The gap between rich and poor doesn’t matter
There has been a lot made recently about the gap between rich and poor getting bigger. In the UK, the opposition Conservatives blame Labour who have been in power since May 1997. Labour of course blames the Tories saying this is one of the legacies they inherited. Specifically they blame Margaret Thatcher, that bastion of evil, the wicked witch of the west. Their words not mine. OK I'm paraphrasing here but those may as well be the words they use seeing as Mrs Thatcher is blamed for pretty much everything that has gone wrong in the UK since 1980. Considering that she hasn't been in power since 1990, you'd have to say her powers of destruction would be up there with the Dick Dastardly, Lex Luthor and all other super-villains rolled into one.
Funnily enough plenty of research will support both arguments, but my thinking is that the premise doesn't matter at all! Why should society care about the gap between the rich and poor when in fact we should only concern ourselves with the poor?
I believe that it's the level of poverty in our society that really should be the focus of government and by extension the society itself. If opportunities are made available to the poor (I don't mean benefits and welfare!) and our leaders are able to mobilise society to reach for those opportunities by being aspirational, then I think we will be in a better place.
I know that others also rail against aspiration and say it's overrated. That's correct if by aspiration you mean getting the cars, bling, flat-screen TVs and Armani jeans. No my friends. Wanting to get those things is NOT aspiration. That's just being materialist. Aspiration is when a person wants to make a lasting difference to their WAY of life, which results in material benefits being a by-product of the hard work that's been put in and the success it brings. As one commenter put it in the article linked to above
If the top of society becomes too rich, (which I don't think there is such a thing) then that's not a bad thing. What matters is how poor the rest are and whether or not the rich do not take advantage of them. Should you care that Richard Branson has x billion in the bank when you and your wife have a combined income of 40,000 per yr, your kids go to a decent school and providing they work hard they can make it through university? That would be just stupid right? It's bordering on envy, and that's pretty much where this whole debate on the gap between rich and poor seems to lead to.
Coincidentally university education, which is one of the traditional means for aspiring working class kids to uplift themselves, has been made way more expensive by the self-appointed working class party. Labour. It's ridiculous to blame the Tories for the society gap which supposedly increased more during the 80's because Thatcher brought this country up to date economy-wise. By spoon feeding the poor Labour has stagnated the living conditions of the bottom 10% which I believe is the true crime. I won't go into that debate too much right now, but I believe Labour (and the Tories when they get in) should just concentrate on providing opportunities to the poor and making the conditions that will enable us to help ourselves.
If the rich get richer during that time, I couldn't care less. And that is why I don't begrudge the bankers, footballers and other high earners. Just so long as you all can be a banker, doctor, footballer or MP, had you wanted and been able to.
Who needs marketing when you have fans in the media?
If you’ve just come back from Mars, then you may not know that Apple launched a new gadget yesterday. Please have a good look at my browser screenshot of VentureBeat (one of my favourite tech blogs) by clicking the image on the right. It’s ridiculous and illustrates the hype that is constantly bestowed upon Apple products by the media.
It’s one thing people having an interest, but its quiet another when the media feeds our interest in Apple with such an overload of coverage. VentureBeat is by no means the most Apple-eyed blog out there (that’s why I read it). Thus it makes you wonder what the Apple-centric blogs are going through right now.
Tis’ the Cult of Mac indeed.
Jay-Z sues to protect his second-hand name. Ridiculous
Around the mid ’90s when Jay-Z decided to start a label to put his records out on, he came up with a really stupid name. Roc-A-Fella. Geddit? Rock a dude with his music? Rock a fellow?
Roc-A-Fella y'all!
That was the clever part but the name was a double entendre, the second part being from the Rockefellers. One of New York’s most entrepreneurial and wealthiest families. Something of a dynasty. I get that part too. I mean these are all things he and his business partners aspired to. What better way to pay them homage?
Except, I believe it was dumb simply because the family still exists. Maybe not with the great patriarch of old but an actual family and corporation that still operates and uses the name Rockefeller.
I guess Jay and Co would have said something like “Well it’s spelt different! We’ve spelt it hood so there’s no conflict there. They’re corporate and we’re hood. That’s what we’re about.”
Anyway Jay, Dame and Biggs brushed all this aside; did their thing; put out great music and actually made a name for Roc-A-Fella in very admirable ways. Some of them corporate, but that’s by-the-by. I can imagine them saying something like “We’re hustling, so anyway we can get it, we get it!”
Fast forward to 2010 and Jay-Z now thinks that no one should do business with any name sounding like Rock A Fella. Case in point a restaurant called Rockafella, located in Newcastle, England. The guy who owns it was recently sued for using that name. Not by David Rockefeller Sr, but Roc-A-Fella as in records. It’s one thing appropriating someone else’s name, but suing others who use a similar name as if it was your own? Ridiculous.
Rockafella restaurant. Part of the Roc-A-Fella Records Group
I know there are issues in all the music genres to do with naming, and that’s understandable. There are only so many names to go round. Freeway and Rick Ross had to take names from the same person due to the shortage. In Reggae Dancehall, which of course has a symbiotic relationship with Hip-Hop, we’re starting to hear names like Busy Signal and Voicemail. Make no mistake people, the name shortage is real. The Killers named themselves after a fake band depicted in the music video of another band. You couldn’t make it up!
The shortage is leading some to speculate that Roc-A-Fella are launching a trading market for band names. Sort of like buying and selling domain names. The premise is that if it’s good and catchy, its worth more. So you register someone else’s name as your own and 20 years down the line or more likely when your band flops, you can just trade it in. Brilliant.
However all this still doesn’t excuse Jay-Z suing that poor restaurant. Does he not realise the name is spelt different? It’s Rockafella with a K. Plus there are no Dashes. Geddit?
Starting a business without an idea. Dumb.
So I’m reading Venturebeat, which is one of my favorite blogs, and they have a Q & A with a guy called Adam D’Angelo. D’Angelo used to be the Chief Technology Officer of Facebook, their first in fact. He left some time ago and has now started a new venture called Quora. A cross between Wikipedia and Yahoo Answers. It’s a question-and-answer site with very refined incentives to get people to share specialist knowledge.
Reading the interview what stood out for me is his answer to the question “Is this what you knew you wanted to do when you left Facebook?”
D’Angelo says “I knew I wanted to start a company and I spent a lot of time thinking about it. And after several ideas, I thought that this one was the one with the most potential.”
What struck me from that statement is that it sounds like D’Angelo wanted to start a business…., didn’t have a specific thing in mind…., came up with several ideas…. and settled on this one. I don’t know, but this really doesn’t sound like the way great concepts are born.
I mean, say you’re in that looking-for-an-idea zone, and it’s been a few weeks and nothing has really come up. What do you do? Do you go back to something you thought about some time ago and add a twist to it? Do you scratch your head harder so that as that bit of dandruff falls it may just dislodge a couple of brain cells that were in the way of a great idea? Then Eureka!
"I'm taking this to the Dragon's Den. Reggae Reggae sauce has nothing on this!"
Call me old fasioned, but I believe great businesses offer services that solve a particular problem. I believe good companies are built from one of the following, though this is not an exhaustive list;
- an idea that came about because someone encountered a problem.
- a copy of a great idea that came about because someone had a problem. AKA a copy cat business. Even the most visionary people have at some point thought about doing something that been done a million times before. That tech company called Apple comes to mind.
- an opportunity to exploit a market’s lack of knowledge. For example, buying cheap electronics in one city and selling them in another.
- an opportunity to go into an under-served market. Your typical bricks and mortar businesses do this most of the time.
In any case, I don’t think most of the above come about because someone some sat down and wondered what to do! It’s like the lotto winner who sits down to think how they are going to multiply their earnings by going into business. I can’t think any significant money will be made that way, if any.
Still good luck to Quora. It seems that, without a solid problem to tackle, they need it.
How many Postmen want their kids to be Postmen?
Sorting office - Jobs worth striking for!
I absolutely hope the answer to the title question is none or at least not many. However the way the Communication Workers’ Union (CWU) is carrying on you’d think that working in a sorting office is a job worth aspiring to. Don’t get me wrong (yeah this is the bit where I say some unpalatable things) because being a postman or working in a sorting office is not a bad thing in itself.
People’s situations vary and of course there are many reasons why someone would be working there, but one thing I can say is that I look down upon anyone who works there and doesn’t aspire for more. Either for themself or their family. Themself because if you’re not working there to better yourself then I really hope you’re doing it to elevate your family. Note that I used the word elevate, by which I mean those workers shouldn’t just be looking to feed their families. There’s more to life than food. Really there is.
Anyway, the gist of the strike if you don’t know or are working in a sorting office (in which case you don’t know) is that the Royal Mail wants to modernise. In 2007 they rolled out a four phase plan to help achieve that modernisation, which the CWU agreed to. I’m not sure why they couldn’t have five phases as it’s common knowledge that all good plans either run for five years or have five phases!
Fast forward to 2009 and they have surprisingly implemented three of those phases save for the last one which calls for rolling out a ‘walk sequencing machine, a device which organises letters into the order the postmen and women will deliver them the next morning.’ A pretty neat idea which to my untrained ear says ‘lower costs, efficiency, speed’ and all the good things that any decent business and it’s customers should hope for. Of course it probably means many jobs in the sorting office will be lost, but hey who wants to haggle over menial jobs being lost? Oh……. the CWU?
The situation would be really funny to me if people’s skilled jobs didn’t rely on the Royal Mail. Losing professional jobs is one thing. But sorters *%?!! This really takes the biscuit. The CWU wants to save menial jobs even though surely the modernisation will result in skilled jobs being created. Granted there’ll be fewer than the lost ones, but hey who really wants their kids to grow up to be Post Men?
A truly hazardous profession.
BP’s oil a shot in the arm for our addicted economies
So BP found has made a ‘giant’ new oil discovery in it’s Gulf of Mexico fields. Good timing for those oil and fuel prices that were starting to go up again, huh?
Well, I for one am not holding my breath for a stabilisation at the current prices of fuel. However, I really hoped that things were going to continue down the same road with reserves of oil and gas dwindling, and our consumption of said fuels holding steady. Humanity has made great strides in making greener flights, cars and consumer electronics. Whilst we’re not nearly enough there, innovation and technological progress in that area is the best way forward in lowering our dependence on oil.
Necessity is the mother of invention and I believe the continued progress we’ve been making could be stunted if yet more oil is found in ‘giant’ quantities. I’m not naive enough to think we could ever be 100% free from our oil habit, but Iike any alcoholic, I’d rather we knew we could do without it.
In all, I’d like to see oil prices come down as a result of low demand and not higher supply.
iLike didn’t believe the hype
Nic Brisbourne the London based venture capitalist yesterday blogged about the lessons of iLike's low valuation. The gist of the article was that iLike, a business based around a Facebook app that allows users to share and interact around music, had been sold for the relatively low figure of $20 million. Nic says;
It seems to me there are two big takeaways here.
1. It is important to build value as well as traffic
Ultimately the true measure of value is net cash flow and it seems that despite being profitable there simply wasn't much scale to iLike's business in revenue terms. I would speculate that is partly because not all their 50m users were very active (it is telling they always quote total registered users not active users) and partly because the inventory they do have doesn't monetise that well. Widgets on social networks suffer from the double whammy of limited real estate in an environment where ads perform poorly.
It is worth noting here, as David Pakman of partner at VC firm Venrock points out, that traffic is often a good lead indicator of value, just not always
.
2. Dependence is a weakness
The other big problem for iLike seems to have been that 70-80% of its traffic came from Facebook, making them vulnerable to changes in FB's terms of service or if FB decided to launch their own music service. So iLike was dependent for its future on the good will of Facebook, and If there is even a small chance that iLike could have its ioxygen (sic) cut off nobody is going to risk paying too much for the company. This problem is all the more acute when the company you are dependent on hasn't sorted out its own business model and is somewhat unpredictable
These are very valid points for any web-based business to take on board. Nevertheless I'm just not sure they apply in the case of iLike and I commented to that end. (Updated: Nic has commented below with more insight and futher clarifying the background information. Be sure to read that.)
I'm guessing, but I think iLike's founders and investors probably knew the value of the company they were building. That they cashed out a slightly profitable company at $20 million, with other bidders on hand seems to suggest that they got what they were looking for and where not unhappy with the price. It would have been easy for them to move along thinking they'd grow and/or get more down the line.
This however, is a lesson to the tech media, analysts and all those who build copy cat businesses. Hype does not equate to a high valuation. It seems iLike (quite rightly) didn't believe the hype.
let the bankers get their money
Cut the bankers some slack. Greed is good.
I’ve just been reading about George Osborne (the opposition Conservative's Shadow Chancellor) statements about how bankers' large pay awards were "unacceptable" for any bank backed by state guarantees. I was stumped once again because I’ve heard this before from him, the press and the Man On The Street.
The Conservatives are making some mistakes on their journey to government. They'll get there despite themselves and because of Labour's ineptitude. However, this banker's pay issue is not going to be responsible for the Conservatives attracting voters and as such they should just stop taking vote-buying stances like these. The public is disillusioned by the banking sector, amongst other things, but thems the times we live in. All of a sudden the Man On The Street is not talking about Osama Bin-Laden, Kandahar and the Tora-Bora mountains, but about quantitative easing and the stimulus package. This doesn’t mean the Man On The Street is adequately informed as I’m about to point out.
For me to believe that the self-appointed party of business is sincere in not wanting the banks to issue big bonuses is quite hard. Why? Because we have to look at what a bonus is in the first instance for us to think about whether or not the practise is a good idea. By definition a bonus is a reward for greater than expected performance. Success, in other words. Anyone who owns a business should be glad if they have to pay out a bonus. Simply put it means that things are going well and that the people responsible are being rewarded for helping to bring about that success. By extension large bonuses are probably a result of big success. I hear that HSBC delivered almost £200,000 in net earnings per head in their investment banking arm the other week. That was just for one quarter by the way. Stunning.
The only issue we should be arguing about is how bonuses are structured. Fred Wilson on AVC.com touched on it some time ago, though I didn't agree with all his points. Among the contentious issues I'm against that he pointed out are;
- Guaranteed bonuses - This, I believe, was a big part of banking remuneration practise prior to the crisis. Guaranteed bonuses are not in anyone's interest other than the person receiving them. No company has any business guaranteeing a bonus, though I understand the thinking behind it.
- Contractual obligations - "all bonuses should, at the end of the day, be subject to board and compensation committee approval (even if the goals that trigger the bonuses have been met). The board has a fiduciary responsibility to look after the stockholders first and foremost. If paying the bonuses (even if they have been earned) puts the company in trouble, then there needs to be a mechanism for the board to avoid paying them. Compensation committee and board approval does that." Where the compensation committee has approved remuneration they should not however, backtrack as happened with RBS and their former CEO.
Having taken into account the above two scenarios I believe bankers (and any other worker) must be given whatever bonuses their success dictates. If that bonus is large and based on a percentage of the business they've brought in, so be it. The bonus just has to be measurable and the business they've bought in, traceable.
Mr Osborne thinking that large bonuses are a bad thing is just something I can’t buy into. Maybe his, the Man On The Street and the press’ sentiments are driven by the prevailing economic crisis, but I think that it’s misguided and an over-reaction. On the contrary, some of these troubled banks like Northern Rock and Lloyds could do with attracting as much top talent as they can to get them out of the messes they’re in. How do you think they can do that?
Of course the Man On The Street is also a voter (probably a former Labour one at that) and thus Mr Osborne wants to be on his side. But hey, I believe voters are a stupid bunch anyway. Mr Osborne doesn’t need to placate them by giving them the bankers’ heads when he may just need those same bankers if he gets to government.
pay attention to anyone who likes what you do
This morning I read an article called Beware of Fringe Fans: Appreciate Them, But Don't Let Them Distract You on MusicThinkTank. The gist of the article is that 'fringe fans' are not the author's "ideal customer. And while (he) welcomes suggestions and respects a diversity of ideas, (he) won't lose any sleep over" such fans. And the author, Bob Baker, goes on to advise musicians not to be distracted by them.
I couldn't disagree more with that thinking. Musicians, artists and anyone who produces, sells or puts out anything for other people, really should be paying attention to anyone who pays THEM attention.
I commented to that end on the original post and am going to repost it here because I think it needs to be said as much as possible otherwise we'll carry on fuelling the multitude of big-headed musicians, sports people and businessman that there is. Not to mention that anyone who wants to succeed in life really has to have a good way of selling themselves. (I'm not talking about pimping here!)
Basically, there's no such a thing as a fringe fan. A fan is a fan, however all of them have different thresholds to consuming your material. That threshold is dictated by things like;
- the quality of your output,
- money (I'd buy this song if it were xx cents),
- time,
- general availability of access to your output and a few other things I could come up with.
Generally, what the industry calls 'core fans' have a much lower threshold to consuming an artist's material than other fans. However 'fringe fans' also have a point at which they will consume your material. That point is just higher than that of your 'core fans'. That doesn't mean to say it can't be lowered at some time in the future. Let's face it, we all wish we had fans and customers whose consumption threshold was so low that they'd pay for our stuff no matter what!
For example, I could get a new, higher paying job and all of a sudden I'm able to buy albums having only heard 1 or 2 songs. Whereas, previously I may have had to think about every dollar I spend, my new, lower monetary threshold is now enabling me to consume that artist's music on a whim.
In my mind, just about anyone who is willing to spend their time consuming a musician's material is their fan. In using the word 'fan', I also include all those who attend gigs on corporate tickets! The press round on them, performers too and moreso the paying fans, however all considered they are as much of a fan as anyone. After all they're giving up their time, (out of their way to do it), after which it's an artist's job to LOWER that fan's consumption threshold. Remember time is money and I'm sure there are plenty of gigs you would not go to even if they were free.
The idea of consumption thresholds applies to all industries and funnily enough I believe banks do a great job playing the theory behind it very well!
In relation to your industry, the question would now be; Can you identify your fans' consumption threshold and where you can, is it economical (time or moneywise) to overcome any barriers that exist?
