A Meaningful Life

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.

I witnessed 3 very well dressed army personnel clear their remembrance day fund raising supplies in double quick time. This happens every year but it is normally school kids doing the volunteer selling who take a couple of hours to sell down the stock for a good cause. This year however the higher profile image of rarely seen military personnel in full garb was obviously lifting fund raising to a new level.

Someone actually pushed in front of me to buy their poppy! Note to self: The product was the same but the presentation was different. I posted on the “different presentation” theme opening up new markets for business some time ago. See Transformers More Than Meets the Eye

Youtube is getting more views than most reality TV shows these days. Tonight I saw strong anecdotal evidence that we are past the reality TV product cycles apex. Advertised tonight was a new show called the “Oldest Drivers in Britain”. Now they really are running out of ideas.

There are still many years left and it will probably never leave us, however original concepts in reality TV are harder to come up with.

What’s the next wave?

If I were in the TV business I’d be analysing Youtube hit rates like a domain squatter watches his Adwords account. I’m sure many in that game are cluing up but we haven’t seen much evidence of it flowing into content. Dance and singing contest shows have given them a grace period for a few more years.

After seeing that over 1,000,000 people had watched a very lame Ferrari, Porsche, Lambo snippet on Youtube last week it got me thinking. Either the title tricked one million rev heads, “Lambo vs Ferrari”, or it’s not about the quality but more about the niche content.

More niche content is next.

So you will see channel’s with just car shows or just gardening shows. Internet TV providers like Joost will speed this trend up.

People like me love TV but don’t have the time so niche works. Niche allows precise content choice. Reality TV on these niche channels will become more of an “authentic reality”.

A lot of reality TV should actually be called “story board reality TV”. Filming someone just as they are in real life will start to grip more as Youtube retrains the content programmers that people like “real”. Youtube has shown that scripted reality isn’t as popular.

Fake reality is sniffed out very quickly and given plenty of “lame” tags. Unscripted content gets lots of hits because it’s real. People value real and they discount the contrived. It’s why people buy cotton instead of rayon and why fake plants never took off. Viral content is scripted and rates right up there but that’s another post.

I posted my thoughts on interruptions in business life today on our Saasu Blog. If you feel the barrage of interruptions like I often do then take refuge in my post called Business Interruptus. Better still get the RSS into your reader or homepage of choice and you won’t miss my posts there.

When the Net began to evolve it was interesting to see what unfolded first. Yep, you guessed it was the easy business models like lists, search, news and online versions of paper publishing.

When I decided to get into the Internet business I said to myself “everyone in this ASP (Application Service Provider) game is going to run off and do the easy ASP’s first”. So I decided to avoid the crowd, create my blue ocean and do the hard one everyone will leave to last.

Interestingly it’s been nearly eight years in this business and it’s only now we are seeing some new faces. I blogged about well being yesterday and mentioned that this market has upside. What business person in their right mind doesn’t think soul soothing has a market for many years to come.

I feel compelled to explain a little further. My hypothesis is that the number of high quality news websites divided by the number of news magazines is a very large ratio (I’m using the term websites to represent blogs and portals). It’s an anecdotal ratio as I don’t have time to do the math or research.

There must be millions of websites dedicated to news but only hundreds of magazines. My second guess is that the number of high quality Lifestyle Websites versus their paper magazine counterparts is much lower.

Anecdotal evidence you can collect online by doing a quick Del.icio.us check of bookmarks reveals that this might be true. There are only 45,000 bookmarks for “Lifestyle” but a massive 1,250,000 for “News”. Even adding in terms like “Health” and “Well being” to bump up the “Lifestyle” numbers still has you at well bellow 500,000 relative to “News” bookmarks (yes I know it’s bookmarks, but to me that represents a vote on a page that is content of type “x”. You can’t ignore it).

Google returns an even more interesting result. 1.4 Billion versus 100 Million. A very large difference. Do you think humans allocate their time at a 14:1 ratio of News:Lifestyle. I don’t think so! Accordingly I smell upside in the air.

So you’ll see more high quality sea change, zen generation and soul soothing content like The Calm Space as overstressed and overworked humans try and fix themselves.

Why the difference? News is easy as long as you don’t expect to be first with the story (expensive). Lifestyle is harder as it requires skill and knowledge to write successfully. It takes new ideas to add value to readers. It requires managing the crossover between spirit and body.

All these things would have hit people as tricky or difficult when considering starting a website. It was easier to build a website and scrape ideas from others and call it a news portal. Looking at readership online is going to be the winner long term. One day you’ll be subscribing to the paper version of the online publication, not the other way around.

Devices are what will change this and they are coming thick and fast to your morning coffee reading as Leah pointed out to me.

This is without a doubt one of the next big areas for business to consumer on the net. Wellbeing is a hot topic. Yes it always has been, however I think we’ve only seen the tip of the recreational iceberg.

Happiness is every humans number one driver. It’s the original driver that causes all other drivers and behaviours. Even survival is second to happiness. After all, you try and survive in order to maintain happiness.

Check out The Calm Space as an example of what will probably be a new breed of well being websites and blogs. There’s lots of education in this area. Yes education, we educate ourselves in just about everything except looking after ourselves and being good parents. I think that’s a bit weird really. Why do we operate that way?

I recently completed a Landmark Education course called Fitness, Vitality and Wellbeing that hits this spot superbly.

Who doesn’t relate to a quiet time having a coffee, tea or power juice while you read your favourite magazine, blog or book. It can only be good for you.

I went with my daughter Ella on a school excursion yesterday to Taronga Zoo. However the winds were so strong that they closed down the cable car for the day so to restore satisfaction with their customers the zoo gave the kids a free mini-train ride around the zoo. Nothing ever goes absolutely perfectly in life or business so the best thing to do when things happen is just get it cleaned up in a fair and reasonable way.

I saw the Transformers movie last week and I noticed that a very small variation from the existing product (plot,theme) can open up entirely new markets (adults). Obviously this isn’t new, however the change was so small it intrigued me. The crux being that there is often a single element preventing your product hitting other large markets. I’ve watched transformer cartoons with the kids a lot and the movie keeps to its roots. The variations are higher levels of realism in the fights, that’s it. You see people dieing rather than death being implied. Really there isn’t any other difference (I’m leaving aside the movie versus cartoon element because the movie could easily have been produced for kids). I’d suggest it’s 95% real juice. The difference simply being battle intensity. So this is leading me to thinking more about this for Saasu and MarketJus businesses. What minor changes open up entirely new markets?

I am a big follower of Michael Gerber and his E-Myth concepts. I love the following excerpt from on of his articles… “One of my very first clients was a plumber. His partner was in the paving business, and also owned a parking lot cleaning company. His Sweepers (I think that’s what he called the big machines that sprayed and swept the shopping center parking lots) were painted bright, bright red, were kept–through continuous washing and waxing–impeccably clean, shone like red jewels in the sunlight, and had every part that could be chromed, chromed to perfection. My plumber client and his partner called this talent and passion for elaborately visual Sweepers “mar-kuh-ting.”