School Districts Allowed to Delay Updating Textbooks. This was the headline in a recent Sacramento Bee article. The story reports how the Elk Grove school district will be allowed to delay adopting new textbooks until 2013. Budgets that were designated for upgrading 2002 and 2003 books will instead be used to save jobs in the district. The article goes on to suggest that by the time new books are adopted California schools may be using 15 year old math books and 9 year old history books.

The reality is that the publishing industry needs to be significantly overhauled, just like many other “closed networks”, such as the real estate and music industries. The education market would greatly benefit from Information alliances between publishers, writers, teachers, students, and many other collaborators who have skills and experience. The problem is that every old industry tries to hold on to as much of their empire for as long as possible. However, the ferocity of the Internet is conspiring to decimate these industries.

UC Davis has taken a unique approach to solving the “pricey textbook” problem. In the article Professors hope to turn page on pricey textbooks , I read that UC Davis professors have come up with a unique way to make textbooks more affordable. The article, written by Caitlin Cobb, goes on to say “Expensive, used textbooks have long been a bone of contention among college students.” Well … duh!

I’m not an expert on education, but it appears to me that their unique idea, of building information alliances between multiple authors, i.e. the wiki approach, makes complete sense. The Davis Enterprise elaborates on how the collaboration is amongst students from multiple colleges and universities.

“Students have to spend a lof of money on textbooks, and publishers will come out with a new version of the textbook, but really they are just playing around with the used book market.” This was a quote from Andrew Waldron, the vice chairman for undergraduate matters.

In my estimation, Mr. Waldron is all too correct. Information today is very fluid and dynamic. And, with the ubiquitous nature of the Internet, information flow and collaboration should be the mantra. In fact, let’s extrapolate the solution a bit further. What if the information alliances were extended to the local printing company, such as Kinko’s/FedEx? Those students who really wanted a “hard copy” of the textbook can select their favorite local printer; click a button and presto – instant textbook. It might even be bought at 1/2 the cost of the “publisher’s version” sans expensive book cover.

The idea of a collaborative textbook makes SO much sense. You now give the “intellectual power” to a collective whole, rather than limit it to a select few. It’s hard for me to fathom that any one publisher or any one author is the final and ultimate authority on a topic, especially in this new age of accelerated Internet discovery.

One other powerful offshoot of these textbook information alliances is that you’ve now engaged students at a much higher level than ever before. They now can take a sense of ownership in the materials and content. In this way, they may even learn and absorb more. Isn’t that what learning is all about anyway?

Is this a novel idea or an idea whose time has come? After all, aren’t we in the 21st century?

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The problem with Amtrak and generally most public transportation is that they don’t really cater to their customers. The information alliances that they’ve built with partners are zero to none. For example, how often have you jumped on Amtrak, say from Sacramento, and got to your final destination in San Francisco, without missing some type of connection? An information alliance / business development effort with the San Francisco public transit system could solve this problem in a heartbeat.

I remember one day leaving San Francisco Fisherman’s Wharf on Amtrak and arriving in Richmond, CA only to have missed my connecting BART service by 52 seconds. Yes, that’s how long it took to get from the Amtrak track to the BART track … down one set of stairs … up another. Again, an information alliance, an exchange of data … bits … would have helped me to make my connection.

The problem, I’ve been told, is that each transit authority is only responsible for their little fiefdom. Forget about customer service. Let’s just get our trains there on time … our time, that is. An information alliance with other transit authorities does not help individual company’s “on time” schedules, but it would help us, “the customer.”

I recently read an article about the slippage of Amtrak train ridership on the Capitol Corridor route. The story was written up in the Davis Enterprise. The article states that while ridership is down this year, on-time arrivals are at an all-time high. It doesn’t take a brain scientist to see how easy that is to accomplish … ridership DOWN … on-time arrivals UP?

Amtrak, like so many other public transportation systems should consider themselves as being in the “people moving business”, as Jeff Jarvis would say, NOT in the train business. By building information alliances with BART, the San Francisco Muni, AC Transit, CalTrain, and countless other transportation companies, we all might take public transportation more often. And, after all, isn’t that what we all want for a greener America?

Here’s another information alliance that can be exploited. What if when you arrived at your final destination a rented bike rack was waiting at your disposal? Or, what if a Zipcar or heaven forbid, even another public transit system that was timed to meet up with a “foreign” transit system?

There is no easy answer to this problem. But, there is no way out without an answer. In other words, we have the ability to build information alliances and data exchange. Someone has to start this business development effort in order to change the “drive my car” mentality in California.

It’s outrageous to hear companies like Amtrak boast about on-time arrivals when the real end-to-end experience for the customer is what’s really lacking. An information alliance / exchange of data and a tad bit of planning would really enhance the experience for the customer. It might even perhaps raise ridership because customers would feel confident in getting to their final destination hassle free and timely, if not “on time.”

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Allow me to first explain the offline real estate market. By offline real estate market, I mean residential homes, apartment buildings, raw land and commercial office buildings … in other words, the physical world of real estate.

Developing business opportunities in the offline real estate market made a lot of people rich, but it also decimated a generation. If you had the good fortune of “buying low and selling high”, you made out like a bandit. However, like stocks, real estate business development is not for the “un-initiated”, nor is it for anyone who doesn’t do their homework. And, even if you do your homework, there are a lot of bad deals and crooked people out there.

Offline real estate development requires an understanding of demographics, local markets, finance, and much, much more. In addition, it requires plenty of money, especially these days, to finance down payments, mortgages, insurance and taxes. It also requires looking at the big picture. It’s all great and wonderful to think about the upside, but what about the downside? In other words, how can you get burned?

Let’s explore an example. Suppose a crooked real estate agent brings you a deal that just looks tremendous on paper. It only requires an investment of a few thousand or perhaps a few hundred thousand in order to make millions. The developer has a great track record and wants to bring low cost housing to people who need it. In fact, the real estate agent believes so much in the deal that he/she has also invested in the deal.

Keep in mind the old adage that if it seems too good to be true, it probably is. There are so many scam artists in the world of offline real estate. And, the biggest problem of all is that the stakes are very high, indeed. You can lose thousands, if not hundreds of thousands or your life savings in offline real estate business development. As a tip, one good tool to check for scam artists, like crooked developers is www.ripoffreport.com.

Contrast OFFLINE real estate business development with ONLINE real estate business development. What is this you ask? It’s the world of building businesses leveraging the Internet.

For example, buying and registering a domain name is analogous to buying a piece of raw land in the physical world. Creating a website, then, is analogous to building a house on that piece of physical land. And, adding content (images, text, video, etc.) on your website is like adorning your physical home with furniture, pictures and such.

How is business development executed in the online real estate market … by creating value for your online property. Let’s take an example. When www.PartyPoker.com first launched, it was merely a website for like minded people to pass the time playing poker. Today, it is the #1 gaming site on the Internet, as tracked by www.Alexa.com.

How did Party Poker become numero uno … through community and social proof. They built the best poker site, invited people, friends of friends and affiliates. How do they make money … through advertising and the cultivation of their subscriber base.

Compared to the cost of offline real estate, acquiring, building and maintaining online real estate is peanuts. Yet, the rewards can outstrip those of offline real estate by a thousand fold, if not more. One real life example is the sale of YouTube to Google for $1.65 Billion in 2006.

There are many more examples of online real estate business development opportunities. The key is to pick a niche, understand your demographics, put down stakes, build your dream site, and invite your flock. Sound familiar?

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No one knows about hard work better than Kenny G, the Grammy award winning Saxophonist. His performances and on-stage presence are legendary. No one gets to his level without good old fashioned hard work and practice. Even a person of his caliber continues to work hard. I’m sure because he loves his art, but also because i think that music is not an end-game, but a journey.

Today, I had the great opportunity to participate in an event with Kenny G. He honored the George Mark Children’s House by visiting with us today, cajoling with the staff, playing with the kids, and just plain hanging out. He even directed his own video footage of the house to use at his concert tomorrow evening in Saratoga.

So, what makes a person a leader? Kenny G defined that today for all the families and staff at the George Mark Children’s House. One can only imagine the amount of requests Kenny G has on his time. And, just think about the amount of available time he has to give, considering his concert travels, set up, practice and even family time.

The fact that Kenny G took the time out of his busy schedule to visit a small, unknown care facility for terminally ill children is an example of what defines a leader. The fact that he spent twice the amount of time visiting than what we expected further illustrates his leadership qualities. And, to top it off, he just made people feel good, which is the real hallmark of a leader.

I’ve previously discussed why the music industry needs to change. New business development paradigms need to be developed which are more aligned with the realities of today’s world. One of these paradigms is the shift to cause-based marketing. This entails taking music and aligning it with a cause. Kenny G’s involvement today serves as an example of how a celebrity, wrapped around a cause, can move mountains. It’s a wake up call for the rest of the “me” celebrities that the whole is greater than the sum of the individual parts.

Kenny G, collaborated with three of his colleagues: Skyler Jett, Robert Damper and Genevieve Goings on a song called “Eternally.” It’s a song dedicated to the cause of George Mark Children’s House. The song celebrates life, dignity of soul, and compassion. Here is a wonderful example of celebrities giving back to the very people who need it most, our children. You can follow the journey at www.EternallyTheSong.com.” Thanks, Kenny.

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The vast tentacles of the Internet (300 million websites and counting) vie for Googlers’ attention every second of every day. Competing for ones attention are a billion text messages per nano second, a plethora of social networking sites, micro blogging services and, yes, even Twitter.

However, there’s also another very important market dynamic that’s evolving … the social awakening of America. Our aging society has grown weary of the excesses of the past decade, which has been punctuated by the serious downturn in the US economy. Combine that with the re-emergence of “Camelot” (i.e. Obama) and we have the ingredients for a public looking for a more meaningful “being.”

Witness the new Hannah Montana movie that opened on April 10th. OUT is the brash talking, skimpily clad Miley Cyrus. IN is the fresh, modestly-dressed and, yes, humble Hannah Montana. One recent Tweeter remarked, “Hannah montana is the best movie evaa. Boom boom clapty clap. .” Is this the start of a new trend?

The Music Industry Evolves into The Industry of Music
The music industry (especially certain genres) has a unique opportunity to re-invent itself and capitalize on these market dynamics. The rallying cry for this re-invention incorporates aspects of:

·    Caused-based social entrepreneurship
·    Teamwork and collaboration
·    Wellness and Fitness
·    Education
·    Ecosystem

By incorporating these aspects into the music ecosystem, there is a higher likelihood that music can transcend “the song” or “the album.” In other words, more people will likely “opt-in” to the message, which becomes part of the brand.

Many analogies exist in today’s market. Martha Stewart, Oprah Winfrey, Suzy Orman and Tony Robbins come to mind. Each one of these celebrities has transcended their categories of talk show host or financial wizard to become a brand trusted by their fans. When a product is introduced, there is a high probability (30% or more) of a purchase by their following.

The music industry has a unique opportunity to re-invent itself by looking beyond the traditional licensing models. It has served the industry well for many years, but today the model is broken and a new model must emerge. Rob Caraeff, EVP of Universal Music Group was quoted as saying “don’t focus on total album sales .. look at consolidated revenue from dozens of revenue lines behind a given artist …”.

The new profit models for the music industry will be created by those visionaries with the leadership and commitment to turn the tugboat into a speed ship. Technology in this context is both a blessing and a curse. The convergence of technology into our lives has hastened the “perceived” value of digital content down to close to zero. But the technology blessing is that now the world is literally at your fingertips. Online advertising and marketing take on new meaning. You now have near instant ability to test and respond to changes in consumer demand. You can create loal, national, or global campaigns at the flip of a switch. And, quantitative data makes your decisions much more precise.

Now, the $64,000 question is which music industry icon will lead the charge.

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Technology makes for a fickle bedmate. On the one hand, if you understand how to stoke the fire, technology can reap millions for the astute business. On the other hand, if you “diss’” technology, it can turn on you like a scorned lover.

Every industry from travel, music, movies, newspaper publishing, and, heck, even software itself is being pummeled by the ferocity of the online world. This new world order has leveled the playing field for global companies of ONE versus oversized, over budgeted multi-nationals of MANY. Simply put, one smart entrepreneur who knows how to leverage the right technologies can decimate an industry.

Witness the story of Marcus Frind, CEO of PlentyOfFish.com. In the last 10 years online dating has evolved into a billion dollar industry, dominated by companies like e-Harmony, Match.com and Chemistry.com. These companies make millions of dollars annually, but they have huge staff overhead and spend millions of dollars in advertising to acquire new customers.

Along comes Marcus Frind (cover of Jan 2009 Inc. Magazine). He decides that his dating service should be free … nada … zero. The result? 1.6 Billion … yes Billion … website visitors every month … $10 Million in annual revenues … 50% margins … 3 employees. What does he sell? $180,000 a week in advertising sales. Why do people pay him for this privilege? The demographics and the traffic are an advertiser’s dream come true.

Throughout the years, the music industry, like many others, has struggled to keep a tight grip on its intellectual property … and, rightly so. Singers, songwriters, and musicians all have the right to be paid for the work that they’ve lovingly produced.

The problem? Technology has leveled the playing field. Now a musician who wants to get his or her music “heard” can just plug in a mike, flip on an electronic keyboard, switch the dial to record and upload to YouTube or Vimeo … Voila, instant “channel”. In this era of digital music uploads and downloads, the world is literally ones oyster.

Instead of imposing artificial constraints, such as digital rights management (DRM), inflated prices or limited availability, the music industry should re-invent itself as the Industry of Music. The magic switch is to think of music as just one component of a broader merchandising platform. For example, sell a 99 cent (or less) song, follow it up with a $9.95 e-book, then a $4.95 fan base newsletter, a $30 / month coaching service, and so on.

The key is to grow ones subscriber / fan base. Then build a relationship with the base by continually “touching” them with quality content. Once trust has been established with this community, complementary products and services can be introduced and sold. The mantra? Sell plenty of fish to selected, qualified markets, rather than trying to sell the same fish to every market.

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It does take some time, understanding and work to get an online business going. However, it will pay off in spades if run correctly. In fact, it could be a profitable venture in a shorter time than trying to build an “offline” business. One way to fund your online business, if you’ve suddenly found yourself unemployed, is to use unemployment benefits to bridge your income shortfall. Of course, consider searching for a “traditional” job in parallel. Craft your strategy correctly, just like you would
if developing any business plan in the traditional world.

There are literally tens / hundreds of thousands of online business. So, it’s clear that you must think outside the box. If you’ve been an account in the past, consider offering online bookkeeping services or consulting with clients for on how to structure their accounting systems. What if you were an application developer in the past, perhaps you can offer your help through online bidding services such as Guru.com or RentACoder.com. These services are great for giving you a baseline of potentially unlimited short-term engagements.

Many people would just brush off building a business online as “too hard.” This is especially true if they’ve never done this before. But, the real question to ask yourself is “what do I have to lose, except time?” Let’s dissect a few of the components. Buy a domain name, build a website or use an existing site / blogging service such as WordPress, and start advertising. You should spend a few hours every night writing about what you enjoy most. Explain to your audience about certain techniques, what actions work best, where to get more information, etc. Once you start, you’ll find it amazing how much knowledge you really do have about the subject.

Of course, you have to realize that regardless of how small your business there will be competition on the Internet. The Internet has something approaching 400 million websites, give or take. But, the beauty of this is that you have the opportunity to check out your competition. You can figure out what they are doing right or wrong and create your own unique products and services.

On the flip side of the coin, if you are not a proficient web designer, you might hire one of these people off of the services listed above: Guru.com or RentACoder.com. These services provide ratings on the coders within their portfolio. It makes it much easier to pick a competent web developer.

Again, just like any business, be sure you know your objectives. The Internet should be a “one-action “model. Don’t confuse the issue with creating too many “personas” or themes about you or your offering. You will end up confusing the audience / paralyzing their thought process and they will end up not buying. Make sure you have quality content on your site, as well.

Marketing will be a key component to a successful launch of your business. I like to say that you can build a website, but if no one knows that it’s there, does it really exist? Remember you ARE competing with millions of other websites. At a minimum, you are competing with thousands of business in your category. How will you stand out? What are your unique selling points? Are you relevant?

Marketing your website is probably the most difficult aspect of starting a small business online. By the time you’re ready to launch your site, you need to be prepared to invest some bucks in bringing your small business to the attention of the world.

In the end; however, this small investment could be the biggest you’ve made to be in control of your own future. This is probably the best time to invest in your tomorrow’s future by developing your own business.

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