann locked horns over the range for future royalties. Hann asked for 3 percent to 6 percent, a rate more akin to a tech product than footwear. Fulks pulled the pair back to 1 percent to 4 percent. (Aerospace engineer M. Frank Rudy, who sold “Air” to Nike, was awarded a royalty of around a single percentage point when he originally made the deal, according to a source familiar with the contract. Nike would not comment on how much Rudy earned.)

Finally, on Mar. 24, the two signed the option, agreeing to the 1 percent to 4 percent range, with an exact percentage to be determined later. It was a huge step. To celebrate, an Under Armour design manager invited Hann to a nearby bar; they drank beers into the night while talking footwear tech. Hann proudly showed off the blue foam embedded in his thumb. They toasted the new shoe. “At that point, I suddenly realized that more people had gone to the moon than had ever licensed running footwear,” he recalls. “We were almost there. I was in heaven.”

That year, Hann was an electrical storm of activity, calling the company almost daily with ideas. Under Armour made six rounds of “prototype tooling,” the aluminum molds for model shoes, and performed extensive testing with favorable results. The project was getting close to “final tooling”—when expensive steel molds are struck in all sizes, men’s and women’s. Then, in summer 2010, Fulks announced that it was time to settle on a licensing agreement. To Hann, this seemed like a formality. He suggested leaving it to the attorneys. Then he waited.

After a four-week silence, Hann couldn’t take it and called a former Under Armour employee for insight. “It’s a delaying tactic,” guessed the acquaintance. “This is their way of introducing sharp elbows.”

Three weeks later, Hann traveled to Portland, Ore., for a hastily scheduled meeting with Adidas. Executives there were encouraging, but they didn’t want a bidding war with Under Armour. That very afternoon, Under Armour sent an apologetic e-mail with the much-anticipated licensing agreement. (Hann doesn’t know whether this was somehow triggered by the Adidas trip.) It included a royalty rate of 1.5 percent for the first stage of sales, and 1 percent thereafter. Through his attorney, Hann countered with 5.75 percent and 4.25 percent. Hann’s lawyer says Under Armour took the soaring rates like a jab in the eye; Under Armour would not comment on the specifics of the negotiations.

For the next three months, Under Armour refused a face-to-face meeting but did make concessions, raising its percentage and throwing in a monthly advance. Hann held out for higher numbers. He fielded interest from a new set of investors and became more wary of Under Armour. “I feel like the mouse dancing with the bear,” he said. “No matter how careful the bear is, the mouse better watch out.” In late October 2010, Kevin Haley, senior vice-president of innovation, took over the project from Fulks. Haley offered to put the licensing negotiation on hold and renew the option agreement at $15,000 per month. The implication was that this would allow them to work together like old times.

Hann rebuffed the offer, believing Under Armour was bluffing and it was a way of avoiding a licensing agreement. In early December 2010, Under Armour’s attorney delivered the news: The company decided to move in a different direction. Hann’s work with the company was over.

Last month, Under Armour introduced its Charge RC running shoe. It features a strip of carbon fiber along the bottom, not for cushioning but to enhance the ride and response. “It’s a different use of carbon fiber than what we were exploring,” says Haley. “But I think it shows that Under Armour takes an open approach to innovation—we test a lot of technologies and make a lot of different prototypes before arriving at what comes to market.”

Unlike Hann’s prototype, the Charge RC fits the current trend of minimal running shoes; it weighs under 10 ounces and has a sole close to the ground. Hann’s shoe weighs more and sits higher. Asked why Under Armour didn’t go with Hann’s shoe, Haley says: “We go down the path of evaluating new technologies with more people than other companies, so we’re going to encounter more situations where it doesn’t work out for us as a commercial product.”

For Under Armour, making a shoe with such an unprecedented technology would have been a challenge to source, manufacture, test, and market. Could Under Armour have managed those logistics given another few months of exploratory development? We’ll never know; Hann’s over-the-top royalty demands denied it that opportunity.

Hann accepts that he had a role in the falling-out. “I know I screwed up,” he says. “But despite my bumbling efforts, the technology deserves to be out there.” In the last few months, he has continued pitching his sneaker. He says he now has a promising new partner, and is also in talks with a medical device company about an electronic invention for hospitals. He has not hired an agent.

Curious about Hann’s supershoe, I took a few turns around his cul-de-sac in the upscale suburb of Wheaton, Ill., with a test pair. I was surprised to see lots of EVA. Hann argues that some foam is needed to hold the carbon fiber in place, but that it doesn’t cushion the shoe. The sneakers didn’t exactly feel like they were injected with gravity-defying Flubber, but there was something different about them. Even though they weren’t especially light, they felt light—like floating on little trampolines.

Parks is a Bloomberg Businessweek contributor.

©2011 Bloomberg L.P. All Rights Reserved. Made in NYC

Twitter Redesigns Its Site

12 Dec

DECEMBER 9, 2011

By AMIR EFRATI

Twitter Inc. on Thursday announced a redesign of the micro-blogging service and new features to help widen its appeal.

In the biggest announcement since Jack Dorsey, Twitter’s creator, returned to the company as an executive in March, the company said that when people first sign up to use the service, Twitter will help them discover information that might interest them, based on their location and other signals.

“It’s not just a visual redesign but a conceptual redesign to make Twitter more accessible to the next billion users,” said Satya Patel, a Twitter senior executive, at an event inside the San Francisco-based company’s future headquarters in an Art Deco building in a blighted neighborhood here.

The redesign, which will roll out globally over the next few weeks, will add a section to every Twitter user’s account called “Stories” that shows them content on Twitter they may find interesting. “It’s the first step to start to surface all the rich content that’s pouring into the platform for people who are experiencing it for the first time,” Twitter CEO Dick Costolo said.

Twitter announced a redesign of the micro-blogging service and new features to help widen its appeal, Amir Efrati reports on The News Hub. Photo: AFP / Getty Images.

Twitter, which lets people broadcast messages called “tweets” of up to 140 characters in length, is attempting to become an online-advertising powerhouse but still faces challenges including the perception that many people don’t understand how to use the service, which includes symbols such as “@” and “#,” and don’t know what kind of information they can view on it. People use Twitter to keep up with the latest news about everything from technology and politics to transportation delays and promotions by big retailers.

The company recently said more than 100 million people actively use Twitter. The majority of its accounts are based overseas, the company has said.

In August the company raised money at a valuation of more than $8 billion and now has more than 700 employees, who will move into the new headquarters in mid-2012. Its fledgling online-ad business is expected to generate around $145 million this year, according to research firm eMarketer, as brands such as Starbucks Corp., luxury-brand giant LVMH and others dip their toes into Twitter’s ad products, which aims to target ads based on people’s personal interests. That revenue figure is up from $45 million last year.

Mr. Dorsey, who was Twitter’s first chief executive and has long been chairman of its board, said that, on average, between 3% to 5% of people interact with, or “engage,” with ads they see on Twitter. That figure is higher than many other forms of online advertising.

Bloomberg NewsExecutive Jack Dorsey, in New York this year, oversees Twitter’s look.

The five-year-old Twitter is competing with other social media companies such as social network Facebook Inc. for the attention of marketers. Mr. Costolo said Thursday that the company is testing a long-awaited “self-serve” system that lets anyone buy ads on Twitter, similar to the kind of system that propelled Google Inc.’s growth, and that it would become available more broadly next year.

Twitter on Thursday also announced that brands such as American Express and organizations such as the American Red Cross will soon be able to customize their publicly-viewable Twitter pages to have more control of how they look.

The company has leased 220,000 square feet in its future headquarters, a space that “holds thousands of people,” Mr. Costolo said.

High Performance … How Companies Can Stay Ahead of the S-Curve

24 Aug

Successful firms don’t just go from good to great, they do it again and again by managing in tandem today’s business and tomorrow’s

by Catherine Bolgar

What beats the taste of success? Tasting it over and over.

A company finds a winner with a product. It takes off, then gains momentum. Sometimes companies make the ride up last longer by introducing spin-offs or entering new markets.

Unfortunately, at some point, sales level off: markets become saturated, competitors launch even better products and tastes move on. The overall sales trajectory, therefore, resembles an S.

High-performance businesses—the ones that consistently lead their industries over many business cycles—jump from one S-curve to another again and again. How they do that is the subject of a new book, “Jumping the S-Curve: How to Beat the Growth Cycle, Get on Top, and Stay There,” by Paul Nunes and Tim Breene, leaders of the High Performance Business Research program at Accenture, the global management consulting, technology services and outsourcing company. The program was born in 2003 to determine exactly how some companies become high performers, through good times and bad, while others lag behind or fail.

Mr. Nunes and Mr. Breene directed the analysis of the performance of more than 800 companies around the world in dozens of sectors, most over a 10-year span. They identified key differences in the companies that successfully make the jump, versus those that peak, then stall and decline. According to Accenture’s research, high performers:

resolve the conflicting needs of today and tomorrow—trading some of today’s performance for tomorrow’s gain
build a hothouse of talent to nurture employees, which then attracts more people with skills and vision, ultimately creating a talent surplus
change top management while business is still thriving
pursue “big-enough” market insights—ones based on changes in the marketplace that are certain to occur—and sure to shake up the competitive landscape
refuse to scale up for scale’s sake and actively manage the downsides of scale at every turn

The challenge is difficult. The research showed that companies that failed “were not illogical,” says Mr. Breene, the former chief strategy and corporate development officer of Accenture. “They acted reasonably. You can look at why the things they did each year seemed to be the strategically correct response at the time.”
Today and Tomorrow

High-performance businesses juggle the contradictory needs of the present and the future. “While the core part of the business might be working to eliminate failure and error, you have to have parts of the business where intelligent failure is accepted. Failure allows you to get insights and innovations and breakthroughs,” Mr. Breene says.

High performers fix what doesn’t seem to be broken yet. The ride up the S-curve can be exhilarating, but high performers don’t just revel in the success. They use it to prepare for their next act, and they actively manage the cresting of their S-curves.

Companies can try to predict when they will reach the revenue peak on their current S-curve by gauging and forecasting market saturation. But there’s always the danger that disruption will strike—a competitor unveils a new product, or technology makes a leap forward—and the curve’s life will be shortened.

Incremental innovations are useful for extending an S-curve and bringing in revenue to fund the next S, but high performers are “remarkably committed to breakthrough innovation,” Mr. Breene says. “They have market-changing ambition. They look farther out. They are happy working on seven-to-10-year time frames.”

High-performance businesses take a long-term view for talent, too. They understand that it’s not enough to “optimize” the workforce. That’s why they turn themselves into hothouses of talent, where they can give people room to grow. They glean insights from employees at all levels and they give them stretch assignments to learn new skills.

“High performers have much deeper planning and talent-management systems,” says Mr. Nunes, the executive director of research at the Accenture Institute for High Performance.

UPS has long been a “hothouse.” For example, it has a tradition of promoting people from within, says Kurt Kuehn, chief financial officer at the Atlanta-based logistics company who himself started as a holiday-season driver more than 30 years ago. “Because we do focus so much on employees as lifetime assets, we have this incredible residual base of talented people”—what Mr. Nunes and Mr. Breene refer to as a “talent surplus.”

A talent surplus makes a company blossom with innovation and creativity. Employees are not just responding to the challenges of the moment but are thinking about how the company can do something better or new.

“As we create a new S-curve, we need an infusion of new talent,” says Mr. Kuehn. “We mix maybe two parts old skills and one part new skills.”

High-performance businesses like UPS become magnets for “serious talent.”
New Strategy—New Leadership

High performers also constantly groom and challenge the upper ranks to prepare new teams to take over when new strategies require. That means not just the CEO but the entire C-suite.

“In order for the company to evolve ahead of the curve, the top team has to evolve first,” Mr. Nunes says.

UPS has transformed itself through many S-curves. Founded in 1907 as a messenger service in Seattle, it began serving more kinds of businesses, then spread geographically, then added air services, international deliveries and logistics.

UPS’s chief executives have had tenures in the four-to-seven-year range—close to the typical S-curve cycle. There’s no bell that rings when a CEO’s time is up, but since the company’s CEO comes from within, he already has been implementing his vision and strategy even before taking the helm, according to Mr. Kuehn.
Early but Not Too

While high-performance businesses think big, they aren’t always first with an idea. Zenith successfully moved from one S-curve—in radio—to another—in TV—but stumbled as it focused on high-definition TV in the 1980s, well ahead of the market.

By contrast, Porsche of Germany was far from first to market a sport-utility vehicle. Porsche tailored its Cayenne to its customer base, offering a unique SUV, rather than a me-too vehicle. It gained traction gradually—the 911 sports car line remained the best-seller during the Cayenne’s first year. Eventually the Cayenne became the company’s top seller—Porsche took its time to get everything right before scaling up.

The secret at the core of high-performance businesses’ successful market moves, however, is something the authors call a “big-enough market insight,” or BEMI. High performers put wind in the sails of their strategies by moving in alignment with a major market shift. Zenith’s insight was perhaps too big and too soon. Porsche’s insight was recognizing that demographic shifts meant growing demand for SUVs was more than a fad, and that a portion of that fast-growing market would favor a company that could deliver in an SUV everything a sports car lover would want.

High-performance businesses go to extraordinary lengths to understand their customers. Procter & Gamble even sends researchers to live with customers to observe how they use products and to reveal unmet needs.

While tending to core businesses, high performers also prepare for their next S-curve with an “edge-centric” strategy. That is, they pick up insights from looking at the periphery of market evolution and customer demand, often by keeping better tabs on what is happening on the periphery of their own organization.

“While it can look like you’re taking your eye off the ball, moving off into uncharted territory, actually you’re keeping your eye on the ball by searching where the best ideas are most likely to be found,” says Mr. Nunes.

Accenture’s Mr. Nunes and Mr. Breene also point out that size doesn’t correlate with success. In picking out companies that maintained high performance over the long term, they noticed that the winners were often midsize contenders in their fields.

“As you scale, it gets more difficult to sustain the characteristics of high performance,” Mr. Breene explains. “You get more complexity and that leads to a tendency toward process, policy and rules. The emphasis shifts toward incremental innovation. The vitality that made the business great in the first place begins to die as it becomes more like a machine and less like a living organism.”

Adds Mr. Nunes: “Everybody wants growth, but scaling, size and complexity tend to drive out headroom. You need headroom to jump the S-curve.”

For more information:
Accenture
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Gigwalk: Make money on your morning commute

2 Aug

By Jennifer Alsever @CNNMoneyTech June 22, 2011: 6:06 AM ET

Gigwalk founders (from left) Matt Crampton, Ariel Seidman and David Watanabe.Gigwalk founders (from left) Matt Crampton, Ariel Seidman and David Watanabe.

(CNNMoney) — Most people make a living while they’re at work. But what if you could earn a few bucks just walking to the office?

Gigwalk, a startup founded last summer in Mountain View, Calif., takes the phrase “mobile workforce” literally. The company harnesses America’s vast army of iPhone users, enlisting them to complete various “gigs” when they’re out and about.

Rates for these micro-tasks have included $5 to snap a picture of a restaurant’s chalkboard menu for an online restaurant guide, $7 to visit a wireless store and check on product placement for a cell phone manufacturer and $30 to test out a new iPhone app. Users are encouraged to work gigs into their regular routines, picking up pocket cash while they make trips to the gym or run errands.

“It’s whatever is convenient,” says Ariel Seidman, the co-founder and CEO of Gigwalk. Inspiration for the service came last spring when Seidman, 34, was the director of mobile search for Yahoo (YHOO, Fortune 500). He watched mapping companies spend exorbitant amounts of time and money dispatching contractors to gather information from far-flung locales. What if they could rely instead on iPhone users who were already there?

Seidman left his job last June. He enlisted two former Yahoo colleagues, Matt Crampton and David Watanabe, to help build the software platform that would bring his idea to life. In December, Gigwalk landed $1.7 million in startup capital from sources including the Greylock Discovery Fund, managed by LinkedIn (LNKD) co-founder Reed Hoffman, and Harrison Metal, founded by Michael Dearing, a former senior vice president of eBay (EBAY, Fortune 500) and an early funder of AdMob, which Google (GOOG, Fortune 500) bought for $750 million.

“I thought it was an amazing concept,” says Jeff Clavier, a managing partner at SoftTech VC, which also invested in Gigwalk. “After five minutes I thought, ‘This is like mobile crowdsourcing.'”

Gigwalk’s corporate clients include TomTom, the Dutch maker of portable GPS systems, and MenuPages.com, the New York online restaurant guide. Gigwalk executives would not say how many clients, in total, have signed on so far. They also declined to release their revenues and the number of active “gigwalkers,” saying only that thousands of people have completed tasks in seven cities: Boston, Chicago, Los Angeles, Miami, New York, Philadelphia and San Francisco.

To sign up for the service, iPhone users download an app, then register with Gigwalk and pass a background check. The company plans to launch an app for Android owners later this year.

Gigwalk uses iPhone owners’ GPS locations and home addresses to filter and distribute appropriate gigs for them. Once a user accepts a gig, there’s a limited time to finish it, usually a couple of days. After a completed task is approved, the user gets paid through PayPal.

To commission Gigwalk for a job, companies specify what tasks they’d like to outsource to smartphone users and pay Gigwalk a lump sum upfront. A percentage of that sum goes directly Gigwalk — the company would not disclose how much — and the rest goes to paying “gigwalkers” as they complete their tasks.

Reliable workers — those who do a good job and don’t submit fuzzy menu photos — are rewarded with the first pick of better-paying gigs.

Gigwalk has become a big time-saver for MenuPages, which maintains 32,000 online listings for restaurants across the country, according to Tom Bohan, the company’s director of content operations. One of MenuPages’ biggest challenges is keeping track of current information: new food items, hours of operation, whether there’s outdoor seating and wheelchair access. In the past, they’ve mostly used Craigslist to hire hourly contractors who can visit those businesses in person to collect data.

Bohan discovered Gigwalk late last year. Though they cost about the same as his regular contractors, gigwalkers turn assignments around for him much faster, he says — typically in about two weeks instead of eight.

Gigwalk’s biggest challenge? Getting people to take time out of their day for small payouts of just $2 to $15 apiece. Seidman says he doesn’t expect anyone to drive 15 minutes to do a $2 or $5 gig. But he hopes they’ll be willing to work multiple gigs into their morning commutes, or squeeze in a task that’s just two doors down from wherever they happen to be at the moment.

That’s worked out well for Andrew Schut, 47, a medical device consultant in New York City who’s the top-grossing gigwalker so far, earning $2,173 since March. Schut maps out clusters of gigs whenever he goes for a walk and tries to knock out a couple on the way to his clients’ offices.

“It’s given me the motivation to see parts of the city I didn’t know about,” says Schut, who created an online community called gigwalkingtips.com. “The beauty of it is you do it when you have time, and if you have time.” To top of page

The Divergent Demographics of Groupon and LivingSocial

29 Jun

JUNE 22, 2011

Targets, advertising strategies vary

Daily deal sites Groupon and LivingSocial saw their audiences approximately triple in the year to April 2011, with gains of 250% and 182%, respectively, according to comScore’s “State of the US Online Retail Economy in Q1 2011” report. But while both play in the same space, differences have emerged in the geographies and demographics of their users, as well as their deployment of display and paid search advertising.

The comScore analysis found that LivingSocial had an edge among East Coast-based users, while Groupon had more of a foothold among Midwest and West Coast-based consumers. This may not be all that surprising as LivingSocial is headquartered in Washington, D.C., and Groupon is based in Chicago.

Beyond the geographic divergence, each provider appears to attract different types of users. comScore found that internet users under 45 leaned toward Groupon, while those ages 45 and older skewed more in favor of LivingSocial. Those ages 12 to 25 underindexed on usage of daily deal sites in general, but underindexed less strongly on Groupon. Both sites were used by women more than men.

But Nielsen found the opposite age skew when it examined the sites’ demographics in March 2011. That analysis found that 33% of LivingSocial visitors were ages 21 to 34, compared to 25% for Groupon, while 51% of LivingSocial visitors were ages 35 to 64, vs. 57% for Groupon.

However, Nielsen also found that visitors to both sites were similar in that nearly two-thirds were female and that their visitors were more likely to be affluent and better educated than the average internet user. In contrast to comScore’s May analysis, LivingSocial’s visitors trended younger, slightly more affluent and more highly educated than Groupon’s. In addition, Nielsen found visitors to LivingSocial 49% more likely than the average American online to earn $150,000 or more, while Groupon’s visitors were 30% more likely.

Rewinding to February 2011, Morpace found that the plurality of Groupon users, 40.2% , were 18 to 34 and that less than a quarter were 55 or older.

The dynamic nature of users opting in and opting out of Groupon and LivingSocial’s emails may, in part, be responsible for driving changing user demographics from month to month. This is a plausible scenario given consumers’ fickle spending behaviors and the services’ monthly churn rates.

In April, Groupon’s churn rate was 18% while LivingSocial’s was 22%, according to comScore. As of Q1, Groupon had about 83 million subscribers compared to LivingSocial’s 26 million.

The larger site has an edge with consumers in terms of awareness, according to research from Bloomberg and YouGov.

Where advertising is concerned, while neither Groupon nor LivingSocial skimps on spending to attract users, they place a different emphasis on how they promote their deals.

The comScore analysis found that LivingSocial concentrated the majority (73%) of its display ads on the top five US Web properties, particularly Yahoo and MSN where the ads run mainly in email and news. The rest of the ads ran throughout the web. Groupon, however, ran only 31% of its ads on top publishers’ sites, spreading the majority (69%) around on mid-tier and more obscure sites.

Another strategic difference between the two providers, comScore noted, is that more than half (56%) of Groupon’s offers were for restaurants, while the hefty portion of LivingSocial’s deals (41%) were for books and magazines.

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