Filed Under (Business, Stuff) by Sean on March-20-2009

People who know me know that I often rag on Starbucks, mainly about their coffee. They over-roast the beans. They scald the milk horrendously in lattes, macchiatos and cappuccinos. You can have any coffee you like at a store, so long as it’s Pike Place. The one thing they do get right, however, is customer service.

Another thing I’m known for is collecting used coffee cups on my desk (or any surface, for that matter). When I went into the office earlier, I decided to pick up one of my collection of Starbucks tumblers and clean it out to take with me. Upon close inspection, I noticed that one particular model (below) was damaged. This particular model has a design flaw; there is no release valve or any way for expanded air to escape. This plagued me all the time with this model since every time I had hot coffee in it with the lever moved to the closed position, I would get coffee splashed all over me everytime I opened the lever to take a sip. In any case, I had presumably left the lid closed, since I noticed that sufficient pressure had built up inside it to actually break the internal arm which connected the rubber gasket seal with the switch on top. Thus it was impossible to close.

Old Starbucks Tumbler

I walked into my neighborhood starbucks and showed them what happened. It’s important to note this was a tumbler I probably paid about $12 for 2-3 years ago. The employee behind the register did not hesitate and told me to grab any replacement tumbler off the shelf to replace it at no cost. “Really?” “Any tumbler. I like the steel ones with the built in French press, ” he responded. So I picked up my brand new $23 plus tax solo stainless steel press pot (picture below) and went on my merry way. He even filled it up with coffee at no charge.

Fancy new Solo Press Pot

My friends know that I go to Catalina Coffee in Houston if I want a good cup of coffee (or Caffe Medici in Austin, where I frequented while attending South by Southwest). But there is a lot to be said about this level of standing behind a product, no questions asked. This wasn’t the first time, either. Years ago, I purchased my parents a Starbucks Barista Aroma automatic coffee maker for Christmas. After 2+ years of nonstop use, it just stopped working one day. My father took it into his nearest Starbucks, and even though it was well out of warranty, received the same treatment as me. This was a $200 coffee maker to boot. It is good to know that even a multi-billion dollar corporation empowers its employees to give you mom-and-pop shop level service every now and again.

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Filed Under (Business, Life) by Sean on February-22-2008

I can certainly identify with this Business Week story about Sprint’s business troubles, largely stemming from customer service woes. I was a customer of Sprint’s for 3 years, relatively happy with the service. The trouble came when I decided to switch service plans to reduce my minutes since I was taking time off work and no longer needed the huge pool of minutes I previously required. Using the Sprint website, I modified my plan. I had my online banking configured to pay Sprint automatically the same amount every month. After confirming the service plan change, I modified my online payments to reflect the new amount. I got a service disconnect notice about 3 months later (I never really paid much attention to the online bills and opted out of receiving paper bills) with a bill attached for nearly $300! Upon calling customer service (this is in 2004), I learned that my service plan in fact never was changed. Of course they had no record of the change I made and it was my dumb luck I didn’t write down the confirmation number the website had given me (nor saved the website – I always do this now). The customer representative said she would be happy to change my plan once I paid the amount due. Explaining my story resulted in nothing more than, “well I’m very sorry.” I had her escalate me to the manager on duty. Again I explained my story and said I would even prepay or renew my contract (I was month to month since my initial contract had expired) if they would simply give me the benefit of the doubt. I thought I had some leverage since I had been spending a decent chunk of change with them and even kept the phone active when I was living in Europe in 2001! Nada. Zip.

Needless to say I was quite exasperated by this point and simply wasn’t going to tolerate it any longer. I told her something to the effect that they could shove my account and balance where the sun didn’t shine and they would never get another penny from me, ever. After going through 3 other providers, including Cingular (another customer service nightmare), I landed with T-Mobile and have never looked back. The mobile phone service providers really need to use T-Mobile as a case study on how to run a customer service organization.

I still haven’t paid Sprint and never will.

Filed Under (Business, Internet) by Sean on February-4-2008

I was certainly as surprised as anyone to see Microsoft’s $46 Billion bid for Yahoo. In my opinion this prospective acquisition ranks somewhere between the most ill-conceived idea ever to a decidedly mediocre, ho-hum idea.

It seems at first pass this is a great deal to short term Yahoo shareholders who are looking for an exit. Yahoo’s stock and innovation alike have languished for years. I believe Yahoo’s woes result from an identity crisis. Are they a media company? A technology company? An Internet search engine? A software company? A software as a service (SAAS) company? Who the hell is Yahoo? As a result Yahoo has, in a way, suffered double jeopardy from this lack of identity. They have aligned their market capitalization to that of traditional media companies, while completely stalling innovation as a technology company.

I think Microsoft and Yahoo have it completely wrong — “it” being strategy. Google has it right, pure and simple. The race is a race of innovation. Google’s innovation has continued to accelerate since its founding. Microsoft continues to dump its decade old software into a blender and spit out boring variations on the same theme. It uses its monopolistic hegemony, ties with PC manufacturers and extortion over its existing install base to keep market share. Google has innovated new and exciting ideas in software to get things done, which has resulted in its meteoric rise. Yahoo once had this innovation bug too, until it decided it wanted to become a media outlet sometime around 2001; it has paid the price ever since.

I believe I can speak with some authority on these three companies since I’ve been a paying enterprise customer of each (in the tens of thousands of dollars and beyond); presumably I’ve seen the best they have to offer and have counted on them to provide mission critical services. In the last 6 months, I have entirely moved away from both Yahoo and Microsoft as a paying customer and user — a timely and fortuitous move in my opinion. I have moved away from both for what can be summed up thusly: please stop telling me how I’m supposed to do things. It seems whenever I try to accomplish a task, their software dictates how I’m supposed to do it rather than the other way around. I think it’s ironic that, as a paying customer of Microsoft and Yahoo, I decided virtually simultaneously to ditch both mere weeks before this development. I don’t think I’m the only one doing so, either. Does Microsoft think that by combining with Yahoo they can stall or reverse the flight? I think not.

So what do I use these days to get things done? I switched to Open Office (which also forms the back-end of Google Docs) to do all of my basic document creation and Ubuntu Linux for my desktop computer’s operating system. I use a mashup of Google Calendar, Contacts, Evolution, my Treo and some web services middleware to keep it all in sync for my PIM. I have been using Linux as a server platform and built an entire company on it since its beginnings in the early 1990s. Back then, when I wanted to implement a feature in software that wasn’t available (which was often it seemed), I would simply dive into the source code, add the features I needed and recompile with my trusty C compiler. Try doing that with Microsoft software! In some cases, where I still have to use Internet Explorer to visit websites designed by Neanderthals that still require IE instead of working with standards compliant browsers like Firefox (I find it amusing that Microsoft’s own web site’s simple “About Us” page has roughly 195 validation errors), I use Wine, which works amazingly well. I also use numerous other open source, free applications from repositores containing thousands of increasingly mature applications. I will devote an entire post to typical applications used for various tasks as well as open source alternatives/equivalents to brand name software (hint: want to install a Photoshop-like graphics application NOW? type “sudo apt-get install gimp” or “yum install gimp” and presto! It’s installed and ready to use within seconds. That was easy!) My apologies, however, as I digress. I do not intend to foment the proprietary vs. open source debate here; that will be another post entirely.

Let’s discuss Yahoo’s languishing innovation, for example. I’ve used their Mail Plus web application for email for many years. One of the things we all deal with is spam. No matter how good spam filtering software is, even the most sophisticated, trained Bayesian filters trap false positives. Therefore it is important to cull through your spam folder to mark these emails as ham (i.e., not spam) to train your spam filter to not trap them in the future. The easiest way I know to do this is perform simple searches of your spam folder and look for legitimate senders and the like. My spam folder collects over 5,000 messages each month. What is my problem? Yahoo doesn’t let you search your spam folder. With the number of users commenting on this oversight in Yahoo forums, you would think Yahoo would listen and correct this problem post haste. In fact, I emailed Yahoo customer support about this issue more than 4 years ago. They still haven’t done anything about it. Presumably, from a software perspective, the reasoning for this is that spam outnumbers legitimate email 6 to 1 and indexing this would add an unnecessary burden on Yahoo’s compute infrastructure. But they are (were) a search company, right? They give you a work-around but it is virtually impossible to implement with anything more than a handful of messages. Google let’s you search your spam mail just like normal email, as you would expect. Google, quite frankly, just “gets it.” Yahoo and Microsoft don’t.

I could bore you with numerous other examples exemplifying huge holes in Yahoo’s business, especially when it comes to their horribly contrived customer support system (even after a perfectly composed, detailed email describing an obvious bug including all relevant details fit for a quality assurance team, you get a ridiculous response prompting you to perform insipid tasks such as checking to see if your computer is plugged in and the like), but I’ll get back to the thesis of this article.

Microsoft is another lost company. I have a great deal of respect for Bill Gates, but I think Steve Ballmer seriously needs to cut down on LSD or whatever deleterious hallucinogens he may be using. Their problems are compounded by pathology within MS that their shit doesn’t stink. In my opinion MS would benefit greatly by adopting open source and creating value on top of it in areas where they excel such as user interface design and features (though that’s arguable with the latest version of Office as an example). Vista was an absolute waste of millions of development man-hours that could have been better used bettering the best-OS-MS-has-ever-made Windows 2003 line up (XP and 2003 Server). I mean, seriously! One of the big deals about Windows NT was its goal to be fully POSIX compliant. Seems they completely forgot what they were trying to do. Even now, 15 years after NT’s release, Microsoft operating systems (still based on the NT kernel architecture) still lack probably the single most powerful aspect of POSIX and *nix systems – a powerful, scriptable, robust command line shell – a must for any serious server administrator’s tool chest.

All in all, the reasons a Yahoo acquisition is a bad deal are many. For Yahoo, it would mean the demise of a company culture that could once again foster great innovation. It would mean some promising software products, including recent acquisitions, could hit the chopping block (Zimbra, Flickr). It would be bad for Yahoo customers who went to Yahoo to get away from Microsoft in the first place. It would mean melding two distinctly different infrastructures (Yahoo is primarily based on open source software fundamentals and linux based platforms). It is bad for Microsoft for the same reasons (i.e., once the above things are priced into Yahoo stock after an acquisition, much of the value would be lost). From a strictly economic and shareholder return perspective, Microsoft would do better to buy back its own stock than acquire Yahoo.

Both companies are suffering from bad strategy. Microsoft is the blood-thirsty bully, reacting to competitive threats with attack posturing and hegemony rather than quietly winning the war through innovation, ala Google. However Microsoft does have a very talented workforce and very smart people which it could leverage if it weren’t for the raving lunatics in the executive suite and the prevailing proprietary technology dogma that should be laid to rest. Microsoft should launch into open source, deploy hostable, SAAS versions all its leading software, port its software to run on Linux and even create its own Linux distribution. Microsoft made a huge bet that the likes of John Gage were wrong with his infamous phrase, “The Network is the Computer.” Microsoft bet wrong. The war is on applications and functionality and efficacy of those applications to get things done. Not operating systems. Increasingly the Internet is the deployment medium for these applications. I suppose perhaps Microsoft has figured this out which is what the Yahoo bid is all about. I still believe, however, that just like Microsoft’s huge miscalculation about the importance of the Internet back in the 90′s, they are still running in circles based on flawed assumptions and fundamentals.

Similarly, Yahoo has the people, the smarts, the culture, market share and the infrastructure to really compete against Google. Its problem is simply lack of a coherent vision of what it is, what it is trying to do and why (and what it wants to be when it grows up). It does have a new mission statement, which is a good thing. Now they need to really put words into action. Microsoft is only buying Yahoo because of its brand and its existing audience, not because of its capability to innovate. I don’t believe mergers just to acquire customers ever work, especially when a large percentage of the customers you’re acquiring got there to begin with by avoiding you. I’m also speaking from personal experience; my Internet company in the 90′s was acquired by a company in an effort to acquire customers and not to continue our proven strategy of success (that will be another whole blog post). The problem was that their going-forward strategy was flawed and as a result the whole house of cards fell down.

In summary, I think this proposed deal is a bad deal on just about every front. Many news outlets and bloggers are calling the bid hostile but that remains to be seen. I only see it as unsolicited, but not yet hostile. Yahoo does have poison pill protection in the event they also see the takeover as hostile. It will be interesting to watch from the sidelines and see how things develop.