Free Markets, Free People

Daily Archives: April 9, 2010


The Internet: Still Not Getting It

It’s been an interesting week for me, because I’ve run into three situations that illustrate to me that, even though the Internet has been around since 1995, and has been hugely important to business–and politics, of course–since 2000, it’s clear that many people are still unclear about it.  Ive been a web developer since ’96, and have been the Managing Principal of WebmasterDeveloper.Com since 2003.  There was a time when I just assumed that no one knew anything about the Internet, and that sort of attitude among customers was defensible. In 2010, however, those days should be long gone.

But that attitude is still out there, and I’ve been hit over the head with it repeatedly this week.

Client 1:

This client created an affiliate marketing web site, aimed at a group of customers to which they have direct access through their other lines of business.  They spent months crafting the web site to provide the best affiliate programs they can think of.  After going live with their web site a few weeks ago, they’ve had 1 sale, and about 40 affiliate click-throughs.  They were shocked that their direct marketing of the site to existing customers has had such a dismal response.  In the course of conversation with the client, I asked, “Did you ever do any surveys of your customers to see what kind of offers would have value to them?  The answer:  No.  We didn’t want to spend a bunch of startup capital doing that.

They’ve spent thousands of dollars building a web site without any knowledge about what their customers want.  They’ve never talked to their customers; never gotten any idea of what their customers need, and how to fulfill that need.  They’ve spent every penny on building a web site to fulfill a need they haven’t even defined with their customers.  And now, since the customers aren’t responding, they’re concerned that there may be some sort of technical problem.

Client 2:

“I haven’t been getting any orders from my web site.  Apparently, the web host shut my site down for non-payment, but I don’t remember getting any notifications that there was a problem with my credit card. Anyway, can you see what I owe, so I can pay them, and you guys can download my site and transfer it to another web host?”  As it happens, the web host not only sent out email notifications, but made phone calls to try and collect payment, with no response.  In May of 2009.  Of course, their web site files are loooong gone.

So, the client clearly hasn’t even looked at his own web site for at least 10 months.

Client 3:

This client is completely changing their web site to become the single point of contact with their customer base.  Their customers will have to pay an annual fee just to see the products they sell, then use the web site to submit initial bids for salvage auctions.  I informed the client via email that we needed content from them.  I received an angry phone call from the client, who screamed at me, “I just want to concentrate on my business, which is [widget salvage]!  I don’t want to spend all my time doing web design!  That’s what I pay you for!”

In other words, the client wants to make the web site his sole source of initial interaction with his customers, but he is uninterested in writing any content for it.  His web site will be the primary public access that customers have to his company, but working on the web site is a distraction from his real business.

And the real kicker is, on the day we finished the initial programming, he drops the bombshell that the site’s design–which he approved on January 27–is completely unacceptable, and he wants to completely redesign the site.  This is akin to approving the blueprints for a home construction project, then kiting in on the day the contractor finishes laying the last bits of carpet and exclaiming, “I wanted four bedrooms, not three!”


All of these clients, despite their differing details, have one glaring thing in common:  It’s the assumption that once something goes out onto the Internet, it works because pixies sprinkle magical fairy dust on it.  Tinkerbell waves her wand, sparkly bits fly through the air, and money just comes rolling in to your bank account.

In the real world, the Internet operates on the same principles any brick and mortar business does.  You still have to perform due diligence.  You still need to market to your customers.  You still need to go into the office–even if it’s a virtual one.

Nothing magical happens simply because people can access your business online, rather than jumping in the car and driving to it.


Democrats: How do we game CBO so VAT doesn’t look so bad?

Mary Katherine Ham reports that the CBO is being hit with a lot of questions about the Value Added Tax (VAT) by Congress.  Taking Paul Volker at his word, they’re obviously in the beginning stages of trying to make the VAT “not as toxic an idea” as it has been in the past. As the title implies, the masters at gaming the CBO are probably already hard at work.

Said CBO chief, Douglass Elmendorf:

“Many people in Congress are interested in it,” he said of the VAT, a national sales tax that adds between 10 and 20 percent to purchases in European countries where it’s been implemented. “We’ve had conversations with a number of members and their staffs.”

You don’t say?!  I know, dear reader, you’re as shocked as I am, aren’t you?

A couple of points – this is going to be constantly misrepresented as a “national sales tax”.  It’s not a national sales tax.  VAT is a tax levied against every step in the production process rendering any retail good 10 to 20% higher than it would have been without the tax.  No one is going to add 10 or 20% at the register – instead everything you purchase will have that additional cost of taxation already added to its final purchase price.  It’s a nicely hidden tax (thus very attractive for the looters in DC) that saves you being reminded of it at the register everytime you buy something.  You’ll just see your overall purchasing power erodeded by whatever the VAT percentage is.

Oh, and that will be in addition to the income tax.   You didn’t think the IRS was going away, did you?  Finally, it certainly isn’t a progressive tax as it will lower the purchasing power of the poor much more than that of the rich.  And we all know what that means – somewhere there’s going to be a subsidy or a kick-back to consumers  of certain levels of income.  And yes, you’ll pay for that as well. Trust me, this will only end up being fully levied on the despised “rich”, as usual in t.

Revenue, folks, revenue – the beast is hungry and insatiable.  And it has a very serious problem looming the future.  It wants no part of lean and mean.  Instead, it wants to be fat, happy and expanding – and VAT would do that.  And you, dear wage earner, are the means to its dreams.

~McQ


Two can play this game

Benjamin Netanyahu has decided that he’s been treated like trailer trash long enough:

Israeli Prime Minister Benjamin Netanyahu has canceled a planned trip to Washington next week to take part in President Barack Obama’s 47-country nuclear security summit conference.

The ostensible reason for the very public cancellation?

He made the decision after learning that Egypt and Turkey intended to raise the issue of Israel’s presumed nuclear arsenal at the conference, a senior government official said on Friday.

Israel is believed to be the only nuclear-armed power in the Middle East but has never confirmed or denied that it possesses atomic weapons. It has not signed the nuclear non-proliferation treaty (NPT).

That’s the official reason – and there may be a grain of truth to it.  It’s Obama’s summit. But given the treatment Obama has given Israel lately, I’m sure Netanyahu has no illusions about his previously staunch US ally stepping in and stopping any such attempted hijacking of the summit by Egypt and Turkey.  Of course, Israel wouldn’t be the only nation there which hasn’t signed the NPT (India and Pakistan).

Probably more importantly though, the summit and nuclear non-proliferation are a pet project of Obama’s.  Israel is choosing to display its displeasure with Obama and the way it has been treated recently (see visa story below as well) by visibly and publicly downgrading their level of participation to Deputy Prime Minister level.  Or at least that’s the way I see it.

In hardball, both sides get a chance on the mound.

~McQ


Biting the hand that feeds it?

It is getting to be fun now.  Tea Parties to the right of us, union parties to the left …

The SEIU (Service Employees International Union), often seen at Tea Party rallies trying to introduce a little violence, has decided that NC would be a good state to test out their promise to Blue Dogs that they’d go after them if they didn’t support the agenda the SEIU Democrats wanted.

Wow, Blue Dogs and Dem lap dogs going after each other. You have to like it.

The SEIU says it will do so via a third party – North Carolina First – which, of course, bypasses the whole primary gig.  That means those Blue Dogs they’ve targeted (Dem. Reps Heath Shuler, Mike McIntyre, and Larry Kissell) will face the SEIU candidates in the general elections in traditionally red districts, thereby reliably splitting whatever blue vote there might be and ensuring a GOP victory.

Of course, that’s if the Tea Party (TP) isn’t running a candidate of its own in the general election (although indications are TP candidates are more likely to challenge in the GOP primary vs. a general election).

The SEIU is teaming up with State Employees Association of North Carolina (SEANC) to try and stand the party up and field candidates for the fall election.  Anyone who wants those  3 seats to go to the GOP is most likely wishing the SEIU and SEANC a lot of luck in doing just that.

Greg Sargent thinks this is a “a serious experiment in reshaping the landscape of Democratic politics, and it bears watching” implying could be a template for similar attempts in other states.  I sure hope so.  And if so, coupled with the TP, it would be an attempt on both sides of the political spectrum to move the primary party in that part of the spectrum more to the left or right respectively.  You have to wonder how independents would react to success in such attempts and then which way they’d tend to go to lend their support.

~McQ