6 tips for surviving a recession, taught by World of Warcraft zombies

Posted by Christopher S Penn on Oct 29, 2008 in Economy | 21 comments

From: www.ChristopherSPenn.com

If you’ve dabbled at all in World of Warcraft recently, you know about the great zombie invasion. If you haven’t, here’s the very short version: a zombie plague spread throughout the game as a promotional event for the new expansion pack. The mechanics of the zombie invasion are simple: zombies spread their infection, causing other players to turn into zombies or die. The mechanism, as set up in the game, was so virulent that it effectively killed off populations of entire cities and made whole parts of the game unusable.

So what does this have to do with a recession? The zombie invasion also destroyed players’ access to the in-game Auction House, which is more or less the hub of the Warcraft economy and the central free marketplace. However, instead of banks not lending, the zombie invasion simply killed off all the auctioneers and auction managers. The net effect, however, was the same as in the real world economy – players, teams, and guilds were effectively denied access to the marketplace, credit, and trade.

Fortunately, Blizzard Entertainment called off the zombie invasion after a few days; real life isn’t so lucky. Nonetheless, the strategies that helped players endure during the zombie invasion are still applicable to the real life recession.

1. Hoard cash. Without access to markets, players needed to conserve cash (in the game, gold) to meet operating expenses (armor repairs, trades). Without access to markets, you basically had to survive on whatever you had in the bank at the time the zombies made the marketplaces unusable. The same is true in the recession. Cut down spending and hoard cash to ensure that you can meet your operating expenses without access to revenue for a short or even intermediate time.

2. Stay away from danger. If you weren’t a high level player, the moment you entered one of the capital cities, you were either turned into a zombie or just killed outright. Only by staying on the fringes and frontiers of the game could you outlast the zombie invasion. The same is true in the recession. Capital markets, investments, real estate, any area of the economy which is “infected” by the financial contagion, is a deathtrap. Only the strongest “players” should even consider being in those areas, and even that’s no guarantee that they’ll make it. If you’re not one of the strongest, the edge, the frontier, the fringe is where survival, if not prosperity, lies. If you’re not involved in things like social media, new media, and the like, you should be. This is the frontier.

3. Make powerful friends. During the zombie invasion, if you were a low or mid level player and you had to go into a dangerous or infected area, you needed a high level player escort or even a team of high level players just to get you to and through the area quickly and safely. Those players who belonged to guilds had access to level 70 (maximum level) players who could get you in and out without certain death. The recession means the same for you and your company, especially if you’re a small business. Strong partners can help provide additional cover. You still have to pull your own weight, but help from your friends and community can mean the difference between making it and not making it.

4. Go back to basics. Without access to markets, if you needed gold in the game, you had to go back to the grind of killing other creatures, completing quests, and non-market mechanisms. The profit from such activities is typically much lower than when you have access to the marketplace, but it got you by and helped you meet expenses. In the recession, back to basics and bootstrap financing is the name of the game.

5. Cash is king. In the game, rare and unique items often sell for huge piles of gold in the Auction House. That Netherstalker Helm of the Bandit can fetch a tidy sum – but only if you have access to a marketplace where it can be bought. With no marketplace, that piece of armor is effectively worthless, because you can’t barter it for armor repairs or food. Only gold matters in a zombie invasion if you don’t have access to the market. If you know access to the market will be restored, you hold onto your valuable game items to sell at a later time, but they’re not helpful otherwise. In the recession, if you can afford to hold your existing investments, you should, but only cash matters. Cash is king, cash is immediately usable, and no matter what you think your investments are worth or what you paid to get them, you can’t use their inherent value as cash.

6. There is an end. The zombie invasion was part of a Blizzard promotion for the expansion pack. It was generally accepted that it was a major game event and would be finite in length, though no one knew how long it would last. The strategies we all undertook to endure and outlast the zombies worked, but we knew they were finite. The same is true in the recession. Things are bad. Things are very bad. Things will not always be bad. If you can outlast the recession, if you’ve got the ability to bootstrap your cash needs, then you’ll be in great shape when the recession ends.

Whether you’re fighting the recession or zombies, see if these tips can work for you. And remember, zombies and recessions both love brains. No matter whether you’re in a virtual world or the real one, that’s the most powerful asset you have.

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World of Warcraft is the new MBA

Posted by Christopher S Penn on Oct 25, 2008 in Technology | 7 comments

From www.ChristopherSPenn.com

One of the great takeaway quotes from Chris Brogan at the MarketingProfs Digital Marketing Mixer was that World of Warcraft is the new golf course. There are anywhere between 10-15 million people in World of Warcraft, including me, and there are millions of people logged on all the time. If you’ve never played, World of Warcraft has its ancestry in Dungeons & Dragons and any number of role playing games, only writ large, on a global scale.

Chris Brogan mentioned that World of Warcraft is the new golf course, in that up and coming leaders, executives, and influencers may go into a virtual world to relax rather than hit the greens. Certainly, with tens of millions of players, there are undoubtedly CEOs, CFOs, product managers, and titles of all kinds in the game, just as there are high school kids and even grade school kids in the game.

I think in some ways, Chris doesn’t take the analogy far enough. World of Warcraft has the potential to almost be an MBA of sorts – not really, not in the sense of a formal business education, but certainly, to be among the top players in the game, you have to master certain skills which are equally valuable in the real world.

For example, if you understand arbitrage, trading, price discovery, and market mechanics, you can pretty much have your way with the in-game economy and the venerable Auction House. Players in the Auction House buy and sell items in a free market, to each other, and the rules that govern free markets apply in the Auction House as well. I’ve had the opportunity to develop a minimal level of proficiency in the Auction House and have made enough in game currency that my character can get the best equipment available to it.

Think it’s just a game? When you look at what highly skilled Auction House players use for analytics, you see terms like 7 day moving averages, interquartile ranges, median buyouts, bid ranges, and much more – terms and language you’re just as likely to find on Google Finance.

How many top traders in the game, making thousands of gold a day, could flip a mental switch and be doing the same on eTrade or working for JP Morgan Chase? True, market dynamics in the real world economy are more complex than in the game – there’s no buying on margin, for example – but the behavior of people is the same whether in game or in real life. An Auction House master trader might very well be the next great hire at Goldman Sachs or JP Morgan, if only both parties knew how easily the skill sets translate.

Leadership and management skills abound as well. In the game, you have guilds, essentially loose collections of players working together for common aims, be they social or game-related objectives. To be a top guild manager requires leadership, charisma, political acumen, and effective management of resources – much like a CEO. Your guild may only exist in a game world, but the human beings who are members are very much real, subject to the same emotional frailties that employees in any corporation are subject to.

There are other kinds of leaders as well. Raid leaders coordinate player teams through challenging instances – dungeons or other battlegrounds – to achieve fame, rare items, or wealth. Highly successful raid leaders amass enormous resources for their teams. Here’s the interesting part. The raid teams can be up to 25 people. Coordinating a team of 25 people towards a single objective in adverse circumstances requires the ability to not only lead, but also to be flexible, to adapt, to manage others in highly challenging circumstances.

What are the skills you value in your company, on your team, in your workplace or group? Where in virtual worlds like World of Warcraft might you find those same skills being applied, even mastered? I’m not saying that your job interview process should include a raid team through Karazhan, but if in an interview a candidate discloses that they’re a level 70 Horde guild leader, you might know a bit more about what skills they might have developed unknowingly.

Here’s some real food for thought: the guild I belong to is run by a level 70 Warlock who is building the guild out nicely, adding new players in specific roles, taking on daily fundraising tasks and managing guild operations. I’m the guild’s economist, managing guild bank items and auctions to raise money for the guild’s operations. Our guild leaders routinely guide newer, less experienced members through difficult parts of the game, explaining game dynamics and providing great leadership skills. Other guild members are developing their roles as well. If my guild’s leader were ever to show up at the Student Loan Network looking for a job, I’d seriously consider hiring her based just on her performance as a guild leader – and I’d know which jobs she doe and does not have the temperament for based on how she handles different situations in the game.

What’s the real world persona of this capable team leader? A 16 year old girl in Southern California. Imagine just how much talent is being grown and developed out there in virtual worlds, where age and race discrimination are nearly impossible, where someone with skills and experience can truly grow, unhindered by our real life prejudices and beliefs, public or private, lock them out of opportunities.

Where is tomorrow’s talent for your organization growing today?

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I'm ditching my business card pile

Posted by Christopher S Penn on Oct 24, 2008 in Technology | 20 comments

I’ve been to a lot of conferences.

I’ve gotten a lot of people’s business cards.

I’ve been less than perfect about managing them all.

Today I’ve hooked up with a company that is going to handle it from now on.

Shoeboxed handles bulk business card scanning. Mail them the pile after a conference, get back a datafeed and the originals in the mail. Excel, CSV, PDF, whatever.

For anyone who has had to manage more than a few business cards after a conference, you know how good this will be for you.

Full disclosure: I signed up as an affiliate. I will earn a very small amount of money if you sign up and buy through this link:

Sign up for ShoeBoxed for automated bulk business card scanning.

And that crate of cards? Going out the door TODAY. Buh-bye data entry.

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A fantastic time at Digital Marketing Mixer 2008

Posted by Christopher S Penn on Oct 24, 2008 in Conferences | 16 comments

I had a blast at the MarketingProfs Digital Marketing Mixer, held in Fountain Hills, Arizona. 300 of marketing’s most dedicated people flew, drove, and walked out to the middle of the desert to talk shop on social media, email, and search marketing, and my hat’s off to MarketingProfs for throwing yet another successful event. Some highlights:

- Speaking to an overflowing room about the prerequisites of social media. I got a real kick out of seeing so many people so eager and energized to learn more about social media and how to get started. Conversely, whenever the conference organizers have to make an announcement that extra chairs are being brought in and it’s STILL standing room only after more seating is installed, I know as a speaker I have to bring my A game up to an A+, to live up to the trust and energy that the crowd brings.

- Speaking on a panel with Gary Vaynerchuk and Greg Cangialosi. Great fun, some powerful takeaways from Gary (including stuff I’ll be trying with the Financial Aid Podcast), and intense energy. If you don’t watch Wine Library TV and read Gary’s blog, you’re missing out, even if you don’t care a whit about wine. Gary’s that passionate and engaging about a subject he loves and deeply cares about. Fun trivia fact that Greg Cangialosi pointed out at the beginning – Gary and I attended the same high school, 1 year apart.

- The HubSpot booth. The folks over at HubSpot, in case you don’t know, have a great little tool called WebsiteGrader.com, which does some very basic SEO assessments of any web site. What made their booth fun was them letting spectators stand around and chat with other participants about their sites. At the conference, there was a representative from a prison management software firm, a virtual mortuary firm, an executive dating firm, and many others, all of whom I wouldn’t have learned about if I hadn’t just hung around and chatted. Really interesting to see how people perceived the relevance of Internet marketing to their industries (so many people say, “But my industry is different because…”) and then watch their eyes light up when you show them how to Google prospective customers and partners.

- Late night discussions with Julien Smith. If you don’t know or follow Julien, you should. He and Chris Brogan are writing their first book, Trust Agents, slated to come out in mid-2009. We chatted on everything from trust to marketing to conspiracy theories.

- Sunrise over the Arizona desert. There’s nothing quite like watching the sun peek out over the horizon, illuminating the landscape. The Arizona desert is beautiful, if hostile.

- Meeting some great new people. I’ve got a pile of business cards to go through, but I had some fantastic and funny conversations with old and new friends alike. Big shout outs to Kati Ryan, Becky Carroll, Bryan Rhoads, Paula Drum, Ace Bailey, Rohit Bhargava, Chris Glenn, Pam Martin, Maly Ly, David Alston, Ron Ploof, Leslie Banks, Sonny Gill, Sharon Philippart, Mandy Clive, Frank Eliason, and the many, many others whose conversations made the conference terrific.

- Being on vacation. I actually booked the MarketingProfs event as vacation time away from the Student Loan Network. It helps me to separate out the vitally important work at SLN from time when I allow myself to just sit back and enjoy an experience. Ironically, I’ve got more potential business partners and business from vacation than I’ve gotten from some financial aid events, and I hope to be able to bring those opportunities to Financial Aid Podcast listeners and readers in the near future.

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Boarding a plane as an economics problem

Posted by Christopher S Penn on Oct 22, 2008 in Technology, Twitter | 11 comments

The airline industry’s boarding and deplaning process is, generally speaking, about as organized as an overweight cattle stampede. If you’ve been on a plane recently, as I’ve been, you know the pain and frustration of watching fellow passengers who seem to pack a couple of freight containers in their carry on, then are surprised when they don’t fit in the overhead compartments, then get belligerent with you, with each other, and with the crew because they packed too damn much.

This is an economics problem. The moment airlines started charging for checked baggage, the boarding and deplaning problem got worse because passengers started carrying EVERYTHING with them. I saw one guy on the flight down to Tampa with his suit pockets bulging with AC adapters and a laptop bag that looked like it would burst. His carry on was so full that the zipper teeth were actually being strained, and it took him a good 15 minutes to sit down finally – thankfully not in my row. His fellow passengers were undoubtedly moments away from demonstrating creative uses of portable electronics and body cavities.

So how do you fix this?

If the airlines wanted to speed up boarding and departure times and still make margins, they’d reverse the charges – charge for carry-ons and make checked luggage free. Imagine if you incurred a $25 or $50 charge for each item larger than one cubic foot, with a simple plexiglas box at check-in. Fits in the box? Free. Doesn’t fit? You get charged.

There would be a side benefit to this as well. Lines at security would move MUCH faster. Imagine if the TSA only had to screen one bag per person. At most, you’d have maybe two items per person if a piece of portable electronic gear was involved.

Shorter, faster moving lines at security. Shorter, faster moving lines in the aisle of your aircraft as you get on and off your plane. Passengers with connections would be more likely to make the connections. Fewer concussions when the Druish Princess’ industry hair dryer can’t bean someone on the skull opening an overhead compartment.

All through the miracle of economics.

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