Observe Business

Observations on Business, Government Policy, and Strategy

Browsing Posts published in January, 2009

I like the seekingalpha.com site. ‘Alpha’ refers to trying to make a movement in the financial markets with no risk. It is very tough to do, almost a mirage. Unless you are Bernard Madoff, feeding all the rich yutzes some Kool-aid.

A gent by the name of Richard Lounsbury, has written a very cogent analysis of the housing situation on the seekingalpha.com site. You will never see something this detailed and well written in the pulpy fissures of Time, Money or the same. He has tied in various graphs and refers to many other reports. Very much worth a read.

 

Pile of money

Pile of money

 

 

creditkarma.com

A credit reporting agency is just one big database. It is astounding to me how they can charge consumers between 15 and 40 dollars a month just for access to data. They charge companies pennies for the same type of data. Due to the three-company credit bureau oligopoly, there is effectively no price competition for consumers.

Now along comes creditkarma.com

With this website, you give them some identifying information, and they generate your credit score for you for FREE. They seem to dip into your TransUnion credit file. You can go every day or every hour and they will update the score for FREE. But you really need to go only once every two weeks.

They seem to make money by marketing credit-score specific offers to you. People with high credit scores get offer A, low credit scores get offer B.

I have signed up for this myself, and I really enjoy using this site. They have a cool little scenario modeling page that tells you how your credit score would change if you did certain things, like get a new card, or pay off your card, or declare bankruptcy.

I love how this site provides a valuable service that is FREE!

Did I say FREE too many times? It is because I am, as are most people, tightening my belt in this tough economy, and so FREE credit scores on creditkarma.com makes me very happy.

 

Round the World Ticket( courtesy of thewidewideworld on flickr)

Round the World Ticket( courtesy of thewidewideworld on flickr)

 

 

I have written several times about the inefficiency of the modern airline industry, and here is one more reason that I feel the airline industry needs to reinvent itself.

It’s called a “Round the World Ticket”.

It allows you to fly around our circular world, visiting places along the way. You have to keep going in one direction, can’t backtrack and have to end up where you started.

The problem with this product is the insane amount of time required by the airline to maintain it. Customers have to call a dedicated airline center, spend about an hour buying the ticket, and airlines inevitably end up selling their most expensive products (such as tickets to Easter Island) for a pittance.

The sheer number of rules, regulations and options on this product make it difficult to maintain. Examples: It is available in three mile sizes (29000, 34000 and 39000 miles) except when it’s not (Continent system).

Business class seats sell for 2x economy, when in reality they should sell for 4-7x economy. Starting your trip from Western countries (where there is most demand) is more expensive than “poorer “ countries, like Sri Lanka(where there is no demand). But, even if you are an American or a Brit, you can buy a ticket that starts your travel in Sri Lanka.

As with most products of a complex nature, people find ways to game the system, as shown on this Wikitravel guide.

Computer software is fifty year old business. In its infancy, it helped win wars: one of the first uses for computers was to calculate artillery tables, so that cannon could be fired accurately. Today, computer software makes everything happen: we could not fly planes or run large enterprises without computer software. 

But it is the only business where the inputs are so disorganized and is considered more of an art than a science. There is no single programming language, there is no licensing exam, there is no structural definition. If you want to wire a house for electricity, you have the National Electrical Code book, which is over 2000 pages. If you want to write a software program, there is no accepted standard. Well, the United States Department of Defense has one, but they are not used outside the Pentagon. 

The computer software industry needs to come up with a standard. It will take a long time, and will likely stifle innovation in the beginning, but the benefits will outweigh the drawbacks.

Here are some very good quotes on computer programming.

Excerpt:

“Most software today is very much like an Egyptian pyramid with millions of bricks piled on top of each other, with no structural integrity, but just done by brute force and thousands of slaves.”

-  Alan Kay

 

Peddlers of gimmicky diet products are now creating fake blogs. These very similar blogs, http://www.aubreysdietblog.com and http://www.tracysweightloss.com may sound authentic but are really a spamvertisement. They are both similar in design and likely to be run by the same person.

Whenever a new medium comes out that a low marginal cost, with no possibility of being punished, we see bad actors starting to take undue advantage. We started with email, Text Messaging, Instant Messenger, Forums, Twitter and now Blogs

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