A Flawed Test

Business Pundit points to a Marketing IQ Test. Being a marketing guy, I took it. The problem with the test is that the "IQ" is based on a single book - by the author of the test. And if you don't agree with the book, you'll score low on the test.

For example: True or False? Line extensions are a very risky way to introduce new products.

I said false. They are probably the lowest risk method of introducing new products. Here is how they scored my response (emphasis mine).

You said false. The answer is true. Line extensions are risky for several reasons, but particularly because they tend to cannibalize the present product. (Chap. 7)

Hey, dude, you are SUPPOSED to cannibalize your own products. If you don't your competition will do it for you.

So if you are interested, take the test, but keep in mind it is just a barometer of how much your opinions match the author's and nothing more. There isn't much intelligence in the test at all.

Glad I Got Mine Early

Tamiflu has stopped being shipped to the U.S. public, I suppose so governments can stockpile it instead of individuals: Flu Drug Maker Suspends U.S. Shipments.

So I get a points for thinking ahead and getting a personal stockpile a few months ago.

Just One Word: Plastics

Think of computer chips as hard, brittle things? That idea will seem quaint in the future: Epson Develops the World's First Flexible TFT SRAM


"Plastic chips", as I like to call them, are just getting out of the lab, but I think they will be common place within a decade. This will allow the creation of all sorts of cool consumer goods than can fold, be rolled up and other uses we haven't thought of, although I would first like to see an iPod nano that won't scratch so easily.

Marketing Trivia, Trademark Category

I can't think of anything worth blogging on today - there's stuff developing, but I can't blog on it yet - so how about a small bit of marketing trivia?

The fast food chain "Arby's" is the phonetic spelling of the initials "R" and "B", which is short for "roast beef", their signature sandwich.

So now you have something to remark on when your officemates are arguing about which fast food chain to go to for lunch.

AMD Hands Their Technology Over to China

I don't think this is a good move: AMD, China Ink x86 Agreement.

Advanced Micro Devices (AMD) licensed its AMD x86 microprocessor design technology to the Chinese Ministry of Science and Technology (MOST) and Peking University, during a ceremony in Beijing today.
...
The licensing of core x86 AMD Geode processor technology to Peking University via collaboration with MOST is expected to contribute to China's development of low-power and embedded x86 processor technology in the Greater China region.

Note that licensing a processor is much different than selling a chip. They are giving the Chinese the inside workings of advanced processor design and one of the crown jewels of their intellectual property. One has to wonder what AMD is thinking.

In addition, note at the end of the article that AMD is paying a tribute to the "Ministry of Education". It wasn't enough that the company had to hand their technology over to them.

Going Against the Crowd

I heard Batman Begins was a good flick, so was happy when it arrived from Netflix. The first 20 minutes lived up to expectations, but then it went downhill fast. The middle third it was simply bad, the last third was awful. If I were in a theater I might have walked out. I remember several bloggers I respect really liking it, and the reviews on IMDB are overwhelmingly positive, so I was surprised at first. But then I remembered that this is par for the course for me.

I figured out at an early age that I tend go against the crowd; that the my tastes, likes and dislikes go against popular opinion and what is trendy. It's not that I try to against popular opinion in some sort of effort to be superior, it's just that my natural tastes don't jibe with everyone else's. So along with thinking Batman Begins sucks, here are some other recent pop trends that I can't stand:

• I think body piecing is disgusting
• I think anyone over 22 who gets a tattoo is an idiot, especially women
• I have never watched a reality show and don't get people who do
• Rap sucks
• Those plastic bracelets that men are wearing around? Stupid.
• People who wear shower shoes (aka flip-flops) in airports and anywhere else that is not on their way to or from a beach or pool look like trailer trash.
• I like women to have some meat on their bones, and can't stand the fashion towards skinny, anorexic women. For example I think Renee Zellweger was much more attractive in Bridget Jones's Diary than in Chicago.
  
  
  

And if your opinion is different than mine? (Shrugs shoulders). It's not like any of the above has any importance in the world, but in 20 years most of the above will be out of fashion, so maybe I am just more on the leading edge.

The Lie of the 80s

I've... just made a terrible mistake. I'll never get to college. My life is ruined. - Tom Cruise as "Joel", Risky Business (1983)

One shouldn't look for deep meaning in this movie, but it does touch on one of the promises to the Children of the 80's: do well in high school, get into a good college, get out in the business world, and you would make it Big Time. Guaranteed. So the keys to the executive suite all start with which college you get into, which is the point Joel is making in the movie.

And it was a lie.

I'm not saying that one shouldn't study and work hard. You can live a nice middle-class lifestyle if you do. It's just that Big Time success isn't predicated on any of that. That, I have decided, is more about luck, or fate, or just being at the right place at the right time. I've seen too many idiot millionaires, dumb-ass VPs, incompetent CEOs, and other clueless rich people to come to any other conclusion. And these were the people who in the 80s were out partying while I was sitting in my room studying calculus.

And it is the realization of this lie that I have decided to focus on things other than work lately. Because hard work within an organization doesn't get you ahead. Giving up weekends in order to get work done doesn't get you a promotion. For those people who don't have to do these things just to keep the job they have, they're just in their room studying calculus again; one of the suckers.

And if you do eke out some sort of raise to the next level, after a certain point the government takes away so much that incremental improvements in income do nothing to improve your lifestyle. It is only HUGE increases in income and wealth that make a difference, so why kill yourself to make another $20,000 a year if the government is just going to take away $10,000 of it? What's that additional $10,000 going to buy you? A quarter of a car?

I have gotten to a point where my income has gotten me to a point where my lifestyle is comfortable, but not lavish. And instead of trading in any more time for incremental income, I am using my time to do things that I find more interesting, or fun, or get me into better shape. Because if I do make it Big Time it will be because of something I stumble into, luck upon, or land when calling someone about something else - which is how I have landed my last several jobs. It won't be because I sat 12 hours a day in a office "working", so why bother doing it?

So while some of my peers might make 25% more than me (or 13% after taxes), they're stuck in an office all day today. Me? I'm going to the beach.

The Coming Death of the Movie Theater

In yesterday's future-predicting post, one of my forecasts was the death of the movie theater. My prediction was largely based on technology trends, with a little push from social trends, but the death of the movie theater may also come about just because going to a movie these days is a crappy experience.

A posting on Techdirt has over 20 negative comments about today's movie-going experience that can be summarized into a few key points:

• Impolite Patrons - This is my biggest beef: People who bring infants to the theater, talk on their cellphone or talk to each other. People seem to forget that there are other people around them who are trying to watch the movie. This comes under the category of oblivions who seem to be taking over our society and driving people away from a variety of public events.

• Commercials - In the past few years this has become THE reason I hate going to the theater. After paying a Hamilton just to get in, I believe I have right to sit down and have the MOVIE start at the designated time, not 20 minutes of commercials (although I do like watching 2-3 trailers, which was one of the items I actually liked about the movie-going experience). These days you have to sit through 7-8 commercials just to get to the previews.

• Insane Pricing - I might grudgingly pay $9 for a ticket, but I won't pay $6 for a few cents of popcorn and $4 for a few pennies of coke - especially if I can just wait three months, pay for the DVD out of my monthly Netflix rental (making it essentially "free") and pour myself a martini that has cost me about a buck for the retail ingredients.

• Theater Comfort - This is actually an area where I haven't had too much trouble, but many of the complaints are about dirty theaters and lack of leg room. Like an airplane, I do prefer if there is not a stranger elbow-to-elbow with me, but for a sold-out show I will deal with it (or not notice it since everyone around me is talking).

• Crappy Movies - The movie-going experience has come so bad, that a movie has to compel me into a theater to watch it. And guess what: most movies just aren't compelling these days. For 2005 it looks like I will end up seeing two, and only two movies in a theater: Star Wars III and Narnia. That's it. The rest just screamed "rental!".

Keep in mind that I home office and often have a few hours to kill in the middle of the day. I would like to go to a movie during the day occasionally, but all the reasons above keep me away. And if someone who is bored rather not go into a theater, I think it speaks volumes about the viability of the business.

A Headline Obviously Meant as a Pun

Turkey Reports First Bird Flu Case

"Istanbul" would have the obvious alternative that didn't make it a pun.

Which brings up a question I have always had: Do people in Turkey realize their country's English name is the same as a large, stupid bird Americans eat on one of their major holidays?

Intellectual Property Protection in China (or the Lack of)

Daily Pundit had an interesting link about China's announcement to do their own High-Definition DVD format. I commented:

More likely (the Chinese standard) is a way to avoid paying royalties to Intel, MS, et al. They have every right to do this, but I'll bet you anything that whatever "standard" they cook up blatantly violates someone's patents. But since (the disks will be) created in China and meant only for China consumption, however, (there will be) no way for a U.S. court to stop the violation.

Most Chinese production today is exported to world markets. If there is a patent or licensing problem, an easy solution is to have a court stop the sale of the products in the U.S., in which case the China factory quickly resolves the problem. But when China production turns towards internal demand, guess what? U.S. companies will have to go to a China court to file their grievance. And what do you think Chinese courts are going to rule? (there is no concern in China about justices ruling against the wishes of the executive branch).

Even if the factory is a U.S. "joint venture" there will be a problem because of a little known issue outside of business legal circles: China requires all foreign Joint Ventures to be covered under China law. Period. So companies that do JVs in China are pretty much handing over the keys to their IP unless they make some other moves to prevent this from happening.

As I said in my previous post on China, I do think there are opportunities to make money there, but businesses have to be careful about what they do and how they do it. China sees itself as the "world's factory floor" today, but wants to move up the value chain into intellectual property. And the fastest way to catch up to the U.S. - which is the undisputed leader in IP creation - is to steal it. And they are setting up their legal structure and courts to support this goal.

Resume vs. Personal Recommendation

You have an important job opening that you need to fill. Failure of this person in this position has HUGE ramifications. The stakes are high. Which way would you go for your selection:

1. Someone who has a personal recommendation from someone you highly trust, but who has a resume that you consider run-of-the-mill.

2. Someone with a stellar resume, but otherwise know absolutely nothing about.

Think about this and pick one, and only one, for your important job opening. There is no "right" answer.

Now look at how you picked and your reaction to the Miers nomination. Did you choose one method but want another method for the nomination? If different, why? Would you pick one method if YOU were President, but want another if you were just an average citizen? Would you use different methods for different positions?

Describing a Venture Capitalist in Nine Easy Steps

Venture Blog stumbled upon the diagnosis for Narcissistic Personality Disorder, and it looks like all they did is describe a VC. Go read the whole list, but here are my favorites:

1) Has a grandiose sense of self-importance

4) Requires excessive admiration.

6) Is interpersonally exploitative, i.e., takes advantage of others to achieve his or her own ends.

9) Shows arrogant, haughty behaviors or attitudes

The full list accurately describes 100% of VCs and about 50% of CEOs by my book.

Things from My Lifetime That Already Seem Quaint

My daughter will know without me telling her that I grew up in a time before cellphones and personal computers. But it is the dozens of small, day-to-day things that people of the next generation find quaint. Here are ten off the top of my head:

1. Rotary Telephones - Someone recently told me a story about giving a rotary phone to a modern teenager, who was unable to figure out how to use it.

2. Pong, Space Invaders, Asteroids

3. Area codes covering an entire state or large metropolis.
3a. And the area codes always had a "1" or "0" in the middle.
3b. And "800" was the only toll-free prefix.
3c. And "900" and "976" prefixes didn't exist.

4. Getting up to turn the channels, and the TV only having only the Big 3 networks, PBS and 2 UHF stations.

5. Everyone actually HAD to use the Yellow Pages to get information

6. Most adults and all children didn't know how to type

7. You knew the minute you picked up a phone that the call was coming from overseas because it had horrible echoes and lots of static

8. Phones were hard-wired into the wall since there was no socket or plug for them. (This was because the phones were rented from Ma Bell and you couldn't go out and buy a phone anyway).

9. The largest retailers were Sears and Montgomery Wards. Walmart was a back water department store in some other part of the country.

10. Amazon was a jungle in South America, Ebay was piglatin for "be" and Google was a very large number.


Any others from you thirty to forty-somethings out there?

China: Understanding the Opportunities

There have been a lot of people wondering about China as a place for business. While there is money to be made, people should go into the place with their eyes wide open about what it is all about.
While China may call itself "communist", that really isn't true any more. A simple definition of communism is a totalitarian system with means of production controlled by the State. With the large number of businesses now in existence, it has become a totalitarian state with the means of production owned by non-public enterprises. In addition, the state has become glorified, with a heavy emphasis placed on nationalism, and it has embarked on a large military build-up in order to gain control in the region. What you have in China today is a classic case of fascism. And in a classic fascist society, the government will do business with private individuals and foreigners as long as it advances its causes, and in China's case this means helping them in three main areas:

• Economic Development - While people in the West see the large number of factories and shiny, towering buildings, the fact of the matter is that China has a severe unemployment problem. The Rand Corporation estimates the real unemployment rate in China is 23% of the total work force. That would be on the order of 150 million people who are unemployed. Read that number again. That is about the same number as the entire population of Japan, or the size of the entire U.S. work force. Another interesting data point in the WSJ today (paid link) is that only 5 million people (in a country of 1.1 billion) have incomes over $5,000 a year, or have any sort of disposable income.
  
  It doesn't get a lot of play over here, but this economic situation is bad enough that China has been experiencing a growing number of protests, which The Economist numbers at 74,000 last year. In fact, the Chinese Government recently issued an edict calling for the reduction in the gap between rich and poor in the country. This in a self-proclaimed "socialist paradise", mind you.
  
  So in order to maintain social stability and keep their grip on power, the Communist party needs economic development. Badly. And it will bend over backwards to get outside companies to set up factories there : tax holidays, trade credits, low wages, buildings, infrastructure, whatever you need to make a buck. Just hire some of their people and you're in.

• Control of its Population - In order to push economic development, the company needs a modern infrastructure, including internet. The problem with the internet is that it is probably the greatest invention since the printing press for spreading information and reducing government control. So the Chinese government needs help from companies willing to help it with its broadband infrastructure, but at the same time provide censorship and control.
  
  Cisco, Microsoft, Yahoo, and "Do no Evil" Google have all obliged. They recognize the vast opportunities available in China, as long as they help the government suppress it's people.

• Military Development - The third way to make money in China is to help them develop their military capability. The easiest way to do this is to sell "dual use" technologies, which our "allies" in Europe are trying desperately to do. But U.S. companies are not blameless as Loral, Hughes and others have been under congressional investigation or fined for dubious sales on the Mainland.

So opportunities exist there, just understand what you are getting into and how far you are willing to stretch your ethics in order to make a buck. In my opinion the ethical curve goes from highest to lowest in the order presented above, since it could be argued that helping people economically is a proven path to democracy, while helping China militarily will ultimately create more dissension in the region.
In a somewhat related note on China economic development, Electronics Today has started an interesting blog called The Silicon Road, which has views and news on electronics manufacturing infrastructure being set up in China.

It's October 1?!

I can't believe it's forth quarter already. What happened to the summer? What happened to the rest of the year?