How To Profit From Negative Reviews

Kudos to toysrus.com for allowing negative reviews on their site. These aren't just negative reviews on toys, these unhappy customers are calling for hammers!

So my 4 year old has been coveting this Star Wars transformer toy for some time, and after a great report from school I thought what a great time to buy it for him. I then went to toysrus.com, found the item and started reading the reviews. 24 out of 29 reviews said basically "don't buy this item" for a number of reasons that were directly relevant to me. So I did not buy the item and further did not select another item to purchase. So they lost a sale? yes.

But what did they gain?

Trust and increased credibility - next time I am on their site and the reviews are on the positive side they will hold more weight. Now I *trust* reviewed content on toysrus.com. Trust is tough to get.

Increased LTV(Long term value) - my trust in toysrus.com has risen and will translate into more sales from me over the long term. They allowed their customers to float the good stuff and flag the bad stuff and this has value to me as a customer.
sound familiar to outbrain's mission?

Positive WOM - here I am blogging about it! Toysrus can't get much better than that. Even better, they avoided a negative word of mouth event (in the shape of a scathing blog post) if I bought the item and experienced the problems that were revealed in the reviews.

Parent Osmosis - they saved me from making a bad decision, and spreading the negative news to my wife. With toys, if one parent has a bad experience, it gets directly relayed to the other parent - the end result, toysrus would have torpedoed two customers for the long term - me and my wife.

Yes toysrus lost a $49 dollar sale, but they gained so much more - my trust and appreciation for not wasting my time and money.

This same concept travels to bloggers and blog content as well. If you believe in ratings on your content, then having negative ratings actually delivers value to the blog by helping your readers sort and filter. Allowing negative reviews/ratings balances out the positive content and this breeds trust. And who doesn't want the trust of their audience/customers?

Only The US Military Can Save MicroHoo

With so many bloggers getting into details about this potential deal, the one thing that stands out like an igloo in Egypt is how in the world can they bring these two groups of people to rally under one flag. At tonight's NYSIA event, one of Henry Blodget's strongest statements was that bringing the two cultures of Microsoft and Yahoo together would be certain "disaster." Should this deal go through, the only organization that has successfully proven over time to bring people with great differences and backgrounds together is the US military. Even if they follow Henry's advice and create a standalone company, Microsoft and Yahoo need to rally their troops under one cause if they are to compete.

The program known as "Basic Training" has united individuals to fight for the same cause more than any other group save maybe religions. The key to Basic's success is that participants are put through hardship. They are dealt enough hardship that eventually weaknesses emerge. This causes members of the team to start helping other members to ultimately accomplish the goals of the group. This process breaks down preconceived barriers, differences and statuses and begins to build the new team as a unified group. With a creative mix of physical and "work related" tasks I think Microhoo can devise a program that can accomplish the same results as Basic Training.

But before you send waves of people into training, a name change seems critical. During and after Basic Training, the American flag is the rally point. Right now Microhoo does not have a rally point. Microhoo needs a rally point that is neither Microsoft nor Yahoo. Whether it's a stand-alone company as Henry Blodget suggests or a sweeping name change, the troops that need to sit shoulder to shoulder in the cubicles need to have a rally point. If you really wanted to optimize employee loyalty, give them the keys to deciding on the name change. Let them farm out the process, make suggestions and pick the winning name.

Many of New York's finest were present tonight as I had the pleasure to chat with Allen Stern who has a good summary of tonight's event here,Nate Weistheimer, Hank Williams, Bill Sobel and Sanford Dickert. When the topic of mixing cultures came up most of the crowd laughed and shook their heads in acknowledgment. Should this deal go through, how to mix these two naturally opposing groups will be the only issue to solve, as all will depend on it. If they don't solve this issue and break out of the box to do it, the next media story of the decade will be Google's antitrust suit as they will grow untethered until then. "Drop and give me fifty" just might be the answer.

photo credit from Armyof1and10

Consumers won't work for Web3.0 & Personalization

Josh Catone keyed a great post today on ReadWriteWeb titledWeb3.0 & the concept of personalization. But.....as the semantic web comes with many promises I *do not* think consumers will work to make any machine or system smarter while waiting for the said benefits of Web3.0. As attention spans shrink, and patience becomes an endangered virtue, consumers will want recommendations, personalization and time savings immediately. They won't work for it. And at the center of it all is figuring out what people like and don't like. Combing the social graph may turn up likely connections but somewhere you need an indication of intent - "I like it" or "I don't."

In our small corner of the world at Outbrain, we are applying some of these concepts to enable true personalization and discovery of blog posts and article type content. We are using the act of rating as the indicator to gauge someone's feelings about a blog post/article. Then, we look at groups of like minded raters to determine what other blog posts/articles would be relevant, and useful to each reader on an individual basis.

Jemima Kiss (cool name - glad I have it right - Josh you may want to have a look here) over at the Guardian sparked this blog trail and her point of how Last.FM "scrobbles" everyone's listening habits to become smart is key. Last.FM scrobbles listening habits and we scrobble ratings. Last.FM uses intelligence from social indicators to enable music discovery and we do the same to suggest, targeted reading recommendations for our users. This takes much of the burden off the user and is essential for those of us "recommenders" shaping Web3.0.

2 Tips For Hosting A Great NYC Tech Event

Last night I attended Ember Media's "The Future of Digital Media - Predictions For 2008." My company Outbrain sponsored the event.) Aside from being a great event, Allen Stern from CenterNetworks (who was also a panelist) posted some details here. I finally figured out why Allen has so many evangelists - its because he can talk well to anybody, no matter their level of understanding. He has talent in keeping his audience in mind when he speaks and when he blogs. Anyway, there were 2 elements that made this event much better than average.

Tip #1: Moderator's ability to keep the tone
Clayton Banks, CEO of Ember Media was the keynote speaker and moderator of the discussion. Clayton was a large factor why the discussion was very good as he kept the tone of the event flowing exactly in balance. Here are the notes I "made to self" on his job well done;

Managed the flow of the conversation, not too fast, not too slow.

Injected humor when appropriate.

Summarized the more complex discussion points in one line, easy to understand phrases.

Reigned in topics that had the potential to disrupt the flow before they did, and pushed topics that were advancing the discussion.

Kept the audience and its understanding level in focus at all times thereby avoiding the conversation to drift only between the panelists.

Choose a location that was unique and made it relevant to the discussion.

Tip #2: A Sense Of Place

This event was held at the Armory. The Armory, run by the Armory Foundation, is home to the premier indoor track and field center in America, and is committed to serving the youth by promoting excellence and fitness through a broad range of athletic, educational and community programs. As the event got closer, and guests started mapping out where the Armory was located, the natural question was why are we meeting there? Those of you who are in NY know the Armory is way uptown (168th street on the A train subway.)

But here are the interesting reasons why we met at the Armory and why this was a great contribution to the event as a whole:

The Armory is a place of energy and celebration of achievement and hard work. On its walls are photographs of some of the world's greatest athletes, and on the tracks and training rooms you can see the athletes of tomorrow hard at work running and preparing for their next challenge. This made me think of startups in much the same way. At the Armory you felt this energy first hand. Actually the energy there made me feel a bit guilty because on your way to the men's room you had to keep hard right because the hallway was actually an indoor track where youthful men and women were bounding by at impressive speeds. It was natural to feel a bit lazy after just having eaten shrimp cocktail, lamb chops and a cold beer but it gave this event a wonderful sense of place. It felt special in a way that no bar or standard meeting room could ever offer.

Also, on the walls at the Armory you will see pictures of a three time Olympian named Will Banks - this is Clayton's brother who was also at the event(pictured above). cool!

To cap it off, Clayton also informed us that the Armory provides broadband access for that part of upper New York and its citizens. So not only were the panelists and moderator good, but the uniqueness of the Armory lent a special aspect to the event as a whole and I believe will be one of the reasons people will talk about the event and remember exactly where it was held years from now. I can't say the same for many of the other tech events that I have attended recently, can you?