This morning, I read a great post by Alex Payne, an entrepreneur/technologist from Portland. He not only touches on how today’s technology journalism has distorted our view of business and start-ups, but on the need for a new type of terminology to describe businesses that rely on technology for disruption vs. businesses that disrupt technology. The prior aren’t really technology companies, they are shoe companies, diaper companies, etc.

Best of all, he quotes the Fight Club: “Sticking feathers up your butt doesn’t make you a chicken.”  Great line.

This reasoning is important not just for journalists, but for  investors, venture capitalists, and small business owners. For instance, what does a VC that invests in technology disruption, and is staffed by former technologists, know about the Razor business?

It also relates to how small business owners should approach technology in their businesses, whether it’s IT, new SaaS software, or social media. For most of us, we should avoid confusing our businesses for technology businesses. If you’re in marketing, don’t forget that while you may be using technology in new ways to disrupt your field, your clients don’t come to you for technology, they come to you for your marketing expertise.  Even though I’m very close to technology every day, I always remind myself and my colleagues that we’re not a technology company, we’re in the business of helping people.

While the massive disruptions in technology over the last ten years have made it easier than ever to start or run a technology infrastructure, I don’t think it has made it any easier to start or run a business. This got me thinking, does technology make small businesses lose focus on the true value to their clients? What do you think?

Dropbox, Box, Jungledisk, and other cloud-sync services are everywhere. We love them, but using them carries a serious  risk, and it’s not what you think.

Cloud-sync services all work in essentially the same way. They copy a subset of the files on your computer to their servers (“the Cloud”) and then sync any changes among your computer, the Cloud,  and any other devices that you specify. Cloud-sync services also allow you to share folders with others using their service.

Many home and small businesses use Cloud-sync services for storing everything from personal photos to sensitive customer data. These services are all advertised as secure, and use security terms such as “256-bit SSL” and “256-bit AES encryption” on their web sites. The truth is, they are secure, but only after the files leave your computer.

When you create a Dropbox (or any Cloud-sync service) folder on your computer and put files into it, you may be under the impression that those files are immediately safe. However, if your computer is like 99% of computers out there, your files are not encrypted on your hard drive. That means that if you lose your laptop, all the files you’ve placed in Dropbox can be seen by anyone who finds your computer. This security hole is compounded if you share your Dropbox folders with others.

This is why we strongly recommend that all our small business clients, especially those that store sensitive data on their computers, encrypt their computer hard drives. This is different than simply using a boot password and requires special software. Next week, we’ll have a post on the different encryption software products, and which we recommend. Until then, you can check out products such as Symantec PGP, Microsoft BitLocker, and the popular shareware product TrueCrypt.

Approximately three years ago, we changed into a managed services provider. This means that we provide a technology support package with guaranteed response times to businesses in exchange for a monthly fee. This is different than the traditional “break/fix” model of technology support, in which a customer calls you when something is broken and you charge them time and materials fees to fix the problem. It’s been a great evolution for us and for our customers.

However, we still had a small number of customers that had not converted to one of our managed service plans. We kept serving them out of a sense of loyalty, out of hope that they would change their minds, and frankly, because we have a hard time parting with the extra revenue.

These customers, however, often demanded the same services and response times that we gave our regular customers. Too often, we responded by using resources that should have been dedicated to our managed services clients.

A few months ago, we finally came to our senses. We realized that what we were doing was not fair to our clients and not fair to our company and employees. We called these customers and told them we’d love to keep them, but they would need to join one of our plans. A few said yes, many said no, and a few tried to convince us that we were making a mistake.

Now that the dust has settled, we don’t regret our decision at all. While we did lose a little revenue, the change has allowed us to refocus on the customers (and processes) that value our services most.

If you have the luxury of saying no to certain customers that don’t fit your business model, you should consider it. It may hurt in the short run, but will pay off in the long run.

Oh, so you’re interested in how Bieber celebrated his 18th birthday?

Really? You listen to Katy Perry?

Last fall Facebook added what they call “frictionless sharing“. Under this feature, apps are able to automatically share things you do on them.

For example, if you accidentally install Facebook’s “Yahoo!” app, which can happen very easily, any article that Yahoo! thinks you read shows up on your Facebook wall with the message:

Rafi read about Jennifer Aniston’s Temper Tantrum on Yahoo!

Oh, and guess what? You can’t turn off fricti0nless sharing.

So, what should you do? You can’t turn off frictionless sharing. All you can do is uninstall the app from your Facebook account. To do this, go to your Facebook page, click on the little down-arrow at the top right of the screen and select “Privacy Setting”. On that page, select “Apps and Websites”. There, you can see what apps you have installed and remove the ones you don’t want.

All this of course assumes you don’t want everyone to know about your Bieber obsession.

You can read more about Facebook’s privacy policies here.

Yesterday, the news broke that some secure Internet transactions are actually easy to crack. This type of revelation can have a devastating effect on our confidence in Internet commerce, although I doubt this one will much impact.

The authors of the revealing study found a flaw in the random number generation that is used to encrypt much Internet data. This is not the first time that we’ve discovered that the numbers our computers generate aren’t really random. Why?

A very good random number generator is a physical one, for example, rolling a die. Unfortunately, rolling a die takes a long time, and that makes it a bit impractical for the billions of random numbers we need every day for everything from online gaming to Internet commerce.

Instead, we use so-called pseudo-random number generators. These are computer programs that generate random numbers based on complex mathematical formulas that can be “seeded” by physical events (the weather patterns, the number of letters in the New York Times each day, etc.). The problem is that we sometimes find flaws in these mathematical formulas or seeding that make these  random numbers deterministic.

So, how do we find something that is truly random? The truth is, nobody knows the answer. Debates on randomness can devolve (or evolve, depending on how you look at it) into discussions about determinism, quantum theory, and the way the universe works.

Whether or not you believe we’ll ever find true randomness, Our day-to-day needs only require something complex enough so that our current computing power can’t find the flaws. At least for long enough to let me buy my shoes on Zappos safely!

PS: For a cool discussion on randomness, check out random.org.

As a small business owner, I despise the credit card industry. As I’ve written in the past, the charges are ridiculously high for the value of the service (around 2-3% per transaction).

Start-ups have been trying for years to disrupt the credit card industry. Paypal created its own money network that can be tied into your credit card accounts. More recently, Square introduced a merchant service with a flat fee of 2.75%. Other services such as Google Wallet simply store all consumer accounts in one place. None of these really attack the core of the credit card industry because on many transactions, they still pay the credit card company’s interchange fees, which they must pass on to the merchant (me).

Dwolla,  is taking it’s swipe (yuk, yuk) at the heart of the credit card industry. Actually, it’s going after the debit card industry, but I’ll get to that in a minute. To use Dwolla, a consumer must create an account attached to her bank account. The consumer can then make instant payments to merchants that accept Dwolla. The consumer can either manually transfer funds to her Dwolla account (free), or can have it done automatically after each purchase ($3/month) or “borrow” the amount from Dwolla – to be repaid at the end of the billing cycle.

So, who wants Dwolla? For merchants, it’s a slam dunk. Let’s see, should I pay 3% or $0.25 for a transaction?  But for consumers, the picture quickly becomes murky.

• Anyone that wants to borrow and repay over time can’t use Dwolla. It’s the equivalent of a debit card, not a credit card. This fact shrinks Dwolla’s user base considerably.

• Why should consumers pay $3/month for something (a debit card) they can get for free? On the contrary, many banks offer reward for using your debit card.

•  The “we’re safer” argument in Dwolla’s consumer marketing material is misplaced. Consumers are not liable for fraudulent charges on credit cards anyway. Only the Merchant “pays” for these through increased interchange fees. This leads to the next point…

• Are consumers liable for fraudulent charges on Dwolla? What protection do they get? I couldn’t find any answer to this on Dwolla’s site, but these are important points for consumers.

So, can Dwolla really disrupt the industry? As a merchant, I sure hope so. But I know that they have to convince consumers first, and that’s a much harder group to figure out. Dwolla just raised another $5M from Union Square Ventures and others. While that’s encouraging, it seems to me like a very small amount for a company targeting the credit card industry. Maybe not everyone is buying into its model. Stay tuned.

Like many busy people, I keep a running to-do list (I’ve been using Evernote). I have one list for my personal task, and one for my work tasks. The lists never really shrink. It seems that for every “buy new pillows”, there is at least one “give $50 to super for fixing toilet”.

However, I can’t seem to live without it. To me, it serves as a part of the brain that us humans (at least me) have been born without. An area in which we can keep lists of things for months without forgetting them. I need some kind of Faceral Lobe (Facere is latin for “to do”). Maybe in the future we’ll have a chip to add this functionality to our brain, but for right now I need my to-do lists.

So you can imagine my disheartened surprise when I learned from the Harvard Business Review that keeping a to-do list is an exercise in futility. Instead, researchers recommend “Living the Calendar”, which essentially means transferring everything from your to-do list into your calendar to give it a specific deadline and time length.

Personally, I refuse. My to-do lists keep me going, and gives me a sense of control over my life. For most every attack on the to-do list, I’ve got a parry:

To-do lists give us too many choices: True, but isn’t choice one of the things that keeps us happy? If I felt like my days were predetermined by my calendar for months out, I’d blow my brains out.

Items languish on the to-do list: So what? I let them. I’m constantly reading through the list to make sure I’m doing the things that need to get done. What’s the point of paying my taxes three months early when I need to get the car fixed today?

We tend to do the easiest things first: OK, we’re all guilty of this. But I have a mantra which goes “Do The Hardest Things First”. It helps me tackle the most unpleasant tasks before the easy ones.

Lack of commitment devices: But is Google Calendar, or whatever you chose, really a better commitment device? You can just move tasks you don’t want to do to a different day.

So go ahead Mr. HBS, “Live the Calendar”. I’m holding on to my to-do list, and to freewill.

First, a disclaimer. We support the blackout, and are against the SOPA and PIPA bills. Second, we don’t believe that posting out an easy way to see Wikipedia entries somehow circumvents their message. Third, we know that if they didn’t want you to look at all, they could have blacked out the entire site.

1. Open Wikipedia and search for something.

2. Right click on the “Imagine a World..” page and select “view page source”  or “view source” (this works in both IE and Firefox)

3. When viewing the source, click File -> Save, and save the page to your desktop

4. Open the file on your desktop. Bingo, you’ll see the content of your search.

NOTE: You can also deactivate Javascript, which is actually easier

On an afternoon break, I went up to the Starbucks on 21st street to get a fix of a ridiculously expensive “Misto”, otherwise known as coffee with steamed milk.

Across the street, a relatively new place called Greensquare Tavern was giving away free coffee outside. Yes, free.

I took these pictures at the same time. The whole time I was at Starbucks, about 50 people bought coffee. Not one single person took the free coffee across the street. Is that brand power or what?

Yes, you read that correctly.  It’s been recently discovered that a hacker with free tools can get your WPA2 within a few hours. Millions of wireless routers may be vulnerable, including those from Belkin, Buffalo, D-Link, Cisco’s Linksys and Netgear.

How it works: Many routers come with a feature called WPS – Wifi Protected Setup – which is enabled by default. Most people simply ignore the feature. It uses a pin number to make it easy for devices to join a network. Instead of typing in a WPA key, you type in 8 numbers that are on the back of the router.

A flaw in the design of some routers is that after a number of attempts, the router starts transmitting a message indicating whether the first four digits are correct. Also, unlike some devices, the router doesn’t “lock down” after a number of attempts.

For example, say your WPA2 password is “1likemym@c” and your encryption is WPA2 Enterprise. The strength of your password doesn’t matter. When the pin  is guessed correctly though brute force, the router GIVES YOU THE WPA PASSWORD.

Here’s a video of the attack (only 1 minute long): wpscrack vs. TP-Link TL-WR1043ND – Demo

What we’d do about it: The truth is, most people don’t have to worry. The odds that someone will spend hours trying to crack your WPA2 code so they can watch you surf the web is pretty small. If you have a router with WPA2 and are concerned, you can disable the WPS feature through your router’s administrator interface.