with Auren
Hoffman
Month of April,
2001
|
Summation Push Auren Hoffman's Summation Push for
April, 2001 This issue:
* Hacking into a Class Action Suit
* School Choice: Next Major Civil Rights Issue
* Reader Responses
* Friend of Auren: Chris Kelly
* Summation Push Pick Links
* Hoffman Reading List -------------------------------- GREAT MARKETING BY SPRINT PCS
In the mobile phone business, companies spend tons of dough attacking new customers. If you divide the proportional marketing cost as a part of the total cost to acquiring a new customer, it will take years to recoup the money spent on marketing efforts.
This practice seemed to make good business sense because the assumption was that once people give out a telephone number, they would be reluctant to change it. Even if consumers found a really good deal on another cell phone, they wouldn't want to change companies because they would have to change their phone number to make the switch. Essentially, changing phone numbers could dramatically increase the switching cost to the consumer.
But apparently the switching cost is not high enough because consumers are still price shopping as mobile services get cheaper and cheaper every year. So Sprint PCS (http://www.sprintpcs.com/) is doing something clever to increase switching costs and build affiliation. When a new customer calls Sprint PCS to set up a telephone number, the system suggests a personalized number. A friend of mine with the last name of Wang recently got a new Sprint PCS phone. Her phone number, suggested by the telephone reps, has "9264" (or WANG) as the last four digits. Sprint PCS feels that personalized phone numbers will create a high affiliation and high switching costs.
(You have great marketing ideas?
Write auren@summation.net) -------------------------------- Share
Summation Push. Forward it to
the smartest people you know. -------------------------------- By Auren Hoffman
Is the next multi-billion dollar class action
suit going to be directed against companies that failed to protect its
customer's data? Last week, I moderated a discussion on discussed cyber terrorism activity directed
against U.S. companies. The FBI recently reported that over 40 major companies
in 20 states have been victims of coordinated activities from hacker gangs
in Russia and the Ukraine see (http://www.fbi.gov/pressrm/pressrel/pressrel01/nipc030801.html/)
After these companies had their sensitive data stolen, the hackers threatened
the company, saying they needed to hire them as "security consultants"
or the data would be sold to organized crime syndicates. In at least one
circumstance where the hush money was paid, the data was sold anyway. The FBI believes most of the problem results from the poor security
features in place within most of even the largest companies. The problem:
Some companies (including banks) are not updating their security often
enough. In some cases, the simplest patches can take months or even years
to get implemented at companies. This means that consumer data is not as safe
as we thought it was. Consumers (myself included) expect companies not
to be impregnable, but to at least make a reasonable effort to maintain
a secure system to keep their data safe. I predict we will see the
following happenings in the next twelve months: * One major class action
lawsuit brought against a Fortune 1000 company that was hacked. Court
documents will reveal that this company failed to follow even the simplest
security features. * The security audit practices
at Big Five firms will double, and double again the year after. Most
B2B companies will be required to receive a satisfactory audit before
their customers entrust them with their data. * This will become a board-level
issue at most large companies. The Board will have a fiduciary responsibility
to ensure that known security holes are patched up. * Companies will use web
hosting services to a greater degree than ever before as a means to
limit their liability. Instead of just renting a few racks, companies
will opt for full-service security help and services like Loudcloud
(http://www.loudcloud.com/)
and Xuma
(http://www.xuma.com/)
will flourish.
Ellen Hancock, CEO of Exodus Communications
(http://www.exodus.com/),
talked about the serious security threat at the last Silicon Forum.
* Folks like Chief Privacy
Officers (see profile on Chris Kelly below) are going to become more
common at companies. They will be a second check on the security team
to ensure that the best steps are taken to keep customer data safe.
(What are your thoughts? Write auren@summation.net) -------------------------------- Send Summation Push to a colleague. SCHOOL CHOICE: NEXT MAJOR CIVIL RIGHTS ISSUE The next major civil rights issue is school choice. The poorest schools in our country are failing our kids. 70% of fourth graders in inner-city schools can't read. Can't read! If you can't read, you have no opportunities. This great country is bound with opportunities and mobility for people who are literate, but those who are illiterate cannot benefit from our society. Those who cannot read are prone to poverty and crime. This is not a curse that we want to place on our children. As our inner city school systems fail our kids, we need drastic reform. One answer is school choice -- the ability for parents to send their kids to a different qualified public or private school. I am pro-choice. Choice creates competition and competition creates ingenuity and dedication. Ingenuity and dedication is what is needed to give our inner city kids a better education and the promise of a better life. In Milwaukee, which has a school choice pilot program, 90% of African Americans support school choice. But major civil rights organizations with rich histories, like the NAACP, oppose choice. There can only be one of two sources of this disparity. Either (a) the people of Milwaukee are out of touch with their own needs; or (b) the NAACP is out of touch with the people. You decide. The common argument against school choice is
that all the smart kids will go to private schools and all the below-average
kids will be relegated to depleted public schools. In fact, that has
not happened in Milwaukee. It turns out that parents of kids who are
doing well in school do not generally see the need to change their kids
learning location. But parents of kids who aren't doing so well in school
want to get their children into a new learning environment -- one much
more conducive to educating them. -------------------------------------------------------------------- Send Summation Push to that intelligent someone. -------------------------------------------------------------------- Is there anything harder then getting a taxi in San Francisco on a Saturday night? -------------------------------------------------------- READER RESPONSES: Last Summation we mentioned the Ban da Bagels group (http://www.summation.net/Push0103.html). Jory Des Jardins, Director of Business Development for MyPrimeTime, writes: "I'm compelled to start an anti-lobby: Ban the Ban da Bagels Group. They threaten my mornings! Was just back in NY -- bagel land. This kind of chicanery threatens a major way of life for a large and vibrant group of people!" Tory Caharta writes: "Your Ban da Bagels piece was one of the wittiest things I have read in a long time." -------------------------------- Send Summation Push to a colleague. -------------------------------- FRIENDS OF AUREN [this section updates you an interesting person
that is a member of Auren Inc] Chris Kelly, Chief Privacy Officer at Excite@Home
(http://www.excitehome.com/)
Chris is a political guy in a non-political Valley. And though he's a hard core Democrat, he's learned enough to have a reasoned debate on any topic. Before becoming Excite's Chief Privacy Officer, Chris held the same job at a start-up called Kendara (which was acquired by Excite). Before that he was one of Gary Reback's trust-busting attorneys at Wilson Sonsini. Before that Chris was a member of Clinton's 1992 campaign and held a variety of White House positions through 1994. Privacy issues are some of the most important concerns of the future (see "HACKING INTO A CLASS ACTION SUIT" above) and Chris is well suited to take these issues head-on.
-------------------------------- Send Summation Push to a colleague. -------------------------------- THIS WEEK'S SUMMATION PUSH PICK LINKS:
* Famous Birthdays
(http://www.famousbirthdays.com/) -- who was born on your birthday? Ashley Judd and
Dudley Moore on mine. And the American Revolution began at Lexington
and Concord NOTE: Auren Hoffman works for BridgePath.com but the opinions expressed
herein are solely those of Mr. Hoffman. NOTE: You may reprint in full or in part (for
free) with permission from author. Auren Hoffman's bio can be found at:
(http://www.bridgepath.com/about/management.html/)
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