Jon DiPietro is Domesticating IT

A guy walks into a bar and asks the bartender for a drink.  The bartender replies, “Sure, hold on one minute.  I just need your name and home address first,” and then snaps a quick photo.  The patron thinks this is strange, but he’s been drinking at this bar for ten years and knows the owner personally, so he’s not too concerned and gives him the info.  The bartender then pulls out his smart phone and taps away for about a minute, then puts it down and serves the drink.  Curious, the guy asks the bartender what he was doing.  ”Oh, that’s our new policy.  Every time a customer enters the bar, we post your name, photo and address on a gigantic billboard on the highway so that thousands of people know exactly where you are right this second.  It’s great advertising for us!”

Sounds a little ridiculous, right?  Welcome to the latest social media rage – geo-locating.  All across the country, retailers and restaurateurs are jumping on to the FourSquare bandwagon, intoxicated by visions of viral marketing and Twitter flash mobs.  On its surface, it sounds like great fun for the participants and nothing but marketing upside for the purveyors.  But as your mom always warned, “It’s all fun and game until someone gets hurt.”  There is a dark side to this technology and I’m convinced that one day the whole geo-location fad is going to come crashing down in a huge and messy implosion.  Do you want your business to be at the center?

Just Because You’re Paranoid…

…doesn’t mean they aren’t after you.

Here’s my thesis.  Someday in the not too distant future, some degenerate psychopath is going to track an innocent college student using a series of FourSquare (or similar service) updates on her Twitter account, then commit an unspeakable crime.  Think this is unlikely?  Watch this video:

Luckily, this was just a burglary.  I suggest to you that this will not be the last or worst crime committed using social media and automatically (and sometimes unwittingly) broadcasting your whereabouts seems to me to be making it just a little too easy.

Although I’m not willing to put my personal safety and (more likely) that of my belongings at additional risk, there are obviously plenty of people who are.  But this post isn’t focused on the individual users of geo-location.  If the benefits you gain from telling people where you are outweigh the incremental risk of giving criminals a little extra help, then be my guest.  This post is focused on the businesses that participate.

Risk vs. Reward

I’ll be the first to admit that the risk of this happening to your particular business is extremely small.  In the risk management business, risk is calculated by multiplying the likelihood of a particular event occurring by its consequence.  In this case, we have a very low risk with a very high consequence.  Businesses need to make an informed, conscious decision as to whether or not the viral marketing benefits justify the risk.  I’m not saying whether or not they do.  I just don’t hear anybody talking about the risks associated with these services and want to spark the conversation.

My question to businesses participating in services like FourSquare is this: Do you want your business name to be the last Tweet sent by a dead college student and see it spread all over newspaper headlines and cable news broadcasts?

This may sound vile and melodramatic, but I submit to you that the sheer numbers dictate that it is very likely that something similar will happen at some point in the future.  The questions are:

• Do you want your business name associated with such an incident?
• Regardless of whether or not your business is criminally liable, what do you think will happen in a civil lawsuit?  Is this what you want to spend your time doing?
• What will happen to the market for geo-location after such an incident?

So let me know… am I being paranoid?  I’m interested to hear from the users and merchants, especially if this kind of scenario doesn’t bother you.

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For the second time in the last three months, I had a grateful client report back to me that a new report commissioned out of my software product uncovered errors in their former spreadsheet-based billing system.  In this case, they would have under-billed a client by several hundred dollars for the quarter.  Considering that this spreadsheet had been in use for years and copied to other spreadsheets for billing other customers, one wonders what the total cost was.

Spreadsheets are like high blood pressure: the silent killer of businesses.  Of course, this means every business except yours and mine. It’s all those other users who have error-riddled spreadsheets with mistyped formulas and errant cell references.  I have every confidence that yours and mine fall into the ten percent of all spreadsheets that contain zero errors.

90% of All Spreadsheets Have Errors

Raymond Panko has been researching and documenting spreadsheet errors since 1997.  In 2009, he conducted seven field audits of operational spreadsheets and found that an astonishing 88% of them contained errors.  At first blush, this is hard to swallow.  But what if I were to tell you that one in every twenty cells with a formula is flawed?  That doesn’t seem so hard to believe.  If you then allow that the typical operational spreadsheet averages about a hundred cells with formulas, then it suddenly becomes quite plausible.

Another field audit of fifty operational spreadsheets by Stephen Powell at Dartmouth College found that only three of them (94% percent) were error-free.  In this study, six main types of errors were reported:

1. Hard-coded numbers in formulas where cell references were intended
2. Formulas that contain incorrect cell references
3. Logic errors caused by using the wrong function or incorrectly implementing the function
4. Copy/paste errors
5. Inaccurate calculations due to cells with omitted data
6. Data input error

These sorts of errors are known to cost businesses billions of dollars every year.  The European Spreadsheet Risks Interest Group published a list of 89 “horror stories” encountered in their own evaluations.

But I’m sure yours and mine are perfectly fine.

What’s the Point?

Databases.  Most operational spreadsheets I’ve come across are a case of trying to hammer a nail with a banana.  They are situations that are best suited by a bona fide database back end and user interface.  The fundamental problem with a spreadsheet is that the data and business logic are not separated from the user.  One inadvertent keystroke can wipe out a carefully crafted formula written five years ago by a statistical guru no longer employed by the company.  Fault tolerance is another issue, as is data type checking and many other standard features of a properly designed databases that will protect both the data and the formulas.

I’m particularly sensitive to this topic after responding to Gary Mintchell’s recent blog post, “You should all learn SQL.”  In it, he noted the proliferation of databases and subsequent need for more non-IT personnel to learn SQL.  As this discussion points out, however, maybe the proliferation is not quite fast enough.

I’d love to hear your thoughts and, particularly, any spreadsheet horror stories you’d like to share.

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I’m going to make the case that you can’t afford not to gamble.

Let’s start with some not so simple statistics (I promise this won’t hurt).  Let’s assume we’re playing a game that has 1% chance to win $1,500 and costs $10 to play.  If your budget is $1,000 your chances to win at least once are 73% (sorry, it’s not as simple as 100/100).  Those aren’t great risk/reward options – $365 of upside versus $270 of downside.  But what happens if the cost of the game drops to $1?  Then your odds of winning at least once are 99.9%, so you’re looking at $499 of upside and $1 of downside.  Now let’s add a another wrinkle to this story.  What if I told that if you there was a better than 50% chance you’d lose your $1,000 even if you didn’t play?

Another way to look at this would be to compare the cost of 99.9% success rate.  In the three scenarios above, those costs are $10,000, $1,000, and $10 respectively.  How much of a no-brainer is it to spend $10 with a 99% probability of winning $1,500?

Cost of Failure

The first point I’m driving at here is that as the cost of failure approaches zero and the reward stays constant, at some point it ceases to be gambling and becomes something that simply can’t lose.  I’m writing about this today because I’m reading the book Groundswell and this concept has been bugging me throughout the book.  Since the authors are market researchers, I suppose it’s no surprise that they constantly harp on the need to carefully segment your target social media market (something they call “technographics“) and properly target your strategy accordingly.  They would have you determine, for example, whether your audience is composed predominately of “critics,” “creators,” “joiners,” or various other categories.  Once you’ve determined this, you can then proceed with deciding the best social media strategy and tools to employ.

The only problem with this approach is that it assumes a high cost of failure, which is not necessarily the case with the wide variety of low and no cost platforms available in our Web 2.0 economy.  Having said that, the book went a long way toward redeeming itself near the very end by encouraging companies not focus on the possibility of failure, but the cost of missed opportunities.  ”To do this, companies need to be ready to fail often, fail quickly, and most importantly, fail cheaply.”

Cost of Not Winning

If that argument is not compelling enough, then consider the final wrinkle to my original allegory.  Why not just play it safe?  If you never try, you never win, but you also never lose.  Right?  That’s true as long as your competitors and/or market don’t change the rules of the game on you.  There is a risk to not adapting or innovating that frequently inflicts more damaging, if not lethal consequences.

You need to consider the cost of failure before dismissing particular approaches or needlessly investing in research that, at the end of the day, may cost more than failing.  And just as importantly, consider the potential cost of doing nothing at all.

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