...on Don't Call Us Pessimists.:
12:34, August 27th, 2008: I'm skeptical that macro-economic factors, such as whether the U.S. is in a recession or in a growth stage, affects the survival rate of small businesses. At most, it is one of a million factors impacting survival rate. Sure, we can name any number of successful companies that launched in the midst of a recession or downturn. I can also name successful companies that were launched in an upturn. The only way to begin addressing this issue is to measure the field of all businesses that were launched during a recession (including both successful and failed businesses) and compare that to the field of all businesses launched during a period of economic growth. Even then, it would merely provide a correlation, not a fact. It's anyone's guess, but I believe that entrepreneurs should focus on more important issues at hand, and start their business regardless of the current economic conditions of the day.
...on Finally - Apple As A Lesson On What Not To Do.:
17:20, August 6th, 2008: As a person who returned my first generation iPhone after two weeks due to hardware malfunction, and who was issued a second 3G iPhone yesterday due to hardware/software issues, I nonetheless believe that the Washington Post and this blog post is incorrect. Both of these criticisms reek of hindsight bias.
One feature of Apple's business model that is incredibly successful is that they actually understand what "synergy" means. They have continually demonstrated how different products (both hardware and software) can work together to support each other in the marketplace. That is precisely why they are so dominant right now.
If you were Steve Jobs who wasn't looking back at the release of the 3G, but instead looking forward to its release, would you suggest that the super successful app store be canceled? Would you suggest that they don't offer the 2.0 update? Which products would you cancel, and why? Only in hindsight does Mobile Me look like the outlier who should have been shelved. Unfortunately the arrow of time runs in only one direct.
...on The Sky Is Falling - Or At Least Bank Lending Is.:
19:22, July 28th, 2008: Beyond commercial lending, the banks have been downright sneaky with their recent education lending practices. Many students are now being charged a 3% "origination" fee that is taken off the top of their loan value before it is even passed on to the school for payment.
...on Google 4 Eva?:
19:18, July 28th, 2008: Nor is Cuil all that effective as a searching tool. I tried googling...ooops.... searching rather for my own name in Cuil and I received no useful results. This is in contrast to Google which provides several relevant results. So far not so good with Cuil in my book.
...on Non-Profit Doesn't Mean No Cash Flow.:
12:35, July 24th, 2008: Not only does "non-profit" mean cash flow positive, but it also means huge profits for the CEOs that run these organizations. Consider the following cases:
Marsha J. Evans, President and CEO of the American Red Cross: salary for year ending 06/30/03 was $651,957 plus expenses.
Brian Gallagher, President of the United Way receives a $375,000 base salary, plus numerous expense benefits.
However, the Salvation Army's Commissioner Todd Bassett receives a salary of only $13,000 per year (plus housing) for managing his $2 billion dollar organization. What a champ!
...on If You're Google, Life Is Still Good.:
16:13, July 18th, 2008: From the perspective of share price to cash flow, Google is trading at its lowest price ever. Not to mention they are sitting on a pile of cash (about $40 per share) and no debt. They are starting to look like the GE of yore.
...on Sleeping On The Airport Floor Just Got Nerdier.:
19:34, July 15th, 2008: This picture gets funnier the longer I look at it. I thought that humans invented technology to escape nature and to avoid sleeping on the group. Can we blame this on high fuel prices?
...on eBay Not Responsible For Fake Tiffany Your Boyfriend Tried To Pass Off As Real.:
18:22, July 14th, 2008: Regardless of who got it right, this case will be likely appealed by Tiffany. I am predicting that Supremes will eventually hear this one.
...on Web 2.0 Not The Only Cool Idea Out There.:
16:11, July 11th, 2008: Judging from the picture, this product wouldn't last 2 minutes in the U.S. without a product liability claim. Is the gentleman in the picture actually standing above the well?
...on It's Official.:
18:05, July 10th, 2008: It's also when I start buying.
...on Breaking: Green Business Is Hot.:
14:56, July 8th, 2008: As evidence of too much money chasing too few ideas, check out the price to earnings multiples of any (and I mean any) business idea attached to the keywords: green, renewable, or alternative.
As one example, I recently examined Babcock and Brown Wind Partners (ASX:BBW), which is in the business of managing large scale wind farms around the world. At best, this debt laden company is trading at P/E multiples of over 120. Investors fleeing from businesses dependent on oil to these "green investments" would be wise to look both ways before crossing the street.
You can see my analysis here: http://thewindmachine.blogspot.com/2008/07/investing-in-wind-energy-part-i.html
...on Start-Up That Lets You Hedge Fuel Maybe Not As Cool As We Thought.:
14:35, July 7th, 2008: Let's hope for everyone's sake that MyGallons.com's shoddy PR doesn't destroy this business model for others to follow. I personally value the opportunity to hedge all sorts of commodities, beyond gasoline. Hopefully, more businesses follow suit and empower consumers in this way.
...on The Economy's Bad! Let's Drink!:
16:13, July 2nd, 2008: Forget about wine during economic downturn! The real money is in liquor and beer. Does anyone actually think that the cash strapped working class is going to spend for a bottle of wine that advertises its notes of bramble berry and forest loam? Diageo brands is a better play rather than Constellation, since it is more focused in the liquor and beer markets. Diageo, purveyor of household brand names such as Guiness, Captain Morgan, Tanqueray, Johnnie Walker, et al. is currently trading at a 2 year low on the NYSE. May be a good buying opportunity!
...on Hedge Fuel, Save Money? :
19:21, July 1st, 2008: This truly is a great idea. The average Joe should be able to hedge risk like any other corporate entity. Theoretically, this should increase economic stability by reducing the effect of price fluctuations at the consumer level. Any perceived downside to increased levels of speculation by unsophisticated consumers? Any perceived downside to widespread unfilled options when the fuel suppliers are unable to meet demand?
...on Should eBay Be Held Responsible For Fake Goods On Their Site?:
17:57, June 30th, 2008: The fashion industry has employed wide-spread copying from the very beginning, not only with low end brands copying high end brands, but vice-versa as well. Fashion has never been focused on creating the most novel concepts, but rather on creating the most adoptable concepts. Many of the high end brands would not be the household name they are today without being widely available in knock-off form. In fact, the knock-offs may actually enable the real deal brand to charge more for their product based on the clout and social status associated with the genuine product.
However, as far as Ebay goes, a company should be held liable for aiding and abetting illegal copying or infringement of a valid trademark, copyright, or patent. The question is whether Ebay indeed has the ability and the resources to stop the illegal conduct. The answer is a resounding yes, and a simple reporting system as noted in the other post is the perfect solution. This is precisely what youtube is currently doing to police its own content. Ebay can't hide it's head in the sand forever while it is being simultaneously enriched from the damage to the good-will of other businesses.
A simple law and economics calculus developed by Judge Learned Hand can resolve this issue. The Hand Test requires that financial liability should be imposed for a negligent tort only if the burden of preventing the injury does not exceed the magnitude of the injury multiplied by its likelihood of occurring; it finds negligence when the actor's burden (B) is less than the probability (p) of harm, multiplied by the degree of loss (L), which can be expressed as the formula B < p × L.
...on What [Some] Investors Want.:
19:07, June 26th, 2008: I don't think VC's know what they want, or rather they want what's already successful. Investing in past success can be a recipe for disaster. Prediction: we will all think Facebook is lame in 5 years, if you don't already.
...on .Com Is So Last Year.:
19:04, June 26th, 2008: The addition of new domain names will surely reduce the market value of the old domain names. Hopefully this will kill off the last remaining vestige of the cyber-squatters who are still holding out from the late 1990's.
...on We're Realigning Synergies And Preparing For Our Daily Paradigm Shift. :
17:07, June 17th, 2008: Don't forget about:
"Sorry, I don't have enough bandwidth for the Penske account"
"What's your POV (Point of View), Tom"?
"I just heard back from Acme Co. and they are hot to trot!!!"
"Let's leverage our opportunities"
"Let's get under-the-hood to take a look"
...on Does Yahoo's Yang Need To Go?:
16:28, June 16th, 2008: Jerry Yang should have been given the boot long ago. Back in November of 2007, Yang nearly purgered himself (or actually did commit purgery) before Congress when questioned on Yahoo's act of disclosing the identity of bloggers to the Chinese government. After that debacle, Yang has done little to repair the company's image. He's just another smug CEO with no direction.
...on Small Carrier Flies Again - For Now.:
13:52, June 11th, 2008: I'm so tired of hearing these excuses and complaints from the airline industry.
First, this is the precise reason why futures contracts were created. These airlines should have been purchasing option ontracts on fuel way out into the future as a hedge against rising fuel prices. Their failure to adequately hedge their fuel costs is not an excuse. A proper options portfolio would have enabled the airlines to plan their fares accordingly.
Second, all airlines face the same exact problem, so I cannot believe that an accross the board rise in fuel costs that equally affect all carriers can be that damaging. A rising tide lifts all boats and vice-versa.
Third, they should have been attempting to conserve fuel all along, just as benpirie mentioned. If they would have focused on efficiency from the beginning, they would have increased their margins during the good ole days and would now be sitting on a rainy day fund.
No more excuses please.
...on How Not To Pitch An Investor:
23:19, June 3rd, 2008: The VC screener is a good idea. Pay someone $15 per hour and don't miss out on the next home run. The reason why they haven't figured this out yet is the very reason why they are VC's. I.e. they invest in ideas, they don't come up with them.
...on Is Your New Idea, Well, Actually New?:
15:49, June 3rd, 2008: All good questions.
Patent's have a limited term of 20 years from the filing date of the patent if filed on or after June 8, 1995. For patents filed before June 8, 1995, the term of the patent is 17 years from the date that the patent was issued.
You have the right to obtain a patent on your idea if your idea is both new and non-obvious in light of the earlier filed patent and any other prior art that may exist. But, just because you obtained a patent on your idea, doesn't mean that you can legally make a product that embodies your idea without potentially infringing someone else's patent, an important distinction.
...on RIP, Bear Stearns:
11:51, May 30th, 2008: I personally held about 10% of my portfolio in Bear back when it was trading at over $100 per share. Luckily I sold out of my position before the crash in order to buy a house.
It looks like the bigwigs at both Bear and CNBC forgot that the strength of any bank is based entirely on the confidence of its depositors. Cramer looks like an idiot in that video. This just goes to show that all the arrogance in the world can't stop a run on the bank.
...on Starbucks Owns Circles, Stars, Sans Serif Font. Your Business Doesn't. :
13:30, May 28th, 2008: While "big business" looks like the bad guy in this particular instance, a closer look at the nature of trademark law in this country provides a rational explanation for their actions. A trademark is valid in the U.S. only if it is capable of distinguishing the source of the goods or services from those of its competitors.
A common way in which a trademark may become invalid is through genericide, which can occur when the public appropriates otherwise distinguishable elements of the trademark in order to refer to a general class of goods. Google provides us with a good example. Consider the now common phrase: "I Googled it". If Google does not aggressively police its mark, the term "google" will become synonymous with search engines in general and will thereby fail to distinguish the source of the goods as required by the trademark laws. Other good examples include escalator, kleenex, and bandaid.
Once a mark becomes generic, it is too late for the business to respond. The mark is forever lost. Aggressive policing of your trademark is the only way to ensure that it will maintain its status as an indication of source in the marketplace.
