Wednesday, October 29, 2014

The UC Berkeley Extension Food Export Start-up Seminar

Imagine yourself at an international trade show working up orders for USA products you trade worldwide.  The work is more lifestyle than money in the beginning, but you are your own boss, or more to the point, working for customers.

You need a desire to be there, and invest a day in pulling together the tools and tactics plus the attitude to proceed.

Exporting food and beverage from the USA is the fastest growing export segment, and the pendulum is swinging toward small businesses.  Whether you have your own products, or will represent producers, the UCBerkeley Extension Exporting Food Seminar will show you have to trade food and beverage at the small business level in which export sales are no more difficult and every bit as profitable as domestic sales.  It is all tools and tactics plus attitude. You will complete all you need to get started in the one day seminar, and have after-seminar support directly from me.

For my part I have been teaching, writing and consulting on this topic, generating export sales for companies large and small, and I have reduced the necessary means to a one day seminar.  You will not find this information anywhere else, although it it widely practiced by those succeeding in the field.

Your next opportunity is -

Mon 8:30AM - 5:00PM
17 Nov 2014
San Francisco Campus
Classroom 503
San Francisco



Click here to enroll.

Be trading food products world wide as a lifestyle and a business.  Be on your way by the end of the day, 17 November.  This is live and in person, and I look forward to meeting you.

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How to Compete With https://www.flexport.com/

The CEO of importgenius.com has moved on, no doubt given the downward spiral inherent in the business model, to a new international trade service backed by Google, etc, called https://www.flexport.com/.   Good luck.

Our mission at Flexport is to use the web to make the import-export process easier than ever before. As the first licensed customs brokerage built around a modern web application, we save importers time and money on every shipment, while helping them avoid some of the major annoyances and pitfalls of doing business globally.

About time, if true.  Why Fedex nor UPS ever did this, I dunno, probably revenue yield issues.  Flexport clearly is NVOCC  (and maybe not even that...)  UPS and Fedex have space to sell, and they want top dollar.  but when the plane is leaving with some more space, they wheel and deal.  Flexport may pull this off.

Now, as I see all of the credit backing this, and flexport will be able to take a loss for a long time while presently viable companies take a revenue hits.  This is my standard criticism of capitalism: entities legally free to risk asset-less backed credit, with taxpayers on the hook for any loss, but profits to the capitalists, is bad business.  This is just more "get big or get out" federal policy where asset-less credit providers are running profitable, productive small businesses out of business, and then will raise prices and limit options.  Ikea for furniture, gap for clothes, govt for education and medicine, fox for entertainment, apple for computers, safeway for food, section 8 for housing, EBT for money, and those who drive this collectivization are rewarded by being exempt from it all, the one percent.  Capitalism 101: kill or be killed.  The feds will back your funding.

Smaller customs brokers and freight forwarders need to compete with this, and answer this criticism.

Download their eBook  https://www.flexport.com/how-it-works

Quote:

For too many people, importing is a black box. Those on the inside, especially in the freight and logistics industry, jealously guard their secrets from new importers. The entire industry seems to pride itself on its ability to price discriminate, gouging at the little guys while reserving their best deals and service for the big companies that know the game.

True, and I've lectured for 30 years that it is not a black box.  I am not sure anyone in the industry guards any secrets, jealously or otherwise, because I am just not sure there are any secrets.    There is another problem, the business is one of moving parts and deadlines and logjams, and every day is unique, since the position of the parts globally are unique each day.  It's like a house on fire, and the fire fighters are not inclined to stop and explain how firefighting works.  It's not a problem of secrets, it's time.  And I cannot think of any industry where time matters more than logistics.

As to price discrimination, it is no secret that it takes as much time and effort to arrange movement 2 pounds as two million, so yes there will be price variation on top of dynamic pricing, and yes yield is the name of the game.  But it is a game of percentages, and in all instances you are paying a broker less than you would do it yourself.

Plus, small shipments are usually specialty goods, where the mark-ups are not as big an issue.  I think this "gouging" argument does not resonate with active traders.

Our mission at Flexport is to empower importers of all sizes with the knowledge and tools to compete in the global market. We want to help make a world where any two humans can trade with each other without regard for geographic, cultural, regulatory, or logistical boundaries.

We have that now, and I've seen a dozen of these dot coms come and go since the 1990s, but this one may have the money to go the distance, plus the infrastructure for supporting the communications if far more built out and robust.

And this:

We can’t promise you’ll make money. We can’t teach you how to find great products from other countries that will sell well in your home market. But we can shed light onto a process that is far too confusing, and help you avoid pitfalls and setbacks that can be painful--even catastrophic--when you’re first setting out.
In our view, the process of importing goods is actually quite simple. The money is made in selecting the right goods, at a price that leaves sufficient room to cover all your costs and then some, while building up the distribution channels you need to move the product in sufficient volume. That’s just basic business, and there’s nothing easy about it. But the actual importing part? That’s pretty easy.

Very good.  They are clear making money is up to you, and the logistics part is simple.  Agreed.  Farm out logistics, agreed.  Excellent counsel.

If you’re not sure what to import, but just like the idea of getting into the import-export game thinking you’ll make a lot of money, you’re probably not ready to get started.

Exactly!  You'll be messing about, wasting time and money trying to make money.  For most small business international traders, the work is lifestyle not money, although the money follows.   The product is everything, not "well, whatever makes money."

As an aside, these people are not importers, so they do not say:

1. the most important thing is business is the customer

2. the hardest thing in business is getting the product (or service) right, as defined by the customers.

And, they do not say entrepreneurs never take risks (Drucker).  All costs are known and covered in advance before anything is imported.  Once all this ins in place, the importing rules, regs, logistics is easy, since we importers always farm it out.  Importers bring in nothing for which they do not already have orders or customers.

But back on topic, the Importing 101 guide has advice and info running from pretty good to terrible.  But then freight forwarders/customsbrokers ought not be advising people how to make money in international trade.

I think CHB/FF will read the flexport offer and realize flexport really cannot deliver all they say, and where flexport notes the importer is on his own, well, there dragons be.  Flexport will encourage dilettantes in dilettantism, and they will get crushed when they meet the very points where flexport wisely will not attend.  Solid business blows past these problem areas, and micro business can be solid too.  Whole lotta whiny emails to flexport is in their future.

And there is the defensive position the small CHB/FF out to stake out against this well funded run at their business.

Signing up with flexport will no doubt yield lower freight charges, but to get there will be every bit as much work as not signing up.  Flexport really cannot make anything easier or less work.

Flexport appears to be offering what any importer needs, and that is a pro-forma cost breakdown prior to importing, and they wisely advise that the uninitiated do several small shipments rather than one big. This is good advice, and where small CHB/FF are slow to help newbies.  But these are a time killer, especially when the inquiry is coming from a dilettante.

So CHB/FF need to prequalify the likely prospects and then provide the proforma preliminary assistance traders need.  Then these small CHB/FF need to co-brand with the traders.  Success is symbiotic.

I've been working with a few small CHB/FF on this for a few years now, and it is quickening.  For the CHB/FF to cobrand at trade shows and other opportune moments will enhance the image of the FF/CHB makes news as spotted, and thus grow the business.  When flexport is just as much work as any other CHB/FF, the savings are the only advantage.  When your business is well know to the CHB/FF, the cost of problems not encountered is literally incalculable.  This is where the CHB/FF can beat flexport.

And as I reflect, this is analogous to the mortgage game.  There are the banks originating loans, and brokers originating loans.  Banks make all problems go away to get the loan booked, but mortgage brokers charge for each problem encountered to make up for the lower cost initially quoted.  If I were a flexport competitor, I'd monitor that.  Is flexport making up on fees after lower costs initially?

Time will tell.

Incidentally, I have some live start-up international trade seminars coming up, email me at john at johnspiers dot com if you want to get a solid start-up going....

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Taxpayers On the Hook

Are there examples where this kind of financing pays off?  Taxpayers out $12 million, a county forking over $10k a month, and a "biofuels" (biofools?) company says China will come to the rescue.
FULTON, Mississippi — A California-based biofuel company says the Export Import Bank of China may loan up to $270 million to build a plant in Fulton, Mississippi.
BlueFire Renewables, Inc. of Irvine, California, says the bank has signed a letter of intent.
The U.S. Department of Energy ended funding to BlueFire last year after disbursing $12 million of an $88 million award, saying the company couldn't complete other financing.
The company says China Three Gorges Corp., a utility, will build the plant.
BlueFire stopped work in Fulton earlier this year. Itawamba County Development Council interim director Harvey Clements says the company continues to pay about $10,000 a month to hold the property.
He says Monday's news is exciting, though he hasn't received official word.
Either side could withdraw from a letter of intent.
I doubt the Chinese come to the rescue.  In fact, I doubt the Chinese decision makers have ever heard of these people.

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Small Beef and Poultry Export Advantage

Big Beef and Chicken have managed to hobble north American Free trade, but an exception to the rules gives small business ana dvantage, for once.  It may change, but
“One third of U.S. meat products are exported,” he noted, so the whole North American meat sector has been thrown into confusion by COOL. Only processors of large amounts of beef and pork products and grocery stores are covered byCOOL. Small-scale meat producers are exempt, Neale said, and other agricultural products such as fresh produce don’t face the same challenges.
So, in the meantime, create those MOQ FOBs for beef and poultry.

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Tuesday, October 28, 2014

Amazon Opens its First Store in New York City

Bill sends in a note from Forbes on Amazon's problem with online sales, ecommerce, having never made money.  And now Amazon is testing out retail stores, first in New York City.

Why try brick and mortar?

Amazon.com is a great company, a dot.com survivor that has been growing by leaps and bounds. But it has yet to deliver any meaningful profits—even after special items are excluded from the calculations–as evidenced by its most recent earnings report published last week.
Wall Street has taken notice, sending the company’s shares sharply lower in a week when all major equity averages staged a big rally.

The pendulum is swinging back.

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Google's Irish Export Growth Initiative

Circa 1988 there was a BBC program on UK/China small business trade upon which I commented, and made predictions, and wished they would do a follow-up at some time.  Well, in 2012 they indeed did a follow-up, and my predictions were proven fairly accurate.

Now comes Google in an effort to build small business international trade, and an interesting article on their efforts. The effort is based in Ireland, which makes me think it is largely a political effort, given Ireland's favorable tax regime, and criticism of google-ish tax avoidance endemic in big biz.  But to their efforts:
"All the statistics we have and the ones done by third parties suggests that if you have a business and embrace digital as a route to market - and you set up a website to connect with customers -that you'll grow your exports twice as fast. So my challenge should be that every business in Ireland has a website and if they do then exports should grow twice as fast," he told the Sunday Independent.
"Suggests?" This sounds like Amazon and their "we know ecommerce is not profitable, so we are introducing some new ideas sure to work."  President Obama in 2009 announced he was going to double USA exports by 2014.  Not even close.  Google wants websites up, of course.  There is no digital route to market.  There is zero to suggest a website to connect with customers will grow your exports twice as fast.  Correlation is not causation.

What does that even mean?  Twice as fast as what?  Over what time period?  From 1% growth to 2% growth over ten years?  If so, at what cost?  Both out of pocket and opportunity cost?

And this is classic survivorship bias.  The only evidence studied is a few standing businesses, not looking at the countless failed efforts at "digital as a route to market".

If and when google can announce marketing online is a less expensive way to gain customers than the traditional alternatives, then that will be new.  They cannot, or they would have.  The problem with online marketing is the cost of acquisition of a sale is almost always, like 99.9999% of the time, is greater than any possible profit.  When that changes, I'll be the first to announce it.
Google has set up a "global export team" which now advises its customers on how to export. There are three different types of clients, he says.The first group are businesses that have never exported. Google supplies these clients with search data that shows if there's demand for their products overseas. For example, an Aran jumper firm could see how many times the phrase 'Aran jumper' is searched by consumers from Osaka, Japan - indicating demand and a potential new market. Simple steps such as translating a website into Japanese could drive sales.
Wow.  That would tell anyone asking absolutely nothing.    On the other hand, one could spend the same time at the USITC.gov website and find out the dollar amounts of wool sweater sales from USA to every country in the world, and the price paid by the importers around the world to USA exporters, plus trends over the years in dollar and quantity, and which ports used, etc.  (There is such Irish trade data too, as there is for most countries worldwide.)  At given price points, you'd know which countries tended toward finer specialty sweaters, and then you could target that country.  Google speeds things up thereafter, but recall trade did just fine for the 5000 years before google was developed.  Fast does not matter if one lacks quality products to begin with.
Secondly, Google advises businesses that already export into some regions to find out if there is demand in other markets. Free online tools can highlight potential new countries or markets for trade, by evaluating customer behaviour or search trends
Here are search trends again.  Waaaay to week a source of info, compared to hard data one can see: time and money spent by people in trade.  Not sure what google can offer in the way of evaluating customer behaviour, but any business that does not have "evaluating customer behaviour" already built into its internal processes is not going to prosper on anything google has to offer.  Evaluating customer behaviour is a fundamental business process, not something that can ever be farmed out.
Thirdly, Google can help firms that already export globally to find and refine new markets or product sets. It could be something simple like showing that Nigerian customers search for green Aran jumpers more than any other type of product.
But doesn't customer feedback do that anyway?  The premise here is google's macroview can supplant the need for a microview.  If so, that would be golden.  But it can't.  The microview is what has driven success at the small biz level for 5,000 years, and I can see nothing google is offering now that would obviate the need for the necessary microview.  It is the microview from which the business is launched, so it is already there, can't be supplanted, but as an offer (you can build a biz on search terms) no doubt many people will jump at the offer to be successful (should grow twice as fast).

It's not in the mix.   Ain't gonna happen.

Don't get me wrong, I love google.  They drive the sales of my book for over a decade, and I use them constantly.  But nothing has happened in the last 30 years to improve doing business one way or another.  It is no harder nor easier to make money, find producers or customers, or transact business.  somethings are faster, but the fundamental offer is still decisive.  There is more information, but it is no better.   It's more accessible to you, but it is so to everyone else too.

The people who fall for these "new ideas" get trapped wasting time in flash and bang and miss the better stuff and solid means to building business.  That means we are denied the good of peoples productivity while they waste time and money in fruitless pursuits.    One reason I teach small business international trade on the side is to correct that.

Last Saturday I taught in Portland Oregon.  Participant Hamidreza Rahmzeda took the class and appreciated the IPR arguments; Garrett Pfaff appreciated the way start-up was clearly laid out; they both said I could quote them, and all participants rated the seminar highly on all counts.

This Saturday I am heading straight into Google territory to offer the same seminar at San Mateo College just south of San Francisco.  If you want in, enroll here now to assure a place in the class.

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Monday, October 27, 2014

The Free Market Treats Ebola

At a gown and tuxedo-studded Christmas event, I was speaking to a pancreatologist, an MD, who was explaining how when a liver quits he can get the pancreas to take over the functions.  He teaches at University of Washington, so he is no nut.  He and a colleague in the midwest have successfully performed the treatment on some 400 plus patients, and I asked how come it is not more widely used when the more common therapy (by far) is more expensive, less successful and more painful?

Essentially the problem is marginal and new has to overcome busy.

Getting cells from a liver to the pancreas done right takes a hot shot surgeon, so you need a team of an MD that goes to this diagnosis and cure, plus the hot shot surgeon.  There is no shortage of hot shot surgeons who would do it, and they love the challenge, but too few doctors who go to the diagnosis and cure.  How come?  Whole lotta medicine to learn, and core curriculum is "this class of disease is handled this way, and here is how." Medical school covers "best of" and then they have to practice within what they learned, of course, with no time for the marginal and new.

Next, doctors certainly can specialize in this and take continuing education seminars on the procedure (he teaches this often) but new and marginal has a problem in our litigious society: when 30% die under the standard therapy for which 100,000 people have been treated, it only takes one dead on a marginal therapy to make a lawsuit.  "Doctor, how come you treated "dearly beloved" with something unusual?"

I tell you know I know doctors who reserve cures for people they know won't bitch if it goes wrong.  There are no guarantees in life, but 98% cure odds are better than 12%.  Romney/Obamacare is built on the hopes and dreams of that minority of voters with the dreadful combination of entitlement and fear.  Medicine is going into lockdown in USA, bringing forth the worst fears of the ACA critics, but there is always medical tourism.  It was one thing to use travel to access nice clothes, but to have watched USA get to where another nice thing about travel is to get quality medicine is tough to bear.

So how do you overcome the problem of "original and new" overcoming "busy?"  A cardiologist took my seminar in San Diego (twice!) and I asked him about heart therapy out of Brazil in which a doctor was making a small cut, sewing it up, and curing a famous disease in USA at nearly none of the cost and much less pain.  The doctor said he knew the procedure well, was doing them all the time, the heart is just a muscle, the problem in essence just a hernia, and the cure like any other hernia, cut it and sew it up.  The problem was it was disapproved initially in USA, according to this cardiologist, because at about $100,000 worth of drugs for the USA alternative there was so much money in the USA way.  When the drugs went off patent, then it was allowed.

The cardiologist explained the heart of the problem of distributing marginal and new ideas to busy doctors.  Pointless compliance keeps them busy (romney/obamacare is pointless on steroids) but the big problem was referral fees are illegal in medicine.  He was quite cross that the lawyers who outlawed referral fees for doctors allow it for lawyers, in fact commonly sell cases to each other, adding incalculable cost to "justice and equity."

This is not to say that referral fees do not happen, of course they do, when a doctor prescribes pfizer drugs, he can expect all sorts of goodies from Pfizer.  Pfizer has a "how to" on their website in case anyone wants in.  And these are approved by the regulators.  And of course as we see time and again, even with it allowed, a fine of a couple billion is acceptable when the profits are in the tens of billions.  So here again, within the patterns and practices of capitalism, pain and suffering and death, killing customers for money, is commonplace.

The solution?  According to the cardiologist get rid of the non-referral laws.  If the cardiologist can kick back a grand to the family MD who refers a case to the cardiologist, then that family MD will far more prefer to take $1000 from the cardiologist than $1000 from Pfizer.  Simpler, easier.  Overall, the patient is out $15,000 (or insurance company) instead of society out $100,000.

But sadly, all practicing lawyers are government employees, without exception, and when it gets down to it, they will always defend the government program, which is currently the patterns and practices of capitalism.

Freedom to and freedom from is the essence of free markets.  To allow doctors the freedom to contract for fees and freedom from force and fraud when contracting for fees, is the free market answer to the system we now have.

(Kant spotted instantly and explained 250 years ago how the USA would fail given our legal system... in essence all lawyers being government workers and the conflict of interest... well, anyway, I've pointed this out before...)

Walmart will give you most  of your medicines at $4 a month if they are generics.  That is how cheap medicine is, but as long as we have patents, will have the FDA complimenting the lie that it takes billions to develop medicines, and BigPharm buying the politicians that keep the FDA in business and in BigPharm pockets.  "Affordable" "Care" Act is going to get you $1000 medicines at taxpayers expense for $500, when it is unlikely the best cure and 50% have no effect but 100% of the time the synthetics go through you and pollute the environment forever.  But that minority of fearful and entitled, mostly white progressives, directs what happens to the rest of us.

USA in this 50 years before and 50 after today will go down in history as the most brutal medically in the history of mankind.  Unspeakable suffering, and completely preventable.  People committing suicide, and now physician assisted, rather than cure or offered palliative care.

Now comes the Ebola "crisis" and a couple of doctors who have to leave the USA to do what pioneers such as Jenner could do before regulation, and the capture thereof by BigPharm.
If direct intravenous oxygen turns out to be successful, we can expect the government of Sierra Leone to announce to the world that it has a treatment for Ebola, as Dr. Rowen and his team are going there at the invitation of its President. That will make international news very quickly. On the other hand, there are commercial interests that stand to make billions, maybe trillions of dollars, on Ebola treatment drugs and/or vaccines, whether such drugs are effective or not. So it would be na├»ve to think that they will not make a sincere effort to suppress inexpensive oxidation therapies for the treatment of Ebola and other potential pandemic diseases…
“Will it be suppressed? Probably yes,” Dr. Rowen says. “I’m not afraid to tell you that my biggest concern in this is that we will be in greater danger from those interests than we will be from the Ebola itself… But you know, it’s something that I have to do. All of us who are going, we’re being guided by something much higher. It’s something that I have to do no matter the risk, because the risk is far greater if we don’t do it.”
Note they will test a cure.  Note they fear for their lives from the capitalists.  And here is the problem, if they mysteriously contract ebola and die, there is no knowing what happened.  And it gets more complicated, because if their therapy does cure patients (technically there are no cures for viruses, your immune system just wins the fight), then that is just valid, in that case not yet proven reliable.  You need many doctors in many places replicating the therapy before you get validity and reliability, and thus science.

This is not a race against time, it is a race against capitalism, the patent regime, and its sycophants.

A country that runs many exposed medical crimes, such as the Tuskegee experiments, and then off-shores them to places such as Guatemala as well, and in which no one is ever prosecuted, is not going to stop.  Doctors know this.  Some are committed to medicine in the face of unspeakable evil.

Right wing Christians love to use the most tendentious of translation of Romans 13 to promote servitude to the state.  But here is what Daniel says, 4:17 -
Daniel 4:17King James Version (KJV)17 This matter is by the decree of the watchers, and the demand by the word of the holy ones: to the intent that the living may know that the most High ruleth in the kingdom of men, and giveth it to whomsoever he will, and setteth up over it the basest of men.
And Peter speaking to the hegemon, Acts 5, v 29 - 32 RSVCE,
29 But Peter and the apostles answered, “We must obey God rather than men. 30 The God of our fathers raised Jesus whom you killed by hanging him on a tree. 31 God exalted him at his right hand as Leader and Savior, to give repentance to Israel and forgiveness of sins. 32 And we are witnesses to these things, and so is the Holy Spirit whom God has given to those who obey him.”
Talk about speaking truth to power.

Apparently the USA does not have the internal mechanisms to investigate, charge and prosecute wrongdoing, if it is done any State workers.  Too bad.  But we can hope for the future.  There is an election coming up, and we can vote for change.  Our options are a Clinton and a Bush.  The Bible says there is a reason we are ruled over by the basest of men (which includes women.)

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Guns and Schools

Yet again a kid kills at school.  When I hear "we have to do something about the guns" I know there will be no change.

Variously we are told the shooter in this instance was involved in a rivalry over a girl, or was heartbroken or whatever, or awkward and then shot the place up.  Now, think back to when you were in high school, if say from 1980 back.  Prior to 1980, we we not shovelling drugs at kids who did not fit into the factory model of education.  That became widespread up post-1980.

I graduated high school in 1973, in Seattle, and I cannot think of anyone I knew who did not have guns in the house.  We went shooting often enough, and the college at which my father taught to this day has a gun and rifle club.  We all knew where the weapons were and how to use them.  Today, I cannot think of many people I know who keep guns handy.  Yet, with all of this "gun control" there are the shootings.  Why no shootings back then when guns were easier, and more now when guns are less easy?  It's the drugs.  We drug kids to behave in ways they normally would not.  In enough instances, the abnormal behavior is to shoot 'em up.

If you recall, you too had rivalries over someone attractive to you, or you discovered the blues, that experience when you realize you cannot make someone love you.  Or you felt like an outsider, or whatever.    What did we do back then?  We grew up.    Kids are not chemically imbalanced until the drugs are introduced by the doctor to whom the kid is referred by the school counselor.  We infantilize kids instead of letting them grow up.

When I hear "it's the guns" I know the solution will not be forthcoming.  It is against the law now, but just make a law that says all shooters' medical records become permanent public record immediately and then you'll see: it's the drugs, not the guns.

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Sunday, October 26, 2014

Afghanistan Opium Sales Up

Sigh. http://www.businessinsider.com.au/the-uss-failure-to-end-afghanistans-opium-trade-2014-10
It also shows how one of the central US objectives in Afghanistan has failed. After 13 years and over $US7 billion, the country’s economy, and its armed groups, are as dependent on the narcotics trade as ever.
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Saturday, October 25, 2014

Something in the Air



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