Did you see it coming? We certainly did but we kept our collective mouths shut about it. But now the cat is out of the bag: the second great internet implosion has begun. Most people have been focused on the burst of the housing bubble and have heard only great things about how facebook and myspace are revolutionizing the internet and how Yahoo! is failing because it missed the social space phenomenon.
We give this a collective ha!. The seeds of the second bubble, what some are calling Bubble 2.0 were scattered into the wind even as the first burst was still a painful ache in our bank accounts. The issue then as now is how to monetize a commodity which is in essence free or so cheap that it might as well be free. For all the talk of a revolutionary of transformative technology, the internet was and remains a giant magazine where the actual cost of the product could never be carried by the cover price or the subscription price and thus the only way to stay afloat in so called "old media" or the new fangeled is to get advertisers to pay for eyeballs. Yes, yes I know people buy things on the internet, but look at the roller-coaster valuation of Amazon over the last ten years, or consider the rapidly rising displeasure with eBay. Both of these sellers extract a fee for something a direct retailer will do for free: sell you stuff.
After the last internet collapse the .com veterans and their venture capital enablers proclaimed that next time they would have a profitable business plan in place before their IPO. Yet we see chimeras like facebook and myspace outrageously over valued and depending entirely on their ability to provide eyeballs to direct advertising or to convince business that buzz marketing is the future and social space networks are the medium for the marketing. Which does nothing to counter the argument against buying ads or even marketing on the internet. First, initial results of campaigns are TOO accurate in measuring the effectiveness of the campaign. Broken down into clicks vs views vs purchases the actual cost of a campaign is not a pretty thing to see. Residual value is of course very hard to measure and is just as fuzzy as the numbers revealed by old-media ads. As for buzz marketing, how will buzz-to-purchase be measured? There is no more irony in the world, the New Yorker last week ran a short story about a New York trendsetter who resents be co-opted into buzz marketing.
The internet that we look forward to is the one that will reduce the cost of doing business and provide constant technological improvement included in a monthly cost of service. Google has started the process with its cloud computing. Users of Google Doc and Spreadsheet will find many, many problems with the system but it does what Microsoft does not: it gets better everyday with out you having to buy a new round of software. Someday Google will be able to monetize these online services as secure business appliances and eventually our hard drives will be free of those hundreds of thousands of jpegs and .docs as we leave everything on the distributed safety net of Google's redundant server arrays.
We don't exactly have Schadenfruede over this coming/here collapse, but anything that drives down real estate prices in San Francisco and Portland is not all bad.
20 March 2008
04 March 2008
More Non-Stop Antioch
Turning again to the remarkable events at little old Antioch College in Yellow Springs, Ohio. Indeed, Antioch is becoming the little-college-that-could, or more correctly the Antioch alumni are becoming the alumni-who-will-not-go-away. Over the last weekend the Antioch College Alumni Association pledged itself to a concept called "Non-Stop Antioch". Under this audacious plan, the faculty and alumni will work to continue to offering an Antioch education if the University declares the college closed. If the University, which is in negotiations with the Antioch College Continuance Corporation (AC3) (an Ohio not-for-profit created to take over the College as a separate legal from the University and preserve the College's historic assets) which might lead to an emancipated Antioch College for the first time since 1977.
This weekend's events were spurred by a Board of Trustees meeting held at the Antioch University Campus in Santa Barbara (oh how redcellconsultants wishes for a job in Santa Barbara) during which the University unilaterally announced that it was closing the college. This was quite a shock to members of the aforementioned AC3 who were in town to carry on with negotiations. The rest of the story is of interest only to those directly connected to the school but the modus operandi of the University offers some lessons for what to do and what NOT to doin a crisis, or a negotiation. We shall let the reader decide which is which:
1) If you want the negotiations to fail to do not set conditions that can be met by the other side. Indeed the Trustees first declared closing in the face of a financial collapse at the college. The alumni association raised over $100,000 per day and offered the money up to keep the college open. The University later claimed that it wanted at least $18 MM as a sort of earnest bond from the alumni to keep the college open. The alumni raised the money and still the Trustees say no.
2) If you want to make sure your alumni will leave you out of their estate planning, do appropriate gifts given with specific covenants to other unapproved projects or uses. Indeed the Trustees have admitted that various bequests to the college have been used for work other than what they were intended for. Who would ever give again.
3) If you want to avoid an Attorney's General investigation don't fraudulently solicit donations by failing to mention to your mark... er donor that you have already committed yourself to closing down the institution at the center of the donor's bequest.
4) If you want to salvage what remains of your reputation, give in and take credit for the resulting success or say I told you so if the endeavor collapses. Antioch University has consistently claimed that all of its other unites are thriving except for the allowed deficits given to the College. If this is the case, why not let the College go its own way, relieving you of the burden, and fulfilling your fiduciary duty by exorcising that part of the University which you maintain threatens the whole. The liability of such a hand-off would fall squarely on the shoulders of the emancipated organization. Unless of course you are hiding plans for even more tremendous pecuniary gain by selling off the assets of your flagship and namesake institution.
Indeed it seems that Simpson Scarborough, the University's PR firm either has a client that does not listen to their advice or the firm specializes in counter-message advising i.e., they really want the College to stay open so they advise the University to maximize the anger therefore the mobilization of the alumni. From the begging SS has advised a corporatist model of operation for all of its higher education clients. Looking over their client list, one could be excused for wondering what exactly the firm has done for their clients. SS's supposed expertise in Branding and Marketing is certainly nowhere to be seen in connection with Antioch University, how can it help the brand or attract customers to have your largest alumni base take legal action against you, have a Chancellor that has the distinction of receiving a vote of no confidence by two separate units of the University.
Our advice, at least for Antioch University, is free. If you want to succeed at what you do (educate through non-residential and degree completion programs, ala Walden U.), let the College go quietly with all of its assets intact. Change your name so that that if the College fails you will not be associated with the failure in every search engine report for "Antioch", and take on a new name that reflects who you are and what you do. Though we normally charge a nice fat fee for branding we will provide a few free suggestions: The American School of Adult Learning, has a very imposing name, no local or religious associations and the acronym is ASAL, easy to remember!; Profit Education Centers, a true reflection of the business model you seem to have adopted and each unit can generate its own specific name so that students have the illusion that they are attending a school where the control is local not several thousand miles away in a town in Ohio no one has ever heard of; The Flat Earth School of Leadership and Change Management, you can get Tom Friedman to serve on your board. The opportunities are there, seize them.
On the other hand, stiff arm the alumni, walk away from their $18 MM, lose the goodwill of 17,000 living alums (who turn out to be wealthier than anyone thought), close down an institution with a 155 year history of exhorting its graduates to "Be ashamed to die until you have won some small victory for humanity." But for heaven's sack, impose a media black out, stop letting your administrators attack the alumni and the faculty of the school. In a hostile take over you smother the opposition as quickly as you can, BEFORE a movement organizes to really oppose your actions.
Again all of this is gratis and admittedly biased and personal. So we can rest easy Antioch University will not listen to our advice. But really, could things be any worse than they are now?
This weekend's events were spurred by a Board of Trustees meeting held at the Antioch University Campus in Santa Barbara (oh how redcellconsultants wishes for a job in Santa Barbara) during which the University unilaterally announced that it was closing the college. This was quite a shock to members of the aforementioned AC3 who were in town to carry on with negotiations. The rest of the story is of interest only to those directly connected to the school but the modus operandi of the University offers some lessons for what to do and what NOT to doin a crisis, or a negotiation. We shall let the reader decide which is which:
1) If you want the negotiations to fail to do not set conditions that can be met by the other side. Indeed the Trustees first declared closing in the face of a financial collapse at the college. The alumni association raised over $100,000 per day and offered the money up to keep the college open. The University later claimed that it wanted at least $18 MM as a sort of earnest bond from the alumni to keep the college open. The alumni raised the money and still the Trustees say no.
2) If you want to make sure your alumni will leave you out of their estate planning, do appropriate gifts given with specific covenants to other unapproved projects or uses. Indeed the Trustees have admitted that various bequests to the college have been used for work other than what they were intended for. Who would ever give again.
3) If you want to avoid an Attorney's General investigation don't fraudulently solicit donations by failing to mention to your mark... er donor that you have already committed yourself to closing down the institution at the center of the donor's bequest.
4) If you want to salvage what remains of your reputation, give in and take credit for the resulting success or say I told you so if the endeavor collapses. Antioch University has consistently claimed that all of its other unites are thriving except for the allowed deficits given to the College. If this is the case, why not let the College go its own way, relieving you of the burden, and fulfilling your fiduciary duty by exorcising that part of the University which you maintain threatens the whole. The liability of such a hand-off would fall squarely on the shoulders of the emancipated organization. Unless of course you are hiding plans for even more tremendous pecuniary gain by selling off the assets of your flagship and namesake institution.
Indeed it seems that Simpson Scarborough, the University's PR firm either has a client that does not listen to their advice or the firm specializes in counter-message advising i.e., they really want the College to stay open so they advise the University to maximize the anger therefore the mobilization of the alumni. From the begging SS has advised a corporatist model of operation for all of its higher education clients. Looking over their client list, one could be excused for wondering what exactly the firm has done for their clients. SS's supposed expertise in Branding and Marketing is certainly nowhere to be seen in connection with Antioch University, how can it help the brand or attract customers to have your largest alumni base take legal action against you, have a Chancellor that has the distinction of receiving a vote of no confidence by two separate units of the University.
Our advice, at least for Antioch University, is free. If you want to succeed at what you do (educate through non-residential and degree completion programs, ala Walden U.), let the College go quietly with all of its assets intact. Change your name so that that if the College fails you will not be associated with the failure in every search engine report for "Antioch", and take on a new name that reflects who you are and what you do. Though we normally charge a nice fat fee for branding we will provide a few free suggestions: The American School of Adult Learning, has a very imposing name, no local or religious associations and the acronym is ASAL, easy to remember!; Profit Education Centers, a true reflection of the business model you seem to have adopted and each unit can generate its own specific name so that students have the illusion that they are attending a school where the control is local not several thousand miles away in a town in Ohio no one has ever heard of; The Flat Earth School of Leadership and Change Management, you can get Tom Friedman to serve on your board. The opportunities are there, seize them.
On the other hand, stiff arm the alumni, walk away from their $18 MM, lose the goodwill of 17,000 living alums (who turn out to be wealthier than anyone thought), close down an institution with a 155 year history of exhorting its graduates to "Be ashamed to die until you have won some small victory for humanity." But for heaven's sack, impose a media black out, stop letting your administrators attack the alumni and the faculty of the school. In a hostile take over you smother the opposition as quickly as you can, BEFORE a movement organizes to really oppose your actions.
Again all of this is gratis and admittedly biased and personal. So we can rest easy Antioch University will not listen to our advice. But really, could things be any worse than they are now?
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