Observe Business

I read about the assassination of the Hamas official in Dubai earlier this year, and was struck by the amateurish nature of it. The Dubai police made a great presentation and were able to finger the members of the assassination team quite quickly. The Mossad looked stupid. I have no experience in spycraft but I have been to Dubai. It is totally on the water and very easy to blend into. Why did the Israelis just not sneak into Dubai onboard a ship? Why fly into Dubai and leave a paper trail?

Now here we have a flotilla blunder, where the Israelis miscalculated the situation and now we have a bunch of people dead, who did not need to die. Mossad could be faulted here because they should have made it their business to know about the ships in the flotilla and the intentions of the people on board the ships. The Israeli military went in thinking the ship passengers were  a bunch of peaceniks but instead got attacked.

Whenever an organization makes multiple mistakes I start thinking about what has changed in the organization. Has Mossad’s  goals changed? No. Has their incentive program changed? I don’t know. Has their recruitement strategy changed? I think so.

Here is an article that talks about how Mossad is ‘modernizing’ its recruitment strategy. I think this is the culprit here. Comparing employment with the  Mossad with employment at a for-profit company isn’t a valid comparison. Plus, if you try to recruit for the Mossad the way you recruit for a private sector company, you are going to get recruits not suited for the job. Recruits who will think differently and eventually undermine he organization. The article is dated from 2001, that is enough time for recruits from that time to come on board, act in a tactical capacity and eventually move up to strategy. And now, we see the results of that strategy. Again, this is all speculation on my part.

I promise no more posts about the Mossad or Israel for at least a month.

Today I’d like to talk about a guy in Florida who had an argument with a car dealer, Route 60 Hyundai,  that turned into a nasty affair. This guy took his Hyundai in for a repair, got a loaner and got into an argument with the dealer about the condition of the loaner when it was returned.

Things escalated but suffice it to say the guy was not happy and used his Twitter feed to bad mouth the dealer every chance he got.

The dealership sued him and this guy got this amazing lawyer, Marc Randazza. Here is his blog.This lawyer wrote one of the best written, most readable briefs I have ever read. If you are interested in knowing about defamation lawsuits, and how online reputations are made (and broken), you should take the time to read it. I promise that it is not lawyer-speak and is in fact very interesting.

Now, what I’d love to do is follow up and find out what Hyundai did to improve its online reputation. I’d love it if Hyundai was watching the twitter-verse (twitter universe), had detected the complaints and moved to do something about it.

This article in the NYTimes (Archived article)talks about how a subsidiary of Wal-mart, Sam’s Club, is tailoring deals for shoppers. Basically, they keep track of what you buy and offer your special deals/discounts based on your purchase history.

This is a long time in coming. Like most Americans, I have a supermarket loyalty card that helps me get substantial discounts once in a while.

As a Product Manager, I wonder when companies will take the next step, and start to customize the experience for the user. My supermarket knows by now that I buy a lot of pineapples but hardly any grapefruit. They know I buy eggs but never pay for the premium eggs.

But they don’t use this to target me as a user! Why not send me a customized list of coupons via email every two weeks? Why not deduce that I happily pay more for organic and try to sell me organic? It offends me to no end to have them collect all this data and do nothing with it. Maybe a smart short-seller out there could try to greenmail Kroger into improving their loyalty program.

I predict the customization will slowly happen and take over everywhere. The big story here is not just that Sam’s club is starting to do customization, it is that this is being done by a subsidiary of Wal-mart. Wal-mart is America’s largest retailer and one of the most sophisticated users of IT on the planet. Wal-mart stores do  NOT have a loyalty program, which is a fact that blows my mind. How could Wal-mart NOT  have a loyalty program?

Imagine the increase the sales that Wal-mart could get with a well-designed loyalty program. Purchase data on millions upon millions of consumers, which can be analyzed n ways to provide customized deals and sales. Wal-mart could then wield even greater leverage on their inventory, and squeeze more profit  out of the retail dollar. Think about how much money Wal-mart could save if they could reduce their inventory carrying costs by even 1%. Wal-mart  could even modify and fine-tune their vaunted supply chain more. Both can be used to save money. When you approach close to half a trillion in retail sales, even a 1% increase in some metrics is HUGE.

Bloviating away

This response is so…so…mushy. It’s like a cheap subway sandwich that has been left out in the rain. It is low quality, tasteless and inedible.

CNN starts out by asking a straightforward question, saying ‘Is Hillary doing the right thing?’ OF COURSE SHE IS NOT.

Let’s role play this:

Hillary: Fess Up! Tell the truth!

North Korea: Ok, we admit. We blew up the ship.

Do you think this would ever happen? No, neither did I.

But Zakaria’s answers are utter and complete milquetoast.

1. ‘..the behavior does seem to cross a line.’

Really, Fareed? Blowing up a ship of a country you are technically at war with crosses a line? This reminds me of those cartoons with Bugs Bunny and Yosemite Sam, where Yosemite Sam would draw lines in the sand Bugs Bunny would keep crossing over them. How does this behavior cross a line? The North Korean attempted to assassinate the South Korean president in 1987. Did that cross a line, too?

2. ‘..North Korean have to understand it is not going to be business as usual after this’

That is exactly what will happen. A few words, some insults hurled, and South Korea will go back to  playing Farmville.

3. ‘..What has been particularly productive is that US and South Korea are ENTIRELY (my emphasis) on the same side of this’

Under what circumstances would they be on different sides? These two countries have ALWAYS been on the same side when it has come to North Korean military action.

4. The second paragraph is blah blah blah blah

The fact of the matter is that we don’t need to say one word to North Korea. North Korea does not matter at all in this situation. The player to speak with is China. North Korea exists because of China. 99% of its trade is with China. Its entire existence depends on Chinese goodwill.

North Korea is  a bargaining chip for China. At one time in the past, China didn’t have many bargaining chips, and so North Korea was valuable. These days, with them owning 1.3 trillion of treasury bonds and being the world’s factory, the chip value of North Korea has dropped very much.

If the US and South Korea want to take care of North Korea, here is what they should do:

1. They should recognize that a North Korean collapse is in no one’s interest.

2. They should recognize that a war is going to be very costly, with the cost running into the trillions. And it is going to end in a stalemate anyway, because that is what China wants. This is China’s backyard, and they will not allow a North Korean defeat.

3. The US and SK should make a list of the top influencers in North Korea. They should then invite them for visits to the US and South Korea. Bring them over, wine them, dine them, take them and their families to Disneyland, take them shopping at Wal-mart, whatever they want. Give the North Korean leader a state visit. (Hey, we shook hands with Stalin). He likes Hollywood, so line up all the movie stars for a meet-and-greet. They should give out tens of thousands of scholarships to North Korean kids. Flood the country with iPads. All this will cost less than one B-2 bomber.

All this is critical to the one thing that the NKorean leadership needs in order to make peace: the ability to save face. With all this goodwill that we will buy, it will let them save face and say maybe the West isn’t so bad. The world has changed. It is all one giant misunderstanding. The West is sincere in wanting to make change. I can envision a come-to-Jesus speech by Kim Jong Il like the one Emperor Hirohito gave after they dropped the second bomb, but without all the radiation.

We should make it very clear that we have no interest in changing the N. Korean leadership. In fact, we want them to stay exactly where they are. We should guarantee their security. We will even send them a planeload of Cognac once a month.

All this will lead to a drawdown in the N.Korean military forces. SKorea will get a huge chunk of cheap labor, and a lot of it can be former NKorean army soldiers.

And China will love it most of all, because (1) does not force them into arbitrating or supporting a war, (2) does not cause a refugee problem, (3) does not expand SK all the way to the Chinese border and (4) all these North Koreans are going to gorge themselves on Chinese goods that the US is going to pay for, thereby keeping the Chinese economy going.

If President Obama implements this plan, he will be the first person in history to get TWO Nobel peace prizes. I’ll be happy if he gives me a ride in Air Force One. I’ll be really happy if he gives me a shout-out in the peace prize acceptance speech!

A few days ago the governor of Texas made some ham-headed statement about seceding from the USA. Most people asked him to not let the door hit him in the posterior on the way out. Most of the world wants to come to America, STILL, and he wants to leave. Who does he think will want to move to his little redneck rump state if it is not part of America?

Anyway, this blog is about business, not emotion, so here we go with the business angle.

I was racking my brain thinking of some innovations to come out of Texas, and I am sure there are some, but other than the Baylor University medical complex, and NASA in Houston, I find it hard to think of anything.

This does not include Texas’s famous steakhouses and their BBQ, both of which are excellent.

Dell is near Austin, but it has never really innovated anything, and is now slowly fading into irrelevance. All it did was ride the boom for about 15 years.

There’s the SXSW festival, but that isn’t innovation.

Southwest is in Texas, and they did innovate a new business model, but they did that back in the 70’s and haven’t changed their secret sauce since then. Jetblue and Virgin America and Spirit and others are making Southwest look more and more like a legacy airline.

The energy companies are concentrated in TX, but try getting them to get off their petroleum crack pipe…it just ain’t happening.

Possibly the only good things in Texas are the rent contol laws (there are none, resulting in plentiful cheap housing) and zoning laws (there are none, resulting in plentiful and cheap housing and industrial).

Mercifully, this state senator in Texas put me out of my misery by publishing this list of Texas ‘firsts’:

1) 49th in teacher pay

2) 1st in the percentage of people over 25 without a high school diploma
3) 41st in high school graduation rate
4) 46th in SAT scores
5) 1st in percentage of uninsured children
6) 1st in percentage of population uninsured
7) 1st in percentage of non-elderly uninsured
3rd in percentage of people living below the poverty level
9) 49th in average Women Infant and Children benefit payments
10) 1st in teenage birth rate
11) 50th in average credit scores for loan applicants
12) 1st in air pollution emissions
13) 1st in volume of volatile organic compounds released into the air
14) 1st in amount of toxic chemicals released into water
15) 1st in amount of recognized cancer-causing carcinogens released into air
16) 1st in amount of carbon dioxide emissions
17) 50th in homeowners’ insurance affordability
18) 50th in percentage of voting age population that votes
19) 1st in annual number of executions

http://shapleigh.org/system/news_article/document/882/Texas_on_the_Brink_2007_Final.pdf

Agriculture is definitely unsexy. You go to your local garden shop, and some wizened old guy tells you the best way to pot or mulch or whatever other verbs/adjectives are applicable to agriculture. But online,  it’s a whole new game.

I was very surprised to see sex being used to sell fruit trees. Check this out:

You can see these types of examples all over TyTy Garden Nursey.  http://www.tytyga.com/

What a great way to circumvent content filters!

I will not turn this note into a scathing attack on the NYTimes, but it sure has fallen from grace in my eyes. They hocked their HQ, and are trying to survive in these crazy times. Just recently their stock traded at less than the price of one copy of the Sunday times. I think I trust the writing from exiledonline.com more.

The only way the NYTimes will survive is if it publishes GOOD articles, not chaff like this.

Here are two reasons why:

Here is an article on the FAA (IMHO quite possibly the second most incompetent federal agency in the USA) “Scrambling to hire more Air Traffic Controllers“. The article reads like a 8th grade term paper, just one long narrative with a few quotes. Its singular and biggest fault is that the article refuses to go into the REASON why there is a ’scramble’ to hire ATC’s: it is the convoluted, dingbat method by which air traffic controllers are hired. Prospective ATC’s who do not come from the military have to first attend a special school where they obtain a degree in air traffic control or something, and they have to be hired by their early 30’s. So, for example, an engineer with a Ph.D. from MIT who is 35 would not be qualified to be an ATC. I don’t precisely know what ATC’s do, but it can’t be tougher than being a surgeon, and you can become that at age 40.

In this economy, where engineers are losing jobs by the tens of thousands, the FAA can hire ALL the ATC’s it needs if it institutes realistic requirements: have a technical degree, pass a security screen, and pass the FAA’s in-house training academy.

And here is another article by James Traub, on Pakistan, the world’s most mispronounced country. It says “Can Pakistan Be Governed?” Well duh. Of course it can be governed, it is the quality of that governance that matters. So we start out with a bad title. The article talks about how the President of Pakistan, Asif Ali Zardafi is faring in his early days in office. The article revolves around a misstep made by the President, in not reinstating a judge, Iftikhar Ali Chaudhry. The country apparently went bananas over having this judge reinstated. Zardari said no no no then he said yes. What Traub COMPLETELY missed was the real reason why people in Pakistan cared about this judge. The regular folk of Pakistan (anyone without access to a Western escape hatch) are literally dying for a decent, working justice system. Now, this judge, whom everyone wanted reinstated, was the chief justice for three years. What did he do in the three years to gain so much faith and love from the people? Did he improve the justice system? Did he write an opinion that changed Pakistani society? From my cursory scan of Wikipedia(you can google it yourself), it seems he did nothing that would affect the lives of the regular folk. Isn’t the chief justice supposed to manage the country’s justice system? So is this article just useful for its shock value, telling us how our latest puppet in Pakistan is going to blow it?

People hate Octomom for having octuplets on top of her existing six children. I was initially speculating that her kids would be taken away from her within six months. I thought about it some more and I realized I was wrong. Here’s why.

Octomom is sitting on a goldmine. At the very least, she can sell the worldwide rights for an interview with her and the kids for $2 million dollars. That is a low figure for a story that has worldwide interest. The Monica Lewinsky interview sold for $7 million, that was over a decade ago. 

Here is how I would do a deal if I was Octomom’s agent:

I would sell the following package of rights for $25 million dollars:

One exclusive two hour interview to be granted after the octuplets arrive at home.

One birthday special when they all turn one.

Another birthday special when they turn two, three and four.

A first grade birthday special when they all turn five.

Another special of the Octuplets visiting Disneyland

Another birthday special when they turn 12 or 13

A final special at their high school graduations. They would be around 17 at that time.

Ten other interviews at the buyer’s choosing, each to be one hour. They can do special interest, such as ‘Octuplet #5 becomes a boy scout’.

I would demand $4 million upfront, $1.5 million to be paid out in years 2-5, and the remaining to be spread out over 12 years. 

This woman is sitting on a gold mine.

And for the sake of the American taxpayer, she should go for the money, otherwise the taxpayers will end up footing the bill for her progeny.

Michael Phelps, the man with the wingspan of a large bird, has been photographed using a bong. It is very likely that he was smoking some marijuana.

Since this is a business blog, I want to discuss the problems the ‘morality clause‘ can cause for endorsements. A morality clause usually says that a contract can be cancelled or have its value reduced if the athlete engages in certain activities. Michael Phelps’ contracts are sure to have a morality clause, and they will be invoked, if not to cancel the contract, then to subtly renegotiate the contract.

The most famous morality clause whopper was for Kobe Bryant, whose famous incident  in Colorado is estimated to have cost him $300 million.

Geithner is Obama’s choice for Treasury secretary. There are several reasons to reject his appointment, although I think our current rubber stamp, do-nothing Senate will wave him through with the equivalent of a slap on the wrist.

He is in favor of the bailout, not just the current bailout, but the last five bailouts. There have been so many, I have lost track.

He was on the New York Fed Reserve, and it is under his watch that the financial industry ran off the rails. Where is accountability when you need it?

Wall Street loves him, which means that the crooks consider him one of their own-ready to turn on the money spigot. Obama’s treasury secretary should be someone Wall Street detests, someone who will make them howl with anger. I don’t know who, but not lap-dog Geithner.

Geithner is also apt to play with fire. In his confirmation hearing, he is claiming that China is keeping its currency undervalued. The Chinese are very prickly about all sorts of things, and this is one of them. Why would Geithner anger our largest creditor? If confirmed, he is going to have to beg them to continue buying treasuries, plus he is going to hope they don’t start unloading their trillion-dollar cache of treasuries.

Finally, there is this great article that takes Geithner to task over his failure to pay taxes. Now, I understand that people mess up on their taxes. But to earn so much money, to know that it is a complicated situation, and then to blame TurboTax for it, is downright disingenuous.

But, he is sure to be confirmed. Don’t worry, Timmy, just hang in there, smile a lot, say you’re sorry, and soon you will be in charge of our 35 trillion dollar economy. God help us all.

Update:

Here is a post from Larry Dignan at ZDNet saying how a guy who cannot handle TurboTax should not be Treasury Secretary. (1/25/9)