Example Business Ideas

Creating Virtual Humans

Here's a business idea I had in 2000 related to creating virtual humans. Ten or more people work under a single human's brand name. It's that simple.

Since time immortal, we've been fascinated with the idea of creating human beings.

We are enthralled with Genesis. Who made us and how did we get here?

We love the story of Frankenstein, in which a mad scientist attempted to create a human being from inert materials.

More recently, in one of my kids' favorite movies, Spy Kids, the bad guys scheme to create robot children that are identical to real-world children but who have super powers and will perform criminal acts at the push of a button.

Who's more enthralled with simulating human life than anyone? Scientists.

The computer geek scientists desperately want to pass the now-famous Turing Test, a challenge that was thrown down by Alan Turing in 1950. To do that, they must develop a computer that is indistinguishable from a human.

Then there's the biotech scientists who are intent on eventually being able to clone humans -- making carbon copies of them from a small piece of genetic material.

Remember that Woody Allen movie, Sleeper? The dictator gets killed and all that's left is his nose. They try to recreate him by using cloning technique on his nose but Woody Allen runs over it with a bulldozer in the nick of time. If you need a laugh, rent that movie!

What Got Me Interested in the Virtual Humans Idea

I've dabbled with playing God a bit myself. A while ago, I co-founded a virtual reality software company that allowed end users to create computer-generated virtual worlds that had all the properties of the real world. At one point, we even toyed with the idea of doing a print ad with God saying "Boy, if I'd had that software, I could have created the world a whole lot quicker" -- we were smart enough not to move that idea forward. That's the last thing I need -- some Unabomber-wannabe sending presents to my house.

My virtual reality days are ancient history now but lately I find myself thinking about creating virtual super-humans again. I think technology and the world have evolved such that you can do it and you can make money doing it.

I'll get to how you do it in a bit but first let's look at the way you make money doing it. The key is to leverage this planet's Celebrity Factor.

The Celebrity Factor

Humans are suckers for celebrities. We worship and adore them. We follow their lead. We shower them with riches.

In the entertainment industry, there are people like Madonna, Julia Roberts, and Brad Pitt. They go from being starving artists early in their career to being rich beyond their wildest dreams. In sports, we have guys like Michael Jordan.

And in business, we have our celebrity CEOs. Guys like Jack Welch and Lou Gerstner, who make tons of money every year.

I have a friend whose father is a celebrity CEO. He worked his way up the ladder to become CEO of one Fortune 500 company. After that, he jumped to senior-level positions at other companies. I tracked his progress and it always seemed that wherever he went he managed to walk away with fifteen million dollars or more after a just few short years.

You might think it's not fair that one celebrity-CEO should be able to make more in one year than a thousand of us mere mortals can make. I wouldn't disagree with you, but, like it or not, it is the way the world works.

What I find interesting and intriguing is that if you could crack the code and figure out how to create a celebrity-CEO, then you could make a lot of money.

If you had an equity stake in the celebrity-CEO that you helped to create, you'd share in his or her rich stock option deals, great salary, and great severance packages. That type of investing might actually return more than traditional venture capital investing ever has.

And the wealth-creation engine is self-perpetuating. Once your celebrity-CEO has the reputation of a Warren Buffet, a Ted Turner, or a Sam Zell, that becomes in effect a super-brand that is as valuable as Pepsi or Nike. It can become a license to print money. With a super-executive on your side, it's easy to raise money for new ventures and easy to achieve financial exits.

That's if you have one super-executive on your side. Imagine if you had a stable of super-executives on your side? They could buy each other's products and services. They could fund each other. They could buy each other's companies. This increases the wealth-generation possibilities exponentially. I'm not advocating anything illegal or unethical. I'm just saying this is how things work in business -- people who know each other do business together and over time, behind closed doors in the boardrooms of America's corporations, they take care of each other.

So how do you create a super-executive and capitalize on the Celebrity Factor? I'll cover that soon but I think it's helpful first to talk about some real-world examples that make the virtual human idea a bit more credible.

Some Real-World Examples of Virtual Humans

Many of the principles that apply to creating a virtual human are based on best practices that many good executives use today.

Let's say that you are an executive that's selling a product or service. Or maybe you're out looking to raise money or form strategic partnerships for your company.

A mediocre executive will generate prospective leads via the bump-into-them method. He might stumble upon an article about a company and decide to call them, extemporaneously making up his pitch once he gets a prospect on the phone. Through this method, he makes five or ten calls a weak and gets mediocre results.

A more talented executive approaches his tasks in a more structured fashion. Before he makes his first call, he recognizes that he needs to create a comprehensive database of prospective leads and prioritize them. He also needs to develop, practice and perfect his pitch before he makes the first call. Once he's created the target database and his pitch, then he starts contacting prospects. He leverages email, snail mail, the fax and the phone. He makes fifty contacts every day. Ideally, over the years, he's built up a reputation in the market such that his reputation precedes him and his calls are returned.

Taking this to the next level, a superior executive recognizes that there are easier ways to do some of these tasks. Here are some of things a superior executive might do:

• Delegate the creation of the prospect database to an assistant;
• Have an assistant research each prospect to identify their "hot buttons";
• Use an assistant or telemarketing force to contact the leads for the first time, pre-sell the concept, and setup an appointment in which the executive closes the deal;
• Leverage a publicist to help establish his reputation, ghost-writing articles for him and securing speaking engagements at industry conferences.

What I'm essentially saying is that some components of a single individual can be outsourced to a great extent.

Superior executives are adept at this skill. They appear to have super-human capabilities but we don't know how much of it is them and how much of it is driven by their helpers.

Consider Flip Filipowski. Flip created PLATINUM Technology and sold it a decade later to Computer Associates for $3.5 billion. Flip acquired my first company and invested in my second company.

After we were acquired and became part of PLATINUM, I noticed that Flip was very responsive to employees. He had 4,000 employees but if I sent Flip an email with my view on a subject, he'd quickly send me back a response. It could be 3:00 AM and I'd send him an email and, more often than not, I'd get a response at 3:30 AM. The fact that he responded so quickly and so enthusiastically always made you feel good.

Flip had this reputation of being this incredible workaholic with great high-level vision and yet intimate knowledge of his company's business. There were other larger-than-life rumors about him -- supposedly he could read some incredible number of words per minute and was incredibly well read.

Based on my exposure to him, I think the guy is on the far right side of the human-talent bell curve so I think there's a lot of truth to his larger-than-life image.

But I always wondered if maybe some of it wasn't hyperbole. Perhaps it was based on good old fashioned kick-ass marketing. Perhaps some of it might not have been outsourced or otherwise leveraged in some way.

I wondered, "How the hell does this guy do it?" I had this vision that maybe it wasn't just Flip, maybe there was a staff of Flips.

Maybe they were quintuplets operating as a single individual. That didn't seem realistic. But a real possibility that occurred to me was on the email front. Maybe Flip had outsourced his email. A lot of times his emails were very terse, such as "Great idea - let me know how things progress" or he'd copy a bunch of people with a "We should look into this."

I never found out the truth but I envisioned his having some assistants who responded with his reply-to address - maybe he never even read the emails himself.

This seems pretty far-fetched. In Flip's case, it probably isn't true because I think the guy is a very talented executive -- not quite what Michael Jordan is to basketball -- maybe more of a Rodman.

But the point is that somebody who is on the right side of the bell curve could potentially be perceived to be, and perform as if, they were much further to the right on the bell curve.

How? By outsourcing themselves.

How It's Done

So how do you create a celebrity-CEO? How do you outsource yourself?

You don't go zap a bunch of dead skin and a brain with electricity or anything crazy like that.

Rather, you take advantage of this world's Labor Arbitrage Factor and the Newest Technology Factor.

The Labor Arbitrage Factor

Labor Arbitrage involves capitalizing on the fact that a talented college graduate in India can be paid $500 per month to do the same work that you'd have to pay somebody $3,000 a month to do in the United States.

And it's not just India. There are extremely talented individuals in the Philippines, Russia, China, etc. who are happy to work for much less than American workers.

I have some experience in this area. Long ago, I ran a 15-person team in the Philippines that worked on U.S. systems projects. They each were paid $5,000 per year in salary. They billed out at $200 per hour -- $400,000 at full utilization. Is there any other way you can think of to get gross margins of 98.75% or even half of that?

I've also competed head-to-head against a software company that was made up of hordes of inexpensive Russian-based computer scientists who were fronted by a small U.S.-based sales and marketing team. For every sharp programmer I hired, they could hire ten sharp programmers. Talk about tough competition!!

So, as you can see, I'm not talking about setting up sweat shops, or anything scummy and exploitative like that. White collar labor arbitrage is good for everyone. In India, for example, they get great jobs, learn new skills, and it's a boom to the Indian economy. The US company, in turn, gets great value at a fraction of the cost.

Indeed, over time, it's precisely the fact that people are seeking out labor arbitrage opportunities that should, in theory, eliminate the opportunity for labor arbitrage. Eventually we should get to world parity (although some powerful people want to avoid that because they think it will lower the U.S. standard of living).

But my perspective is that if you don't leverage labor arbitrage, your competitors will. So you have to do it. That means you have to do it if you are a business competing with other businesses.

And, eventually, it will mean you will have to do it if you are an individual competing with other individuals, and you want to win.

See where I'm going with this?

Let's say I make $150,000 a year here in the United States. I take $60,000 of that and I hire ten ultra-sharp guys in India at $5,000 per year each to be my virtual employees. I can live on $90,000 so I can afford to make the investment.

Now, there's eleven of us working as one. I don't tell anybody that I've got ten guys working for me while I sleep, making me look good. That's my little secret.

When it's time for promotions, how are my co-workers going to compete with me and my team? Assuming I'm not a blooming idiot, assuming I've got a certain level of capability and social skills, I think I'm going to get the promotion.

Before too long, I'm making $450,000 a year. I quadruple the salaries of my team in India so they are making $20,000 each, which makes them very happy, and I keep $250,000 for myself. Over time, we expand the virtual team and work to get our collective group into the celebrity-CEO pool, at which point we start making millions each year. Fat city, as they say.

Future WorkForce: Working as a Team

To me, my ideas about leveraging guys in India to be a virtual team that works under a single brand name portend the way the workforce is going to evolve over time.

Look at Barbara Cartland. She wrote 723 novels that sold over 750 million copies. How the heck did she do that? My theory is that some of the most prolific authors are really teams of people working under a single brand name.

Think about J.K. Rowling who wrote the popular Harry Potter books. It's farfetched but how do we know she isn't simply the creation of a bunch of MBA students who built a company designed to write a series of best selling books? Maybe they hired twenty writers to write the books and quietly conducted focus groups with children to see what they liked and what they didn't like. Recognizing that we like the romantic idea of a starving author toiling away in a coffee shop, they packaged up that story with J.K. Rowling playing the lead role and took it to market. Unlikely? Yes. Impossible? No.

You start to see this team selling concept a lot now. My broker friends at DLJ have naturally evolved into team selling because it was more effective. Two guys close the sale, one guy does the research, and another guy generates leads and sets up the sales calls. Previously, they each did all the functions themselves but it became apparent that together they could make more than they could separately so they self-organized as a group, and now on average they each outperform all the others who are still working as individuals. I interacted with my broker for years before I finally realized that he was actually a team of people working under his brand name.

I think working as a team is the future of our white-collar work force. If I start a new company, I won't look for individuals. I will look for a team that has a strong track record. You see that all the time now. For example, a group from Apple leaves en masse to join a startup. That happens because increasingly we recognize that teams of people who have perfected their productivity and their capabilities are way more effective than individuals who are loosely joined together and managed in traditional ways.

New Technology Factor

So how exactly would you create a celebrity-CEO by leveraging a team of smart guys in India?

It requires some good technology. Ideally, you'd write some new code that would implement it perfectly but a lot of the tools are available now that can help. They are surprisingly cheap and guys like me use them all the time.

Let's start with Microsoft Outlook. Here are some interesting things you can do with Outlook.

First, I can setup multiple email accounts (Tools > Accounts), each of which can have a different reply-to address. I have someone who researches leads for me for my business and I've set them up with multiple accounts in Outlook. One account is for their personal email and one account allows them to send emails as if they were coming directly from me. The recipient of an email sent by my researcher cannot distinguish whether I wrote and sent the email or whether my researcher wrote and sent the email. So, in effect I've cloned myself and I've passed the Turing Test. There's no reason I can't have my ten guys in India doing exactly the same thing for me.

You start thinking along these lines and you start to see the potential. If I want to raise my visibility, it's important that I write articles and get them placed in industry publications. I can have my guys in India write the articles and submit them to various publications. I'd also like to be visible in my industry by getting speaking engagements. They can build and work a database of speaking engagements on my behalf. They will send the emails out but it will appear as if they come from me.

Let's say somebody responds to an email sent by one of my clones. Can my clones reply back or do they need to pass the baton to me? As long as it's just email correspondence, there's no need for me to be involved. The clones and I just need to have a good understanding as to how we reply to various things.

One thing I noticed long ago with email correspondence is that I end up typing the same things again and again. To avoid rekeying, I use Outlook signature files. It's a bit of a hack but it works. Basically, I just key the text into a text file and then use the Insert > Signature function to quickly drop frequently-used text into my emails. There's no reason my guys in India can't do the same things, using text that we all agree on. Over time, as we work together closely, I'm sure they will be able to respond to any inquiry exactly the same way I would.

In terms of lead generation, that should be a snap for them. They can research the Internet to find leads I should be calling. For example, I get a daily email from VentureWire that says which companies have received funding. Ideally, every time somebody gets mentioned in that newsletter, I'd be sending them an email introducing myself and congratulating them on their raise. I'd do that myself but there aren't enough hours in the day; with the help of my friends in India, I could do it. Better yet, we could write a program that does it for us.

It's amazing how useful mail merge is if you use it the right way. In Outlook, I can almost instantly send 200 emails to 200 individuals and give each of them the impression that I sat down and wrote the email specifically for them. I get spam emails all the time where it's blatantly obvious that they are mass mailing a lot of people. But I also get emails from people I know that seem to be highly personalized and yet I wonder if they aren't sending a very similar message to quite a few other people.

Much of what I've talked about so far is simply about increasing my personal productivity by using tools and support staff well - helping me to be more productive in delivering messages I've written to people I know. But, there's additional potential in the computers being able to do stuff that I don't even need to know about.

For example, if my contact database includes the birthdays of my contacts, it would be nice if my computer would simply send out messages every day like this one:

Peter,

Just wanted to send you a quick note to wish you a happy birthday.

I hope everything is well with you, Maria, and the kids.

I would love to get together some time and catch up. Call me when you get a chance.

Ken

Does Peter need to know that the computer sent him that message without me doing anything? No. In fact, the worst thing that could happen is that word gets out that you are not really yourself, that you've delegated yourself out to computers and a bunch of guys in India. You don't want people looking behind the curtain to discover that you're not really the wizard you claim to be.

Beyond Outlook, there are other programs that give a glimpse of technology's potential to make me much more productive. For example, I use SpyOnIt's intelligent agents to monitor web sites. For one of my companies -- a PR company -- the agents I've established monitor the PR web pages of companies that I want to sign as clients. If they announce any news, I am immediately notified. I can then send them an email congratulating them on their news and initiate a conversation with them. It gives the impression that I am really on top of the news - in fact, it's my computerized agents that are really on top of the news. Taking it to the next level, I've started to use agents to monitor the internet for stories that mention their competitors. When is a company most inclined to give their existing PR firm the boot and start looking for a new firm? It's when they get a message that says:

Jim,

I saw the attached article in ComputerWorld today and notice that it mentions three of your competitors but you guys didn't get a single mention. Who's handling your PR? If you worked with us, this kind of thing wouldn't happen.

Using SpyOnIt agents has been helpful to me but I'd like to further automate this process. Right now, I get the agent's notification that an article has been written but I still need to sit down and write the email to Jim myself. There's no reason that writing and sending that email to Jim can't be completely automated.

Microsoft's .NET initiative is going to really help enable these types of applications. There's a very powerful technical architecture that allows events (e.g. an article about Jim's competitor) to communicate with computer programs (sans human intervention) and cause them to take an action (sending my email message to Jim). As it evolves, this is going to be very powerful.

Of course, computer programs and my guys in India can't give my speeches for me. They can't go to meetings for me. When it comes to face-to-face time, or even phone calls for that matter, they can't replace me. But if they handle 90% of the stuff that I'd love to do if there were ten of me, that would be huge.

Summary

This has been long-winded and not as well structured as I'd like. I think I will come back to it later and polish it up. There are "diamonds in the rough" with some of these ideas. I'm sure of that.

You can envision a scenario where some of these concepts are packaged up and you could build fundable business plans around them. There's also a strong marketability factor in these ideas -- as mentioned at the very beginning of this piece, augmenting human capabilities via the computer has always held a high level of intrigue. Just as Lotus was able to build an industry by coining the phrase "groupware", I think you could take some of these concepts and build a whole new NEW NEW THING by packaging up personal augmentation software as "i-ware" or something like that - the basic idea being that the computer can start to represent you, do things for you, and basically make you more powerful and effective.

Personally, I do find the whole concept a bit scary. Kurt Vonnegut wrote that book Player Piano in 1952 in which computers become so sophisticated that they basically run everything. The only guys who have jobs are a few guys who maintain the computers. I see that coming. It starts with guys like me leveraging some guys in India and developing software to do various things for us. Eventually, the computers start doing everything for everyone.

For myself, I don't necessarily want celebrity-CEO status. Being on center stage can be a pain in the ass - even in the corporate world, it creates a ton of pressure and there is the ongoing pressure of performance and the equivalent of a papperazi out there that bugs the crap out of you. My preference would be to find a handful of guys and gals who do want it and reap the rewards of affiliation. I've always been a COO behind the scenes and I am happy to be the COO for my celebrity-CEOs.

And of course I still want to be highly leveraged in terms of my own personal productivity. What I'd like to have is a mini-me, a virtual me, that allows me personally to scale

In other words, if you look at hotshot CEOs who get paid $50 million a year, of course they have a great track record (sometimes as a result of a random walk effect) but they also have a great supporting cast beneath them. Part of the role of that team is to make the CEO look good and to free the CEO up to spend time on the most important decisions. In a minimalist version of this, the CEO has an executive assistant who screens his calls and his emails and sets up appointments for him. This is often expanded to include a corporate staff (or the use of outside consultants such as McKinsey or i-bankers) that help the CEO to make good decisions. In addition, there's a PR team that promotes the CEO as an industry thought leader -- they get him speaking engagements, they identify talking points for him, and in some cases they write the speeches for him and he may just be a charismatic talking head to a certain extent.

So, my thinking is that a small group of people would do well to create such a brand in one person. There has to be a deal in place where everyone benefits. If the CEO makes $50 million in a year, maybe he keeps $10 million and the rest goes to his cohorts.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities

Contributors

Business Glossary