What are you selling?

I was asked that question a few nights ago. We were having dinner at an upscale place in Cabo. The guy that asked me is one of the best salesmen I have ever met. I have heard the question before at a sales seminar by Jack Daley and knew immediately where my friend was going. “Peace of mind” I said with the utmost of confidence.

According to C.S. Lewis, there never has been and never will be a radically new value or value system. “The human mind can no more invent a new value than create a new primary color.”

You had better be selling something that people value or you will fail.

Knowing where your kids are and that they are OK provides peace of mind.

Knowing where your stuff is and how it is doing provides peace of mind.

A retail notion is that all purchases are emotional and then buyers rationalize the need after the purchase.

I can’t help but relate this to a comment from the “Nanny” post. This customer is buying peace of mind. The comment from “Janis” criticizes the purchase as “keeping her on a leash”. The customer has decided that the incremental cost of a device to provide “touch points” during the day gives more peace of mind than the same money used to pay for a more secure Nanny. All purchases are emotional. I doubt an increase of $15 a month to a Nanny, would provide the same incremental “peace of mind” that the Ublip tracker provides.

I had lunch with a good friend the other day. It was her turn to buy and it made the sushi taste even better. But by far the conversation was the best part. I am not a degree bigot, but Donna Reganbaum reflects well on her Stanford undergrad and Harvard (pronounced “HAH-vahd”) MBA. She is the poster child for intellectual curiosity and lifelong learning. I always leave lunch with my head exploding AND a homework assignment. It nostalgically takes me back to office visits with Dr. Kamangar at UTA while working on myPhD.

This time, my homework was to investigate the Hawthorne effect. She was able to label something I had observed and exploited without knowing the underlying psychology. After doing my homework - I now understand the why as well as the what and when.

From Wikipedia - The Hawthorne effect describes a temporary change in behavior or performance in response to a change in environmental conditions. Others have broadened this definition to mean that people’s behavior and performance change (generally improve) following any new or increased attention.

In the 90’s I sold a bunch of firewalls to managers that needed to keep employees in check. “Surfing” during working hours reduced productivity substantially. By installing a system to track where people were going on the web while at work, peoples behavior changed.

I’d like to propose a corollary to Hawthorne. People’s behaviors change even when they only perceive that there is a change in environmental conditions - increased attention - even though it may not be the case.

Even if the manager never looked at the reports, the “Hawthorne Effect” is real.

This of course leads to all kinds of opportunities. One of the most interesting is the “Red Light” - devices. They detect people that run red lights. The most profitable provider of these systems is the one that sells many more “dummy” devices than real ones. Higher gross margin when there are no components inside.

Years ago I said that “m2m will be successful when nobody notices”. Well, that is true, but when everyone notices, m2m will provide ROI .

Ublip has signed a new contract with a very interesting start-up called Geoforce ( www.geoforce.net ).  Ublip is developing the production version of their innovative asset tracking/management service - and we will be deploying and hosting it on our Foundation platform.  One thing that’s very interesting about the Geoforce solution is the way it combines different asset tracking technologies and hardware (GPS, RFID, GPRS, Satellite) into a single, easy-to-use web presentation.  Some of the first deployments will be in the oilfield services sector, where companies apparently are constantly looking for their assets - which may be somewhere in their yard - or on a drilling rig somewhere around the world.  Either way, Geoforce’s customers will be able to find their stuff, NOW.

In an interesting use of mostly existing technology, companies have begun reporting on street traffic based on data received from vehicle GPS units. Just recently, 16 states along I-95 spent $5 million to provide this capability to both motorists and government users. I had been aware that this was already among many technologies available, and had even been used in a few projects (on a smaller scale than the I-95 project), but what surprised me most from this article was the fact that there are a dozen companies all exploring this approach to providing traffic data.

What I like the most about this is how well the effect scales up — for example, with only one or two motorists every 20 miles or so you can provide thousands of people with a fairly decent picture of how well traffic is moving along the interstate. As the number of vehicles providing data goes up, that figure gets more and more accurate. I would expect you’d see the same effect as in random polling, where an impressively small number of samples can give you a surprisingly accurate result.

One day, this will be nothing more than just another input into the fully automated cars which will all be driving us to work. Until then… keep listening to the traffic reports.