Anyone with a passion for clean elections will be distressed by graphich proof of election fraud in California. But armed with proof, one may do good while doing well by designing a clean election method. There is a business opportunity here...
First, proof of fraud:
http://vote.ss.ca.gov/Returns/rcd/0159.htm
Keep hitting the "next" button on the lower right, and you will see the next districts election results. As you click thru, you'll see the republican vote results for 1st thru 4th position is statistically identical for every California district except one. This is statistically impossible, but there you have the results.
We are of course being scammed this election (if not every election, as documented in STEAL THIS VOTE by Andrew Gumbel and reviewed elsewhere on this blog). Hillary will be the next president, McCain will lose, and we change "change" in the form of more of exactly the same.
It of course does not have to be this way.
Thursday, February 7, 2008
Proof Of Election Fraud
Wednesday, February 6, 2008
Very Cool Bicycle Hubs From Germany
The Germans have come up with a 14 speed hub where all of the gears are internal... the company is called Rohloff and the hubs mean no grease, derailleurs, chains popping off mid-stroke... they are a thousand bucks and most people buy the hub and build a custom bike around it.
Why Pursue Non-Customers?
One main reason a person seeks intellectual property rights is to forbid others to sell an idea one has secured as his own "property." "I can make more money if no one can compete with me."
In Hong Kong, outside the Rolex store across the street from the Marco Polo Hong Kong Hotel, street vendors sell fake Rolex watches. How can this be? Well, no customer for a real Rolex watch is a customer for a fake Rolex watch. They are two completely different people. Rolex loses nothing when someone buys a fake. Indeed, Rolex gains because there is more free advertising when one wears a fake Rolex.
When Microsoft complains Chinese software pirates cost the company and others $3.9 billion dollars per year because their software goes for as little as $2 in China, the claim is absurd. People earning $30 a month in China will never pay $400 for a copy of Microsoft office. so to say Microsoft loses sales to pirates is just silly.
On the other hand, poor people pirating software do not sell for less than their costs. Therefore, there are people in China making money selling Microsoft software. The fact that these poor people can make money at $2 a copy, and Microsoft cannot, is a compliment to the ingenuity of the poor, and a cautionary tale about the obtuseness of the Microsoft organization.
Certainly the software pirate has none of the sunk costs of software development, but Microsoft is stuck with X sunk costs, so they are at the same place as pirates in China, in China.
There is a way to make money in a pirate-rich environment. Microsoft presently orders a Chinese factory to make (say) a million copies of Office for Microsoft to sell in China. Then Microsoft gets busy tracking down pirates in China at USA taxpayers expense. (Which, as an aside, is really the only reason companies pursue pirates. Take away the subsidies, and the "injured" company loses any interest.) With only a million copies on the market, and those at a high price, the pirates then get busy making money too, out of their factories. The authorized factory could care less about any piracy going on. They have their Microsoft contract, they have made their money. "Pirate on, dude," as they say in China.
A better way is for Microsoft to order a Chinese factory to make (say) a million copies of Office for Microsoft to sell in China. This is all Microsoft will sell. Further, Microsoft agrees that the factory can make as many more copies as it likes to sell to whomever the factory wants at whatever price. The only stipulation is Microsoft gets say 10% of the revenue of all those sales.
The result is Microsoft sells its million copies, just as Rolex sells real Rolexes. Next the Chinese sell even more copies, off which Microsoft makes money it otherwise would never have seen. Also, Microsoft benefits from the initiative and creativity in marketing that the Chinese now have an incentive to demonstrate in selling Microsoft Office, an intiative and creativity the Chinese otherwise would not manifest. Further, there is zero piracy going on in China under this scheme, since the authorized factory has a very big incentive to suppress any piracy, using Chinese methods to do so. Whatever those may be.
Another version of this is say Tommy Hilfiger orders 10,000 jackets from a factory. The factory makes 12,000 to yield 10,000 perfect jackets for Hilfiger. The 2000 defective jackets go out onto the back alleys to be sold at discount.
Result? The cost of those defective jackets do not have to be amortized on the 10,000 good jackets, giving Hilfiger a better price. Those customers buying defective Hilfiger were never Hilfiger customers anyway, they are customers for only defective Hilfiger, and Hilfiger does not sell defective goods. They are non-customers of Hilfiger.
Cheap Management
When arguing that cheap management is our motivation for going overseas, not cheap labor, I note the obverse is true... for foreign suppliers, we small business importers are extremely inexpensive (cheap) new product introducers into the USA. In fact we are no cost at all to the suppliers, since we are paid by our customers in USA. And we are paid around $250 an hour for our work. When overseas suppliers sell to us, they are exploiting the cheap management we provide.
Ruminations on Week Three
"Who Has Your Passion For Your Version?"
The question of your customer going around you came up in class, which is a perennial... and I think I hit on a pithy riposte, "who has your passion for your version?"
I think the error in thinking that your new product will be stolen is the error that the product is perfect as it is, plus it will sell fantastically well immediately. This error leads to another, and that is erroneous idea that you must protect your idea with intellectual property rights (patent, trademark, copyright).
Although the product or service idea starts with us and our experienced dissatisfaction, our inquiries in the marketplace will not only confirm if it is a good idea to pursue, but at the same time feedback on the mere idea will more fully inform your concept and lead to a better product.
Once you execute your first minimum order shipment, customers will naturally critique your item, leading to ever more improvement in product, which in turn improves the sales of the item. Since you are always buying minimum orders form your supplier at the small biz level, "better sales" translates into quicker accumulation of customer orders, which in turn means more frequent orders from your suppliers (not larger orders, but more frequent).
Now pause, since you are constantly changing your products, why would you seek intellectual property rights on an item you are constantly changing in order that you may get more sales? It does not make sense to "protect" your item at the small biz level. Why not skip rather large lawyer fees for a one time iteration of an item? Soon enough the item will be so different that your patent is irrelevant.
Now back to "customers or suppliers going around you." I mentioned the value you provide in breaking up a suppliers minimum among many USA retailers, and allowing many USA retailers to avoid a suppliers minimum, doing a favor for both. Aside from that, and the fact it is unlikely an overseas supplier would burn you when you are bringing the supplier new USA business, who has your passion for your version? Who is going to make do the work necessary to ever improve and come up with your versions? Well, nobody, because you are unique, as are your contributions. Even if someone did steal your idea (and they will not) they are stuck with a version that by they time the thief presents it, you are already on to a better version.
Of course, in big biz everyone steals each others ideas. It just does not happen at small biz level.
Tuesday, February 5, 2008
"Newswriters" Still Making Up Market stories
One story said it was profit taking, another says it was service sector weakness. Since the writers cannot possibly know, they are making it up.
http://biz.yahoo.com/ap/080205/wall_street.html
It would be possible to know, and thus make a valuable resource, if someone were to take the time to do a valid and reliable survey daily, sort of a neilsen Ratings for stocks, to get an idea of why people bought or sold their shares on the market. It could be done, but I suppose if someone can get paid without working, he will.
Not A Prediction: Hillary Will Be President
Before the Super-Tuesday tally comes in, I want to go on the record again saying Hillary will be the next president of the USA. I do not like to make predictions, and I am not in this case. It has already been decided. What is happening now is just firing up everyone who has been disaffected by the last 7 years... blacks unhappy with govt response to Katrina get Obama! Nutjobs wanting USA on LOCKDOWN have Rudy, who cancelled an election he was going to lose so he could continue to be Mayor... the evangelofascists who got scammed by Bush & Co. have Huckabee as a consolation prize; I have no idea to whom Romney appeals... and of course John McCain will be the Republican candidate but cannot beat Hillary. Now that everyone is fired up and mostly saying hooray for our side, Ron Paul will do for Hillary what Ross Perot did for Bill... Paul will split the conservatives and election fraud will do the rest. Everyone will have re-bought into the system, and we will have more of the same.
Officers Misbehave!
This made the news in Ohio, and as the newsman said it is hard to watch, so fair warning. A women called 911 and ended up arrested herself by an officer confused as to who was who.
http://www.youtube.com/watch?v=a1yUsYIk2EM
Whatever explanations come forth, the facts are male officers stripped a women, a violation of rules, they left her naked and handcuffed in a cell, a violation, for six hours, a violation.
About 20 years ago the rules changed in USA, where cops were no longer allowed to use their discretion in domestic violence cases. Always someone must be arrested. Cops hate domestic violence calls, and hate the requirement to arrest someone even more. Obviously this cop arrested whoever was close at hand and got it over with. Probably one reason all cities are having trouble hiring new officers is “who wants to do that kind of work?” More and more, it is the wrong people.
(When the law was first passed, the cops resisted by arresting women instead of men, since very often in domestic violence cases it is the woman doing the hitting, something of a backfire for those pushed for this legislation).
There is a sort of cause and effect in life, and since none of those responsible for Abu Ghraib were punished for it, the politicians have invited this kind of abuse into our culture. (OK, agreed, it only becomes news when it happens to an attractive white woman; nobody complains what has been going on for years to minorities...)
Glenn Greenwald at Salon makes the same argument regarding torture and spying, noting that the democrats are giving a pass to the republicans on every degeneration the republicans demand. Of course they do, because they want that power when they rule next.
http://www.salon.com/opinion/greenwald/2008/01/31/mukasey/index.html
There is an alternative to all of this, and that is withdraw our consent and turn these functions over to private enterprise. No, not “outsource government work” but to take the work away from government and let insurance companies and private security firms provide for our safety and security.
Monday, February 4, 2008
Online Course Reflections
Just a few follow-up thoughts on the online class second session...
Frequency not volume... if you grew up in USA, there is only one way to do business as taught in business schools, assumed on all trade magazines and newspapers etc, and that is you compete on price by means of volume. So far in this class we've learned there is another basis, and that is competing on design.
If you are competing on design, what you have is new. Your product is the answer to the #1 question of every customer in the specialty markets "what is new?" the # 2 question is "What is your minimum?" because the stores have no idea how the "new" will sell, so they manage away the risk by buying an absolute minimum.
And so do you. Your supplier may have a 500 piece/ $5000 minimum production run requirement, and you may be selling 10 units per store, thus you need 50 stores to place orders with you, in a workable amount of time, for you to get enough orders to cover the supplier's minimum.
And so you do. Now this first shipment, once delivered, may not sell well. (if it does, great, just keep taking orders). If it does not ell well, the stores will tell you why: wrong shape speed flavor size material color or whatever. Even if it does not sell for the retailer, they still pay you, plus they tell you what is wrong. At this point, you fix those problems, and try again. And you keep this up and watch your product get ever-better.
As your first shipment sells out, and you order a second shipment against new orders from new samples, and in this way you are able to remain flexible and responsive to the market. So your next shipment is an absolute minimum as well. You never order more than an absolute minimum from the supplier, in spite of the fact that you are shipping in less than container loads of goods, and gaining no economies of scale you mmight get from volume shipments.
In volume, you may get a 100,000 order from walmart, and then work to get that to 500,000 in 6 months, then 1 million 6 months after that, always trying for more and more volume.
In frequency we may get our first $5000 order covered in 6 months from now, then we shoot for another $5000 in 3 months, another $5000 in a month and a half, another $5000 in 3 weeks, another $5000 in a week, and so on. We never push for the economy of scales of mass merchandise.
No one knows us starting out, they will let us offer something marginal and new, and if we do well, continue to do business with us, even offer new designs for us to work on, ever growing our business.
Any problems we run into we sort out as we go, and there is really nothing we have teo worry about, because since we love what we do, we enjoy solving the problems.
Anne and Mileandru gave us good arguments to work with Wednesday, and I'll address these as devil's advocate.
Secrecy leading up to a launch denies us the good of the feedback of so many customers. Secrecy also implies the item will have a huge market, something many will want to steal. I doubt this, but let's address it on a practical level.
With a big, secret launch you have the problem of all your eggs in one basket. It takes money for a big launch, and then you have the problem of finding the, and at what cost? What if something goes wrong with the product, and a recall is required. If you scare everyone, getting anyone back will be a challenge.
The same item launched noisily on the margin to upscale stores keeps the exposure minimum, so that if anything goes wrong nobody knows and nobody cares. To recall $5000 worth not anything is not the end of the world. Financing the launch of a small business only takes the money for the first minimum production run, say $5000, and you can earn that on your own working part-time at Starbucks if need be, in other words, there is no stopping you.
There is money to be made while working through the upscale stores, money that can never be gotten later. plus, there is lifestyle to be lived while developing the business from small to bigger which you miss out on if you try to go straight to big. it would be a drag to devote 4 years and all assets to a project that leaves you far worse off than you started.
It might help to forget about starting a business, and just think in the much narrower terms of milestone # 3... that is getting enough orders from customers to cover the suppliers minimum in a workable amount of time, profitably. Get that done and then decide what to do. Think of it like a small project you do in the next couple of months, like cleaning out the the garage or something that is a challenge but not amazing. Don't sweat it like "I am trying to start a business."
then when you get to milestone #3, execute and repeat as necessary.
I was in Las Vegas at the Ski Industry Association show Tuesday and met Klaus Obermeyer , who founded Obermeyer Sport (clothing) over 60 years ago. Never heard of him? Most people haven't, but the down parka, the turtleneck sweater and stretch ski pants all came out of his company. He is another example of someone who experienced a problem, solved it for himself and then sold it to everyone else.
He would tell you what I am telling you... I know because I learned if from people like him and do it myself. (Actually his daughter took my class some 20 years ago when she was starting a snowboard company herself... which I thought was strange since her father has forgotten more than I'll ever know... but there you are... I didn't mention to him I tutored his daughter.) He must be over 90 years old, was laughing and acted as delighted to greet me and my wife as though we were his first customers ever. He just loves what he does, the money just comes with the work. We want to work it the way he did.
Rumination After A Class
Somone made a commnet in my online class that got me thinking... I don't quite recall who said it, but it was something to the effect that "just because people express excitement for your product does not mean they will ever buy it."
I could not agree more. In fact, I think it is a common problem, I address it in the book as "mother-in-law" marketing. We talk to people who naturally agree with us or are merely sympathetic, and they encourage us to the point we are delusional as to what the demand may be for our product or service or whatever.
How to protect ourselves from self-delusion while starting up a business?, We protect ourselves by only ordering from the supplier what we have enough orders from customers to cover. And then we repeat as necessary.
Now, those retailers to whom we eventually return with samples are neither friends nor relatives, and not inclined to flatter us. Quite the contrary, they are inclined to be clinical and clear.
What we do have going for us is the fact when we are first showing our product we are doing so to cold, hard buyers. Second, we are showing something new, that they are likely to order merely because it is new and different. Yet, they WILL NOT take any risk, hence their negligibly small orders, what I call "confetti orders," because the buyers throw these orders out like confetti.
Here is your problem... you can get those "confetti orders" that all retailers throw out, but you must get enough and in a workable amount of time, or the deal will not work.
(Of course, if you cannot enough, or timely, then your problem is in the design of the product, and you must redesign further based on what market feedback you've received while failing to get enough or timely orders).
Happily, just about any buyer will try something that offers no risk and is something the buyer already has identified as "a good idea and does not exist." And of course this is why the supplier overseas will not go around you, it makes no sense for the overseas supplier to fill such small orders; nor will your customers go around you to the factory direct, to buy such large quantities. You eliminate risk by buying a minimum from the supplier, which is to way to large for the retailer, and breaking it into minimums way too small for the supplier to ship. This is just one of many solid values you provide and for which you get paid.
Those companies you see thriving did it this way, and so should you.
Headlines... How Do they Know?
It is very strange to read what investors are thinking according to an AP writer... how can he possibly know what the collective wisdom of millions of investors are on a given day? I think it is instructive to see plainly how news organisations just make up facts to go along with events. And especially in the business area, where so many have so much at stake.
Along with Gloria Steinem, it turns out CNN's Anderson Cooper is (ex?) CIA, as Bob Woodward (ex?) Naval Intelligence.
Do you rely on the news? Is this a problem for you? Perhaps there is a small business to be made in news. (Actually there are plenty doing this right now, I think it is called free press.)