Beyond the rather humorous back and forth between Arrington and the entrepreneur is the larger question… Are these securities laws created in the early 1930’s in response to the market crash and Depression still relevant in 2008?

To the best of my knowledge the only person to challenge these laws in any type of serious manner was the founder of a small microbrewery. Wit Brewery as chronicled by Andrew Klein (founder) in his book Wallstreet.com successfully raised a few million dollars allowing them to expand marketing and distribution outside their initial core market in NYC. After multiple unsuccessful VC pitches Andrew turned to the web in the early 90’s where he published a prospectus that users could download, review, and if interested send them a check. Reaching out to his passionate customers Wit Brewery quickly attracted thousands of investors each investing a few hundred to a few thousand dollars. This phenomenon attracted the likes of the Wall Street Journal which in turn attracted the SEC lawyers. Given Andrew’s background (he was a corporate lawyer prior to founding Wit Brewery) he was able to keep the SEC at bay and with the insight he gained from the public capital raising process he ultimately transitioned Wit Brewery into Wit Capital — an investment bank.

Yet, the core of what Andrew was trying to accomplish — allowing small investors with an interest or passion for a specific product to invest in small businesses looking to raise capital is still mostly a dream more then a decade later and one of the core reasons for this are the prohibitive securities laws mentioned above. Consider the following:

If I am software engineer making $130K/yr I can loan a deadbeat $10K to repay their $40K in credit card debt via Prosper yet I can’t efficiently (i.e. with a few clicks on a site) invest $10K in a former colleagues new technology venture (something I know a whole lot about) or a local frozen yogurt store looking to expand their stores in the region (again something I know a whole lot about because I see the lines out the door on a nightly basis from my apartment). Furthermore, small investors in these small businesses (unlike loan officers or American Express who are the usual sources of capital for small businesses) are willing and able to become product evangelists for these young companies.

I think its about time we revisit these securities laws.

I imagine the early versions of this feature will be similar to the integrated docking stations for the PowerBook or those strings your mom used to attach to your mittens to keep them attached to your coat. Yet, with fewer male-female connections to make the mobile phone version of the docking station will progress far more quickly then the docking stations for the Powerbook.

[PowerBook docking station. picture source wikipedia]

Innovation at the expense of laziness and old-minded dogma

• Ford Motors pumps billions into upgrades of its Ford F-150 pickup truck (i.e. gas guzzler)
• Ford Motors loses $15.3 billion in 2006 and 2007 and more to come.
• Ford Motors shuts down its Menlo Park, CA car dealership
• Tesla Motors (an electric car manufacturer) opens up a new car dealership in Menlo Park on the same site as the old Ford dealership.

I looked this up after trying to move my cable service from one location to another on comcast.com — while ostensibly a helpful service I never actually made it thru the process.   I was attempting to do this while eating lunch at my desk and listening to my voicemail.  Whenever I submitted or requested information I thought the site was down as it never displayed a processing icon and I simply thought the site was down and hit refresh — multiple times.  Now I could have just glanced over at the status bar on the lower left hand corner of the browser, but while eating lunch and checking v-mail this was not something I thought of at the time and I imagine that millions of users actually have no idea where the status bar on a browser sits or what it does.  So, after multiple failed attempts I ended up calling the Comcast call-center costing them about $5+ to handle my call. While $5 may not seem like much the fact that such a simple user interface fix cost them real dollars is unfortunate.

My hiatus from this blog has been long - a couple of months - and from from the Mac far too long - 15 years to be exact - but I am falling in love with the Mac all over again. We recently completed an acquisition of a great little product developed by a fairly well known Mac developer (David Watanabe) that makes searching from your browser super fast– check out the announcement and give Inquisitor a try if you are Mac user and let me know what you think.

• Each flight was 100% full
• Seats were old, cloth was ripped in some places, and one of my seats did not recline.
• Entertainment included watching David Letterman reruns from a few months back on monitors which vacillated between black & white and full color throughout.
• Due to mechanical issues the cabin temperature was either frigid or so warm people were tearing off their cloths (sounds more exciting then it actually was).
• For a 6 hr. flight from San Francisco to Miami they charge you for food (odd, since for a 6.5 hr. flight from Boston to London they serve you food)
• The definition of “carry-on” luggage now includes 50 pound rollers — when 100 or so people are each try stuffing this into the overhead compartment it gets rather crowded.

While I happened to be flying American Airlines they clearly have lots of company in the category of poor flying experiences these days. This is a rampant problem throughout all of the major U.S carriers (United, American, Delta, Northwest). These carriers have old equipment, neglected employees, and antiquated software systems. When you combine this with the FAA that is still using 1950’s technology to manage air traffic flow it creates “get me out of here” customer experiences. For a country that prides itself on technology innovation and service our flying experience is an embarrassment.

Business professionals — folks who fly a lot have reached a boiling point and are looking for something new and different. Which airline executive has the the guts to begin innovating again. Only a few years ago cell phone customers were an angry bunch — they had dingy plastic cell phones that did no more then call people, shoddy network coverage, long handcuff contracts, and call-centers that replaced humans with robots. Apple came along and re-defined much of that experience —everything from buying the cell phone, to onboarding customers, to the cell phone itself. Who is going to pull an Apple on the airline industry. Lets start with the flight experience — here are some of the things I am looking for:

• New airplanes: clean interior, inviting ambience, cushy seats that recline properly, and a comfortable cabin temperature and pressure.
• In-seat entertainment: I want at least 15 channels of live TV.
• Laptop friendly seats: Electrical outlets in all seats and seats when fully reclined do not crush an open laptop in the seat behind it.
• Food: Option to buy a meal at booking— if the flight is six hours and leaves at 9am I am pretty certain that I will want either breakfast or lunch provide me the option to buy a civilized hot meal.
• No Black-Out Dates: No black out dates for using frequent flier miles.

Granted this only solves part of the problem, but its a start and its focused on the longest segment of most peoples trip — the flight itself. Other parts of this problem — cramped airport terminals,, long security lines, limited public transportation to airports, etc. require federal and local government agencies, so lets leave that till January ‘09 to start addressing those problems.

Cubicles are the ultimate form of a poor compromise. Lets consider the two reasonable extremes of providing a working environment for employees. On the one hand you can go with the bullpen approach or you can go with offices. Somebody must have said, well if we just built walls around these desks then we would have the best of both worlds (lots of bad products get developed with this type of thinking). We would have the privacy of an office as well as the open and egalitarian benefits of the bullpen. Nothing could be further from the reality as cubicles

1. provide a false sense of privacy — you can’t make a private call from your cube.
2. generate just as many distractions as a bullpen environment as you can hear every conversation.
3. rarely provide the upside associated with the bullpen model where ideas can flow quickly and people have the latest information required to make good decisions.

I have no doubt that technology companies and especially those companies whose success relies on developing code cubicles are a significant drain on productivity and general employee satisfaction. Rather, a better model would provide employees (especially software developers, product managers, qa, etc.) with a small office and in the center of the floor provide an ad-hoc meeting places (not conference rooms that you need to reserve) with Wi-Fi (of-course), refreshments, etc. where employees could congregate around if they need to ideate, exchange information, etc.

In the fall, the personal finance software space — led primarily by Mint.com (which did a superb execution job for a V1 product) and Wesabe was all the rage. Its clear that this space was due for a refresh and had grown stale as both Intuit and Microsoft starved their products for too long creating an opening for the likes of Mint and Wesabe, but its too early to write the eulogy for Quicken and Microsoft Money as Omar and others suggest.

It will be a few years before we can declare any winners in this space — but there are three questions that the likes of Mint and Wesabe need to answer in order to be considered long-term viable competitors?

First, do Mint.com and Wesabe investors have the patience that is needed to fight this out over the long-term? Building a loyal user base in this space will take time as even the early adopters will only dip their toe before committing significant financial data to these services as they want to be certain that these services are committed to privacy and security but perhaps as importantly that their built for the long haul. Nobody wants to wake up two years from now reading an email that they are shutting down and moving all of your data to ACME Financial Service Inc.

Secondly, can they expand the set of users in the personal finance market beyond the Quicken and Microsoft Money base? The personal finance software market is relatively small as the effort to reward curve is steep — your forced to spend lots of time and energy setting up Quicken or Money before you start to see its benefits which only works for a small and dedicated set of the market.

Finally, can they broaden the value proposition beyond simply providing a 360 degree view of your spending and wrapping it in a slick user interface? Sexy pie-charts are interesting for all of 3 minutes, but what will keep people engaged?� The savings trick employed by Mint is a good start, but from my short experience with it not super helpful (i.e. it’s an execution problem).

SPG.COM (as in Starwood Preferred Guests) recently overhauled most of their site and it is still not entirely clear to me what they were trying to accomplish. But one thing is clear, they sacrificed simplicity in the name of “prettiness” — much of the site resembles a messy desktop with a nice desktop picture placed behind it.

In addition to the structural issues with the site they also got the small stuff wrong. Often times it is the little features that can either delight or frustrate users to no end. Here is an example of one of the most basic site features - logging in- gone wrong:

Login: Initial State

Login: In Focus State

So, whats wrong with this design?

The single biggest problem is that they require you to omit the letter from your SPG number (e.g. F8732333) when using your SPG number to login. This is likely a back-end issue that somehow forced its way to the front-end, this should not happen. The back-end issues need to be dealt such that they don’t hamper the user experience. After all, back-end systems are there to serve customers. Once you are dealing with this constraint here is what you don’t want to do:

1. Place the helper text in faint gray letters (see the Initial State screenshot above)
2. Place the helper text within the input box. Once the user sets their focus in that box that helper text is lost and if the user

Additional issues include:

1. Placing the “Retrieve Password” by the UserId — it should go below the “Sign In” button.
2. Placing the “Privacy Policy” link in this area.
   • a.) Once a user agrees to a Privacy Policy then stick a link to it in the footer — why place it in the login area.
   • b.) What purpose does it serve in the login area —is somebody going to say to themselves… wait before logging in again let me make certain that I agreed with their privacy policy.
   • c.) I wouldn’t be surprised if the internal dynamics (strong and empowered legal department vs. a weaker products group) yielded this poor experience.

As a customer of SPG I am looking forward to a return to function over form — focus on task completion not cinematic value.

1. Health
   • How much exercise do you get per week?
   • How much crappy food do you eat per week?
2. Energy Consumption
   • How much money are are you spending on energy and do you know the cost of your energy choices?
   • How much damage (carbon emissions) are you doing to the earth?
3. TV consumption:-)
   • How much time are you wasting?

Because we all just have one shot at life, these are actually are a lot more important then the @work metrics.  Measurement and analytic products in the business domain are well-established and long-ago crossed the chasm.  However, on the consumer side while there are niche products such as Polar watches there are no self-measurement products (needs a catchier name, but for now this highly descriptive will work) that have successfully crossed the chasm. 

Nike+ iPod is poised to cross the chasm and is starting to uncover the opportunities of a self-measurement age. There are a couple of things that they nailed in this first version that will enable them to cross the chasm:

1. Plugs-Into Existing Products
   • We don’t need to create new products from the ground up to measure these everyday activities we simply need to plugin sensors and displays into existing products. Contrast this to a product like Polar that is attempting to build niche products from the ground up that help athletes measure their performance.
2. Low-Cost
   • Once you’ve spent $400+ on an iPod and Nike sneakers buying an Nike+ iPod Kit for $29 is not going to break your bank.
   • This point is driven by #1 above.
3. Simple Setup
   • Just put the sensor below the insole of your sneaker and a small receiver snaps into your iPod — that’s it your done. See here.
4. ‘Thermometer’ Interface
   • Explains to the user how they are progressing or regressing with their runs.
   • Lightweight analytics that allows you to slice/dice your runs — for those of you familiar with Business Objects or Siebel Analytics there are hints of those types of experience here.   Below are my runs for the past few months as seen on nikeplus.com

What still needs some work:

• Positive Peer Pressure
  • Enable users to encourage and compete with each other. This is incredibly imporant because it keeps people engaged and provides a viral way to introduce potential customers to the product.
  • They don’t need to create a new social-network to develop this community and positive peer pressure. Rather tap into an existing social network at the point of registration (more on this for another post).

Beyond the value that this creates for users, it also builds lock-in for Nike and Apple — when I get ready to buy a new set of sneakers in a few months guess what I will be buying.