Monday, February 29, 2016

Making Personalized Marketing Work

Marketing

Making Personalized Marketing Work

February 29, 2016

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Let’s face it — U.S. marketers spent nearly $60 billion in 2015 on digital ads, but the industry doesn’t do a great job connecting people with products they want. According to Christophe Primault, CEO of GetApp, just 10% of consumers find what they’re looking for when interacting with online content.
The key to relevant messaging lies with data, but the challenge is no longer collecting it. Each day, we create 2.5 quintillion bytes of data. Today’s challenge is using data to deliver customers more contextual, personalized impressions.
Imagine a world where programs execute optimized, data-driven campaigns tailored to each consumer. No longer will “audience” refer to nebulous demographic swaths. Soon, every digital ad you see will be tailored to a very specific audience — you.
The Silicon Valley giants that gave us social networks, smartphones, and apps have realized the power of those tools to capture the customer data required for hypertargeted marketing.
Twitter, for example, recently launched Brand Hub, an analytics tool for large advertisers and medium-sized companies. It enables businesses to monitor brand-related tweets, measure their share of conversations relative to competitors, and automatically classify customers’ tweets.

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While marketers want to track customers’ brand sentiments on social media, the tool’s real power is that it enables companies to hypertarget by viewing top influencers in the conversation. Brand Hub lists phrases being tweeted and estimates brand loyalty implied by tweets, enabling marketers to personalize messaging according to users’ online behavior.
If your company isn’t eligible for Twitter’s Brand Hub, don’t fear. There are other techniques your company can use to make your marketing more personalized.
1. Get (more) social. Once you’ve qualified a high-quality lead, it’s tempting to make the sale and move on. But don’t view a high-value customer as the end game. Instead, realize he’s the tip of a valuable iceberg: his social networks.
If you were a professional photographer, you’d consider a woman searching for wedding photographers to be a target customer. The key is to step back and look at her family and friends, too.
First, offer discounts to encourage her to like or follow your brand on social media. Once you can view the customer’s profile, investigate her online connections. Are her friends getting married? Would family members want to take a family portrait? Contact connections and — this is key — mention your shared connection to provide social proof. Simply mentioning a mutual connection can increase conversions by up to 468%.
2. Try account-based marketing software. ABM software is another effective way to hypertarget marketing efforts. ABM treats accounts as separate marketing opportunities and tailors digital messaging accordingly. For example, my company uses ABM to deliver personalized ads based on search queries. Somebody who searches “land contract” will be targeted with a message reading, “Create your land contract today.”
3. Consider the bigger picture. This is all about critical thinking. Let’s say a consumer searched “calculus textbooks” before leaving Amazon. Rather than remarketing those textbooks to the customer – usually by showing him ads for them all over the web – Amazon might instead assume he’d bought them elsewhere, and instead consider complementary products like graphing calculators or tutoring guides.
Spotify personalizes ads based on consumers’ interests and demographic data. If somebody listens to a “Morning Run” playlist, Spotify might deliver ads for running shoes or athletic apparel. By monitoring a person’s Spotify activity, the streaming service can categorize leads with great specificity: cat owners aged 40 to 45 in a big city; beer drinkers in Kansas; young, African-American men who bicycle.
4. Use geo-targeting. Nearly two-thirds of American adults now own smartphones. As a result, brands can tap into users’ locations to market everything from nearby fast food to industry-specific software.
Geo-targeting is particularly useful for industry conferences, a concentrated source of leads. If you can’t attend, use geo-targeting to market to attendees without leaving your office. Buy mobile ads in the city — or in a specific block — where a conference is held. Then, use ABM software to tailor messages for each lead.
At my company, we create ads based on leads’ IP addresses. To market lease agreements, for instance, we consider a user’s city (e.g., “Create your Phoenix lease agreement!”). We further adjust messaging based on time of day and seasonality.
It’s incredible how far marketing has come in recent decades. Not long ago, marketers would buy a newspaper ad or billboard, then hope for the best.
Today, we can’t predict exactly who will buy what and when, but we’re getting closer. The industry has begun a radical transformation — one where marketing dollars will be better spent, ads will speak directly to us, and brands will intuit our every need.

Sathvik Tantry is the co-founder of FormSwift, a SaaS platform helping organizations go paperless. FormSwift’s tools allow businesses and individuals to create, edit, sign, and collaborate on documents and workflows in the cloud, eliminating unnecessary printing, faxing, and snail mail.

Powerful People Underperform When They Work Together

Collaboration

Powerful People Underperform When They Work Together

February 24, 2016
















        
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      All too commonly, we see groups of leaders fail to accomplish their goals — legislators who cannot agree on a bill, heads of state who cannot broker meaningful peace deals, or boards of directors who make disastrous decisions for their companies. Why do powerful people, when working together, fail as often as they do?
      This question is particularly vexing because researchers have long found power to boost individual performance in a variety of ways. When people work alone, feeling powerful helps them process information more effectively, think more creatively, and focus for longer stretches of time. If power enhances individual performance, then by extension one would assume that groups comprising high-power individuals would perform particularly well. But our research found the opposite: power hampers the ability of leaders to work with other leaders.
      In a series of experiments, we brought more than a thousand participants — students and executives — into our laboratory and videotaped their behavior as they worked on a variety of tasks on their own or in groups. The tasks were designed to mimic those that leaders might face in their day-to-day work: some tasks tested creativity and persistence while others tested decision-making and the ability to reach agreement in complex negotiations.
      In one experiment, we randomly assigned students to the roles of either a leader, worker, or a control condition. In the first phase of the experiment, each leader was given power over a worker — evaluating the worker’s performance and deciding how much money the worker would receive for completing a task. Control participants simply worked together as peers with equal power. In the next phase of the experiment, we reorganized participants into groups of three and had them work on a creativity task in which they designed a new product. Leaders worked with leaders, workers with workers, and control participants with other control participants. Which groups were the most creative? Independent judges rated groups of leaders to be the least creative of all groups. Their product ideas were the least innovative and the most uninspired. Particularly striking is that this effect emerged even though power makes people more creative when working alone.
      This pattern emerged consistently across studies.  When more powerful individuals worked alone or on tasks that required less coordination with others, they performed better than anyone else; but when they worked together on tasks that required more coordination with others, those same powerful individuals performed worse than others.
      In another study, we brought executives into the laboratory and assigned them to groups of four, based on their actual power in their organization. The four most powerful executives were assigned to the first group, the next four most powerful executives to the second group, and so on. This time we had the executives take part in a negotiation where they were tasked with reaching agreement on which of four candidates should be hired for a senior management position. Again, we found that groups of the most powerful executives underperformed relative to groups of less powerful executives: only 46% of groups comprising the most powerful executives reached agreement. In contrast 86% of groups comprising the least powerful executives reached agreement.
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      Why did groups of leaders fail so consistently? Videotapes of the group members’ interactions revealed some fascinating answers. Across studies, groups of leaders performed worse in part because their members fought over who should have higher status than others in the group — who should get to call the shots, who should have more influence over the group’s decisions, and who should command more respect than others. In essence, leaders fought over who should be “top dog” in the group, and this conflict over status harmed their ability to work together effectively.
      Videotapes also showed that groups of leaders were less focused on the task and shared information less effectively with each other than did members of other groups. Again, this pattern is particularly ironic because power tends to make people more task-focused and efficient when working on tasks alone. When working together therefore, leaders’ status concerns — be they jockeying for position or avoiding the potential loss of face that might result from sharing ideas that could be judged harshly — appears to distract them from the task at hand.
      So while the possession and experience of power can make leaders more capable than others on individual tasks, that same power appears to undermine their ability to get along and work with other leaders on collaborative tasks. Interaction among leaders who are accustomed to possessing power is vulnerable to conflict and miscommunication, which undermines their collective performance.


      Angus Hildreth is a doctoral candidate in the Management of Organizations Group at the Haas School of Business, University of California, Berkeley.


      Cameron Anderson is the Lorraine Tyson Mitchell Chair in Leadership & Communication II at the Haas School of Business, University of California, Berkeley.

      The Very First Mistake Most Startup Founders Make




      Founders

      The Very First Mistake Most Startup Founders Make

      February 23, 2016

          



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      This article was updated on February 25.
      Founders face a wide range of decisions when building their startups: market decisions, product decisions, financing decisions, and many more. The temptation is to prioritize these choices over decisions about how to structure their own founding teams. That’s understandable, but perilous. Our research, forthcoming in Management Science, identifies one of those important pitfalls: founder equity splits, i.e., the way founders allocate the ownership amongst themselves when starting their company.
      Since 2008, we have studied the equity splits adopted by over 3,700 founders from over 1,300 startups in the U.S. and Canada. This builds on Noam’s work over the last fifteen years, which has shown that even the best of ideas can falter when the founding team neglects to carefully consider early decisions about the team: the relationships, roles, and rewards that will make the founders a winning team.
      It is said that a team has succeeded at splitting the equity if all of the cofounders are equally unhappy. Unfortunately, founder unhappiness tends to get even worse with hindsight; the percentage of founders who say they are unhappy with their equity split increases by 2.5x as their startups mature. Increasing discontent within the founding team is a prime indicator that destructive turnover may be on the horizon. Exhibit A: Facebook. As memorialized in the movie The Social Network, Mark Zuckerberg’s initial equity split with Eduardo Saverin went sour as the company evolved. Mark’s attempt to reclaim Eduardo’s equity landed him in court—maybe good for winning Academy Awards, but not good for business, let alone personal relationships.
      When and How to Split Founder Equity
      Different teams have different ways of splitting the equity: some do it up-front, others wait to get to know each other; some go through a careful negotiation process, others are quick to shake hands and get on with it. Most important, some divide the equity equally amongst all founders, others come to the conclusion that the fair outcome is actually an uneven split that reflects differences among founders.
      Robin Chase, cofounder of Zipcar, a car-sharing company, had heard a horror story from a friend about how the negotiation over founder equity had derailed the friend’s startup. Eager to avoid that outcome, Robin proposed to her cofounder a 50/50 split at their very first meeting, just as they were getting to know each other professionally. The cofounders quickly shook hands and accepted the equal split. Robin breathed a sigh of relief, they had avoided the high tensions that often accompany an equity-split negotiation.

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      At Smartix, Inc., which created a smart-ticketing system for sports venues, the founders adopted a very different model for splitting the equity. The founding team believed that “it’s best to delay [the equity split] because things are still unknown and changing.” When they finally split the equity, they took a very deliberate approach, fearing the effects that might emerge if any founder felt that the equity-split process was unfair. In their dialogue, the team delved into each founder’s past contributions, outside opportunities, preferences, and anticipated future contributions. They decided to split the equity unequally, with the founder-CEO receiving more than twice the stake of the cofounder with the lowest stake.
      When founders are splitting the equity early in their company’s life, they face the heights of uncertainty — about their business strategy and business model, about their eventual roles within the team, about whether each founder will be fully committed to the startup, and about many more unknowns that will become clearer as they get to know each other. Things are even more uncertain for cofounders who have never worked together. Bypassing a serious dialogue about what each of the founders wants or deserves might be easier in the short-term, but is unlikely to be the right thing for the long-term health of the company.
      Dive In or Take Time to Discover?
      Robin Chase of Zipcar soon became very disillusioned with her “quick handshake” decision. She had never worked with her cofounder before, and had made some bold assumptions about how well they would work together, whose skills would be most valuable, and what the level of commitment would be. She threw herself into building the startup, crafting its business plan, and going parking lot to parking lot, looking for those precious parking spots that her company so desperately needed. Her cofounder? She didn’t even quit her day job, and contributed from the sidelines, at best. Robin soon came to realize the perils of that quick handshake. Her rushed negotiation had compromised her team’s longer-term effectiveness by causing her “a huge amount of angst over the next year and a half.”
      Our research sheds light on what Robin learned the hard way. We look at the amount of time founding teams spend discussing their equity splits, and find statistically significant differences between teams who split quickly – neglecting to have a serious dialogue about personal uncertainties and expected contributions – and those who have a lengthier and more robust dialogue. Robin rushed through that discussion, forfeiting the chance to discover what made her cofounder tick, whether her cofounder was enjoying her existing job, whether she was even willing to join Zipcar full time, and so on. In our data we find that those teams that negotiate longer are more likely to decide on an unequal split: the harder you look, the more likely you are to discover important differences. More generally, we argue that if cofounders haven’t learned something surprising about each other from their dialogue, they probably haven’t engaged in a serious enough discussion yet.
      The Perils of Family
      Our data also indicate that splitting founder equity well between family members is particularly challenging. Cofounders who are relatives usually believe that they already know each other intimately and therefore don’t have much to discover about each other. However, we often act very differently at home than we do at the office, and also very differently under the extreme stresses that accompany startup life. If you’ve never cofounded together, it’s likely that you will be surprised by how your relative acts as a cofounder, often in negative ways. In short, relatives bypass detailed founder discussions at their peril, yet they are statistically more likely to do so.
      Equity splits are a microcosm that beautifully reflect this. In our analyses, we find that founding teams that include relatives spent significantly less time negotiating equity splits. They were also much more likely to split the equity equally. Indeed, our research suggests that many founding teams care about displaying outwardly visible equality: not only does everyone gets the same equity share, everyone also gets exactly the same salary. This way no one can say afterwards that it wasn’t “fair.” This logic frequently trumps the alternative logic that a “fair” split should take into account that different founders contribute different skills, spend different amounts of time on the venture, or give up different job opportunities.
      Equity Splits Have Longer-Term Impacts
      Founders tend to think “our equity split is just between us; it doesn’t affect anyone else.” However, that “first deal” between founders could be a first sign of what troubles lie ahead. What do investors make of teams that split the equity equally? Our data suggest that they are less than thrilled. Even after statistically controlling for a lot of factors, our data still suggest the same basic message: companies that have equal splits have more difficulty raising outside finance, especially venture capital. Venture capitalists could obviously tell the founders to come up with a different equity split, but that causes a lot of strife and heightens cofounder turmoil and turnover. Given that venture capitalists invest in less than one out of every hundred companies that come across their desk, they are looking for reasons to say no. An equal split can send worrisome signals about the team’s ability to negotiate with others and to deal with difficult issues themselves. Interestingly, our research suggests that equal splits are more a symptom than the cause of trouble. It is not the equal split per se that turns off the investors, it is that equal splits are a symptom of bigger issues with the company.
      Go Organic
      Robin Chase’s painfully-learned advice: Adopt a “more organic” agreement than the static one typically adopted by founders. Vesting, in which each founder has to earn his or her equity stake by remaining involved in the startup or by achieving pre-defined milestones, is one way to achieve the dynamic approach advocated by Robin. Yet, for founders’ initial equity splits, such agreements are still the exception rather than the rule because there are many barriers to having the difficult conversation about adopting such mechanisms.
      Essentially, such agreements are the equivalent of a newly engaged couple grappling with adopting a pre-nuptial agreement. Despite knowing about the high rate of divorce among married couples, we can’t bring ourselves to discuss the adoption of pre-nups with our fiancés. The same goes for the discussion of a “pre-nup” within a founding team. Setting up an agreement up front that outlines negative scenarios that might occur in the future, with corresponding actions to help avoid them, could help founders avoid headaches and increase startups’ chances of success.
      This article has been corrected to clarify the early roles of the Zipcar founders.

      Noam Wasserman, a long-time Harvard Business School professor and author of the bestseller The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, this summer will become the founding director of the new Founder Central initiative at the University of Southern California.

      Thomas Hellmann is the Professor of Entrepreneurship and Innovation at the Saïd School of Business, University of Oxford, the Academic Director of its Entrepreneurship Centre, and a long-time researcher and teacher of entrepreneurship and entrepreneurial finance.

      This article is about FOUNDERS

      How To Be Your Most Productive On Planes, Trains, And Automobiles

      4 minute read

      How To Be Your Most Productive On Planes, Trains, And Automobiles

      An ex-Googler and a former Bain consultant reveal how they leverage hectic travel schedules to help build their successful jewelry company.

      [Photo: Flickr user Janaina C. Falkiewicz]
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      Matt Nichols and Jon Blotner travel a lot for work. In their prior jobs (at Google and Bain & Company, respectively), both got into the habit of working as efficiently as possible while on the road. Now that the two work together at the jewelry company Gemvara, where Nichols is CEO and Blotner is president, they’ve honed an even finer science of which types of work activities best suit the particular circumstances of their travel.
      Gemvara CEO Matt Nichols and president Jon Blotner
      "We’re able to utilize different geographies and different modes of travel to kind of change the way we think about things," says Nichols. Want to work smarter in transit? Check out Nichols's and Blotner’s tips below:

      The Commuter Train

      Both Nichols and Blotner live in Wellesley, a 35-minute train ride out of Boston. Most nights, they go home on the same train together. It’s not a convenient place to have a laptop open, so they won’t do traditional work there. Instead, they’ll tend to use that time to brainstorm big new ideas; the change of scenery helps. But most of all, it’s the duration that suits a blue-sky session: "Thirty-five minutes is long enough to have a good discussion about something, but not so long that you’re thinking about all the reasons why it might not work," says Nichols.
      Adds Blotner: "You think about the idea, you let it marinate overnight. If you’re still excited about it the next morning, then you know it’s something you want to dive into." Two of their bigger ideas—Gemma Gray, a lower-priced line of jewelry, and Sequel, a business focused on resetting pre-owned jewelry—were hatched on these commuter trains.
      Photo: Flickr user Loco Steve

      The Amtrak Business Trip

      Nichols and Blotner make semi-frequent trips from Boston to New York on Amtrak. It’s a 3.5-hour journey, which they find is an optimal amount of time to flesh out an idea, says Blotner. Something about being in transit for that length of time discourages multitasking, and encourages a deep dive on a single idea. So they’ll take an idea like the resetting business Sequel and begin to scrutinize it. What are the hypotheses that they need to test? What might their target market be?
      The latter question answered itself on a recent Amtrak journey. As they hashed out some questions about Sequel, a voice behind them said, "That’s a great idea!" The woman in the seat behind them, it turned out, had plenty of family jewelry herself that she needed to have reset.
      There’s something about the rhythm of those 3.5-hour journeys (or seven hours roundtrip), so much so that occasionally Nichols or Blotner finds themselves seeking excuses to get to New York. "We joke that we go there for meetings, but we’d make the trip even if we didn’t have the meeting," says Nichols. "I’ve gone to New York just for one meeting, partially for the meeting, partially just for those seven hours." Those moments on the train "might be some of our most productive moments," concurs Blotner.
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      Photo: Flickr user Cheryl

      Airports And Flights

      If you’re trying to maximize productivity during air travel, say Blotner and Nichols, you need to think differently about pre-boarding and in-flight.
      The time between security and boarding can itself be extremely productive, they find. Blotner has found himself in a kind of Zen state amidst the hubbub of airports. "You’re sitting in the lobby of an airport talking and watching the people, and there’s a sort of white noise and a lot of energy, but it allows you to focus." They make a habit of showing up for flights three hours in advance for this reason.
      When on the plane, they might improvise a work mode based on their situation. Are they sitting together, or apart? Is there in-flight WiFi, or not? Most often, though, they find that a flight is time to focus on individual projects. If they’re more than a seat apart and there’s WiFi, they’ll communicate exclusively over email—even though they’re on the same plane.
      There’s also a need to remember the old adage about loose lips when in flight. If they’re headed to a small town to meet with a potential partner that’s a huge employer in that town, there’s a likelihood that someone who works for that company may be within earshot. Better, then, to not talk competitive secrets.
      Photo: Flickr user Jason Cordis

      Cars, Taxis, Ubers

      Think a car ride is a chance to grab some shut-eye or daydream? Think again! On a recent trip to meet a partner in New England, Nichols drove while Blotner cracked his laptop and pulled together a presentation.
      Nichols and Blotner knew they had hired well when they found that a senior member of their team thinking strategically about car options recently. Several team members were at a meeting with a branding agency roughly 20 minutes by car from their office. When the meeting ended, that senior team member had ordered an UberSUV, knowing well that the best way to keep the creative energy flowing was to get everyone in the same vehicle for those 20 minutes of transit. "If we’d gone our own ways and had a 30-minute gap, we’d never have been able to keep the momentum and excitement coming out of that meeting," says Nichols.

      Related: Your Perfect Productive Day

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      A Robot That Has Fun at Telemarketers’ Expense

      Fashion & Style

      A Robot That Has Fun at Telemarketers’ Expense

      Photo
      Credit Ulla Puggaard
      Roger Anderson may not seem like a superhero. But to many, he has become one.
      By day, Mr. Anderson is a consultant who works on phone systems, setting up phone lines for companies and the kind of networks that ask you to press 1 for this, 2 for that. He loves telephones. When he’s on vacation, he visits places like the Museum of Communications in Seattle, where he takes selfies next to old telephones wires. (His wife even made him a little hat embroidered with telephones.)
      But by night, he wages battles against evil telemarketers, tweaking and honing a robot that can talk endlessly to telemarketers, wasting their time so they don’t have to waste yours.
      It all started a few years ago, when a telemarketer called Mr. Anderson with a pitch, and rather than talk to the sales guy, he handed the phone to his young son. The telemarketer cursed at the little boy. Enough was enough.
      Average people harassed by telemarketers do not have many options. They may try to block callers by painstakingly entering each number into their smartphone’s block list, signing up for VoIP phone services that offer spam call filters, or downloading apps like Truecaller. There is also a national Do Not Call Registry, but many calls still get through.
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      Mr. Anderson, however, is no ordinary telephone user, so he decided to take a crack at solving the problem in a new way.
      Enter the Jolly Roger Telephone Company. Whenever Mr. Anderson hears from a telemarketer, he patches the caller through to his robot, puts his phone on mute and lets his bot do the talking.
      While the simple robot does not possess anything near artificial intelligence, it does understand speech patterns and inflections, so it can monitor what the telemarketer is saying, and then do its best to try to keep the person on the end of the line engaged.
      Often the robot just has a little fun. Using recorded lines spoken by Mr. Anderson, it may say the following to the telemarketer: “I just woke up from a nap, I took some medicine and I’m really groggy. Can you go a little slower?” Sometimes it interrupts the telemarketer to ask questions. “Do you drink coffee?” or “You sound like someone I went to high school with.”
      The idea is to keep the telemarketer on the call for as long as possible. The longer the conversation goes on, the more eccentric the robot becomes. In one sequence, the robot tells the telemarketer that a bee landed on his arm, and asks the telemarketer to keep talking as he focuses on the bee.
      After seeing that the service worked, Mr. Anderson made it freely available to anyone; it works with landlines (with conference call or three-way calling service) and cellphones. To send telemarketing calls to the robot, add the phone number 214-666-4321 to your address book. Then, the next time you get a call from a telemarketer, patch the number in, merge the calls and put your phone on mute while the robot does the talking.
      For Mr. Anderson, this service isn’t just about wasting the time of people who want to waste our time. He sees his service as a way to help ordinary people, especially older Americans, from being defrauded.
      According to reports from industry groups and companies trying to thwart telemarketers, the telemarketing industry wastes tens of billions of dollars a year in time. The Federal Trade Commission said that in 2015 it received 3.6 million complaints about unwanted telemarketer calls. And the National Association of Attorneys General says that millions of Americans are defrauded by illicit telemarketers every year.
      “It’s really scary to hear how these telemarketers are trying to scam people,” Mr. Anderson said. “There really is no way to protect yourself. You can not answer the phone, but they’re going to call you again tomorrow and the day after that.”
      And people are eager to use the robot. This month, after Gizmodo, the technology blog, wrote about the Jolly Roger Telephone Company, the robot’s number has been ringing off the hook. There have been over 70,000 calls to the bot, Mr. Anderson said, most lasting for three or four minutes.
      But recently, one of the calls went for 22 minutes. It was from a cable company that called to try to get a customer to sign up for bigger, better, faster cable.
      “Whenever you ask the robot a question, it always replies ‘yes,’” Mr. Anderson said. “So it kept signing it up for all the sports packages and high-speed services that the cable telemarketer offered.”
      Mr. Anderson feels as if he’s truly helping people with his robot. He’s spending nights and weekends perfecting it. (His young son is even helping to monitor the calls that come into the phone line.) And he recently started a Kickstarter campaign with the hope of perfecting the bot. He’s also trying the cover the cost of all those incoming calls.
      But his ultimate goal is bigger.
      “My dream is to disrupt the autodialers,” he said. These are the robocallers that can dial 10,000 phone numbers a day and are able to detect if an answering service or human being answers the call.
      In other words, Mr. Anderson wants his robot to do battle against other robots. That sounds like a superhero to me.