Christopher S. Penn – Marketing AI Keynote Speaker

Blog

  • Counting down to 2008

    Counting down to 2008

    Christmas has come and gone and now we approach probably my favorite holiday of the holiday season – New Year’s Day. I love that for many people on the Gregorian calendar, it’s a perceived fresh start, a way to reboot, a way to mentally delineate between what was and what could be.

    Some things to consider over the next week:

    1. Review 2007 from a perspective of accomplishment. It’s always good and fun to review the year past and make note of accomplishments, as well as ways in which things might have gone better. You’ll have your fair share of both, but it’s perfectly okay to pat yourself on the back for momentum achieved.

    2. Review 2007 from a perspective of education. What did you learn this year? How did you grow? What things, ideas, and people helped you to transform this year?

    3. Start thinking about 2008. What goals do you want to achieve? How will you measure them? What things might stand in your way of achieving those goals, and how will you sidestep or transform those opposing forces into allies?

    4. Start energizing for resolution. My teacher’s teacher, Stephen K. Hayes often says that a goal not written down is merely a wish. The word resolution is part of resolute – to be firm, unshakeable, unwavering in the face of all the things that would stand against you, that would work to diminish you. As you contemplate what you will be resolute about in the New Year, find an emotional anchor you can tie it to. Write down your goal, and then as you hold the paper, wooden plank, or other instrument of written commitment, find one emotional meaning in your goal.

    For example, if your goal is to improve your health and you’re a parent, think of the joy on your child’s face as you’re able to run and play with them outside without tiring, or take them on that mountain hike they’d always dreamed about. Imagine the sheer joy of seeing and breathing new experiences that come from a body that obeys effortlessly your mind’s desires.

    For each positive energizing vision, contemplate the wrathful, negative as well so you’re inspired to push away from the negative and pull yourself towards the positive. In the same example, imagine the look on your child’s face at your early funeral because you neglected your health.

    Grim, yes, but nothing is as powerful as our human desires to avoid pain and embrace pleasure. Habits we form can only be changed if the pain of staying the same is greater than the pain of change, and by emotionally “charging” yourself up, you’ll give your goals the energy boost they need.

    Get ready to reboot.

  • LinkedIn Trust Levels

    I have a reasonably large LinkedIn network, and as such, I receive LOTS of requests for introductions, networking, etc. as the end user and as a conduit for third parties. If you’re in my LinkedIn network, I’m now going to start including a little text nibblet in the introductions I forward, as follows:

    • TL0 – Trust Level 0. Out of courtesy, I’m passing along this request. I know nothing about the deal being talked about and do not endorse it in any way.
    • TL1 – Trust Level 1. I know the party immediately referring this to me, and trust them, so whatever trust they pass along in their private note to me, I’m passing along as well, but I still don’t endorse the offer/deal/introduction.
    • TL2 – Trust Level 2. I know the party and the deal all the way back to the origin if it’s a 3rd level connection, and I trust the parties earlier in the chain. Because I trust them, I am willing to endorse the offer/deal/introduction insofar as I know it’s not fraudulent or spam.
    • TL3 – Trust Level 3. I know everything in the chain up to me, and I heartily and wholly endorse the offer/deal/introduction and strongly encourage you to connect and make good things happen, as I believe it’s to both parties’ benefit.

    Needless to say, much of what I pass along on LinkedIn will be TL0. Here’s what a sample request will look like:

    Hey there. Passing along an intro/deal/etc. TL0. – CSP

    How are you managing trust on LinkedIn and other recommendation-style sites?

  • Money is based only on faith

    Money is based only on faith

    I had the terrific experience of speaking in front of high school students today, and the part that I think disturbed them most was the opening discussion about money and where it comes from. It’s unsettling to a lot of people to realize that money – currency – has no intrinsic value. Its value is entirely based on the faith you have in it and the government that’s backing it, as well as the faith of the vendors from who you buy stuff.

    Once upon a time, money had backing and intrinsic value. You could redeem a United States dollar bill for a dollar’s worth of silver or gold, albeit a small amount, and thus the money had intrinsic value. Today, it’s only a medium of exchange, as there’s no store of value any longer. Your money is worth only what you think it’s worth, and more importantly, only what others think it is worth. Ask anyone in the currency exchange markets just what the worth of a dollar is relative to other currencies in the world.

    At the end of the day, if there ever was a serious crisis of confidence in the US dollar, it wouldn’t matter whether you were a pauper or Bill Gates – your money would be worth the exact same amount – the paper it’s printed on. Ask anyone still alive who survived the Weimar Republic, when citizens burned Deutschmarks to keep warm, so low was their value. History was not kind to the Weimar Republic or what came after – a dictatorship led by a guy with a scrubby mustache who gave us a second World War.

  • A new definition of community

    I’ve been giving this a lot of thought as I work on a presentation for Emerson College tomorrow night with Chris Brogan. What is community, in a world where friends can be a click away but a thousand miles apart, where you can be next to someone but can’t talk except via Twitter, where you don’t know your neighbors next door but you do know their daughter on Facebook? What is community when a recession is imminent and when it seems like there’s more call for help, more people in need than ever before?

    A community is the place where you can do the most good.

    Maybe it’s online, maybe it’s your church group, maybe it’s Second Life or MySpace, maybe it’s coworkers. Your community is the place where you can be most effective at making the world a better place, for yourself, for your friends, for everyone.

  • Scratch troubled, we are screwed as a country

    Scratch troubled, we are screwed as a country

    I read with great alarm on CFO.com that as the housing and mortgage crisis deepens, people are dipping into or even cashing out retirement funds.

    “In the last four or five months we have seen an absolute onslaught of people trying to do hardship withdrawals and loans out of 401(k)s,” Mark Anderson, CFO of Granite City Electric, told CFO magazine in October. “What has happened with housing and the economy has really blown up for people at the lower end of the spectrum.”

    When you cash out a retirement fund to pay down a mortgage, you take a double hit. First, you lose the money itself in a market that is declining rapidly, dumping good money after bad. Second, and most perilously, you create an enormous opportunity cost for yourself that you will in all likelihood never recoup in your lifetime.

    Let’s do the math. Let’s say you are an eager 21 year old college graduate, with a great outlook on life, a job that pays a salary of 2,000 a month before taxes, and 45 years in the workforce ahead of you. If you start saving today, 3% of your income with employers that match with a 3% contribution, and your investments give a safe return of 6% over your working lifetime, you’ll retire at the age of 66 with roughly330,000, give or take.

    Now, let’s say you, at the age of 50, make some bad choices and consider bailing yourself out of a mortgage problem with the 110,000 you’ve accrued so far in life. Boom, problem solved, right? Wrong. You’re now in incredible trouble. You will retire in 15 years with a grand total of only35,000 in the bank (at the same savings rate). To retire with the same amount of money as you would have had, you would need to save 30% of your income instead of 3%, have an employer that matched 6%, and hope for an 11% return over those 15 years. Otherwise, you have to depend on the government and HOPE that Social Security is still solvent when you retire – otherwise, you will not retire.

    What SHOULD you do if you find yourself in super-serious, no end in sight mortgage trouble? Walk away. Mail in the keys to your lender, declare bankruptcy, rent a nice apartment somewhere, and work off the bankruptcy. Does foreclosure look bad? Yes. Foreclosure and bankruptcy means you’ll be paying cash for a lot of things for a while. But it lasts 7 or 10 years at the most. 7 to 10 years of bad credit is easily survivable, and you may even develop good personal spending habits by only being able to spend what you have. Compare 7 to 10 years of conservative living with 30 years as an elderly man or woman trying to make ends meet with meager savings. Can’t declare bankruptcy? Leave the country. As long as you have useful skills, there are PLENTY of nations on this planet that are all very nice, and very few of them have credit bureaus connected to the United States.

    Truth: the United States is NOT the best country in the world. It’s one of many very good countries, and any flag-waving moron who blindly believes that one country is the best has probably never traveled more than 20 miles past his doorstep. LOTS of good countries in the world.

    Unfortunately, for a lot of people, they’ve already dived off the cliff, and that means a certain percentage of the population in the years to come will be gambling that social services and the government can assist them in their “golden years”.

    Is that a gamble you’d take?

    Like the old Willie Nelson song goes, know when to hold ’em, know when to fold ’em, know when to walk away, know when to RUN.

  • Dear Non-Profits and Political Campaigns

    Could you use an extra 45,000 per week?

    If so, you might want to consider having a subscription object written for you in Second Life.

    A “bonus” called an allowance is issued in Second Life every week to residents. It’s L50, or roughly US0.18 per avatar.

    18 cents doesn’t sound like much, but hire a developer to create a script for your cause and ask people to donate their L50 every week to your cause. A quarter million Second Life residents would be US$45,000 per week. Not too shabby!

  • It's not easy being legal

    Dear music industry,

    Please make it easier to be legally compliant.

    Thanks.

    —

    I had an unpleasant experience this morning in the iTunes Store. I mentioned on Twitter to my friend, Bronwen Clune, that Josh Groban’s new album, Noel, had a very good version of Little Drummer Boy on it. I figured, heck, it’s only 99 cents, I’d send her a copy of it legally through the iTunes Store, make a nice Christmas gift, right?

    Apple apparently had a different idea:

    “An email you’ve specified to receive a Gift is set up for an account in a different country’s iTunes Store (Australian). Gift recipients may only redeem their gift in this iTunes Store (United States).”

    Apple, did it ever occur to you that I might have friends outside the country I live in? This is, after all, the Internet, where borders are crossed with the click of a mouse. I checked other digital stores that have a pay per download, and no luck on Amazon or CD Baby. Everyone loses. The musician doesn’t get paid, the label doesn’t get paid, Apple and other providers don’t get paid.

    Instead of buying and sharing the music legally, I had to go dig up a YouTube video that someone else had posted with the track as its soundtrack. I’m not willing to break the law by ripping the track myself but if someone else has already done the work and stuck their neck out publicly, I’m not opposed to sending a link.

    Here’s the thing. Apple – you missed a revenue opportunity. Please let me BUY music for friends internationally. I realize the US dollar is close to worthless overseas, but still. How many musicians in iTunes miss out on revenues and sales every day because of this e-commerce paywall between nations?

    Music industry – the lesson is not that free will always win. EASY will always win. I could rip this track for free by breaking the DRM and converting to an MP3, but that’s 10 minutes of my day I can spend doing something else (like blogging about it). That would be free, but I want easy. I value my time more than my money, because I can always make money, but my lifespan is finite and irreplaceable. Make it EASY for me to legally buy, share, and distribute the music I love, and I will. Yes, price is a consideration, but it’s not the ONLY factor.

    Musicians – always have more than one e-commerce store distributing your stuff, because occasionally a customer will want to do something unexpected with your music, and if they can pay you for it easily, all the better. For example, I can imagine a tip jar being set out on a musician’s web site that says, “Feel free to rip my CD and if you want to send an MP3 to a friend, all I ask is that you drop 99 cents in the jar per track. Thanks.”

  • Is waterboarding torture?

    I’ve got an easy answer for that. Pick five Republican senators and five Democratic senators at random, wheel a kiddie pool into the Capitol Rotunda, strap them to a gurney, and have them try out the technique – no permanent physical harm, we promise! – for 60 seconds.

    At the end of the 60 seconds for each of the 10 senators, poll them as to whether it was just “aggressive interrogation” or if they felt they were subjected to a torture technique.

    This would accomplish two things. First, the people making the decisions should have first-hand experience of anything that might be done in the name of the people that could be called torture. Second, perhaps we’d have fewer used car salesmen running for office if they knew they might have to experience what they legislate.

  • We really are in trouble in this country. This is just the beginning of it.

    “I have been saying for about two years we’re looking at a 1929 kind of event. I think that we are really in trouble in this country. And what you have seen in the last four months is just the beginning of it.”

    -Patrick Byrne, Chairman and CEO of Overstock.com, December 2007

    “If home prices decline by 30 percent, as one noted economist has said could happen, “We’re all going long apples and boxes to sell them in,” Syron said, invoking an image from the Great Depression.”

    – Richard Syron, Freddie Mac CEO in today’s Washington Post

    “The current credit crisis will come to an end when the overhang of inventories of newly built homes is largely liquidated, and home price deflation comes to an end. That will stabilize the now-uncertain value of the home equity that acts as a buffer for all home mortgages, but most importantly for those held as collateral for residential mortgage-backed securities. Very large losses will, no doubt, be taken as a consequence of the crisis.”

    – Alan Greenspan

    The United States doesn’t -make- anything any more. For the last 5 years, our economy has been driven by increases in asset prices, namely housing. People cashed out equity and spent like crazy, driving the economy forward.

    All good things must come to an end, and we’re seeing just the first inning of the housing bubble unwind in a game that’s going extra innings. As prices drop, equity vanishes, and mortgage owners owe more than the property is worth.

    Next in line are consumer grade loans – auto defaults are already up, as are student loans, because when the choice is between a roof over your head or a student loan payment, you go with roof every time.

    Housing equity can’t be used to pay down those loans any more, so they go red. The next wave after that is credit card defaults, because once you’ve maxed out, you’ve got nothing left and have no way to pay. Discretionary income? No such animal in a recession. Everyone’s paying just to stay afloat and with the basics.

    All this plays out over the next 3 years. Mortgages are unwinding now, but subprime goes nuclear in March 2008 with the largest wave of rate resets yet, 65 billion worth, and stays at that level for 6 months. Defaults typically occur in 30 days of a rate reset; some borrowers don’t even make a payment.

    Expect secondary loan (car, student loan, etc.) default rates to hit the wall shortly after the mortgage ones, and credit cards even sooner as the source of last resort financing, because the people who are in trouble are living lifestyles beyond their means.

    Scared yet?

    While I’m not a certified financial planner or anything, I’m going to give this piece of advice. If your money is in a place that is not insured, move it to an insured place. Insurance means FDIC coverage for up to100,000 of cash per account. Money market funds are discovering they’re tainted with bad mortgage debt. Municipal bonds are finding out their guarantors overextended.

    Anyone who promises a fix for this situation that isn’t “we have to ride this out” either has something to sell you or is running for office. Don’t believe them. This financial crisis took years to make and it will take years to unmake.

  • Exhibit A in Net Neutrality

    Rogers Canada is modifying Web pages. Take a look at this Wired article.

    Is this a marketing dream? A marketing nightmare? Bit of both.

    If you searched for a student loan, I could buy a modification of the results you get from your ISP. Even if you wanted a loan from my competitor, if I paid enough, I could divert you instead.

    If you searched for my company’s products, a competitor could do the same to me.

    Expect this to become a hot button issue for net neutrality.  If this goes unopposed, just imagine what the political campaigns will do to every web site you visit. ISPs will be rewriting traffic all day based on bids. Rudy Giuliani needs a boost in Iowa, so he’ll pay Comcast to rewrite all requests for Mitt Romney’s web site to his. Someone might even play dirty and use soft money to redirect a candidate’s traffic to a Swift-boat style attack ad instead.

    Stand up for net neutrality, or you won’t be able to trust a thing you see online – ever.

    And if you use Rogers or any other ISP that uses these practices, drop ’em. Vote with your wallet, because that’s the only language some of these people will ever understand.

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