Maytag recently introduced a "personal beverage vendor"! Thinking ahead, they have a business blog devoted to the product. (the product is not for me, and has been slammed as a "product for people who can't get off their ______ and get a cold drink in the kitchen".
This is another example of the changing advertising and customer relationship game.
Barry Ritholtz nicely summarizes the monopolist's modus operandi:
Microsoft has a monopoly on the desktop -- and because of that, there are certain behaviors they are legally restricted from engaging in (at least, in legal theory). Microsoft should not be able to disadvantage competitors by leveraging that monopoly in a way that restricts competition.Clearly, in the case of newspapers, protected by the Newspaper Preservation Act of 1970, it's rather simple to create additional print publications, that for others would be expensive. Similarily, they can use this monopoly postion to give away advertising products & content, if necessary, to kill competition (just like Microsoft gave away Internet Explorer, to "cut off Netscape's air supply").Search is a perfect example: By setting the default to MSN search, and making it extremely awkward to change it, they automatically become one of the top 3 players in that space. What would take any other company billions of dollars to do, they get for, oh, about nothing.
Local print media monopoly, Capital Newspapers (prints and generates advertising for the Wisconsin State Journal and the Capital Times) has announced a new weekly publication that targets long time, successful weekly Isthmus. Capital Newspapers, protected by a federally sanctioned joint operating agreement (Newspaper Preservation Act of 1970: the JOA allows two newspapers to "share" advertising, overhead and printing costs) is using those monopoly derived funds to compete with a traditional, non protected business - Isthmus publishing.
This is similar to a tactic that Microsoft used, illegally, to squish Netscape. See Lee Enterprise's (owns 50% of Capital Newspaper) 2003 10-K (286K PDF) for a look at the Capital Newspapers (formerly known as Madison Newspapers Inc) local revenues (112M!) and net income of $16M (14%!).
Perhaps this is simply a negotiating/acquisition tactic? Capital Newspapers would likely enjoy acquiring Isthmus Publishing and thereby solidify control of the local print advertising business. This tactic has been used before, with a local business weekly and a children's (Dane County Kids) publication.
What to do? Vince and Linda and the Isthmus have done a superb job for the community. Send a note to our representatives (Representative Tammy Baldwin | Senator Russ Feingold | Senator Herb Kohl) telling them that the time is long past to repeal the Joint Operating Agreement Statute. And cancel your subscription (if you have one) to the State Journal or Cap Times.
UPDATE - the act is certainly not helping quality, as Glenn Reynolds points out.
UPDATE2 - Perhaps this is the natural manifestation of the Clear Channel effect in Radio - played out in the newsprint business. Madison is fortunate to have two dailies - BUT - they should compete like anyone else, which would change things, significantly.
Perk Hoggs on the cost of executive perks.
The problem is not the cost of the perks themselves; at a ten-billion-dollar corporation, they’re hardly even a rounding error. It’s what they are symptomatic of. Perks and rigid management hierarchies tend to go together; perks are designed in part to reinforce status divisions, and rigid hierarchies do not lend themselves to intelligent decision-making, since they isolate executives from the rest of the company. Also, C.E.O.s who indulge in perks are likely to be profligate in general with shareholder money.There are problems in both the private and public sector. Our senators have incredible health care AND average much better investment returns than us poor taxpayers. There are plenty of examples of corporate excess. Hoggs makes some useful points. Via John Robb.
Tribune owned LA Times recently announced layoffs, just after winning a couple of Pulitzer prizes according to this story by Jacques Steinberg.
"Look at USA Today; how many Pulitzers have they won?" Mr. Janedis added, singling out the flagship of the Gannett chain, which has yet to win one. "But they sell a lot of advertising and get good rate increases."The article also compares major publisher cashflow margins (from Banc of America Investment Securities):
The idea is to create a new tourist industry: "For the last 30 years, people have thought that space flight is only for a select number of government employees," said Peter H. Diamandis, chairman and president of the X Prize Foundation, the competition's organizer. "We want to change that mind-set."
Yuko Shimizu on Harvey Mintzburg's new book: Managers not MBA's
Congratulations! You have a sparkling new degree, highly prized in this world. You have learned a great many things about business. You have invested two years of your life, not to mention lost wages and a small fortune in tuition, in this impressive undertaking. As a result, you are fully qualified to go out and become a menace to society.Granted, this isn't fully the fault of your school. Nothing personal, but full-time MBA programs by their nature attract many of the wrong people--too impatient and analytical, with little experience in management itself. These may be fine traits for students, but they can be tragically ill-suited for managers.
Conventional MBA programs then compound the error by giving the wrong impression of management: that managers are important people disconnected from the daily work of making products and producing services; that managing is largely about decision making through analysis; that managers pronounce deliberate strategies for everyone else to implement; and worst of all, that by sitting still in a classroom for a couple of years, you are now ready to manage anything.
Mark Cuban has been writing a series of essays on building a business. Today, he talks about sweat equity, and building a business the old fashioned way.
The reality is that for most businesses, they don’t need more cash, they need more brains.So true....
Bio 2004 is underway in San Francisco. Wisconsin, like many other states/government bodies, has a pavilion.
The exhibitor list is here. This list, with numerous government bodies illustrates the great temptation that states provide narrowly focused tax incentives, as discussed here recently.
In the end, these conferences can suffer from "increasing returns", because the Kansas Biosciences Association, among many others are exhibiting (in the Kansas Pavilion), so too must the Illinois Farm Bureau, and many, many others.
I've written a bit about Madison's air service. Marv Balousek writes today about Madison "leaking" passengers to Milwaukee and Chicago. Leaking means passengers driving to other airports in an effort to obain lower fares. Airport Director Brad Livingston cited one example, Orlando:
115,142 people flew to Orlando, Fla., last year from the Dane County Airport's market area, just 59,024 or 51.3 percent flew from the Madison airport. Orlando was the airport's most popular destination.
This is not a big surprise. Visit to travelocity.com and search a number of city pairs from Madison to Orlando, Austin, San Francisco, Boise, Denver and other major markets.
In some cases, fares are attractive from Madison, others they are not. (Madison to Minneapolis is a great example): on June 2, 2004 a typical business roundtrip (fly up at 7:00a.m. and return around 6:00p.m.> Northwest has a nonstop fare of $403 plus taxes and fees. Interestingly, on the same day, Southwest flies from Dallas to Houston (a similar distance) for a roundtrip fare of $197.20 (planning ahead will save money).
There are a couple of reasons for this discrepency: Northwest has no competition on Madison-Minneapolis flights; while Southwest does from Dallas to Houston. There's also a philosophical difference between Northwest's business approach (charge the highest prices possible) and Southwest's (let's grow traffic by charging low, friendly fares).
Finally, the only time major airlines reduce fares and increase frequency is when they are faced with low fare competition.
Southwest is the only game changer for Madison...
Aaron Nathans writes about Port Washington's Allen Edmonds Shoe Company, and their ongoing efforts to continue making shoes, competitively, in Wisconsin (rather than China):
The rumble, hum and clack of the Allen-Edmonds shoe factory went quiet in late December. Many of the machines that helped workers pack insoles, trim the leather and buff the finished men's dress shoes were gone by New Year's Day.But John Stollenwerk, the president of the company, was not preparing to send his operations overseas. Instead, Mr. Stollenwerk gambled on staying put and reconfiguring his factory floor, which reopened on Jan. 5, with a new manufacturing method that could increase production and cut down on mistakes. The moves required an investment of $1 million, or 1.1 percent of the company's 2003 sales.
Mr. Stollenwerk is resisting a tide that has decimated the American shoe manufacturing industry: About 98.5 percent of shoes sold in the United States are now made abroad, according to the American Apparel and Footwear Association, which is based in Arlington, Va.
From Wired: They are masters of innovation, technology, and strategic vision: 40 companies driving the global economy.
Old-school business types found some solace in the bust - at least the upstarts got their comeuppance. Hardly! With the economy finally perking up, newcomers are running the show: Three of the top five companies in this year's Wired 40, our annual list of enterprises leading the charge toward a connected global economy, were founded in the past decade. One-third are less than 20 years old.This year's list reflects the churn we've come to expect in the tech economy. Only nine selections appeared on the original list back in 1998. Still, the criteria for inclusion remain unchanged. These 40 leaders have demonstrated an uncommon mastery of technology, innovation, globalism, networked communication, and strategic vision - skills essential to thriving in the information age.
Randall, co-auther (along with Peter Schwartz) of Abrupt Climate Change [PDF] is interviewed by World Changing Blog:
Their scenaric findings -- that the gradual global warming we're experiencing could plausibly trigger an abrupt climate snap, and that its effects would be massive, perhaps catastrophic, and of direct relevance to the national security of the United States -- we're picked up by media around the world, gathering a snowball of controversy and hype along the way. Their scenarios, freely available on the Web, were termed a "secret Pentagon report," and their descriptions of possible climate catastrophe taken as bald prediction.But underneath the hype was a reasoned attempt to judge the seriousness of the threat posed by climate instability. That's something all of us hoping to change the world have to take into account. So we asked Doug about the implications of that report (now that the dust has settled), the movie The Day After Tomorrow, and how to think about the future of climate change.
Katherine Skiba summarizes state political lobbying spending (data is from the Wisconsin Ethics Board). I was surprised at Wisconsin's top spender(s):
Herb Kelleher on the survival of an airline; a recent talk to Southwest's Senior Leaders:
In a wide ranging discourse on the current state of affairs in the airline industry, Herb’s talk was packed with historical truths and current observations based on over 35 years of industry experience. Here is a synopsis of his remarks.
- As an airline executive, his prime goal and proudest accomplishment has been job security for the People of Southwest.
- Nothing is as injurious to one’s quality of life as a layoff or furlough.
- In spite of being in one of the worst businesses in the history of business, Southwest has prospered because of its People.
I've written before about Madison's air travel challenges and opportunities.
I continue to believe that only the arrival of Southwest will truly change Madison's air transportation opportunities. The "Southwest Effect" is just what Madison needs: the average fare decreases and the number of passengers dramatically increases when Southwest enters a market.
I recently phoned Gary Kelly, Southwest's CFO to encourage them to fly to Madison. Southwest gets major points for having a real person answering the phone and playing good music while the call is being routed around the company.
Dave writes about Amazon's controversial one-click purchase patent (many business process patents, are I believe an abuse of the patent process). Evidently, Amazon assigned their patent(s) to Deutsche Bank as part of a credit agreement between 1995 and 1997.
I wonder if there might be a tax shelter angle to this (amazon was generating huge losses at the time, and other firms might wish to do a deal for the tax benefits of those losses)? Years ago, I worked for a major international beverage firm. One of their (this firm was not unique) tax reduction/avoidance strategies was to create the flavors in tax havens (Puerto Rico, Cyprus, Ireland among other places) and sell that essential component back to US entities at high prices (this is of course a rather simplistic analysis). The US entities then generated small margins or losses while the offshore unit generated the large margins. This tax strategy, among many others is discussed in the very enlightening book by NY Times reporter David Cay Johnston: Perfectly Legal.
Deutsche Bank, like many others, has been part of a number of tax shelter strategies.
This abusive patent process is the major reason I do not link to amazon (barnes & noble online is a fine alternative).
One would think that this type of thing should happen here first....
Maria Alicia Gaura writes:
After 25 years of persistent work, Marin County rancher Albert Straus has figured out a way to run his dairy farm, organic creamery and electric car from the manure generated by his herd of 270 cows.Cheered on by a small gathering of engineers, environmentalists and fellow farmers, Straus stepped into a utility shed Thursday, switched on a 75- kilowatt generator, then stepped outside to snip the ribbon spanning a spanking-new electrical panel.
Thomas Content writes that "Wisconsin residents are paying more for electricity than consumers in seven other Midwestern states, a reversal from several years ago when power customers here paid the lowest rates, a study found."
Forbes Mark Tatge writes about our "Miracle in the Midwest":
David C. Schwartz is right at home in the dark. That's where his fluorescent microscopes can do their work, scanning thousands of samples of DNA that make a slow crawl across computer screens and methodically map the human genome. All this activity is packed into a cramped room inside a lab at the University of Wisconsin at Madison. "Most people think I came here because I hated New York," he says with a boyish smile and a twitch of the mustache that curls over his lip. "I came here to start a companyInteresting sidebar:
Out-of-state venture capitalists complain that most of these hatchlings need better management. G. Steven Burrill, who runs the San Francisco merchant bank Burrill & Co. and has invested $15 million to $20 million in young Wisconsin companies, bemoans the failure to capitalize on opportunities. "We see 100 deals a month in life sciences," he explains. "But I don't see even one a month from MadisonBurrill is correct - while there are many opportunities here, it is not generally a risk taking culture.... unfortunately.
Tom Friedman writes about a recent trip to Silicon Valley:
Still others pointed out that the percentage of Americans graduating with bachelor's degrees in science and engineering is less than half of the comparable percentage in China and Japan, and that U.S. government investments are flagging in basic research in physics, chemistry and engineering. Anyone who thinks that all the Indian and Chinese techies are doing is answering call-center phones or solving tech problems for Dell customers is sadly mistaken. U.S. firms are moving serious research and development to India and China.The bottom line: we are actually in the middle of two struggles right now. One is against the Islamist terrorists in Iraq and elsewhere, and the other is a competitiveness-and-innovation struggle against India, China, Japan and their neighbors. And while we are all fixated on the former (I've been no exception), we are completely ignoring the latter. We have got to get our focus back in balance, not to mention our budget. We can't wage war on income taxes and terrorism and a war for innovation at the same time.
Curriculum was and is a hot topic in the Madison School District.
Further, the tech industry has been playing footsie with Hollywood (ironic, given the size of the tech industry vs Hollywood) regarding our fair use rights. Dan Gillmor has recently published a draft version of his upcoming book: Making the News. Chapter 11 includes some very troubling quotes:
When Microsoft shipped its first search-engine (which makes a copy of every page it searches), it violated the letter of copyright law. When Microsoft made its first proxy server (which makes a copy of every page it caches), it broke copyright law. When Microsoft shipped its first CD-ripping technology, it broke copyright law.It broke copyright law because copyright law was broken. Copyright law changes all the time to reflect the new tools that companies like Microsoft invent. If Microsoft wants to deliver a compelling service to its customers, let it make general-purpose tools that have the side-effect of breaking Sony and Apple's DRM, giving its customers more choice in the players they use. Microsoft has shown its willingness to go head-to-head with antitrust people to defend its bottom line: next to them, the copyright courts and lawmakers are pantywaists, Microsoft could eat those guys for lunch, exactly the way Sony kicked their asses in 1984 when they defended their right to build and sell VCRs, even though some people might do bad things with them. Just like the early MP3 player makers did when they ate Sony's lunch by shipping product when Sony wouldn't.
Unfortunately, Microsoft's answer has been to build Digital Rights Management -- the more appropriate term is "Digital Restrictions Management" -- into just about everything it makes.
But now consider the ways it could be used, beyond simple tracking by copyright holders of what they sell. Anderson writes:
[Trusted Computing] provides a computing platform on which you can't tamper with the application software, and where these applications can communicate securely with their authors and with each other. The original motivation was digital rights management (DRM): Disney will be able to sell you DVDs that will decrypt and run on a TC platform, but which you won't be able to copy. The music industry will be able to sell you music downloads that you won't be able to swap. They will be able to sell you CDs that you'll only be able to play three times, or only on your birthday. All sorts of new marketing possibilities will open up.
The potential for abuse extends far beyond commercial bullying and economic warfare into political censorship. I expect that it will proceed a step at a time. First, some well-intentioned police force will get an order against a pornographic picture of a child, or a manual on how to sabotage railroad signals. All TC-compliant PCs will delete, or perhaps report, these bad documents. Then a litigant in a libel or copyright case will get a civil court order against an offending document; perhaps the Scientologists will seek to blacklist the famous Fishman Affidavit. A dictator's secret police could punish the author of a dissident leaflet by deleting everything she ever created using that system - her new book, her tax return, even her kids' birthday cards - wherever it had ended up. In the West, a court might use a confiscation doctrine to `blackhole' a machine that had been used to make a pornographic picture of a child. Once lawyers, policemen and judges realise the potential, the trickle will become a flood.The Trusted Computing moves bring to mind a conversation in early 2000 with Andy Grove, longtime chief executive at Intel and one of the real pioneers in the tech industry. He was talking about how easy it would soon be to send videos back and forth with his grandchildren. If trends continued, I suggested, he'd someday need Hollywood's permission. The man who wrote the best-seller, "Only the Paranoid Survive," then called me paranoid. Several years later, amid the copyright industry's increasing clampdown and Intel's unfortunate leadership in helping the copyright holders lock everything down, I asked him if I'd really been all that paranoid. He avoided a direct reply.
Joan Shelley translated a "knack for knobs" into a fast-growing $1.4m business, according to Doris Hajewski:
Knobs are an unusual foundation for a business, especially for a triage nurse.The mother of eight children, Shelley turned a flair for decorating cakes into a home business. In rapid succession in the 1990s, that led to assisting with commercial kitchen design and then teaming up as a designer with Amish craftsmen from southern Illinois. They made cabinets, and every one of those cabinets needed a knob or handle.
"Customers, especially the high-end ones, wanted something special in hardware," Shelley said.
She acquired lots of catalogs, but she wished there was an easier way to find what the customers wanted.
Enter Kristina Shelley, the self-described computer geek of the Shelley brood. At age 16, in the late 1990s, she had mastered the Web design classes at Oconomowoc High School. She started taking college classes and working part-time at Apex, a now-defunct Web development business in Milwaukee.
Steve Greenhouse writes a useful article on the economic & cultural implications of the Wal-Mart system:
We already know that Wal-Mart is the biggest retailer. (If it were an independent nation, it would be China's eighth-largest trading partner.) We also know that it is maniacal about low prices. (Some economists say it has single-handedly cut inflation by 1 percent in recent years, saving consumers billions of dollars annually.) We know that its labor practices have come under attack. (It charges its workers so much for health insurance that about one-third of them do not have it.)
David Pogue reviews the latest VOIP (Voice over Internet Protocol) services, which allow you to call anywhere in the United States for as little as $20.55/month (plus your broadband internet connection):.
This development is annoyingly called voice-over-Internet protocol, or VoIP, which means "calls that use the Internet's wiring instead of the phone company's." When you sign up, you get a little box that goes between your existing telephone and your broadband modem (that is, your cable modem or D.S.L. box, a requirement for most of these services).At that point you can make unlimited local, regional and long-distance calls anywhere in the United States for a fixed fee of $20 to $40 a month (plus the cost of your broadband Internet service, of course). Overseas calls cost about 3 cents a minute. These figures aren't subject to inflation by a motley assortment of tacked-on fees, either; voice-over-Internet service is exempt from F.C.C. line charges, state 911 surcharges, number-portability service charges and so on.
Save money, switch! I've been using www.packet8.net for some time.
According to city assessor Ray Fisher Friday when 2004 property assessments were released. "My house went up 10 percent this year. I look at it as money in my pocket." - Beth Williams writes. Interesting perspective.... Can't say that I agree with Ray on that one. Bill Novak writes:
"Last year, assessments went up 8.6 percent and the local real estate tax was up 7.1 percent, according to the Assessor's Office. In 2002, assessments were up 8.1 percent and taxes went up 3.2 percent. In 1997 and 1999, assessments went up and taxes went down." What about 1998, 2000 and 2001?
There has been talk in the state legislature of completely shifting school taxes from the property tax to other sources, such as the sales tax. Wayne Wood, a retiring representative from Janesville and Rep Mickey Lehman (R-Hartford) developed a proposal that would have used a sales tax increase to reduce property taxes for schools.
Michigan dramatically changed their school finance system a few years ago, substantially reducing property taxes, in return for an increase in sales taxes.
My view is that the time is long past to remove school spending from Wisconsin's high property taxes. Every Wisconsin property owner should reasonably expect:
How should we replace some of the property tax revenues?
Political paralysis on this issue can only lead to drastic measures in the not too distant future.
Related Links: Assessor's office | Wis Taxpayer's Alliance (lots of useful information)
Former Wall Street bond trader and author of the quite useful book Fooled by Randomness pens an op-ed piece in today's New York Times where he describes black swans (an outlier, an event that lies beyond the realm of normal expectations) with respect to 9/11 and the current investigation:
Most people expect all swans to be white because that's what their experience tells them; a black swan is by definition a surprise. Nevertheless, people tend to concoct explanations for them after the fact, which makes them appear more predictable, and less random, than they are. Our minds are designed to retain, for efficient storage, past information that fits into a compressed narrative. This distortion, called the hindsight bias, prevents us from adequately learning from the past.Black swans can have extreme effects: just a few explain almost everything, from the success of some ideas and religions to events in our personal lives. Moreover, their influence seems to have grown in the 20th century, while ordinary events — the ones we study and discuss and learn about in history or from the news — are becoming increasingly inconsequential.
Consider: How would an understanding of the world on June 27, 1914, have helped anyone guess what was to happen next? The rise of Hitler, the demise of the Soviet bloc, the spread of Islamic fundamentalism, the Internet bubble: not only were these events unpredictable, but anyone who correctly forecast any of them would have been deemed a lunatic (indeed, some were). This accusation of lunacy would have also applied to a correct prediction of the events of 9/11 — a black swan of the vicious variety.
Speaking of Entrepreneurs, IBM launched System/360 on April 7, 1964. Many consider it the biggest business gamble of all time. At the height of IBM's success, Thomas J. Watson, Jr. bet the company's future on a new compatible family of computer systems that would help revolutionize modern organizations. Get a behind-the-scenes view of the tough decisions made by some of the people who made them, and learn how the System/360 helped transform the government, science and commercial landscape.
John Byrnes has written one of the better articles [164K pdf] I've read on the topic of Wisconsin's generally poor entrepreneurial track record. He correctly points out that:
- Most attendees at recent VC & Economic Conferences were from government agencies, community development organizations, schools and universities (why? most real entrepreneurs don't have time to sit around and talk, they'd rather make things happen)
- Byrnes further muses that perhaps our culture is to blame: "We may be dealing with the long-term effects of an overprotective social climate that discourages risk taking."
- Too much overhead: Byrnes cites a recent study by the California-based Milken Institute which shows that Wisconsin has more economic development offices and business incubators per capita that almost every other state, including California! Byrnes calcuates that the ratio of business support people to entrepreneurs is 100 to 1; if you add educators, the ratio is 1000 to 1!
Byrnes is right on. We don't need more state sponsored programs (that generally only benefit the largest firms). We in fact, need less paperwork (I can't imagine how a small business keeps up with it all....), more risk taking and a more entrepreneurial financial environment (California has this in droves).
Byrnes article appeared in the April, 2004 issue of Corporate Report Wisconsin.
David Brooks pens a too funny look at the proposed Liberal Air and it's counterpart Right Wing Express. The faculty seating arrangements are too funny....
On a more serious note, I recently received an email from County Executive Kathleen Falk regarding non stop air service to and from our local airport. She also attached a note from Brad Livingston, our airport director regarding their current initiatives (non-stop service to and from Atlanta along with potential incentives to increase service).
John Schmid writes about Trafficcast's agreement to create a traffic monitoring system in Shanghai:
"This is a great example of a Wisconsin-developed technology and a Wisconsin-developed business that has found a significant market in China," Doyle said in an interview in Shanghai.Much of the hiring will take place in China. In Shanghai, there will be more than 100 employees eventually, adding to the 35 in the United States, Li said. Without giving the company's annual revenue, she predicts China will catch up to U.S. sales within two to three years.
Optimism is everything
Amidst much discussion on outsourcing, Wisconsin native (and Netscape co-founder) Marc Andreessen writes about America's economic & cultural strengths:
more via John Robb....
- Higher education: -- we're the best in the world; students come from every other country on the planet to study in our colleges and universities.
- Entrepreneurialism throughout the system -- we continue to be the most entrepreneurial economy on the planet (more than China, more than India, certainly more than Japan, ... and way more than Europe).
- Risk-friendly culture (this is hugely important) - this is not true across all states - Wisconsin needs to encourage more risk taking - state subsidies are not the answer
- Culture that loves new things -- American obsession with the latest and greatest -- often made fun of but hugely valuable.
Judy Newman has a timely article on the state of Madison's biotech industry:
The biotech hub took a big hit last week with the news that PowderJect Vaccines in Middleton will close, wiping out the jobs of 88 employees, many of them highly educated, specialized scientists and technologists. And it's not the only local biotech that has pared its staff or even disappeared in recent years. <
There are several issues here:
Doc Searls provides some useful advice to anyone running web surveys....
Big company Web site user surveys invariably suck. They tend to be too long, to ask the wrong questions, and to be done by outside companies that don't have relationships with users. So I usually don't take them.
Bottom line: keep it simple and listen to your clients....
Interesting look at unconventional marketing (from book of joe)
The Comme des Garcons Guerilla Store flouts conventional wisdom in almost every way. Said Nancy Koehn, a professor at Harvard Business School, "Guerilla marketing is the wave of the future. Red Bull and Trader Joe's have built their followings by word of mouth."
from doc searls....
NEW YORK, March 6 (Reuters) - Warren Buffett, the world's second-richest person, wants to pay more taxes. And he wants the rest of corporate America to pay more too.
In his annual letter [196K PDF] to shareholders of his Berkshire Hathaway Inc. (nyse: BRKa - news - people) holding company, released on Saturday, the 73-year-old Buffett said Berkshire's taxes rose more than eleven-fold to $3.3 billion from 1995 to 2003, as profits rose ten-fold to $8.15 billion.
During the same period, federal income taxes paid by all U.S. companies fell by 16 percent, to $132 billion.
"We hope our taxes continue to rise in the future -- it will mean we are prospering -- but we also hope that the rest of corporate America antes up along with us," said Buffett, who has previously criticized Bush administration tax policy.
Visit Berkshire Hathaway's site to view Buffett's annual letters, from 1977 to 2003.....
Doc Searls has some useful commentary on a recent PBS Cringely column (The Curse of the Hundred Bagger) regarding the stagnant economy.
Searls references Peter Drucker's Post Capitalist Society with respect to the declining utility of large corporations (he's right on).
Architect Santiago Calatrava (Milwaukee's Art Museum) is set to make his mark on New York City's skyline with a new residential tower.
A first:
I (along with others) received this very nice thank you note from the captain of a UA 737 yesterday.
Tom Peters posts 16 points on outsourcing/offshoring. Points 6 and 7 are interesting.
6. Americans' "unearned wage advantage" could be erased permanently. ("There is no job which is America's God-given right anymore." -- Carly Fiorina, Hewlett-Packard)
7. The wholesale, upscale entry of 2.5 billion people (China, India) into the global economy at an accelerating rate is almost unfathomable.
His conclusion: we need to train many, many more creative, risk-taking entrepreneurs. That will require a massive shift in how we educate our youth. The only reliable indicator of whether you will be an entrepreneur: you are the son or daughter of an entrepreneur. If that skillset can't be transferred more generally, most people will be left behind.
Thanks to John Robb.
I've lived in the west, and there's no question, that residents in Wisconsin and the Midwest in general need to start to take some business risks, and grow more entrepreneurs (It is truly genetic, I believe).
David Cay Johnston writes today in the New York Times that a federal grand jury in Manhattan is investigating the sale of tax shelters by KPMG, the big accounting firm, to corporations and wealthy individuals who used them to escape at least $1.4 billion in federal taxes.
I sent this email to letters@nytimes.com today:
Good Morning:
I am writing in response to your periodic coverage of "abusive" tax shelters.
http://www.nytimes.com/2004/02/20/business/20kpmg.html
I believe articles such as this would better serve your readers if they included references to the mess that is the US Tax Code (David Cay Johnston's book includes many useful references). The code is ripe for all sorts of strategies and tactics, many that I'm sure remain to be discovered and exploited.
One of the worst examples, I believe, is the deductibility of vehicles over 6000lbs - which has lead many independent and small business owners who formerly drove sedans to purchase very large, gas guzzling vehicles, simply for tax reasons. What has this policy cost the treasury?
This Edmunds article mentions $17billion over 10 years.
How about ethanol?
Yet another example:
Prior to a 1986 Tax Law change, real estate partnerships (among other examples) were created for the purpose of generating tax losses. Partnerships were created for the sole purpose of selling tax losses.
I find the political grandstanding on this issue absurd. Does Senator Levin disapprove of the massive SUV tax subsidies?
Why has this issue been attractive to some politicians, vs other tax matters? Is there another agenda? Who benefits if the accounting firms are largely taken out of the tax shelter game? Do law firms and investment banks continue to do their deals?
Best wishes -
Jim Zellmer
You can watch, and view transcripts of the Senate Committee on Governmental Affairs November, 2003 hearings on this matter here [Day 1 | Day 2]
Venerable Cambridge based Rowe Pottery works is operating under a court-appointed receiver and is scheduled to close by May 1, founder Jim Rowe said Thursday.
Mike Ivey summarizes Ross DeVol's (director of regional economics at the Milken Institute) presentation at the MGE innovation center.
DeVol recounted the list of negatives facing Wisconsin as it tries to move from a traditional agriculture and manufacturing economy into a more knowledge-based economy. The negatives include a lack of venture capital, the loss of top talent to other states and the failure to lure any big name "anchor" technology companies.
Presentations and meetings are nice, but I think we have too much of that and not enough risk taking (there's plenty of money here).
Fascinating WGBH special on Tupperware.
Here's a site that sells retro tupperware.
A pair of Californian entrepreneurs want to turn an empty lake bed just east of town into a non-polluting dairy farm for 90,000 cows, and to convert the cows' prodigious produce of manure and flatulence into a renewable form of energy. This “cowtown”, which will cover 1,900 acres, is the brainchild of William Buck Johns and Henry Orlosky.
See also the Harper Lake Energy Project.
LaFarge based Organic Valley is a $184 million company with dairy, meat and egg producers in 16 states and one Canadian province. It's the third largest brand name in the entire organic foods industry, according to the latest Mike Ivey Column.