Stories that repeat – part 6

The story

This is a story from a movie about Russian tycoons. Plato and his friends are standing by a statue of Lomonosov in Moscow. Plato is telling this story. “Say I owe $1 to Mark and Mark owes $1 to Larry and Larry owes $1 to Moussa and Moussa owes $1 to Volodja and Volodja owes $1 to me. Than along comes Lomonosov and gives me $1 for one of my gloves. With this $1 I pay Mark and Mark pays Larry and Larry pays Moussa and Moussa pays Volodja and Volodja pays me. Lomonosov however cahnges his mind and returns the glove and gets his $1 back. Where we stand now? Lomonosv has his $1, I have my glove and the debt is gone. Nice isn’t it.”

The repetition

Replace $1 with $100 Billion and Lomonosov with the Fed and you’ll get the US Financial system in summer/fall of 2008.

Stories that repeat – part 5

The story

I was in 9-th grade, when the students of my class were sent to help farmers pick tomatoes. We would pick roma tomatoes and put them in cases. We would get a ticket for every case full of tomatoes delivered to the warehouse. Needless to say that the more tickets the better for the bearer.  Some boys noticed that the farmers do not have sophisticated printing technology and the tickets are easy to counterfeit. Boys at that age are not known as big thinkers. The idea was implemented quickly, almost as quick as it took for them to get caught.

The repetition

A public Company engaged in software development and implementation decided that writing software and implementing it is a daunting task and frankly not that profitable. Like picking tomatoes. So they decided to invest in the stock market their free cash instead of investing in the software. It worked until they got caught in market’s downturn, causing them to lose not only the cash invested but also the profits made on the software side. As a result their stock is at record low. Hopefully they will return to their core software business with the little cash left or they go pick tomatoes.

Stories that repeat – part 4

The story

One of my favorite children’s books is “The adventures of Dunno”.  Yes, you can find it on the Internet, just Google the title. One of the stories there was about two artists. They would both do portraits of girls. First will do very realistic portraits and wouldn’t listen to girls demands. The other one would listen to what girls are asking for. She noticed that they pretty much wanted the same “the eyes bigger and the mouth smaller”. She got smart and created rubber stamps with the portraits in demand. Not only her job became easier but she became very popular and wealthy too. Well I may have made up the part about the wealth.

The repetition

Well this story repeats quite often look at Hollywood for example where they rubber stamp popular movies. The reason I am writing though is the housing in California in late 90’s and until now in 2007. They have built more Tuscany houses in California for the last 10 years than in Tuscany for the last 100 years. Come here folks the rubber stamps are out and we are churning them houses hot from the press. Unlike the old Tuscany homes everything is fake in our California homes – the stone, the wood, the fireplaces, but who cares. The business is good.

Stories that repeat – part 3

The story.

I was a teenager in the late 60-ties with plenty of time on my hands and very little money. Beatles were hot and vinyl was expensive. Couldn’t afford tape recorder either. One day I noticed an article in one magazine explaining how the tape recorder works. It was showing a simple diagram with 3 parts – magnetic head, amplifier and speaker. Wow, I said to myself it, why don’t I buy those 3 parts and build a tape recorder. In the process I have learned that there are thousands of other parts going into the tape recorder and I gave up on the idea as quick as I have embraced it. Hey don’t judge me I was in my very early teens.

The repetition.

I have noticed that many venture capitalists look at businesses the same way I looked at the tape recorder diagram. They look at revenues, expenses and profits and do not see the many parts a business is made of. That’s why the role of the people who know is extremely important as it is for the venture capitalists to put the right management team in place.

Stories that repeat – part 2

The story.
It happened sometimes in the middle centuries. A Spanish ship got damaged and thrown by the winds at the shores of an unknown island. Fortunately for the sailors the islanders turned to be friendly and would even provide water and food in exchange for whatever the sailors got. Sailors would have few golden coins with very high value and many copper coins with little value back home. They were not home though. So the sailors decided that they will get more if they pretend to praise the copper coins more than the golden ones.

The repetition.
Mister X of a big law firm has worked hard for long years and has built a strong reputation. He and a colleague of his Mr. Y decide to start their own law firm. First thing they realize is that no reputable attorney is willing to work for them unless as a partner. They do not want to take too many partners so they proceed and hire second and third level attorneys and junior attorneys. Here you have your two expensive golden coins and many inexpensive copper coins. Our friends X and Y reach the wisdom of the Spanish sailors quickly. Sell the golden coins cheap and charge solid for the copper coins. They would approach new customers with their own resumes and skills plus attractive discounted rates. Naive first time customers would be impressed and hire them in an eye blink. What happens thereafter is a fast switch to your copper coin attorney at a rate which is anything but discounted for what you get. Mrs. X and Y love the model for administrative cases and discovery phase of litigation. There is little or no responsibility there and the model flourishes. Mrs. X and Y will advise you to quit when things get tough. The work in advanced litigation stage becomes too complex and too difficult for a junior to do. The model is not working anymore. Mrs. X and Y understand that their participation is needed and this is not want they want. This is against their model. So they would advise you that you have no chances in said litigation and it is your best interest to quit.

Stories that repeat – part 1

The story.

It happened somewhere in California lately. Hard working family opened a pizza place. They wouldn’t spare the time and effort to turn the place into the best pizzeria in town. They managed to do it. They were living the American dream. Customers were piling up and the business was flourishing. They landlord didn’t think so. As soon as the lease expired the Landlord did not renew it. Instead he moved into the space and started his own pizza business trying to take advantage of his tenant’s hard work and success.

The repetition.

Yahoo was just a directory, search engine and a web information portal in the early days of the Internet in mid and late 90-s. Our company Aplus.Net used to advertise web hosting and domain name registration with them. Once in a sudden, out of the blue we have received a letter from Yahoo saying that they will not renew our advertising contract because they consider us a competitor?!? The web hosting business was just one of the many businesses Yahoo entered at that time. Online dating, travel, jobs, domain names come to mind. It seems that Yahoo examined their advertiser’s list and found the most successful online industries and got involved in those. Yahoo’s CEO Mr. Terry Semel stated in an interview that he used to run theme parks and he has noticed that people would buy pop corn and other stuff when they walk around the theme park. This is good point Mr. Semel, however you have to get those folks in the theme park first. They won’t come if the rides suck. This is exactly what happened. While Yahoo was busy imitating us in the web hosting and domain registrations, Google came in and ate their breakfast in the search engine space. What goes around, comes around.

To twitt or not to twitt that is the question

If you use the twitter to announce to your followers what you are doing at any moment such as taking a shower or going to the bathroom, than I am sorry for you and sorry for your followers as well. I have a simple “twitt” for you “get a life”.
Twitter is a broadcasting of short messages. How “broad” is your broadcasting depends on how many followers you have. Unless you are Bob Dylan, Julia Roberts or another celebrity your broadcasting is anything but “broad”.
Twitter is not instant either. For the geeks who spend their life in front of computer screens with several windows open all the time it is almost instant. For regular folks like me it is not.
If you think about it hard and long you may find some cases in life when the use of the twitter would be appropriate. If you think a little bit more though you may find out that other technologies such as SMS, e-mail, social networking, forums, BLOGs etc. may fit the bill. Actually, one of the most frequent use of twitter is by blogers to promote their blogs.
Finally, unlike the BLOGs, forums, social networks etc. the twitts are not searchable so that your “deep thoughts” will never make it beyond your followers.
In most cases the twitter is waste of time and a fashionable movement, which I predict will vanish. I commit to not edit this BLOG. Let’s get back to it 2 years from now and see. Meanwhile feel free to join me on Twitter. I do not post often, so that it is a win -win situation 🙂
🙂

In Memoriam

Michael Jackson taught us a lesson. There is not such thing as retirement. He died while working and this seems to be the right thing. Everyone is crazy about “natural” nowadays. Well let’s look at nature. Is there a retired fox or retired eagle. The eagle dies as it flies. So did Michael. Rest in peace.