Self-Employment Wisdom Affirmation

An SME is a small or medium sized enterprise, to be distinguished from large business, aka, dinosaurs. I, along with about six million other people, own a Seattle-based co-op called REI.  It is a medium sized business by all definitions, started by sport mountain climbers just before WWII.  So far it has been largely West Coast, but comes a story now they are moving onto the East Coast, filling in the real estate where dinosaurs have died.

The Sears store and Auto Center was recently sold to Seritage Growth Properties as part of the agreement in which Sears Holdings leases the store from Seritage, Reifs said. Under the agreement, Seritage has the right to recapture the space occupied by the store, he said.
After Sears' departure, the space will be developed for REI, along with additional junior box and small shop retailers, including restaurants, according to the Seritage third quarter operating results.
Saks Off 5th, the outlet version of the luxury department store, has signed a lease and will also occupy some of the space, West Hartford Community Services Director Mark McGovern said in an email Thursday.

Saks 5th Avenue is also by all definitions a medium-sized enterprise as well.  Both REI and Sak's compete on design, not price.  (And competing on design, not price, you'll have about 80% of your customers the one-off upscale stores and about 20% those well-known medium sized enterprises.  And of course you want exactly zero of the dinosaurs, the large businesses, as customers.)

Naturally, well-run companies that survived the bust will be the first to take advantage of the dying dinosaurs' demise.  Note what the real estate developer is doing: repurposing from dinosaur to delightful.

As an aside, while stores like Sports Authority drop dead from ex nihilo credit heart attack, a coop like REI thrives like crazy.

Your savings and pension and even social security depends on the dinosaurs thriving.  They will not, they cannot.  To keep from being taxed to death, you were persuaded to invest all in the limited range of securities allowed by law.  The law of course was designed by those who benefit from money pouring in every month to that limited range of securities.  Either way, the thieves end up with your surplus.  That is your future, because it the reality right now.

What is the best investment hedge given the reality?  Self employment, which is a misnoner. The real term would be customer employment.  We are all customer-employed, the hedge is to cut out the middle-man and be customer employed directly.

See yesterday's post for some options.

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Robot Labor: Why This is Good for Small Business

If everyone loses their jobs to robots, then what can all these unemployed buy?  This is a subtext to Mish's emphasis on robotization.

Yesterday, Apple’s iPhone maker, Foxconn announced an immediate cut of 60,000 workers to be replaced by robots.
Today, Adidas announced the first ever 100% robot-made shoe.

Robots replaced the horses that once provided the drivetrain in transport.  We still use the terms horsepower and drivetrain when speaking of automobiles.  How will we refer to the number of people a robot replaces?  FTEs?  (Full Time Equivalent)

Did the elimination of millions of carthandlers due to locomotives bring poverty?  No, an increase in efficiency brought more leisure time at the same income level.  Did 99% of buggy whip makers going out of business bring on poverty?  No, those people got jobs building railroad cars.  Did containerization end longshoreman work?  No, wages went up and as costs of logistics dropped more could be traded.  Now the median longshore wage is over $100K per year.  Some make a quarter million.

iPhones will get cheaper as will shoes.  As will McD and Starbucks and Uber as they go to robots.  At the same time, human interaction will become premium.

Design will become premium.  Robots do the same thing over and over very well.  Robots cannot improve design, and there seems to be, in life, X amount of design talent.

Those people who once hand sewed shoes can still do it.  Unemployed, some who love making shoes will work with excellent designers and come up with super -premium shoes.  Lifestyle over accumulation.  They will need people who can market, find customers.  Lifestyle over accumulation.  I need only put on a hand tailored jacket with Levis (ok, and a tailored shirt too...) to get treated as though I am some royalty.  When a robot makes a million shoes, they better wear out fast to recover the cost of the robot and have a revenue stream to maintain the machine.  My shoes last thirty years, and look and fit better than anyone else's.   Of course the cost at least four times as much initially, but it is very economical.

I carry a flip-phone and endure derision from children, because people with smartphones miss too much in life.  There are no features on a smartphone that are net-advantageous.  I doubt there ever will be.  Pictures racing by on a screen does not mean you are going places. I am all Apple all the time because Apple's products are the least bad.  Apple charges too much for equipment that does waaaay too much.  If and when defunct Apple production lines start making things I design for myself, then I'll pay a lot more for a lot less tech.

It takes so little to live so much better.  It's mostly attitude, social conditioning.  Are you socially conditioned from the outside to be a consumer?  Or internally self-conditioned to work for lifestyle, not accumulation?

It's inevitable that among the unemployed some creative will start their own businesses.  They need to link up with the others in complementary businesses to thrive: small materials processors, small manufacturers, small designers, sales reps, retailers...  all people who tend toward lifestyle instead of accumulation.  Yes, countless others will elect to join the fight at the trough, screaming their claims of share allocation ...  but that is a choice.

Self-employment is also self-improvement, personal transformation.  I offer classes in business start-up, highly rated and unlike any others.  Check them out.

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Best Investment Advice: Get Married

The next era will be one in which the family business is the last bastion of self-actualization.  Since a town can now tell you what to pay employees, they do.  Since freedom to contract is necessary for business survival, no freedom to contract in wages means, well, no employees.

 (Why are govts so destructive in wage policies? It's tricky,  most gov't union contracts are minimum wage plus, so the push behind this is a raise for gov't workers, not some "justice" issue.)

This is too bad as far as it goes, but not insurmountable.  There is a genre of business, the family business, and while it once hired many people, may also be run as a family affair. And really, in life, there is nothing as satisfying as family and kids, etc.

At the same time, the trend is to not start a family, and I think Mish is typical among many economists who say "very good."  But to me this just means fewer families makes each one more valuable.  And fewer family businesses makes each family biz more valuable.

Mish is probably not uncommon among cold-blooded economic writers who are pro-abortion, and in a recent post he asked why not let refugees die in the Balkan winter cold, as a sway to check refugees.  Yikes.  How about instead USA stop creating refugees by starting wars (although in fairness, Mish also advocates that.)

So Mish welcomes this:

Delaying marriage is yet another deflationary trend the Fed is fighting. The Fed's inflation tactics and government interference are largely to blame.
Wages have not kept up with education costs and for someone in college the CPI is seriously understated. In addition, union handouts and ridiculous pensions that millennials have to support but will never receive, add greatly to the problem.
Millennials also have to overpay for health care, picking up the tab for overweight boomers etc.
Finally, attitudes towards having children have changed. Many women put their careers first, a smart thing to do in my opinion. Kids, who can afford them?

Well, if people waited until they could afford kids, none of us would be alive.  Most poor kids have no idea they are poor until someone points it out.   There is no preparing for kids, and as one who has raised three, the challenge is not monetary, no, not at all.

Find a mate, start a biz, get married, have kids... Mish advises not, I advise do.    Make sure you are both on the same page for the ups and downs of self-employment.  It is a lifestyle, not an accumulation method.

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WalMart: It's Over

WalMart has begun its return to Bentonville, Arkansas, an odyssey begun in 1962. The neat idea of price cutting, "stack 'em high and watch 'em fly" was one of those unforeseen right time right place things when ten years later Nixon took the world off the gold standard (lite).  It was perfectly positioned to borrow asset-less credit and use it to call forth misallocation by aggregating more production to itself.

Wolf Richter dissects Walmart's big stock price drop.  Wolf notes financial engineering.  Read the comments too, he has smart readers. 

As banks lent asset-less credit (malcredit) there was no rational limit on how much Walmart could buy at ever-lower prices as USA factory owners committed the folly of price cutting (page 221 of my book) as they accepted Walmart orders.  With lower costs on product compliments of the banking fraud explicit in lending malcredit, not money, there was no limit to where a genius cost-cutter like Sam Walton could work:

1. Financial engineering.

2. Product

3. Land

4. Buildings

5. Logistics

6. Employees.

The economic policy of the USA is get big or get out.  By being the biggest and baddest in this regime, Walmart was the winner. The irony is collectivism's biggest beneficiary are right wing ideologues.  Or perhaps the lesson is not lost on right wing ideologues.

The losers were the countless smaller factories in USA that, as mentioned above, cut prices to gain Walmart volume business. Family businesses (as well as family farms.) I watched these companies increase sales and go out of business in the 1970s and 1980s. Greed kills. I was in China watching as Walmart buyers could take the demand data from USA, wherein the USA supplier had been squeezed to death (another story from my book, how Levitz choked Kroehler to death) to China and get the Chinese management and state-enterprise subsidies to ever cut costs (labor rates has never had anything to do with international trade) and inevitably build that country's infrastructure.

Walmart is not the only one, every mass-merchandiser, big box retailer now on top played this same game, Toysrus, Lowes, Office Depot, Safeway, Best Buy, Petco, Barnes and Noble, The Gap, you name the category, the biggy played the game.  And every one is in trouble now, because the malcredit game has reached its limit, something everyone knew would happen, but no one could say when.

When.  Now everyone agrees it is over.

This roll-up process wherein the biggest borrower crushed the smaller retailers decimated the family businesses that were the USA economy.  Those families also hired employees to help out.  To be destroyed by this juggernaut was inevitable if you made the mistake of joining in and participating in the force and fraud of accepting malcredit.  Countless small businesses simply moved up market and thrived, another phenomenon I outline in my book.  But those who tried to play the discount game were wiped out.  Critical to your survival was how you defined wealth:  personal accumulation, or the range of goods and services one could afford with what they earned.  Also, people who saw business as a lifestyle and not a money making opportunity always have the advantage.

And as an aside, never in the history of USA has a single American job been "exported."  What happens is as a factory becomes outdated, the new factory with all the new processes and systems is built overseas, with new labor needs. The USA worker does not know how to do the new job, but his dis-employment is useful for diverting attention by claiming his wages are too high, that foreign workers are paid less, as if wages matter in overall costs. As a part of financial engineering,  overseas activity is necessary to book profits overseas in order to avoid USA taxes.  Our biggest importers/exporters also pay negligible taxes, for the all perfectly legal tax exemption programs. It works to blame it on USA labor for he lack of jobs.  Blame the victim. The argument misses the point: the jobs are gone because our only choice, democrats and republicans agree, get big or get out, USA is a collectivist state. All of capitalism's patterns and practices are ordered to collectivism.  The right and left wing obscure this by calling this fraud "the free market" and such moral crimes as NAFTA and TPP "free trade agreements."

The solution to this is to no longer protect by hegemon force the fraud of lending credit, creating malcredit, which has driven out benecredit.  Now that is not going to happen, indeed, quite the opposite.  McDonalds, Boeing, Microsoft, Walmart, and all the companies whose welfare depends on force and fraud are looking to the super-secret TPP program to save them, just as NAFTA was a boost in protectionism in the 1990s. Democrats and republicans alike overwhelming supported NAFTA, and after the election, will pass TPP, no matter who wins.

I do not recommend criminalizing the fraud, merely delegitimizing it by withdrawing the state violence necessary to maintain it.

Bad money crowds out good, bad credit crowds out good credit.

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Seaweed Micro-industry and Anarchy

An obscure magazine called Lucky Peach did a long article on the seaweed harvesting industry in Norther California.  They don't put their articles online, but you can buy back copies.

The article is very instructive, and highlights how microbusiness is and can be.  My observations while I was reading the article.

1. Given the nutritional benefits of seaweed, including seaweed in a diet means you need ot eat less of other things, like fish, to get a well balanced diet.  Less fisheries needed, the less harvested.  The less we actually eat to sustain ourselves, the more efficiently our body performs.  I've been down to two meals a day for about a decade, no snacks, for the simple reason that is all I need given what I eat.  If you are american you are probably eating way too much of the wrong things, and it is slowing you down.  Sure good food is more expensive, but less needed, so it is a net savings.

2. The fact people have started gathering seaweed for commercial purposes means people are regularly present where once was no one.  They watch our coastlines and give us early warning of threats like pollution, or whatever.  They are advocates for off the radar parts of the ecology.  The more we eat of seaweed, the more it is harvested, the better our coastlines are protected.

3. The people who harvest the seaweed are not capitalists, they are not about accumulation, but commonwealth.  As free marketers, they mix their labor with natural resources to create a product to sell.  Private property occurs when you mix your labor with natural resources, or otherwise trade your own services with those who do. No one owns the coastlines, and the state does not enforce real estate property rights (another example of why we do not need to have real estate property rights.)  If conflicts were to occur, they could be solved by recognizing the treaties giving Indians ownership, and then let the Indians lease out shore use. 

4.  As you read about the people actually involved, they are old enough to be aware of the pre-1970 economy, in which comity, not polity was supreme.  So sad to see people under 55 without a clue as to what could be.  Business is about lifestyle, not accumulation.

5. We see in free markets no one need own land.  Capitalism depends on a real estate regime, communism does not. Now the communists are a direct lot, they just executed the unneeded landlords.  In capitalism the Supreme Court simply makes laws allowing for big business to take private lands for themselves.  If you resist, then the capitalists will just kill you too.  All -isms are grounded in violence, one way or another.  Owning real estate is not necessary nor sufficient for a free market, indeed it seems to inhibit it.  The Indians and the communists got this right for different reasons, but in any case, leases are not necessary but sufficient for free markets.

6. We see the seaweed harvesters come up with best practices, which are adopted among competitors. Practice creates rules and regs, and the lease enshrines the rules and regs to maintain sustainabillity.  For example, the hegemon has made a hash of regulating seawed on the Northern Caifornia coast, and the only reason it has not killed off the micro-industry is the local regulators do not enforece the stupid tules.  (What hegemon rules are not stupid?)  Anarchists love government, but not the hegemonic state. Anarchists live by rules, rules necesarily not violence-backed.

7. With leases, the lease sustains the environment and those who own the lease mix their labor with natural resources, and the work is handed down to the next generations, who either renew the lease or let it go to the next highest bidder for a new lease.  Capitalism demands real estate ownership so lists may be known of whom to tax, and real estate is a handy choke point.

The article illuminates yet another example of working anarchy, and the chaos the state introduces where freedom naturally yields prosperity.  We have peaceful means to govern this limited resource we call land (or ther seas, which ought also be leased, but capitalism is about accumulation into ever fewer hands by the means of usury.  So for capitalism to obtain its raison d’etre, capitalism must have a provision for personal ownership of real estate.  From this flows all of the horrors of capitalism that has plagued the world for the last two centuries: war, poverty, starvation, refugees, lack of proper food, clothing, medicine, education, etc.

I understand how this may fill you with rage at capitlaism and capitalists, but we must remain meek, never resort to violence like the communists, and simply withdraw our consent to be governed by the hegemon so we can move forward, broken people that we all are, to the more just comity of no one owning the lands, or more specificaly, giving it back to the Indians, who can then lease it out to the highest bidder, subject to terms of sustainable best use.

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U S A Airports

Some thirty per cent of applications for business visas to the USA are rejected, and those who do come here, even in transit, are subjected to unwarranted indignities that are repulsive:

You step off the plane and make your way to the immigration hall, which as always is packed to capacity. After standing in line for more than an hour, you’re photographed and fingerprinted before finally being released into the baggage claim and customs hall. (Or maybe it takes even longer: after docking at the gate, airline station personnel inform you that due to extremely long lines at immigration, all passengers are being asked to remain aboard the aircraft for the time being.) Not to mention, if you’re coming from a country that’s not on the U.S. visa waiver list, you’ll need to have obtained a visa in advance just to begin this process, no matter if you’re only passing through.

And there is a result...

Two years ago in a CNN poll of 1,200 overseas business travelers who’ve visited the United States, twenty percent said they would not visit the country again due to onerous entry procedures at airports, including long processing lines. Forty-three percent said they would discourage others from visiting. Separately, in a copy of Air Line Pilot magazine, U.S. Chamber of Commerce counsel Carol Hallett stated that “the United States risks falling behind Asia, the Middle East, and Europe as the global aviation leader.”

When you are a criminal regime, you fear even when no one is pursuing you.  Our security state reflects this, making everyone a criminal suspect.  Even people just passing through max security airport lounges.

Then this:

There’s not much we can do about geography. 

O yes there is!  You can stop invading other peoples' geography to steal their natural resources to fund our welfare programs.  You can order the governance of your own geography in a way that is not repulsive to honest, productive people.  You can behave in a way that does not cause a critical mass of people to say "let's find an alternative to the oceans that lead to USA, and instead work this eur-asian land mass that already connects 80% of the worlds population.  Let's just stay away from the USA."

Nice work, progressives!


We need a Hong Kong in USA where american can be free, and no one has to be killed so we can have our freedoms.

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Wexner and the Lessons of The Limited

Here is a critical bit of info from a titan who says he learned it as a kid.  Yes, that handing down of information has been broken by FIRE.  Here is Leslie Wexner:

“When I was a kid, before my first store, they talked about stores as theater and retail as theater. It still is,” says the 77-year-old, attired casually in gray slacks and a blue oxford. “Retailing is a free form of entertainment.”

FIRE is the massive, false economy which will continue to degrade, as our "enemies" improve, slowly surely. The guy not only received an education from an earlier generation, he never bought into the dot.com  madness. Here...

In defiance of e-commerce evangelists, he opened 50 new locations in the last year.

Yes, brick and mortar is where the customers are, plus good old fashioned mail order. Catalogs drive sales to internet where orders are placed...

His online business is not the focus, but it’s doing just fine, accounting for $1.5 billion of his annual sales.

The selling is out of the catalog, the transaction is on the web. And he hasn't started exporting yet...

And there are billions more waiting for Wexner outside of America’s borders. 

What he has done is franchised it out to other countries, that is having no presence of his own companies overseas, just let locals import and manage the brand in their respective countries.

Wexner found a problem and worked on a solution...

When his father left on vacation, Wexner tried to solve the riddle of why his dad had always worked so hard but never made any money. He found a stack of invoices, and on a piece of scrap paper began tallying the cost and profit from each item in the store.
The numbers added up to a counter-intuitive conclusion. Although big-ticket items like dresses and coats looked like they had huge margins, they actually made no money because they sat on racks forever. All of the store’s profit came from less glamorous items like shirts and pants. 

His dad fired him...

... founding a rival store to his father’s with a $5,000 loan from his aunt in 1963. He put a limited selection of clothing in the store–only the shirts and pants that flew off shelves–and named the place The Limited. ...He made $20,000 of profit in his first year, twice as much as his dad’s best. The secret was his focus on only a few products, a revolutionary idea at the time. 

Steve jobs studied him...

Wexner says that Steve Jobs (or presumably it was Jobs–”what’s-his-name from Apple,” Wexner says off-handedly) was one of many to credit The Limited boss with inventing specialty retail. “Probably did,” he shrugs.

I recall the era well.  There were countless people opening "boutiques."  Most of them were crammed with merchandise and went under.  Wexner did it right. He tried to figure out how Victoria's Secret worked when it was a one man operation in San Francisco. The founder sold out to Wexner,

His financial advisors had warned him that $1 million was too much for the business. Wexner let Raymond run it under The Limited’s umbrella for a while, and his deputies rolled their eyes as it bled millions more. When they examined the financials more closely, they realized the only way Raymond had been making any money before the acquisition was from a secondary business selling mail-order sex toys. Wexner fired Raymond and moved headquarters to Columbus. 

Wexner took the same idea and made it profitable.  Raymond could not, so he had ventured into something desperate and kept it secret.  Raymond failed at his next venture, and then killed himself.  Why do two people working on the same project diverge so terribly: billionaire v suicide.  Perhaps it gets to how they process suffering...

By the common definition of wealth, Wexner was unhappy...

“By the time I’m in my early 30s, I’m, by most measures, enormously successful. And the more successful I was in terms of business achievement and accumulation of income, the more ineffective, unhappy I was.”

Read the article for how Wexner dealt with it...  And comes the question...

After 51 years as CEO of his company, is Wexner thinking about retirement? He smiles, having known the question was coming. 

Of course not.

Update:  Victoria's Secret puts out 400 million catalogs a year...  if that generates $1.5 billion in online sales, then that is $3.75 per catalog.  Not worth it, unless the catalog drives people into the stores plus online.  Wexner owns both sides, the website and the brick and mortar, and links both through dead tree advertising.  You should too...

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Pay With EBT, Ship the Food To Caribbean

This is old news, but with Costco studying the China market, there may be a twist.

“Everybody does it,” said a worker at an Associated Supermarket in Prospect Lefferts Gardens, Brooklyn. “They pay for it any way they can. A lot of people pay with EBT.”
Customers pay cash for the barrels, usually about $40, and typically ship them filled with $500 to $2,000 worth of rice, beans, pasta, canned milk and sausages.
Workers at the Pioneer Supermarket on Parkside Avenue and the Key Food on Flatbush Avenue confirmed the practice.
They said food-stamp recipients typically take home their barrels and fill them gradually over time with food bought with EBT cards.
When the tubs are full, the welfare users call a shipping company to pick them up and send them to the Caribbean for about $70. The shipments take about three weeks.

All immigrant groups rock the welfare payments (you think they come here because of our freedom?)  There may have been a time pre-1964 "Great Society" welfare regimes when people came here to work and look for freedom, but now we cannot know if it is 'freedom" or "Free $#)*."

Whatever, but USA sent $522 million last year to the Caribbean in Foreign aid.  This goes to the Harvard educated elites to keep these satellites in poverty and dependent on USA.  This EBT card scam also helps.  USA food processors, the biggies, get the profits, the taxpayers take the loss, and the Islands never develop a domestic retail trade, nor do they bother to grow a domestic retail trade commensurate with their potential when they can get food "free" from the USA.  The elites then compliment USA Imperialism by repeating the mantra "our people are culturally inferior."  Break his legs then criticize him for not walking.

Costco is getting a handle on sales of its Kirkland brand to China.  In doing so, Costco will figure out what percent is EBT-scam based (the amount of China sales that does not originate in China after it is easier to buy in China) and this will be private trade data, information no one in government policy making will have.  Not that it would matter, since get big or get out, the USA policy imperative, either way General Foods, General Mills, and other Big Food companies products are being moved and taxpayers are subsidizing their profits.

WE are not going to get rid of the EBT cards, or the welfare state, these things cannot be backed away from.  Empires just fall and become fond memories and whimsical lapdogs to the next empire, like the UK.  Not bad, but delusional.  Or they may become somewhat dignified like Italy.

It ain't the hand you are dealt, it's how you play the cards...  and there is no judging a man for how he plays his cards.  But we can say, "hmmm... instead of buying Fritos and Pepsi and Kentucky Fried Chicken (yes allowed) with your EBT, why not buy Foie de gras, raw milk sour cream, organic lemons, caviar, all products no Big Ag makes, only small AG products, and then improve your health as you starve the beast?"  This will divert money meant for big ag to the struggling small ag that is specifically targeted for avowed destruction by the USDA in particular and the federal government in general.

Smile at that single mom with the screaming kid checking out in your upscale grocery paying for excellent foods with an EBT, and offer to help her with her groceries.  Make them most welcome, they would be revolutionaries.

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Poverty Draft & Veterans Benefits

One benefit of being a veteran is the leadership experience as an attractive resume point, nationwide jobs preference programs, massive training programs, all leading to better jobs prospects after time in the service.  Or not:

As of September 2012, 736,000 veterans were unemployed and the jobless rate for post-9/11 veterans was 9.9 percent, with young male veterans (ages 18 to 24) experiencing an unemployment rate of 18.1 percent.

The unemployment rate in USA is reported as around 5.5%, so veterans are running about double, and young veterans nearly four times.

How come?  Is the fact of the matter military experience makes people undesirable as employees?  Or is it just officers get the experience benefit and the grunts, no?

Since we now have a poverty draft, the young should know these figures, if any think they will escape poverty by joining the military.  They might, but the odds are they won't.

If you really want to be all you can all be, start a business, the most revolutionary act an American can perform.

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The Alibaba Heist

Those outside of China who ever heard of Alibaba are probably familiar with the "trade lead" site where buyers and sellers can "hook up" internationally.  I've always advised against "trade lead' sites, even before the internet in their newsletter versions, because they are usually people with no customers talking to people with no supply, with a large contingent of scammers standing by.  I've characterized it as trying to drink from a fire-hose of sewage when all you want is a sip of clean water.  What I learned long ago was to work directly with that sip of clean water (the best suppliers and customers) and ignore the trade leads.  Indeed, one of the myriad steps in due diligence is to make sure a supplier or a customers is NOT on alibaba.com, for a busy, top company would not bother with that desultory exposure.

Alibaba also once had a JV going with Yahoo.com that gave alibaba.com some stature in USA, but that was severed when reputation issues where hurting Yahoo.com.

Today Alibaba is ebay, youtube, paypal, einsurance, google, sprint, geico, fedex, twitter, facebook, amazon, and everything else all in one. Is that a good idea?  Think management issues.

As a side note, I do like the idea of an economy that is so integrated and comprehensive that it acts in the place of any government.  Alibaba.com would be an example of what comparative law theorists call "private law."  It would be, except it is an invalid instance: private law grows organically along anarchistic lines, it is not a plot hatched by a few dozen people and financed by Goldman Sachs.

I've been looking for a reason why Alibaba would be a good buy, and about the most significant explicator I can find is here:

Michael Tudor, founder and CEO of New Jersey-based Ripen eCommerce, said small- to mid-size businesses can look at Alibaba as a shortcut to reaching the massive Chinese e-commerce market.
"Tmall (one of Alibaba's marketplaces) is a particularly brand-friendly marketplace for a number of reasons, including small commission rates and the fact that it doesn't sell merchandise of its own, unlike Amazon," said Tudor. "At the same time, Alibaba.com is a business-to-business site that connects manufacturers with retailers around the world. No other site has been able to streamline the connection between manufacturers and buyers."

Delusional, or fraud.  First, Alibaba can do nothing about physics, the cost of moving goods.  You can get $150 for a live Dungeness crab in Beijing.  But you have to get it to Beijing.

The fact that amazon.com does compete against its clients is the reason, albeit counterintuitive, that Amazon.com took the lead.  The lack of exclusivity allows the best to rise, not all too often crowd them out.  Alibaba.com may have eschewed a critical factor.

Second, what does a $20 billion (or whatever) flow out of USA pensions into Chinese tallies do for the USA small to mid-size businesses (not to mention the pensioners)?  Alibaba has been around since 1999.  There is nothing that will be improved in the next year that was not available in the last year.  At no time did Alibaba have any advantage that was not otherwise available in the last fifteen, nothing in the next fifteen that will be unique to Alibaba.  So where is the advantage in having moved $30 billion tally in pretend pension contributions onto Alibaba's books, in exchange for stocks held by pensions?

Third, what's for sale?  Let's read the prospectus:

(alibaba is) the largest online and mobile commerce company in the world in terms of gross merchandise volume in 2013, according to industry sources.

What industry sources?  No telling...  and a company in China that is "all-in-one" is likely, should be, the largest in the world.

Now what is for sale with this stock is a couple of websites... alibaba.com, taobao, etc...  all those other functions are part of the alibaba.com "ecosystem" -

Given the scale we have been able to achieve, an ecosystem has developed around our platform that consists of buyers, sellers, third-party service providers, strategic alliance partners, and investee companies. Our platform and the role we play in connecting buyers and sellers and making it possible for them to do business anytime and anywhere is at the nexus of this ecosystem. Much of our effort, our time and our energy is spent on initiatives that are for the greater good of the ecosystem and the various participants in it. We feel a strong responsibility for the continued development of the ecosystem and we take ownership for this development. Accordingly, we refer to this as “our ecosystem.”

So all those Chinese third party providers, strategic alliances, investees, are not part of what one is buying, but they all benefit from you buying the stock.

And what is Alibaba's China market penetration?

Well, their graphs are selective, but in mobile they claim a 76% market share in China online sales. Wow.  In a country, China, where 7.9% of retail sales is online.  Wow!  That is about 20% more  internet market penetration total in China than internet market penetration in the USA.  In USA only about 6% of retail sales is online.  When I ask in classes what per cent people think occurs online in USA, usually they offer a figure say 50% or higher.  They are astonished to learn it is so little.  And then I go on to say "why is it not higher?  There is nothing to keep it from having gone higher yet, and maybe it will get to 8% (where China is) but I doubt it will ever go above that. " (Back in the 1980s when every was a sure most retail took place out of catalogs, then too in boom, penetration never got about 8%.  There are rational limits.)

Online sales has maxed out its viability, and has yet to prove profitable. Apparently so does Amazon, who is yet to turn a profit with online sales, offers seminars on what may work to make online sales profitable  (who knows, it's never been done), and at the same time is trying to get into industrial supplies sales online.  (It usually costs more to attract a customer online than the profit from a sale.)

That Alibaba "76%" is GMV.  Gross merchandise volume.  That is, including returns and dissatisfaction. That 7.9% is entire China....  Hmmm....  AS one day google took over the search from yahoo, and Apple took computing away from Microsoft, is it possible there is something preferable to alibaba.com?

For a company of this size that made only $1.6 billion net before taxes and payouts FY 2013, and that if only

Non-GAAP MeasuresWe use the non-GAAP financial measures of adjusted EBITDA, adjusted income from operations, adjusted net income and free cash flow in evaluating our operating results and for financial and operational decision-making purposes.

Strikes me as rather tight, even if whimsical.   And if they are turning such a profit, why go borrow $3 billion in August from the very bankers who are underwriting the September IPO?  Although no reason is given for the $3 billion dollar loan a month ago, perhaps it was a down payment on the fees the banks will make, $3 bil being about 10% of the IPO.  Prepaid in case the coming crash comes before the IPO?  In any case, the price surged 40% on top of the richly priced $68.00.  No crash yet. Ka-ching.

Why USA?  Why is a Chinese website raising its IPO money in USA?  There is a perfectly good stock exchange in Shanghai, but China tends to shoot people who do very big fraud.  I have no idea if this compelled the Alibaba crew to seek money elsewhere, but Hong Kong turned Alibaba.com down too.  Are you kidding?  No place that values the rule of law, peace and prosperity would ever allow a website like Alibaba.com to do an IPO on the HKEx.  So what does that leave?  O yes, USA!

No matter what happens, the usual suspects made a killing off fees and fast-trading:

Six firms were listed as Alibaba’s lead underwriters, listed mostly in alphabetical order: Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup. They emerged as winners for the honor of running an I.P.O. that could ultimately end up raising more than $20 billion.

The alibaba.com offer is for a scope and scale that is unmanageable, the model is false-economy based, the content is apparently maxed out, and the funding is pension's desperate need for yield.  It's Enron on 'roids.  It may be crazy, but it is tradable.

On the other hand, had dim sum yesterday with a rep of a freight forwarder firm based in Chile.  He laid out the strategy and tactics on building new markets for their business by assisting certain segments of markets in various countries.  It all made sense, they'll make money, business will grow.  The "get big or get out" thing has failed.  The pendulum is swinging back.  There is money to be made at the small business level.  It is people with real products selling to people with real customers that is real economy based.  These people are why there are clothes on you back and food on your plate.  Nothing terrible exciting, but it's a lifestyle.

 Alibaba has nothing to offer those people.  But it is a way for a few people to become billionaires, and others to imagine they could, if that is your definition of wealth.

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False Economy

After attending a book reading last night, a fellow gave me a lift home.  As we walked thought the streets of a hipster neighborhood, he complained bitterly of the trash and filth on the street, complaining loud enough to invite a conflict.  Construction is underway all over Seattle, with a view to reaching from some 700,000 now to 2 million in what, a decade?

The author had noted we have tremendous resources going into mass transit (some 2 billion in bonds to dig a mere 26 feet of a severl mile tunnel only to be stopped cold by an unknown obstruction), and his point was why can we not fund proper health care, why are we board and dosing street psychotics for a 2 week stretch then throwing them back onto the street?  (Because in states, the bad policies always win.)

Amazon, Google, multiply biotechs, Boeing, Starbucks, a University or four,  our community colleges are shifting to four year gigs to sell Bachelors degrees to high-paying Chinese students, everybody is making cleaning up.  Finance, Investment, Real Estate.  Dot.com. Everyone is cleaning up, if you are in those fields.  

The author had noted we have tremendous resources going into mass transit (some 2 billion in bonds to dig a mere 26 feet of a several mile tunnel only to be stopped cold by an unknown obstruction).  And looking at a map, it is pretty clear the powers that be are rearranging the city to be a wealthy core with rings of less fortunate and a mass transit system to keep the flow moving between districts.

IN Tombstone, the counties and provinces that most embraced Maoism looked best briefly as people gorged on the "free food" in communal kitchens.  Travellers were assured a free meal and place to sleep.   The food came from the stores.  The "wealth" was provided by simply emptying the storehouses early.  Plenty of food now meant export earnings could be ramped up.  The reckoning of yield on crops (yield on investment, or stock market price) skyrocketed as false economy statistics proved communism was triumphant.  Starvation followed, for several years.  The counties and provinces who did "best" suffered most.

Prior to 1971, that which one could invest required money (more than now.)  But there was no debate as to what money was back then, gold and silver.  After we went off the quasi-gold standard, banks not only learned they could lend credit, that if and when this borrowing credit short and lending credit long failed, a necessarily disastrous scam, the Feds would bail them out,  every time.  (And they know they will be bailed out next time too, so it goes on, right now.)  So the began to lend credit, not money.

This makes for fantastic possibilities, Indian farmers who are starving, but have an iPhone!  Wars that can continue for 23 years (Iraq) and no end in site.  Countries with no legitimacy at all, but populations under control.  Everyone a superstar, but unable to write a sentence.  Amazing medical breakthroughs, and astonishing brutality.  Whole industries can be built out, selling things online at no profit, selling coffee and distorting traditional businesses by access to E Z Credit, and mountains of talent to keep track of who owes what and how to avoid the taxes.  Air travel cheaper than it costs, with 25% in taxes going to TSA and "security" theatre.  This is all false economy, like buying a high ranking on google.

"People are getting paid, they are buying things, the economy is moving here."  Here the conversation usually switches to "but look around at all the poor, the kicked-to-the-curb ill, the 99% who are not making it."  I don't work that angle, since 98% of the poor are voluntarily poor.  Certainly there is the 2% of street people whose distress will break your heart, but the vast majority on the street, so to speak, are there by choice.  When offered picking apples or EBT card lifestyle, they took the EBT card.  The 1% can ignore them, because the 1% know full well there is an EBT lifestyle, just as there is the 1% lifestyle, it too a product of the welfare/warfare state built on the false economy of lending credit.

You will be told debt is as old as money, and I would say older.  In fact, the classic barter-to-money narrative, as David Graeber points out, has no instance in history.  What is everywhere at all times is "vendor financing."  When I was a kid my father sent me to the store fairly often to pick up "one pound ground round" and milk or whatever.  The nice lady rang it up on the till, tore off the receipt, wrote "Spiers" on the receipt and put it in the drawer.  Off I went, and at the end of the month, my father went around to the pharmacy, gas station, grocery store and paid out from his pay packet what he owed whom.  Each of those who extended my family credit each month were businesses extended credit by their suppliers.  Suppliers were extended credit by manufacturers.  Extraction businesses were so fundamental they were usually backed by old money.  But what you see is everyone extending each other credit, almost no money involved at any point, except at extraction and then the extinguishing of debt, when my father paid out his debt with warehouse receipts called silver certificates, now gone, but once common.  There was gold and silver backing the currency.  There was widespread credit extended, but asset backed and no usury (interest) charged.  Man did not go from barter to money to solve the problem of double coincidence of wants conundrum: the lamb merchant gave basket maker credit and noted it on a tally.  The egg merchant took lamb merchant's tally in trade for eggs and paid the basket maker.  Credit, not money everywhere.

Money shows up when times are dire, and relationships are broken.  No one trusts anyone else to pay, so they no longer offer credit, they demand money, gold and silver, to extinguish the debts now.  Archeologists find tallies where a civilization was wiped out by natural disaster, they find stashes of gold and silver where the civilization was wiped out by social unrest.  In USA today, people are stashing gold and silver.

So what is the difference between the credit system we have now and what we had?

1. Back then it was asset based.  Credit was extended for groceries, against a claim of a paycheck.

2. Back then it was diffuse and limited.  The lenders knew well to whom they lent, and if they judged their customer poorly, only the lender suffered, no one else.

3. Today, there is no possible way you can know from whom the credit comes, the teller or loan officer mimics friendship, but friends are impertinent and annoying.

4.  Back then there was no usury, all extended credit as a loan, today there are no loans (almost) without usury.  Charging and paying interest always does damage.

5. Back then it was impossible to track all of this economy, nor tax it.  Now with all going through a few banks, all can be seen, and taxed.  Not content with collecting more taxes due, they added on taxes payable.  This advanced the progressive dream of "get big or get out."

6. We hate those we harm, noted Tacitus.  The 1% know their advantage is necessarily tied up with other's disadvantage, they are getting what cannot be in a fair system.  The 1% control the policies.  Those policies reflect hate.  Look at the representatives of the 1%, those with whom you come in closest proximity, the police officer.  The more you are of the EBT culture, the more you experience the hate.

7. And we love those we help.  The merchants who extended credit back in the day truly, profoundly cared about their customers.  Kid sick?  Take another month.  And the customers appreciated the people who operated the commerce in their neighborhoods.

What net advantage do we have from google, cell phones, socialization and concentration of medicine, total financial lockdown, the severing of community, mass transit for people collected into cities to run the FIRE flipping and dot.com gigs, so we can have sales systems yet to turn a profit and travel that is charged off to someone else's tab.  That tab being run is not against assets, it is against future earnings, next generations.

There is no rational limit to what you can do once you begin to lend credit at interest.  Look around, this is all one option.    It doesn't really matter what array the few have foisted on us, it cannot last.  There is no rational limit, but once faith in the system fails, an irrational limit will be met, and down comes the system.  Worse where things look best.

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Twelve Inspection Points On Business Start-up

Kevin has sent in an edition of a newsletter that is a perennial favorite.  I understand why the info is popular, it is badly needed.  note that what i teach is rather along these lines, and why I teach is this info has largely disappeared.  Once upon a time, it was passed on from entrepreneur to successor.  now there are too few entrepreneurs.  but this part...

Bill Gates is known as "America's richest man." ... Gates bought the system for a mere $50,000 and presented it to IBM. That was the beginning of Microsoft's rise to power. 
 Apple had by far the best product in the Mac. But Apple made a monumental mistake. They refused to license ALL PC manufacturers to use the Mac operating system. If they had, Apple today could beMicrosoft, and Gates would still be trying to come out with something useful (the fact is Microsoft has been a follower and a great marketer, not an innovator).

I'll argue with because in fact Apple today is bigger than Microsoft, far more profitable...  Gates IS still trying to come out with something more useful... Microsoft is a lousy marketer, simply riding on Government sales, and not an innovator.

But other than that anachronism, the info is very good...  give it a read.

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I Love Hong Kong

Hong Kong's credit rating is in debate with the governance question, and the people are taking to the streets over who would be their governor.  Beijing is saying Hong Kong will select a governor from a beauty pageant stacked by Beijing.  Li Ka Shing, the Hong Kong billionaire is diversifying his way out of Hong Kong.  Is this the beginning of the end?

No way.  Hong Kong is China's most reliable city, safest and most productive.  Li Ka Shing is a billionaire because at the time of the last riots, circa 1967,  this plastic flower maven bet that Hong Kong was not over and doubled down while the rich were getting out.  Today Li Ka Shing is the "rich getting out" and some hard, young Hakka businessman is doubling down on Hong Kong, praying for a S&P downgrade so his investments make all the more.

As to China offering a beauty pageant of politicians from which all Hong Kong can pick, England gave the people of Hong Kong no choice whatsoever for 250 years, and Hong Kong exceeded the UK on all measures.  Occupy Central is a very good thing, because people need to demonstrate their love for freedom or lose it, as in the USA.  Where we lost it.

I love Hong Kong because it was started at the same time as the USA, by the same heirs of freedom, both as a historical accident, and both were to remain small entities (hence 13 original colonies.)  Hamilton and his crew hijacked the confederation and engineered the deeply flawed constitution, and it was downhill for the USA from there.  When I am in Hong Kong, I am in what the USA ought to have been in 2014.  Among other things, private companies issue the currency.  They know what money is in Hong Kong.  In USA, we have agreed to lie to ourselves, since pretty much only the poor are hurt by the lying.

Another facet upon which I will bloviate is the problem of real property rights, meaning land ownership.  Such a problem in USA.  So much land, and already occupied.  (There is that word again.)  That would imply property rights.  How to handle it?  At first, when our numbers were small, we negotiated.  Later, with bigger numbers, and a capitalist regime, we murdered.

Now in Hong Kong, all arrivals found the land already occupied.  But by the King of England or the Manchu.  People tend to negotiate with the King of England rather than murder for a piece of land.  So for the 250 years of pre-China retention, no one could own land in Hong Kong.  Yet it grew to a premier city-state.  Nothing is new under the ChiComs, no one can own land (one exception, the Church of England owns a spread that the Chinese acknowledge.  Go figure.) And yet, some 3 of the top ten billionaires in Hong Kong made their money in real estate.  99 year leases, property development.

Imagine what we might have accomplished if we respected the Indians rights, and worked within what is ethical?  I know USA is just a corporation, but it is a corporation run by people, and people can decide to do the ethical thing.

A little existential tension makes for good when the comity is good.  I say the smart money is on Hong Kong.  What Beijing proposes is an improvement over what the Brits offered.  And always remember, USA is a democracy.  Do the people of Hong Kong really want to end up like us?

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Supreme Court Union Busting

The powers that be are not going to let USA die quickly due to its policies.  One faction that can be crushed to benefit the economy is public employee unions.  The Wisconsin union-busting was just a mere trimming at the side, the California decision on union seniority on the schools is another, the Supreme Court banning taking money from non-state employee caregivers for union coffers is another mere nibble.  State schools where I have been an independent contractor for 20 years now want me as an employee, so they can mulct my income for their unfunded pension liabilities.

Some people are screaming bloody murder, and others are insisting it is a tiny thing, each change.  Both are right.  The dismantling of the Government Union cartel is underway, and the inevitable is clear.  One way of another those pensions are null and void.  Scream bloody murder, but it will do no good.  What was given slowly over time will be removed slowly over time.  To whom do those who are losing turn for appeal?  Supreme Court said their piece, the republicans won't help...  so vote democrat. Just as democrat Roosevelt turned on his Wall Street backers, and republican Nixon opened relations with communist China, it will be a democratic regime that performs the coup de grace on government unions.  Hillary 2016!

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Third World Politics

One feature of the third world is when its military shakes down business. The USA is exceptional in this regard, it does not happen here.

As the four-star general in charge of U.S. digital defenses, Keith Alexander warned repeatedly that the financial industry was among the likely targets of a major attack. Now he’s selling the message directly to the banks.
Joining a crowded field of cyber-consultants, the former National Security Agency chief is pitching his services for as much as $1 million a month. The audience is receptive: Under pressure from regulators, lawmakers and their customers, financial firms are pouring hundreds of millions of dollars into barriers against digital assaults.

OK, just this once.

Now you would think if such a threat was imminent, he might have done something while in the service to keep us safe.  Or if he was retired against his will, then surely his pension and a love of country would compel him to advice gratis, or for not more than expenses.  His pension and bennies are already makes him a millionaire.

But no, the whole thing is about money, shakedowns, let problems happen so your price goes up.  I grew up hearing about those godless communists, but the real problem is the godless capitalists.

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False Economies

Honeywell is kept alive by its war-machine contracts, when it should have folded long ago.  I blogged on that company before, and innovators have entered the field, grown, sold to Google for $3 billion before Honeywell could not even think of a reply, so they sued to stop competition.

Finally Honeywell has replied.  It has four reviews, all five star, my textual analysis says they were written by the same person.  Why not?  If you never listen to customers anyway, why not just make it up?

Honeywell is one of those countless "we don't care, we don't have to..." companies that depend on government contract.  Sad thing is, we keep them in business with our tax dollars.  This is all so Soviet.

Welfare, war and spying is not the basis of a sustainable economy.  In my book I talk about how how the last USA industrial sewing machine company outsourced its sewing machine production, and with the same domestic capacity began making missile parts for our wehrmacht at ten times the profits.  I was at an Apple store yesterday in which clearly some head honchos had shown up to measure something, and every employee, including the honchos, were dressed like children.  Well, with no sewing machines, perhaps that is inevitable.

Is the pendulum swinging back?  Every USA industry category is subject to get big or get out. Clothes, Gap; Furniture, Ikea; Food, McDonald/Starbucks; Housing, Section 8; entertainment, netflix; medicine, morris dancers; security, TSA; and so on.   So I was pleased to see in Seattle a brick and mortar company that sells beginner suits to people who desire to transition to adulthood, SuitSupply.  Quality seems good, price is fine, and 55 stores worldwide.  That is tiny by today's standards.  Maybe de-escalation of the big-or-get-out imperative is to go from 1000 stores necessary to 100, 50, 20, 10, one being enough to make a living.  No doubt their compensation package, usually min wage plus commission at such places, would have to be adjusted for the new law, which means a separate accounting for the Seattle store, which defeats the advantages of having 55 stores...  no doubt they will adjust, but others considering Seattle will skip it for markets that are not so adverse to small business.

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Medical Tourism - Tombstone part 4

It is remarkable to read the Book Tombstone by Author Yang and marvel at granaries full as people starved.  In spite of the evidence from the VA scandal,  Romney/Obamacare marches on.  The VA scandal is all about lying, and "responsible parties" (mistakes were made, let's move on) unable to manage things when they are lied to.  But when nonsense is the party line, when all have gone absolutely mad, lying is self-preservation.  Truth is suicide. China had its whistleblowers too, all suffered, just as we have in USA today.

You cannot read Tombstone about 1960 China without seeing USA Today.



As communism marches on in USA, outside USA free market medicine is growing rapidly in response to the destruction of medicine in USA.  Two fellows with whom I was drinking Friday night both sang the praises if Bumrungrad Hospital in Thailand.

Bumrungrad was the first Asian hospital accredited by the Joint Commission International (JCI), the international arm of the organization that reviews and accredits American hospitals.

Medicine does not cost a lot, it is just in the USA to advance communism we are charged a lot.  Medicine does not cost that much, it is just with patents and the State as the #1 customer they can charge that much.

Bumrungrad International is an internationally accredited, multi-specialty hospital located in the heart of Bangkok, Thailand. Founded in 1980, today it is the largest private hospital in Southeast Asia, with 580 beds and over 30 specialty centers. Bumrungrad offers state-or-the-art diagnostic, therapeutic and intensive care facilities in a one-stop medical center.

Yes, one stop.  One of the fellows with which I was drinking mentioned a surgery in Thailand which cost less then the follow-up back in the States where a doctor changed the dressing.  $450 for surgery in Thailand, $500 to change the dressing in back in the... back in the...  back in the USA.  When surgery is $25,000 in USA, and 2 weeks in Thailand, surgery included, recovery at a beach resort is $4000... well... medical tourism.

Yes, world class medicine on a private model.  And as USA declines collectively to provide quality medicine, the world organizes to take up the slack.

And just as while people were starving in China, China was exporting grain, so USA doctors are heading out to find a better life.  None of this is unintended consequences, collectivization is the goal in all things in USA.  Get big or get out, that is federal policy.  As they say, don't fight the FED.

One can see what is going on and get angry, or one can realize there has never been "good times."  Happiness is around family, and joy is around working on solutions to problems.  So, looking at the world today, especially in USA, the most revolutionary thing you can do is start a business, and a family while you are at it.  And as for medical care, well, there is always Thailand, if you are in international trade.  Back in the ...back in the...



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Start-up Weekend

Where is the customer?  And shouldn't they make clear this is limited to Cloud Computing?

All Startup Weekend events follow the same basic model: anyone is welcome to pitch their startup idea and receive feedback from their peers. Teams organically form around the top ideas (as determined by popular vote) and then it’s a 54 hour frenzy of business model creation, coding, designing, and market validation. The weekends culminate with presentations in front of local entrepreneurial leaders with another opportunity for critical feedback.

Market validation?  You mean the product or service is pitched to buyers?   You form a hypothesis and test it with your target customers during the 54 hours?  No?  Then why would anyone form a business model, code, design or anything else?

Startup Weekend is a global grassroots movement of active and empowered entrepreneurs who are learning the basics of founding startups and launching successful ventures. It is the largest community of passionate entrepreneurs with over a thousand past events in 110+ countries around the world.

If there has been thousands of these, why is there not a scorecard of how many of the "winners" went on to thrive in commerce?

Whether entrepreneurs found companies, find a co-founder, meet someone new, or learn a skill far outside their usual 9-to-5, everyone is guaranteed to leave the event better prepared to navigate the chaotic but fun world of startups. If you want to put yourself in the shoes of an entrepreneur, register now for the best weekend of your life!

Shark Tank and such events as Start-up weekend may be fun and entertaining, but none of the people involved are your customers.   And there is no way to access the customers in the time alloted.

Seattle will be hosting truly a unique event kicking off on May 16th. Startup Weekend and 9Mile Labs are coming together to host one of the world's first B2B Startup Weekend! B2B (business-to-business) implies that your primary customer and source of revenue is another business. The objective of this event is to encourage and empower entrepreneurs to build their B2B idea. To help the B2B entrepreneurs, 9Mile Labs and Startup Weekend will be bringing great people and resources to this event to educate and coach participants on the key considerations for building a viable B2B business.

Wait!  "primary customer... another business...   coach participants on key considerations..." there is only one consideration, and that is the customer.  No one will dispute the customer is the most important thing in business, but getting the product right is the hardest thing.  That takes interacting with the customer.  You must at some point speak to a customer, why not make that the first thing?  As I read through the brochures I see a sort of Disneyland of Rides as opposed to business start-up.  Again, for $99, probably fun, but where are the businesses that get started?

Also, apparently in Seattle there is only one business, and that is cloud computing.  No restaurants?  No  manufacturers?  No apparel companies?  No jewelry? This event is centered on something called 9Mile labs.

About 9Mile Labs9Mile Labs is a high-tech accelerator based in the Seattle metro area focused on B2B software and cloud technologies. 9Mile Labs runs two 3-month programs every year, each with a group of 9 startups. During these 3 months, startups receive funding, access to an impressive set of mentors, free workspace and the opportunity to present to investors at the end of the program in exchange for an equity stake in the startups.

Although success is doubtful in their approach, one thing is for sure...  what happens when you have all those resources directed to one tiny area, cloud computing?  The price comes down.  Very good. Further, the entire effort is dedicated to software and cloud computing.  Apparently there is no other business.

It seems to me this is selling fantasy to people who are hoping for the big score.  Good luck.  if you are not going after the customer first and building organically a company based on matching your natural talents and customer needs then I wonder how far one will get.

I should talk though, I've never kept track of how many people have taken my class and started up.  Plenty of positive feedback over the years, but no data.  But then I don't claim to be an incubator, merely a lecturer.  And then, people do save time and money and actually get businesses up and running based on directions form my seminars and follow-up assistance.  That's what me feedback says.

I am in discussions with a local school to form a business incubation program, and funny, I keep thinking "everything but tech" to specifically exclude tech from the program.

I think the tech business and funding model advances a false economy... indeed, if one contemplates the false economy, the thread that holds it together is tech.

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Burke On Change

This television series greatly influenced me as to competing on design....  this episode in particular was a revelation.  When you have 50 minutes, give it a view



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Question As to What Business

What type of business do you recommend that would best weather severe economic problems in the U.S.? An export business focused on foreign markets that hopefully wouldn't be affected as much? If one had an export business, wouldn't problems in the U.S still be a problem (loss in domestic manufacturing capability)? What about the specific export product? Agricultural products maybe, non-high tech, housewares? Having your own business may not be the "lifeboat" one thinks. Or maybe it's a business like a barber, manual labor, truck driver, that cannot really be outsourced, but always needed no matter how bad or good the economy is doing. 

It seems to me that is thinking like an investor, not an entrepreneur or customer employed.  Your criteria is make money no matter what, and avoid problems.  Quite the contrary, being customer employed is to accept you will not make money if you fail to produce to customer satisfaction, and you intend to make an unmistakbly bad situation better, not avoid it.  Business is a participation racket, not a protection racket.

The work begins not with gaming how to make money and avoid danger, but acknowledge what causes you pain and gives you joy working on a solution. In this way you make a unique contribution, come what may.  It also becomes a lifestyle, your lifestyle, unique among all lifestyles, you become orignal and authentic.

Certainly for some that is in the skilled trades (what you call manual labor), and “no truck drivers, no nothing.”  Good truck drivers are critical.

I never said being self-employed is a lifeboat, but a revolutionary act, doing good while doing well when everything is geared toward collectivization and the destruction of the individual.  Fight the power, doing good while doing well.

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