Blog Relocation Notice

This blog has slowly moving to the following link:

http://seekingalpha.com/user/607230/instablog

Particularly on economy, investing, and financial topics. During transition stage, this blog will remain open and provide the above link in each post.

Brilliant blunt demos

This is the description of Michael Bloomberg's description on Wikipedia page about his business career:

In 1973, Bloomberg became a general partner at Salomon Brothers, a bulge-bracket Wall Street investment bank, where he headed equity trading and, later, systems development. In 1981, Salomon Brothers was bought^[14] and Bloomberg was laid off from the investment bank and given a $10 million severance package.^[15] Using this money, Bloomberg went on to set up a company named Innovative Market Systems. His business plan was based on the realization that Wall Street (and the financial community generally) was willing to pay for high quality business information, delivered as quickly as possible and in as many usable forms possible, via technology (e.g., graphs of highly specific trends).^[16] In 1982, Merrill Lynch became the new company's first customer, installing 22 of the company's Market Master terminals and investing $30 million in the company. The company was renamed Bloomberg L.P. in 1987.^[17] By 1990, it had installed 8,000 terminals.^[18] Over the years, ancillary products including Bloomberg News, Bloomberg Message, and Bloomberg Tradebook were launched.

However, unspoken story about the first Bloomberg terminal can be found in Bloomberg's autobiography. He was angry when he was let go at Salomon Brothers' acquisition. He and a few engineers at Salomon teamed together to build the first terminal. When the time came to show off to Merrill, the terminal didn't work a day before! That was a definitely a disaster. Somehow, during the demo, engineers made the screen display something that prevented the demo from being a complete failure. That was sweating experience.

Another demo from Dean Kamen, who made his name by founding FIRST, for For Inspiration and Recognition of Science and Technology. The organization is to stop American's brain drain and try to boost innovation. Kamen started as a teenage business when landing a light show project at the Hayden Planetarium in New York City. He barged in to the office of the museum's chairman's office to convince him that the light show systems needed to be upgraded. All he got was rebuffing. Undeterred, he then bought parts from Radio Shack and built the first light show system. He used his employee pass to get into the Planetarium and tested his system. The system was short circuited and blasted into smoke. After unknown number of attempts, he finally got it working. When inviting the chairman again for the demo, the chairman was angry. Kamen didn't flee away by the chairman's fury but showed the automatic system. The chairman was impressed by the design and approved Kamen's light show project. Kamen was paid $2000 for each system. That was his first business ever.

"Frog kiss", Kamen called it that kissing many frogs before finding the prince, is a state of norm in many business.

What kills a grown company?

There is an article on the Harvard Business Review on venture back startup companies. The author claims that there are only two types of such companies:

http://blogs.hbr.org/cs/2013/04/there_are_only_two_types_of_ve.html

Companies are either diving into Brave New World or moving faster, better, and cheaper. Company founders need to justify roadmap by looking at their vision, culture, and resources. The assertion is exclusive and quick. On the VC side, this is true as VC only funds companies by this standard: is the company doing the next new, big thing or innovating current products, processes, etc? But on the entrepreneur standpoint, some times they aren't as aligned with VCs. At the beginning stage, the alignment can be tuned, tweaked, or enforced. As company grows quickly, the task become uneasy. This can be seen from larger companies.

When companies become larger, more work force in place, companies emphasize integrity, values, may be diversity, and many more. People create compartments to structure space. Unlike startups where clear rewarding system is ultimately driven by survival, larger corporation citizens are more keen on ladder climbing, which maps to rankings. A rung up or down doesn't immediately lead to survival crisis. In other words, all stake on the table is a rung up or down, not death. Somehow like a virtual money versus real money in investing practices. Investing with virtual money can never learn investing. Therefore employees aren't well aligned and focused.

Another perspective is blurry technical importance. Large companies often have debates on whether they should hire technical centric or administrative centric managers. This is the sign that the companies are getting sick. One VC once said that he only invested in companies that have strong technical DNA. The funding startups can get from his firm is anti-proportional to the number of MBAs in the team. MBAs did many case studies to develop processes as well as complexity of corporation politics.

On the other hand, few larger companies can go back to their startup days. HP tried, Intel tried, many will still try. People is still learning how to manage large population or network. Thus companies aren't killed by competitiveness but by themselves.

The art of displaying

Revealing invisible attributes requires skills, knowledge, and ultimately art. One needs to be an agile observer and articulator in findings but keep the fine line. This is so in science and also in social interactions.

There was a famous oil drop experiment that was used to measure the electron value, i.e., the e charge value. Back in the early 20th century, scientists didn't have advanced tools to measure electron charge directly. So they had to find indirect ways to gauge it. One way was spray mist of water between two horizontal metal plates with opposite polarity, negative and positive charge. The distance of the two plates was known. The mist falling trajectory would be subject to the charge. Observers would calculate the electron charge from the droplet behavior, e.g., velocity and mass. This was a sound design. However, that was an unexpected problem: water evaporated quickly. Thus it was difficult to isolate evaporation from electric charge affection. A small tweak was proposed: use oil instead of water. Oil won't evaporate after emitting. Then oil drop trajectory would be viewed from telescope. The idea is the same of water but more practical.

Social interaction often isn't as easy. People interaction also sometimes is governed by unspoken rules that need to think carefully. For example, when bosses asked subordinates to evaluate them. What and how to say is very critical, when come to shortages. In consequence, what is good would be a lurking trigger point: such as good relationship with other departments, good interaction with employees and customers, etc. Then, the hard part begins: find indisputable facts first such as work-life balance better (more team buildings), more quarterly meetings (only one in the past). The hardest one is fairness: more favorite on some and ignore the others. Expert advice often point out the key is align both side's goals in the very beginning: all of these is to help get to the top. Open the scene by declaring: if you want to be the big shot, you would need to do these.

This business is easy to say than do. There is more nuance than science. Like an aphorism says, science is to make everyone understand, business is how to make other misunderstand. This fine line isn't that obvious though.

Craigslist scams

The Craigslist website is a popular free resources for almost everything from online marketing to tutoring. However, scams are rampant as well. Scams are mostly money wiring, identity phishing, or nothing. Literally nothing. Really don't know what the scammers want because some scams are so widely known that they would never succeed. One research says that even at very low probability they would succeed, scammers operate at extremely low costs so that they can continue doing that. It is similar to recruiters that keep calling regardless the callee's interests. The only difference is the callee gets a chance to yell a real people instead of cyber ghost. Ninety nine percent of time they would fail but the one percent makes the day.

Here are examples that can bring awareness of scams so that we push the one percent closer to zero.

From Barry Johnson (a normal name):

Hello,

   I am looking for a private tutor for my son..Let me know how much you charge per hour for 2-3 times a week..send me your e mail address with details.
Regards,
Barry. 

If ever reply to this, your email box will see the reply like the following:

Thanks for replying back to our online job posting, requiring your tutor  service for my Daughter, I would like to make a tutoring arrangement between you  and my Daughter for the month of  Jan 15th 2012, I would like you to tutor her within a  period of 4 weeks, on a schedule basis of 1hr Daily, 4 times weekly.We are paying you the first week teaching payment before she will be coming so that you can ensure you are hired for this work and we pay the weekly wages of $500. I would like to use these medium to inform you that my Daughter don't live in the US, she would be flying from London to the US, I want you to teach her Any One you are very good in this Subject during this period of staying in the US, if there is need to extend your services, an amendment would be made to your salary. The Local Library would be your meeting place with her, she would be dropped off/picked up by her nanny during the hours of teaching.
Hope to hear from you soon
Barry

The other uses unusual sender's name such as small capital names or numbers:

From toby williams (small capital at From field)
Hello,

    I came across your posting on the site . I am in need of a teacher
for my daughter, Sharon, while I work in the city.I'll like to know if
you would be available to take her the lesson.Kindly get back to me
quickly so that I can email you back with the full schedule.
Or, from "craigslist reply fa23"

Hi!
I saw your resume. I would like to know if you can tutor my Daughter.She is 15yrs and her name is Susan.Kindly write me back with your interest.
Quests like the following usually phishing for your email addresses as Craigslist's email server address is useless for scammers. Don't be fooled by the "Sent from my LG ..." message.

From "1":
Do you still have it for sale? Please provide me your email address so that I can contact you regarding it.

Sent from my LG Thrill™ 4G smartphone with glasses-free 3D on AT&T

Very likely these messages are computer generated so no cost at all. However, there must be someone need to actually read them and identify there is potential victim. So who have such time doing that?

A bogus business

CNN has a report on the housing market titled "Housing: The bidding wars are back!",

http://money.cnn.com/2013/04/04/real_estate/bidding-wars/index.html?iid=HP_LN

A series of numbers from broker website and agencies seems convincing home buyers/sells that the market is back. So far so good until a buyer story stuck the rosy picture:

"It was very frustrating," said Jackie Kaufman. "We felt we were always on the outside of the loop and that people who won the homes had the inside track."
By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price. 

The couple had bid up offers above the asking prices in their first three attempts. All of them failed but the fourth try was $30K less than the asking price. The rosy picture suddenly became skewed. Whose gain whose loss in this deal? The agent might have told the owner that there was no offer and needed to reduce price. Or he might have convinced the owner a quick lower priced sale was needed before rate increase. Whatever untold reasons drove the sale, the house is gone. So can we say owner's loss, buyer's gain? Who would know what will happen when the new buyer becomes seller in the future. Both head and tail are agent's gain.

This story tells who the real rainmaker is. Next time, if you're buying or selling a house, do due diligence on your own. It probably is a good idea to list as an FSBO (for sale by owner) for a while. What you heard may not be true especially when truth and lie are mixed. This is probably the biggest middleman to be removed by technology, particularly the bad ones. Online broker has gained some clout but agency rating seems not catching up accordingly.

Extending from there, the same message applied to what TV, newspaper, online news tell us: the economy is extremely good and strong. True but may not that strong as perceived by the media. Look around to see if there are spending cuts, hire freezing, furlough etc then make next move. There are surprise spots that caution us.

Another HP board room drama

Following last week's New York Times article on HP's board re-election, three directors stepped down on Friday, including the board chairman. Whitman is not elected to be the next Chairman.

The new board chairman, Ralph Whitworth, said, “All boards should evolve, certainly when they’ve had the recent past this one does. You can expect some evolution of the board over the coming years — months, maybe.” That may indicate more changes at the board level. HP's tradition may mean that there are in-fights on-going.

The new HP board has a fresh look. Long term speaking, the turn-around effort has removed one uncertainty factor and hopefully can focus on execution instead of decision. But it has never been easy for HP. So we will need more confirmation. In a sense, the situation is more risky because of the changes. Also we can assume HP's highest level shuffling will stop high visibility deals in the coming months. Therefore, it is expected a slow recovery. Goldman had down graded HP because the weakness in PC market. The slow recovery may also limit HP's performance in 2013. Note that it has been up about 50%. So Goldman's tone came in as a confidence alarm.