Category Archives: General

The Pursuit of Money is Ruining the Pursuit of Money

It’s been a while since I’ve blogged here. I’ve been immersing myself deeply in shoujo and josei manga (Japanese comics for young and older women), so I haven’t been taking time to maintain this blog. Outside of that, there hasn’t been much for me to ramble on about. Maybe you’ve noticed like I have that not much has changed in the past 5 years. Just in my own life I’ve noticed my husband and I are driving the same cars and don’t feel the need to get new ones, we are still driving our entertainment off the same two laptops, I’m still using an iPad 2, and both of our “newer” laptops are equivalent to the Blackbirds we had 5-years ago.  I feel this enormous sense of stagnancy, and quite frankly most everything bores the hell out of me. Okay, okay, there are three things that excite me: Manga, 3-D printing, and drones — specifically the prospect of food delivery using drones (I want the taco-copter yesterday).

It would be too easy to blame the economy and the government gridlock for this stagnation. The economy is a symptom of stagnancy rather than a cause from my point of view. Companies and very rich people are sitting on huge piles of cash rather than using that money to create things and employ people.  Money is power, yet as long as companies and rich people sit on that money, it’s reduced to worthless paper, and thus diminished in power. Somewhere along the line monied people have forgotten about this and instead believe hoarding cash has some kind of meaning. We are seeing the value of money challenged by the Bitcoin “Revolt” (and yes, this is a revolutionary movement, because let’s face it, paper is just as worthless as bits), the rise of bartering, and the Maker movement. People simply have no money to trade, so some of us have gone back to actually trading useful stuff; you know that thing called “doing BUSINESS”. Anyhow… keep sitting on that paper, companies and rich people. The world will move on with or without your money. The question is do you want use your power to shape the future or are you playing “he who has the most paper when they die wins”?  Nobody cares about that beyond where your money, and hence your power, goes after you die.  So you may as well spend it all now and make the world in your model.  This thought brings me great sadness because so many idiots have lots of money.

I think it’s safe to say the stock markets are no longer engines of innovation. People put money in the stock market for short term gain and not because they believe in the long term vision of a company. Company chase the stock price quarter to quarter and concentrate on the paper rather than on the products that they sale. Hence the endless pursuit as cutting back to profit, a line of thinking that makes absolutely no sense. In this paradigm, R&D is another expense to minimize rather than the engine of growth. Instead strategies like currency exchange become the engines of growth to get more currency — worthless paper chasing after worthless paper. Meanwhile companies find themselves 3 to 5 years later with no new products in the pipeline, a bunch of worthless MBA spouting nonsense about hockey-sticks, and no actual engineers to design new products because they were all laid off in the relentless pursuit of the bottom line.  Raise your hand if this describes the current state of your workplace? Is your company going broke? Is your company’s stock price in the toilet? When will CEOs realize this is not “business”. The company’s stock is not the company’s product and the stock market brokers and analysts are not your customers.  Seriously, what does it matter whether Wall Street likes your latest product? They aren’t the ones buying your product. Your CUSTOMERS are the ones buying your product. Ignore the whims of the stock market and get back to selling actual stuff and services to paying customers.  When business is doing well, meaning your company is selling lots of stuff and services for a profit, stock market adulation will come.  I imagine as long as executives and boards are paid with stock and when they bonuses are dependent on hitting stock market targets, their focus will be on the stock market rather than on products and the customer.  And because these folks make money whether the company is doing well or not, executives could care less. They’ll move on to the next company to drain on the way to the bottom, without it being acknowledged that these executives may actually be a very poor manager.  It’s a vicious cycle. I wonder when a group of execs will get together and decide that this compensation scheme is doing to great harm to society on the whole and change compensation to focus on customer satisfaction and true market growth — as in actual paying customers — and not the stock “market”?

Another harmful consequence of chasing the bottom line is severe risk aversion. Executives don’t want to try something new and revolutionary because they fear if it’s not a hit, they’ll be clobbered by the stock market. I wish I could say it had nothing to do with getting executive bonuses, but it is human nature to put oneself before all others and everything.  This seems silly considering how much money big companies are sitting on. I suppose not every company is like this. To Microsoft’s credit, they tried with The Surface and they are trying with the XBox One, but they totally misread the market and are getting clobbered by customers. Honestly that sounds like a bunch of their tech leadership is completely out of touch of with everyday people, and  is usually a problem caused by lack of diversity, siloed organizations, and corporate inbreeding (driven by ranking). But I digress… Anyhow… I look around and ask myself, with the exception of Google, why don’t I see a 3-D printer from major tech giants who have giant printing divisions (Uh HP, cough, cough, Canon, ahem….cough, cough…the remnants of Kodak… hack… ugh… Whoo! I don’t know what frog got caught in my throat). Of course, it’ll be over once Amazon builds an army of 3-D printers and delivery drones that let people get whatever they want overnight… >_>…. Sigh… Bezos wasn’t kidding about that alarm clock. Wake the hell up and quit chasing the iPad. The iPad is a commodity. Quit piling on that.  Instead, why don’t you rehire the Engineers you laid off, pay them fairly, and let them loose on creating new markets. And, no creating new markets is not what an MBA does.  Masters of Business Administration are Administrators. They administrate.

Ugh… okay, enough rambling for now and back to enjoy my manga.


In Response to R&D Productivity Metrics

It’s been 2-years since I thought about and responded to the question posed in this blog entry about R&D productivity metrics. The fundamental problem I had with the metrics is that they measured research and development productivity in terms of money in a forward looking manner.  I still maintain this is an easy way for decision makers to fool themselves into making silly decisions and leads to all sorts of  trouble when these prognostications get folded into the financial outlook a company feeds to Wall Street.

But what if we look at R&D in a way that’s more predictable for the nature of R&D, then maybe we can get a more straight forward answer about what R&D to invest in. I think research and development that has the potential to lead to more R&D and more products is the best kind of R&D.  In a way it’s an indirect way to look at money. Put another way, it would be better to do R&D that will lead to more R&D and that can be leveraged into a greater number of products than doing R&D that dead ends when the effort is completed.

Let’s go back for a little bit to think about why a company or a person might do research and development.

1.  A problem needs solving to enable a product

2.  A company wants to enter an existing market

3.  A company wants to create a new market

Problem solving on the fly is basically incidental R&D — a problem comes up, the problem gets solved and life goes on.

The next two reasons for doing R&D require some forethought.  Entering an existing market is difficult because in order to be successful you have to offer a product that is better than the existing products and you have to be able to see into the future to predict whether this market has life left in it.  For instance, I pity the companies that invested heavily in variable printing only to see things get suddenly flipped over by the Internet, e-readers, electronic displays, and the Sustainability Movement.  As for creating a new market, that’s even trickier.  In that case it’s R&D by dumb luck or your company employs some visionaries who can create a vision of the future that appeals to customers.  Dumb luck and visionaries who actually predict correctly are hard to come by.  I think, though, the thing that binds these two reason to do R&D is the need for excellent vintage charts.  And I don’t mean vintage charts with products that have more features as time go by.  What I mean are vintage charts that take technology development and connect them with the trajectory of the markets they are entering.  This of course means linking it to future customer needs and not necessarily some made up vision of the market in terms of dollars.  A good example of some good products that probably came from a good vintage charting are Apple’s iPod to iPod Touch to iPhone and Magic Mouse and eventually to iPad.  These all took the idea of “touch” and expanded it into a technology development that built upon itself to create a string of products with excellent sales.

In thinking about vintage charting, you have start with a vision of the ultimate product or products and then move backward to unlock what technology developments have to happen.  In that process, you can move forward and to the sides to see product adjacencies.  I think if you happen upon a base technology development effort that spawns a grand tree of potential products and other R&D efforts, then you’ve got yourself something to pursue.  Your initial R&D effort will be rewarded with a future filled with products and growth.

I think, though, such activities should be done with scientists, engineers, and marketing.  Too often vintage charts are left only to marketing or engineering managers alone in cones of isolation.  You need the scientists and engineers to isolate the fundamental technology development components and you need the marketing folks to provide insight about customers.  Most importantly, though, an organization needs to have people who can look at matters across engineering and marketing and also have a compelling vision of the future.  And no, I don’t mean a vision of 10% growth year over year until we’re huge.  That’s not a vision of the future.  Those are goals for Wall Street and such goals can only be met by money and financial math manipulation.  What I mean is a technology and product vision and perhaps a 20 – 40-year outlook on society (For example, in 20-years we will create a mechanical suit that will result in a super soldier, or in 10 years all forms of entertainment will be on-demand).  This is difficult in times when companies choose put themselves at the mercy of Wall Street.  However, at some point if a company truly wants to be successful, then they have to concentrate on making something real rather than running a scam to create money from nothing.  Also, in the end, strong sales and excitement about new products always pleases Wall Street…So…well…’nuff said, right? Now get out there and invent!

Could Things Be Perking Up?

Yep, it seems like things are perking up, at least locally in my world.  I see people returning to restaurants and there’s a lot to traffic around my local strip malls.  I’m also getting some activity job wise.  I don’t have a job yet, but at least I’m now getting some promising phone calls and e-mails from actual companies instead of hungry head hunters.

I’ve been discussing the matter of optimism with friends, family, and acquaintances and we all agree that if we believe things are getting better, then we will act like things are getting better.  If a whole bunch of people start to believe and act this way, then things will improve.  Basically, it’s a self fulfilling prophecy.  So let’s be optimistic!  At the same time we need to temper our optimism with reality and pragmatism.  I would hate to see ourselves in a spending frenzy that leads into another bubble-bust cycle.  I think, though, we as a people have learned a lot from the boom of the last 25 -30-years and the bust of the last 2-years.  The old saying “if it looks too good be true, it probably is” has been reinforced.  Also, I think sudden poverty has taught a bunch of us spoiled folks that we need to save and that we are not entitled to stuff and jobs by virtue of education and our parent’s middle class social and financial standing.  On the flip-side, I think we all woke up to the reality that middle class people are not “rich” and that we can become quite vulnerable within a day.    I think the gap in wealth and power between the middle class and wealthy was made very clear in the last year, and as such, has put a lot of middle-class people in their “place.”

I think this bust has brought back a powerful spirit of America and what it means to be “American.”   We aren’t islands onto ourselves and sometimes we have to share for the common good.  I must say, even though times are tough, the progress we are making to become better people, improve our country’s infrastructure, and be better world citizens makes me feel proud to be an American.  I am inspired by our perseverance and our inventiveness.  I do believe the US will rise out of the mess stronger, more benevolent, and more respected than it’s ever been and I look forward to the changes ahead in the next few decades.

DOW drops below 7000

So what I’ve suspected seems to be coming to pass. The past 20-years have mostly been hot air — people playing the stock market and trading houses like Pokemon. It’s only been recently that I’ve begun to pay attention to the economy and business matters and it shocks me how much of the US economy and the world economy in general is run off of debt trading. The problem has always been as companies and banks trade debt for increasing margin, no one ever questions who at the end of the chain actually has the tangible “money.” Of course this leads to the creation of the illusion of having money, but in reality it’s just that — air and a figment of everyone’s imagination. So in the end, we are left with that original bit of money that was first lent out and leveraged to 30x its value. We are seeing this now the stock market falls to late 80’s values as the air is let out of the balloon.

It also amazes me that the US could keep consuming despite the fact that we make less and less to actually trade. We traded the “US brand” in terms of debt notes for goods from countries like China. Hahaha! But it all falls apart as soon as somebody really wants their money. The world has come together to build this sand castle and we struggle against the rising tide to add more sand to the castle before the waves wash it away. And again I ask, what are we as the US going to give our debt owners when they want their money? And if we owe more than we have, then do we give the country over to debt holding nations in Asia and the Middle East. It’s a HUGE national security problem!

The way I see it, current government intervention is just drawing out the pain of an eventual collapse. I’m sorry but the gig is up! The illusion is broken! Granted the US has made great strides in IT and biotechnology and those assets should be worth something. But the rest of this BS nonsense — insurance to insure insurance and trade based on brand identity — is now starting to bear its ugly fruit. It’s Enron all over again — selling futures on the weather and valuing assets at what is hoped to be the value in the future, rather than their real value right now. It will now all return to its initial value plus those real gains in technology, medicine, and the like. We must now return to actually making things to trade and in an economy based on actual trading, you can’t expect people who have no jobs to buy goods. So here’s the deal — it’s great to be global, but if you are going to sell goods in a country, people of that country should be employed to some extent to make those goods. All other countries seem to understand this. This is why when US companies try to sell in foreign countries they must make the product there to avoid tariffs and high taxation. This is further extended by the fact that the companies must form join subsidiaries with the host nation’s governments. The US does this with foreign automakers, but in private industry. So why not do this with everything else? Companies scream “protectionism.” And I understand why now. It’s because a global company is not beholden to any state. They are beholden to their shareholders to pay back the greatest dividend regardless. I don’t have a problem with this as long as everyone understands that global companies are “nationless.” However, if a country is counting on that global company to provide jobs — then we have a problem. Case in point IBM which is trying to start a “brain-drain” from the US to India so they can pay lower wages, thereby increasing share holder value. There is no allegiance to the US and you could even say that actions like this hurt the US. The question is whether the US cares when things like this happen. Is it wrong for the US to protect its economic security? Believe it or not, companies will figure out a way to make money, so in this global economy, there’s no harm in saying American products for Americans — it doesn’t bar any company from coming into the US and employing US workers to make products for the US. It doesn’t bar trade either. Each country is blessed with different resources, so we must trade to distribute those resources. This gets back to the simple fact that trade is a two-way transaction and the sooner we get back to that fundamental principle, the sooner we as a planet can get back on track.