I have a handheld PDA/Cellphone. I am addicted to it. The design purpose of this device is to help me stay better connected to people and processes. At a certain level, this works. I make contact about 75 times per day via email and maybe there are 15 phone calls. The more I use this device the less I actually see other humans....why?
The need to respond to the high volume of written communication requires that I focus. In order to focus I need to be alone. So it is sort of interesting that in order to effectively communicate with other people I need to be alone. I have two theories that extend from this:
Theory #1: Quality is Deteriorating
We are over-communicating. The number of communications I have with a given individual via email per work task is increasing. Each communication reflects incrementally smaller units of knowledge and feedback than was the case before.
Let's think about this......I've noted that my work flow is broken down into a greater number of components. I know that my pace of task completion is going down due to the start/stop traits of this new process management paradigm. I am doing this [sending mid-process emails to get feedback] in hopes of lowering my error rate per task completed - thus hoping overall to increase my productivity (i.e. gains in quality more than offset increased time requirements). But the problem is that the person from whom I am requesting the feedback is mired in the same high-volume communication swamp in which I am mired. As a result, his ability to provide high value feedback which otherwise should lower my error rate is diminished. Therefore we have this unanticipated result of lower quality output to which we have tacitly agreed...so I am not sure I have met the qualitative requirements of output to support a case of true productivity increase. The illusion is that the increased physical activity in my email-based feedback loop is, in fact, increased productivity. Ok.....enough.
Theory #2: Modern Portfolio Theory Isn't Working for Me
I also use my PDA and its various communication capabilities to widen the circle of people with whom I communicate. What is the value of this? I think that part of my motivation is that it is not "what I know but who I know." The premise to this is that knowing more people creates more options. Thus by communicating via email and expanding my volume of touch points...I am creating more options for myself.
So let's consider each of these options an investment. I thus have a larger portfolio of options - a form of diversification. Is this investment strategy paying off? Some investments theorists look at diversification as a path to mediocrity. The design purpose around diversification is to manage uncertainty of individual investment positions. Some days I feel that my current chosen strategy of keeping the network wide open to an average communication flow of 75 emails has the actual result of creating more uncertainty not managing it down.
Technology is, in my judgment, often process-centric not people-centric. I believe that the value of my options should be driven by the human relationship. By getting so involved in the process of processing processes I don't "see" the other person. As a result, the value of each of my options in this diversification strategy is less than it might be in a more narrowed investment strategy. I communicate less effectively because of the device that was designed to help me communicate more frequently. This is nuts.
In conclusion:
A company is, among other things, an implicit contract between people. The complexity of this contract is great and requires substantial and frequent human contact to prompt understanding and attainability of its objectives including commercial objectives. There is a minimum threshold of human contact required to create real potential value for any one of my portfolio options. My communication device takes that away from me. As an investor, I am looking for the application that manages around these issues. If I find it, I am not sure I will know exactly how to value it.
Friday, February 10
Monday, February 6
"From the Edge" with Richard Yoo - Founder of Rackspace
In our business, we regularly seek perspective from those who are at the forefront of technology. In this posting, we are looking for some insight from Richard Yoo, founder of Rackspace Managed Hosting (www.rackspace.com), one of the largest private hosting solution providers in the US. As a founder of Rackspace, Richard has had the opportunity to peer into the IT infrastructure and IT challenges of a very wide variety and sophistication-level of companies that outsource application management. Richard is a native Houstonian.
Energy IT (Question): Who is Richard Yoo ("RY")?
RY (Answer): I'm a technologist. I'm an early adopter of new technology... Whether it's a new gadget like a cellular phone or TiVo, or something very abstract like teleportation - I've probably read quite a bit about it or actually played with it enough (if it actually exists) to understand how it does (or may) fit into our future lives.
Also... I'm an entrepreneur - I've started a few companies, one of which [Rackspace] generates over $200 million in annual revenues currently. I find lots of opportunities in the tech sector since I'm exposed to things so early in the game.
Energy IT: Tell us what you're thinking about these days in terms of IT?
RY: Impact.
It's amazing how many companies exist today that don't spend any time thinking about IT. This occurs in both larger and small companies, but I find it the most shocking with the smaller companies since I feel that they need it the most. It's not uncommon for smaller companies to think that spending time and money on IT is for "the big companies"... Particularly since they believe that IT spending is expensive.... But even a simple accounting system like QuickBooks or implementing CRM like Salesforce.com can have a huge impact on both productivity and customer experience.
Energy IT: What opinion/observation do you have currently about IT that is most contrary to popular opinion?
RY: People shouldn't try to build everything from scratch. I'm a huge fan of COTS - "commercial off-the shelf" stuff. Business spends tons of money - and more importantly, years of development time, trying to build tailored systems that need to be rewritten due to changes in the business. There are countless COTS systems available for various problems that are inexpensive and simple to implement. It's true that it won't solve your problems completely, but an 80% solution for 20% of the cost of developing it in-house is huge... And often times, the vendors will take any feedback you're willing to give them to improve their product - which in turn may give you the final features you require for your particular needs.
Of course there are exceptions to the rule - FedEx was the very first courier that implemented such a detailed level of package tracking... So yes, to be first FedEx had to make the huge investment to make such a feat come to life... But if you're a FedEx competitor, it would also be silly to think that such systems aren't available turn-key these days.
Energy IT: What's the most important thing about IT?
RY: IT is the new assembly-line. Back in the day, when Ford started producing cars in a system-like fashion, it changed how people manufactured all sorts of things. Now, it's ridiculous to try to build something without an assembly-line system. These days, all companies need to spend IT dollars to streamline their businesses... Whether it's lead tracking for sales, or inventory tracking for supply chain management... Or even automated reporting for daily snapshots on how the business is doing. Ultimately - anything that can be automated, should be.
Energy IT: Richard - thanks for answering our questions. We look forward to hearing from you in the future.
RY: You're welcome!
Commentary from Energy IT - Regularly we give the world too much credit. Reasoning and common sense suggests to us that everything that could have been automated has been automated. We wonder how a very large company hasn't already done X or Y via software and systems and we approach the investment possibilities with skepticism. Our skepticism is regularly toppled with the facts. Early in my venture capital career I was informed by a highly successful veteran software salesman that...."a lot of money has been made off of adequate technology." The subtext of Richard's comments regarding automation seem to jibe with our experiences...there is tremendous greenfield opportunity to automate business process to increase productivity. IT is a large component of that opportunity within the energy sector that is just now embracing general IT en masse.
Energy IT (Question): Who is Richard Yoo ("RY")?
RY (Answer): I'm a technologist. I'm an early adopter of new technology... Whether it's a new gadget like a cellular phone or TiVo, or something very abstract like teleportation - I've probably read quite a bit about it or actually played with it enough (if it actually exists) to understand how it does (or may) fit into our future lives.
Also... I'm an entrepreneur - I've started a few companies, one of which [Rackspace] generates over $200 million in annual revenues currently. I find lots of opportunities in the tech sector since I'm exposed to things so early in the game.
Energy IT: Tell us what you're thinking about these days in terms of IT?
RY: Impact.
It's amazing how many companies exist today that don't spend any time thinking about IT. This occurs in both larger and small companies, but I find it the most shocking with the smaller companies since I feel that they need it the most. It's not uncommon for smaller companies to think that spending time and money on IT is for "the big companies"... Particularly since they believe that IT spending is expensive.... But even a simple accounting system like QuickBooks or implementing CRM like Salesforce.com can have a huge impact on both productivity and customer experience.
Energy IT: What opinion/observation do you have currently about IT that is most contrary to popular opinion?
RY: People shouldn't try to build everything from scratch. I'm a huge fan of COTS - "commercial off-the shelf" stuff. Business spends tons of money - and more importantly, years of development time, trying to build tailored systems that need to be rewritten due to changes in the business. There are countless COTS systems available for various problems that are inexpensive and simple to implement. It's true that it won't solve your problems completely, but an 80% solution for 20% of the cost of developing it in-house is huge... And often times, the vendors will take any feedback you're willing to give them to improve their product - which in turn may give you the final features you require for your particular needs.
Of course there are exceptions to the rule - FedEx was the very first courier that implemented such a detailed level of package tracking... So yes, to be first FedEx had to make the huge investment to make such a feat come to life... But if you're a FedEx competitor, it would also be silly to think that such systems aren't available turn-key these days.
Energy IT: What's the most important thing about IT?
RY: IT is the new assembly-line. Back in the day, when Ford started producing cars in a system-like fashion, it changed how people manufactured all sorts of things. Now, it's ridiculous to try to build something without an assembly-line system. These days, all companies need to spend IT dollars to streamline their businesses... Whether it's lead tracking for sales, or inventory tracking for supply chain management... Or even automated reporting for daily snapshots on how the business is doing. Ultimately - anything that can be automated, should be.
Energy IT: Richard - thanks for answering our questions. We look forward to hearing from you in the future.
RY: You're welcome!
Commentary from Energy IT - Regularly we give the world too much credit. Reasoning and common sense suggests to us that everything that could have been automated has been automated. We wonder how a very large company hasn't already done X or Y via software and systems and we approach the investment possibilities with skepticism. Our skepticism is regularly toppled with the facts. Early in my venture capital career I was informed by a highly successful veteran software salesman that...."a lot of money has been made off of adequate technology." The subtext of Richard's comments regarding automation seem to jibe with our experiences...there is tremendous greenfield opportunity to automate business process to increase productivity. IT is a large component of that opportunity within the energy sector that is just now embracing general IT en masse.
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