I have been reading a lot about the merger and acquisition (M&A) division of many financial firms and the more aggressive sounding name for a similar part of a company, Leveraged Buy-Outs (LBO). I am all about world peace, multiculturalism, and equality of opportunity, etc. But when it comes to business, companies are not charities. I want to know more about how to create a successful LBO of another company; because, it is my opinion that Starbucks (SBUX) and Noah’s Bagels (BAGL) should become one company, exploiting the best aspects of each company to bring a better service to customers.
I worked for Starbucks a few years ago and was not really impressed with the corporate culture that it had developed for itself, so I quit. Recently Starbucks began to sell food they can heat up for customers in a really big convection oven. I have not tasted any of it, fortunately for me all the selections are non-vegetarian so I haven’t even been tempted, but I can tell it is all crap. Moreover, walking into the store used to be somewhat pleasant because I like coffee; now, it smells so bad inside that I want to sick up from the food being sold.
On the other hand, the bagels at Noah’s are really great. There is a good selection of smears (cheese creams) and there is a big selection of bagels made fresh with all sorts of good other toppings and combinations for making the bagel experience even more tasty. Yet the coffee brewed at Noah’s not only leaves something to be desired, but makes me question my affection for coffee altogether. This is where being a consumer becomes a challenge, and I don’t want to be challenged when I am gladly giving away what little money I have.
The problem with a LBO with these two companies is that Noah’s is in the red this year and has owners who would see positive cash flows only if Starbucks bought the bagel company. At this point, we would be looking at a merger and/or acquisition of Noah’s by Starbucks. This product-extension merger for Starbucks is what was supposed to happen when the breakfast food was introduced, but failed miserably, I avoid Starbucks completely because of the terrible smell that is a bad mixture of coffee, cardboard and reheated egg.
To make a sound merge decision, a key figure is a Price Earnings Ratio, Noah’s has a P/E of 2.76, meaning that investors are willing to pay less than $3 for each $1 in earnings. A very low number when compared other companies in the industry. Krispy Kreme (KKD), for example, has a P/E ratio of 80, Starbucks’ is 26, Panera Bread Company (PNRA) has a P/E of almost 30. There are other figures to consider, but just looking at the balance sheet for each company will reveal Starbucks has over 25 times the dollar amount of assets of Noah’s. Just to be clear for the mathematically challenged: Noah’s total assets are $200,000 while the total assets for Starbucks is $5.5 million.
While I am interested in finance, I can still think in terms of business and economies of scale. It would not be efficient, nor very practical to make the bagels inside the Starbucks coffee stores. There would need to be just a few adjustments to the business of each company to make everything run well enough to provide the customers with exceptional goods and services. Some may question my irritation of having to go to one store for decent coffee and another for a decent bite to eat; well, I am paying to make my life easier, so make my life easier.
First, Starbucks would do away with the mediocre selection of pastries and other products, selling the superior selection of current Noah’s Bagels stock, delivered fresh each morning from the location of the nearest current Noah’s. Next, Noah’s would install an espresso machine and employ a barista to make and serve coffee and coffee drinks in addition to the sumptuous selection of bagels and bagels sandwiches. Finally, Starbucks would begin to open new stores that better accommodate the paring of delicious bagels and finely picked and roasted coffee. Thus, a beautiful symbiosis of breakfast and sales is created.
Sunday, October 24, 2010
Sunday, October 17, 2010
Midterms All Week
I will be back next week, after this wave of midterms passes. Wish me luck. Until then, I hope this keeps you smiling.
Sunday, October 10, 2010
Money Never Sleeps
What should a business do when confronted with an increase in the supply of labor from a low ability group that has a high productivity of output? What if this group is a non-native group that carries a racial stigma yet provides the lowest wage cost in the market? The decisions made by a manager will be tied with increasing the profits for the company, producing the best results with the available inputs.
The argument for immigrant labor as a complement to the native labor force follows that an increase in low-skilled work will push the high-skilled native workers into better jobs, more requisite of their skills. Often this movement up the labor ladder coincides with a physical relocation of the worker as better employment is found in other parts of the country.
Two American economists, George Borjas and David Card , have dissenting opinions from one another on the actual impact of immigration in the labor markets. Each have many papers that have been published, some as independent papers and others as responses to one another, filled with all kinds of data, tables, graphs, and math. The most recent housing bubble that wrote the demise of the banking system has, in my opinion, given opportunity for new papers to be written on the future of immigration impacts to the labor market.
An example of the problem has been written in The Economist as recently as the beginning of September. It reads: “Many owe more on mortgages than their homes are worth. Households often opt to stay put rather than default, leaving them trapped in places with high unemployment and unable to move to where jobs are plentiful.” In terms of unemployment, this is structural, requiring government action that is contrary to what has been explored with looser monetary policy.
It will be in the best interest of the immigrants to remain in their current jobs and with their current, lower wages. That is the rational behavior expected of an individual who maximizes well-being. If, however, the native workers become substitutes to the immigrant workers, where both compete for the same jobs in a lousy job market, I can predict a magnification of the racial stigma many immigrant workers already face. Love thy neighbor; because, he is you.
The argument for immigrant labor as a complement to the native labor force follows that an increase in low-skilled work will push the high-skilled native workers into better jobs, more requisite of their skills. Often this movement up the labor ladder coincides with a physical relocation of the worker as better employment is found in other parts of the country.
Two American economists, George Borjas and David Card , have dissenting opinions from one another on the actual impact of immigration in the labor markets. Each have many papers that have been published, some as independent papers and others as responses to one another, filled with all kinds of data, tables, graphs, and math. The most recent housing bubble that wrote the demise of the banking system has, in my opinion, given opportunity for new papers to be written on the future of immigration impacts to the labor market.
An example of the problem has been written in The Economist as recently as the beginning of September. It reads: “Many owe more on mortgages than their homes are worth. Households often opt to stay put rather than default, leaving them trapped in places with high unemployment and unable to move to where jobs are plentiful.” In terms of unemployment, this is structural, requiring government action that is contrary to what has been explored with looser monetary policy.
It will be in the best interest of the immigrants to remain in their current jobs and with their current, lower wages. That is the rational behavior expected of an individual who maximizes well-being. If, however, the native workers become substitutes to the immigrant workers, where both compete for the same jobs in a lousy job market, I can predict a magnification of the racial stigma many immigrant workers already face. Love thy neighbor; because, he is you.
Sunday, October 3, 2010
A Cure for the Hurd
A few weeks ago the Department of Justice ordered a few of the big software companies, Apple, Adobe, Google, et al, to remove each other from a no-call list, preventing employees from being taken from one firm to another. This was an attempt by the government to halt the possibility of collusive activity between these software giants, implying the importance of competition within an industry.
Flash forward to the present and enter into the drama of Hewlett-Packard and Oracle. Oracle boss, Larry Ellison, is in a rage about the hiring of Leo Apotheker by Hewlett-Packard as a replacement for Mark Hurd, who was hired by Oracle after he was let go from Hewlett-Packard, creating tension between the once complementary companies.
Quickly, Hurd left H-P over allegations of sexual harassment and went to Oracle. Oracle develops software and H-P primarily develops hardware, such as printers and the netbook I am using now. When Hurd was taken in by Oracle, H-P was freaking out because they thought Hurd had access to privileged information and would use that information against H-P.
In the computer industry, software and hardware are perfect complements; and, H-P and Oracle had a successful relationship, sharing 14,000 customers. H-P chose to hang Hurd out to dry when he was presented with some problems, despite the immeasurable success that he brought to the company “on the back of fierce fiscal discipline,” according to the New York Times, “focused on fostering growth in three areas: operating and managing next-generation data centers, mobile technology, and printing in its broadest applications.” In fact, when I looked at H-P share value, the stock doubled while Hurd was at the helm from $20 in 2005 to $40 in 2010.
It is obvious he was important to H-P, first a lawsuit was filed against him, and then they hired Mr Apotheker. If H-P were a man, (We’ll call him Tony) he is morally adverse to the actions of Mr Hurd but still has a need for his innate qualities as a leader. Tony has an anger problem and is acting in his well-being, yet filled with anger; nothing good can come from that. The next step for Tony, apparently, is making a bitter decision to “get back” at Hurd and his new family (we’ll call them the Osterholms).
H-P needs to forget about Hurd and let him live his new life with his family, stop pestering him and, ultimately, Tony needs to get his own life. Whether it was truly a strategic management decision to hire a former software CEO in Mr Apotheker, or a bitter hiring decision directed at Hurd and Oracle, one hopes that H-P is able to survive on the island it has built for itself, depending on no one else to seamlessly transition from hardware to its weak spot, software. Can anyone say “Apple?”
Flash forward to the present and enter into the drama of Hewlett-Packard and Oracle. Oracle boss, Larry Ellison, is in a rage about the hiring of Leo Apotheker by Hewlett-Packard as a replacement for Mark Hurd, who was hired by Oracle after he was let go from Hewlett-Packard, creating tension between the once complementary companies.
Quickly, Hurd left H-P over allegations of sexual harassment and went to Oracle. Oracle develops software and H-P primarily develops hardware, such as printers and the netbook I am using now. When Hurd was taken in by Oracle, H-P was freaking out because they thought Hurd had access to privileged information and would use that information against H-P.
In the computer industry, software and hardware are perfect complements; and, H-P and Oracle had a successful relationship, sharing 14,000 customers. H-P chose to hang Hurd out to dry when he was presented with some problems, despite the immeasurable success that he brought to the company “on the back of fierce fiscal discipline,” according to the New York Times, “focused on fostering growth in three areas: operating and managing next-generation data centers, mobile technology, and printing in its broadest applications.” In fact, when I looked at H-P share value, the stock doubled while Hurd was at the helm from $20 in 2005 to $40 in 2010.
It is obvious he was important to H-P, first a lawsuit was filed against him, and then they hired Mr Apotheker. If H-P were a man, (We’ll call him Tony) he is morally adverse to the actions of Mr Hurd but still has a need for his innate qualities as a leader. Tony has an anger problem and is acting in his well-being, yet filled with anger; nothing good can come from that. The next step for Tony, apparently, is making a bitter decision to “get back” at Hurd and his new family (we’ll call them the Osterholms).
H-P needs to forget about Hurd and let him live his new life with his family, stop pestering him and, ultimately, Tony needs to get his own life. Whether it was truly a strategic management decision to hire a former software CEO in Mr Apotheker, or a bitter hiring decision directed at Hurd and Oracle, one hopes that H-P is able to survive on the island it has built for itself, depending on no one else to seamlessly transition from hardware to its weak spot, software. Can anyone say “Apple?”
Sunday, September 26, 2010
Take This Badge Off Of Me
First off, I do not believe for one second that pharmaceutical reform is knocking on the door of this country. Further, this blog is not about politics, not even really is it about economics or business (though I do use the language of economics and business). My blog is for the purpose of developing my idea-shipping skills. With the necessary disclaimer out of the way I would like to get on with the strategic management decisions being made by pharmaceutical companies developing cancer- fighting drugs at prices close to $100,000 a year simply to prolong a cancer patients’ life a few months.
I know I just said this is not really about economics; but, I am going to use an economical technique known as cost-benefit analysis without the use of quantitative data that would turn this into an economic report. It is akin to the pros and cons decision making tool we use when we are trying to decide if we want to stay in our current relationship or get out, quickly.
Benefits to the expensive drug treatment to prolong life of a terminal cancer patient: A few more months with loved ones, finishing end-of-life business.
Costs to the expensive drug treatment to prolong life of a terminal cancer patient: A few more months with loved ones, finishing end-of-life business, on a life support system, reeling from the negative side-effects of ineffectual treatments of chemotherapy, and other preventive medicines that prevented nothing, causing loose bowels, nausea, and probably another type of cancer or Cancer. The high monetary cost of the drug imposed on tax payers through employer/government health care programs; yet, “ Bob Svensson, 80, a former corporate finance officer from Bedford, Mass." would not spend that money," because the benefit doesn't seem worth it, he says.” His insurance company, ergo US taxpayers, foot the bill.
My education in marginal cost-benefit analysis tells me the pharmaceutical and health insurance companies should stop offering and paying for these drugs. Yet, how does one put a price on a life? Oh, these same companies do it all the time, you say? They deny non-terminal patients treatment, you say? I’m sure the 300+ million people living in America today have at least one story about the inconsistent or inhuman practices by these very oligopolies.
I had a lecture this semester about medical research for treatments that benefit those most willing to pay. The class was Economics of Racism at Sac State and we learned that while there is nothing biologically different about any human on the planet, there are still different genetic combinations between people of different ethnicities that allow the same disease to be contracted through genetic mutations over a different sequence of genes. As a result, the treatment for disease X will work on Person A, but not on Person B because the genetics of the two people differ. Typically these two people are from different “races;” and, Person B will not get a variation of the drug because he or she is poor and unable to qualify with the insurance company to pay for the drug.
The companies responsible for treating the sick and dying could still make lots of money without tossing a decent cost-benefit analysis out of the window. I fully understand the concept of increasing the market share of existing stock as the driving motive of a firm; perhaps, the companies in the health care industry should be not-for-profit entities so that universal health care would become a reality. Not-for-profits are not now targeted as socialist entities, so why the government cannot create a law serves and protects its citizens I am not sure; I stay away from politics.
I know I just said this is not really about economics; but, I am going to use an economical technique known as cost-benefit analysis without the use of quantitative data that would turn this into an economic report. It is akin to the pros and cons decision making tool we use when we are trying to decide if we want to stay in our current relationship or get out, quickly.
Benefits to the expensive drug treatment to prolong life of a terminal cancer patient: A few more months with loved ones, finishing end-of-life business.
Costs to the expensive drug treatment to prolong life of a terminal cancer patient: A few more months with loved ones, finishing end-of-life business, on a life support system, reeling from the negative side-effects of ineffectual treatments of chemotherapy, and other preventive medicines that prevented nothing, causing loose bowels, nausea, and probably another type of cancer or Cancer. The high monetary cost of the drug imposed on tax payers through employer/government health care programs; yet, “ Bob Svensson, 80, a former corporate finance officer from Bedford, Mass." would not spend that money," because the benefit doesn't seem worth it, he says.” His insurance company, ergo US taxpayers, foot the bill.
My education in marginal cost-benefit analysis tells me the pharmaceutical and health insurance companies should stop offering and paying for these drugs. Yet, how does one put a price on a life? Oh, these same companies do it all the time, you say? They deny non-terminal patients treatment, you say? I’m sure the 300+ million people living in America today have at least one story about the inconsistent or inhuman practices by these very oligopolies.
I had a lecture this semester about medical research for treatments that benefit those most willing to pay. The class was Economics of Racism at Sac State and we learned that while there is nothing biologically different about any human on the planet, there are still different genetic combinations between people of different ethnicities that allow the same disease to be contracted through genetic mutations over a different sequence of genes. As a result, the treatment for disease X will work on Person A, but not on Person B because the genetics of the two people differ. Typically these two people are from different “races;” and, Person B will not get a variation of the drug because he or she is poor and unable to qualify with the insurance company to pay for the drug.
The companies responsible for treating the sick and dying could still make lots of money without tossing a decent cost-benefit analysis out of the window. I fully understand the concept of increasing the market share of existing stock as the driving motive of a firm; perhaps, the companies in the health care industry should be not-for-profit entities so that universal health care would become a reality. Not-for-profits are not now targeted as socialist entities, so why the government cannot create a law serves and protects its citizens I am not sure; I stay away from politics.
Sunday, September 19, 2010
We Are What They Feed Us
This week I take on the food industry in America. The more I learn about business the less I realize I know about the reality of my personal view on business. Being raised a vegetarian I have an incensed disdain for the processed foods served in the supermarket and I just cannot understand why people, children and adults, are so adverse to eating healthy food. So I will offer my thoughts on the corporate food industry in America.
The Economist (September 18, 2010) reports Harry Balzer of NPD, a research firm, saying “taste, value and convenience are the most important to the consumer (79).” My problem with the interpretation of consumer preferences by these food manufacturing companies is that companies such as Kellogg, Kraft, PepsiCo, and others create the taste, value and convenience consumers desire. These food companies, who, in effect, act as an oligopoly, need to make the food that is nutritionally good for us taste better to those finicky consumers, and make the preparation as easy as other food stuffs on the market, further reminding people that veggies cost less, therefore consumers can purchase more with their dollar.
My dad, master vegetarian chef of the family, used cumin on steamed vegetables and they taste so much better than vegetables that are served plain. I now spend $5 on a bouquet of veggies: broccoli, cauliflower, yellow squash, zucchini squash, asparagus and corn, spend five minutes chopping them up and another 5-10 minutes to steam them on the stove. Sprinkle some cumin and half the meal is prepared. Pepper tastes great, in addition to garlic power. Pour on vinaigrette dressing (not ranch), there are a number of ways to make something great for you taste great at a low cost and will not “inconvenience” the consumer much.
There was a time when the pre-packaged processed foods were a terrific, new item at the markets. Moms did not have to wait in long lines at the deli to get sandwich meat for school lunches and had more time to see Timmy’s soccer game. The turkey didn’t taste that much different and it stored in the refrigerator easily. Little did Mom know that jobs were about to be lost when the packaging process became automated. Now is the time to take a stand against the corporate automation by demanding less of the pre-packaged processed lunch meats, demanding more of the variety that comes from the butcher. This will work two-fold: a decrease in demand for the pre-packaged foods will drive up the price and therefore become less desirable to consumers (decrease in value), and the increase in demand of the butcher prepared selections will decrease the price, thus further increasing the value to the consumer.
There is little that is healthy about macaroni and cheese if it comes out of a box or if it is made from scratch. The reason the popular line of Macaroni & Cheese tastes good is due to the chemistry involved with the process. Cheese does not naturally melt to simulate “good” mac and cheese unless it comes in dehydrated form, filled with preservatives in a small package inside the cardboard box of enriched-(sugared) macaroni pasta. The food in that box will not taste like anything but the cardboard box unless the manufacturer includes all the chemicals made in the research and development lab. My eyes grow wide when I am standing in line at the supermarket behind a shopper with 20 frozen dinners from Healthy Choice. I wonder to myself “is your life so busy that you cannot spend a 1/2 hour preparing some food to eat?” No, he is just lazy. Perceived taste and perceived convenience will sacrifice good eating habits every time. Nah, perhaps I should say good eating habits are trumped every time by the perception of good taste and the perception of convenience to the consumer.
I know there is a middle ground between TV dinners and fully preparing a meal in the kitchen. Kraft, et al, is doing fine by Michelle Obama reducing the amount of sodium in foods (78), salt tastes good, though, and it is a natural resource, unlike most of what is in their food. I know my Morning Star weenies are filled with sodium because that is how you make something that is not meat resemble meat in taste and texture. Americans have high levels of sodium in the food eaten because that is how manufactures make a collection of synthesized atoms taste like beef or meatloaf when it really is not beef or meatloaf. The sodium levels in my family are at healthy levels because we don’t eat a majority of the food on the shelves of the supermarkets, we therefore eat all the salt on our food as we care to. These firms need to stop playing tit-for-tat game theory with the consumers who do not expect to be playing the game, our lives are at stake.
The Economist (September 18, 2010) reports Harry Balzer of NPD, a research firm, saying “taste, value and convenience are the most important to the consumer (79).” My problem with the interpretation of consumer preferences by these food manufacturing companies is that companies such as Kellogg, Kraft, PepsiCo, and others create the taste, value and convenience consumers desire. These food companies, who, in effect, act as an oligopoly, need to make the food that is nutritionally good for us taste better to those finicky consumers, and make the preparation as easy as other food stuffs on the market, further reminding people that veggies cost less, therefore consumers can purchase more with their dollar.
My dad, master vegetarian chef of the family, used cumin on steamed vegetables and they taste so much better than vegetables that are served plain. I now spend $5 on a bouquet of veggies: broccoli, cauliflower, yellow squash, zucchini squash, asparagus and corn, spend five minutes chopping them up and another 5-10 minutes to steam them on the stove. Sprinkle some cumin and half the meal is prepared. Pepper tastes great, in addition to garlic power. Pour on vinaigrette dressing (not ranch), there are a number of ways to make something great for you taste great at a low cost and will not “inconvenience” the consumer much.
There was a time when the pre-packaged processed foods were a terrific, new item at the markets. Moms did not have to wait in long lines at the deli to get sandwich meat for school lunches and had more time to see Timmy’s soccer game. The turkey didn’t taste that much different and it stored in the refrigerator easily. Little did Mom know that jobs were about to be lost when the packaging process became automated. Now is the time to take a stand against the corporate automation by demanding less of the pre-packaged processed lunch meats, demanding more of the variety that comes from the butcher. This will work two-fold: a decrease in demand for the pre-packaged foods will drive up the price and therefore become less desirable to consumers (decrease in value), and the increase in demand of the butcher prepared selections will decrease the price, thus further increasing the value to the consumer.
There is little that is healthy about macaroni and cheese if it comes out of a box or if it is made from scratch. The reason the popular line of Macaroni & Cheese tastes good is due to the chemistry involved with the process. Cheese does not naturally melt to simulate “good” mac and cheese unless it comes in dehydrated form, filled with preservatives in a small package inside the cardboard box of enriched-(sugared) macaroni pasta. The food in that box will not taste like anything but the cardboard box unless the manufacturer includes all the chemicals made in the research and development lab. My eyes grow wide when I am standing in line at the supermarket behind a shopper with 20 frozen dinners from Healthy Choice. I wonder to myself “is your life so busy that you cannot spend a 1/2 hour preparing some food to eat?” No, he is just lazy. Perceived taste and perceived convenience will sacrifice good eating habits every time. Nah, perhaps I should say good eating habits are trumped every time by the perception of good taste and the perception of convenience to the consumer.
I know there is a middle ground between TV dinners and fully preparing a meal in the kitchen. Kraft, et al, is doing fine by Michelle Obama reducing the amount of sodium in foods (78), salt tastes good, though, and it is a natural resource, unlike most of what is in their food. I know my Morning Star weenies are filled with sodium because that is how you make something that is not meat resemble meat in taste and texture. Americans have high levels of sodium in the food eaten because that is how manufactures make a collection of synthesized atoms taste like beef or meatloaf when it really is not beef or meatloaf. The sodium levels in my family are at healthy levels because we don’t eat a majority of the food on the shelves of the supermarkets, we therefore eat all the salt on our food as we care to. These firms need to stop playing tit-for-tat game theory with the consumers who do not expect to be playing the game, our lives are at stake.
Saturday, September 11, 2010
Shopenomics (changed)
There is a new web start-up called Swipely where a consumer can track her “path of consumption” throughout the day. According to The Economist “those who cherish privacy will recoil in horror, but for digital exhibitionists [Swipely] is a dream.” It appears to be the child of online banking and Facebook, only it is not connected to either; sadly, Swipely is a completely independent social network site. This is where the firm may have gone wrong and my suggestions are: Find some way to be integrated into Facebook and offer more coupons and deals to “swipers.”
Everybody and their mom have Facebook, literally. One reason Facebook is so popular is because it does so much for the user on one site and does not make online group activities difficult or confusing. Question: Why do I want to have a Facebook and a Swipely account since they both act in the same fashion? The idea behind Swipely is it “makes it easy for customers to tell their friends how they are spending their money in the real world, something they probably would not do if they had to type all the data in. (The Economist Sep. 11 2010, 76)” It is a similar idea to location-based social networking that lets people know where you are and allow businesses to send restaurant deals and travel tips. The technology Swipely uses allows for a secure, read-only connection to the bank of a user to download transaction history. Going back to my question, even if I did find the marginal benefit of Swipely to be greater than zero, why will my Facebook friends want to add another site when they have happy feet at Facebook?
The next deal is deals. If businesses are going to get me to advertise their product every time I use plastic to make a purchase, there should certainly be a rewards program involved. For places such as Starbucks and Dominoes, the consumer should be rewarded with a free latte or a free pizza after so many visits. Other stores that sell clothing and shoes might offer discounts on select items if a person “checks-in” to Facebook to tell all of her friends she is at H&M or J.C. Penny’s shopping. The Swipely sales team should go out there and get as many stores as humanly possible to get on board with the discounts and sales promotion so that each time a shopper “checks-in” or makes a purchase, the whole freaking world will know about it. The concept that Foursquare members can get discounts and perks from businesses by becoming “mayor” or frequenting a place often is genius and truly should be more accepted by the millions of people who update everything all day long.
I had to sign up with Swipely to get the down-low, however, I do not intend to make use of it. Honestly, I barely go to Facebook and only recently did I feel “ready” for the experience. Shopping, in the rich-world, has become a leisure activity that is a hobby for a lot of people, discounts on the new handbag from Louis Vuitton would make sense for a shopper who updated where she was. Frequent buyer rewards is a great way to increase loyalty if the consumer is going to broadcast every purchase made with the handy-dandy plastic card. Swipely is a good idea but it will not work as an independent social network site. Hey Mark Zuckerburg: Buy out this firm and make it work on Facebook.
Update: Daring Fireball uncovered this gem that relates nicely with my article. It is a little long; I'll admit, I didn't read the whole thing.
Everybody and their mom have Facebook, literally. One reason Facebook is so popular is because it does so much for the user on one site and does not make online group activities difficult or confusing. Question: Why do I want to have a Facebook and a Swipely account since they both act in the same fashion? The idea behind Swipely is it “makes it easy for customers to tell their friends how they are spending their money in the real world, something they probably would not do if they had to type all the data in. (The Economist Sep. 11 2010, 76)” It is a similar idea to location-based social networking that lets people know where you are and allow businesses to send restaurant deals and travel tips. The technology Swipely uses allows for a secure, read-only connection to the bank of a user to download transaction history. Going back to my question, even if I did find the marginal benefit of Swipely to be greater than zero, why will my Facebook friends want to add another site when they have happy feet at Facebook?
The next deal is deals. If businesses are going to get me to advertise their product every time I use plastic to make a purchase, there should certainly be a rewards program involved. For places such as Starbucks and Dominoes, the consumer should be rewarded with a free latte or a free pizza after so many visits. Other stores that sell clothing and shoes might offer discounts on select items if a person “checks-in” to Facebook to tell all of her friends she is at H&M or J.C. Penny’s shopping. The Swipely sales team should go out there and get as many stores as humanly possible to get on board with the discounts and sales promotion so that each time a shopper “checks-in” or makes a purchase, the whole freaking world will know about it. The concept that Foursquare members can get discounts and perks from businesses by becoming “mayor” or frequenting a place often is genius and truly should be more accepted by the millions of people who update everything all day long.
I had to sign up with Swipely to get the down-low, however, I do not intend to make use of it. Honestly, I barely go to Facebook and only recently did I feel “ready” for the experience. Shopping, in the rich-world, has become a leisure activity that is a hobby for a lot of people, discounts on the new handbag from Louis Vuitton would make sense for a shopper who updated where she was. Frequent buyer rewards is a great way to increase loyalty if the consumer is going to broadcast every purchase made with the handy-dandy plastic card. Swipely is a good idea but it will not work as an independent social network site. Hey Mark Zuckerburg: Buy out this firm and make it work on Facebook.
Update: Daring Fireball uncovered this gem that relates nicely with my article. It is a little long; I'll admit, I didn't read the whole thing.
Sunday, September 5, 2010
What’d You Do With My Cloud?
Here is an improvement on a business idea for the firm who created Instapaper, the software that allows a computer user to save the content of a webpage to read later even if there is no internet connection. (Per the recommendation of Daring Fireball): Make an add-on for your program that will work like an RSS Reader. Otherwise how am I supposed to “read later” when I am offline if I can only access the saved webpages when I am online?
Perhaps I am not doing something correctly; however, the queue at Instapaper I created while surfing with a connection is on the cloud. Now that I am no longer with a connection I cannot access the cloud where I saved the webpages. I may not be a tech wizard but I am pretty savvy when it comes to getting around a computer: We had our first Apple/Macintosh computer in my home when I was in 5th grade and I had to take classes in Management Information Systems (Windows, Office, and Internet Explorer) last year in college. If there was anything I am average at, it is the computer.
Something is not right with the design of Instapaper because I am unable to make it work without an internet connection, when the whole point of the software is to be able to do work without an internet connection. It is a good idea; I suggest a new version, or perhaps the creation of an Firefox bookmark add-on that will store the queue of webpages to be viewed once the internet connection has been disconnected.
Perhaps I am not doing something correctly; however, the queue at Instapaper I created while surfing with a connection is on the cloud. Now that I am no longer with a connection I cannot access the cloud where I saved the webpages. I may not be a tech wizard but I am pretty savvy when it comes to getting around a computer: We had our first Apple/Macintosh computer in my home when I was in 5th grade and I had to take classes in Management Information Systems (Windows, Office, and Internet Explorer) last year in college. If there was anything I am average at, it is the computer.
Something is not right with the design of Instapaper because I am unable to make it work without an internet connection, when the whole point of the software is to be able to do work without an internet connection. It is a good idea; I suggest a new version, or perhaps the creation of an Firefox bookmark add-on that will store the queue of webpages to be viewed once the internet connection has been disconnected.
Saturday, August 28, 2010
The Harder They Come
Inkling has developed the best software for college students on the most sophisticated technology platform, the iPad; yet, the application Inkling has created does not have its target market in mind. The application that features “a textbook with features,” including a search option, social networking capabilities, and “Eye-popping pulchritude” works only with the iPad console and the books available are mostly lower-division, undergraduate textbooks. The ebook and related software developed for college students should be a less expensive alternative, more interactive learning experience, and be supported on normal as well as luxury systems.
Textbooks cost between $100 and $200 for each class. When a student is enrolled in three to five classes each term for a minimum of eight terms, book costs, undoubtedly, become very high. I intend to spend more than four years in school and stand to face higher book costs than a typical four-year student. Moreover, new editions come out often and bookstores are often unwilling to purchase the used book at the end of the semester if a new edition is expected; and, if they are repurchased, textbooks are bought back at a fraction of the cost. On a side note, last semester I found a copy of my accounting textbook online for $70 and at the end of the year I sold it to the bookstore for $85. But I did so with a feeling of vindication for the unjust prices the bookstore charges and the unrelenting updates the editors push every year. I barely cracked the book just to get key terms for each chapter; this is common, students are required to purchase an expensive book that often is only used as “reference” to the rest of the lecture.
The semester prior to the one just mentioned I was in my first accounting class, ever. I wanted to do really well in the class and I was very motivated to learn the material so I stayed late in the library and attempted the assignments in the back of each chapter. This proved difficult on some of the more in-depth questions. I might spend two hours filling in a balance sheet from the information given only to find out that my answers are wrong when I check the answer in the back of the book. The answer in the back of the book is just an answer; there is no process detailed in the back of the book to help me understand how to solve the question correctly. The software pioneered by Inkling removes that exact barrier by creating interactive quizzes that test a student’s knowledge with immediate results and through step by step instruction if the student runs into any problems along the way. Further, it allows for social networking within the class to better connect the students with one another if there are any questions. Where there is limited space in a textbook to quiz a student about which accounts belong to receivables, payables, long-term investments, short-term investments, etc., there is more space in an ebook to randomize a matching component so the student is better prepared to determine which account a carpet cleaning expense is classified under for a firm.
Many of the problems the ebook is prepared to alleviate include the price of the product designed as well as advances assisting the student with his or her course. The driving issue with the great new software developed by Inkling is the inaccessibility to the typical student. As previously mentioned, the textbooks available for download are for young, undergraduate students who are not likely to have the iPad at a cost of nearly $700. The laptop personal computer has just recently become close to a normal good for the college consumer, while the iPad is easily still a luxury good, a novelty despite the appealing nature of its capability.
When I was a student at Sacramento City College, affectionately referred to as Sacramento Inner-city College, I was humbled by the “new-ness” of computers by a large number of students. Poverty is a disadvantage passed down -- though not through genetics. Computers are becoming less expensive and decent models are available to lower income students, these students are now becoming familiar with the benefits of computer technology, yet are still burdened with the high cost of books and the obtuse nature of the work in classes that will provide the most advantage. The students who were left behind when personal computers were introduced are now being left behind by the overwhelming interest in the iPad.
I refuse to take for granted the excellent education I received in grade school and the positive role models of my parents, grandparents, aunts, uncles, and cousins, who are all college graduates. When the best learning tools are provided to those who need them the least, whilst those who need the most help are held at arm’s length by four letters: MSRP, it begs the question put forth by Michael Franti of the musical group Spearhead: “Are we a part of the solution or a part of the pollution?” Do I believe President Obama is a socialist? No. Do I believe I am a socialist? No. Do I believe there should be greater equality in our country? Yes; and, I believe that measures of social equality should be begun in the government. That does not mean I dislike the software created by Inkling; in fact, their software is what I wanted to create with a firm -- that is until my friend emailed me a link to their website and showed me my idea had already been started.
Access to cheaper textbook information and a better learning experience, available to a student on any computer device used by him or her not only makes common sense, but it is a sound environmental decision as well. Inkling has made great strides forward in the transition to a more integrated technological society. My only hope is the software is created on an open source that other developers can push the important facets of the technology into platforms and hardware accessible by the majority of students who do not have the economic liberty to purchase an iPad this semester. Parting words to Inkling: Great work, please keep it up and continue to digitize more textbooks and keep the prices in line with the axiom that information for all of society is a greater benefit than the bottom line of your firm. (I guess that is the little socialist in me speaking.)
Update: If I could afford one, I would have an iPad and would be spending money with Inkling (if my classes were offered) because it is exactly what would help my studying. Nevertheless, I am very fortunate and grateful for what I do have.
Textbooks cost between $100 and $200 for each class. When a student is enrolled in three to five classes each term for a minimum of eight terms, book costs, undoubtedly, become very high. I intend to spend more than four years in school and stand to face higher book costs than a typical four-year student. Moreover, new editions come out often and bookstores are often unwilling to purchase the used book at the end of the semester if a new edition is expected; and, if they are repurchased, textbooks are bought back at a fraction of the cost. On a side note, last semester I found a copy of my accounting textbook online for $70 and at the end of the year I sold it to the bookstore for $85. But I did so with a feeling of vindication for the unjust prices the bookstore charges and the unrelenting updates the editors push every year. I barely cracked the book just to get key terms for each chapter; this is common, students are required to purchase an expensive book that often is only used as “reference” to the rest of the lecture.
The semester prior to the one just mentioned I was in my first accounting class, ever. I wanted to do really well in the class and I was very motivated to learn the material so I stayed late in the library and attempted the assignments in the back of each chapter. This proved difficult on some of the more in-depth questions. I might spend two hours filling in a balance sheet from the information given only to find out that my answers are wrong when I check the answer in the back of the book. The answer in the back of the book is just an answer; there is no process detailed in the back of the book to help me understand how to solve the question correctly. The software pioneered by Inkling removes that exact barrier by creating interactive quizzes that test a student’s knowledge with immediate results and through step by step instruction if the student runs into any problems along the way. Further, it allows for social networking within the class to better connect the students with one another if there are any questions. Where there is limited space in a textbook to quiz a student about which accounts belong to receivables, payables, long-term investments, short-term investments, etc., there is more space in an ebook to randomize a matching component so the student is better prepared to determine which account a carpet cleaning expense is classified under for a firm.
Many of the problems the ebook is prepared to alleviate include the price of the product designed as well as advances assisting the student with his or her course. The driving issue with the great new software developed by Inkling is the inaccessibility to the typical student. As previously mentioned, the textbooks available for download are for young, undergraduate students who are not likely to have the iPad at a cost of nearly $700. The laptop personal computer has just recently become close to a normal good for the college consumer, while the iPad is easily still a luxury good, a novelty despite the appealing nature of its capability.
When I was a student at Sacramento City College, affectionately referred to as Sacramento Inner-city College, I was humbled by the “new-ness” of computers by a large number of students. Poverty is a disadvantage passed down -- though not through genetics. Computers are becoming less expensive and decent models are available to lower income students, these students are now becoming familiar with the benefits of computer technology, yet are still burdened with the high cost of books and the obtuse nature of the work in classes that will provide the most advantage. The students who were left behind when personal computers were introduced are now being left behind by the overwhelming interest in the iPad.
I refuse to take for granted the excellent education I received in grade school and the positive role models of my parents, grandparents, aunts, uncles, and cousins, who are all college graduates. When the best learning tools are provided to those who need them the least, whilst those who need the most help are held at arm’s length by four letters: MSRP, it begs the question put forth by Michael Franti of the musical group Spearhead: “Are we a part of the solution or a part of the pollution?” Do I believe President Obama is a socialist? No. Do I believe I am a socialist? No. Do I believe there should be greater equality in our country? Yes; and, I believe that measures of social equality should be begun in the government. That does not mean I dislike the software created by Inkling; in fact, their software is what I wanted to create with a firm -- that is until my friend emailed me a link to their website and showed me my idea had already been started.
Access to cheaper textbook information and a better learning experience, available to a student on any computer device used by him or her not only makes common sense, but it is a sound environmental decision as well. Inkling has made great strides forward in the transition to a more integrated technological society. My only hope is the software is created on an open source that other developers can push the important facets of the technology into platforms and hardware accessible by the majority of students who do not have the economic liberty to purchase an iPad this semester. Parting words to Inkling: Great work, please keep it up and continue to digitize more textbooks and keep the prices in line with the axiom that information for all of society is a greater benefit than the bottom line of your firm. (I guess that is the little socialist in me speaking.)
Update: If I could afford one, I would have an iPad and would be spending money with Inkling (if my classes were offered) because it is exactly what would help my studying. Nevertheless, I am very fortunate and grateful for what I do have.
Sunday, August 22, 2010
To Start, Begin With An Idea
My newly improved blog will be an exercise in shipping new ideas. Long time friend John Grubb directed my attention to a author and blogger Seth Goodin. Seth's blog has some good thoughts that were brought to my attention at the right time to maintain my motivation.
Seth's suggestion was to blog each day, about an idea of how I might improve a business, for a month and witness the shift in my ability to ship new ideas. Every day is more than I can commit myself to; therefore, I will commit to once a week for the duration of the Fall 2010 semester.
The first post will count for the next week; and, seeing how today is Sunday, let's make Sunday the deadline for each week. Fore...
Seth's suggestion was to blog each day, about an idea of how I might improve a business, for a month and witness the shift in my ability to ship new ideas. Every day is more than I can commit myself to; therefore, I will commit to once a week for the duration of the Fall 2010 semester.
The first post will count for the next week; and, seeing how today is Sunday, let's make Sunday the deadline for each week. Fore...
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