Saturday, March 14, 2015

Stop Worrying About Price

One of the big inhibitors to people pursuing a successful business is their discouragement when they see their prices will have to be relatively high.  Another big inhibitor is fear someone will steal their idea.  De minimus!

Yes, price is one of the Four P's, product price place promotion.  But just one, and not the most important.  At the specialty level, product, that is, its design, is most important.  Price is least.  Price only has a secondary issue or what volume at what price point.  iPhones would still sell profitably at $2000 or at $500, only the quantity sold would change.

Even when selling the exact same thing, price is not that big of a deal, then place and promotion matters.  For example, here is a famous crisp bread that sells for $4.49 as a stock item in an upscale grocery store.  Not two miles away, it sells for $3.89 as a stock item at Safeway, some 60 cents less.  but wait wait...  Safeway often puts it on sale.... another buck forty off, for a total of two bucks less.  And there is more, a manufacturers coupon is on the price ledge, for another buck off: total $1.49.  I save $3 off a $4.49 item by stopping by 2 miles away.

You know nothing, let your customers decide if the price you need charge is right.  All you need is enough customers at a profitable price to cover the supplier minimum, in a workable amount of time.  If so, you are on your way.






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Why India Is Poor

The reason India is poor, and has not improved since the British Raj was dismissed, is the British Raj was replaced by a Hindi Raj, a collection of Fabians and socialists worse than the British.

That is changing.  In the meantime the rest of the world has been denied the good of Indian creativity and competition.  Might be changing...
NEW DELHI: As part of efforts to improve its ranking on 'Ease of Doing Business', India today reduced the number of mandatory documents required for import and export of goods to three in each case. 
The move will also lead to reduction in transaction cost and time. Currently, around 10 documents are needed to fulfil the official obligations.
Who knows?  In the measure Indians give themselves freedom is the measure the rest of the world will benefit from Indian genius.  With freedom the pie just gets bigger, and everyone gets a bigger slice.

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Are You a Lawyer, Interested In International Trade?

I hadn't though about this, but I am well aware of "private attorneys general" a part of the American genius buried by the fasco-capitalists.  We need never wait for some political hack to initiate a criminal proceeding, any citizen can do it on his own.

And if you do, you get part of the pay off:
The lawsuit, initiated by private citizens, alleged the company made false statements to secure loan guarantees from the Export-Import Bank of the United States.
These whistleblowers sued under the False Claims Act, which allows citizens to sue on behalf of the government and share in any recovery. The will receive $608,000 of the settlement and and $100,000 from Hencorp to cover attorney's fees, costs and expenses.
Now, you need not be a lawyer to do this, but since there is so much law involved, a lawyer would have an advantage.  (Now, all licensed lawyers are government workers, without exception, in spite of any pretension of any being in "private practice" so they may be technically barred... but any law student could handle this.)

The Export-Import Bank is notorious for blatant fraud, so one could simply pick any company that has an ExIm loan and begin discovery for public records and the cross references names, etc, soon enough you'll stir up something that stinks.

A Roman CAtholic priest picked up millions when a medicare doctor tried to do an unnecessary triple bypass on his perfectly healthy heart.  If there is Fed money involved, necessarily there is fraud.  Go get 'em.

A great way to do good while doing well.

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Friday, March 13, 2015

Usury - Show me the Teaching

At 2 minutes and 20 seconds, the bishop makes an error: "Usury ... can be defined as charging and unjust interest rate on a loan."  No, usury is (using the word interest as he uses it) charging any interest on any loan.  That is what the church teaches, and has never changed its teaching.  (I suppose you might argue this Bishop means any interest is unjust, but that is not sensible from the context.)



The above video is cited as evidence in an article of religious efforts to curb the exploitative "payday loans."  The article is a litany of religious efforts to fight this injustice.  But for each effort is noted a failure to make any progress.  Wonder why?

But of course.  David wanted to build God a temple, but God forbid him to do so "for the blood on David's hands."  Since usury is widely practiced by bishops aplenty, why would God allow them to provide any good here?

Being usury-free is a funny thing, you have to be there to "get it."  It is an experience, not an ethical or rational stance one can intellectually arrive at, but an experience.  The only way it is going to persuade is from within the regimen.  It is in the order of "things unseen."

It is wrong to use usury at 36% to exploit the poor, but not to use it at 12% to build a Cathedral? The church teaches it is wrong, literally at any rate.  The only difference between 36 and 12 is the time it takes to do the damage.

Is it credible to claim exploitation by people who charge 36% and live in palaces when you pay 12% and have a Cathedral?  (And note, the most beautiful Cathedrals in Christendom were built without a groat at usury.)

The Bible expressly forbids 1%:
Nehemiah 5:9-11New International Version (NIV)So I continued, “What you are doing is not right. Shouldn’t you walk in the fear of our God to avoid the reproach of our Gentile enemies? 10 I and my brothers and my men are also lending the people money and grain. But let us stop charging interest! 11 Give back to them immediately their fields, vineyards, olive groves and houses, and also the interest you are charging them—one percent of the money, grain, new wine and olive oil.”

The people who once owned fields, vineyards, olive groves and houses are not "the poor" they are the middle class and richer. I do realize there are plenty of sources which contradict this teaching, but sources that contradict the teaching are not the teaching.  The teaching is that any usury (what we call today interest for purposes of obfuscation) is wrong at any rate.  It is not for me to argue against those who claim usury is permitted, it is for them to demonstrate where the Church permits it.

Waiting...  (Yes, I've read your source.  It does not address the teaching, it only makes an impertinent claim....)

The reason the Church, and God, reiterated expressly by Jesus, condemns usury is not because They say so, but because it does damage.  It is not possible to exercise usury damage-free.

The Compendium of the Social Doctrine of the Church twice mentions usury and both times expressly condemning it, noting the recent explicit condemnation of usury by Saint Pope John Paul.  I am finding this teaching document far more useful than the Catechism.

The current Catechism of the Catholic Church does not contain the word usury.  Not once.  Check it out yourself. It does use the word interest as a synonym for usury once:
2449    Beginning with the Old Testament, all kinds of juridical measures (the jubilee year of forgiveness of debts, prohibition of loans at interest and the keeping of collateral, the obligation to tithe, the daily payment of the day-laborer, the right to glean vines and fields) answer the exhortation of Deuteronomy:“For the poor will never cease out of the land; therefore I command you, ‘You shall open wide your hand to your brother, to the needy and to the poor in the land.’
You'd think with the overwhelming condemnation of usury (charging interest) going back to the beginning of Judaism, and its near universality today, a change might be noted?  At least an approval?  But the only thing in current official Catholic teaching is a re-iteration of the ancient condemnation?

The last formal papal teaching of the Church on usury was in the 1740s, Vix Pervenit.  If a change had taken place, one might have noted it.  Any who who claims a change took place needs to cite the teaching where the change is noted.  Again, fill in the blank, I read it, it is someone claiming the church changed its teaching, not a citation of church teaching, or change thereof.

For those who claim it changed, I ask: cite the teaching of the Church.

Can't be done.

Now, as to the problem of payday loans, let one who is usury free start with Catholic teaching:
2429    Everyone has the right of economic initiative; everyone should make legitimate use of his talents to contribute to the abundance that will benefit all and to harvest the just fruits of his labor. He should seek to observe regulations issued by legitimate authority for the sake of the common good.215
The problem is not vast swathes of people who avail themselves of payday loans, the problem is the vast swathes of regulations that destroy any possibility that the vast majority of people might ever exercise economic initiative in fasco-capitalism.

We all love a system that works for us, and it is easy (and F U N !) to condemn those for whom the system does not work.

Elsewhere, regarding regulations, Jesus expressly says "obey the regulations, just do not be like the regulators."  And there is the path to overthrowing the system as it applies exactly to you.

Obey, but know the regulators are your enemy, and do not be like them.  Don't use interest yourself.  Don't fawn and become obsequious. Within the milieu of conscientious objection to force and fraud, of which usury is both, there are countless creative responses.  The pusillanimous regulators and the base politicians simply do not have the time and creativity to keep up with people who are inherently free.

The answer to the problem of payday loans is to teach people they can beat the system, if they will not "be like them."  The bad guys came up with a system within politics that obtains the status quo.  Appealing to the basest people to amend the status quo is to "be like them."  Dead wrong.  Either a borrower or lender be, and you are in usury.  Don't expect usurers to lead the victimized poor out of usury.

After being proclaimed Messiah, Jesus first act was to overthrow (literally) the economic order.  The powers that be turned him over to the Romans, whose response was shock and awe, baby:  You want a king, ecce homo!  INRI!

We are not the messiah, and we will be (are) off the radar.  The freedom from the usurers is there, but you cannot ask them to "only charge 12%" and expect good results.  The victims will be just as despoiled, just not as quickly.  How is "less bad" good?  Why not teach what the church teaches: prohibition of interest (as used in this context)?

The most revolutionary act we can perform is start a business.  And don't be like them, make it usury-free.

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Thursday, March 12, 2015

Sitting Ducks: Paycheck, Property, Pension

Mish introduces a new term, NIRP, negative interest rate policy, in his ongoing explication of the state of affairs.  I've noted here before the next 40 years will be bad for anyone depending on a paycheck, property or pensions.  So does he:
In their inane attempt to prevent consumer price deflation, the world's central banks have spawned massive asset bubbles in equities, junk bonds, and housing.
When those bubbles burst, they will spawn the extremely destructive asset deflation that central bankers ought to fear, but never do because central bankers never see the bubbles they create until they burst wide open.
The last forty years the hegemon helped their friends and punished workers, with inflationary policies.  There was no rational limit to how much asset-less backed credit could be lent.  That is bad enough, but it was lent at interest, even worse.  The result is a false economy, that is coming down, and the powers that be have no control over the freefall.

Due to credit deflation, as the powers that be come after your pay, pension and property, as you extend credit to customers the longer it takes for you to be paid, the harder the currency in which you are paid. Your accounts receivable are denominated in so many small amounts, they are not worth stealing plus the plan is to catch your money in the form of taxes on your profits.  But the laws that allow big biz to avoid paying taxes work for the self-employed too.

Best be self-employed, renting.  Get married if you are young, have kids, for in about 30 years there will be some great opportunities in real estate.  In the meantime small businesses will be the most pleasant place to be.

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Russia Gets a Seat on SWIFT

O dear.  The USA is trying to punish Russia for the USA destabilization of the Ukraine.  one way is to isolate Russia economically, and one specific way is to cut Russia out of SWIFT, the Society for World Interbank Funds Transfer.

But Russia's increase in world trade, in spite of the USA sanction on Russia for USA destabilizing the Ukraine, has earned Russia a seat on the board.
Increased banking traffic means Russia now has a seat on the board of the SWIFT global interbank communications system. The seat comes at a time of increased pressure for Russia to be removed from the organization because of sanctions.
In response to the sanctions, Russia joined other countries that are targets of USA destabilization in forming an alternative.
At the end of last year, the Central Bank of Russia (CBR) launched an alternative to SWIFT for domestic payments which was a part of a broader move to get away from Western financial dominance. The new service allows credit institutions to transmit messages in a SWIFT format through the Central Bank to all Russia’s regions without restrictions.
So the Russians will have their cake and eat it too.  The Bible notes our leaders will be remarkably stupid so we never feel they are in charge.

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Robert Reich on Free Markets

Robert Reich has made some odd statements, but very pleasing to those who love free stuff...

1. The "job creators" are CEOs, corporations, and the rich, whose taxes must be low in order to induce them to create more jobs. Rubbish. The real job creators are the vast middle class and the poor, whose spending induces businesses to create jobs. Which is why raising the minimum wage, extending overtime protection, enlarging the Earned Income Tax Credit, and reducing middle-class taxes are all necessary.
Bobby, the end user pays all taxes.  The poor pay taxes on almost all of their income, the rich on almost nothing.  As Pynchon said, get them to ask the wrong question and the answer does not matter.  The question is not whether to tax the rich, but "why taxes?"  The answer of min wage, overtime protection and EITC are irrelevant, and cutting taxes for middle class is absurd since any taxes end up coming out of all of their income eventually.
2. The critical choice is between the "free market" or "government."Baloney. The free market doesn't exist in nature. It's created and enforced by government. And all the ongoing decisions about how it's organized - what gets patent protection and for how long (the human genome?), who can declare bankruptcy (corporations? homeowners? student debtors?), what contracts are fraudulent (insider trading?) or coercive (predatory loans? mandatory arbitration?), and how much market power is excessive (Comcast and Time Warner?) - depend on government.
Bobby, as a Jew, you know there was 400 years of free market in Israel before, in direct contradiction to the will of God, the Jews demanded government, their first king.  Things went downhill fast, and really never recovered. There are many examples of anarchic free markets before and after then.  There is a free market, in nature, and then there is government intervention.  AS far as what good government provides, how is that working out so far?  Start by checking your list of "public goods."
3. We should worry most about the size of government. Wrong. We should worry about who government is for. When big money from giant corporations and Wall Street inundate our politics, all decisions relating to #1 and #2 above become rigged against average working Americans.

Go get 'em, Bobby!  You be the first person in the history of mankind to set about with a plan to remake society, and have it turn out well.  Come up with the policies that will make the government for the people.

The problem is where we see such good things, it is accidental, never the result of a program.

If at first you don't secede, try try again.

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Wednesday, March 11, 2015

China Cross-Border Free Trade eCommerce

You’ve spent thirty years doing the gruelling work as an American building an import business in China, that is to say a wholly owned subsidiary that follows the rules, pays the taxes and distributes in China.

I told you not to do that.  For forty years I told you!

With the Shanghai “Free Trade Zone” anyone in USA can sell your product from USA direct to your customers in China, and not worry about the VAT, import tax limited to 10% max, and Chinese labelling, nutrition fact slabelling, Chinese standards for ingredients and additives waived, no certification on orgainic and such, nor claims qualifications on food and biodynmaics. All is waived.  

If someone is not going around you with your products, then your competitors have a fast lane to your customers with theirs.

I told you, don’t do it.  Just get a Chinese importer as a customer, and forget trying to set up a biz in China yourself.

I learned of the Shanghai Free Trade Zone (FTZ) innovation in logistics at a conference on selling into China last week, and the various companies which are concentrating on this effort.  Of course many Alibaba (with which you ought NEVER do business or use) units are in on it, as well as Walmart, Amazon and Costco.

So here is the offer:  easy access to vast Chinese markets, throw rules and regs out the window, and do it your way: sell direct from USA, warehouse in Shanghai and sell direct out of your China-based stock, or sell to Chinese company that retails your product.  You name it, they will facilitate it.  Have it your way.  And finally, you can control your product, eliminate the problem of trade mark violation.  Buyers know via the Shanghai FTZ they are buying the real McCoy.

Now, there are some set up fees, transaction fees, some initial permissions, but after that, it is clear sailing into the China market, for any and all comers.

The conference was loaded with solid info, but there were two data points conspicuously missing (but always missing in eCommerce conversation in USA as well):

1. Per cent of China retail market that is online?

2. Cost of customer acquisition for online sales?

What do you think the percent of retail sales are in the USA that take place on the internet?  40%  18%?

It is about 6 percent.  No more.  In China it is 5%.  This means in usa 94% of retail sales take place off the internet, meaning to do a eCommerce pure play is to miss 94% of the USA market.  And in China, you'll miss 95% of the market.  My research said six, but I’ll take their word for it.  Less than USA  

I pointed the missing market to one of the presenters in the private meeting, and she replied "Brick and mortar has its charms."  Splendid!

I asked cost of acquisition, I was prepared to explain what this means, but they were hip.  Starts at 10%, and rises form there, depending on the product.  Naturellement. 

When Chinese have a certain accent, are fully informed, and no nonsense, I think they are party members. I first met them back in the 1970s, they have a certain look and feel.  One kept asking me:  why are you here?  What did you come here for?  “Just the facts, m'am.”

So note how, for only 5% of the market share, how much heavy firepower (Alibaba, Amazon, Costco, Walmart) is concentrated on that narrow 5% market.  And the cost of acquisition is quite expensive.  These heavy hitters are willing to lose money for a while in hopes of carving out market share.

The talk was of massive ramp-up of SKUs.  This means cost of acquisition will rise as you try to crowd in on the big boys presentation of product to the extremely few buyers available.  One of these heavy hitters noted they are putting up posters on walls in train stations so people can scan with their smart phones and order right then.  How Qing Dynasty, 220 BC!  Big poster ads in the transport hub!

Current info is Amazon is getting about 3000 orders a day out of this arrangement and Costco with its Kirkland Brand about 100 order a day.  Given their fantastic resources, reflect on those numbers. They are getting the above, and with your resources what will you get for your overwhelmed effort to find market by these means?  What will be your cost of acquisition?  How much time will it take to maintain?

The reason I attend these things is if there comes a better way to do small business international trade, I want to see it first and use it.  This effort and innovation changes nothing for those at the small biz int'l trade.  MOQ FOB to Chinese importers (not to your own subsidiary in China), targeting the 95% of the market, is still the best way to go.  In fact, with the big brands smashing each other over 5% of the market means they are not competing against us in the 95%.  And remember, in most of China, no one knows the difference between your canned soup and Campbell's.    You start on equal footing.

That last benefit, the proof the product is the real McCoy does not really work.  The copyists will still do a brisk trade, for the fine point that Kirkland can only be had via the FTZ is not going to stop people from buying Kirkland outside the FTZ channel.  The only sure-fire control is traceability, so those working the FTZ angle will be at a disadvantage to we who use traceability working in the 95% brick and mortar markets.

Nothing has changed, except the big boys have left the field.

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Trade Deficits?

I'd never heard of Campaign For American's Future, but probably just as well, their understanding of economics is abysmal.
In modern terms, we would say that you were "running a trade deficit." How much damage do you think that "trade deficit" is doing to you and your ability to make a living in the future? How long do you think you would let that "trade agreement" continue?
I run a trade deficit with Safeway on groceries.  Am I harmed by a trade deficit with Safeway?  I cannot think of a single customer of mine from whom I buy anything in return.  Are all my customers harmed?

Title of the article had "free trade" in scare quotes, so I read the article.  It is true that the USA has really no free trade to speak of, but true free trade is not the agenda of these folks.  The agenda is mercantilism, protectionism, so welfare queens in USA need not make an effort to compete.
This continues because we, the United States, do not have national industrial/economic policies that recognize the U.S. as a country with national economic interests. Instead, our leadership and opinion elite have been convinced by the ongoing conservative campaign arguing that government should not "interfere," and that acting as a country to protect our national economic interests -- known as "protectionism" -- is bad. Meanwhile other countries are doing exactly that, and their economies and industries benefit from it.
So this crew is not interested in free trade, just making a special plea that a different set of welfare queens win. So that is one set of welfare queens, and here is their target, the other set of welfare queens. From the current head of the ExImBank:
“Our bottom line is American jobs, but we also know that the bottom line for your small businesses is sales,” Export-Import Bank President Fred Hochberg said during the event. “Our products, our experts, our entire agency, it’s all here to break down the barriers that hold you back from winning global sales.”
Really?  The ExImBank is in the business of product design and management skill?  I thought the ExImBank lent credit at taxpayer's risk to welfare queens overseas who in turn buy products from welfare queens in the USA, like Boeing and Microsoft.  No?

No.  ExImBank harms the USA economy by allowing non-viable businesses to undercut viable businesses who have built market without welfare queenism.  But the policy of the hegemon is "get big or get out" so the effect, destroying viable businesses, is consistent with the stated goal.  When the stated goal is destruction, the means destructive, and the results destructive, at what point do you begin to take the hegemon seriously?

All free trade is unilateral.  You never need an agreement to initiate free trade.  "Free trade agreement" is oxymoronic.  Trade deficits do not matter, but "free trade" and "industrial policies" do so distort investment that poverty, war and injustice follow.  Econ 101.

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Tuesday, March 10, 2015

McD and Credit Deflation

The most expensive thing in a happy meal is the toy, and McDonald's has always competed on price.  For the last fifty years that has worked very well, but now we are in deflation (credit deflation.)  McDonald's sales are sliding, and there is nothing they can do.

The company said its sales in stores open at least a year fell by a startling 4 percent in the United States and by 1.7 percent globally.
“Consumer needs and preferences have changed, and McDonald’s current performance reflects the urgent need to evolve with today’s consumers, reset strategic priorities and restore business momentum,” the companysaid in a statement.

They can't lower prices, because the ingredients they buy are based on ZIRP interest rate land, growing subsidized product that has maxxed out demand world wide.  Production cannot widen from maximum, land cannot be bought cheaper, demand will not slacken when the more you subsidize, the more you sell, you cannot cut labor when 98 million workers are unemployed and collecting benefits.

McD cannot go up-market because the infrastructure of McD is designed for cheapest fastest.  No possible way the owned stores can cover the component cost of financing the means of production, pay their bonds, with the revenue of lower sales at higher prices.  The strategy of the last forty years has trapped them.

When McD's raises prices clientelle will comparison shop and prefer the smaller, better.  This leaves the customers who do not care about price, the 48 million who pay by EBT cards, (on in seven Americans) become a bigger concentration of McD clientele, leading to a downward spiral for Mcd's.  Ironic that, welfare queen McD's is failing because its welfare-subsidized customers won't work for McD.

Cut corporate welfare first, and watch the real-economy small businesses rush in to fill the need.  they will hire the most will to get off EBT first, for a smooth transition from fascism to free markets.

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Monday, March 9, 2015

Smuggling Into Vietnam

Buy USA has been an utter failure, and I imagien Buy Vietnam would be as well.  It appears Vietnamese merchants slap "made in Vietnam" tags on Chinese goods, for some unknown reason.
Bui Ngoc Son from the Institute for World Politics and Economics Studies noted that the “buy Vietnamese” campaign would not have much significance if Vietnamese, by accident, still use low-quality Chinese products that bear Vietnamese brand names.
By accident?  We may surmise false labelling is to fool the consumer, but usually consumer could care less.  Is it to complement the folly of official regulation?  Who knows?

There is a foolproof way to not only prove this, but enforce it, and that is with traceability. QR codes referring back to actually producer who affirms the goods one is at that moment viewing are the Real McCoy, as we say in USA.

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U S A Hegemon

This is how it works:

The USA military destabilizes entire regions, and then sells weapons for third world people to defend themselves.
“There is an immediate military threat emerging on the Saudi periphery,” said Sabahat Khan, a defence analyst at the Institute for Near East and Gulf Military Analysis.
“The threat from ISIL has reached the Saudi border. It’s going to be a battle that will span many years. In Yemen, to the south, the [Houthi] rebels are creating problems ... that’s in addition to the long-standing threat from Iran.”
The Middle East is also the world’s fastest growing defence market, with annual spending totalling about $150bn, according to the Stockholm International Peace Research Institute (Sipri).
Global defence spending totalled about $1.75 trillion last year, says Sipri.
“When we look at the likely export-addressable opportunities at the global level for the defence industry, five of the 10 leading countries are from the Middle East,” Mr Moores said.
Here is the President who lead earlier lead the Army to victory over the Nazis. He warns of "powers sought and unsought."  Sure arms companies seek business, but right wing Christians give them powers unsought and the progressives much welcome the funding of their sinecures brought about by the revenue from arms sales.  Sounds good, except the little girls we set on fire so we can have free $#*! and the people who starve while trade is disrupted for a snuff film fest.

Before you address a problem, you must admit there is a problem, and assess its contours.  We've known about this for fifty years at least.


Sack cloth and ashes, at least.

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Sunday, March 8, 2015

USA Bad Policy For China

If one disagrees with the policies of the powers that be of the USA for the USA, then naturally one would object to their policies for others.  Especially if they are hypocritical.

Trade policy arguments are staggeringly hypocritical, and I've covered that enough here.

Pollution control policy might be toward a god end, but the hypocrisy is today USA wants China to avoid the means to get rich that USA used to get rich: pollute, pollute, pollute.  to this day the USA is one of the worst polluters on the planet, but we will not test for the unseen concentrations of synthetic drugs urinated and untreatable flowing into our waterways.  No knowing what the harm is, and because it is big Pharm, we'll never know.  And as with big Ag, like cigarettes, it will take decades to see the science on GMO harm come to light.

And here we go again...  we want China to not use the means we used to excel:

In 1843 a copy of Charles Dickenss popular A ChristmasCarol was sold in England for the equivalent of $2.50, while American publishers sold it for $0.06 (Clark, 1960,
40).
“Virtually every new book of consequence to appear in London before 1825 was reproduced immediately in Philadelphia, New York, Baltimore, and/or Boston, usually over several imprints...[and interestingly] the American printing community was peopled to a very large extent by immigrant Irish printers, than whom none could have found greater glee in turning out things English to their personal profit” (Kaser (1969, 17) quoted in Redmond (1990, 4)).

Sound familiar?  We were a much more vibrant, progressing country before we introduced state violence upon free trade.  China ought to reject USA conventions.  And progress.

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Shark Tank Failure Rate

In a seminar Saturday a person whose client's product was selected for the Shark Tank TV show shared that the show was being revamped because 90% of the winners fail.  This would not surprise me, but if true, then the "winners" of the Shark Tank who get funding have a worse performance track record than the general population, whose success rate is 80% failure within the first five years, not the shark tank 90%  Again if true.

I googled the failure rate question and the articles are relentlessly about the "success" stories, none of which talk about success in the way of viability, only in "increased sales" or "as seen on TV" never in terms of profitability.

Apparently the revamping of Shark Tank is taking the form of end-caps in Bed Bath and Beyond, in which all contestants are offered a position on the end-cap (an end-cap is the shelves facing the cross aisle in a retail stores, prime real estate in that world of location, location, location.)  So win or lose, an end-cap slot is yours.  Not sure how that could be of any value to a start-up, actually sounds disastrous. How do you organize a business around that anomaly?

I think I've watched a total of about three minutes of Shark Tank, while channel surfing in a hotel once, enough time to figure out what was going on.

As with all of these "reality" shows (which are anything but...) humiliation is a huge part of the entertainment.  The deer in the headlights look is the money shot.  Aside from that, no one needs money to start a business, or expand, one needs customers.  You can get more customers without giving up part of your company, so what is the point of a show that offers money for expansion, especially when the "winner" has to give up some of the company?  I dunno...  not sure why anyone would want to participate.  OK...  the whole thing is TV entertainment, but the premise makes no sense.

Some rich people might be able to spot a winner, and back it?  But none of those people are your customers?  How could they possibly know anything?  You must talk to your customers to find out what your customers think.

And now that we are in the era of credit deflation, people will be fighting to extend no-interest loans to small businesses.  In credit deflation, the longer it takes for you to get your money back, the harder the currency.  Kiva is already brokering no interest loans, their strongest division, and in Seattle, as well as many other cities, there are banks extending no interest loans, like Community Sourced Capital.

But but but...  there is million dollars worth of exposure?  Really?  To what end?  Can anyone trace the exposure to sales and profits?  Read Ogilvy on Advertising, and you'll learn just how delusional this idea is.

What I did find in my research is 2/3rds of the winners never get funded.  They are told they "won" some deal, but the money is never passed on.  Why would it?  None of those "judges" has any idea what will succeed, it is a TV show for entertainment, not a rationale venue for project funding.  Why would anyone actually go through with funding any of these delusional prospects?
Of the more than 35,000 people who now try out each season, fewer than 150 make into the tank. ...
What happens next is far less inspirational. As many as two-thirds of those televised deals never come to fruition, estimates TJ Hale, who has interviewed more than 70 participants for his show, Shark Tank Podcast.
Perhaps the 90% failure figure includes the 2/3rds who are never funded anyway.  Who knows?  But it took about three minutes for the show to bore me, delusions all around billed as reality.

Do not start, or go any farther in business, if you have not read this book... it will cure delusions.
Ogilvy on Advertising



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