Locked out, Manhattan, New York City

Alan Patrick, The Economics of Unethical Behaviour:

… by and large 80% of us are sheep 80% of the time.

Thus, as you can see, roughly 2/3rds of the time all consumer sheep can be fleeced all the time. In other words you can build a very sound business by fooling people, and the (probably more costly) approach of Being Good only impacts about 20% of the market.

See Alan’s post for a graphic that explains his thinking pretty clearly.

I’d like to believe it’s not true. I’d like to believe that in a business based on a multi-turn game (i.e. a business that is built to succeed and serve repeat customers for years) it’s not profitable in the long-term to regularly fleece people.

But let’s say Alan is right, which he usually is, over 80% of the time, by my estimation.

Why are 80% of us sheep?

Why are we sheep 80% of the time?

Why is fooling people cheaper than Being Good?

Why won’t an ethical edge pay?

Or, better yet, what would have to change to make “fooling people” an unsustainable and economically dominated strategy?

Yoga, Bryant Park, New York City

Above: the where we spend our time, and the how we spend our time, obvious. How to maximize the value of the encounters at the intersection of the where and the how, less obvious, but incredibly valuable.

No, I didn’t win.

First, my response to Gary Whitehill, The Seed Funding Phenomenon Bubble of 2010:

Even if valuations don’t skyrocket, it’s hard to see the returns solely justifying the effort of these seed programs. But the need is there, and the returns to the community are there, even if the returns aren’t strictly ROI-based. Long-term, these seed programs will be funded as “entrepreneur community programs” by entrepreneurs (i.e. TechStars) or by smart local governments with economic development money and a hands-off approach. If the city / region’s entrepreneurial community isn’t vibrant enough, governments will need to fund these programs to seed the community until there’s a strong enough base of entrepreneurs with capital to provide viable alternatives.

I’m stoked that TechStars is launching in NYC in 2011. I’m interested to see how NYC Seed performs. Even if the returns are questionable so far, these pre-seed / seed funding programs create enormous value for entrepreneurial communities. However, much of the value is in the form of externalities to the locality and broader community that cannot be captured by a purely returns-based private investor. What kind of externalities? Experience and knowledge for budding entrepreneurs. Press and PR for burgeoning entrepreneurial communities. Attention that can help attract national talent and broaden the minds and views of local entrepreneurs. Education and exposure for local mentors and capital on how companies are built and funded outside of their region.

Pre-seed programs are a cheap way for communities to fund the early failures and haltering steps of individual entrepreneurs and entrepreneurial communities. At the early stages of an entrepreneurial community’s development, passion does not economically translate to profit. Too many externalities escape to the community; too much of the value created by the early leaders seeps into the community without financial returns. The gap between passion and profit isn’t closed until talent, capital and opportunities combine to create the scale necessary for entrepreneurial communities to grow.

Can private capital fund the gap between passion and profit necessary to build a sustainable entrepreneurial community? Maybe. It depends on the city, obviously, and the particular spikes of money, talent and interest in investing into entrepreneurialism and economic development resting in each city. In NYC, Silicon Valley, Boston, Austin and many other cities, the returns to supporting entrepreneurial ventures are apparent and profitable (directly and indirectly). In other cities such as New Orleans, it’s less apparent, and less profitable, and more difficult for private capital to fund that gap. Thus, who can fund that gap? Can governments create entrepreneurial hubs? Can governments be smart enough to invest (i.e. give) non-returns-based capital into pre-seed programs and step out of the way?

Should they? In some cities, yes. Can they? I hope.

Related: a blast from the past, my core conversation at SXSW in 2009, Venture Capital for Long Tail Entrepreneurs.

In our future, passion and purpose pays.

What do I mean?

In our future, doing good is good business, because …

… a business without a “social good” is not a sustainable business. And I’m not talking about environmentally, culturally or morally sustainable, but strategically, economically and financially sustainable.

I’ve written and talked about the role of humanity, meaning, ethics, passion and purpose repeatedly over the past year or so, heavily influenced by John Hagel and Umair Haque.

These principles span many of the Millennium Development Goals. An economy that allocates returns based on meaning, ethics or purpose directs attention, effort and money towards things that matter: it promotes gender equality, it allocates food and basic services better to eradicate extreme hunger, reduces child mortality, values environmental sustainability, and creates a strong base for countries and organizations to partner on economic development goals.

Think about the work you do: Is passion or purpose a source of a competitive advantage for you and your company? Are profits tied to passion? Is the purpose of your job or company aligned with the source of revenues or profits? Is passion a valued asset at your company? Can you true back your work to supporting a larger purpose?

No? Why not?

In our future, to create a thriving, sustainable economy, passion and purpose have to pay. Meaning, passion and purpose have to play a meaningful role in allocating profits, as important as access to inputs like land, labor and capital, as important as the level of education, knowledge and information, as important as product/market fit, as important as any other input in a business’s equation.

And how does that happen? To start, we have to care. We create a demand for products and services through what we buy, talk about, read about and do. Our individual consumption decisions create market demand; companies create products and services to fit markets demand. If enough of us demand passion and purpose, then companies will have to find a way to embed humanity, passion, ethics, meaning and purpose into what they do.

“When we have low-quality demand, we have low-quality jobs.” It starts with us. Care about what you buy. Invest your time, money and attention in things you believe in. Talk with your friends and colleagues about things you’re passionate about. Invest in yourself. Make the decision to reward passion and purpose, and passion and purpose will pay.

—

View this photo on Flickr, and view the rest of the submissions to the project in the Flickr group pool.

TEDxNOLA was a local, self-organized conference convened in New Orleans to explore the pivotal role that crisis plays in the development of groundbreaking ideas. On August 27th, 2010 during the week of remembrance of the 5th Anniversary of Katrina, Le Petit Theatre du Vieux Carre hosted intellects and achievers to examine how crisis forces us to rethink, reinvent and reinvest. How can creativity save a community?

View all the photos from TEDxNOLA on Flickr and Facebook.

Mitch Landrieu, Mayor of New Orleans

James Carville

Gary Solomon, Jr., The Solomon Group

John Besh, John Besh Restaurants

Lisa P. Jackson, EPA

Matt Wisdom, Turbosquid

A Clandestine Meeting, Brooklyn, NY

Yes, I currently have a Pepsi Refresh Project and three SXSW panel proposals up for voting. And I’ll probably write blog posts about them soon. But I’m torn.

Wait, don’t get me wrong; I love supporting friends’ projects. Send them over, I’ll take a look, and vote, donate and help promote if it’s meaningful, valuable, and can change lives (yours, mine, everyone).

I like the players. But I dislike the game.

I understand why we (online digital strategists) create these contests. We tap into the naked human desire to win contests and their rewards, provide people a way to market and promote their own cause / reason / project, and help them directly promote themselves, driving traffic, attention and money indirectly to us, the creators of these contests. Inexpensive marketing, tapping into other people’s time, passion and self-interest, to support our underlying business goals.

That’s not underhanded or duplicitous, it’s just how it is. Tapping into people’s self-interests to drive your own self-interest is simply smart business, marketing and product strategy.

That’s the game.

And it always has been. The difference, and this is where we’re feeling the pressure, is driven by the fact that everyone has the potential for a larger voice on a larger platform than ever before. More content, information and voices? We need more context, more filters, more curators. More contests, more clamour for votes and money? We need better ways for us to signal what we care about and track the impact my votes and money had. More context, more filters, more curators.

As Sloane has told me before, contests can be tricky strategies for fundraisers to pursue, because votes don’t mean money. And when the votes don’t add up to money (meaning, you don’t win), you have to go back to your supporters for money. But in your supporter’s mind, they’ve already helped you. In their mind, they’ve already given you something. And they have, even thought you many not have received the benefit. That’s the problem.

Not all contests and fundraising platforms are equal, mind you. Mechanics matter. Kickstarter, for example, is as much of a market-testing and fan management platform as a project fundraising tool. Each platform and contest embeds its own game, a bounded set of social interactions that promote and incent gestures, behaviors and actions.

That’s why game theory matters here. All contests are games, a set of interactions, incentives, moves, risks and rewards. Yes, it know most of these contests come from a place of good. The intent is good. But the game simply creates too many opportunities for the execution to fail, to misplace the rules, incentives and rewards for everyone involved. And we’re left with a bad taste in our mouths, a lingering dissatisfaction in our heads, and a hole in our hearts.

Thus, as Mike would say, we need to change the game.

But I’m first to admit I don’t have the answer. Simply ending all contests isn’t the answer. At first, I didn’t want to just say “this sucks”, without proposing a solution. But perhaps, by raising the issue, we can start to problem-solve this one out. I’ll certainly be paying attention.

Found, @Newseum, Washington DC

Privacy is a conversational black hole. “Drop the subject into the middle of a room and it sucks everybody into a useless place from which no light can escape.” (link)

We all love to talk about privacy. The reality, however, is that:

Most users care about privacy but don’t think about it in day-to-day life.

Few people truly value privacy.
Seriously. We all value privacy in the big, philosophical, fundamental “human right to privacy”, in the sense that we agree that it’s important, and we hold the idea near and dear to our heart, and we’ll get upset, justifiably, if our right to privacy is violated.

But few people value the marginal costs and benefits to privacy at the granular level that would allow us to make reasoned decisions about what we choose to share and not share. What’s the price of privacy? What’s the value of publicity?

Example: do you consciously think about the pros and cons, the marginal value and benefit, the full impact of what you share on the web, or a Tweet, a Facebook post, a Flickr picture or a blog post? Do you consider what could happen in the short and long-term?

No. Why? In many ways, we can’t.

We haven’t developed these heuristics yet. Our guts are still figuring out the equations that compress a lot of information and thought into a “gut call” about the impact of what we do online.

It’s hard. And as Alan Patrick has pointed out many times over the past two years, widespread adoption of web services have contributed to privacy erosion. Fundamentally, individual users don’t have the power, incentive or ability to reliably influence how companies use our data, thus our data is free but everywhere in chains. Companies haven’t given us enough information or guidance about how our data is (and will be) used, we evaluate each decision on the margin without considering how all our decisions add up, and we undervalue our privacy, making poor decisions about how we use web services.

But of course, not only do we get something for using those services, but we also get something for spending our privacy.

My comment to my friend Jim Goldstein on his post Privacy: You’ve Just Given It Away What Next?

What about the value of making something public?

There are valuable, tangible, even measurable benefits to making information public. As long as it’s within our control, and we can value the benefits and costs of our decisions, that’s all that matters. Private, public, whatever.

The issue isn’t about privacy per se, but control over data, where it goes, who sees it, putting it into (and taking it out of) the stream of information that people see, interact with, and act upon.

But this is a conversation we’ve had before :)

I share what I choose to share because it creates the friction that brings people and passions together. It’s not the only way, and I don’t share everything: but I share what I share because I think the benefits are worth the costs. Maybe I’m wrong. But I’ll learn by doing and testing. I’ll learn by spending my privacy.

Wisely, of course.

How? Consider the misplaced debate about privacy; the real debate is over control, not privacy.

Noah Brier, Stalked? Not Really: Noah Brier Responds:

At the end of the day a breach of privacy requires some reasonable expectation that something would be kept private. Not only did I not have that expectation, but for much of the information I put on the web I hope for exactly the opposite.

Exactly.

We don’t just “give away privacy.”
We use services and exchange our time, money and attention to get something back from using that service. There’s a value exchange there. We’re explicitly opt-ing in to use the service under those terms, good and bad. Don’t like it? Quit.

Why did “quit Facebook day” flop? Because even if we don’t like how Facebook handles their product decisions, privacy settings, etc., we get enough value out of using it that it’s worth it to put up with the pain.

Remember that Facebook is a business. Their choice on how to manage privacy is a business decision. As my buddy Ethan put it:

“The business model they appear to be pursuing makes Facebook’s interest to erode/obfuscate privacy *just* to the marginal point before which there would be a mass exodus. No more “privacy”, no less.”

And to be honest, we shouldn’t expect Facebook to look at it in any other way. It’s up to us, the market, the aggregate of all of us, to tell Facebook what we want. Not just tell, but to *do*. What we do indicates what we agree on; markets are aggregations of actions. That’s how a market works, whether it’s a market based on money, attention or any other measure of value. And if enough people don’t like it, or use it, or pay for it (depending on the business model), then it won’t be successful, and it won’t exist.

And the fact that we didn’t quit en mass says something pretty powerful.

Yes, Facebook “should” make it easy for people to manage how their data flows. But I argue it’s not because of morals or ethics, but just good business.

Granted, increasingly, in many ways today opt-ing out of technology is opt-ing out of society. We’re drawn into using some services because we simply have to. But we can still choose how we use them.

Underlying this is a powerful investment opportunity. More personal data, services, networks and connections creates the opportunity for better curators, filters, blockers, and routers of data. The value in content isn’t in content but in how it flows, how it gets added to, remixed, rerouted, represented.

But that’s a thought for another day.

The other day I got an odd email from Google Webmaster Tools telling me NOLAlicious was infected with malware. Given the sample of infected pages the email reported, I knew the old, neglected WordPress install had been compromised. Since the current site isn’t run from the neglected WordPress, it was an easy fix: delete the WordPress. Done. Submitted a request through Google Webmaster Tools to review the site. Hour or so later, all fixed.

Later that night at 1:30 AM I got a second email reported a malware infection, but this time for my blog on Unstructured Ventures.

Hmm. Deleting isn’t an option here. At one time, that blog was my main voice for analysis and commentary about business, entrepreneurship and venture capital, and was ranked in the top 30 VC blogs (and still in the top 50, according to one site). Although I don’t blog on this site anymore, it’s still garners a significant amount of traffic.

Thus, this wasn’t going to do:

So I dug into Google on two fronts: exploring Google Webmaster Tools, and searching for terms to figure out how to fix my WordPress blog from a malware attack.

Google Webmaster Tools had a range of articles, links and advice about assessing the damage, cleaning a website, and resubmitting it to Google once it’s cleaned.

I ended up depending on two articles to understand and find the sources of malware on my website: Mediatemple’s Recovering from a site compromise and StopBadware’s Tips for Cleaning and Securing your site proved tremendously valuable for me.

Google’s Webmaster Tools also helped me understand the source of the infection and test my revisions. The Malware diagnostics page (under “Diagnostics” on the Google Webmaster Tools Dashboard) allows one to understand which pages are infected; the Fetch as Googlebot tool under “Labs” on the same dashboard) is a great way to “see the page that Google sees” for an infested site. Unable to safely view the page in my browser, I was able to use the Fetch as Googlebot option to look at infected pages and find the offending code.

I originally searched for a hidden iframe in my WordPress PHP code, but didn’t find anything. My second route, searching for unescape() and eval() javascript functions, quickly led me to the javascript function creating a huge block of obfuscated code right after and before the body and /body tags, respectively.

FTP’ed in, fixed the code in the WordPress PHP scripts, re-uploaded and tested the site with the Fetch as Googlebot tool: clean. Submitted a request for Google to review the site, and a couple hours later, the malware attack notices disappeared.

Clean. Done. Right? We’ll see.

Addendum

Well, that lasted a week.

Another “Malware attack” email from Google Webmaster tools pointed out that I only cleaned up my site half-way.

So I started digging again to find out what was wrong.

In response to a question about security, Mediatemple actually sent me a useful email that detailed out some helpful links, captured below:

To begin moving forward, we strongly recommend that you utilize this article to work on recovering from a site compromise:
http://mdtm.pl/9wZwhZ

If you happen to be running WordPress, and you have noticed the appearance of an unexpected WordPress user in your database, for example “johnnyA”, “johnnyB”, or “amin”, you will want to remove those users as soon as possible. Also, here is a third-party article that you may find helpful in removing any injected code:
http://mdtm.pl/a9B5YF

If you are experiencing a “redirect hack”, in which your domain is unexpectedly redirected to an external site, please go here:
http://mdtm.pl/97iaeu

Here are instructions on how to “harden” a WordPress blog:
http://mdtm.pl/92GwYG

Additional WordPress hardening suggestions:
http://mdtm.pl/9py2Mj

For a helpful list of security best-practice articles and additional security information related to (mt), visit our newly created security resource in the (mt) wiki:
http://mediatemple.net/security

To get a wide view of more of our most recent security-related efforts, please take a look at this comprehensive blog post regarding security at (mt):
http://mdtm.pl/9gx2GB

Lastly, if you do not feel comfortable resolving compromise-related issues yourself, Sucuri.net has extended a substantial discount on their scan/cleanup services for (mt) customers:
http://sucuri.net/mediatemple

And once I started digging in, I realized I had fallen prey to the JohnnyA attack.

Using the info about JohnnyA WordPress malware on MediaTemple, I ran a search for “eval(” and found three infected files tucked away in various parts of my WordPress installation.

Re-cleaned the HTML, cleaned the PHP, re-uploaded, and everything worked again.

I then looked further into hardening WordPress, listened to Brad Williams on WordPressTV, from WordCamp Boston 2010, and took a serious look at Sucuri, making more changes and modifications to lock some things down further.

Done. For now.

When did we all have to learn to be webmasters? Sheesh.

Everyone needs a constant.

I’ve been watching past seasons of LOST this year with my girlfriend, and on a recent Season 4 episode we saw Desmond almost lose his mind as he jumped between two different times, places and versions of himself, until he found his constant. *

I’ve found my constant. And New Orleans, you’re part of that, in a way you might never know or fully appreciate.

I love New Orleans in a way that’s hard to explain, loving and hating you for the exact same reasons, at the exact same time. I feel that everyone in New Orleans understands that, and can tell a story about an amazing, sensuous, vibrant experience in New Orleans wrapped within a “wait, what just happened?” moment.

We acknowledge the imperfections, we embrace the “fierce paroxysms of happiness in spite of our troubled circumstances”, and we live. “The sweet is never as sweet without the sour”, something New Orleans knows all too well; the contradictions make the charms richer, more meaningful, more human, creating the tightropes we walk every day.

You understand that.

But I hope you understand it’s a tightrope I simply can’t walk with you every day.

New Orleans, you’re still home, but starting today, so is New York City. I’ll be splitting my time between NYC and New Orleans, maintaining a home in both cities, investing my time into professional opportunities in NYC, bridging NYC and NOLA professionally and socially, building a life across both communities.

Let me be clear: I’m still the devoted “unofficial New Orleans ambassador” I’ve become in seven short, amazing, rich months.

Since I moved to New Orleans in December 2009, I co-created a newsletter (NOLAlicious), got involved with the New Orleans startup ecosystem, curated the New Orleans Startup Digest Newsletter (since taken over by Chris Schultz), assisted with campaigns to help build awareness and financial support for the Gulf Oil Spill response (Gulf Aid, Gulf Coast Benefit Concerts, Citizen Gulf, and a Pepsi Refresh Project in partnership with Help Portrait), and tirelessly evangelized about New Orleans, talking about the charms and opportunities throughout my travels, talks and writing.

That won’t stop. I’ll stand up for you every single day. I’ll just be doing a lot more of it from outside your environs. I hope you understand that New York City is simply full of too many professional opportunities that I just can’t pass up right now.

So New Orleans, I’ll see you soon. New York City, I’ll see you today. Let’s go.

NYC! Are you ready? Drop me a line, we’ve got a lot to discuss and do. Much more, to come.

—

* No spoilers of future episodes! If I misinterpret, let me figure that out as we keep watching…

We form ourselves more by the routes we take than the destinations we reach.

Failure.

Failure is a rich word, a simple word with a rich vein of thought, opinions, lessons and advice behind it. Every single day, we hear stories about failure, advice about how to deal with it and lessons of how people and organizations have recovered from it. And sometimes, we experience it ourselves.

When you experience failure, what do you do with it? Ignore it? Own up to it privately? Acknowledge it publicly? Attempt to hide it? Show it off?

Although we might be tempted to ignore failure, the fact is that the seeds of success are often in the ashes of failure.

Contained deep within each way to fail are practical, valuable, tangible lessons that can help us all move on, evolve, grow, adapt, and succeed. Less important than failure itself is the direction we take from it.

Or at least that’s what I think. But I’m interested in your thoughts, opinions, lessons, stories and links. Valeria and Elli have prepared some key questions, links and ideas to guide us along this week’s #kaizenblog; follow along and join in.

Join us for this conversation on Friday, April 23rd at 12pm ET/5 pm GMT on Twitter by using the hashtag kaizenblog. It might be easier to sign into the conversation by using Tweetchat or Tweetgrid. Add your thoughts to the conversation!