Friday, July 29, 2005

I Don't Get It

The final passage of the Energy Bill extends Daylight Savings by 4 weeks instead of 8 weeks. I prefer the longer version - or even a permanent DLS - but will take what I can get. The news article discussing the bill had this:
Farmers said the change would adversely affect livestock.

DLS is nothing more than a mass rescheduling of the day. Think if it as working 8-4 instead of 9-5. School goes from 7-2 instead of 8-3. So if you are retired and don't work, don't have kids to prepare for school, own a Tivo, and shop at stores that are open 24/7 (or on-line), DLS has little affect on your life.

Farmers - and cows - set their own hours. Except for occasional market events like auctions and the like, how does DLS have any change on livestock? The farmer can decide when he is going out to the barn and milk. Can someone out there fill me in, or is this just a silly argument?

Thursday, July 28, 2005

The Business Experiment Moves Forward

The Business Experiment is currently casting its tenth and final vote on the "first round" of ideas. Each vote had around five business ideas, so it's been pretty interesting parsing and selecting what business is "best" from only a high-level description. But that is what the first phase of the experiment is all about. The theory is that a group - as a whole - will make a better decision based on a high-level overview than going into a deep dive analyses on all 50 ideas and then discussing each one at length.

Ideas that pass the first round, however, will have a more detailed analysis and discussion for the second round of voting, now that we have supposedly separated the wheat from the chaff. I should note that of five votes tallied so far, none of my first picks made it out of the first round. Draw your own conclusions on either me or the "crowd".

One interesting thing that has come up from the voting was an observation by Rob, who is driving the experiment:
Has anyone watched the votes at several different times during the day? It seems that, with the exception of one poll, once we get 40-50 votes, the results stay at about the same ratios.

I suggested this is a result of sample theory - which is the principle used in polling. You don't need to get a "vote" from every single person in a group to get an accurate representation of what a group wants, you only need to get a large enough sample - the result will be the same.

The interesting issue this brings up about "Wisdom of Crowds" decision making is that the whole "group" isn't needed to make a decision, only a representative sample. So what does that say about the concept in general and how you put it to work? It's a topic that a core group of us in the Experiment are now kicking around.

Monday, July 25, 2005

Match the Mission Statement

I have volunteered to be the team leader for writing the business plan over at The Business Experiment. The business hasn't been selected - it is being voted on over the next week - but I am getting things set up to get the plan written once the business is selected.

One question that came in on the forum today was if a "mission statement" is included in a business plan. I think this term needs to be defined before an answer can be given.

The "goal" of a business is definitely included in a business plan. The plan states the product or service, the revenue it will generate, the profits will it return, and how the enterprise is going to do this. This is what a business plan is all about: telling investors what your goal is and how you're going to achieve it.

But "mission statement" usually refers to the generic-sounding, warm-and-fuzzy statements that HR departments put into customer conference rooms. 90% of the ones I have seen are worthless, although that leaves a few out there are pretty good. But those 90% have given Mission Statements such a bad reputation that there is a random mission statement generator that puts out stuff that is as good as anything out there.

But I thought I would look into this a little further and check into some mission statements of some large, well-known companies to see if bigger meant better. After all, a large, well-known company should have a mission statement that should be easy to identify, even if you didn't have the company name in front of you. So here they are, with anything taken out that would identify the specific industry. See if you can match them up. Answers in the comments section:

Companies in Alphabetical Order: Apple, Dell, Ford, GE, Honda, HP, IBM, Intel, Microsoft, Panasonic/Matsushita

1. We continuously strive for synergy between technology, systems, and human resources to provide products and services that meet the quality, performance and price aspirations of our customers.

2. Do a great job for our customers, employees, and stockholders by being the preeminent building block supplier to the worldwide digital economy

3. This company flatly states they have no mission statement.

4. Be the most successful xyz company in the world at delivering the best customer experience in markets we serve.

5. To enable people and businesses throughout the world to realize their full potential

6. We will democratize (our product)

7. Produce high-quality, low cost, easy to use products that incorporate high technology for the individual. We are proving that high technology does not have to be intimidating to non-experts.

8. We strive for the creation of new values, by pursuing user-friendliness and accomplishing a high-tech mindset, driven by challenging spirits and full speed of actions.

9. To be the best service organization in the world

10. To grow by continually providing useful and significant products, services and solutions to markets we already serve — and to expand into new areas that build on our technologies, competencies and customer interests.

Sunday, July 24, 2005

My Million Dollar Book Idea

While working out for the third time in 36 hours this weekend, the thought occurred to me for a weight-loss book that would sell millions. And it would be short - only two sentences.

Title: How to lose 25 lbs in 6 months

Sentence 1: Exercise more
Sentence 2: Eat Less

Okay, maybe it's not THAT simple. One has to have time to exercise, and I understand that those with heavy job and family responsibilities may have trouble doing that. So I think the real trick is finding an exercise that you really enjoy. This way it isn't about "exercising", it's about making time for a hobby. And fitness becomes just a byproduct of the hobby.

For example, I know tons of people who swear that running just melts pounds away. It's probably true, but even in my current high-stamina, limber state, the thought of lacing up shoes and jogging down some road Suit me up in a martial arts uniform and tell me you are going to work my butt off to the point that I am gasping for air and have legs that feel like lead weights, and I'm there. For me, I also think the group dynamic of martial arts helps versus running, which is largely a solo activity.

So my book is now more than two sentences.

Then I would have to add an "afterword" for those who are successful in their weight-loss program: people who tell you that you look too thin. Mothers and grandmothers fall into this category, especially ones who like to cook. So I am bracing myself for my next visit with my Ukrainian grandmother-in-law. She will take one look and start immediately start feeding me.

Friday, July 22, 2005

Another China Mystery

Reporter in the field "Shakel" sends in the following picture from his trip to China. After sending it to various Sinotologists, experts in language, and marketing guys who have logged lots of miles in Asia, no one has offered an explanation of what "Laughing Bag Counter of Entrance" means.

Anybody have any suggestions?

Thursday, July 21, 2005

China Re-Evaluates the Yuan

It will be interesting to see what affect the changing the value of China's Yuan will have on the U.S. trade balance. Technically is is not a true "float" as they will limit is value in within a band of values, and the initial change is below value that U.S. trade representatives wanted. But this could change prices for everything from toys to clothes at the local Wallmart.

Update: The "re-evaluates" is a pun done on purpose, for those who asked.

Tuesday, July 19, 2005

Daylight Savings to be Extended?

The WSJ is carrying a story today (paid link only) on how the current energy bill that is winding its way through congress extends daylight savings one month on both ends. Instead of going from early April to the end of October, it would go from early March to the end of November.

This would put the country on non-DLS for a whopping three months a year: December, January, and February. The extension is not a done deal, but the article puts its passage at a very high probability. And it would take effect immediately - we would not go off our current DLS until the end of November this year (the Sunday after Thanksgiving, in fact, giving travelers a 25 hour day for the last day of the weekend).

Personally, I like this change. The politicians like the supposed energy savings (100K barrels of oil a day), but I am one of the large majority of Americans that like it due to the lifestyle and leisure options it opens up. I would probably approve going on "permanent" DLS, but I do understand the issues that some have with it, sending kids to school in the dark and the like (although I remember going to school in the dark plenty during standard-time winter months, so I am not sure how much of an issue this really is).

Obviously this doesn't affect Arizona and parts of Illinois that opt out of DLS, and if there are large communities (typically rural) that don't like the change, more areas could decide to opt out if they can get passage through their state legislatures. But count me as one who is rooting for its passage.

Update: A second article the following day in the WSJ says the extension is on hold due to complaints by various groups. I guess this could be on hold for a while, or indefinitely.

Monday, July 18, 2005

2005 World Growth Rates

Reporter in the field Rorschach sends in the following picture, which was compiled with data from the World Bank and OECD Economic Outlook:

The U.S. and European numbers are not surprising as they are consistent to what has been reported in the WSJ and other MSM sources. China, India and Japan are also frequently sited.

What I did find surprising was Africa and South America. The "North Africa and Mid East" area is most likely being propped by the rising price of oil. Sub-Saharan Africa doesn't look right to me based on all the hand-outs they are asking for, but when you start on such a low base I guess any growth look large. "South America" is probably being propped by Brazil, as well as oil prices, but is masking a few really poor performers in the area when grouped as a whole continent.

But one thing that really hits home is a piece of data only partly brought out in this chart: The U.S. - the world's largest economy - has growth that is about double the next largest economy, Japan, and three times the third largest economy, Germany (grouped in with Europe). And we are starting from a GDP that is over two and a half times larger than the next largest competitor.

I don't think the average person on the street realizes what an economic powerhouse the U.S. is., but part of that is probably because the nearest democrat is consistently telling them how rotten the economy is - when it isn't.

Saturday, July 16, 2005

No More Whale

In a post earlier this week I talked about how I wasn't all that concerned about my daily traffic since I see blogging more as a pastime than anything else. It's also a way to organize my thoughts, meet like-minded people, and share ideas and jokes.

So if I am not going to concern myself over traffic, the same should also be true for "linkage", which is another metric bloggers measure themselves by. The most popular method for this is the TLB system. I have to admit this was a good milestone to measure oneself while getting going, but after a year or so at the same spot, I think this tool no longer applies to me.

So while I will probably check it from time to time, I am taking it off the sidebar. Actually, I would have done it sooner except I thought the picture I used for my ranking of "Large Mammal" was pretty cool, so I will miss that more than anything else.

I'll probably make some other changes in the coming weeks.

Friday, July 15, 2005

New Stock Option Rule Hit Lower Ranks

I once read something - I can't remember where, but I think it was Stanley Bing - that went something like this (I can't find the direct quote, but here's the essence of it):
No matter how well you do your job, no matter how well you are liked by your superiors, no matter how irreplaceable you are to the organization, your boss will eliminate your high-paying job in order to keep his high-paying job.
This seemingly obvious statement hit me for some reason, I think because it called out how little of business is a "team effort". For the vast majority of managers out there, "work" comes down to little more than keeping their job and increasing their compensation, and little else.

This concept goes all the way to the top in most organizations, which is why periodic attempts by the federal government to "rein in executive compensation" does little more than hurt the lower rank and file. This is because the corporations (run by CEOs and board members who are CEOs of other companies) just rejigger the rules and accounting to keep their compensation the same and force the brunt of the ruling onto the lower ranks - they will eliminate as many jobs or perks below them to keep what they have.

Which is why I was not surprised by a little article tucked away in the 4th section of the WSJ yesterday:
Cuts to equity-compensation plans, being made as a new expensing rule is about to take effect, will effect lower-level employees the most, according to a study by Deloitte Consulting.


Among those reducing stock options, 45% said reductions would occur below management level.
The secretaries and entry-level employees kissing their stock options goodbye can thank the FASB's new accounting rule requiring companies to treat employee stock options as an expense. Although it has no fundamental change to the business, it will force companies who don't want to see the income hit cut stock options - and they aren't going to cut them from the top.

Thursday, July 14, 2005

No Clown Shoes for Me

I don't know what it is, but fashion designers for men have some serious problems when it comes to shoes.

Finding that the soles of my current "dress shoes" (aka hard-sole-shoes) were starting to wear thin, I went to the mall to get a new pair. Since my foot has been the same size for nearly two decades, I don't have to try shoes on, just look for the style I wanted:

o Slip-Ons - I'm an airport every week traveling to my client. And airports these days mandate that all hard-soled-shoes be taken off at the security check point. Since my goal is to brisk through security as quickly as possible I don't want to be sitting there lacing up my shoes for a few minutes, meaning slip-ons are a must. In addition, assuming I travel to Asia again, many restaurants there require you to take off your shoes, creating another reason for slip-ons.

o No Pilgrim Shoes - A year or two ago the rage in men's shoes was to put a big-ass buckle on the top, making them look stylish enough for pilgrims. Every time I see someone wearing these I expect to look up and see them wearing a wide-brimmed hat with a similar buckle.

o No Clown Shoes
- The Pilgrim shoes might be fading out of style, but in their place, Enrique', Seth, and the other men's fashion designers have replaced it with something else: the clown shoe.

These are apparently the rage since 80% of the stock out there look like this: long, wide front - much larger than the foot - with a very wide toe. Here's a side-by-side comparison. If black laces were put on the clown shoes, they could pass for current fashion:

Now Mrs. Director might call me out of style, but I need something by next week that will allow me to present to a bunch of old fogies sitting on the board of a public company. And for that sort of thing, there is one style of shoe that is timeless: wingtips. Slip-on wingtips (like the picture at the top of this page). The problem is, you can't find them in the mall. They have all been replaced with Pilgrim and Clown shoes.

Tuesday, July 12, 2005

A Grand Business Experiment

Rob over at Business Pundit has started an impressive project: to create a company using only blogging, podcasting and other tools of the internet. The idea is similar to Open Source software, but to applied to the whole business plan:
Yes, you heard correctly. Business bloggers and readers will test their cumulative business knowledge by collectively starting and running a business - out in the open.

Can we do it? I don't know. It seems crazy, and counterintuitive to everything that we think about business, but that is why I want to do it.
This project intersects with some concepts I have been thinking about on the "virtual corporation". I think macroeconomic developments in the U.S. economy coupled with demographic shifts and changing American work habits will force huge changes to how companies do business over the next 20 years. The networked PC has created a seismic shift in retailing, and the next phase will be to change how "work" is accomplished.

I see the project as a case study more than anything. If it becomes profitable, great, but I think its real value is as a lab experiment on new ways to do business. The web site for the project is here, and I'll update its progress here from time to time.

Free Airport WIFI

As I sit here waiting in John Wayne Airport for my flight this morning I found a free WIFI node provided by an outfit called Nextphase Wireless. I don't know why it's free, except maybe to "seed" people into using it, then once they get people using it, they can ask for money once they hit critical mass. But that really isn't necessary in an airport. Looking through their web site, their model seems to be to get property owners to provide the service, but I can't imagine a government entity providing it for free. Maybe it isn't "free", but was a 10 cent adder to my higher-than-usual cup of Starbucks (nearly $3 just for a Venti coffee).

Just a tip for the next time anyone is stuck in John Wayne (I was going to add that John Wayne is the only airport named after an actor. However, that's not true, is it? Reagan National is named after an president, who was once an actor. Maybe it is the only U.S. airport named for an actor)?

Friday, July 08, 2005

The Deal Optimism Cycle

While helping my current client out on an acquisition, I noticed that, like any deal, there is a periodic cycle in which optimism and euphoria on whether the deal will happen is followed by pessimism and dread that the whole thing has been a waste of time.

The cycle is approximately every 12 hours and is closely synched with the most recent time you had the legal team in the room, since their job seems to consist of why the deal shouldn't be done, while the finance and marketing due diligence teams' job is to tell you why it should be done.

Thursday, July 07, 2005

Security No Slower Than Usual Today

After hearing about the blasts in London this morning, I thought I would give myself more time at the airport, figuring they would be on "heightened security", meaning longer waits.

I blew through faster than normal, and am now on-line, drinking coffee, and waiting for my plane, so maybe security isn't that heightened. Or maybe the regular security is so good that "heightened" doesn't mean anything. Or maybe it's because Thursday is the second slowest travel day of the week.

Tuesday, July 05, 2005

I'm Old for a Blogger

MIT is running a blogging survey. Like any on-line survey where participants are self-selecting, there is an issue of how accurate the results are, but with over 50,000 people participating so far, my guess is that the results are statistically accurate.

I thought the age distribution graph to date was interesting. When you re-log in to take a look at the results, it highlights your answer. So you can see in the graph below where I stick out as an old man in blogger land, although my guess is that all the "majors" are up there with me.

Click on the below to take the survey yourself.

Take the MIT Weblog Survey

My Corporate Valuation Workbook

I'm really good at writing business plans. I can put together a slide set and related text showing why - from a marketing perspective - a certain idea should be funded, an acquisition take place, or a division spun out to stand on its own.

Unfortunately, "C-level" type executives also like to see a financial analysis to back up the pretty slides and marketing shtick, so I have had to develop - with help from others - what has become my standard financial model for corporate valuation. So, at the request of Dutch, I'll share an overview of what this looks like (I am taking the screen shots from a start-up that never got funded, so no proprietary data will show up).

First, the Excel workbook contains all the basic financial aspects of the enterprise, each having its own tab:

These are all linked together, so a change in, say, average sales price (ASP), cascades through the workbook and shows up the cashflow, income statement and breakeven tabs, so "what-if" analyses are easily done on the fly.

The spreadsheet is broken down by quarters throughout the analysis, with yearly roll-ups provided as needed. As seen here in the Capital Costs sheet, there is not a lot of detail in some of the headings, so I usually add additional sheets that provide a full breakdown, and link the sum into this sheet. I also usually tie the spreadsheet into any written analysis I have done, which is why in this example you see "phases", which were outlined in the written business case.

The Operating Expense sheet has proven pretty valuable since most people don't consider a lot of the little things that add up while running a business: postage, long distance, consultants like me. In most of my spreadsheets (although not this one) most of the operating charges are based on headcount, so changing headcount changes not only the salary line, but all other expenses for the business, such as required square footage.

I am not going to bore you with screen shots of every tab, so let's just say that the sales tab is based on product volume and ASP, and that Cost of Goods Sold (COGS) is based on variable costs. Everything rolls up into the tabs that everybody really wants to see: income, cash flow and break-even:

This spreadsheet evolved over several iterations, and I've been toting around the current version for about half a decade now. It's proven very valuable since it is a necessary part of writing a business plan.

Saturday, July 02, 2005

New Look or Old?

Reader Ed points out that Blogger fixed the problem with my old format - right after I spent a good deal of time getting the new layout to a point where I sort of like it.

So what will it be? Do you like the new look, or the old look, archived here?