Embracing Chaos

I’m glad the music industry is finally allowing legal sales of music online without DRM.  Before this, the situation was absolutely screwball.  Consumers had three choices for getting music onto the electronic devices:

1. Buy the CD and rip it
2. Illegally download it through a peer-to-peer network or sketchy Russian service
3. Buy the DRM’d track legally

The first option sucked because it either involved driving to a brick and mortar store or waiting for somebody else to drive the CD to your house.  There’s no instant gratification.  Then there’s the hassle of converting the CD to electronic format.

The biggest problems with the second option are things like not knowing how to do it.  There’s also some risk of viruses, etc by trawling shady parts of the net as you try to figure it out.  And there’s a minimal risk of the RIAA suing you.  But once you overcome these fears and startup costs, you end up with exactly the product you want.

The third option kinda sucked because modern DRM systems don’t work very well.  I think there’s nothing intrinsically wrong with DRM.  Enforcing copyrights through technical means is a good part of a multi-layer security and incentive system to promote the creation of valuable intellectual property.  But modern DRM systems are incompatible with each other across brands and devices and often they just plain break.  So as a music consumer, if you do the morally correct thing and pay for your music, you end up with an inferior product.

Now with DRM-free track sales, consumers can do the right thing and get the best possible product.  How this fact has been lost on the RIAA for so long amazes me.

This is just one example of why the digital music industry is a horrible one to be in right now.  I wrote a thorough analysis of the industry for my strategy class at school will likely post more of it as time goes on, but I wanted to start here.

Sorry for going dark for a little while there.  As expected, starting a new job while taking a full load of classes at school has been challenging.  Also unsurprisingly, the Google job is very engaging.  I’ll describe a bit of what it’s like on the inside and also how this affects the kinds of things I write about here.

I spent my first week in Mountain View at the Googleplex.  My entering class of "Nooglers" were subjected to inane videos and boring HR discussions.  But a couple hours into it we powered up our laptops and within 15 minutes I’d found the internal wiki and started reading project plans for every internal initiative I found interesting and a bunch that I didn’t.  I devoured the information and didn’t unplug myself until wee hours of the morning.

I’ve been spending a lot of time over the last few years analyzing the industry and thinking about what opportunities exist for creating value by solving people’s problems on the net.  Many of those I’ve captured here.  Now I look at the world differently in terms of what problems are still left to be solved because I can see that Google is in the process of solving many of the problems I’d identified.  It’s a little difficult for me to remember what I thought before knowing Google’s plans.  A myriad of half-written blog posts help remind me.  I had been planning on finishing many of them but now I don’t feel so comfortable doing so.  For example, writing about security holes inside Gmail is fun target practice from the outside, but questionably ethical from the inside even though I’d identified it before joining.  The same applies to unexploited business opportunities.

I’ve been asked a lot about the best and strangest things encountered during my week in Mountain View.  The best thing was hands-down the food.  It’s amazing.  Almost every building has their own restaurant with a theme.  My building had a tapas-inspired restaurant featuring many small plates and often fabulous seafood.  The best hamachi sushi I’ve ever had was served there on a real shiso leaf with some light sauce I can only describe through the ecstasy I felt from it.  They served black cod, which I love love love.  (I’ve got a great recipe I need to post to addgarlic.)  Pumpkin bread pudding.  Fresh figs everywhere.  Chilled beet soup.  Even simple things like a ham and cheese sandwiches on fresh bread with arugula were fabulous.  Other cafes have themes like organic hippy foods, dishes prepared with a maximum of 5 ingredients, or everything grown within 150 miles.  It’s all amazing.  As a result I found myself drawn to campus in a predictably Pavlovian manner.

One thing I’ve said for a while that this trip reinforced was the idea that you can’t pay your corporate cafeteria’s chef too much money.  You can get a chef for $50k/yr or $150k/yr.  That extra $100k/yr will do so much more for employee satisfaction than pretty much any other way to spend the money.  Sure you’ll end up spending some more on ingredients or subsidies.  (Or else the chef will leave.)  But it’s worth it.  A couple years ago Real hired a new Chef, Ariel IIRC for their cafeteria and the food got so much better I started bragging to my friends about it.  A little while later a number of things happened at about the same time — Real’s stock dropped, Ariel moved on and life at Real wasn’t as much fun any more.  I won’t try to extract the causality relationships between those events here.

The oddest thing I saw was definitely the automatic toilets.  They’ve got butt-warmers, front and back washing sprays, dryers and more things that I never figured out.  I wonder if they weigh you and keep a high-score list for largest excretion.

Now I’ve got the fire-house turned on full bore and am trying to add value for my team from a position of relative ignorance and keep up with everything going on around me while finishing up a full load of business classes.  But I wanted to take a few minutes to share what’s been going on with you my dear readers.

The UW Business School recently got a name: Foster.  Michael G. Foster to be exact.  Although just "Foster" is perhaps more fitting since 3 generations of the Foster family have contributed to making this possible.  Just how much does it cost to get a prominent business school named after you?  About $50 million.  Here’s how it went down.

It all started way back in 1928 when Albert Foster graduated from UW Business School.   Not too long later, he founded the brokerage firm A.O. Foster & Co. which was successful enough to enable his family to get into the philanthropy business.  Albert’s son Michael G also attended UW Business school.  Michael G died a few years back and his relatives wanted to honor his memory some how.

Balmer Hall, the building which currently houses the UW Business School is mercifully scheduled for demolition almost as soon as I graduate next year.  The plan is to build three new buildings.  The Foster family intended to name one of them after Michael G, but after seeing the architectural plans thought that maybe one building wasn’t enough to honor his memory so the discussion expanded to multiple buildings and next thing you know they were asking the same question you did.  We can pretend the conversation went something like this.

"How much for 2 buildings?"

"That’ll be another $10 mil."

"How much to throw in the whole school?"

"$50 million is what we’ve been saying all along."

"But we already gave you $3 mil to name the Albert Foster Business Library.  How about we give you $46.5 and we call it a deal?"

And so it was.  It’s good to know that Foster Business School is built on rock-solid negotiating skills.  :)

In all seriousness, it’s nice to see philanthropy with few strings attached.  I hear "generous donors" are often really demanding in how their money is spent.  But not here.  They even released the naming rights for the individual buildings back to the school to help offset more of the construction costs.

Overall I must express heartfelt thanks to the Fosters.  I’ll be proud to earn my MBA from Foster.  I already like it better than UWBS.

Want to read more?  Visit the Foster Business School on the web, or read what a professional information-disperser wrote about the transaction.