Changing Healthcare: Structure & Culture

When we think about moving healthcare from a model that is focused on treating sick people (big buildings with lots of beds and lots of drugs and complex procedures) to a model that is focused on keeping people healthy (community-based primary care offices where patients can monitor and manage their health), we must consider two important questions:

1. Will the public and our politicians allow our treasured hospitals to close or restructure, enabling large healthcare providers to re-position themselves for the future?
2. Will patients actually pursue and engage in preventative care (e.g. get their annual physicals, cancer screenings, etc.) or will they continue to wait until they're already sick before seeking care?

Regarding the second question, I met with a healthcare executive last week that worked with the Saudi Arabian government when they were going through their transition from treating the sick to providing community based primary care. He told me that he warned people over there that, despite their best efforts, it wasn't going to work. Because even if you tell people they must come in for their annual check-up, they won't do it unless they're sick.

The Saudi Arabian government responded by saying, "oh, trust us, if we tell them to come in, they'll come in."

It turns out they were right -- patients do come in when the doctor tells them to come in.

Because an enormous part of the population over there receives their monthly paycheck from the government, they're much more engaged and compliant when the government (e.g. their physician) asks them to do something.

Obviously American culture is much different.

It's critical that we recognize the substantial structural and cultural change that must occur before we truly reform the U.S. healthcare system. This isn't going to be easy.

School Safety

A friend of mine received the letter below from his son's school last week (click to see larger image). Amazing what things have come to.

My iPhone's Home Screen

I had a conversation the other day about the apps I have on my iPhone's home screen. I thought I'd capture the list here. Here's a screenshot.

Foursquare. I like 'checking in' because it keeps a record of the places I've been. I don't interact with people on it but the 'explore' function is good for finding new bars, restaurants and coffee shops. It's better than Yelp in many ways.

Twitter. I don't Tweet all that frequently but I check my feed multiple times a day.

Reeder. This is where I read the blogs that I follow. I check it multiple times a day.

Facebook. I'm trying to move away from using Facebook. I hardly ever post though I check it a couple times a day.

Google Maps. The best mapping app I've ever used. I use it constantly when I'm on the road.

LinkedIn. I interact with people through LinkedIn almost every day. I also check it sporadically for news and other updates.

WEEI. This is an app for my favorite Boston sports talk radio station. I listen to it pretty much every morning.

TripIt. This app keeps me organized when I travel. I wrote a post about it a while back.

Instagram. I don't use it that much but I have it on my home screen as a reminder to take more photos.

Podcasts. I listen to multiple podcasts a day.

Weather. Very simple app. I've preset the cities I travel to most frequently so I can easily find out what to expect.

Kindle. I don't use this app all that often as I prefer to do long form reading on a larger device. But I try to crack it open while I'm on the subway.

Music. I have lots of music apps (screenshot below). I'm still trying to determine the app(s) that work best for me. I probably use Pandora the most these days. I'm going to write a post on this in the coming weeks.

Settings. I have this on my home screen so I can easily manage wi-fi connections. I wish there was an easier way to manage these on the iPhone.

Clock. I use the alarm clock app daily.

WordPress. I've actually never written a blog post on the app but I use it often to capture new ideas.

So that's my home screen. It'll be interesting to see how this changes over time.

Ecosystems Create More Jobs Than Companies

60 Minutes had a story last week on the increasing impact of robots in corporate America. Because of the technical innovation that continued during the recession, as companies begin to grow again they're finding that they can replace many of the lost jobs with robots instead of people. One of the researchers in the piece points out that Apple, Amazon, Facebook and Google are all public companies and have a combined market capitalization of nearly a trillion dollars. But together, they only have  around 150,000 employees. Which is about half of the size of GE and less than the number of new entrants into the American workforce each month. Sounds like a bad thing, huh?

Not really. What this comment ignores is the ecosystem that these companies have built.  Each one of the companies listed above creates far, far more jobs than the number of employees that work for them directly.

Some examples:

• Apple's app store now has more than one million apps that are built and sold by entrepreneurs that don't work for Apple.
• Thousands of independent merchants sell their goods through the Amazon Seller Program. Amazon gives these sellers access to 200 million+ shoppers each month. Amazon also enables authors to self-publish and sell their work through the platform.
• There are more than 10 million revenue generating apps that plug into Facebook.
• Google's Android app store has more than one million apps built and sold by entrepreneurs that aren't employees.

So when you dig a bit deeper you find that the combined market cap of these four companies is incredibly dependent on the work of an enormous number of entrepreneurs that are making a living through these platforms. So while GE may have more employees than these companies, the number of individual livelihoods that are supported by their platforms dwarf the employee headcount of any American company.

Blocking Out The Competition

Over the last few months, Twitter has removed the auto-preview feature for Instagram Tweets. So now you have to click through the link in the Tweet to see the photo. Presumably Twitter did this to encourage their users to use their native photo sharing application. When LinkedIn redesigned their profile page about a month ago, they dramatically decreased the exposure of a user's Twitter account. In fact, it's not even on the main profile page, you have to click "contact info" to see a user's Twitter account. This is a drastic change given the LinkedIn/Twitter integration that used to exist.

So LinkedIn is blocking out Twitter and Twitter is blocking out Instagram.

I think this is dangerous for LinkedIn and Twitter. I've written in the past about how difficult it is to build a successful B2C business. Your product has to be so great and so valuable if you want to win. You don't have the luxury of a salesperson whispering in the user's ear giving them context on your decisions or information about what's coming soon and how the product will improve. The product has to be great, right now.

Of course, I don't know all of the facts behind these decisions. But I do know that the effect of blocking out applications that users like is bad. And in a B2C business, what's bad for the "C" very quickly becomes bad for the "B".

Research & Preparing For Meetings

When preparing for an important sales meeting, salespeople will generally do a bunch of research; they'll read news articles, read the company's 10-k, check out the LinkedIn profiles of the people in the meeting, etc. Often, they'll spend money on Hoovers or other databases to gain any edge they can. Of course there's nothing wrong with this, but one thing to consider: how often has the thing that you currently care about most at work (the thing that is going to get you a big bonus) been available in a 10-k or a press release.

Sure, directionally we know that you want to grow revenue or cuts costs or prioritize a new product launch. But I can't learn the important specifics of that in the media or in a 10-k. Further, business has become so much more iterative over the years that, in my experience, by the time the media picked up on an initiative I was working on, we were already onto the next thing.

With that in mind, I would propose that when you do research, you prioritize having conversations with people on the inside. Before a meeting, find someone you can talk to that will help you prepare. It could be a junior person, it could be a personal assistant, it could be anyone that can help you get information.

These people should be happy to talk to you. You're not having these conversations to get inside info you shouldn't have access to, you're having these conversations to make the upcoming meeting more productive.

So when preparing for a meeting, yes, do your research. But more importantly, have conversations with people on the inside that know what people on the inside care about.

Selling To CEOs

Seth Godin had a good post a couple weeks ago titled, The danger of starting at the top where he talks about the downside of selling directly to a company's CEO. They key line is this:

When making a b2b sale, the instinct is always to get into the CEO's office. If you can just get her to hear your pitch, to understand the value, to see why she should buy from or lease from or partner with or even buy you... that's the holy grail.

What do you think happens after that mythical meeting?

She asks her team.

And when the team is in the dark, you've not only blown your best shot, but you never get another chance at it.

I agree and disagree with this. Two thoughts:

1. Yes, you need to be careful when going straight to the top, but I don't think you need to be afraid of selling to the CEO directly. But you do need to be careful in your approach. In short, don't sell. Have a conversation. Ask about her business, what problems she has, talk about what you do, your industry, her industry, potential synergies, who would be good to talk to, etc. If you're not selling, you should be comfortable talking to anybody.
2. While you're having conversations, you should also be evangelizing. That is, you should be drip marketing your prospects. I defined drip marketing in earlier posts as:

Regular, short and highly interesting/engaging/insightful pieces of information (most often without an ask) that educate the recipient and — just as importantly — change their perception of what you do in a favorable way.

If you're having conversations and "dripping" the right people, you should be free to navigate your prospect's company to find the person that will be most interested in your solution.

Snapchat & Sharing With Discretion

I've written in the past about the fact that Google+ is trying to fix social networking. While they’re not doing it very successively, the concept behind Circles is a powerful one. It allows users to easily share with discretion; i.e. to share certain updates and photos with selected groups (or circles) of friends. If Facebook favors 'open social networking', and Google+ is promoting 'discreet social networking', then Snapchat is promoting 'private social networking'.

From Wikipedia, Snapchat is:

a photo messaging application. Using the app, users can take photos, record videos, add text and drawings, and send them to a controlled list of recipients. Users set a time limit for how long recipients can view their photos, up to 10 seconds, after which it will be deleted from the recipient's device and the company's servers.

Sounds like something James Bond would use.

Snapchat was started back in September 2011 by a couple of Stanford guys. It now has around 200k monthly uniques, a $50 million valuation and users are sending 50 million 'snaps' a day.

Snapchat's success is a clear indication that there's a market for privacy. Social networks that don't facilitate the ability to easily share with discretion would be smart to take a closer look at Snapchat.

Productivity Tips

I came across some really good productivity tips this past week. One group in a great post from Matt Heinz and the other in a post from Erin Schulte from Fast Company. I'll add two things to their lists that have worked really for me:

1. Each morning I write down my top three priorities for the day. That is, the top 3 most important things that I need to accomplish that will help me get to where I want to be. I actually capture these in the Chatter app in Salesforce.com, but you could capture them anywhere. Then, at the end of each day, I update the Chatter post confirming that I got them done. You'd be shocked at how productive you can be if you only do the 3 most important things on your list each day.
2. To prevent myself from spending the day responding to incoming streams of messages, I work 'offline' for large portions of the day. I put on my headphones and close all web browsers and switch to "work offline" mode in Outlook and go to work. These are typically the the most productive parts of my day.

I'm sure I have others but those two stand out as things that have really helped me ramp up my productivity in recent years.

2012 Music

I’m not going to post my ‘most listened to music’ list like I did last year. For a variety of reasons my music wasn't syncing to my Last.fm profile for the entire year so the data isn't accurate. That said, here are some great artists that I hadn't listened to all that much (or at all) in the past that I listened to quite a bit last year.

• The Lumineers
• The Shins
• Iron & Wine
• Hayes Carll
• Angels & Airwaves
• Townes Van Zandt
• The Felice Brothers
• Whiskeytown
• Beach House
• My Morning Jacket
• Band of Heathens

I also discovered a genre called post rock. It’s very relaxing and great to listen to while you work. Some of the bands I like include The Six Parts Seven, This Will Destroy You and Marconi Union. Check out this somewhat depressing but very inspiring video that recaps the events of 2012 -- the soundtrack playing in the background is a great song by This Will Destroy You.

I also listened to a lot more of the stuff I listened to in past years, including:

• Ryan Bingham
• Steve Earle
• Radiohead
• Mumford & Sons
• Micky & the Motorcars
• Reckless Kelly
• Bon Iver
• James McMurtry
• Bob Dylan
• Uncle Tupelo
• The Avett Brothers

Some new, some old -- 2012 was a good year for music.

The Downside Of Good Reporting

It turns out that, even today, nearly all of the big checks in the ad industry are still being written for big, broadcast marketing efforts (television ads, radio ads, billboards on the side of the highway, etc.).  You might find this surprising given all of the conversion-based marketing channels that have popped up over the years. Advertisers no longer have to worry about not being able to track their ad spend. Marketing has become measurable. Google can tell you how many leads they drive to you so the problem of wasted ad spend should be over. So why are marketers continuing to spend on the big, hard to measure stuff? In many cases, the reason is that lots of ad buyers are really out to do one thing: avoid getting fired. So they’re very reluctant to take a risk on something that can be tracked. Many would rather their boss see a beautiful ad on the highway on her drive to work as opposed to a report showing that the new marketing campaign failed to drive a positive ROI.

With that in mind, in your early conversations it's important to understand where your prospect sits on this topic. My take is that high performing companies and individuals want to measure their performance and the performance of their vendors -- so that they can intelligently expand (or limit) partnership growth. If they are reluctant to measure success, they may not be the right partner as growing the relationship will typically be much more difficult.

Be cognizant of the fact that your partner might be hesitant to be measured. Try to get them to open up a bit on the topic -- it'll help you get a better sense of whether or not they're the right fit.

Taxes

The two most significant taxes that Americans pay each year are a tax on their income and a tax on their investment. The income tax is a tax on people's labor. Firefighters get paid for fighting fires. Teachers get paid for teaching our kids. And CEOs get paid for driving their company's strategy. Depending on how much they get paid, they pay a portion of that pay to the government. The tax brackets break down like this for a family:

• 10% on taxable income from $0 to $12,400, plus
• 15% on taxable income over $12,400 to $47,350, plus
• 25% on taxable income over $47,350 to $122,300, plus
• 28% on taxable income over $122,300 to $198,050, plus
• 33% on taxable income over $198,050 to $388,350, plus
• 35% on taxable income over $388,350

So a father that is raising his kids and working as a firefighter putting out fires and adding direct value to society through his work making $150,000 is paying 28% of the value of his labor to the government.

The investment tax -- capital gains and dividend taxes -- taxes something different. That taxes a bet.

When someone invests in Facebook and the value of the stock increases, or the company pays out some of their profit in the form of a dividend at the end of the year, the profit that the investor made is taxed. This is passive income -- the investor is just sitting there watching the money come in. He's not necessarily adding incremental value to society on top of his investment (in most cases).

There's nothing wrong with this -- investment is critical to a prosperous economy -- and the investor should make as much as he possibly can on his investments. But because he's adding less direct value to society, if we're going to tax him, we should tax him at a higher rate than we tax direct, value-creating labor. Simple, right? Right.

But we don't do that. Here are the current rates:

• 20% on capital gains
• 15% on dividends

So the investor that makes $150,000 per year in capital gains pays 8% less than the firefighter does for his labor.

And this is why our tax code is backwards. This is why Warren Buffet's assistant pays a lower tax rate than he does. This is why, in 2009, the Americans with the top 400 incomes (who made, on average, $202 million per year) paid a lower tax rate than you did. One quarter of them paid less than 15%, and more than half of them paid less than 20%.

We have to fix this. I'm not going argue what the tax rates should be (at least not today).  But I am arguing that we have to flip the structure so that tax rates on labor are lower than the tax rates on investment. It's just backwards.

In his controversial New York Times article, Buffet suggested the following solution:

I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.

Of course this won't fix the entire fiscal mess and I think we need to go a step further and flip the tax structure so investors pay a higher rate than workers regardless of their income. But Buffet's plan is a step in the right direction of creating a fairer tax code that incentivizes the activity that leads to greater prosperity for the country as a whole.