I am in the midst of trying to stick to my New Year's Resolutions and this year also decided to put together my 2010 Business Resolutions.
Resolution 1: Be More Authentic
In the world of webcasts, email barrages, etc. it is difficult to come across as being authentic. People are tired of the "in your face" selling approach hidden behind the veil of a blog or information rich webinar. I have resolved to treat each communication with our clients and prospective clients as one that provides valuable information in a style that reflects who we are.
Resolution 2: Happy Hour
We need more happy hours - The name says it all! I am not resolving to drink more, but rather to celebrate more. I haven't run this by my wife Kelly yet, but if it is a Business Resolution - I think I have a chance.
Resolution 3: Start Writing that Book
For years, I thought about starting a company, and I finally did. The other topic I have pondered is to write a book. I keep bouncing back and forth between a business book, a children's book or fiction. The titles will range from "Building a Business out of Bubble Gum and Shoestring" to "Mr. Magoo Goes Bananas". As you can see - I have some work to do on the focus, but resolve to finally figure that out and at least write the introduction.
Resolution 4: Twitter
I can now spell it, so that's a start. I resolve to finally figure this out and make it part of my day and our communications strategy. I am a GenX guy, and looking to get with the times and this whole social networking world.
Resolution 5: Lunch
I resolve to make enough time each day for lunch. Try as I might, I many times find myself skipping lunch. I am going to start by putting an Outlook Reminder on my calendar, so that nice lady on my Blackberry will remind me "Adam - time for lunch". I am trying to figure out how I can super-impose my Mom's voice into that message. Of course, that is too technical and I will hold on that one until 2011.
I am a little worried about this resolution as it is in direct conflict with my personal resolution to lose some weight. Kelly tells me that I can eat nuts, berries and salads and kill two birds with one stone. I hate it when she's logical. Dang!
A.E>>>
Wednesday, January 13, 2010
Friday, December 18, 2009
Beware the "Black Box"
Throughout the course of my career I have developed hundreds of analytical models that have been or are being used by many of the banks, credit issuers and direct marketing companies in the country. Statistical modeling is not a topic that I typically bring up at cocktail parties or in general conversation - as it it is the equivalent of administering a few doses of vicodin mixed witha shot of bourbon....zzzzzzzzzzzzzzzzz.
However - there is one topic of modeling that has interested me for many years and should be of interest to the general model consuming public. That topic is that of the "Black Box" approach to selling model based solutions.
Back in the 90's when modeling solutions were coming out of the woodwork, a variety of companies begin marketing their models and scores as their differentiator. The typical tagline was that their solutions were superior because their analytics and analytic teams were "better".
A prime example of this was the Falcon product from HNC which today still is the modeling platform for the majority of all card transactions world-wide. HNC brought neural networks to the industry and they positioned their solution as superior because of those deep analytics. And guess what - it worked! The positioning catapulted their solution to the top and they never looked back. However - if you ever asked HNC what was behind the modeling, they would tell you it was a "Black Box". That is, it was the secret sauce and could not be divulged.
A couple years later, I was presented with a similar situation. I was jointly developing a model with the old Fair Isaac (now FICO). While it was supposed to be a joint effort, when I asked to review the models and codes, their lead analyst informed me that he could not divulge. I asked why not, and he told me that it was a "Black Box", could not be divulged and I probably could not understand anyway. As a trained statistician, all I heard was - "We're smart and you are stupid".
That is when I began to become fixated on the implications of the "Black Box" approach to marketing scoring based solutions. At the time, FICO positioned themselves as the "Gold Standard" in modeling. However, their prospects, clients and competition were referring to them as the "Four Letter F Word". I do think that over time, this has led to their market erosion and loss of credibility.
Most of the people I have ever met from HNC or FICO are, indeed, very smart people. However, when you take the "Black Box" approach to positioning scoring solutions - I think you are jeopardizing your brand and doing a disfavor to your people. After repeatedly hearing "We're smart - you're stupid", eventually people grow tired of it. After all - I don't think anyone likes to be told that they're stupid or incapable of understanding. Especially when it is not true. There are tens of thousands of modelers out there who know exactly what I am talking about.
I have always been a firm believer in transparency in the modeling and scoring process. As solutions providers, we exist to solve problems and provide value. When we throw up the "Black box" it undercuts our value proposition and opportunity to be collaborators. That is why we always work closely with our clients and give them deep understanding of what it is that drives those models. This does not mean that I have to pull out the source code or hand over the actual model on a silver platter. We all need to protect our Intellectual Property. However, this transparency secures a position of collaborator and partner. It also leads to deeper understanding from our clients about what is driving their business.
Transparency in modeling and scoring is becoming more routine over time, as model developers and users understand that it is one piece of the solution. However, it still amazes me that there are some select companies today that are positioning the "Black Box". I welcome that competition. I have to say that I don't mind my competitors positioning themselves as "We're smart - you're stupid".
A.E>>>
However - there is one topic of modeling that has interested me for many years and should be of interest to the general model consuming public. That topic is that of the "Black Box" approach to selling model based solutions.
Back in the 90's when modeling solutions were coming out of the woodwork, a variety of companies begin marketing their models and scores as their differentiator. The typical tagline was that their solutions were superior because their analytics and analytic teams were "better".
A prime example of this was the Falcon product from HNC which today still is the modeling platform for the majority of all card transactions world-wide. HNC brought neural networks to the industry and they positioned their solution as superior because of those deep analytics. And guess what - it worked! The positioning catapulted their solution to the top and they never looked back. However - if you ever asked HNC what was behind the modeling, they would tell you it was a "Black Box". That is, it was the secret sauce and could not be divulged.
A couple years later, I was presented with a similar situation. I was jointly developing a model with the old Fair Isaac (now FICO). While it was supposed to be a joint effort, when I asked to review the models and codes, their lead analyst informed me that he could not divulge. I asked why not, and he told me that it was a "Black Box", could not be divulged and I probably could not understand anyway. As a trained statistician, all I heard was - "We're smart and you are stupid".
That is when I began to become fixated on the implications of the "Black Box" approach to marketing scoring based solutions. At the time, FICO positioned themselves as the "Gold Standard" in modeling. However, their prospects, clients and competition were referring to them as the "Four Letter F Word". I do think that over time, this has led to their market erosion and loss of credibility.
Most of the people I have ever met from HNC or FICO are, indeed, very smart people. However, when you take the "Black Box" approach to positioning scoring solutions - I think you are jeopardizing your brand and doing a disfavor to your people. After repeatedly hearing "We're smart - you're stupid", eventually people grow tired of it. After all - I don't think anyone likes to be told that they're stupid or incapable of understanding. Especially when it is not true. There are tens of thousands of modelers out there who know exactly what I am talking about.
I have always been a firm believer in transparency in the modeling and scoring process. As solutions providers, we exist to solve problems and provide value. When we throw up the "Black box" it undercuts our value proposition and opportunity to be collaborators. That is why we always work closely with our clients and give them deep understanding of what it is that drives those models. This does not mean that I have to pull out the source code or hand over the actual model on a silver platter. We all need to protect our Intellectual Property. However, this transparency secures a position of collaborator and partner. It also leads to deeper understanding from our clients about what is driving their business.
Transparency in modeling and scoring is becoming more routine over time, as model developers and users understand that it is one piece of the solution. However, it still amazes me that there are some select companies today that are positioning the "Black Box". I welcome that competition. I have to say that I don't mind my competitors positioning themselves as "We're smart - you're stupid".
A.E>>>
Monday, November 2, 2009
When Will the Madness End?
For a fourth time, the FTC postponed the Red Flag compliance deadline for non banking regulated companies. The original deadline was to be November 1st, 2008. It was set to go live on November 1st, 2009 and now they have pushed it back to June, 2010.
http://www.networkworld.com/news/2009/110209-layer8-ftc-red-flags.html
This new compliance requires non banking institutions that could be exposed to identity theft to put in new procedures to detect and mitigate identity theft. For example, health care. Medical identity theft is growing as people are using stolen identities to receive medical services in a victim's name. You can see that it might be a good idea to have health care providers to makes sure that doesn't happen.
Dear Mr. Elliott, we see that you owe us $25,000 for a liposcution treatment that you received in Los Angeles". Huh?
According to the press release, the 4th delay was caused by members of congress saying that the new compliance is not well understood and we should not punish companies. Huh?
Since when did making sure that companies that receive confidential identity data use it wisely become unfair. In the credit card world, for anyone receiving credit card information - they must be PCI compliant. They must have standards in place to make sure that do everything possible to minimize credit card numbers from being compromised.
However, when it comes to a persons identity, we once more say that this isn't as important. Ironic. If your credit card is compromised, the consumer has a $50 liability and that's the extent of the damage. If your identity is stolen, you may have years and thousands of dollars expended before you can clean it up, if ever.
Priorities? In the meantime, identity theft rose again in 2008 and all expectations are that they will rise again in 2009.
A.E>>>
http://www.networkworld.com/news/2009/110209-layer8-ftc-red-flags.html
This new compliance requires non banking institutions that could be exposed to identity theft to put in new procedures to detect and mitigate identity theft. For example, health care. Medical identity theft is growing as people are using stolen identities to receive medical services in a victim's name. You can see that it might be a good idea to have health care providers to makes sure that doesn't happen.
Dear Mr. Elliott, we see that you owe us $25,000 for a liposcution treatment that you received in Los Angeles". Huh?
According to the press release, the 4th delay was caused by members of congress saying that the new compliance is not well understood and we should not punish companies. Huh?
Since when did making sure that companies that receive confidential identity data use it wisely become unfair. In the credit card world, for anyone receiving credit card information - they must be PCI compliant. They must have standards in place to make sure that do everything possible to minimize credit card numbers from being compromised.
However, when it comes to a persons identity, we once more say that this isn't as important. Ironic. If your credit card is compromised, the consumer has a $50 liability and that's the extent of the damage. If your identity is stolen, you may have years and thousands of dollars expended before you can clean it up, if ever.
Priorities? In the meantime, identity theft rose again in 2008 and all expectations are that they will rise again in 2009.
A.E>>>
Fox Guarding the Hen House?
This is the last topic I thought I would be writing about, but in the past few weeks it has caught my interest in a big way.
A few weeks ago, a colleague of mine that works for a regional high speed internet provider called me to ask if ID Insight maintained information about which households in the country have high speed internet access? When I asked why, I didn't realize how this would lead me on an odyssey canvassing the government, the Obama Stimulus package and a lot of bickering.
The Broadband Stimulus Package is a $7.2 Billion grant program that is part of the American Recovery and Reinvestment Act. Remember: Cash for Clunkers? Ya - that one. Anyway - the Broadband stimulus is intended to bring high speed internet to the hinterlands of rural America.
The way the grant works is generally as follows. If you apply and receive a grant, the government will subsdize 80% of the costs to bring high speed to a particular area. So, if you are a regional operator and it would normally cost you $5 million to lay down the fiber, cable, etc... now it will only cost $1 million. Obviously, this can be very lucrative for the carriers and enable high speed to areas where it may have previously not been possible.
Here's the kicker. To receive a grant, the applicant must demonstrate that an area is under-served. Here's the second kicker. The data does not exist. So how do you get the data? Enter Connected Nation. This non-profit was formed to obtain the data and information needed. They do this by working directly with the carriers to obtain their subscriber lists and develop these broadband maps.
Sounds logical on the surface - right? However, when you do a deeper dive, you find the following. Connected Nation was formed and is managed by the biggest telcos in the world. You know 'em - AT&T, Comcast, Verizon, etc....
So here's the rub. Many smaller and regional telco's are vying for the grant monies, but they don't have all the data. When they apply, the big telco's are now protesting those grants saying that the area is "served". They then hold up Connected Nation as their proof. The regional carriers are left to try to disprove. Their motive is to not allow competition where they don't want it.
The regional carriers and municipalities are furious. And they should be. Why should the major carriers be able to control who goes where and stifle competition? Connected Nation lobbied for this data requirement, and then turned around and lobbied for a separate grant of $350 million to collect the data themselves. Wow!
This saga will continue to play out in the weeks and months to come. Attached is a recent report issued on Connected Nation.
http://www.ntia.doc.gov/broadbandgrants/comments/61BC.pdf
Also - we have a little secret. We have already compiled the data, and it was not collected through the major carriers. It cost us just a trifle less than the $350 million that the government just set aside. Shhhhh. Don't tell anyone.
A few weeks ago, a colleague of mine that works for a regional high speed internet provider called me to ask if ID Insight maintained information about which households in the country have high speed internet access? When I asked why, I didn't realize how this would lead me on an odyssey canvassing the government, the Obama Stimulus package and a lot of bickering.
The Broadband Stimulus Package is a $7.2 Billion grant program that is part of the American Recovery and Reinvestment Act. Remember: Cash for Clunkers? Ya - that one. Anyway - the Broadband stimulus is intended to bring high speed internet to the hinterlands of rural America.
The way the grant works is generally as follows. If you apply and receive a grant, the government will subsdize 80% of the costs to bring high speed to a particular area. So, if you are a regional operator and it would normally cost you $5 million to lay down the fiber, cable, etc... now it will only cost $1 million. Obviously, this can be very lucrative for the carriers and enable high speed to areas where it may have previously not been possible.
Here's the kicker. To receive a grant, the applicant must demonstrate that an area is under-served. Here's the second kicker. The data does not exist. So how do you get the data? Enter Connected Nation. This non-profit was formed to obtain the data and information needed. They do this by working directly with the carriers to obtain their subscriber lists and develop these broadband maps.
Sounds logical on the surface - right? However, when you do a deeper dive, you find the following. Connected Nation was formed and is managed by the biggest telcos in the world. You know 'em - AT&T, Comcast, Verizon, etc....
So here's the rub. Many smaller and regional telco's are vying for the grant monies, but they don't have all the data. When they apply, the big telco's are now protesting those grants saying that the area is "served". They then hold up Connected Nation as their proof. The regional carriers are left to try to disprove. Their motive is to not allow competition where they don't want it.
The regional carriers and municipalities are furious. And they should be. Why should the major carriers be able to control who goes where and stifle competition? Connected Nation lobbied for this data requirement, and then turned around and lobbied for a separate grant of $350 million to collect the data themselves. Wow!
This saga will continue to play out in the weeks and months to come. Attached is a recent report issued on Connected Nation.
http://www.ntia.doc.gov/broadbandgrants/comments/61BC.pdf
Also - we have a little secret. We have already compiled the data, and it was not collected through the major carriers. It cost us just a trifle less than the $350 million that the government just set aside. Shhhhh. Don't tell anyone.
Wednesday, September 16, 2009
Why I Depise PowerPoint
It seems like we live in a PowerPoint world these days. As a provider of financial services solutions, my day is filled with meeting after meeting and presentation after presentation. The vast majority of these meetings are over the phone - especially for those 'first' appointments.
And of course, the medium of choice is our old friend PPT. Couple that with WebEx - and you've got yourself a meeting! It is from there that it is all downhill. After spending hours and sometimes days crafting this masterpiece - the meeting kicks off and jumps right to the AGENDA. From there, you jump into the next slide, the next and so on.
All the while, your audience is on the other end and you have no earthly idea what is happening. Are they sleeping, are they listening or are they busy catching up on their last week of emails. I don't know. I do try to periodically check in and ask if there are any questions. Sometimes that gives you a clue, when there is about a 10 second pause, and then: "Sorry - I had you on mute." Or even better yet, when they put you on hold and they have some lovely music playing in the background.
When they are engaged and asking questions, it is more often than not that these questions lead me to jump past slides or abandon the carefully crafted deck all together.
Because of this - I avoid PPT at all costs. Sometimes it is the necessary evil - especially when you have a large audience and you have information that needs to be on the printed page. However, more often that not, the carefully crafted deck is useless and a complete waste of time.
Especially when you are on a first appointment and your job is not to present your latest gadget, but to listen and discover. I can't solve a problem if I don't know what the problem is or they do not understand yet what their problem might be.
To me, PPT has become a crutch for verbal vomiting and self adulation and comes at the expense of valuable dialogue. I will be speaking at a conference in October, and of course the first thing they did was send me instructions about when and how to upload my PPT. I wonder what they are going to think when I say "I don't have one".
Here's a recent blog on the best and worst of PowerPoint.
http://news.bbc.co.uk/2/hi/uk_news/magazine/8213901.stm
And of course, the medium of choice is our old friend PPT. Couple that with WebEx - and you've got yourself a meeting! It is from there that it is all downhill. After spending hours and sometimes days crafting this masterpiece - the meeting kicks off and jumps right to the AGENDA. From there, you jump into the next slide, the next and so on.
All the while, your audience is on the other end and you have no earthly idea what is happening. Are they sleeping, are they listening or are they busy catching up on their last week of emails. I don't know. I do try to periodically check in and ask if there are any questions. Sometimes that gives you a clue, when there is about a 10 second pause, and then: "Sorry - I had you on mute." Or even better yet, when they put you on hold and they have some lovely music playing in the background.
When they are engaged and asking questions, it is more often than not that these questions lead me to jump past slides or abandon the carefully crafted deck all together.
Because of this - I avoid PPT at all costs. Sometimes it is the necessary evil - especially when you have a large audience and you have information that needs to be on the printed page. However, more often that not, the carefully crafted deck is useless and a complete waste of time.
Especially when you are on a first appointment and your job is not to present your latest gadget, but to listen and discover. I can't solve a problem if I don't know what the problem is or they do not understand yet what their problem might be.
To me, PPT has become a crutch for verbal vomiting and self adulation and comes at the expense of valuable dialogue. I will be speaking at a conference in October, and of course the first thing they did was send me instructions about when and how to upload my PPT. I wonder what they are going to think when I say "I don't have one".
Here's a recent blog on the best and worst of PowerPoint.
http://news.bbc.co.uk/2/hi/uk_news/magazine/8213901.stm
Tuesday, September 8, 2009
Latest Threat
Last week we came across another fraud activity that I thought I would share. I was speaking at a conference last week and there was some discussion about one of the latest threats related to altering of a person's credit report. Not exactly new, but renewed.
The scam is as follows. The credit bureaus, by law, have to remove delinquent information from a consumer's credit report within 4 days of receipt of a valid affidavit of identity theft from law enforcement. Once the bureau has the form and the accounts that should be 'sanitized', they then have 4 days to remove.
Makes sense if, indeed, there was identity theft present. However, this is not always the case. The bureaus are finding that many of these affidavits are counterfeit or fictitious. In fact, they went on to describe that they are getting hit particularly hard in the Southern California area and that many suspected reports tend to all have Armenian surnames.
They then went on to describe how there are a bunch of credit repair companies charging hundreds and thousands of dollars to clear a consumer credit report. This is how they are clearing.
Flash forward 24 hours. As I boarded my plane back to Minnesota - I brought up a data study for a prospect - hoping to see if we could help them identify a particular fraud ring they were seeing. At first - the frauds that we analyzed did not seem to out of the ordinary. However, at second glance, we realized that they were all Armenina surnames out of..... you guessed it - Souther California.
This one is pretty scary. Scary - because they all tended to be verified, have good credit, no real fraud characteristics, etc.... Once that credit report has been 'sanitized', they are free to resume roaming and take everyone to the cleaners.
I am sure that once they steal their next batch of money, they just return to their 'buddy', re-sanitize and do it again.
Are our credit granting systems under attack? Is this a pre-cursor of things to come?
A.E>>>
The scam is as follows. The credit bureaus, by law, have to remove delinquent information from a consumer's credit report within 4 days of receipt of a valid affidavit of identity theft from law enforcement. Once the bureau has the form and the accounts that should be 'sanitized', they then have 4 days to remove.
Makes sense if, indeed, there was identity theft present. However, this is not always the case. The bureaus are finding that many of these affidavits are counterfeit or fictitious. In fact, they went on to describe that they are getting hit particularly hard in the Southern California area and that many suspected reports tend to all have Armenian surnames.
They then went on to describe how there are a bunch of credit repair companies charging hundreds and thousands of dollars to clear a consumer credit report. This is how they are clearing.
Flash forward 24 hours. As I boarded my plane back to Minnesota - I brought up a data study for a prospect - hoping to see if we could help them identify a particular fraud ring they were seeing. At first - the frauds that we analyzed did not seem to out of the ordinary. However, at second glance, we realized that they were all Armenina surnames out of..... you guessed it - Souther California.
This one is pretty scary. Scary - because they all tended to be verified, have good credit, no real fraud characteristics, etc.... Once that credit report has been 'sanitized', they are free to resume roaming and take everyone to the cleaners.
I am sure that once they steal their next batch of money, they just return to their 'buddy', re-sanitize and do it again.
Are our credit granting systems under attack? Is this a pre-cursor of things to come?
A.E>>>
Wednesday, August 26, 2009
Broadband Stimulus Data
Over the past few weeks, we have been bombarded with requests for broadband connectivity and internet usage data. Turns out that as part of the Obama Administration's American Recovery and Reinvestment Act that $7.2 billion in Federal grant monies have been set aside to help bring high speed internet to communities without access.
For those that receive a grant, these companies and communities receive $0.80 on the dollar for all expense to provide the access. Pretty good incentive if you asked me.
However, for companies and communities to apply for the grant, they must have data and maps that shows the current connectivity and usage. That's the dilemma. That data does not exist. Why? Because only the carriers have this data and they treat as highly confidential. However - a requirement it remains.
As such, many communities and carriers have not been able to apply for these substantial grants. That is until now. We recently announced the development of the first national database of internet connectivity and usage down to the Census level geography needed.
By accessing our proprietary databases of internet users, we were able to combine with our analytics to produce the data and maps needed.
Pretty exciting stuff. Who would have thunk that a company focused on ID Theft and fraud would be creating a database to enable a computer in every home and classroom. Should be interesting watching this all play out.
A.E>>>
For those that receive a grant, these companies and communities receive $0.80 on the dollar for all expense to provide the access. Pretty good incentive if you asked me.
However, for companies and communities to apply for the grant, they must have data and maps that shows the current connectivity and usage. That's the dilemma. That data does not exist. Why? Because only the carriers have this data and they treat as highly confidential. However - a requirement it remains.
As such, many communities and carriers have not been able to apply for these substantial grants. That is until now. We recently announced the development of the first national database of internet connectivity and usage down to the Census level geography needed.
By accessing our proprietary databases of internet users, we were able to combine with our analytics to produce the data and maps needed.
Pretty exciting stuff. Who would have thunk that a company focused on ID Theft and fraud would be creating a database to enable a computer in every home and classroom. Should be interesting watching this all play out.
A.E>>>
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