Fabrice Grinda

The road to hell is paved with good intentions! In public policy above all else, I have often found that some of the best intentioned laws end up having the opposite effect and hurt the very constituencies they were supposed to help.

For instance when laws prevent banks from charging high interest rates to relatively poor people (to compensate for higher default risk), they end up removing their access to credit altogether and sending them to loan sharks. Even more morally controversial and ambiguous, I recently read a report showing that in very poor countries, when child labor is banned, a large percentage has to become child prostitutes to support their families.

Stephen Levitt and Stephen Dubner, who wrote the highly enjoyable Freakonomics and write great articles for the New York Times (http://freakonomics.blogs.nytimes.com/), just analyzed the impact of three laws respectively meant to help the deaf, poor borrowers and red-cockaded woodpeckers. In all three cases, the laws spectacularly backfire.

Read the article at:
http://www.nytimes.com/2008/01/20/magazine/20wwln-freak-t.html?ex=1201496400&en=5a18f7392ce44671&ei=5070&emc=eta1

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The mother of an OLX employee called 911 in Argentina to report a robbery in progress across her street. The police did not answer, but played a “helpful” message: “If you are in danger, try to avoid the danger”!

Non sequitur: It’s interesting how many countries are now using 911 as their emergency response number because their citizens got used to using that number after seeing it in use in so many American movies and TV shows.

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While on the topic of hiring, my friend Auren just wrote a great article as to why great people are so much more valuable than good people, especially for engineers.

As Auren puts it: “In markets characterized by winner takes-all – increasingly true in a globalized world – you need the very best; “good enough” will no longer cut it when against intense competition. These are the people that build great and lasting companies. Companies that are lucky are built on the backs of good people.”

Read the full article at:
http://summation.typepad.com/summation/2008/02/the-power-of-gr.html

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A lot has been written about the science of hiring: finding candidates through referrals, having multiple interviewers, getting references from potential recruits’ bosses, etc. In fact, I would recommend you all sign up for the free tips from Smarttopgrading (www.smarttopgrading.com) and read Jack Welsh’s many articles on the topic.

However, there is another side to the equation an intangible “X Factor” that can change everything. It is that indeterminable “je ne sais quoi” that is making me more open minded. One of the candidates we recently interviewed was loved by everyone, came extremely highly recommended and presented extremely well, but I could not help feeling that he was too bureaucratic and therefore would not fit well in the organization and would slow us down. In light of all the positive reactions everyone had, I decided to give it a try. I have been very pleasantly surprised. He brought processes and organization without slowing us down.

More often, the opposite happens, a candidate meets all of the criteria and “feels” right but once in the company, it just does not work. There might a cultural difference or even just a personality conflict with someone else that cannot be resolved and brings the productivity of the entire team down. When that happens, you must move decisively in realizing it does not work and letting the person go.

In both cases, my conclusion is now the same: if the candidate seems great give it a shot. If it works great! If not, end it sooner rather than later.

In many ways, this is similar to my approach to entrepreneurship: 9 rigorous business selection criteria to choose the business. Once in the business try lots of things through trial and error and back it up with decisive action to take advantage of opportunities or correct mistakes (of which there will be many given the approach).

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A few months ago I described the “Grinda Hypothesis” where I posited that social networks would be hard to monetize (Advertising on Facebook and MySpace: the “Grinda Hypothesis”). It seems that Google is coming to the same realization: they are losing more money on their deal with MySpace than they expected (http://bits.blogs.nytimes.com/2008/01/31/googles-loss-is-murdochs-gain/?ref=technology).

Maybe I should add a time element (correlating improvements in demographic targeting on social networking with ad value and ad space) and make the Grinda Law :) Then again, I should keep the “Grinda Law” for something more meaningful :)

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I would very much like the deal to go through and actually succeed! For the sake of innovation, the Internet needs the search and online advertising business to be competitive. If you are in the direct to consumer world, Google probably accounts for the vast majority of your traffic, revenues and marketing spend. The dependence is scary!

Unfortunately, two mediocre companies merging usually make a larger mediocre company – not a better one. I can see why Google dominates the online advertising market. AdWords is so much easier to sign up for, use and optimize campaigns against. The sign up is much harder on both Yahoo and MSN. On Yahoo there is no way to buy traffic globally – you need one account per country and they all use different platforms! The US uses Panama, Brazil an older version of Panama and many other countries older versions still! It’s extremely difficult to get accounts, reporting is a mess and it’s hard to optimize. Sometimes Yahoo is actually cheaper than Google on a ROI basis, but it’s so painful to buy campaigns we don’t bother anymore! Even Panama – while better is still not as good as Google’s solution.

If the deal goes through, they have their work cut out for them: unify the media buying and selling platform across all companies for all their properties on a global level and then we will be talking!

I hope they succeed, the Internet needs it!

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