During challenging times we sometimes wish (even beg) for just one sale to come along where it seems it’s not like “pulling teeth” to get an agreement that turns into a sale. We get questioned deeply on our pricing structures, bonus programs, shipping incentives, hours of operation, etc. Then, just when it seems you’ve spent 25 continuous hours across from a potential client answering questions that would make a CIA operative jealous. There’s still more to go. However, be careful what you wish for.
Case Study: Years back I was out pounding the pavement during an extremely volatile time for businesses of all stripes. (It was the savings and loans crisis of the 80’s) It seemed no matter who you called on, the sales process was grueling. Like anyone else I wished (and probably begged) for just one easy sale to break up the relentless door slamming or indignant “not interested” that seemed never-ending, day after day. Then it seemed I received my wish.
I called on a new prospect and was received as if I was some long-lost relative. The owner made time right then and there to listen to my offerings, and more. Then after answering some ancillary questions she said, “Why don’t we place a sample order as to see how well things go and we’ll discuss the possibilities of more after that.” Inside I said to my self, “Finally!” And proceeded with all the details.
The order was by all accounts a substantial one and like a peacock strutting new feathers I strolled back into my office and handed the owner the order for review. (The owner back then reviewed all new business before allowed into the system.)
After reading the order up and down and murmuring some words to himself, he looked up at me, took the order – and proceeded to rip it in half. I stood there dumb founded.
Then he went on to tell me the person I had met he knew of very well. Seems that this was her M.O. She would take advantage of any unsuspecting salesperson or company to place orders with, then would drag them out for payment right to the precipice of legal action. Unknowingly I had been no more than a fly wandering into a very skilled spiders web.
The owner said there was no way I would have known and it had nothing to do with me. He expressed that he was appreciative that I was out there hitting the pavement anywhere, and everywhere as a good salespeople should. Then he said something I never forgot… “You’ll never forget this the rest of your career, and from here on in you’ll never wish for the easy sale. For when it ever happens again – you’ll question it first. Which will save your bank account as well as the company’s.”
He was absolutely correct and I’ve been grateful to have learned it so early in my career. So always remember, be careful what you wish for, because – you just might get it.
Profiting At The Bottom Line™ is a monthly memo, which is pithy, powerful, and to the point. It focuses on innovative techniques and or ideas that you can put to work immediately in your daily or business life.
When I first wrote on the subject of subscription everything along with how this fits in with the decision of net neutrality or, how this changes everything. Many were quick to say my thoughts were probably more bordering on hyperbole other than what’s probably to evolve. With that I would like to show you a headline and story that was reported by the Wall Street Journal over the weekend, To wit:
Netflix to Pay Comcast for Smoother Streaming
Deal Ends Standoff, Might Serve as Precedent for Relations With Other Broadband Suppliers
By Shalini Ramachandran
For those who may not have seen my previous thoughts, here are a few excerpts from:
More on The Subject Of Net Neutrality And What It Might Mean To You: (full article here)
“In my post: The Next Segment Of Luxury – Subscription Everything (You can read the full article here) I made the argument that everything as far as the way the web now works, and or is made to work in the future changes. And not a subtle change either. Everything as far as pricing, availability, delivery, and more – changes or, can change. Period.”
“Well, the ruling is now – law. And that law does one thing different from any laws previous. It gives the cable providers dominion over their pricing models via URL’s access/speed . And that is a game changer.”
“Suddenly, the web that was putting cable operators into the back seat has found that quite possibly this new law hasn’t just allowed them to ride shotgun. Rather, has put them into a brand new vehicle they control with a shotgun!”
Far from hyperbole now, and game changing far faster than anyone else thought – or dared say publicly.
However, that’s not all that changed, and this one goes straight to my other observations that, again, people were quick to tell me my I was way off base because, “This time it’s different!” So I say again, to wit:
Google® just like Facebook® purchased this past Friday a little known company to those outside of silicon valley. Yet, this company along with what they provide as a service to advertisers is not only detrimental to their ad sales narrative, I believe just like of the Facebook acquisition, must be purchased at any cost for fear the narrative gets away from them.
Again – for those who might have missed my thoughts on the Facebook purchase of WhatsApp™ in my article:
What’s Up With Facebook? Here are a few excerpts: (full article here)
“Why is this such an issue or Achilles’s heel for the media space in general? In my view: It’s the key that can open the door letting in the unwanted wind that can knock down a very carefully built house of cards. The idea that ad revenues are the end all, save all, “Ace in the hole” will leave many an investor shaking their head when they find that card might not be a wild card – but a Joker.”
“What’s being brought to light more, and more about the whole “user growth” issue is what is a “user?” It seems more, and more that “user growth” can be found to mean, “click farm growth.” And that my friends is a very, very, very, (did I say very?) real issue to a publicly traded company if that story finds greater traction.”
So whom or what did exactly Google buy? Well none other than a company that by all accounts was the leading company of the tech world in verifying the absolute fraud and abuse in the very narrative that needs to be protected at all costs – The click farm. For the more traction this story gets (and its data reviewed and verified by advertisers) the greater the threat to any public companies market capitalization via their stock pricing.
So that company? Spider.io is their name, and I’ll bet unless you are an absolute technical expert – you have no idea who or what they are. For those who want to know more here is a link to a video they put out recently about how display advertisers were being defrauded. (Link to video here. If this stays up for long, I will be astonished)
It was published on Dec. 5th of 2013 and so far as of this posting has well under 1000 hits. Yet. I’ve read in some tech circles where this is being heralded as a move of great faith that Google is getting their house in order; as to get more of a handle on the click farm phenom and better protect clients. That may be so however, it can also be just as I expressed in my earlier articles: Buying this company might be more about purchasing the narrative and protecting it more for Google itself because; the ramifications are absolutely stunning and large if this gains traction in a market based on ad revenues fueling bottom lines. Both in the present as well as the future.
As I’ve said before, the changes to an entrepreneur and their business plans or models can change near instantaneously moving forward. Anyone who thinks what was today will be tomorrow as this whole meme of “the internet of things” gains more and more traction is kidding themselves.
Think it’s hyperbole still?
Netflix® is just the first to find out and pay up, And it’s not even been 90 days since the law passed. Think they’ll be the last? Think you’re not next? I would ask you to think again because as an entrepreneur….
It’s imperative to think of the possibilities, not an option.
I’d like to take this opportunity as to express in some other examples why I take such umbrage with so much I see across the web involving the whole social media space, and why I think it’s important to you.
I both see, as well as talk to a great many whom are not only putting the cart before the horse, but think this is perfectly fine because they’ve been convinced by others their horse – is actually a unicorn. It’s one thing to put one in front of the other, but when you start believing in mythical creatures to back up your business plans. You’re going to run into some real issues is all I can say.
The problem here has been the substitution of real business practices, (i.e., making real actual legal tender accepted by a bank as a deposit) glossed over for the proverbial “snake oil” by far too many, Many, that at first blush appeared authentic, but as time has moved on, appear more and more to look like nothing more than shills.
Let me add this for some clarification before I go any further. I’m stating here, some – not all. There are a few (although that number is very small) that truly are authentic, and genius as to their insights of the social media space. But tragically that number is far too few in my opinion.
The issue therefore is how many wide-eyed entrepreneurs buy the proverbial “snake oil” then realize once they’ve been, “had.” Never give the very people who can help them with their challenges a second look. e.g., Just look at the motivational speaker industry as one example.
If you think I’m just trying to express some form of made up outrage as to stand on a soapbox, let me illustrate using the following…
Just recently, I personally was left slack-jawed when I was perusing the web and found one of the so-called social media space “guru’s” website. As I looked I noticed he was critiquing others sites or their presence on the web, both naming names, and posting critiques publicly.
Maybe they asked for his view, maybe they didn’t, either way it had all the appearances to a casual passer-by this was him just “doing his thing.” However, that isn’t the half of it.
As I read further I was stuck that he had a video posted that supposedly was him ranting on why one’s feelings of apprehension on identity issues across the web were wasted thoughts. And, why he doesn’t care and is the reason why “he’s winning.”
Fair enough, only one problem. That video when clicked on has been made “unavailable” and is a blank hole. Also, it had been that way for over a month! I guess the privacy of that video was more private than we were led to believe. But I digress.
Honestly doesn’t it beg the question: If you are a social media guru, along with a self-proclaimed critic/criticizer of others web presence and more. Along with writing books, and charging hefty fees as to instruct others what they should be doing. How in the world can one allow something as obviously damning to one’s own word or ideas stay up for not days, but weeks bordering months? Unless it really is all – do as I say, not as I do. Which is deplorable in my view.
Now you might be saying, Well maybe that was a bad time or he didn’t notice it because he was busy, etc., etc. I would agree with you if it had been a day or even a week. But- week, after week, after week? Sorry, not if you’re claiming people should listen to you and follow your lead. Along with charging them. However, there’s more to this that backs up what I’m trying to express.
This same person also was conducting an online class at a very well-known seminar site where, if people were to sign up and pay for the class, they would receive a free copy of his new book that was just released.
Again, I was left wide-eyed when there on the front page that advertised the class were listed the comments of people who had already both paid and/or taken it. Comments to the effect were (I’m paraphrasing) “Where’s my book? Weeks have gone by and the best answer I can get is a ,”Sigh, we’ll check into it.” from the XXXXXXXXXX customer service? It’s been weeks, and still nothing! If this is what it is – I want a refund!”
The above was the tenor or tone of a few of these comments. Again, smack dad front page for all to see and, these have been up for far more than weeks.
The issue? There they were – with NO response or contradiction from either the seminar site nor the author. Maybe there was a response to these on the authors own site? Nope – nothing. Zip, zero – nada.
Here’s my beef with all this. If this had happened to me I would be outraged. First off, if my people allowed anything as such to be to sitting on my own website for weeks that was anathema to everything I profess – heads would roll – and they would roll publicly, right on my site.
Also, there is no way I would allow a third-party site to allow comments that scorned me for not doing something that should have been taken care of either by them – or me. If they were allowed to stay there, only one thing can be summarized. Nothing has been done by either. Period.
If the vendor messed up and didn’t fulfill their obligation you could rest assure at the very least, there would be a message on my own site front, and center to anyone that didn’t receive X or Y to contact me directly for fulfillment of my promise.
Then I would threaten the seminar site itself with legal action if they did not either make whole those who had issues, or take down the site and give me the names as so I could make them whole myself, for they would be purposefully inflicting harm on my good name if they continued to leave such things up making me to look bad for their incompetence. I – would not have any of it.
I would do all the above and more, even if it cost me money. Unless – I really didn’t care for the whole thing reeks of “snake oil” as in – do as I say, not as I do.
I mean honestly ask yourself truthfully: This is the practice or examples one should expect from an “expert?” Hardly, in my view.
I guess all that really matters is – “How’s the book sales going?” And that’s where I take issue with a great many of these social media shills. For I have said over, and over again, “The only one’s making money in social media – are those charging you for their advice on social media.”
For what it’s worth this is far from an isolated indecent. The web is littered with these types of examples.
Again the problem for me is when many unsuspecting entrepreneurs hopes and wishes turn into disillusionment when trying to emulate or put into practice the advice many of these so-called “guru’s” profess.
For its nothing but wasted time and/or money when the “experts” are saying one thing – and doing another. And that leads many well-intentioned, hard-working, newly minted entrepreneurs, or people with the entrepreneurial spirit disheartened. Which I find reprehensible.
Entrepreneurship is hard enough without trying to weed through the myriad of so-called “experts” telling them they should do one thing, while all the same not drinking their own “tonic.”
Today, one needs to be literally living under a rock to have not heard about the Facebook® acquisition of WhatsApp™. Everywhere across the media spectrum heads are being scratched on why Facebook would spend (wait for it……) $19 BILLION dollars in total for a company that most anyone outside of silicon valley never even heard of.
Is this a move of brilliance and foresight, or, is there something else? I believe it’s a little bit of both along with the following caveat: Not all brilliance, is brilliant.
Let’s first put a few things into perspective. Today, there is a meme throughout the tech world (especially silicon valley) that a Billion dollars is pittance to pay for an idea. Yes, that idea may actually be in the physical world as in a working company or product, but (and its a very big but) until an idea generates a profit (as in actual legal tender that banks will take as a deposit) it’s basically still just an idea. However, “ideas” in today’s world are chump change. And change for chumps seems to start at around the billion dollar threshold.
What’s so glaringly obvious on this current move by Facebook and why, to me is this: More than a sheer move and acquisition of brilliance, it seems more as an act of the brilliant, willing to throw billions out the window in desperation. Yes I said it – “desperation.” Let me elaborate.
It wasn’t all that long ago when everyone heralded the latest and greatest songbird of the social media coal mine; Twitter™. With great fanfare and more we watched its IPO (initial public offering) take to the skies well above its opening price.
Again the songbird was chirping like many before it with a vibrato in its tone sounding hauntingly familiar to many who “bird watch.” To my ear, the call of; “It’s different this time!” sounded much like the other canaries that came before it. Then a strange thing happened that hadn’t happened before – they had to report publicly, numbers that all these early investors needed to hear so that they too would rejoice in song. Only those numbers were nothing to sing about. As a matter of fact they probably wished they needn’t be spoken at all. That number? User growth.
What followed next was exactly what happens when new world meets the old world. When “free money” (as in Federal Reserve quantitative easing programs aka QE) is no longer as free-flowing as just 6 months earlier. The first sign of disappointment causes knee jerk reactions. Hence Twitter’s immediate stock price pummeling by the market. Welcome to the real world is all I can say here.
Once you go public, that sweet song everyone listened to had better be just as sweet at earnings time or – you’ll be singing a new tune. Yet this is far from the only worries the whole social media genre has working against it in my opinion. There’s something far more troubling and needs to be curtailed or this whole ruse of “social everything” falls apart. The issue? It’s all smoke and mirrors.
Now first off let me state this clearly as to not get everyone riled up in a tizzy as if I just insulted someone’s mother: The idea, infrastructure, ability, and the whole phenom itself that is all wrapped up in this thing known as “social media” I believe is both genius, and exploitable. (exploitable meaning creating sustainable commerce or businesses)
And – the very people behind the companies formulating better, and far more superior ways of connection and interaction on a near daily basis is absolutely amazing and commendable. I’m speaking directly at the business side where money is to be made, profits to be dispersed, and general business models that are sustainable entities performing in and around the public markets. That is what I’m addressing, nothing more.
So with that out-of-the-way let’s get back to the whole user growth issue. Why is this such an issue or Achilles’s heel for the media space in general? In my view: It’s the key that can open the door letting in the unwanted wind that can knock down a very carefully built house of cards. The idea that ad revenues are the end all, save all, “Ace in the hole” will leave many an investor shaking their head when they find that card might not be a wild card – but a Joker.
What’s being brought to light more, and more about the whole “user growth” issue is what is a “user?” It seems more, and more that “user growth” can be found to mean, “click farm growth.” And that my friends is a very, very, very, (did I say very?) real issue to a publicly traded company if that story finds greater traction.
One of the stunning details to my ear when I listened to parts of Twitter’s investor report was the size of its user base outside the U.S. It wasn’t a mere percentage number, it was an exponential number as in over 2 to 1 or, more than 2/3’rds of all its users. You might say, So what! That’s great news meaning the world is using their service and will be growing it even more once the U.S. catches up. Ah yes, but I would like to through the proverbial cold water on that with just this fact: Nearly if not ALL the click farms are located outside the U.S,. and guess what these click farms do? For a price (a very cheap price I might add) they’ll give you thousands, if not millions of the very product these companies need as “product” to sell advertisers: Followers, Likes, and Users.
So prevalent is this now becoming I give it no more than another year (if that) before it’s reported en masse across old school main stream media. And that is another big problem for all these current Wall Street darlings. Why? Well…when you finally have something to throw back at the very advertisers that shunned you in place of the new kids on the block that crushed their business model, do you not think they’ll return the favor in spades?
Let me give you just a few examples that have come to light recently.
First, you can go on to any search engine you choose and type: “Buy likes followers” and you’ll get a myriad of places to shop to look just like that celebrity you want to emulate. All, at discount prices. And if you think others aren’t on to this let me share with you a great video as to explain this very subject. It was made this month by an outfit named Veritsium and is only 9 minutes long. (You can view it here) For anyone that’s just the slightest unsure of what I’m proposing here, this is a must see as to put it in real world context quickly. Along with understanding why my thesis on this subject is making calls of what some might see as preposterous. Personally, I believe I’m being more prescient than preposterous, but only time will tell.
Which now brings us me back to the prior subject. Facebook buying WhatsApp for $19 Billion dollars. What’s up with all this? Well… I just read a 2 part wonderfully argued piece by Sarah Lacy the editor of Pandodaily™. In her article she bases her insights around 3 words, “follow the photos.” (you can read the full article here) I absolutely agree with her insights however, I would add 3 more that mirror them: Follow The User. As in, being able to justify with smoke and mirrors if need be they are actually “users.” For if that get’s questioned with any real rigor – all bets are off for these darlings of Wall Street in my view.
So one might be asking; “Just what do you mean or implying by that?” Easy…
If user growth or monikers such as followers, likes, and such are the product you need to sell advertisers so they’ll spend their money with you rather than some other media outlet. If the user generation, user origin or more begins to become more of a hurdle to defend rather than an asset to entice. Then a smart company would do what’s needed to be done if they were both bold enough – and rich enough…
Buy the threatening potential revenue killing narrative at any cost before there may be no more money to do it.
Think of it this way (or as to understand how I view this whole deal) WhatsApp is being reported to have more than 350 million active users. And here’s the key – all outside the U.S. or for lack of a better term, in emerging countries.
And why is that so important in my view? Well if I was in charge of sales at FB I now have the perfect insulation or inoculation from the virus of “click farm user growth.” Now when one looks at my user base all those emerging countries (you know, the ones that have the high amounts of active click farms) suddenly disappear beneath my overlay of real user based on the folded user acquisition of WhatsApp.
You think that narrative at a sales presentation or earnings announcement isn’t worth $19 Billion? I would suggest you think again.
Let me put it into a visual to make my point. First is a price chart of Twitter and their stock valuation. Look at the drop when they announced their earnings report and the reaction to that stocks valuation. For many it wasn’t a bad report however, for the speculative crowd or investor, that user growth figure was a key figure on whether to stay or go. And by the looks of it, not only did they go – they haven’t come back.
You think $19 Billion is expensive compared to what is at stake in market cap losses if such a premise and disillusionment to the meme of “social everything” is lost? I could be absolutely wrong (and a great many will gladly tell me how I am) But here’s what I’m not wrong about: Thinking that I may just possibly be right. And the reason for that is at least I’m thinking about the possibilities and implications. Rather than just allowing myself to be mesmerized by numbers that in the end could actually be worse than ever imagined.
Because they might have been imaginary to begin with.
Addendum: For those wondering why I’m making this argument, I use as exhibit A, another of these former Wall Street darlings that seemingly were the “brilliant of the brilliant” in their decision-making prowess. Remember when Groupon® turned down Google® for $6 Billion dollars? Well look at what happens when the market of today’s “new reality is the old reality” meets user growth problems or uncertainties. That 22% sell off? That is just this evening’s move. Not some trend of days, weeks, months, or years. Think this isn’t first and foremost on Mr. Zuckerberg’s mind, let alone everyone at Facebook itself? I would prod you to think again.
All of us at times during the decision-making process agonize over which choice is best. Problem is, more often than not, many over think what they should do running smack dab into analysis paralysis.
It’s one thing to be cautious and want to make the correct decision. However, when analysis of what decision to make leads to making no decision, then you need to do something different. Or, you’ll get caught in that vicious circle of beating yourself up knowing: You should be doing something – as you’re doing nothing.
If you’re waiting for the exact moment, the perfect circumstance, or more, chances are greater than a million to one they’ll never be as perfect as you dream they should be. However, there might be a, “just right” time, as opposed to perfect. Yet, if you approach decision-making from the prospective of you’ll only act on perfection, that perfect moment can go sailing by and quite possibly never to be seen again.
When you know a decision has to be made where that decision will call for a next step that will demand immediate action, don’t over think it. Use an evening, a weekend, or even a quick discussion over a beverage with a trusted adviser or friend. Weigh the options out for what’s the worst that can happen, then trust your gut – and move!
Trust in yourself that you’ll learn, acquire, or hire the necessary people or tools down the road as you make your way.
The real reason for contemplation or “think time” is not in the knowing of all the variables to every question or situation that can be contemplated during the decision process. The real reason for why you should need time to think it over is whether or not: You’re truly committed to seeing whatever the project or decision is to be made – through to completion. That is where the true decision lies.
All the rest are details to be filled in later. Your resolution as to keep your commitment to a decision sacrosanct is what needs to be thought about. Nothing else really matters after you think that one through and answer it honestly.
And with practice, most decisions can be made near instantaneously.
Remember:“If you wait for perfection before doing, then perfectly waiting is all you’ll do.”
It would seem my ideas or the possible implications about the upcoming (hypothetical) changes in the way the web is both used and/or allowed access, to or by service providers is becoming more prescient than I first envisioned.
Today it was announced that the cable giants Comcast™, and Time-Warner™ have plans to merge with Comcast buying the former for around $45 Billion or there about. One might look at such a merger through the same prism as earlier media giants joining, then basing their presumptions on why things will be better in the end for shareholders through “synergies.” Which we know from example after example never seem to materialize.
The landscape is littered with these types of mergers. Need I remind anyone that Time-Warner itself was once part of the AOL® family via such a scenario and how that went? However, this one just might be a little different, and more meaningful to everyone. (And I mean everyone. i.e., Content providers, web-sites, blogs, all the way through the chain.)
For years these providers (the broadband owners) for good or ill have been at the mercy in some ways by being responsible for the infrastructure and delivery vehicles or methods to the public at large, much like a utility company. Yet, unlike most utilities, the revamping or updating of the infrastructure used by the very companies (content providers) that both use, and at times, can tax the system with through-put to the end-user seemed as if the infrastructure wasn’t part (nor should be) of their concern.
More or less these providers acted or thought they had no monetary responsibility to pay extra for anything else in the way of user charges as to help cover these costs. After all, they were the “content” and if they didn’t have something customers wanted to see, then the cable companies wouldn’t need to improve or expand. (Yes I know this is a gross oversimplification or generalization but for this argument it makes it simpler to contemplate the bigger picture in my view.)
In some ways it’s a little, “chick or the egg” type scenario. i.e., If no content, why the need for cable? Butted up against the argument; if no cable who sees your content?
Although both have a responsibility to each other in the end for one is dependent on the other at this point in time. One thing has changed and becoming a little more than clear: With the change in the Net neutrality decision: The power of who, how much, when, or if, has gone from a neutral hand to the providers hand. i.e., The broadband infrastructure owners.
In my post: The Next Segment Of Luxury – Subscription Everything (You can read the full article here) I made the argument that everything as far as the way the web now works, and or is made to work in the future changes. And not a subtle change either. Everything as far as pricing, availability, delivery, and more – changes or, can change. Period.
Let me make more of my argument using just this one example…
If this merger is allowed to go forth. (There’s always congressional approval and other stumbling blocks that must be made in deals such as these.) The new combined entity will control 1/3rd of ALL U.S. households broadband cable service. Does one think with the new law passed which now gives them the authority to treat URL’s differently, or proportionately as they see fit any coincidence on why such a deal is made now?
Sure it’s been in the works for a bit, however, that is how these things work. If you get the favorable ruling you march forward, if not, you say, “Oh well” and move on. Well, the ruling is now – law. And that law does one thing different from any laws previous. It gives the cable providers dominion over their pricing models via URL’s access/speed . And that is a game changer.
In many ways content providers have had the edge. Now? This turns those tables. As I’ve stated before, think of it from this perspective: ESPN® wants all their new and fancy fantasy stats, video replay options, ability to watch multiple games in multiple picture in a picture capabilities, reports simulcast from other areas and more, all on one television screen or through a mobile device – live. (This is all hypothetical for this argument)
Last year ESPN could build all the backroom technology to do it, then just pump it out in a firehose type fashion to the cable operators and, let them be responsible to get it to the end-user. (That would be you or me) Today? The broadband providers can say: “Ummmm, Hey that sounds like some great stuff you want to do. But it’ll now cost you. And, as far as all the bandwidth you’re pushing at us currently? Ah, well, we need to sit down and maybe renegotiate our fee schedule.”
You can make this argument for Netflix®, Amazon Prime®, Roku®, Apple TV®, and the myriad of others. Suddenly, the web that was putting cable operators into the back seat has found that quite possibly this new law hasn’t just allowed them to ride shotgun. Rather, has put them into a brand new vehicle they control with a shotgun! As I said, this could be a change of dramatic consequence.
Another voice on this very topic is Mark Cuban. Recently he posted an article on his blog titled: App Neutrality Should be Part of the Net Neutrality Discussion Jan. 19, 2014 (You can read the entire post here)
I believe this is a topic that anyone who either aspires or takes entrepreneurship seriously should keep up to date on. For as many know. The web can more than empower a business when used effectively, however, in today’s rapidly changing regulatory environment – It can cripple the uninformed or naive entrepreneur just as quickly.
One needs to not only know what’s going on today, but where things may go tomorrow as to be ahead of your competitors to adjust properly or proportionately.
A funny thing happened to the financial markets since the new year. Suddenly, a great many unicorns are pulling up lame, and what about the rainbows they were paraded across you might ask? Well, they seem to have been painted with watercolors, for the reign of reality has shown they were far from anything naturally weatherproof. Let alone permanent.
The issue at hand isn’t something to gloat on, nor some version of, “See I told you so.” What must be made clear is for all the people who chuckled, sneered, brushed off, or anything else the warnings from people like myself, as well as others is this: The new reality is nothing more – than the old reality. And nothing brings on tears faster than reality.
Over the last 5 years the consummate “bear” or short side player in the financial markets has been used as a virtual piñata for the so-called “smart-crowd” paraded across the financial media landscape, along with a newly minted herd of indignant to reasoning “bulls.”
Over, and over, and over again. (did I say over?) Month after month, year after year, any type of weakness in the markets has been met with nothing but buying action. The markets have been up, up, and away on nothing more than a “free money” buying spree. Although the a fore mentioned “smart crowd” incessantly argued otherwise.
Fundamental analysis has been absolutely worthless. Most charting patterns or technical analysis (primarily in the main indexes or correlated ETF’s) has been near worthless on holding any positions overnight – unless one has been a bull. Nearly every technical setup of a bearish nature has been nullified within nearly 48hrs for years. Bullish setups might be more statistically favorable to positive resolutions. However, not at the rate they have been over the last few years. The statistical odds just don’t work that way. Unless – the game has been rigged.
The issue front and center is if one has allowed themselves into believing their success has been from skill rather than just the beneficiary of Lady Luck. For this is where Lady Luck can also show; she can be one mother of a heart-breaker to the uninformed. (let alone make a gold digger blush with an unrivaled swift and thoroughness as to empty one’s account.)
Statistically speaking the main indexes sported a sell off this past month which not only has been near nonexistent for years, but also rather uncommon in decades past. Many have pointed to these occurrences and are expressing “bullish” outcomes or resolutions. i.e., Far more upside to come. I however think something is far different this time.
I could be wrong, and many will point to the recent bounce as proof which has worked every-time since 2008. So why would this time be any different? I believe it’s different because of 2007 thru 2008. All those other times people were actually getting in, or back into the markets. Today, not only are they not in, at every chance they take more out to reduce exposure or increase their safety in cash. (I know cash is a relative term, just think, “bird in the hand vs two in the bush” for this argument.)
To back up my thesis I use the following article that was posted on ZeroHedge.com. (for full article click here)
Equity Funds Have Largest Weekly Outflow In Over Two Years
One may think the data irrelevant however, since the charts, amounts, and other data points are supplied than none other than Bank Of America®. It should at least be taken into account that something has changed. And not for the better in my view nor would it seem one of the worlds, “Too big to fail” protected banks.
Data like this isn’t something a financial adviser at one of these banks is going to whip out in a PowerPoint™ presentation to conclude why you should turn over your assets to them with confidence. Is it?
The real issue at hand here is as I said before: “The new reality is nothing more – than the old reality.” But what exactly do I mean by this. Well, its two-fold. First – Its beginning to once again look, sound, and a few other things exactly like when we were all supposed to take comfort in the financial media “smart-crowd” as they reassured us over, and over, and over again that there was; “Nothing to see here people. Please keep moving (or contributing to your 401K) Please!” Only to then be hit with one of the greatest financial shocks in modern-day history.
The second which I believe and have said on numerous occasions is far worse: “Nobody’s going to wait around if there’s even a chance of another hiccup. Let alone plunge.” The data above seems to support my first inkling. Whether I’m right or wrong remains to be seen. Although what has also changed this time from last time, is the reality of trusted voices who argued on the same side of the issues as myself and others, not only capitulated, but seemingly are crushing their integrity in the minds of many as they seemingly became “bullish.”
Hugh Hendry was the latest, and seems to have done it at the very worst of times. Just when he was about to be, quite possibly, proven correct. Only time will tell I guess. Yet, as I said in previous articles: “Capitulate doesn’t mean you then go and join the other side.” A side many great intellectuals and people I admire made great arguments and reasoning’s why thinking that way was a fool’s errand. To then have them say the equivalent of; “Well can’t beat them, might as well join them!” shines a duller light on the credibility side of the ledger after that in my view.
Since January the Federal Reserve (Fed.) has shocked (shocked!) the financial markets and players with doing precisely what they said wouldn’t happen: Cut or reduce QE. (quantitative easing) Not only did they do it by $10 Billion per month in reduction, but then followed that with another reduction matching the first for a total of $20 Billion dollars per month. What followed next? Immediately our financial markets sold off in a meaningful way not seen in years, followed by absolute chaos beginning to take shape in the emerging markets.
Remember when every financial media outlet was professing with writers and talking head guests that what the markets needed to go higher was for the Fed. to simply get out-of-the-way of the markets because; the underlying economy was picking up steam and was well sufficient in strength and more to take the reins from here? Ooopsy, is all I’ll say to that. It would seem not only has that tune changed, but the band that was on the wagon seems to have vanished also.
Now suddenly China’s shadow banking system is running amok. Liquidity that was fueling the economic boom in China is seemingly overnight turning into a drought. How can that be you ask? You thought (and were told ad nauseam) it was China’s GDP and more that was the cure to all our ails? Seems like they were more addicted to the Fed. than the “smart-crowd” let on. Well, there goes that scenario I guess. But the flip side of that scenario isn’t quite finished, and has probably more real teeth than the paper tiger many thought earlier.
As I stated in my earlier essays: The issues to watch for as to what happened here, was when we “broke the buck” in the money markets. That’s when all bets were off. The place to watch out this time that can ruin the day for everyone is – if it begins happening in China. Well guess what? Yep, it’s starting.
How far it goes is anyone’s guess, but if Argentina is showing us anything (Oh yes, another it seems reliant on our Fed. interventionist policies) as it’s going full tilt towards monetary pandemonium. Who knows what lays next for the others. I am shocked of how little media coverage any of this is getting. But then again, most news now falls into the; “We don’t want to upset the children now, do we?”
All I know is the following: Back in early 2007 I remember both reading, watching, and listening to the so-called “smart crowd” hem and haw about why there was nothing to be nervous about. 5%, 10%. even 20% corrections from lofty prices were healthy for markets. But when they started reasoning the 30%, 40%, and more were even “better” times to get back in to see the market drop another 20% days later was when I knew these people really had no clue of not only what to do, but what was actually transpiring.
I could be totally wrong (and I have been and willing to state it) but, (and its a very, very, big but) this time seems hauntingly similar to last time. And if that inkling proves correct. The crying has already begun behind closed doors.
And if true, just wait till they open those nursery doors fully. For that reality will be more than tears can bear.
If there’s one thing I’ve taken notice of more and more; it’s they way people now dress. I can not believe how some people (a great many I will add) are leaving their homes dressed in attire that can easily be referred to as bed wear, along with absolutely outrageously bold or cartoonist flair.
Trust me when I state this point: I’ve been called many things in my life, but no one has ever referred to me as a prude. I don’t care how people dress per se´(fashion is subjective of course) however, I’m speaking about people who walk their children through a busy mall where both the child as well as the parent are clearly wearing bed slippers. Or, the adult (If their 26 is that the correct terminology? But I digress.) where the ambient temperature outside is hovering at 0º or below, with a wind chill factor of about -20º wearing shorts, and a hoodie. At one time it was a rare event. Today, I see it daily.
My wife and I have been stunned to see (more than once!) women visibly beyond college age wearing in the winter months, when the temperature was below freezing, a bubble coat, earmuffs, scarf, jeans, gloves, and (wait for it….) beach tongs! This is no fashion statement. This is fashion idiocy plain and simple. (please save the emails)
When it comes to business attire I’m beginning to wonder if there is such a thing any longer. It’s one thing to not want to splurge for a designer suit or separates. It’s quite another to show up in a professional setting wearing a loudly printed plaid blazer paired with T-shirt, skinny styled Chino’s, and sneakers. Regardless if the labels are Ralph Lauren®, Hugo Boss®, Armani®, and Converse Chuck Taylor’s ®. Unless you’re a notable or known celebrity, actor, or rock star – you’re going to be taken as looking more like a circus clown no matter how many people told you, “But, it looks good on you.”
Another issue that seems to be entering the world of business fashion is the, “bed head” hair look. This look might go over well on the local night club or bar scene however, show up for an interview or serious business meeting sporting this look, and I’ll guarantee that look will keep you clearly where it was inspired from. Home, in bed, with nothing to do, along with nowhere to go.
And women? I’ll tread lightly here for I understand the wrath I can unleash would make the Kraken jealous. So all I’ll say here to this point is this: Heels can make a woman’s look. Heels and platforms that could be used as stilts to roofing contractors? As one of my favorite comedians would say, “Can we talk here?”
If a dress and shoes are so tight, and high, they don’t allow one to walk across a room without appearing to be animatronic or, on the verge of falling with every anticipating step. You’re thinking and dressing too much for Saturday night. Not business. Regardless of what anyone will say out loud, people will judge. Period.
If one thinks I’m picking on a subject matter that is irrelevant to today’s entrepreneurs I would ask that you think again.
Today, more and more, the stakes are growing ever higher to both hire talent, as well as sell your services to an increasingly nervous and risk avoiding customer base. Trendy, outspoken, hip, and the myriad of other fashion statements go hand in hand when times are good. When times become increasingly shaky in a clients eye, what they want first is reassurance in their decision-making processes.
People for better or worse make quick snap decisions via visual cues. Dressing for success doesn’t mean style and sensibility gets thrown out the proverbial window. Far from it. What does get amplified in challenging times is what people deem as “safe or trusted” appearances. I feel a growing trend will be away from the “casual Friday” or “anything goes look” in public or private, with a move back towards putting in place more, and more policies that seem to capture the theme of “distraction free” clothing policies.
Just remember as you’re dressing for success and taking the time to both work and appear as the professional you are. Most of your competition is not only unlikely to be dressing for success. They seem to be more aligned with not even getting out of bed in the first place.
Use the changing times and attitudes to your advantage. Your competition is more concerned with checking their “status” online instead of the business you’re making happen in the real world.
We’ve made noises about it before, but it’s now official. Mark’s next book titled: The Business Of I “Its Personal” is in actual production and due out late 2014. We believe this may be a pivotal book in both the entrepreneur as well as motivation genre. I’ll post more details and rewards for subscribers of the blog as time moves forward.
Below is the final approved front of the upcoming book.
So as always, please stay tuned. It’s going to be one of Mark’s most prolific years.