Month: February 2013

Audio Podcast from Mark’s “Prose Series”

Without Conviction Decisions Are Meaningless

This podcast and more available in iTunes®

© 2012 Mark St.Cyr in association with StreetCry Media. All Rights Reserved

The quick hitting no holds barred series based on “Mr. Engineer, please hit the record button and let’s go!” Designed and delivered to be thought provoking and unique for its forget about edits and retakes format.

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F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it…Get this) :”What happens when…”

As I’ve stated many times; you might not be correct on timing however, that doesn’t mean what is possible can’t happen. It can lead many times to what I like to compare to the “Chicken little” or “Canary in a coal mine” scenarios.

You’re trying to express where people should be looking for clues as to what potential dangers may be on the horizon, as well as potentially profitable actions that might also be available.

As an entrepreneur one does not always have the luxury of waiting for a certain scenario to unfold before acting. You have to set plans and ideas into motion with an eye towards the percentage of what might unfold. You’ll never achieve 100% perfection. Those that try more often than not never accomplish anything. Their still waiting for that “exact moment.”

I wrote back in 2010  in today’s day and age of being less reliant on the bricks and mortars model to hold businesses in place. In that light I offer the following story that basically has gone either unnoticed or under reported by most media outlets. As an entrepreneur it has broad ramifications. Everywhere.

The state of California announced last week they were … (wait for it) retroactively rescinding a tax break they gave to entrepreneurs that sold and made profits on the sale of their business. Yes – you read that correctly: retroactively and not just for 1 year but – 4 years! You can read more here.

Many current entrepreneurs are now up in arms. (as they should be) The problem for many in the world of business is this: Both the people elected along with the people who voted for them believe this is good for California. Not only is it not. It will have chilling consequences in the very near future the way I read tea leaves.

One of the main reasons for this mindset is every one of these brainiac’s believe; if you own a business (of any size including solo practitioners) you’re rolling in money.

I believe it’s our job as entrepreneurs to explain what it is to actually be one. You need to explain to both your family and fiends. As well as those “idiots” that always express how “they know” what business is like yet haven’t a clue. Because, it’s also this very same group of people that will believe they’re brilliant, then they’ll vote in this kind of stupidity where you live and work.

Right after they leave California because there’s no more work for them.

Think about it.

© 2013 Mark St.Cyr

No Picnic Basket Required

This week was a strange week for anyone that just started opening their 401K statements again. For those that are new or been trading for a few years, this week certainly holds up to what must seem as a “once in a blue moon” event.

Imagine what this week must be like when seen through the eyes of a 16-year-old day trader that’s accustomed to racking up over 30% annualized returns. Obviously something must be wrong. If not how else can the markets go down 2 days in a row? I mean – “OMG!”

Of course I’m being sarcastic yet – not by much.

Anyone that’s been involved watching or trading markets knows the proverbial trading queue involving magazine covers:
When the covers say it’s “Time to Buy” – it’s  -“Time To Sell” and vise versa.

Yet, in this day of print media going out of business faster than their ink dries. The “talking head” shows were a buzz with the equivalent of what a tabloid finds newsworthy. A 16-year-old actress that’s also a self-professed day trader sporting yearly returns that would make a vampire squid blush.

I had seen the story of this young girl and her exploits as a day-trader and wanted to know a little more. Her name is Rachel Fox. This is nothing about her personally. She seems like a great kid with her head screwed on straight. It was also uplifting to see a young adult actually involved in managing her own money. I wish her kudos.

What I do wish to shine light on that I believe will be instructive to a great many in the coming weeks, months, and quite possibly years is this: “Markets do go down – and sometimes – they don’t come back up.” At least in the sense of where you can exit at a slight loss, or break even as has been the way of the last few years.

Personally my business bent is that of a Short Seller. I regard this side of business much more invigorating in both the analyzing of data, as well as the trading. One of the greatest pleasures I take from seeing the world from this viewpoint is this: When the world is coming apart and panic is abound; Shorts (aka Bears) by nature find exhilaration in the havoc. They begin implementing strategies and more with clear thinking and vision while everyone around them is just losing their minds.

Personally I believe the reason behind this is because it’s not easy being a bear when everyone from the Federal Reserve to 16-year-old day traders have you in their sights because “JBTFD” (just buy the f’n dip) has been rewarded again, and again, and again, and again, and, well you get the point.

An inflection point for the markets just might be closer than many dare think. This could actually be scarier (many think it never could) than that of 2008 and for the very reasons people believe it can’t. Of course I’m speaking of the Federal Reserve.

Nearly overnight all the wonderful reasons why markets were rising based on earnings and more were drowned out by the gasping of commentators everywhere that the Fed might take the punch bowl away. (oh the humanity!)

Imagine someone that’s been trading their own 401K or other investments over the last 5 years. For the most part everyone “buys” stocks. (Very few are what one calls “Short sellers.”) They’ve learned technical analysis, stop-loss orders, learned how to read all sorts of indicators or technical studies, and far more. But, (and it’s a very big but) the one thing they have not experienced is a fast-moving panic induced down move. Just for context. The last time a sustained down trend that lasted more than a day or so was when our teenaged wonder trader was (wait for it) eleven!

With the advent of HFT (high frequency trading) along with their headline reading algorithmic quote stuffing schemes all one needed to do was just wait for the market to spin on a dime and rocket not only back up – but higher. Over the last 5 years that’s all one’s known. What happens when it no longer does?

JBTFD’s can turn into trying to catch a falling knife faster than one can say “WTF!” Or should I have said “OMG?” If I’m correct it will be the former that’s used far more often than the latter.

Just what happens to one’s psyche when all of a sudden fast markets ignore your stops? They gap over or under them never giving you an opportunity to close that position that now has your net liquidation total showing negative numbers? The word “Hello” won’t be coming be coming from some trading icon. (pun intended) It’ll be from the margin managers desk. Like I said: “Hello.”

Just how many new orders will they put in to buy when every-time they do the market drops another 2 – 3 – 5% or more then does it again – for days!
What happens to the self-proclaimed “Pro” that’s been trading for 3 to 4 years and has yet to experience a week like the many experienced in 2008? I know this; exhilaration won’t be the term used to describe what they feel.

Of course Bears or Shorts have been wrong over the last 5 years. Many have deep wounds or scars to prove it. However, unlike most they take their cues when everyone else is either blind to the clues, or just refuses to see them. And I quite possibly saw one of this years best.

As I said earlier I wanted to find out a little more information on our teenaged wonder trader when I saw her in an interview with one of my personal favorite talking heads: Jeff Macke. I hadn’t seen him for quite sometime. My favorite line he used to expound was “If the markets are open – it’s a good day to short the airlines.”

As I watched his interview on Yahoo Finance™ all I could think was : If the news of the day is a teenage wonder trader making 30% returns – It’s a good day to short everything!

© 2013 Mark St.Cyr

Spotting Trouble (follow up)

Someone pointed out I was incorrect in stating (or using) as an example “1 basis point as opposed to a penny.”

I was using the example for context because I have sat across from people when talking about markets or finances when someone trying to sound like they were up on the art of investing have used the wording of “a 300 basis point gain” as to say their stock rose by $3.00.

For the record as to not offer any confusion. A basis point is actually 1/100th of a percent. Not 1/100th of a dollar.

Mark

Spotting Trouble Quickly

I was asked: “In a discussion. How do you tell when someone knows what they’re talking about if you yourself don’t know the subject matter at hand?”
I felt it was a great question. Here’s my response:

When a person begins talking on any subject as if they know the most intimate details. Yet, no matter what question is posed, they immediately start referencing vague terms or speaking in jargon as if you (or everyone) should know what all that jargon means, while giving off the vibe of “talking down” if they have to explain it. Look out!

A person that knows a subject usually can tell when another person is on par with their understandings or not. Jargon is used heavily between peers. However, people trying to explain their positions or ideas are usually more than aware if the people they’re discussing with are on their same level of understanding in their “jargon.”

Far too often heavy uses of jargon (or vague terms) are used as a form of cover to make someone sound more “intelligent” or more “in the know” than others. Anybody on – or having anything to do with Wall Street is notorious for this. “You made 1 basis point.” As opposed to: “You made a penny.”

In a discussion, if you’re the only one (as an outsider) as opposed to a group that works in the same field (as in rocket scientists) you’re probably going to feel left out of the conservation. That’s an understandable circumstance, and sometimes unavoidable – it’s called life. However, more often than not (if they’re polite minded people)  someone will say something to the effect “Sorry about all the jargon.”

However, when you’re sitting one on one with someone or, in a situation that doesn’t resemble an in-house water cooler discussion. And the jargon is flying faster and heavier than a jumbo jet. This should be your first clue something is just not right. Trust your instincts that someone just might be trying to buffalo you or everyone within earshot. Or, they’re just jerks. (both should be treated about the same in my book)

What you never want to do is what far too many will:

Start acting and talking as if you understand everything being said in some attempt to quell some feelings of insecurity or inadequacy.
Don’t do it! (con-men look for just this and begin to grin)
Politely ask for something to be clarified if you need to know. If not: Lips tight – listen only.

You can more often than not spot trouble quickly, while possibly being remembered as one of the most intelligent people in a discussion by keeping ones mouth closed, at the right times.

© 2013 Mark St.Cyr

What Is “Recognized” Or Why Care

Someone asked me the other day after reading my bio what I actually meant by the term “recognized expert.” Was it fluff? Or, was there a real meaning behind the use of the term. It’s a fair question.

She asked because she sees the term “expert” used everywhere. (emphasizing the term everywhere) So what was the meaning behind recognized? Was it because I’m a public figure, writer, speaker? Or, was it just something for embellishment purposes? Should she add it to her bio? Again, all fair questions so here’s how I explained it.

The term “expert” at one time had more weight behind it than it does today. Now everyone who has an idea or opinion on any subject believes they can call themselves an “expert.” (and too many do just that in my opinion)

Yet, if you truly know a subject and can demonstrate proven results regardless of the topic, the term “expert” just might fit the bill. You don’t need some form of certification in most cases. (although many will pay some place to say they are) Rather you need to know the subject matter your working with through in, and through out. Along with being able to demonstrate that knowledge. Not just “say” you can.

A person that works on lawnmowers might not be an “expert” on engines. However, they just might be an expert on engines that power lawnmowers.
I believe you can see my point here.

It’s a subtle difference in the way it’s presented. Yet, the meaning or implications are miles apart. Especially if you’re the one whom just hired this person as an “expert” to speak on engines – to the 500 attendees at a conference that’s featuring new engines to power this years super cars. See the ramifications there?

Ever wondered when you’ve just experienced one of the most dreadful talks given from a stage just who gave this person the title “America’s Top (fill in the blank)?” Easy – they themselves did. Nuance in phrasing does not mean knowledge or expertise. However, far too many try just that – and fail miserably.

Recognized should mean what it implies: Others – whether in your field or not have either cited your opinions or work. Or, have invited you to participate as a panel member (or something similar) where members or attendees (usually experts in their own right) can openly ask you as to give insights or answers to questions they may have relating to the subject at hand or others.

In other words: You, are recognized as a person capable of delivering thoughts or ideas worthy of listening to – or for contemplation by others that add meaning or insights to the discussion. Regardless if anyone agrees with you. Which at times is another reason why you might have been asked. (but that’s another subject for another column)

Here’s an example using myself for context:

In 2005 I was asked to both speak and participate as a panel member at a major conference where the marketing strategy was rolling out for that year. The campaign was also to be coordinated throughout the entire industry. The attendees were by invitation only. Some were noted Fortune 500 while others represented the largest players in their respected markets. (who is irrelevant for this discussion)

This wasn’t an event some speaker’s bureau booked me into. (although this is where far too many will now assign the term “expert” to their bio) At the time I was in the middle of a turn around operation in Boston. The company itself was the #2 market leader, and the turmoil surrounding why this company was in trouble was the gossip du jour throughout the industry. (one of the principles left and walked out in a bitter conflict)

I gained the attention of the industry when not only did we turn it from near death. We began taking market share away from our rivals that were telling everyone we were D.O.A. The call came to me from the industries council president in Washington, DC. (I actually confused him at first with not jumping at the chance. Refusing twice before finally accepting because as I told him “Although I’m honored, I’m far too busy” – and meant it because – I was!)

They wanted me to speak and participate as a panel member at their conference to discuss challenges on marketing and more facing the industry as a whole. This industry by way of size and influence makes Wal-Mart® seem small. On a side note. To my knowledge this industry remains the only industry where Wal-Mart tried to force its will on pricing and was sent packing hat in hand. I’m not using hyperbole.

So without going on further I believe you can see the point I’m trying to make in demonstrating the difference with one stating they are “recognized,” as to using the term (along with far too many others to list) in a frivolous manner as to sound like some “expert” personified.

I’d like to share another example I learned years back from a friend and colleague. For context years ago when I was younger I bar-tendered in real hard-core biker bars. This is where the term 1%’er means something totally different from what the term means in the headlines of today’s media. So let’s just say I have some insightful or knowledgeable first hand experience in issues others in my position might not.

We were having coffee one morning and discussing a topic that involved a headline making incident involving an outlaw motorcycle feud that was taking place in both Massachusetts and New Hampshire. A question then arose (from another not us) about what one would do in the given situation we were discussing. Then this person stated: “Well, I would just say I know someone.” (meaning if they said they “knew” someone connected that would be enough to quell the matter at the time)

My colleague looked and said:
“That’s fine, but you’re going to be asked – Who?
Because, ‘Who’ is going to be asked if they know (or recognize) you.
And if they don’t – you’re going to have even bigger problems.”
I never forgot it.

He could make that statement as an expert because he still intimately knew a number of well-known “Who’s.” (I think you catch my drift) In other words, if you say you’re recognized by someone, you had better be. Or you’re going to have issues.

So, when someone asks – or you want to know if the person actually is an expert in any given field or subject just remember:

Anyone can call themselves an “expert.” But can they answer the question of – By who?

This is where most prove they’ve overstepped and could be in over their head.

Or worse.

© 2013 Mark St.Cyr

Linked Into What Exactly?

As of late everything social is getting front page headlines across the media as many are announcing their earnings report. The dribble: “Better than expected, and the jump in stock price is showing they’re learning how to monetize.”

Well OK. However, exactly how are they monetizing? And is the jump in price a true jump? Or a short squeeze? Hard to tell either way.

If you listen to the analysts or the so-called “smart crowd” when these reports are given. One thing stands out to my ear when they begin to gloat on the spectacular increase in sales as the cause for the rise in earnings or other metrics.

I listen for one thing: Sales of what?

That might seem irrelevant to many; questioning the “what.” However, it can be a critical difference as to decipher what’s really going on.

Analysts, Wall St., and anyone else that’s hitched their wagons to the social media parade only care about one thing: Is it making money yet?

Like a child in the backseat on a road trip they will ask their version of the “Are we there yet?” just as often. (if not more)
And like that child – they also don’t care how; just as long as “it gets there.” You or I on the other hand might not be as impressed, or possibly might even get concerned with just “how” they’re getting there.

Let’s use LinkedIn® for this example. Everyone currently is clamoring about what a great business model, or great this or that. Fair enough, maybe it is – maybe it isn’t. However, entrepreneurs should be asking what does all this mean; and what are the opportunities if any?

Questions such as: What exactly is LinkedIn? As an entrepreneur can one make money from it? What does it offer in ways of putting actual legal tender into one’s bank account? For most the answer is one word – nothing.

Unless you’re a marketer (or data miner of sorts) and you want to pay LinkedIn for all that great data they’re collecting as to sift through, dice, and keep or sell to others. Just what’s in it for you?

And there lies a problem no one sees that I believe is coming down the pike that will catch many by surprise. And, for some many other consequences good or bad are unknown.

LinkedIn is basically a place to sport (or post) one’s resume online. In return people hope (and most pray) someone or some company will see their great achievements and offer them the job of a lifetime with 6 or 7 figures, corner office, and more. It wont. (Please save the emails about one’s friend – of a friend, that knew someone, that was told about this person, that now runs Amalgamated World Dynamics of the Universe, all because of posting there.)

Personally I don’t use LinkedIn. I cancelled early on and wrote about it when the founder made the public statement about people’s concerns with privacy (I’m paraphrasing) “People who are worried about privacy are old people.” Something akin with brushing any concerns aside as in one is stupid, or foolish to worry about such things. Well why would a company that makes its living by selling your data and info think any different?

They make money by selling all that great uploaded information to anyone and everyone that will pay. And, probably to people or places you wouldn’t want them to also. I don’t know whom exactly good or bad – but, do you?

So, if the head of the company says he doesn’t care, and thinks you’re a fool for caring – well I guess that solves any questions on who will or wont get your seemingly private information doesn’t it? I bet you feel better now since I reminded you – right?

Here’s how I look at all the great “connection” to be had there:

If you make all your information and job history public. Have you not just made available to everyone including the not so upstanding side of recruiters (aka: sleazy) access to all your info as to job search you?

In other words; to scrape your data off the site (or pay for it) and submit it to hundreds or even thousands of companies in hope of a hit without you even knowing or realizing it.

What happens in the event you get “that call” from one of these people saying: “Hey, we have an offer for you from XYZ inc. and you say great I’m interested! Only to get a call later that day from the actual XYZ inc. saying they saw your resume and would like to make you an offer. I’ll bet you just went: “Huh?” Which is exactly my point.

Guess what… You have a problem. Possibly legally, monetarily, or both with the added benefit of losing the offer all together because XYZ wants no part of this dilemma. (say lawyer or legal issue to a company and watch how fast they lose your number)

You see even though you didn’t give any recruiter permission to shop you exclusively your info is out there – publicly. There’s nothing but possible profit to be made if “they” get someone to bite. You may think: “So what, I’ll take the offer” that’s their problem about getting paid. Oh contraire.

Maybe you won’t pay but, sometimes it’s not about you. You might not but that doesn’t mean they won’t pursue payment from the employer through the courts. To them it’s a lottery ticket. To you – it might be your livelihood.

How do you think XYZ inc. will respond to Sleazeball Recruiters calling them for payment? Or worse, threatening court action if they feel they’re getting brushed off? Maybe they’ll call after you get hired and you luck out. Maybe – it’ll be before and you never get called back. Then what:
“Hello, Hi: is my cousin Vinny there?

This hasn’t become an issue currently. However, that doesn’t mean it can’t or wont.

For the average person the stakes might seem worth it. You’re a needle in a haystack for someone (or sleaze ball) trying to keep track as to if they can lay claim they had anything to do with you getting hired somewhere. However for the high 6 figure executive? Well now – the stakes change here don’t they?

One must assume this crowd will be monitored a little more closely as sleaze ball’s love to watch bigger stake races. And, if all of a sudden such controversy erupts; what happens to all the current users of LinkedIn if overnight its realized posting there could hinder rather than enhance a possible job?

Not saying it could or would. However, to not think of such possibilities ever playing out and there implications, let alone the speed at which they could take place – is incomprehensible in my way of thinking for entrepreneurs that are serious in today’s marketplace.

Let’s look at few more questions or points:

In today’s environment; the more people who are out of work – the more people will post there. So what happens if the job market turns around and things get better? Does the site gain or lose users?

What happens if just ONE headline story as I described hits the media headlines? You think its a back page story? Or – a headline above the fold, juicy tale of woe to help already eyeball starved media outlets attract readers? Then what happens?

Here’s something I know first hand from real people. Every single entrepreneur or business owner I know has either never visited the site again after signing up. Or, stopped responding to invitations of linking because; not one of these ever resulted in a worth while business opportunity. Ever!

I know some that have posted directly onto their info the equivalent of “No collaboration offers need apply.” Because that’s all they’ve ever received. Offers of collaboration that resemble offers more in line with letters from a Nigerian Prince. When they ask me what I did with my account and I say: “I deleted it.” the most common response I get is: “Yeah, I think I’ll do the same next time I remember.”

Only for not remembering is their info still there. Remember, I’m speaking here about entrepreneurs. Not job seeking hopefuls.

Far too many I feel use it in hopes they’ll hit the lottery.
The true entrepreneur hopes they’re not the winning ticket.

Here’s a link I feel is a credible source on this topic and might give more context to my argument. (Ask The Headhunter® Nick Corcodilos)

Although we come at this from different angles, its his insights that makes one view the possibilities in lights we may not have thought of at first glance. And as entrepreneurs sometimes we don’t have the luxury of a second chance or look.

We need to make sure our lenses are as focused or as clean as possible so we can see opportunity – or trouble – before others.

© 2013 Mark St.Cyr

A Very Touchy Subject – final entry

To say everything is changing at breakneck speed would be an understatement. Not only have the products, their cycles, finance, markets, fads, heroes, and more changed. It’s also the driving forces behind them that has also changed.

For some of us what we might think (or once thought) were drivers have been replaced almost as quick as the changes in the products themselves. And that is the reason why I truly started down this path with p–n being my first example. Just the mention of the word gets the attention of many. (or most)

Being an entrepreneur of any stripe whether you own your business or just working and living through the vantage of an entrepreneurial mindset. One thing is certain: You just can’t look at the world of business or its drivers through the same lens as the masses. It’s inherent upon you to not only envision what’s moving or pushing a market. It’s just as important to what will sustain a market. Any market. Buttressed with; is what everyone thinks is “the market” actually “the market?”

The vast majority of people (or consumers) believe they have a pretty good handle on what is driving any product or service at any moment in its cycle. Primarily it revolves around the notion that “they” are the driver. Anyone serious about understanding markets (all markets) knows the last person who understands what’s driving a market is the very customer themselves. That’s why people like Steve Jobs stood out as a visionary. They understand this at the gut level.

They’ll assume this, that, or the other thing when in effect it’s only on par with grasping at straws. However, the very reason this understanding is so important is this: “They” are nearly every single person you’ll ever meet, hang out with, work for, or marry.

Remembering that its solely up to you to look for answers even in the least likely of places is again imperative for any entrepreneur.

So why is this topic so damned important? Well here’s a few last points to ponder that hopefully rounds this all out.

In part one I opened the discussion up about Google® and the implications of its new policy concerning p–n. And why does this matter? What’s the driver? Is it a preemptive change for fear of future government edicts? Censorship? Or could the rationality be a marketing ploy as to out maneuver Apple® in its dominant stance against p–n. And why would something like that even matter?

I’m using Apple as an example only because it entails so much of what I’m trying to express. (Not because I believe or want the examples pursued)

Forget Apples stock price. For all intents and purposes Apples last quarter results were not amazing. They were staggering. However for this discussion I want to zoom in on just 2 things that far too many gave not a hint of interest.

Remember that foolish product met with snickers? The Mini™. Well it sold so well they couldn’t produce enough to satisfy orders. You would think they would take a lesson from Microsoft and produce enough – but not sell enough to even create a buzz. Let alone be witness to one actually being used by someone in real life. Except for product placement on television; I have yet to witness someone using one as of this writing.

Another amazing factoid is the blowout sales numbers of the iPad (another product met with snickers) and those very sales were dominated by people 50+. You know what the over 50+ crowd does that the under 45 crowd rarely does? They BUY things.

Yes, they actually purchase rather than looking high, low, or anywhere else as a way to get it for free. So if you think Apple; you think of people who spend actual money. If you think Google; you think people who want it free first – if not free only. And there lies the crux.

Sure Google has search and yes they have the Android®. However, unless you’re Google or Android versed; navigating is not only laborious – its pathetic. (sorry not trying to be insulting I’m just stating my opinion as a former everything PC user) You feel like you need to be a computer programmer to use it properly.

Personally I was a PC person all my adult life. Both in personal use as well as business and could navigate issues pretty well when they occurred. (which was far too often) So when my mother-in law asked me to help her with what seemed as a simple issue she was having on her Android phone I said “sure no problem.”

What a freaking headache I acquired. In the end she needed to go to the store where she purchased it as to get the settings to work properly. (It was with her mail – I mean – MAIL!) Neither of us could figure out what or why it wouldn’t sync properly. This is not supposed to be rocket science. All she kept asking my wife was: “Did you have this issue with your Apple?” Her answer: “No.” You could feel her frustration knowing she couldn’t use her new gizmo. (Her younger son recommended it over my suggestion. Oh well…)

So, if iPads are shaping up to be the dominant PC replacement for the 50+ segment. And, this segment not only has more money to spend – and a willingness to spend it. What changes if any could possibly transform a market in ways we may not be aware of currently? Could television alone move beyond what we now know into something far different?  (not withstanding the breathless anticipation of “analysts” hopes and dreams for anything Apple into this marketplace)

Remember, this segment has more money – there’s more of them – and, they are willing to PAY for something if it’s something they want. If you think I’m using hyperbole here just look at what is being heralded as a coup in the television marketplace with Amazon® acquiring the rights to the current blockbuster television series Downton Abbey. Welcome valued – I mean “Prime™” customers!

They also know what they don’t want. They don’t want p–n being thrown in their faces when they’re not expecting it. And Apple has kept a vigilant stance from allowing it to seep into its ecosystem. (Here’s a link to an article on Pandodaily™ by Nathaniel Mott for some context)

So here’s a market changing mother of an impact statement any entrepreneur should always have ready to ask and answer if they’re serious about business:

  • You want one customer that will spend $100 a year with you? Or 1000 that wont part with a nickel and will leave you even quicker if you dare charge even a penny for what ever your offering is?

That question alone is not only worth contemplating; it’s the only question that will matter in the coming future.

Yes Google has search, but here’s what I say: So what?

They are the dominant player currently however, you don’t need to buy – go out and rent, purchase, or anything to replace it. If Google said tomorrow we’re turning off our servers or, going to now charge some form of an access fee (this is a thought experiment so save the emails saying they couldn’t) what would you do?

Oh yeah; click on Bing®.

I hope you’re starting to see my point. And, if it’s that easy for something so profound as what Google did to the Yellow Pages® in such short order. Why couldn’t a shift of millions upon millions of users find Google itself irrelevant because on their iPad, as their using it to control their TV’s; Bing comes up first? Not Google. Just think about that for a few moments along with all its possible implications down the chain. We’re not talking anything small here.

Does it matter anymore what engine you’re using? Oh, and by the way – doesn’t Microsoft® have more of a ventured stake in Apple than it does with anything Google? Again, what happens if Microsoft implements more Apple into its user face of products and services rather than trying to fix the now shaky (or possible disaster) Surface®? If Microsoft is using its excess reserves in ways to create revenue other than in-house development. (They’re acting as a bank in the Dell® going private deal.) Who’s to say they don’t deploy other monies in concert with Apple as to acquire other markets unknown or unforeseen in ways we look at today?

Could Google end up in the end only being a verb of its former self? Again – who knows, but one has to think about implications that the masses don’t. Remember, iPad’s are still selling by the MILLIONS and to whom is the dominant buyer?

That’s why I started this conversation. That’s what an entrepreneur does. To paraphrase Wayne Gretzky: “It’s anticipating where the puck will go – not just where it is.”

© 2013 Mark St.Cyr

A Very Touchy Subject (part 2)

I must assume some of you at first blush wondered why in the world I would even touch upon such a topic. It’s a fair question.

The reason is more times than not we believe one thing is driving a market. Yet, we find the actual drivers aren’t anything we first considered. Remember when a cellphone was the newest and greatest device known to man before it was replaced with a smart phone?

Think back to all those great features we enjoyed while continually adding more at a near breathtaking pace. You, me, and a lot of others believed those updates or added features were caused by our demand or, our ability to influence the market of cellphones. After all it’s all about us. Right? Wrong…

Back in the days of olde at around the late 90’s early 2000’s (to some that’s equivalent to the time of Gutenberg) cellphone models were constantly updated, improved, and at a far more breakneck pace and offerings than iPhone® is accused of today.

However, all those features, models, or updates were not caused by what most thought. (namely ourselves) The market was dominated by the demands of Japanese teenage girls. (Here’s an older article to give some context.)

That’s correct. As you were using the modern phenom of business efficiency with all it’s great models, features and more. The primary reason why it was equipped with, had a certain look or feel, and it’s user interface was set up by the direct influence from this market demographic . They were the drivers – not us. (us being a relative term)

Consequently if they didn’t need or want a certain feature. We weren’t getting it. Regardless if we needed or wanted it. Again, they were the market – not us.

As we all know teenagers are all about style, fads, coolness, what-ever. Although, what they were all about to the cellphone industry at the time was – Dollars and Cents.

If Ma, Dad, Mr. or Mrs. Business buy only 1 cellphone every year or so, you are not even considered market worthy when compared to a teenager with teenage angst. Especially if that angst compels them to want (and buy) the latest model to be in the “me too” club. Never mind how many they’ll need to buy just to replace the lost or damaged ones. (Adults treat these items like they cost money. Need I say more?)

Changes in business today not only spin on a dime but, it can change for reasons we believe we know (or think we do) and in hindsight can be shown more often than not we were completely unaware of the true reasons or impact of the drivers.

Ponder this for a moment: If the business world dominates what technology or platform we will use – especially for business. Why then did a product like Apple’s iPhone® not only take the mass market by storm – it basically made the only dominant player Blackberry® (who?) irrelevant?
iPhone was laughed at by the business world as being an enterprise player. Today, it’s the other way around.

All this market shift, change of platforms, change of leaders, change of everything we have come to know as the “world of a cellphone” happened in less than 5 years. iPhone was first released in June 2007. Most never seen or had one till frankly quite later. Now, frankly they don’t know a world without it. I say again – 5 years!

Now, even though the above resembles change at the speed of light let’s put into perspective this change when we remember a very important, and critical factor:  You need to actually go out (or order online) an actual phone.

How much faster with the possibly of far more impact can happen when you take the critical element of needing an actual physical product to foster such change? That’s an important question that you might want to re-read.

Newspapers laughed when CareerBuilder® or Monster® started vying for job postings. After all (they told themselves) who’s going to look on-line for a job in their own backyard? And regardless they’re about selling news. Besides, they always have the classified ads. What are people going to do, sell their belongings online?

Yep, and you can now buy “like new” printing presses cheap on Ebay® I’m told. (I don’t think they’re selling all that well – there seems to be no demand.)

Just how fast did you change from looking up a number or address in something called “The Yellow Pages®?” Can you even remember when you no longer even looked?  You just Google® it now don’t you?

Do you even keep those books they leave on your doorstep any longer? Or do they go directly to the recycle bin? For most it’s the latter. Again, that is decades of business practice and more – gone!

How about a few more? DVD’s, VCR’s, CD’s, all now – irrelevant.

I could go on however, there is a common thread here. All of these were as I said earlier – an actual physical product.

All this change – all this disruption – all at break neck speed – all changed, and took place by what seemed like very minor disruptions to dominant leaders at first. Yet, was exactly what led to their demise.

For some their demise revolved around their contention that the affected portion was only a small part of their business model. Only to find out it wasn’t “small.” It was their business model.

Newspapers, books, and others fall into this category. For others it’s “This is the best technology has to offer because that’s what we think.” Only to find out things like getting rid of the keyboard and replacing it with a screen – or getting rid of disk altogether and streaming was the better technology.

And even if it isn’t. It doesn’t matter. If that’s what the customer now wants and buys. That’s the best. Period.

Recovery for most is near futile once it takes place. Which make it all the more important to be alert for these seemingly subtle changes in the first place. Because the end result can be anything but subtle.

I’ll finish this up with one more column forthcoming.

© 2013 Mark St.Cyr