Facebook Graph API

A very simple tutorial on how to integrate the new Facebook Graph API into your web service:

http://www.emanueleferonato.com/2010/09/17/php-facebook-graph-api-hello-world-application/

BlogPress App

First post from my iPhone 4


- Posted from my iPhone

MBA Oath

The Economist has more on the MBA Oath coming out of HBS -- will this help create better managers, and ultimately, a better profession?

You can check out the article here. My friend, Alex Vallejo, also has an interesting entry on the profession of management at his blog here.

Cut The Suppliers

Wal-Mart recently announced efforts to suspend the sale of cigarettes in their stores. Citing the move as a way to promote a greener and more health-conscious Wal-Mart, this action may actually bear more economic motives. A recent blog in BusinessWeek suggests the recent tax hike on cigarettes -- up 61 cents to $1.01 per pack -- could have serious consequences on future demand of cigarette sales.

However, this move by Wal-Mart poses an interesting question: if Wal-Mart, a company that sees $.03 for every dollar in sales as profit, considers cigarettes an unprofitable venture in the future, then how will other retailers respond? Will there even be a response? And, should there be a fat tax?

This would be a good time for a Porter's Five Forces...

Keep CEOs Out Of Tech?

George Colony, CEO and founder of Forrester Research, has an eye-opening post on his blog titled CIOs to CEOs: "Stay out of tech". Colony found that many CIOs would like to see the CEO of their company "stay out of tech", essentially instilling more trust in the role of CIO.

Colony naturally disagrees with this view -- as do I. As he states, "the CEO doesn't have to program, but he/she cannot be ignorant when it comes to IT/business technology". This technological disconnect between CEOs and CIOs -- which I had originally believed was based on a lack of understanding of technology by CEOs themselves -- may actually be instigated by CIOs in the workplace. Though there may be no factual evidence of this, the evolving face of IT must be discussed by both CEOs, CIOs, and senior level managers in order for ideals like "IT-as-Change" (dubbed by Andrew McAfee and discussed in this blog post) to be executed.

As Colony puts it, "there is much change being driven by tech in the outside world that the CEO must understand -- and translate for the inside". This is probably the primary job of the CIO, as much of IT's best-practices must be carefully crafted by technical hireups in the company. However, using this technology to create competitive advantage -- and future business change -- is something a CEO must always be involved in. With new technologies emerging everyday, the CEO must continually be aware; thus, the CIO must look to the CEO as a partner, rather than just a "boss".

I guess my best example could be the Barack Obama campaign. Obama, and his advisers, knew that the web was going to be a game changer in this past election. They knew enough to incorporate it into their campaign strategy and looked to their technical people as allies to make this happen. It undoubtedly became a competitive advantage for Obama, even though Obama himself did not know exactly "what to do" to ramp up such a large online following.

New Apartment

Secured an apartment today in Davis Square. We really lucked out on this one... will post pictures when I move in.

IT and Business Meet

Just found this article over at the McKinsey Quarterly website about IT as a commodity. I wish I found it days sooner! The authors seem to share the same perspective as me, based upon my comments published in IT as Change. Below is an excerpt from McKinsey's article Where IT Infrastructure and Business Strategy Meet that I found very true:

Yet the very ubiquity of these computing, storage, and networking technologies makes some executives regard IT infrastructure as a commodity. That’s a mistake. Yes, components such as servers and storage—even some support processes, like the monitoring of applications—have been commoditized. Even so, an effective infrastructure operation creates value by making sound choices about which technologies to use and how to integrate them. A technology product purchased from a vendor may be a commodity, but the ability to bring together hardware, software, and support to provide the right combination of cost, resiliency, and features for a new application isn’t.

Deep Thought About Twitter

Twitter has been tremendously successful at removing communication -- and cultural -- barriers across individuals and organizations using the internet. It's simple platform encourages a high degree of information sharing, thus leading to powerful viral effects.

Google Wave now promises to introduce an equally powerful set of communication tools and platforms for the web. While more collaborative than Twitter, both offer better ways of discovering information through technology.

But, should Twitter be careful about losing its prestige, dominance, and sexiness to Google Wave -- similar to what happened to Apple in the late 1980s when Microsoft stepped in with Windows? Granted, Microsoft has always lacked in the style and design factors, but ultimately won market share over Apple through the commoditization of the PC, thus bringing down the cost of ownership. Secondly, Microsoft offered developers a dynamic platform for building applications, enhancing the value proposition for the PC.

Certainly, Twitter is a free service, and it appears Google Wave will be as well. However, will the ubiquity of Twitter fail to meet the more open and progressive Wave system? Although cost of ownership was a primary factor between Apple and Microsoft in the late 1980s and early 1990s, the "software gap" between the two brands seemed to hamper the success of Apple. Will the limited functionality of Twitter force the same consequences?

Blue Ocean Strategy

I just finished reading Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne. The book is an excellent read for aspiring entrepreneurs or managers looking to create differentiation in an existing marketplace that may appear to be saturated or already "well known" (called a "red ocean"). Creating "blue oceans" requires companies to think beyond their existing customers and locate non-customers, a process that may sounds impossible or incredibly difficult without the appropriate analytical tools.

Perhaps the greatest takeaway from Blue Ocean Strategy is the strategy canvas introduced in the beginning of the book. A strategy canvas, though a bit ubiquitous, is excellent for visually and analytically determining how a company can locate new pools of customers or look beyond the competition for alternatives. My favorite example in the book discusses how Callaway Golf used the Big Bertha golf club to bring in country club guests who did not regularly play golf and claimed they found it difficult to hit the ball. Callaway was able to ascertain a new market opportunity for these non-customers by introducing a driver that had a bigger head, making it easier to hit the ball. Using a strategy canvas, they were able to see that Callaway competitors did not have a product that targeted such a demographic, thus simultaneously creating alternatives in the segment.

Below is a sample strategy canvas I found on the web for Yellow Tail wine. Check it out; you can see how new opportunities can be engineered when companies "go against the grain".

See also: The Strategy Canvas @ blueoceanstrategy.com

Google Wave and AllThingsD

I am way overdue on this, even though Google Wave was announced yesterday. Check back for a post on the D conference and Google Wave.

IT as Change

Andrew McAfee wrote a thought-provoking entry in his blog over a week ago about the future perception of IT among business leaders. He posed the following question: Is IT becoming more of a commodity or a driver of change?

The post is thorough and an interesting read. I commented on it, and had this to say about where I see IT moving in the future:

Only until the CEO ('E' for executive) can rationalize IT -- to the extent a CEO currently understands the use of electricity in the workplace -- can technology be depicted through the IT-as-electricity imagery; essentially, marginalized as a commodity in the enterprise. Certainly, some facets of IT, like software and workstation deployment, have become more commoditized over time and give the company little competitive advantage, if any. However, most of today's emerging technologies (like cloud computing) are still rather fragmented (in the sense they are less standardized relative to business processes like software and workstation deployment); therefore, I do not agree with the IT-as-electricity imagery and continue to look at IT as change.

IT-as-change makes the most sense to me. Sure, I think it is understandable to see future commoditization of cloud computing services like Amazon AWS, let's say, given the economies of scale associated with on-demand infrastructure. However, these are public clouds and I believe much of the shift in cloud computing will move toward private cloud usage. As others have said in this comment roll, companies will use IT and cloud computing to their benefit in different ways; but crafting this strategy is where the CIO's role begins to evolve, rather than disappear (hence, my support for IT-as-change). Data is the true commodity here, but using this data to engineer the company's next competitive advantage is where IT must, and will, persist.

Though only a recent graduate, possessing (relatively) limited professional experience through internships, I have nonetheless seen companies design, develop, and implement their own private cloud services in-house to achieve greater efficiencies through collaboration and mass distribution of on-demand, highly-custom software. This is not new, but incorporating the right balance of public-private services and SaaS applications is critical. Obviously, just plugging into a cloud platform without any purpose or direction will not yield many benefits for the business -- and this is where CIOs see their next challenge.

What do you think? Am I spot on or way out in left field? Let me know: I, like McAfee, am equally interested in learning more about what others think about IT in the enterprise.

Time To Play Catch Up

I am a bit behind in my reading. Considering I just graduated yesterday from Bryant University, and will not be starting work until the first week of July, I'm going to try and finish those books that I have neglected over the past semester.

I have also been on an Enterprise 2.0 kick lately, trying to catch up on some reading in that fast growing interest area of technology. Essentially, the term "Enterprise 2.0" begs the question: how can social media be effectively used in the workplace? Boston will be hosting an upcoming Enterprise 2.0 conference this June. I have already secured pavilion tickets.

On a side note, I've also built up a small sample of writings over the past two years at Bryant. If you'd like to see a few, check out The Archway's website.

And most importantly, congrats '09!

My Next Project

For those who know me, they have probably heard of my web service known as appACT. When I initially built the application two years ago, I wanted a system that allowed users to tag their messages by data type, not data subject. To do this, I created a series of miniature web applications, cleverly nicknamed "web apps" on appACT, to solve this problem. You can now find the same concept on Facebook, where you are able to add specific link, video, and application data to a wall.

I am now looking to redefine the appACT idea to better align with evolving modes of modern communication. By applying new and exciting ideas from the Enterprise 2.0, I hope to leverage some exciting technology to make this possible. Unlike appACT, I hope this project becomes a group effort, and ultimately, a business.

I apologize if I am being overly broad and vague about my new idea. I'm still trying to grasp my head around the service's inner-workings and more research must be done; but as progress is made I'll surely provide more updates, if not questions, on this blog.

RMBS Transparency

Summer goal: Consistent blog postings!

Having taken a bond analysis course this semester, I have been able to study the "technical" side of mortgage backed securities (MBS).

Residential MBS and Commercial MBS securities are inherently different loan types, as identified in their nonrecourse and recourse attributes, respectively. Residential loans in an RMBS pool share similar characteristics and metrics, such as consistent loan-to-value ratios and interest rates. However, commercial loans in a CMBS pool cannot be analyzed from an aggregated basis; instead, each loan's riskiness is based on its projected cash flows from an income producing property and subsequently discounted. In this situation, a loan-to-value ratio doesn't make much sense, so a case-by-case evaluation of each commercial loan based on geographical, industry, and seasonality factors help determine the loan's riskiness.

While there are many other differences between RMBS and CMBS, like the treatment of prepayments, the process in which underlying loans are analyzed remains an important distinction. So what's the problem here? Though CMBS are still relatively ambiguous instruments, RMBS are sometimes even less transparent. Investors only have credit ratings to follow to gauge a basic understanding of underlying collateral, sometimes without information regarding geographical dispersion of loans.

At the European Securitization Forum in Decemeber 2008, the group released a set of voluntary guidelines for RMBS issuers to follow. Inside the report (PDF) there is a list of several fields that the organization asks European investment banks to disclose at the security's pre and post issuance and on a regularly scheduled basis.

This specific loan-level information is vital and must be made accessible to individual and institutional investors of RMBS. For example, portfolio managers must be attentive to geographical loan characteristics due to potential differences in prepayment speeds -- a factor critical to RMBS performance. Therefore, the question arises: should investment banks (or credit rating agencies for that matter) post this information, in an organized, structured, and standardized fashion along side its ratings? Or is such a change negligible as the system possess much greater risks?

Quick Thought on GE

I'm currently reading the HBS Case GE's Growth Strategy: The Immelt Initiative and one of the appendix items lists several of the company's long term growth areas. While biotech and renewable energy are breakthrough industries, some sectors include vertical finance, global mortgage, and asset optimization -- services that have come under the microscope in recent years.

Though GE has positioned itself "to grow its industrial earnings faster than its financial service earnings", it will be interesting to see how the company reconsiders its growth areas in light of the macroeconomic environment and political agenda of the Obama administration. Will GE run into a diversification problem as a result of this systemic shift in economic and political priorities?

Wake Up, Microsoft

Google will likely be partnering with Twitter to integrate ads within Tweets. Twitter, which has grown enormously over the past year, currently lacks a true business model or integrated advertising program.

Microsoft has really passed up on this incredible opportunity. Though the software giant has partnered with Facebook to pursue similar strategic objectives, Google has once again blocked Microsoft on this one. So much for Microsoft making the most out of its $2.5 billion initiative to compete with Google, as declared last summer.

Elsewhere across the internet, there are very few -- if any -- internet properties like Twitter or Facebook that have achieved a powerful brand identity, following, and success. The launch of Google Ventures, too, may also make it harder for Microsoft to partner with high-growth, strategy-deficient web service companies and run it like a VC. Instead, Google offers such start-ups with a great value proposition: a pre-packaged "business model" through AdSense and management support through Google Ventures.

Could that Google combo work in the future? The fact is, the tech sector is starting to mature and Microsoft may be too big -- and too late -- to align with the same types of strategies Google is currently pursuing.

Most Livable Cities

Forbes has compiled a list of the 15 "Most Livable Cities" and includes three Massachusetts municipalities: Peabody, Worcester, and Cambridge. Forbes generated the list by primarily focusing on quality of life statistics across the country.

Read the story. Pictures are also included.

Chrysler-Fiat Merger

David Kiley of BusinessWeek discusses the viability of a potential Chrysler-Fiat merger -- Listen Now.

Kiley makes a great point: on paper, both Chrysler and Fiat seem like two perfect complimentary companies. However, despite these potential benefits, each company has tremendous obstacles to overcome. Quality, for example, is something neither Chrysler or Fiat is known for in the United States. For the marketplace to reward them, the company needs to make a tremendous impression on the consumer while managing to solve other important issues like fuel economy.

Civilian Conservation Corps

This article in the New Yorker mentions the Civilian Conservation Corps (CCC), a great-depression era federally funded work project. My grandfather actually participated in this program as a teenager before joining the Navy, and it reminded me of his stories. Here's a quote:

As a teen-ager, when I lived outside of Washington D.C., I went backpacking with friends along the Appalachian Trail, which runs from Maine to Georgia. Every ten miles or so the white blazes that mark the main trail would intersect with blue blazes leading off to roughly constructed but reliably leak-proof shelters hewn from logs. Usually the shelters sat near freshwater springs. Sometimes, on a stump beside the lean-to, or on one of the walls, you could find a tarnished plaque commemorating the Civilian Conservation Corps and describing the date of the shelter’s construction during the nineteen-thirties. For an adolescent in the confusing, materialistic suburbs of the nineteen-seventies, these shelters were powerful artifacts; they made credible and specific our school-book pages about Great Depression and its improvisational-jobs programs.

The article also compares the current stimulus to the New Deal, making mention of the 1930s Federal Writers Project. A short read, but very interesting.

Longevity of Facebook

After taking a few weeks off, I'm back to the blogging business.

Today, headlines are revealing the departure of Facebook CFO Gideon Yu, a previous top executive at both Yahoo and YouTube. This isn't the first time Facebook has seen top leadership moves. The entire company has been shifting for the past two years, including the exit of a few early Facebook co-founders. What does this all mean? Well, perhaps an upcoming IPO.

As suggested by the WSJ, Facebook may be looking to replace Yu with a CFO from an existing public company, one who may have experience with investment banks and tech IPOs. Facebook has been finding it difficult to raise additional cash at high valuations, most likely due to the current economic environment but perhaps also because of the company's extremely high valuation.

Overvalued? Microsoft really set the bar in 2007 when the software giant invested $250 million in the firm for any equity stake of only 1.6%, thus giving the company a $15 billion valuation. Most IPOs eventually drop from their issuance price after a period of stock price appreciation. For Facebook, the potential pull back in price may be fast and furious if the company seeks unrealistic valuations.

To make sense of this "IPO pull back effect" theory, take a look at J.Crew (JCG). Since it's initial offering in 2006 at $20 per share, the company has enjoyed a brief climb in price and subsequent drop well before the market crash in Q3 and Q4 2008. (During the time of the pull back in summer 2007, the DJIA was continuing to grow.)


Classic entrpreneurship lessons also teach us that firms flushed with VC cash sometimes avoid practicing good fiscal management. Amar Bhide of the HBR article Bootstrap Finance: The Art of Start-ups says firms that keep their growth prospects in-check are less likely to fail: "Start-ups that failed because they could not fund their growth are legion. Successful bootstrappers take special care to expand only at the rate they can afford and control."

This is especially true for Facebook. Can Facebook become the $15 billion dollar behemoth some investors claim it is? Previous attempts at introducing business models -- like Facebook Beacon -- have stirred controversy among the site's constituents. Therefore, has the company ironed out all the details of it's growth strategy? Startups with little cash usually focus hard on getting it right the first time considering the high costs of failure. For Facebook, the company has had a lot of breathing room to experiment and try out various business models.

But, despite this flexibility, Amar Bhide makes an excellent point: "Success, especially in new and growing industries, follows many detours and unanticipated setbacks; strategies may have to be altered radically as events unfold. Failure to meet initial goals is a poor guide to future prospects."