Market Madness


Were things 12% better, or different, 1 month ago?  I’m dubious.

I’ve a confession to make… the stock market makes no sense to me. 

Why?  Let me flip the questions… why would it make sense?

I buy “shares” in a company.  I’m now an “owner”. Except I have no control.  Other people, inside and outside the company, have more information than I do. I can vote, but my vote is meaningless, as compared to, say some large pension fund that bought a big hunk.

The “value” of my holding is dependent on what other people think of the company. But what they think is based on what they think other people will think.  And the weird self-dependent circle continues on and on.

Our nation has made serious financial mistakes. These are known numbers, and have been known for ages. So on Monday, after a ratings agency finally says “uh oh” the market tanks. Then it bounces up and down in wild swings, when essentially the macro picture hasn’t changed a lick. It makes no SENSE!

It’s uninformed speculation on what other people, the mob, will think.

How would I change it?  I’d have stock value be mathematically tied to the book value of the company. Book value being derived from assets, cash on hand, and likely receivables and other measurable, unmanipulatible values.

I would still permit speculation, but I would tax it heavily.  Ownership above, I probably wouldn’t tax at all. Nor would I tax the accumulation of value, and the sharing of value (dividends) at all.

You would still have to guess about company performance, but you wouldn’t be guessing what other people would think of it.

Speculation always ends badly.

Follow-up: Groupon


A recent study shows that most businesses that try Groupon will not do it again:

About 60% of businesses considered their Groupon experience a success, but more than half of customers do NOT want to run another Groupon. Almost 40% of Groupon customers, meanwhile, thought their experience failed.

How viable can a business model where 40% of the customers view the experience as “failed” be?   I’m sure it will settle out somewhere. But long term those bad experiences will permeate out as those involved start new businesses, or manage other businesses.

I’d be interested in polls about the experience of consumers using the Groupon offerings. I watch the offerings come in on my smart phone, but I’ve never “bit” on any.

Dissection of Groupon


What are new customers worth?  What are loyal, repeat, customers worth?  These are the questions cogently raised by Rocky Agrawal’s dissection of the Groupon Business Model.

I’ve either built, or played a key role in building, three successful business ventures. And I’m in the process of making another one.    I learned early on that a customer I already have is worth WAY more than one I don’t. have yet.  An easy reminder of that is the $7K just sent me via electronic purchase order by a long time customer.  By my rough gauge that is 1 of 5 orders given me today from folks I’ve done business with for years.  Combined with a couple orders from new customers it was a good day.  And  just another pleasant reminder that that hard work we did for them 5 years ago is still paying off.

Bootstrapping a startup that lacks loyal customers is hard, frustrating and thirsty work.   In the beginning, all customers are new (and expensive to acquire).    My approach is to find strategic customers and make them partners.  I give them a great deal, free in most cases, in exchange for feedback and their assistance and referrals.  Will it work? Time will tell.  If it were easy, everybody would do it!

One thing I won’t be doing is randomly letting price focused customers exploit my offerings without a loyalty / feedback relationship.  That’s what Groupon provides.  Groupon customers remind me of the folks who visit yard sales before the stated opening times. They want bargains but it is better to wait the day out and work with those who arrive when you are packing it in, or to give a great deal on an item that isn’t selling to somebody who just bought your big screen TV and agreed to haul it off for you.

This lack of loyalty is also why I delayed and delayed and regretted putting in a Yellow Page ad for a successful photo business I had through much of the last decade. It was a part-time venture, but it ended up being among the largest (and likely most profitable) photo businesses in my region. Why?   I spent time pleasing customers and making money, not answering phone calls from people asking about pricing.  90% of my business was referral based from customers who would think of using no other photographer for their family, wedding, or business.

That’s why when I decided to start a mobile software company my concept focused around customer loyalty apps.  I wanted to provide a way to help businesses foster, keep, and expand a reciprocal relationship with customers that are loyal to them. Oh… and keep to my other simple formula – value, value, value, and the best support they have ever received ever period. Simple!

We are 5 months into the project, and perhaps a month or so off from the launch of about 20 apps for companies I’m loyal to, or that I think are strategic for feedback, market exposure, and yes… more feedback!

I wish Groupon the best. But I’m pretty sure it will fade as folks realize that the grass isn’t always greener on the other side of the fence, and that they really should be nice to the girl that accompanied them to the dance.

The Government’s odd GM calculus


The government claims it is a success. Megan McArdle says “nope”.

To put that in perspective, GM had about 75,000 hourly workers before the bankruptcy.  We could have given each of them a cool $250,000 and still come out well ahead compared to the ultimate cost of the bailout including the tax breaks–and over $100,000 a piece if we just wanted to break even against our losses on the common stock.

Of course doing that would have been dumb too. But it does show the point.  Better would have been to let them take their lumps and end up being owned by their investors who would then have incentive to bring the company back to profitability and a higher competitive position.

But that wouldn’t help Democrats would it?

Indie Publishing

Good Read. .99c

In the past couple months I’ve read a couple dozen Amazon Kindle books. And very few of them had publishers, and cost more than .99.

And they were terrific.

Amanada Hocking’s success as an Indie publisher on Amazon Kindle has been the most noticed.

And she shouldn’t. She gets to keep 70% of her book sales — and she sells around 100,000 copies per month. By comparison, it’s usually thought that it takes a few tens of thousands of copies sold in the first week to be a New York Times bestselling writer.

I haven’t read any of Hocking’s books, but I have enjoyed a number of .99 cent books from Thomas DePrima, C.V. Larsen, John Locke, and Nathan Lowell.  Although, as I progress through some of their series, their prices rise as they get picked up by publishers.  Good business, I guess, and they still cost well below one of the crap “established” authors putting out pulp.

For instance,  the $10 bucks I spent on Brad Thor’s recent crap, or one I tried from A.J. Tata ($7), proves that Publishers can pick books about as well as Producers pick movies. In a word… terribly.

Amazon user reviews and Amazon recommendations have become like RottenTomatoes or Movies.Yahoo.Com for me – I can find books that I like but that have no publisher.

Can Amazon keep this up?  I don’t see why not. Unlike Apple, or Sony, for instance, Amazon consistently and always puts its consumers first.  As long as they keep doing that, they should continue to thrive.

Now I’m all confused

I thought I had it figured out….  I’d do two native versions of our products, one for iOs and one for Android.  Then Nokia, the largest handset manufacturer partnered with Microsoft. Which is fine… but I’m confident that partnership can fail, just like most of what Microsoft has touched of late.

But then I saw this:


A iPad sized Windows netbook that folds to become a touch screen tablet.

That appeals… quite a bit. And it costs less than an iPad.


Good job Dell.   Don’t be surprised if I own a couple of these in the near future to try out.

Obvious two or three summers ago


You’ve never heard of a MeeGo phone?  Didn’t think so.

The new CEO of Nokia ripped his company’s managers a new one yesterday with this scathing memo:

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

Basically, Apple owns their high end, Android is the one likely to beat Apple, Android owns mid-range and is moving into the low prices, and the low-end non-smart phone is now owned by an OEM designer called MediaTek which ships basic phone BIOS / sub-systems in 1/3rd of all phones sold in the world.


Nokia is an important customer of mine. I’ve dealt with them for years. I wish them the best. But…. this was obvious at least two summers ago and it isn’t encouraging that just a memo arrives now.

They have talented people. But they didn’t win the underlying Phone OS game. Their only hope is to move that talent to Android or Windows Mobile, but also to get ready to shrink.

For instance, I see no reason why Nokia couldn’t be a major Android phone and table maker. They have the talent and resources to give Apple a great run for its money.  And by using Android they can save a ton on basic OS development and focus, instead, on beneficial phone and table user experience.   Sure… there are other big companies doing that… Samsung, Motorola, LG.   But there is room for a talented, well resourced new one.

Update: They went with Microsoft. Not a surprise since their new CEO is a Microsoft alum. This gives them a little less crowded space to succeed in, but it always makes them a bit more expensive/or less profitable than the Android based competitors.

Why I have a mobile division


This summer, during my San Diego sabbatical,  it dawned on me that the mobile device market would be be growing faster than the PC market for some time.  And that in short order it might be bigger than the PC market.


Only three years after the iPhone launched, the smartphone market is already bigger than the PC market.

I came back from the sabbatical, dealt with a flooded house, and somewhere along the line started a mobile division of my company to create mobile software for marketing and sales departments. (

We have just launched the early phase of its products, but I expect sales and growth may  beat my existing software division easily in 2011.

Sabbaticals…. good for business?  I think so!   I doubt, alas, I’ll have time for one this year.

Credit Card on the Spot

I bought something at an Apple store the other day. Don’t hate me. I needed an iPad case, and they were close.

A friendly blue shirted Apple guy helped me pick a case out. He then swiped my CC on the spot and e-mailed me a receipt. Slick.  No line. Just choose, buy, done.

This intrigued me, and it turns out,I can do this on an Android phone too.  This ROAMpay, which actually uses audio signals to communicate with any mobile device that has a microphone jack seems a very clever and usable solution:

Credit Card processing… where ever you are.

Apple behaves like monopoly, in for rude awakening


You in back… give me 30% of your money!

Apple informed publishers today that if they want to sell content that runs on the iPad, they will have to pay 30%, just like in the App Store.

This, of course, means that Kindle will not be viable on the iPad. Which THEN means my iPad will collect dust after it is replaced by an Android pad.

And, sure, the iPad is nice. But the Galaxy Tab is nice too, and so are the zillions of alternatives steaming west from factories all over Asia.

So.. good luck with that Apple.  Continue to be the hated “1984” character you actually made fun of in 1984.   I’d add that Microsoft, even at their worst, only hoped to reach Apple’s level of greed.

Quote of the Day

By bailing out Wall Street–preserving equity value, preserving bonuses, subsidizing massive profits through artificially low interest rates–the government suspended this natural law of capitalism.  In so doing, it rewarded the folks who had made the worst products and the dumbest decisions of all.  And the country is NOT better for that.
The quotation is about Warren Buffett’s odd thank you letter to the Government today.  It seems that when people get old they often find religion or socialism. Warren, after making bank off capitalism for decades, seems to have forgotten what got him his wealth – wise investment and reward for risks won, and punishment for risks lost.

Last Refuge of a Failed Economic Empire


The only thing actually “deflating” is Fed credibility…

Funny and devastating.

Caution… some scatological terms used.

All about Short Sales


Short Sale Specialist… Tim Tucker

My friend, Tim Tucker, is a hard working real estate agent here in St. George, Washington County, or anywhere in Southern Utah.  If you need your house sold, especially if you are looking at  a short sale, I’d recommend him highly.  If you wonder about short sales, he’s placed a short sale FAQ on his website that may be of interest:

How do a get a short sale started?

It takes two things… a buyer and the bank’s agreement.  Both are tough to get and take lots of effort with repeated contacts and myriads of forms and other pieces of information.   But for you it is easy… just call or e-mail us. We can take it from there. Most banks and mortgages aren’t located in St. George, or Washington County even, so this requires a lot of phone, mail, and fax contact. Having a team handle that makes it go easier and more successful.

I’ve known a lot of agents in this town – who wasn’t an agent 4 years ago (-;..  Tim is BY FAR the hardest working, most organized and diligent I’ve known.  And that is saying something because you have to hustle hard to make it in that business.   Frankly, I don’t know how he works that hard. But he does, and a lot of folks are out of troubled home mortgages because of it.

If you have, or know somebody that needs to get our of their house, Tim is your guy. His contact info is on his website.

Big Deal (yawn)


I like the Beatles. A lot actually.  But who does Steve Jobs think will be excited about having The Beatles in iTunes?  Those of us who like them already bought the box set when it came out many moons ago and ripped it to our mp3 player (ipod or not).  I bought it at least. A lot of folks just got it off Kazaa or Limewire. Which I don’t agree with. I buy what I listen to.  Anyway, this certainly wasn’t the “rock my world” announcement Jobs was promising. I thought maybe he was dropping prices on the iPad, in light of competition from aPads.  That time will come…

I don’t buy music through iTunes.  I buy it via Amazon, cheaper and easier and earlier on without all the DRM crap Apple puts you through.  Or on CD.




Questions Google Asks


Google interview in progress…

Interview questions from Google – sample below:


  • How many piano tuners are there in the entire world?

  • You have eight balls all of the same size. 7 of them weigh the same, and one of them weighs slightly more. How can you find the ball that is heavier by using a balance and only two weighings?

  • You have five pirates, ranked from 5 to 1 in descending order. The top pirate has the right to propose how 100 gold coins should be divided among them. But the others get to vote on his plan, and if fewer than half agree with him, he gets killed. How should he allocate the gold in order to maximize his share but live to enjoy it? (Hint: One pirate ends up with 98 percent of the gold.)

  • I guess this is useful. It can find logical, clever, informed people – which is probably a good base of people to hire from.



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