People in the tech sector get the “always connected internet” and the iPad is a nice manifestation of this understanding.  However, I think most of the folks in Redmond and Cupertino haven’t internalized the concept in deeper ways; in the way internet startups or mobile phone players think about it.

What to rule (more of) the world and make even a ton more money?

Sell the low-end iPad for $99.  How so? Take a cue from the US mobile phone market and require a two-year contract for MobileMe.  This pretty cool cloud-sync tool would be the standard way to get content from your computer to the iPad.  You could sell it to the public as live backups and if the iPad had a camera (only miss in my book) you could tie iChat to the subscription of internet phone and video conferencing

Today MobileMe is $99/yr and I have to imagine the take rate for iPhone users is low.  If you required it at $19.95/month you would be awash in incremental subscriptions and it wouldn’t be hard to share some of that cash with a few newspapers to sweeten the deal for consumers.  Here’s the deal: you could easily subsidize the hardware price with a subscription plan like this.  And by the way, US consumers totally whiff on the math.  Apple, you come out WAY ahead on this deal.

But wait, there’s more.  The best part?  I haven’t dug through Apple’s financials but I have to believe the iTunes Music Store and the App Store are eye-poppingly profitable.  Selling one more digital copy of a song or app is virtually 100% profit.  So what would a $99 iPad get you here?  Simple.  Thousands and thousands more people buying stuff from your store.  This is the measure internet startups use so often – monitize the eyeballs.

By focusing on the cloud and adding a subscription model to a hardware device you strengthen the solution, broaden the adoption, deepen the grip, and accelerate the success of your closed online store.  Holy cow, Steve, you’ll not only get richer but you’ll rule our digital world.

It’s safe to say that since the dawn of the personal computer industry, tech marketing has been modeled after the theories of generalized technology adoption. The advice: one should market to the early adopters and grow into the early majority of the bell curve of adoption over time being ever cognizant of the chasm between the two.

More recently folks like Malcolm Gladwell and others have gotten us to focus on the long tail, outliers and the edges of markets to find the connectors, tipping points and influencers. Much of this work has celebrated social media and networks as proof these trends theories are correct and sound.

I’m beginning to believe we may have missed something in our rush to anoint the latest round of social scientists and their approach to using new media for marketing: ants. Or should I say more specifically the immense size of small numbers. So here’s a tangent. Some time ago I read that ants make up the largest cumulative biomass of species that walks the earth. The problem with looking for the connectors makes us elephant hunters when maybe we should consider what would happen if we leveraged the strength of the ants.

Could it be that 1,000 complete nobodies impact a market more than one somebody in the age of new media? Have we devolved to the rule of the mob? Let’s assume I have 150 friends on Facebook and 50 followers on Twitter and I decide to compose a glowing post about a movie I just saw. Judging by what I’ve seen on these networks 3-4 people will comment on or like my post and then if flows out of sight in the stream of news for my friends. What’s interesting is the 3-4 people’s comments will show up on their newsfeed which means their 150 of so friends will have access to my post. In the end I can see that from my one post there’s the potential of nearly 500 people hearing my voice.

So what? Newspapers land on millions of doorsteps each morning. Get to an editor, the elephant, and you’re home free. Or maybe not. If I go back to my previous story and use the 500 viewers of my comment and multiply that by the other 999 complete nobodies that made a similar comment we can see that 500,000 viewers have seen a similar post. Yes, the paper gets delivered and you can use the old school “impressions” metric but in the end we all know a small percentage of those who get the paper will ever see a particular story.

I haven’t been able to mathematically prove it but I’m beginning to think all the latest thinking on new media hasn’t deeply internalized how it actually works in the wild. How many people are influenced by one person’s comment on a social networking site? I don’t think the math is simple; rather I think it’s quite nuanced.

In my day job I’m going to test the idea of marketing to the middle. We are going to test the strength of ants. I’ll keep you posted on the outcomes.

Home to over a billion persons, India is one of the more densely populated countries in the world to still maintain a traditional rural and bustling urban life. I am here to learn about the water crisis. I suppose most westerners would be surprised by this, since many consider the water crisis only an African issue. It is profoundly not. In fact nearly two-thirds of those who lack access to safe water live in south Asia. And to my surprise, the number of Indians who lack access to improved sanitation is nearing double the number of people on the entire continent of Africa that lack these basic services.

But like anything, to really understand an issue, you have to peer behind the numbers and walk the streets to see it first hand.

Just yesterday, I visited four different urban slums here in Trichy, India. The conditions are visibly harsh, but the people I met didn’t seem troubled by their station in life. Here, many families will earn the equivalent of USD$2-3 per day, ususally for jobs such as loading trucks, working lower-end retail positions, selling small items, or providing other services or manual labor. This level of wealth will put these families in the “middle third” of the world’s poor and well ahead of the 10 percent of Trichy residents who live below these means. Many have bank deposits, and surprisingly, some own property – be that as it may. Most of the residences I visited were barely the size of a suburban American bedroom; five, seven or eight people, their belongings, and their entire livelihood fit inside this residence.

The water crisis here is unique. Over the past decade, municipalities have constructed massive water towers which are filled with river water and then redistributed to community water points throughout the slums. Usually 50-60 families will share a single water point – a single tap. We arrived early this morning to see water collection; as often is the case, water is only available from 6:30 a.m. to around 8 a.m. every morning. Women are only allowed to take three vessels for their family’s needs. If they don’t arrive early enough to take their place in line, they will go without for the day. Women here will spend two hours a day collecting water. These are actually comparably favorable conditions, considering what many others in India and other developing countries must endure.

Sanitation in the slums is what one might expect. There are community latrines which charge a one-rupee (about two-cent) use fee; however, every latrine I visited was without customers. I did see open defecation and other sewage flowing through the “gutters” of the slum into a nearby stream. So, I am unsure of the logic of charging people for latrine usage.

On the edge of town, water is provided via water tower or water lorry, the latter being a large tanker truck that delivers water on a set schedule to neighborhoods. We visited one such place today but discovered water is delivered only every other day, not this morning as expected.

Finally, I did see families enjoying the convenience of household water connections and latrines in the slums. These were provided through our WaterCredit initiative here in India. They still have schedule limitations but the convenience can save them hours a day compared to their fellow neighbors.

Given the nature of construction in these villages and the need for water pressure, the water connections are normally 1.5 to two meters below street level. As I visited these families, I was proudly ushered to a step-down cement area, normally just inside the front door, where women were happily filling water vessels. In groups of 12-15, these families (or, more accurately, these women) borrow money through microfinance institutions to finance a water connection. The terms are favorable and are often repaid prior to the loan term which is normally 12-18 months.

India is most certainly incredible.

Since I was in my late 20’s I had always dreamed of my turn as the founder of a high-tech startup. It was going to be my fast ride on the big IPO/buyout fantasy of “never having to work again” – unless I wanted to. Over the past 4-5 years I have come to the conclusion that this dream has passed me by while also growing disillusioned with the “toys for boys” mantra of new technology. Lord knows I love new gadgets, but catching the next big thing, in my analysis, has become little more than catching the wind. It is nothing.

About a year ago I was introduced to WaterPartners (water.org) through a good friend. During a laid back casual lunch we talked about the state of technology, social networking and the direction of online engagement. It was a good time and led to a fun proof of concept consulting project this past summer. I didn’t realize it would open a new chapter for my professional, and hopefully personal, life.

On 13-Feb I will be starting a new position with WaterPartners leading their marketing and individual donor engagement efforts. I am humbled I’ve been given the opportunity to help them and terrified by the challenge. The folks there do fantastic work – my job will be simply to focus a lens on their accomplishments and energize a community to support the effort. If you haven’t heard of them, WaterPartners delivers clean water projects in the developing world. We in the western world might find it difficult to imagine how desperate this issue is in places like Eastern Africa and rural India but it very tragic. As I learned more and more about their mission and philosophy, I could see how helping them would not only provide me new challenges but could also reshape my perspective on myself and others by doing something that matters.

Please don’t mistake my story as being judgmental. We all have our life journeys. It is only because of my years of work in the tech market that I’m able to consider such an opportunity and certainly living in the midwest eases the transition. I’ve also been very lucky to work on some very cool products and technologies over my career so in hindsight I really didn’t miss a thing. It’s just time to start the next chapter of my life.

Keep an eye open to water issues over the coming few years. If I’m up to the challenge you won’t have to look very hard, it will be coming to you.

Back in 2002 the press, fresh off the browser wars, was looking for a new race to call. Personal wireless was new, confusing and there were many standards vying for the hearts of engineers so it looked like a good candidate. Bluetooth was way over-hyped, under-delivering on it’s promise of ubiquity while a newcomer was making huge in-roads in capturing major design wins in the notebook market.

The US tech press was deeply familiar with the PC industry and had long ignored major developments in the mobile phone market. Bluetooth was tearing up design wins in phones, which was delivering scores more users, but the press kept “the race” going – at least for a few years. Then all of sudden someone finally figured out Wi-Fi was really about connecting devices to an IP network and Bluetooth was solely for connecting mobile devices to one another and the race was unceremoniously cancelled. Bluetooth did not kill Wi-Fi and neither did the other; they have in fact lived happily ever after.

A few weeks ago Facebook released Facebook Connect and the coverage was deja vu to me. The technology includes several nice features but the one many in the press have mistakenly focused on is its “portable” identity. Not only is this feature not the killer feature, it is not really portable at all – you can use your Facebook credentials to log into other sites. And of course since only Facebook has the rest of your “identity” I’d expect it will be a long time they let it go much of anywhere. So your Facebook identity is anything but portable.

However, by focusing on identity, the press have looked to compare Facebook Connect and OpenID. And with comparisons naturally the question is asked, “who will win?” So while the press looks to make a horse race of it, to me I have to say the two technologies are not comparable at all.

With OpenID, the user gets to decide where they would like to register their identity. There is no central place or single site where someone can do this and in fact there are dozens of these “relying” parties. While not part of today’s specifications, I can easily imagine the OpenID initiative providing mechanisms where I might be able to choose to include and exclude a multitude of information that can be selectively shared with sites that implement the technology. And since there will be competition, I can see some relying parties offering full “data portability” where others might take a more restrictive approach.

Facebook Connect is an attempt to expand the value of Facebook as the primary portal of the net generation. Both the social and monetary value of Facebook I might add. OpenID is the real deal, at least on paper, when it comes to portable identity. Being an standards effort there is still much work left to achieving that promise; again a reminder of Bluetooth in 2002. Where Bluetooth got usability right it has thrived (like in mobile phones and handsets) but where they were distracted it has essentially died (like the PC market except for a small selection of keyboards and mice).

My definition of a good comprise is one where neither party feels completely happy. When a technology is developed that selfishly enriches a single party, one entity is happy but ultimately everyone loses. Facebook Connect is fantastic and will provide value to those who’s lives center around the social utility site. OpenID is confounded with compromise but is best positioned to become the portable credentials of the web. It will be fun to watch both technologies thrive and live a life happily ever after.

1) Shorten the campaign season. For goodness sake, narrowing down the field during the primaries shouldn’t take so long. It seems like the Democrats started nearly two years ago. In addition to our sanity I’d like to ask a very simple question, what would your current employer do if you left you full-time job for nearly two years trying to get your next one? I assume all the candidates still draw a paycheck from the U.S. or Alaskan government while they are out job hunting. At a fundamental level this just seems wrong. And if they really have that much free time, maybe they’re getting paid too much in the first place.

2) Stop the hate. Few things have depressed me more this year than to endure the name calling and negative campaigning. Both candidates talked about change but whenever I turned on the TV I saw the same old thing. Name calling, ridiculing, misrepresentations of voting records – both camps are guilty of the offense. There was a moment in one of the debates when either candidate could have pledged to end the negativism but neither didn’t. If you believe in karma you have to agree neither candidate is going to have a smooth ride once they get into office.

3) Answers to questions. Speaking of the debates, perhaps we could just have candidates vote yes or no before they give their long winded questions to the moderators. Far too many times I got very irritated that neither Obama or McCain could not, or would not, answer a question. My favorite, “Given the $700B bailout plan, what programs will you cut given this reality?” Neither candidate gave a satisfactory answer in my book. Maybe I’ve been through too many media training sessions but all I saw was rehearsed talking points and rarely a straight answer.

4) Spending limits. It is absurd how much money is being spent to influence and get out the vote. And what’s terrifying, the fundraising numbers cannot match the incalculable number of volunteer hours contributed to the effort as well. If Google can become a worldwide brand with little to no advertising why on Earth do candidates, at nearly every level, spend gargantuan dollars to advertise themselves. With all the incredible innovation in social networking, social media and online connection we desperately need a version upgrade to the Candidate 2.0.

5) Outlaw yard signs. It occurred to me last week that eventually all those fancy yard signs are going to end up in a land fill. Oops. I hope candidates who supports green initiatives don’t print signs. I did the math, if all the signs were made of paper (not all are), nationwide we destroyed 180,000 trees for yard signs. So there is an environmental cost to the election as well. I won’t get into carbon emissions of travel, and on and on. My recommendation, if you’re running for federal office, ask your supporters to simply fly an American flag in their support. Not only is it patriotic, doesn’t destroy the Earth, but you can keep using it after your candidate wins or loses.

Bonus 6) Let it go. Practice acceptance and impermanence. I have to believe there will be voting day issues but please, let’s not see a repeat of 2004. And whomever loses, remember our government is designed to correct itself. The entire House of Representatives and one-third of the Senate will be back up for reelection in 24 months. Then just 24 months after that we’ll get to vote for President again. Given the length of our campaign season, the losers shouldn’t wait around too long to get started for the next time. Or, as evidenced by Mr. Gore, there is life after politics which can include spoils like Board seats and Noble prizes. Good for Mr. Gore.

Get out and vote.

For me this year’s election, for obvious reasons, is more interesting than the past several. Over my 20 year or so career I’ve learned a lot about marketing, positioning, messaging and spin. I know about talking points, media training the importance of a memorable quote. And this year we have a bounty of back and forth.

But over the past week or so I’ve started to grow uncomfortable with the spectacle of the sport. Crowds yell, hoop, holler, laugh and happily applaud razor sharp barbs tossed at opponents. It seems the more personal, the better these days. For some reason it’s what we want to hear – a quick punch right in the kisser.

More alarming are the conversations I’m having with friends about the election. I’m curious to hear what people think, why they do, and what they make of each party’s ticket. Even in crowds I would not expect it, resentment and divisions in our country are alive and well. And it’s not that we only disagree with one another it seems we find another’s view inconceivable. I actually think there are people out there who really do hate this candidate or another. It feels personal and it saddens me. We also know the media is no better and often they love to fuel the passions.

After reading just about everything I could get my hands on these past two weeks of conventions and all the points and counter-points made by the candidates, parties pundits and reporters I am disappointed no one has made a rather simple observation: no matter who wins, no matter who, a historical barrier will be broken. In January we will either be inaugurating a person of African decent to the presidency or a woman to the vice presidency. Gender and race will be a big step.

When I think about the election in this way I don’t think any of us can loose since no matter what happens we all win.

As some of you already know, I like to dig into the numbers. Not financials and budgets per se, but demographics and adoption trends. For firstly a marketeers’ task is to persuade the audience of inevitabilities; not that the world can be different, but it will be. That success is inevitable despite insurmountable odds. It is simply the epitome of selling hope in a bottle.

One cannot ignore the ever growing adoption of Facebook, especially in the teen audience. When will it’s success become “inevitable?”

I’ve been following the age distribution of Facebook for the past few years and in particular the teen crown; given I have two kids in that demographic. One question that did intrigue me was geographic differences: what state have the highest per capita adoption of Facebook among? I did some digging and the numbers are surprising.

So which states comprise the top 10 in per capita usage of Facebook by teens? High-tech hotbeds like California, Texas, North Carolina, Washington or Virginia? No, the highest rank of these states is Virginia at #18.

The top ten in order are: District of Columbia, South Dakota, Connecticut, Missouri, Kansas, Massachusetts, Arkansas, New Hampshire, Rhode Island and New Jersey. The list above is Virginia (#18), North Carolina (#25), Texas (#37), Washington (#39) and California (#42).

Think things are weird? Per capita, Kansas has nearly three times more teens on Facebook compared to California. Think that’s a rural thing? Not so. Massachusetts boasts similar numbers compared to California.

The chart shows off the results. Darker colors indicate highest adoption, lighter colors lower. Enjoy. If you’d like the spredsheet with the numbers, leave a comment

#1 Be right. One could soften this and simply striving to be only opinionated but I don’t think that completely nails it; you must confidently and consistently be right. I normally (there are exceptions) mull things over privately for a long time. I play devil’s advocate with myself, try to see things impartially, view a situation from many different angles, reflect on what I’ve observed thus far and anticipate what might happen. Then I take a position. And once I’ve taken a stand I require solid reasoned argument to refute it. There are many times I can recall of admitting my error but I can also recount many far many more times where I stood alone and to this day know I was dead right.

#2 Ask people to pick. I’ve noticed this issue most frequently with managers I’ve worked for in my professional life. Very often in business you are faced with competing priorities and limited resources. My strategy for these situations has been to reassess goals and choose the objectives which can be achieved while deliberately choosing to not work those which are not achievable. More often than not, you have to pick, and it seems people don’t always like to have to do that. And worse, some have the habit of reminding me of the things not accomplished to which I remind them we made a conscience choice to not do them.

#3 Work for the company, not your boss. While we are on the topic of work, one of my favorite pieces of advice given to me during a performance review was, “Mike, remember you work your boss, not the company.” He was right but I have never been able to fully digest this concept. I always go back to “what would the shareholders think?” Being a manager is no assurance of right-minded thinking, clairvoyant nature nor sound decision-making abilities; I know, I’ve been one. I’ve only worked for a few command and control type managers and thankfully for all parties affected it was short.

#4 Challenge conventional wisdom. In part due to the pace of modern life, to stay ahead of the pack it is an imperative to challenge conventional wisdom. I’d like to believe one of the reasons I have found a home in the technology industry is that the soul of this industry is about proving people wrong. The conventional wisdom is “it can’t be done” and all I can think is “like hell, watch this.” Go to nearly any meeting in corporate America and you can see the effectiveness of conventional thinking in action. Too often organizations do something based on the momentum of the group but I like to challenge commonly held beliefs.

#5 Playing the contrarian. It is not in my genes to be a lemming so instinctually I take to the opposite position of most groups. When there is optimism I can often be found to be pessimistic; where there is despair I’m the first to find hope. I don’t know why I’m like this, I just am. There is a method to my madness. I’d like to believe having protagonists in a group makes the group better.

So there’s my list. Do people think you’re a rebel too?

We all know the story about digital music and the iPod. I’m sure there are many angles to take on this one; the piracy story, the compression story, the record-label view, the artist view, the consumer and on and on, but I think it’s easy to argue the iPod saved the music industry. Yes, musicians and their handlers hate to admit it, but I know more people who, after buying an iPod, have bought more music than they had on their own without an iPod for years – or in my case decades. A buck is easy and often times it’s an impulse buy. How else can I explain buying The Knack’s “My Sharona”? (If you didn’t graduate high school around 1980 you won’t get it). It also helps the model let’s you buy only exactly what you want – not the industry-preferred packaging of albums.

And another funny thing happened. Today, even a good many of the teens I know are going legal as opposed to downloading ripped music from illegal file sharing sites. Apple made it easy to be legal, provided value over a free download with things like cover art, and simplified the process with the iTunes store and gift cards. What’s the standard birthday gift for a teen these days? A gift card to the iTunes store.

I can still hear the music industry complaining – but I ask, “where would they be without the iPod?”

So let’s now turn our attention to the computer software industry. Today, MS-Office withstanding, most folks rarely buy software these days. More and more free shareware and web-based tools are becoming available online so dropping more than $20 on an unknown feels like a real gamble. I know the velocity of the packaged software industry of 2008 is radically different from a decade ago.

In some ways you can see parallels between the historical software and music industries: (1) their packaging strategy is customer-hostile, (2) market consolidation was bad for consumers and (3) they both have unnecessarily long (non)value-add chains. Let me explain.

Both industries have pursued a packaging strategy that is customer-hostile. To buy the single song we wanted, we had to buy the entire album. Similarly, in the software business to get the 10% of a program we really need we have to buy 80% we don’t want and will never use. Of course this strategy was pursued to increase margin through perceived value: the hardware delivery cost for one or ten songs was the same so why not bundle a bunch of stuff together and charge more?

More and more, there are only a few big record labels just like software vendors. Once you get past Microsoft and Adobe who else is out there? And what do they do about packaging? You can hardly afford to buy a standalone version of their products since bundling makes them more attractive. Fewer market-makers leads to fewer choices which means bigger profits for those who are left.

And finally, both industries built a wide chasm between the “artist” and the “buyer”. The infrastructure necessary to successfully run a package software business, or that of a record label are sizable. You have distributors and resellers to pay-off. You have gatekeepers to the market like radio stations and product reviewers. You need to market, sell and support these complex products and supply chains; and of course, everyone wants to get paid along the way. In the end the artist or developer got whatever was leftover.

Now, last month, we get the $0.99 software program – enter the App Store for the iPhone. It was an epiphany for me. Here on my phone, while I’m idling away a spare five minutes someplace I can find a little “one-hit wonder” of a software program, download and pay for it in a matter of seconds all for less than the price of soft drink at my local convenience store. If it doesn’t work out, so what? It was only a buck. Shamelessly I have to admit it, I have purchased more software (for me, not work) in the last week than I have in the last five years. And I love it.

Has Apple done it again? Did Apple reinvent the software business? We’re not even close yet but I see the signs pointing an interesting direction. What does it mean for ad-based business models? What does it mean to software development overall? Do we just go and build really tightly targeted apps and sell them for a buck with the developer keeping 70 cents on the dollar for each product sold? Why not? Hmmm… gotta run and go download the iPhone SDK.