Friday, October 15, 2010

Google/NVidia/Word of Mouth

The stop sign design currently used in English...

One of the things I really like about my Droid X phone is the navigation app. It's essentially eliminated the need for me to worry about having a navigation system in any car I buy or rent. I'm highly prone to making wrong turns, so having an electronic genie available at all times that can instruct me in minute detail on what to do is excellent. On thing that occurred to me earlier this week as I was driving home from a meeting about thirty miles from my home is that Google is getting all sorts of interesting information by providing that App. They can get a pretty good real time perspective on how slowly traffic is moving on a particular freeway. Over time they can get an idea of traffic flow on surface streets and where stop signs and traffic lights are. As Android based phones become more common they are going to have more and more data points to look at. I wonder what all those clever people at Google are planning on doing with this information? One thing they could do is reroute in real time based on traffic flows. That information is already available for most freeways and some major roads, at least hear in the SF Bay area, but coverage seems to be a lot less common for surface streets. You wouldn't even need to be in the navigation application. All it would take is the GPS being enabled. Even without the GPS they can make a pretty good guess based on cell tower triangulation and the maps of wireless hot spots that they've built.

Google started out with a fairly simple idea, to help organize the worlds information. Even a fairly simple idea can lead in an amazing number of directions.

The big news on the the NVidia front recently has been their decision to directly sell finished boards.  Historically NVidia has sold GPU's to partners who have then created boards that were in turn sold to customers.  It's nearly always the case that being closer to the final sale means higher margins, but undermining your partners in this way can be  a very bad thing as they tend to take such changes in the way the world works very negatively.  Several years ago NVidia acquired the assets of a competitor called 3Dfx for song after 3Dfx essentially did the same thing, thus alienating their partners and accelerating their demise.

So, is this an act of desperation or a change in business strategy with potential risks and rewards?  I've seen both theories advocated by various technology pundits.  I'm honestly not sure which side is right.  Having signed up Best Buy to sell their cards certainly wasn't a bad move.

(Word of Mouth)
Recently my wife and I have been shopping for an alarm company.   Some friends of ours have a more immediate need and have thus been a bit more aggressive in pursuing a solution.  We've been sharing information during the search and one thing that struck me is how common this is and how positive or negative information about a particular company is magnified.  Our friend got a big time hard sell and bad attitude from one of the major national players in this space.  Instantly I removed that company from our list of prospects.  Another company that I heard about while having lunch with some coworkers faired much better when our friend contacted them by being professional and customer focused.  Rather than trying to sell our friend as much equipment as they could they made suggestions on how to get the best possible coverage without spending too much up front.  It's probably not a surprise that this second company is currently the odds on favorite to get both our friends business and ours.

Word of mouth is hard to measure, but it is likely a significant factor, particularly in situations where a company is trying to acquire new customers.  It's kind of amazing to me how many businesses drop the ball in this area.  Bad interactions multiply.  Customer facing employees are extremely important to the long term health of any enterprise.  This concept is often ignored by companies that are looking for a short term improvement in their bottom line by outsourcing.  I suspect that most of us have had sub par experiences as a result of such efforts.

Really though, outsourcing isn't the problem here.  The problem is the fact that some companies don't seem to value the contribution that customer facing portions of their business provide to their bottom line.  Bad customer experiences can come just as easily from employees who are some combination of badly trained, badly treated or badly paid.

In general it seems to me that companies don't always have a very good idea of where value is created.

Image via Wikipedia

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