Ecosystems or Platforms?

A recent post by a followed SA author (John M. Mason) returned to the ‘ecosystem’ value chain narrative – i remember this from almost 10 years ago as my former employer tried to create “the third mobile ecosystem” behind Google and Apple. We failed miserably, but the learnings and strategy were invaluable. John has a solid way of tilting paradigms for investor evaluation, and I appreciate that. Ecosystems are a type of moat – but way more resiliant. Ecosystems take big money and years to evolve to that strength however, and that was our learning – we tried to make it happen on our timeline. They also seem cemented with differentiated and spectacular user / customer experience – not a ‘thing’.

Actionable take-way will be an increased scrutiny on my T investments.

Managers, pay attention!

If investors value well run companies (those who treat their employees well) … you can assume a couple of things. a) investors are stupid and employee enthusiasm for their employer has nothing to do w/ company performance, or b) enthusaistic employees (happy) are more productive, innovative and resiliant and increase the value of their company beyond competitiors who treat employees less well.

Even if you have small business and do not sell stock … do not you want the same results? productive, innovative and resiliant employees who increase your company’s value beyond your competitors?

Seems straight forward to me

Hacking tools and hands for hire – cheap!

Much has been said / printed about the cybersecurity risks we all face with our digital information and transactions. But, i believe many of us underestimate just how easy and cheaply it is for ‘bad folks’ to get access, tools and other resources to do the work … for example, quote: “In another case, McGuire and Bromium found a database of passwords and PIN numbers that appeared to belong to customers of Qatar National Bank, a global bank with tens of billions of dollars in revenue, for sale for roughly $10.”

That quote was from an article referenced by Washington Post –

WAPO pointed to a Bloomberg post – you may need subscription

An interesting costing estimate, quote: “The price for commissioning an attack on a specific corporation averaged about $4,500, the researchers found. Bespoke corporate espionage services, targeting either individuals or specific information from a particular company, were available for fees ranging from $1,000 to $15,000, they said.”

Thought provoking article – ‘should read’

Eric B posted an article this weekend that I found one of the most provoking reads in several weeks.

Here was my comment to the author

Eric … one of the most thought provoking article I have seen in the recent up-roar of tariffs and inverted yield curves. One of your key elements here is to expand our analysis horizons from days / quarters (typical) to decades using the JPN / EU patterns. The other point you made but did not hammer too hard – is that the employment trend (older people working longer) and the financial insecurity of the younger cohorts (especially 25-35 yrs) – think low income and high debt – is a vicious cycle (or virtuous) – that younger cohort will enter their later years worse off than the current older cohort, so … older folks work longer than boomers; and the cycle continues with greater values at each spin. These are important long term trends for us investors and I applaud your effort to extend our analysis horizons.

Btw … this is not important for investors, but business folks working on longer term product roadmaps and strategic plans. Many of our future growth variables and assumptions need to be challenged in the context of these demographic and debt pressures building across the globe.

AI Patents

Another great dataset from Statista … Patents can be cash machines later but can be hard to tell which ones generate the cash, e.g., NOK and QCOM from the early cell phone days. MSFT was a surprise as the top one with such a gap.

VZ offers NB IOT network

This is just a beginning. One cool part of the announcement is the inclusion both IP and non-IP traffic, and even more so specific use cases. Quote:

  • Smart cities – improve citizen experience and municipal operations through parking sensors, waste management and smart lighting.
  • Smart buildings – enhance building safety and incident response times through connected smoke detectors including regular auto-test, battery check and real-time alerts to the relevant parties in case of fire.
  • Industrial – improved machinery maintenance cycles and factory safety through machinery control such as equipment status, factory control, and process and safety monitoring.
  • Environment monitoring – increase focus on environmental responsibility through status reporting of manhole covers, fire hydrants and chemical emission levels.
  • Agricultural – improve efficiency in the agricultural industry with livestock tracker, connected greenhouse, stationary tracking and monitoring of air quality, humidity, moisture, temperature, and weather conditions of air and soil.
  • Asset Tracking – improve efficiency and decrease costs by using pallet tracking and geo-fencing.
  • Utilities – improve efficiency and decrease waste by using gas and water metering, including smart meter consumption tracking and pipeline monitoring.

The more of these announcements, use cases and developer kits the more device innovation will take off!

Yikes … this is going to happen more & more …

what the public and customers can do about it is a complicated question

quote: “According to Blake, the attack relied on a computer bug that was widely known — and there was a software patch that fixed it. That means if the utility had updated patches on all of its systems, the whole thing could have been averted.”

Leadership – A role model

Recently as I retold a story about an example of a leader actually leading a large organization through tough times, I realized this example embodies a favorite snippet (thanks to Jack / Carol Weber): “In absence of good communications, people will make it up and convince their friends it’s true”.

I worked in a large organization (~2000) and the org and biz were on a roll, growing and projecting growth. I seldom saw or heard the General Manager, but often his 2nd in command. Then, unexpectedly our product’s market collapsed, and our business was threatened closure. The GM started a cruasade to both preserve the business and the careers of the people who worked for him. Immediately, he was in front of the entire organization regularly, telling us what he knew that he COULD tell and be open to both answer questions and updating us on the ideas he is pushing. He set our expectations very well to not over expect immediate success and he worked tirelessly to create a new future. He did create that future; but it meant for a couple of years 90% of the workforce needed to find a new job.

In the end, he created a new and vibrant future for the organization; and, he helped find jobs for almost every single employee if they wanted another one. He demonstrated what great leaders do … first regular, transparent and candid communication, and second, the discipline, persistence and compasion to deliver those futures. He shortly thereafter retired from our company. I would like to believe that he was content delivering his career best and walking away.

He communicated and provided information when rumors could have destroyed both the business and the people … good, strong leader communication will make outstanding results easier – it’s necessary, but not sufficient …

Executing a strategy I don’t understand = pain

This is probably obvious to most, but like many things, I had to bang my head against the wall to learn it. My lesson is not investment domain specific though that was my classroom.

I am always receiving promos for different investment or trading platforms, most of which are subscription cloud services. Sometimes i see one that is worth giving it a spin. My first lesson awhile back was a ‘paper exercise’ is not a sufficient test; i always make exceptions or rationalizations of insufficiencies of the platform or my required responses to it. I have to put skin in the game, i.e., money, to learn.

I saw one that seemed like worth a try; I followed their daily recommendation but failied to exercise the stop/loss due to my inability to monitor every minute of trading hours. – i did not understand the behavioral requirements of the strategy. I lost all $200 of my test.

Looking back, I would do one of or both of deeply understanding the strategy and my required behaviors and / or follow a poorly undertood strategy to the letter of the prescribed behaviors. The risk of the second action is that I would not be able to innovate within the strategy when conditions change, yet conditions always change.

This then is the pain of a poorly understood strategy … failures of execution both due to mistakes and the inability to innovate within changing conditions. The remedy is simple – execute only strategies I know sufficiently to innovate; and ideally, constantly increase my strategy portfolio.

Small Business Optimism Falls in January

“Small Business Optimism Returning to Normal Levels as Owners Express Uncertainty about the Future

The NFIB Small Business Optimism Index slipped 3.2 points in January, as owners continued hiring and investing, but expressed rising concern about future economic growth. The 101.2 reading, the lowest since the weeks leading up to the 2016 elections, remains well above the historical average of 98, but indicates uncertainty among small business owners due to the 35-day government shutdown and financial market instability. The NFIB Uncertainty Index rose seven points to 86, the fifth highest reading in the survey’s 45-year history.”

Poor government decisions and behavior have impact

BLS Unemployment & Gig-Doers

I believe that the unemployment rate is incapable of calculating a sizeable portion of those whose “jobs” will end early in an economic downturn. These are the folks who I am calling “Gig-Doers” – these are the folks who push a side gig or a portion of their gigs are off the mainline employment / payroll system. Maybe they get cash, maybe they invoice against a services contract … but they are probably not fully calculated in the current numbers (critical here is the n).

Here is the BLS FAQ where you can get how they count

What I see happening as the economy slows, the Gig-Doers will be the early ones to lose their side hustle, lose material income and be compelled to re-enter the traditional employment system increasing the n. I intend to watch that over the next few months, as even this month unemployment went up as jobs created also went up – quote: “The labor force participation rate, at 63.2 percent, and the employment-population ratio, at 60.7 percent, changed little over the month; both measures were up by 0.5 percentage point over the year. (See table A-1.) The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by about one-half million to 5.1 million in January. Nearly all of this increase occurred in the private sector and may reflect the impact of the partial federal government shutdown. (Persons employed part time for economic reasons would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.) (See table A-8.)

The bold text above is my emphasis of the unknown source of the increase in part time workers. The gig economy and the prevelance of alternative payment modes outside the traditional payroll system is going to be very difficult for our current systems to monitor with any actionable sensitivity in the early changes. How this impacts economic models, projections and business decisions is yet to see, but this is the first slowing economy we will see with a material gig element.

Here is another article estimating the size of this workforce

A New Business Scam

Th is last month, I officially established my consulting business, Plans and Clues LLC, with the state of Oregon as well as a US Fedral EIN.  At least one of those things puts my business name and address in the public domain … the state of OR.  So there are either people or bots scanning the public domain for new businesss so they can contact you …

They sent me this very official sounding and looking document that could easily be mistaken for a state or fedral agency requiring a fee be paid.

But if you read the top paragraph on the right side, if clearly states that this same documentation that they are asking you to pay for is available for free from the state of OR.

This is a scam that they are intending you do NOT read and just go ahead and pay.  If not, how many businesses will stay in business if the EXACT same product is available for free from the government?

30 minutes on Plan for Profit

I presented at short view on “Plan for Proft” for a local Chamber of Commerce Lunch event this week. A framework to help people start thinking about the needed clues to create a plan to meet their unique and individual profit goals.

Caveat:  These slides are not that helpful for people who were NOT in the talk itself – this is not a “leave-behind, stand on its own” collateral.