It was a spectacle with followers no different to sport or rock-star crowd pull. It’s simply about passion for something. That’s just how humans are. There’s nothing wrong with that in my book.
I posted on SydneyNorg a citizen journalism website (love that concept) about the opening in a bit more detail. I met up Bronwen Clune the creator of PerthNorg and SydneyNorg at drinks with Ross Dawson of Future Exploration Network last night.
One of our Saasu customers optimises Web 2.0 in it’s original meaning. He uses 88miles.net for tracking time on projects against customers and uses Saasu.com for his accounting ledger, tax and so on. 88miles and Saasu’s API’s have a little chat during the day keeping all his stuff in line, like a couple of fax machines having a banter. bidi bidi bidi beeeeep bidi bidi bidi —– Don’t you love that, it’s not humans having to do it!
What the customer actually has is a virtual application. Two distinct applications developing and enhancing separately but operating as one. Very cool.
Portfolio managers use tools to optimise placement of investments. It’s all about rigour and hard maths. So to should we optimise how we spend our time. It’s all too easy to concentrate on money, it’s in your face day in and day out, but people forget to act on the well known truth that time is money. You cannot separate the two.
Myles Eftos of Madpilot Productions built the 88miles.net connector, so a hat tip to the mad pilot. Check out his blog he shoots from the hip which is just how I like it.
When 37signals in Getting Real dished meetings it really smacked of what I call zero math opinion. I really enjoy reading their blog but on occasion I disagree with their opinion. I was reminded today when Seth Godin posted a funny cartoon on the topic of too many meetings.
Meetings can be good, very good. Meetings can be cheap options, investments with uncertain pay-offs and a premium price, maybe an hour of your time. You can treat your meetings like buying cheap call options. Many will expire worthless, but occasionally one will hit pay-off in the form of sales, capital raising, a change in strategic direction, new ideas, an acquisition or a new channel. Theoretically at least, an unlimited upside.
So the maths is all about the premium cost of these options, say an hour of your time, versus the pay-off probability.
You can practise a portfolio approach where you try and pick the eyes out of the market, pick the best meetings for you and your business but clearly recognise you stand to miss the big one every time you decline a meeting or think it’s better handled via emails and phone calls.
In my experience meetings I thought were valueless have ended up being the ones they have had huge pay-offs. One meeting I didn’t really want to go to at an investment bank I worked at ended up resulting in one of our best customers adding seven figure revenue to the bottom line over the subsequent year. Obviously this altered my thinking on meetings.
Humans are very bad predictors of outcomes. On a portfolio basis we are quite ok at predicting but in isolated circumstances and incidents such as a single meeting we are a bad predictor.
So spin the maths in your favour and have a few more meetings than the time efficiency champions would allow you.
Inflation is bullish for stock markets longer term. Yep, those of you who remember inflation spikes of decades past might recall doubling of prices across decade periods. Stock markets doubled also, they had to, the math required it.
Stock markets aren’t alone. Your home is the biggest asset you’ll probably ever buy but for some reason incumbent conservative governments and their Fed Reserves don’t care much for affordability. While the “consumption inflation numbers” hang around 2-3% they are doing their job. Well that’s like telling a kid “don’t worry, the mixed bag of lollies are only going up 2% this year”. Meanwhile you neglect to mention that the bike (his big asset not yet purchased) is going up 10-20%. All the time you know his McDonald’s wages will never catch up to that kind of asset inflation.
Governments shrug of asset inflation as good economic management that makes people rich. That’s all well and good if you are already on board and own assets that ride the liquidity wave.
There was a saying in markets. You own two houses, you’re long. Own one, you’re square. Own none, you’re short the property market.
How many liquidity booms, housing booms, commodity booms do governments need to see before realising it ends up wrecking many lives, spoiling many dreams and leading to parents working many more hours than they spend with their kids.
Sure governments and federal reserves will testify their concerns, but at the end of the day they let these assets booms go on unabated until the next collapse proves them wrong. By then it’s the next guys problem, or some other countries fault. They just hope the history books note them down as boomtime public servant success stories.
The bulk of your spend these days is twice as much as it was in the 90’s. Sure your PC and food bills might not have grown much but look at your big spends, your home and your vehicle. The big ticket items that lead to a fat mortgage and a 60 hr work week is a lot more expensive.
When asset inflation goes up the wealth divide grows. When consumption inflation goes up the wealthy don’t feel it but the masses do.
If it costs us twice as much to get things done then it costs a business twice as much also. If you want to build a business you will be paying asset plus consumption inflation prices. Thus, a built business must go up in value (risk adjusted) to create parity with starting one from scratch. Yes, this is way too simplistic (leaving sectors etc aside) but it highlights this historic market fact. Just ask Buffet if you don’t believe me.
I thought I’d write this because there are a lot of bears around and I realised many of them have never seen a recession. Sure stocks will and can remain depressed for some time but inflation will at some point drag them substantially higher, beyond what you would expect, crazy prices.
We have heard from our contacts that flooding in Mackay (Australia) recently caused accounting practices and businesses a major data recovery problem due to software based accounting files being lost in the floods. Obviously anyone using SaaS accounting (Software-as-a-Service online accounting) would have escaped the pain that data loss can cause a business.
Our Saasu.com data centre retains client data well clear of flood zones and data centres floors and entrances are purposely raised for localised flooding protection from burst water mains and other problems that can occur.
Datafiles for old style accounting software are only as good as your last backup. If you haven’t backed up recently here’s a knock knock reminder. Else, change to online accounting and other online services and outsource that task!
Sometimes I have some really good things I want to share and our Saasu.com blog isn’t quite suitable. So I’ll still be posting here. However they will be succinct posts in honour of time management for readers and me 
I love a lot of what 37 signals are about but I must say I don’t agree with David’s view that monetize is word we don’t need. Monetize doesn’t mean making money. Monetization is a conversion process, which is why I like the word (even though I use it sparingly because it is so misunderstood). For example you can monetize your house by selling it. That doesn’t make any money it just changes the form of the asset.
If people paid more attention to the process of monetization they can indirectly make some money. How you ask? Assets all fluctuate in value. Employing monetization when you want to convert unrealised asset value into realised asset value is key. Lack of asset liquidity is a problem that monetization techniques address, but strictly speaking it doesn’t make you any money, just realises the gains or losses. What you build, sell and do makes the money in reality. Landscape your house to make some money, sell it to monetise it.
At Deutsche Bank we had a saying for idea testing. “Can you monetise it?” Systems can be like a salesperson. If you are going to buy into the value add argument would you employ Facebook to distract hundreds of employees? Facebook and it’s fans claim it brings many advantages to business. What is the opportunity cost of those employee Facebook hours? Could you spend them on something else?
I’ll be controversial on this one and say it should be disallowed. The ratio of distraction to value-add is heavily skewed against giving staff access in the workplace. The coal face reality is that this thing isn’t getting stuff done. It’s not creating massive networking opportunities that the same time spent working on other social media could. It’s not high quality content with high IP value. It’s not producing widgets. It’s not paying you any money. It sucks time. Time is money.
I can’t see an easy way to monetise it from a business perspective. Sure you can pick up some networking value but it’s limited relative to those Facebook Hours better spent on hard core CRM systems such as Salesforce.com that drive workflow, lead generation and networking. These systems create business opportunity. Alternately, I’d put those Facebook hours into using a system like a Wiki to collect employee ideas on business improvement, planning and sales strategy.
For people without investment banking backgrounds this could make or save you a fortune. Worst case it might take the blinkers of your eyes around the topic of free or cheap options that are all around us.
There’s a simple test to see if something is like a option. Have you been given the right to do something for free or cheaply for a period of time. If so, then it’s an option and has financial value.
Here’s a few examples:
Quotation Option
Getting a quote is a chance to better a price. So each quote has value while a vendor has agreed (or implied to agree) to beat any other price.
Reverse Auction Option
I once bought a car from my desk. I called six dealers and told them I will buy the car specified in the fax I was sending them at 4:00pm that afternoon. I told them they were in competition and that my purchase was only about price. I repeated this to make it clear. I said that you only get one quote, no second chance. Five dealers faxed me their prices, one refused and one was extremely aggressive on pricing whom I ended up buying from. I removed variance in the product with my faxed instructions and specs. e.g. removing service location as a consideration. I saved 18% off the list price.
Pricing Mechanism Option
Continuing from above, I was told that this dealer network closed their sales books mid month (another option they had with their manufacturers where if they exceeded ‘x’ sales they had a jump in revenue payment to the dealer group). So the pricing mechanism was multifaceted. What they sold at wasn’t a clean equation. Towards this special date of theirs it wasn’t so much about profit but about vehicles sold. Vendors give you the option to chose when you buy from them. Again, that’s worth money.
Deposits On Goods (in some cases)
Sometimes you can legally walk away from a deposit, sometimes you can’t so make sure you have the vendor spell it out to you. I’d never do it personally for ethical reasons unless I’d checked they were ok with it in advance. The option here is to find something the same but far cheaper. This sounds lame but there are actually millions of dollars made and lost on this one alone by the big end of town.
The housing market is a classic example of it. Back in the 80’s and 90’s the deposit on a property bought of the plan was a cheap upside option on house prices. Developers didn’t always document the transaction as a full sale with delayed payments but instead they just asked for a forfeitable deposit of say 5% that you could walk away from. This doesn’t happen as much these days, but there are still anomalies even though more complex. The developers didn’t realise they were ‘writing’ call options on property prices extremely cheaply. Property markets were moving 10-30% per annum.
Some smart cookies ran around buying 5% options and just sat on them waiting for prices to go up. The downside was 5% and the upside was, well lets call it, the Moet outcome. The kicker was not having to fund the full price of property if they invested the traditional way. Some made fortunes. I was only a kid then 
Decisions With Financial Impact
There are dozens of these, too many trade secrets I’m sorry, become a Saasu.com customer and I’ll reveal some One example is the right of Company Management to decide if a company wants to buy back its own shares from the market. There are multifaceted advantages in this ‘decision option’. Accordingly it has value when the circumstances are right.
The Time Extension
When someone is willing to sell you something and leaves a firm price with you for a day then they are giving you the right to accept or decline for 24hrs say. This is an option with very little time value. Accordingly it isn’t worth much. However if you ask for (or are offered) a time extension you are effectively being given money. That time has value. If the market price changes but you can still transact at the offered price per your agreement then you stand to save money or avoid losing money.
Either way you win in this situation so the option had value. I could go on for a while but I’ll save some for another day. If you have any share them and I’ll post and credit them to you next time around.
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