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17615900248272fbf5d212a98321a3ee | https://www.forbes.com/sites/francinemckenna/2012/07/16/auditors-all-fall-down-pfgbest-and-mf-global-frauds-reveal-weak-watchdogs/ | Auditors All Fall Down; PFGBest and MF Global Frauds Reveal Weak Watchdogs | Auditors All Fall Down; PFGBest and MF Global Frauds Reveal Weak Watchdogs
Ring-a-ring-a-roses, A pocket full of posies; Ashes! Ashes! We all fall down. Kate Greenaway’s 1881 edition of Mother Goose; or, the Old Nursery Rhymes
Never again, they said, after $1.6 billion of customer money “vaporized” at MF Global. But now there’s been another big fraud against customers in the futures industry.
This time the CEO of PFGBest - and Best Direct Securities as its SEC registrant is known according to Audit Analytics – has admitted in a note accompanying his failed suicide attempt to falsifying books and records for more than twenty years.
More than $200 million of customer funds are likely gone for good.
When a well-known, supposedly well-regarded, and very visible CEO presides over such a disaster, everyone looks for clues. Who should have known and how could they have known sooner? Jon Corzine, MF Global’s CEO, a former New Jersey governor, U.S. Senator, and Goldman Sachs CEO did nothing so dramatic as PFGBest's CEO and, as yet, has made no admissions he used customers' money to cover his own trading failures.
The made-for-TV drama is instead unfolding in Cedar Falls, Iowa and Chicago where, in “truth is stranger than fiction” style, PFGBest's Russell Wasendorf Sr. says he used his “blunt authority” as sole owner and CEO to falsify bank statements sent to regulators for twenty years using Photoshop, Excel, scanners and laser printers.
Instead of MF Global’s world-renowned auditor PwC, we’ve got a one-woman show, Jeannie Veraja-Snelling, signing the audit opinion accompanying the financial statements for PFGBest. Not that there’s much less apparent incompetence when a global firm like PwC misses increased risk and deteriorating controls at MF Global and signs off on a clean annual audit opinion as recently as March 31, 2011, seven months before MF Global was forced into bankruptcy. PwC also signed off on a 10-Q review at the end of June, and a bond issue in August of 2011.
Wasendorf’s suicide note said that he duped his first-response regulator, the National Futures Association, by intercepting its request for confirmation of his bank balances, including funds segregated and safeguarded for customers, by using a P.O. Box he set up in the name of US Bank. He simply wrote whatever he wanted on those confirmation requests and signed in the name of the bank. His doctored banks statements with matching figures were sent along with the confirmation request back to the regulator.
“I was forced into a difficult decision: Should I go out of business or cheat?” he wrote. “I guess my ego was too big to admit failure. So I cheated,” his suicide note said.
Regulators, auditors and internal controls can not prevent a psychopath from lying, cheating and stealing to perpetuate a myth and sustain a lavish lifestyle, but they can and should detect the fraud much sooner if not immediately.
Wasendorf's admission does not explain how he also duped the independent auditor. One of the cornerstones of an independent audit is an independent confirmation of bank balances. PFGBest’s auditor was either duped for twenty years or complicit in the fraud. Neither conclusion is a good one for her. Auditors are forbidden to use company personnel to obtain or process bank balance confirmations. Of course, that hasn’t prevented auditors from falling down on this critical part of their job anyway, leading recently to some of the biggest and most notorious fraud cases in years.
Deloitte’s audit client Parmalat gave that firm falsified bank confirmations. Deloitte’s Milan firm and its international coordinating firm eventually settled the 2003 case with Parmalat bondholders and shareholders for almost $200 million total. Price Waterhouse India partners are still facing criminal charges and the firm is being sued by its former audit client Mahindra Satyam for the fraud revealed by Satyam’s CEO who admitted to falsifying $1 billion in bank balances. Price Waterhouse India paid fines to the SEC, PCAOB, and settled with shareholders. Regulators said Price Waterhouse India’s audits were negligent because they failed to obtain confirmations of bank balances directly from banks and instead accepted management’s representations without independent verification. Several of the current Chinese frauds allege bank confirmation fraud, including accusations of collusion with executives by bank officials and negligence by auditors Deloitte China and others.
What’s even more troubling to me is PFGBest’s auditor, and many others who audit only SEC-registered broker-dealers, may be breaking laws as well as being negligent in their public duty to the capital markets.
Section 17(e) of the Securities Exchange Act of 1934 (as amended by the Sarbanes-Oxley Act of 2002) requires every registered broker or dealer to annually file certain financial statements with the SEC that are certified by an audit firm that is also registered with the PCAOB. The SEC allowed an exemption to the PCAOB registration requirement for auditors of registered broker-dealers until the Madoff fraud occurred. At that point, the exemption was allowed to expire. As of fiscal years ending after December 31, 2008 the financial statements of non-public broker-dealers must be certified by a PCAOB-registered public accounting firm. Dodd-Frank officially extended the PCAOB’s authority to allow oversight of auditors of broker-dealers.
It’s taken a while for everyone to catch up. The SEC put out an FAQ from the Office of Chief Accountant in February 2009. A January 2010 FAQ from the PCAOB explained the auditor registration requirements more fully. According to the PCAOB, there have been 567 additional audit firm registrations since 2009 and 517 of those firms audit only broker-dealers.
The PCAOB held its first free public forum for auditors of broker-dealers in October of 2011. I attended the full-day broker-dealer auditor forum in Chicago in April of 2012. New PCAOB Board member Jeannette Franzel, a representative from the SEC’s Office of Chief Accountant, a representative from FINRA, and PCAOB staff including the small business liaison, an economist, and professionals from the office of registrations and inspections explained the requirements and answered questions. It was an excellent program and I learned a lot.
One issue that provoked heated discussion at the Chicago forum was auditor independence. It seems many of these Certified Public Accountants and broker-dealer auditors were under the mistaken impression that it's the AICPA’s rules for auditor independence that apply to them, not the SEC’s. SEC rules, post-Sarbanes-Oxley Act of 2002, prohibit an auditor of an SEC-registered firm from performing a list of nine prohibited services including bookkeeping and systems design and implementation for its audit clients.
Several audit firm professionals tried to convince the SEC and PCAOB staff that they were mistaken in the belief that broker-dealer auditors could not sign the broker-dealer audit opinion as well as help implement accounting software, prepare period-end journal entries and compile those same financial statements and regulatory reports that they would audit. PCAOB staff told me that this issue has come up at every forum.
Those audit firm professionals were dead wrong. The changes that will have to occur to bring the audit firms, and their clients, in line may mean not only consolidation of audit firms that can not deliver audit-only services cost effectively and per the standards, but also consolidation of broker-dealers who do not want hire competent accounting and systems professionals in-house or pay for it separately from a firm other than their auditor.
How many other broker-dealer frauds will we see because external auditors are not independent, objective and professionally skeptical enough?
A total of 107 people showed up at the broker-dealer forum in Chicago, representing 56 different audit firms. No Big Four audit firms came but next-tier firms like Grant Thornton, McGladrey and Crowe Horwath sent professionals.
PFGBest’s auditor, Jeannie Veraja-Snelling, did not show up. That’s maybe because Veraja-Snelling had no interest in what the SEC and PCAOB were saying.
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577d764374a1ae02b4db74d7a8656f01 | https://www.forbes.com/sites/francinemckenna/2012/07/17/marissa-mayers-pregnancy-what-does-yahoo-have-to-disclose/ | Marissa Mayer's Pregnancy: What Does Yahoo Have to Disclose? | Marissa Mayer's Pregnancy: What Does Yahoo Have to Disclose?
Gallery: Marissa Mayer 17 images View gallery
Marissa Mayer, Yahoo!'s new CEO, starts her job today. She is not only taking a big job at a company that’s had its share of issues and five CEOs in the last five years. Mayer is also six months pregnant. She disclosed that news three hours after Yahoo! announced her appointment. Yahoo's press release made no mention of the fact that Mayer may be taking some time off soon to care for herself and a new baby.
Questions about CEO health disclosures came up last when Apple’s CEO, Steve Jobs, started showing signs of possibly serious illness. Did Apple have a duty to disclose Jobs' condition? Under the SEC's rules, according to Broc Romanek, Editor of TheCorporateCounsel.net Blog, companies don't have an affirmative duty to disclose unless a Form 8-K is triggered or a periodic report such as a 10-Q or 10-K is due but, even then, a CEO's pregnancy would not typically be captured by an SEC disclosure obligation. Yahoo! 2Q earnings are expected to be announced today, one day after the new CEO announcement, and its annual meeting was held less than a week ago on July 12.
Apple shrugged off initial inquiries about Jobs' health and said in one instance that his gaunt appearance was due to a "common bug." If a company has an outstanding statement that the CEO's health is sound, says Romanek, there is an argument that the company had a duty to update (or was misleading to begin with). The SEC opened an investigation into Apple’s lack of disclosure of Job’s health issue.
Employment law also complicates the discussion about whether Mayer or the company should have disclosed her pregnancy along with her new job. Mayer did not have to disclose her pregnancy -- news of which first appeared Monday in Fortune magazine -- to a potential employer and the employer can’t ask. In this case, Mayer says she told the Yahoo! board about the baby during the selection process and directors did not consider her condition an obstacle to considering her for the job and, in the end, hiring her.
The rules of the listing exchange also matter. Yahoo! is listed on NASDAQ where Rule 4310(16) requires that: "except in unusual circumstances, a Nasdaq-listed issuer shall make prompt disclosure to the public through any Regulation FD compliant method (or combination of methods) of disclosure of any material information that would reasonably be expected to affect the value of its securities or influence investors' decisions. The issuer shall, prior to the release of the information, provide notice of such disclosure to Nasdaq's Market Watch Department if the information involves any of the events set forth in IM-4120-1."
Under this guideline, disclosure of a CEO's health would depend on the "materiality," which would take into consideration a mix of factors including the relative importance of the CEO - in this case big - and the magnitude of the illness – maybe not so. Romanek told me this morning, “If a CEO is seriously ill, I believe it should be disclosed. But less serious illnesses shouldn’t be. Hard part is determining what the threshold is. But a pregnancy is not the type of thing companies usually disclose nor, in my opinion, should they be required to do so.”
Mayer is 37, and pregnancy is more risky for her and the baby than if she were younger. The March of Dimes says 1 in 5 women in the United States has her first child after age 35 and the good news is most have healthy pregnancies and healthy babies. Studies show, though, that women in their mid-to-late 30s and 40s may face some special pregnancy risks. Mayer may need more than a “few weeks” and may not be able to “work throughout it,” like she told Fortune. As far as we know, mom and baby are healthy, but contingency planning, starting now, should also be in the works.
So, congratulations on everything, Ms. Mayer! I'll pray for the best – for you, your baby and the long-suffering Yahoo! shareholders.
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956114fccc167f415e37fe74788b31c0 | https://www.forbes.com/sites/francinemckenna/2013/01/08/settling-the-foreclosure-reviews-winners-and-losers/ | Settling The Foreclosure Reviews: Winners And Losers | Settling The Foreclosure Reviews: Winners And Losers
Who says there’s no recovery?
Monday's announcement of an “agreement in principle” to end the foreclosure reviews at ten of the fourteen mortgage servicing companies provided a neat recovery for the banks, and their "independent" consultants, who've been mired in an expensive, seemingly unending project from hell. The "independent" consultants assisted the banks in "extending and pretending" long enough to figure a way out. Now no one will ever have to admit how much the banks really owed borrowers and institutional investors for financial damage from foreclosure abuses.
Regulators also recovered from the persistent criticism and growing scrutiny of a poor design and weak monitoring of the consent decrees that started it all.
Ten mortgage servicers have agreed to pay more than $8.5 billion in cash and other assistance to help borrowers now rather than pay billions later based on the results of the foreclosure review process. The April 2011 OCC/Fed consent orders sanctioned the servicers for foreclosure abuses for the period 2009-2010 and mandated the detailed reviews. Not one check was ever cut for the harmed borrowers, but the banks have reportedly paid out more than $1.5 billion dollars to the “independent” consultants hired and paid by the banks, rather than directly by the regulators, to perform the detailed reviews.
The combined OCC/Fed press release says, “A payment agent will be appointed to administer payments to borrowers on behalf of the servicers." The settlement announcement cut off the review process before consultants submitted final estimates of how much each bank owed to harmed borrowers. The calculations of harm were never formally submitted to the regulators for approval. So, it's not obvious how each bank's payment agents will be able to make accurate and complete payments to borrowers for foreclosure abuses like fee and penalty overcharges.
It's curious, too, that banks like Bank of America immediately announced the impact of the settlement on 4th quarter results even though no contingent liability amounts for the foreclosure review results had ever been disclosed. It's as if the bank couldn't wash its hands of the mess fast enough.
Sources close to the foreclosure review engagements tell me that the new payment process will be very simple and is being designed by the OCC/Fed with no input from the consultants anymore. (It's as if the consulting firms couldn't wash their hands of this mess fast enough, either.) A previously published OCC/Fed harm matrix includes recommended dollar amounts to be paid to all damaged borrowers by harm category and that, you would think, would be a good place for a new process to start. Sources tell me that the matrix, however, is being tweaked as we speak so it will be as easy as possible for each bank to determine how much each borrower will get.
The mortgage servicers will decide which of the foreclosure abuse categories each borrower's case falls into based on these revised guidelines. Some borrowers could potentially deserve compensation for more than one harm category. No questions will be asked, no further analysis will be done, no audits will be performed, and there is no assurance of consistency in payments by the various servicers for the same harm.
There’s never been a recession for consulting firms that serve financial services firms and government agencies that monitor banks. The lion’s share of the $1.5 billion paid out went to Promontory Financial Group – run by former OCC Chairman Gene Ludwig – and PricewaterhouseCoopers LLC. PwC also did well when audit clients JPMorgan Chase and Bank of America got even bigger by swallowing up the firms that failed during the crisis and when clients Goldman Sachs and AIG were favorites for financial crisis taxpayer support.
The detailed reviews for all 495,000 borrowers whose homes were in foreclosure in 2009 and 2010 and who submitted compensation claims as of December 31, 2012 will never be completed. Final reports from each consultant and contract deliverables such as verified formulas for precisely calculating harm in thirteen broad categories for more than 3.8 million borrowers will never be completed or delivered to regulators. The consultants get out of the deal with their dough before any money is paid to borrowers and any class action lawsuits are filed that claim borrowers were cheated by the process.
Why did the OCC and Fed suddenly decide to stop the runaway train? Many, including me, have been writing about the deeply flawed process for a while, seemingly in vain. In a brilliant strategy orchestrated jointly by the banks and their consultants, the project was stopped because the OCC/Fed became uncomfortable with the billions of dollars in fees paid to the consultants by the banks with no results in sight. These industry-expert consultants used a manual process rather than utilizing automated tools to gather borrower data and review it for harm. The OCC and Fed strongly suggested that templates for the independent file reviews be thorough, detailed and standardized across the engagements. However, the independent consultants complained the design was "over the top" and contributed to the ballooning time estimates to complete the review of each case file.
Easier to blame overzealous and incompetent regulators rather than have to acknowledge illegal and immoral activities by servicers.
Sources told me that the extension of the deadline for borrowers to submit claims to December 31st caused a surge of new claims in the last thirty days, more than doubling the number previously outstanding. That may have also scared the wits off banks and their consultants as well as worried the OCC/Fed. Regulators claimed borrowers’ complacency was, perhaps, proof there was less harm than expected but a surge in complaints meant more work, more money to consultants and more harm to hide. The OCC/Fed and the banks started talking settlement on December 24th and their sense of urgency took even the consulting firms by surprise. Most of them planned to bill well into 2013 for more “make-work”.
Left behind by the settlement are institutional investors in securitzed mortgages who were also overcharged and cheated by the abusive foreclosure processes. For example, the Citibank consent order specifically states that the foreclosure reviews should address, “processes to ensure that a clear and auditable trail exists for all factual information contained in each affidavit or declaration, in support of each of the charges that are listed, including whether the amount is chargeable to the borrower and/or claimable by the investor…”
Institutional investors were supposed to benefit from the damage analysis. However, activities to address investor interests were left out of the consultants’ project plans and the settlement announcement is missing any plans for compensation to harmed investors. The unfinished calculations of harm by category are even more valuable to institutional investors than to the disparate borrowers. If the "independent" consultants had automated the review process and validated the harm calculations, they could have easily pivoted to helping institutional investors in securitized mortgages, held by millions of pension plans and retirement funds, recover losses. Instead, the consultants will end the foreclosure review engagements richer, perhaps, but with no comparable next big thing to replace this money machine.
Servicers can now carry on with business as usual and wait to be sued rather than being forced to fess up to their faults. The settlement is a cheap out for banks like Bank of America, Wells Fargo and JPMorgan Chase. There’s no accountability, transparency or behavioral changes required at the servicers.
Additional collateral damage from the settlement comes from the loss of jobs for most of the consultants hired to do the foreclosure reviews. Promontory used staffing firms to meet the body count - out of work mortgage professionals, lawyers and others who have been working for minimum wages. Specialized boutiques like Promontory and Treliant don’t keep thousands of low-level mortgage servicing clerical staff around otherwise. The consulting arms of auditors PwC, Deloitte and Ernst & Young put thousands of full time staff on the job. I'm fairly certain they will not be able to avoid layoffs.
Caleb Newquist at GoingConcern.com has a great summary of the possible impact on staff at Deloitte, PwC and Ernst & Young. (KPMG is conspicuous in its absence from the entire process since, as auditor of Citibank, Wells Fargo/Wachovia, HSBC, and of mortgage originators Countrywide and the defunct New Century, the firm is perhaps painfully aware of where many of the rotting mortgage corpses are buried.)
The GAO is still planning on publishing its second report, requested by Congress, on the foreclosure review process and one that is expected to be damaging to all parties involved. Bob Rieke of the GAO told me his team is “evaluating how we can be of the most help to the process. We are still consulting with our requesters on reporting options.” The OCC and Fed can define when the project is over for the consultants. Congressional leaders should force regulators to demand final reports from all the "independent" consultants before they get final contract payments. Regulators, at least, made sure that the engagement letters between the banks and consultants included mandated access for the OCC/Fed to all the data produced by the reviews. Congressional leaders should demand that the GAO audit the new payment process. It doesn't seem that any other oversight is apparently planned.
The next big thing is not here yet for firms like PwC and Promontory. Rest assured, however, whether it’s helping the CFPB get set up or supporting the Treasury and the Fed via open-ended, blank check procurement agreements, these firms are expecting a phone call any day from regulators handing them another risk-free, billion-dollar engagement with the same minimal expectations for performance and actionable results.
PwC spokeswoman Caroline Nolan said the firm had no comment on the IFR settlement.
Promontory Financial Group declined to comment on the IFR settlement because of client confidentiality.
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9842a07ac305744190b8569662ddc53f | https://www.forbes.com/sites/francinemckenna/2013/06/21/deloitte-by-any-name-wont-be-monitoring-ny-banks-for-a-while/ | Deloitte By Any Name Won't Be Monitoring NY Banks For A While | Deloitte By Any Name Won't Be Monitoring NY Banks For A While
When the Superintendent of the New York State Department of Financial Services, Benjamin Lawsky, said he was going to hammer on a banking consultant, many thought the nail might be ultra-connected Gene Ludwig’s Promontory Financial Services. After all, it was Promontory that pooh-poohed the bad conduct at Standard Chartered, estimating it at mere millions instead of hundreds of billions.
Instead Lawsky banged on Big Four auditor Deloitte’s Financial Advisory Services business unit. DFS fined the firm $10 million this week and banned Deloitte from accepting new consulting engagements at financial institutions regulated by Lawsky. Deloitte’s violations took place while standing in the shoes of the regulator as a “monitor” at Standard Chartered. The original Deloitte engagement was the result of a 2004 joint written agreement between Standard Chartered and the New York State Banking Department – a DFS predecessor agency - and the Federal Reserve Bank of New York which identified several compliance and risk management deficiencies in the anti-money laundering and Bank Secrecy Act controls at Standard Chartered's New York branch.
The order addresses Deloitte's "misconduct, violations of law, and lack of autonomy during its consulting work" at Standard Chartered Bank on those anti-money laundering (AML) issues.
From a press release from New York Governor Cuomo’s office:
DFS's investigation into the conduct of firm professionals during its consulting work at Standard Chartered found that Deloitte: Did not demonstrate the necessary autonomy required of consultants performing regulatory work. Based primarily on Standard Chartered's objection, Deloitte removed a recommendation aimed at rooting out money laundering from its written final report on the matter to the Department. The recommendation discussed how wire messages or "cover payments" on transactions could be manipulated by banks to evade money laundering controls on U.S. dollar clearing activities. Violated New York Banking Law § 36.10 by disclosing confidential information of other Deloitte clients to Standard Chartered. A senior Deloitte employee sent emails to Standard Chartered employees containing two reports on anti-money laundering issues at other Deloitte client banks. Both reports contained confidential supervisory information, which Deloitte FAS was legally barred by New York Banking Law § 36.10 from disclosing to third parties.
Oof!
American Banker’s Chris Cumming quotes me while describing the impact of this enforcement action.
More significant is the precedent Lawsky has set. It could be "very disruptive" for banks if other states, following New York's lead, ban consultants from operating and issue their own sets of regulations, says Francine McKenna, an accounting watchdog and journalist who has contributed to American Banker's BankThink columns. "Banks will have to have a contingency plan if suddenly a very significant consultant stops working," she says. Even though the New York sanctions on Deloitte would only apply to state-chartered banks, they could have a spillover effect in terms of industry-wide reputational risk. Some consultants expect to see big national banks — especially those already under regulatory scrutiny — also rethinking their use of the firm.
Deloitte’s law-breaking at Standard Chartered probably made officials at the Federal Reserve Bank of New York particularly uncomfortable. Deloitte’s audit arm is the financial auditor for the entire Federal Reserve system, and Deloitte also audits some of the firms the Fed has been highly dependent on during and after the crisis such as BlackRock. Deloitte’s actions at Standard Chartered belied its intended role as the eyes and ears of the Fed and DFS, making sure Standard Chartered corrected its money laundering ways. Instead, Deloitte helped Standard Chartered assuage regulator concerns by breaking the law and sharing confidential regulatory information with the bank from its other “monitor” engagements.
Deloitte has been working on a similar engagement to correct AML violations at the nationally chartered US operations of HSBC Holdings PLC in New Castle, Delaware, where the firm is again acting at the behest of the feds. The HSBC engagement is a "look-back" at thousands of old transactions ordered by the OCC in 2010 when the regulator cited the bank for multiple anti-money laundering failures. According to Reuters last year, it was not going well.
The New Castle look-back, overseen by consultants Deloitte LLP, was manned by more than 100 former law-enforcement officials, bank examiners and others. Many of them were working under contract with outside anti-money laundering consulting firms…In the HSBC look-back, one contractor said, many suspicious cases were "buried." In one case, the contractor wanted to find out why 13 parties had wired a total of $1.3 million into an HSBC account in Hong Kong on the same day. He said that when he asked a Deloitte supervisor to request that the Hong Kong office provide information about the customer, he was told that decision rested with the HSBC manager in charge of the account. The information never was provided, and the same contractor said he was later fired for not clearing enough alerts. The look-back team held brief weekly meetings at which Deloitte overseers ticked off how many cases had been cleared and complained about delays. Several contractors said that investigators deemed slow on the job were fired.
Similar allegations - that Deloitte seems more eager to please a bank involved in a regulatory action rather than stand tough as the proxy for the regulator - recently surfaced at Lloyds Bank in the UK. That engagement addressed customer claims processing for payment protection insurance (PPI), designed to cover loan repayments for debtors who became ill, had an accident or lost their jobs.
PPI was mis-sold by UK banks on a massive scale to customers who did not want or need it. According to the London Evening Standard, Lloyds - the biggest PPI seller in the UK - was fined £4.3 million by the Financial Services Authority for not settling PPI claims promptly.
From the London Evening Standard on June 11:
Lloyds Banking Group has admitted “issues” in the handling of PPI complaints and fired Deloitte which operated the unit. It comes as an undercover reporter on The Times claimed that when he went through the training procedure to join the PPI complaint centre at Royal Mint Court he saw staff taught how to “play the system” against customers. This included turning a blind eye to the risk that fraud may have been committed and knowing that most customers gave up if their complaint was rejected first time around.
Most of the headlines for news stories about Deloitte FAS’s agreement with DFS regarding Standard Chartered referred simply to “Deloitte”. Deloitte spokesman Jonathan Gandal tried to make the distinction in the firm's official statement:
Deloitte FAS looks forward to working constructively with DFS to establish best practices and procedures that are ultimately intended to become the industry standard for all independent consulting engagements under DFS’ supervision. It is important to note that, as the agreement also states: “This is not intended to affect engagements performed by any Deloitte entity other than Deloitte FAS. Neither the fact of this agreement nor any of its terms is intended to be, or should be construed as, a reflection of any of the other practices of Deloitte-affiliated entities.”
However, Deloitte itself says on its global website:
“Deloitte” is the brand under which nearly 200,000 professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, and tax services to selected clients.
Can’t have it both ways.
So it’s not too surprising that the public, and even regulators, legislators, and some journalists are often confused about the difference between Deloitte LLP the audit firm, Deloitte Consulting the consulting firm (not to be confused with Deloitte FAS LLP a different consulting firm), and Deloitte the tax advisory firm when one of them gets into trouble. It’s also hard to separate the Deloitte global member firms such as Deloitte’s China firm when it’s sued or sanctioned for Chinese reverse merger fraud and refuses to cooperate with the US regulators from Deloitte Touche Tohmatsu the global “coordinating” firm and then from the Deloitte US firms. The Big Four audit firms look more and more like any other multinational corporation hiding behind myriad separate legal entities rather than global professional services partnerships providing “seamless” service delivery.
Reputation risk doesn’t seem to get in the way anymore of audit firms helping some criminal banks do lots of illegal things. That’s what I said when DFS first made the allegations against Deloitte in August of last year.
“Reputation risk” is now an oxymoron. Bankers and their enablers, the audit firms, have no risk to their reputation from anyone that matters. They are both repeatedly the subject of settlements, consent decrees, non-prosecution agreements, cease and desist orders and the rest of the regulator arsenal. They keep profiting and repeating their crimes with impunity. That’s what I warned about when Deloitte was awarded the “independent” consultant role at JP Morgan Chase, performing the “look back” review required by the OCC/Fed consent decrees signed with a dozen banks in April of 2011 as a result of foreclosure abuses. Deloitte has an even bigger incentive to cheat and look out for JPM Chase and itself on that engagement, rather than borrowers who were cheated by the bank. Most of the foreclosures Deloitte is “independently” reviewing are based on mortgages acquired by JPM from Bear Stearns and Washington Mutual, two of Deloitte’s audit clients before those institutions failed and were taken over by JPM.
I wondered out loud to NY DFS spokesman Matt Anderson, "How does DFS plan to make sure Deloitte, and the banks, don't circumvent the ban by shifting Deloitte FAS staff to other Deloitte entities and running new engagements through them?"
Anderson reassured me. "DFS has the ability to monitor compliance since it controls access to confidential supervisory information under its 36.10 authority. They can't access the information without our approval. The road runs through our agency."
Benjamin Lawsky and the NY DFS team are on it. Let's hope federal and state regulators in the US and international regulators follow that lead with similar tough actions against all the various forms, and firms, used by the Deloitte and its fellow Big Four enablers – PwC, KPMG and Ernst & Young.
Deloitte provided its full official statement, a portion of which was reproduced above, in response to my request for comment.
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e5baff72845bf67db8c59092060b25dd | https://www.forbes.com/sites/francistapon/2018/08/24/reliable-water-and-electricity-is-a-luxury-in-guinea-bissau/ | Reliable Water and Electricity Is A Luxury In Guinea Bissau | Reliable Water and Electricity Is A Luxury In Guinea Bissau
It's surprisingly popular to use the word Guinea when naming a country. Consider these four countries:
Guinea Guinea Bissau Equatorial Guinea Papua New Guinea
Only Papua New Guinea is not located in Africa (it's in the southwestern Pacific Ocean).
It's surprising that guinea pigs don't come from any of these countries and that none of them touch the Gulf of Guinea.
In my quest to become the first person to ever know the difference between the three Guineas in Africa, I began by visiting Guinea Bissau.
From space, the waters of Guinea seem inviting. (Photo by Planet Observer/Universal Images Group via... [+] Getty Images)
The easiest way to illustrate the state of Guinea Bissau’s infrastructure is to observe the potholes in front of the Presidential Palace and Parliament. If the President can’t manage to make his short commute to the office smooth, then you know the country is in trouble.
The roads varied from the horrible to the horrendous. But there are exceptions.
Street vendors sell food and goods on the roadside at Bandim market in Bissau, Guinea-Bissau, on... [+] Monday, Feb. 12, 2018. The International Monetary Fund (IMF) said an increase in public and private investment would provide new growth impetus for the West African nation. (Photographer: Xaume Olleros/Bloomberg)
I learned that staying in the $15 per night hotel was unwise because you’re paying to sleep in a wet sauna. The electricity almost never worked. Therefore, even if the hotel supplied a fan to help fight the malaria-infested mosquitoes and the humidity, it would just work for two hours. This also gave you limited time to recharge your batteries.
The next night, I moved to a $40 hotel that had its own generator. They guaranteed electricity. However, in the middle of the night, they ran out of fuel.
In the 19th century, merchants in the market square of Boulam, Guinea-Bissau would sell water.... [+] Today, most Bissau-Guineans get their water from wells, even in the capital since the government doesn't supply municipal water in a dependable fashion.
When it rains, get naked outside
A curious thing happens when it rains in Guinea Bissau. To understand it, you need some background. Just like electricity cuts are the norm, so are water cuts. Whenever I turned a faucet, the only thing that usually came out was the hiss of air.
Hotels store water in cisterns. When you need to shower, they’ll bring you a bucket of water.
Few Bissau-Guineans have a well or a cistern. Instead, they have a couple of jerry cans with water. Filling them up is typically a tedious affair and may cost 10 cents.
Therefore, when it rains, many people (especially the young ones) will strip off their clothes, grab a soap bar and lather up in the middle of a warm tropical downpour for all to see. It gives new meaning to when the weather forecaster predicts showers.
Bissau is always hot. Electricity rarely works. Refrigeration is rare. Result: fresh meat attracts... [+] flies but Bissau Guineans buy it anyway. (Photographer: Xaume Olleros/Bloomberg)
To escape the heat, I took a ferry to Bubaque Island. The few tourists that Guinea Bissau receives mainly charter a boat to fish around the 88 Bissagos Islands, which are located over 60 kilometers away from the capital. If harpooning a fish is your thing, Guinea Bissau is the place to go.
Bubaque Island has plenty of deserted beaches. (Credit: Shutterstock)
A cheap ferry from the capital goes to the island of Bubaque. You might want to charter a private yacht if you don't want to share your boat ride with pigs and goats.
On Bubaque, you can bike across the island. For those who love boating and fishing, Guinea Bissau is a destination that will surprise you. You'll encounter extreme poverty and extreme friendliness.
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68f117e2a48184c3932f1164e1a9ab33 | https://www.forbes.com/sites/francistapon/2018/08/31/driving-across-guinea-bissau/ | Driving Across Guinea Bissau | Driving Across Guinea Bissau
After staying a couple of weeks with Nicolas Vasic, the French Consul for Guinea Bissau, I was ready to drive across the tiny Lusophone country. Vasic would remain in Guinea Bissau for another year. Then he served as the French Consul in Monaco for two years. Thus, he transferred from one of the world’s poorest countries to one of the richest ones.
In 2018, Vasic is enjoying his retirement in Nice, France. He still appreciates things that are hard to find in Guinea Bissau: running water, reliable electricity, and immaculate roads.
Bissau Guineans females fetch the water since running water is a rarity and the society doesn't... [+] expect males to do that chore. (Photo credit: XAUME OLLEROS/AFP/Getty Images)
Once I got off the main highway (south of Gabu), the road deteriorated. On my way, I passed cashew trees as well as fields of corn and cassava.
Cashew nuts are the cash crop of Guinea-Bissau. (Photo credit: SEYLLOU/AFP/Getty Images)
The biggest impact that the Portuguese ever had on Guinea Bissau was when they introduced maize and manioc (also known as corn and cassava). Unlike grains, cassava can be stored underground for over two years.
First introduced in the 1500s, those two crops created a population boom because the locals suddenly had easy access to calories. Today, it’s their staple food. Nowadays, most locals, especially the women, are fat.
Cassava = Cheap Carbs. (Photo credit: ISSOUF SANOGO/AFP/Getty Images)
The countryside was tranquil. There were countless small thatch-roofed homes. Green grass was everywhere. The reddish dirt road was sometimes flooded. That gave the sensation of driving in a creek.
Jungle trails abound in Guinea Bissau. (Credit: David Degner/Getty Images)
At first, locals were shy about being filmed but then they would enthusiastically pose with their children. Sometimes children carried babies. The youngest kids were half naked. The men wore T-shirts. Nobody’s clothes were ever torn. They were poor, not destitute.
We're rich in time. (Photo credit: XAUME OLLEROS/AFP/Getty Images)
During my last couple of days in Guinea Bissau, I didn’t see another car. I hadn’t seen a gas station since the capital. I bought 20 liters of diesel from a man who had some in a jerry-can. His village had 300 people. In the deserted roads, one of my hitchhikers used my ax to cut a tree that had fallen on the road. He invited me to stay in his thatched hut since the night was falling.
When it was dark, I let him borrow my crank flashlight. I loved it because that torch because it didn’t need a battery. It fascinated him.
The next morning, I forgot to remind him to return it to me. If he did purposefully steal it, then he was the first West African hitchhiker (among hundreds) to steal something from me. (Read my hitchhiking tips.)
I was surprised that there wasn’t a bridge to cross the Rio Coruba at Che Che. Instead, a metal cable stretched across the river. A diesel-powered generator would pull a barge along the cable. Since I arrived at 6:30 a.m., I had to wait until the barge operator showed up at 8:30 a.m. Meanwhile, women were cleaning their clothes by the river. One was topless. Children under five were usually naked.
Baby breastfeeding while his mother washes clothes.
I didn’t know it at the time but driving in this remote area of Guinea Bissau can be dangerous. The year after I left, 24 locals were killed when their bus exploded on a landmine. After that, Guinea Bissau asked for foreign assistance at demining. By sunset, I arrived at the base of Guinea Bissau's tallest mountain, which is effectively a hill.
Read more of my articles about Guinea Bissau.
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afcab332221c8fb80ebf2d16b9c0135d | https://www.forbes.com/sites/francisvorhies/2011/06/17/biodiversity-what-are-we-talking-about/?utm_medium=twitter&utm_source=twitterfeed | Biodiversity -- What Are We Talking About? | Biodiversity -- What Are We Talking About?
The first edition of the TEEB Report for Business stated that “Businesses that fail to assess their impacts and dependence on biodiversity and ecosystem services carry undefined risks and may neglect profitable opportunities.” This is just one example of the growing recognition of the importance of biodiversity for companies.
However, when we talk about biodiversity, what are we talking about? Biodiversity – or biological diversity – is a terribly complex concept with two widely used but significantly different definitions. If companies are to address biodiversity both as a business risk and as a business opportunity, they should be clear about how the term is being used.
The new EU Biodiversity Strategy (released last month) defines biodiversity as the “extraordinary variety of ecosystems, species and genes that surround us” and as “our natural capital, delivering ecosystem services that underpin our economy." This definition closely mirrors the definition adopted by the 193 Parties to the Convention on Biological Diversity:
“Biological diversity means the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes
of which they are part; this includes diversity within species, between species and of ecosystems.”
Interestingly, this definition differs from the one often used by one of only three countries that are not a Party to the Convention – the United States. (The other two non-Parties are Andorra and the Holy See.) The US Agency for International Development defines biodiversity as: “the variety and variability of life on Earth. This includes all of the plants and animals that live and grow on the Earth, all of the habitats that they call home, and all of the natural processes of which they are a part.”
The US definition places much more emphasis on the species component of biodiversity and is actually close to the definition often used by scientists. The American Heritage Science Dictionary, for example, defines biodiversity as “The number, variety, and genetic variation of different organisms found within a specified geographic region.”
So is biodiversity referring the variety of species within a particular area or is it also about the area itself, i.e. the “ecological complexes” and the “ecosystems” included in the definition of the Convention?
The definition that companies use is material in that it will influence their strategic approach to biodiversity – whether to focus on conserving wild species or more broadly on conserving the integrity and diversity of natural environments and processes upon which they impact or depend.
For companies, the more encompassing and internationally accepted definition of the Convention on Biological Diversity is probably more useful. Biodiversity is about species and their habitats, but importantly it is also about ecosystems and the ecological complexes of which they are part. This leads on to the next question about biodiversity: What are we supposed to do about it?
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e57a59124bf3d7b9c5a76fe33ce33830 | https://www.forbes.com/sites/francisvorhies/2012/07/09/sustainable-agriculture-post-rio20-opportunities-for-the-sai-platform-coca-cola/ | Sustainable Agriculture: Post RIO+20 Opportunities for the SAI Platform & Coca Cola | Sustainable Agriculture: Post RIO+20 Opportunities for the SAI Platform & Coca Cola
09 July 2012
One of the hot topics at the recent Rio+20 Conference was sustainable agriculture. It is a topic that is particularly important to Dr Ernesto Brovelli who is the Senior Manager, Sustainable Agriculture at The Coca-Cola Company and also the new President of the Sustainable Agriculture Initiative (SAI) Platform. I asked him about his views on Rio+20, sustainable agriculture and biodiversity at both Coca-Cola and the SAI Platform.
Francis: Sustainable agriculture was highlighted in the Rio+20 outcome document. How can the SAI Platform respond to this re-commitment from our governments?
Ernesto: “Though the concept of sustainable agriculture is not new, Rio+20 provided a welcome injection of new political support. This in turn provides new impetus for the SAI Platform to further its programmes of work on sustainable agriculture.
“About 8 years ago, the SAI Platform developed the principles and practices for sustainable agriculture for various commodities such as arable crops, fruits and coffee. In so doing, it aimed to align expectations and facilitate a common understanding of the issues within the food and beverage sector and its many stakeholders. Today, we are focusing our efforts on operationalizing these principles and practices by establishing check-lists as tools for engaging the growers.
“We are also further developing a framework for Sustainability Performance Assessment (SPA) which aims to measure the environmental impacts of practices in the field. The check-lists and SPA are practical means of implementing the Rio+20 outcomes.”
Francis: On the SAI Platform’s website, a new publication on ‘A Framework for Corporate Action on Biodiversity’ from the UN Global Compact and IUCN has been posted. Likewise, at Earthmind, we have also launched a new website on BioTools for Business. How might the SAI Platform address the biodiversity dimensions of sustainable agriculture in its work?
Ernesto: “Biodiversity has been difficult to address in part because it is a complex concept, making it challenging to measure and manage. We see an important first step taken by SAI Platform in creating awareness of biodiversity as a core business issue for the food and beverage sector and helping our members and stakeholders to understand what it means for growers and operations.
“Biodiversity also needs to be more fully integrated into the check-lists for principles and practices which I mentioned. Additionally, we need to develop a practical approach such as ‘functional biodiversity’ with respect to conservation and restoration. By functional biodiversity, I mean aligning natural processes in a landscape with farming practices so that biodiversity, while being protected, it also adds greater value to the growers.”
Francis: For Coca-Cola, Ernesto, biodiversity is clearly a priority issue. What is Coca-Cola doing to ensure that its operations are biodiversity responsible? Also as a member of the SAI Platform, do you see opportunities for sharing your experiences with other members to build an industry-wide approach to biodiversity responsible management?
Ernesto: “Of course, biodiversity is important to the farming interests of Coca-Cola, such as fruit farming for our Minute Maid branded fruit juices and drinks, since many fruit are reliant on pollination for their development. Biodiversity also has direct linkages to the emphasis that the company has placed on water and energy responsibility. Good water management can and should sustain and enhance biodiversity. In this regard, biodiversity needs to feature in indicators on water quality. Likewise, good energy management can also have direct and indirect positive impacts on biodiversity.”
“At Rio+20, all the sustainability issues were addressed as they need to be addressed by the SAI Platform and by its members, such as Coca-Cola. These include biodiversity, water, energy, and rural employment. Indeed, through the SAI Platform, all best practices and lessons learned can be shared to help the food and beverage sector as a whole ensure that agriculture becomes more sustainable.”
One good example for the SAI Platform from Coca-Cola is how the company has been connecting the sustainability dots between biodiversity and water in its support for wetlands projects in Europe. A flyer from the corporate website notes that:
“Protecting wetland habitats and watersheds and restoring biodiversity are the aims of several projects, including the regular ‘Thames 21’ river clean-up by employees in Great Britain and Greece’s clean-up of Lake Kerkini, where 1.4 tonnes of rubbish was collected in a single day.”
http://blogs.forbes.com/francisvorhies/
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6e08a5b5b9dd51654a1665e6e8047451 | https://www.forbes.com/sites/francoisbotha/2018/12/17/the-rise-of-the-family-office-where-do-they-go-beyond-2019/?sh=309545825795&utm_campaign=The%20Business%20of%20Family&utm_medium=email&utm_source=Revue%20newsletter | The Rise Of The Family Office: Where Do They Go Beyond 2019? | The Rise Of The Family Office: Where Do They Go Beyond 2019?
Family offices are moving out of the stuffy boardrooms and starting to become agile forces to be... [+] reckoned with. Photo by rawpixel on Unsplash
There has been a significant increase in the number of family offices globally over the last ten years and this trend is expected to continue. EY estimates that there are currently 10,000 single-family offices, a ten-fold increase since 2008. Even more impressive is the sheer amount of wealth being managed by these firms. Research conducted by Dominic Samuelson, CEO of Campden Wealth, suggests family offices currently hold assets in excess of $4 trillion. Family offices are now capable of making transactions that were traditionally reserved for big companies or private-equity firms and therefore are becoming a disruptive force in the market-place. This trend has received growing attention from large investment banks, who have moved to appoint senior bankers to manage family offices. There have even been strategic shifts within the hedge fund industry, The Wall Street Journal reports that since 2011, “three dozen hedge funds have converted into family offices." In the same article, Ward McNally sums up the family office phenomenon quite neatly by saying that they are “as quiet as you possibly could find”, but “they’re writing extremely large checks.” It is clear that family offices have become a force to be reckoned with.
What Exactly Is A Family Office?
Even today the term "family office" is still one that can be used in many different contexts and carries a variety of different meanings. The family office was initially created to look after the wealth of ultra high net worth families. But the modern-day family office does far more than that. Martin Graham, Chairman of Oracle Capital Group, explains how family offices have evolved to be a one-stop shop.
We work with anything from help with immigration, finding a property to live in, getting children into school, setting up charitable foundations, or project finance. And then, critically, we do a lot of wealth structuring: preserving wealth within and between generations by using things like family trusts and foundations. And on top of that, we also do asset management.
There are two main variants of family offices that have emerged: The single family office and multi-family office. The former is the traditional family office that serves as an advisory and wealth-management firm supporting one ultra high net worth family. The latter serves multiple families, and this format is becoming increasingly popular. Even the original Rockefeller family office now has over 250 clients.
How Did Family Offices Come About?
Most agree that the origins of the family office were European, with the concept being developed and formalized in the U.S. by the House of Morgan and the Rockefellers soon after. Wealth management was the most significant driver, and therefore it is not surprising to see the proliferation in family offices over the last few years as the number of billionaires grows, and the time taken to make significant amounts of money decreases. Other drivers include global volatility, new types of investment options and the focus on multi-generational wealth preservation, all requiring specialist advice. “We saw a growing demand for advice and expertise arising from direct investments,” said Michael Maslinski, Partner at Stonehage Fleming. “This was compounded by increasingly complex regulations, a more litigious society and the risks of an unstable global economy.” Commenting on long-term wealth preservation, Maslinski says: “For most families, the biggest risks they face are in the management of succession and intergenerational transfer. The practicalities of handover frequently impact both on the decision-making process and the decisions themselves, particularly where specialist assets are involved.”
What Does The Future Hold?
Moving beyond 2019, both single- and multi-family offices will continue to expand their focus to include much more than just wealth management, legal and governance. Other main areas that will see a lot of attention include working toward real-time consolidated reporting, developing soft factors like defining a clear mission and purpose and negating new risks like the complex universe of cybersecurity.
The rise of the family office is set to continue, along with plenty of changes expected within this sector. “We will see a move towards greater professionalization of the family office,” says Maslinski.
Family offices today must prepare to give advice on an ever-broader range of issues and, as such, need to ensure that they have the appropriate resources to meet this new demand. The objectives and role of the family office will need to be more clear than in the past.
Graham adds: “I’m convinced that a lot of people won’t be in this business in the long term because they don’t follow a client-led approach. The key to success is having very deep, involved relationships and understanding of clients , and being able to provide increasingly sophisticated services in a way, tailored to client needs.”
In Short
The combination of continued global uncertainty and new wealth sets the scene for sustained growth of the family office sector. As requirements become more complex and holistic, we can expect to see the family office offering evolve to include a renewed focus those elements that will help build strong family brands and manage solid reputations.
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0df2c99bf3d097b125027c5e0bc500ed | https://www.forbes.com/sites/francoisbotha/2019/04/17/leverage-strategic-kpis-soft-assets-and-technology-to-drive-decision-making-in-family-offices/ | How To Leverage Strategic KPI's, Soft Assets And Technology To Drive Decisions In Family Offices | How To Leverage Strategic KPI's, Soft Assets And Technology To Drive Decisions In Family Offices
KPI's alone are not the best suited for family offices. But tracking these alongside soft assets can... [+] help drive decisions that better align with families. Getty
Key Performance Indicators are essential in managing any business. Not only do they define a picture of success but they are also intended to horizontally and vertically align people and functions to specific goals and create a sense of personal and shared accountability. At the end of the day, it is only what is measured and tracked that gets managed. However, despite the obvious necessity to leverage KPI’s as a tool to enable success, an extensive MIT Sloan Management Review survey indicates that only 27% of companies strongly influence process and people management through their KPIs. Additionally, many companies who are actively tracking organizational and functional performance against a set of KPIs are still limiting their performance measurements to traditional and retrospective hard factors like spend, revenues, and profits which offer little insight into how a business will likely perform in the future and do not align to company strategy or vision.
As early as 1992, Robert Kaplan and David Norton introduced the Balanced Scorecard Framework which utilizes strategy mapping to better align KPIs to strategic objectives and to go beyond outcome-tracking by incorporating critical performance enablers like customer satisfaction, internal efficiencies, talent development and culture into the KPI mix. Despite the editors of Harvard Business Review considering it to be one of the most influential business ideas of the past 75 years, it is only a minority of companies that are fully leveraging scorecards to drive effective decision-making. Moreover, now that 27 years have passed since the Balanced Scorecard was initially introduced, new soft factors like agility, purpose and reputation have come to the fore and new intelligent reporting technology is allowing progressive data-driven companies to get a massive head-start on the rest of the field.
Agility Is Essential In A Fast-Evolving World
Aaron De Smet, leader of organization design at Mckinsey, defines agility as the ability of an organization to renew itself, adapt, change quickly and succeed in a rapidly changing, ambiguous, turbulent environment. Considering the pace of change that businesses are now experiencing — with accelerating technological innovation, intensifying competitive pressure and fast-evolving customer expectations — it has become increasingly important to be flexible and swift in terms of decision making. For that reason, consider appropriate agility measures like speed-to-market, decision-making time-frames etc. in your company scorecard.
Improving Agility With Technology
Swift and effective decision-making will require improved analysis and reporting tools that provide an ‘at a glance’ yet dynamic view on business health. Expect companies to start leveraging consolidated multi-variable reporting tools which include hard and soft KPIs, supported by AI and machine learning, to make informed business decisions. According to an MIT Sloan Management Review article Leading With Next Generation Key Performance Indicators, machine learning is “poised to radically influence how executives use KPIs to monitor and spur growth. As next-generation predictive algorithms are incorporated into business process planning and design, they seem destined to inspire next-generation digital dashboards. KPIs will consequently offer predictive and prescriptive indicators, not just rearview-mirror reviews. Data-driven companies that leverage these advances by reconceiving their KPIs will enjoy distinct competitive advantages. ”
Hold Your Organisation Accountable To Its Purpose
Our next generation consumers and employees are motivated and inspired by a very different set of principles and priorities. A purpose-driven culture is essential to attracting next-generation talent and to connect companies and brands more authentically with their target audience. It is becoming increasingly important for businesses to establish a greater level of affinity and emotional connection with their customers. Companies are encouraged to clearly articulate their purpose statement — a reason for being that supersedes sales and profit and identify practical and organizational measures to track their commitment to this purpose.
Other Soft Factors To Consider In Your KPI Reviews:
Corporate Culture: Consider using internal surveys to track culture scores and to gauge employee morale, loyalty and satisfaction.
Brand and Reputation: Consider appropriate measures to track perceptions of your business amongst your target consumers or potential employees.
Talent Management: Incorporate measures to assess company performance in attracting and retaining the right talent, and progress with training and development, diversity scores, etc.
Customer focus: Consider measures that can track product satisfaction and brand equity and understanding where customers are at in terms of brand loyalty and advocacy.
Start Now
Take steps now to future-proof your business by aligning the focus areas of your functions and work-force to measurements that matter. This may require some introspection to really understand what success means for your company and what enables that success, but that is what winning companies do. Reap the benefits by demonstrating a real commitment to tracking your company’s performance against these soft and heard measures and embrace available technologies to support a more agile, data-driven approach to decision-making.
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4a8df8165d920208c5fdd93a0c678ed3 | https://www.forbes.com/sites/francoisbotha/2019/10/15/from-mom-and-pop-shops-to-professional-family-offices--what-is-the-key-to-sustained-business-growth/ | From Mom-And-Pop Shops To Professional Family Offices — What Is The Key To Sustained Business Growth? | From Mom-And-Pop Shops To Professional Family Offices — What Is The Key To Sustained Business Growth?
Many businesses with humble beginnings have been able to weather change and grow into empires. Could ... [+] professionalization hold the key to success? Lee Russell, Texas 1938
Family businesses are built with an entrepreneurial vision that, at its core, has continuity, renewal, longevity and legacy in mind. To realize these objectives requires not only the achievement of sustainable business performance and profitability but also harmonious family relationships, next-generation engagement and successful transitions as succession comes into play
Petru Sandu's "Framework of family business professionalization," demonstrates that achieving this requires varying degrees of professionalization. This is necessary throughout the business's overlapping ownership and family life cycles.
The Complexity Of Family Businesses
All businesses face challenges. What is unique about family-owned operations is the inherent complexity of family dynamics they encounter. These complexities intensify as the ownership life cycle unfolds. This life cycle, originally described by Kelin E. Gersick, Ivan Lansberg, Michele Desjardins, and Barbara Dunn in Stages and Transitions: Managing Change in the Family Business, forms part of Sandu's professionalization framework.
1. The Founder Stage
Most family businesses begin at the controlling owner or founder stage with a single owner and their spouse enjoying full ownership and control. During this stage, the family is generally young and small, relationships can be contained to a small sphere, and usually, the business is the focal point of the family's life.
The owner is typically the visionary and indispensable nexus of business activity, building value and directing activity. To survive, grow and ensure business efficiency and continuity, according to Sandu's framework, management and leadership development both among family and non-family members is vital during this stage, as is succession planning if the business is to reach the next phase of the business life cycle.
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Some formalization is required to do this effectively. Business objectives, as well as the family's values and vision, should be clearly defined and communicated. A detailed succession plan that encompasses both contingency and purposeful succession naming should be put in place if the organization is to continue to thrive. Next-generation engagement efforts become a necessity to ensure effective succession transitions.
2. The Sibling Stage
During the second generation of the ownership life cycle, the sibling stage, brothers and sisters control the business together through ownership. The controlling family is often larger and more diverse and the company more sizable and complex. Family ties and relationships can become slightly disconnected as the siblings start their own families.
At this stage, the continued success of the business relies on the siblings' ability to work as a cohesive team. According to Sandu's framework, professionalizing the business by defining power structures and forming a family council or office, along with a family constitution, can help to ensure harmony as well as mitigate current and future conflict.
3. The Cousin Stage
By the time third-generation enters the business, the cousin stage, significant complexities arise. Both the company and the family are larger and more complex. With three generations related not only by blood but by marriage and often with various parties operating from different corners of the globe, new dynamics come into play.
Cousin families are presented with numerous challenges, from accepting branch differences to maintaining balances of power amongst these, as well as retaining aggressive reinvestment in the business. Additionally, they're faced with managing the psychological impact wealth has on their families. Oftentimes the new dynamics require a complete redefinition of the family mission as they require one that encompasses the extended family.
This unique microenvironment impacts not only the business and its future, but also the family, driving and shaping the future of both. Thus, maintaining and enhancing family cohesion and dedication to the business is paramount to continuity.
At this stage, the importance of professionalization within the family business becomes increasingly evident. Research shows that the introduction of formal governance structures, councils and boards within the organization becomes essential and that most family businesses are more professional by this stage.
The success of these professionalization efforts relies on all parties, including next-generation family and external members being on the same page to avoid conflict.
The Growth Versus Control Trade-off
To ensure the successful transition from a young family business, to what Sandu terms "the passing of the baton," higher levels of formality are required. Thus, the younger generation often drives professionalization.
Professionalization, can, however, be a double-edged sword if not managed accurately. W. Gibb Dyer, Jr refers to it as a "rational alternative to nepotism and familial conflicts that plague a family business." It must, however, be noted that increasing professionalization might contribute to the weakening of the family's identification with the business and often even diminished family control. This is because pursuing growth ultimately requires external party involvement and, in some cases, even funding. A fact that often explains older generations’ resistance to professionalization efforts.
Still, when managed well, attorney and mediator at Family Business Matters, Sonja Kissling believes that professionalization can afford the modern family office a substantial advantage over other firms. She explains that professionalization is a U-shaped process.
Initially professionalization is likely to weaken the family’s identification but professionalized family firms are then likely to have a strong family identification. Sonja Kissling, Attorney & Family Business Mediator
In evaluating the professionalization of the family, the trade-off between growth and control is a significant consideration. It is also one that can be a source of great interpersonal conflict if all family members are not in agreement on the proposed strategy.
Professionalization With Purpose
Different levels of professionalization are necessary within the various stages of family business evolution. Being aware of the common challenges that a family may face at each stage of the multiple lifecycles allows family members to be proactive and address these issues before tensions arise, making room for greater prosperity.
Still, it is vital to be cognizant of what to professionalize within the family business and to what degree. According to family dynamics consultant, Brian Russell, "The business should exist to serve the family more than the other way around and in order for it to continue to do that over time, a progressive degree of professionalization is likely to be needed, potentially one day culminating in complete professionalization - if, at that point, divestiture of control is what best serves the family."
He adds, "'What best serves the family?' can be a gut-wrenching question, particularly for siblings who still remember the founder's idealized long-term vision of the business." When it comes time to answer it, or when reassessing a preceding generation's answer, Russell believes that "A good family-dynamics consultant can help the family members, individually and collectively, to take their respective loyalties, varying senses of duty, differently-aligned priorities, etc. into account and arrive at the right answer for them." From here it can be determined exactly what needs to be professionalized and when.
Professionalizing with purpose throughout the various stages of the business's ownership and the family life cycle is vital. This not only ensures the preservation of the organization's entrepreneurial spirit but also its ability to capitalize on opportunities, reinvent itself and continue to grow and prosper for generations to come.
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b083efa982dd64aa6499e2cd5f8b5eed | https://www.forbes.com/sites/francoisbotha/2019/11/28/the-5-cs-of-family-business-success/?sh=4b7011c7d281 | The 5 Cs Of Family Business Success | The 5 Cs Of Family Business Success
Lego is not only great to build a model of a family business but also a model for family business ... [+] success. Alphacolor on Unsplash
A growing body of evidence indicates that family-owned operations outperform non-family owned ones in every sector across the globe over the long term and especially during times of recession. This finding has been reflected in Credit Suisse Research reports since 2006, as well as research conducted by McKinsey and the Boston Consulting Group.
What gives family-owned organizations this unique edge? To answer this question, researchers Danny Miller and Isabelle Le Breton-Miller studied various global family businesses. These organizations were assessed based on a specific set of criteria. The companies in question were placed either first or second in the world in their industries, they had been through the succession process at least once in their generations and they held at least $1 billion in assets or sales. Their samples included companies like Michelin Tyres, Estee Lauder, Hallmark cards, Walmart, Cargill and L.L Bean.
What they discovered was that the best performers pursued what they referred to as the “the 4C advantage” that enabled them to compete effectively. These include continuity, community, connection and command.
1. Continuity
While most publicly traded companies invest with their quarterly earnings or next shareholders report in mind, family businesses invest in the long run. Founders and next-generation heirs aren’t thinking about the next month but rather the next three decades to ensure business continuity so that their organizations can support both their children and grandchildren.
The long-term mindset and focus on stewardship afford family businesses a significant advantage. This is because it often translates into capital being allocated in a more pragmatic, sustainable and disciplined manner.
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One such example, drawn from the Miller and Breton-Miller study, is that of Cargill. A few years back, the grain giant took their record earnings and invested 110% of it into global enterprise expansion, something you probably wouldn’t often see taking place in public companies.
While long-term capital preservation and value creation may be favored when it comes to the overall strategy, successful family-run businesses don’t just sit on their assets. They aggressively pursue and leverage opportunities and strategically plan trajectory shifts to create higher value for both the family and their investors. This often explains why family- and founder-owned companies generate better financial metrics, exhibiting more significant growth and profitability than their non-family counterparts.
2. Community
Family businesses start as just that – family. Families naturally have a degree of unity that becomes an inherent part of the company. As the operation grows and other family members or external parties are brought into the fold, the sense of unity holds from it, a sense of community forms.
The family’s objectives and values are shared and adopted by all parties involved, essentially uniting the tribe. As the company continues to expand, the shared values and goals are instilled in all who join it. This helps to develop a cohesive, collaborative workforce.
3. Connections
As family businesses often begin as local mom-and-pop establishments, the foundation of these organizations is built on more than just an exchange of goods or services. As business owners, the founders generally invest time and effort in forging connections and shared experiences with both their clients and suppliers. As their business grows, these strong relationships continue and help to foster loyalty.
A great example of this is illustrated in IKEA’s early growth phase. When one of its suppliers was struggling to keep up with IKEAs growing demands, instead of taking their business elsewhere, IKEA extended a loan to the supplier to develop its own business. To this day, supplier relationships remain an integral part of IKEA’s business, and the company continues to invest in suppliers’ companies as it pursues its business objectives.
4. Command
As family-owned companies are in command of their own operations, they are more agile, can make decisions rapidly and act by moving into markets relatively quickly. This offers them a considerable advantage over their non-family peers when it comes to taking advantage of opportunities that arise.
Within families, communication is usually honest and unencumbered. Ideas can be discussed at breakfast; plans can be made at lunch and development can be actioned by dinner. In other types of organizations, especially those constrained by bureaucracy, the same process can take months.
A proposed fifth “C”
In addition to Miller and Breton-Miller’s 4Cs of advantage, conclusions drawn from recent research could lead to the proposal of a fifth “C”, one that is emerging as a significant differentiator between successful family-owned businesses and their competitors — Conservativeness.
Credit Suisse research shows that family-owned companies typically have less leveraged balance sheets, a fact that helps to insulate them during times of financial crises. What’s more, is that they are also able to reduce leverage more rapidly in the years following such periods. This not only contributes to their resilience but also ensures continuity, a concept in which conservative long-term views often find their origin.
This is because founders and family owners with long-term views tend to be cautious about spending and more mindful of the returns when doing so. For example, some research shows that family-owned organizations generally have lower research and development budgets than other businesses, both public and private. This, however, doesn’t mean that they are less innovative. The study shows that they are more innovative in their processes and gain higher innovative outputs. The researchers suggest the reason for this is that family owners ensure that their staff only make sound investments as part of the broader business strategy.
Coupled with higher top-line growth and margins as well as reduced dependence on external funding for growth, these factors suggest that family businesses may also be better at generating cash flow returns as a result.
As families consider continuity and continuity planning, they need to be mindful to do so in a manner that celebrates and preserves these inherent competitive advantages and prevents anything that would diminish them.
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809e02b493d9d4258d3686a2e00700e0 | https://www.forbes.com/sites/francoisbotha/2021/02/08/elon-musk-all-in-on-bitcoin--heres-what-family-offices-should-know/?sh=ee18fba6e6d9 | Elon Musk All-In On Bitcoin, Here’s What Family Offices Should Know | Elon Musk All-In On Bitcoin, Here’s What Family Offices Should Know
Elon Musk has recently commented on cryptocurrencies with increased frequency and Musk’s Tesla just ... [+] revealed it bought $1.5 Billion worth of Bitcoin. Could this be a sign of investor confidence rising? Getty Images
Over the last couple of weeks, Elon Musk has been really vocal about cryptocurrencies. This week it's all about Dogecoin that has the potential to be the currency for the planet. And two weeks ago Musk updated his bio on Twitter to simply read "#bitcoin". Musk who has 44.7m followers also mentioned on the social audio app Clubhouse, that he thinks “Bitcoin is a good thing” and that he should have bought the cryptocurrency eight years ago. To top it all off, Tesla recently revealed it bought $1.5 Billion worth of Bitcoin.
The meteoric rise of digital assets, and Bitcoin in particular, in 2020 is undeniable. As the pandemic-ravaged world was catapulted into a new way of life at almost every level, the geopolitical environment became increasingly destabilized, global debt reached record highs, the need for increased monetary stimulus grew, and interest rate projections flattened.
These events left economists questioning the future of the world's declining fiat currencies and investors looking for avenues to decrease their reliance on the failing financial system.
In the face of these challenges, some of the world's savviest institutions and investors have shifted their focus to decentralized finance, further diversifying their portfolios into digital assets as part of their risk mitigation strategies. One of the primary investments of choice? Bitcoin.
This trend has not escaped family offices' attention. According to Nelson Minier, Head of OTC Sales and Trading at Kraken, "Over the past year, particularly over the past 6 months, there has been an increased general interest in the market from family offices in crypto assets. This has been due to the increase in money printing, which has distorted the traditional market valuations to historically high levels."
As the cryptocurrency continues to move from the fringe to the mainstream, should family offices be looking to Bitcoin as part of their long-term risk management and investment strategies? To answer this question requires a review of recent developments.
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A growing interest in alternative investments
For many family offices, considerations surrounding alternative investments, including digital assets and cryptocurrencies, are not new. Amid the prolonged low-interest-rate environments of the past few years, and with the advent of "smart investing," even the most conservative family offices have slowly shifted away from solely traditional investment focused mindsets.
In recent years, many families have gone beyond the traditional 60-40 equity to fixed income asset allocation framework within their portfolios, making way for broader diversification into alternative asset classes. A notable trend during portfolio rebalancing in mid-2020 when, according to the 2020 UBS Global Family Office Report, many favored cash, precious metals, gold and equities in developed markets within alternative investment categories.
However, as global events continue to unfold, geopolitical tensions are heightening, and doubts surrounding fiat currencies are growing. The increased risks associated with holding cash make doing so less appealing.
With these weighty concerns in mind, asset-backed digital financial instruments and cryptocurrencies have garnered renewed interest among investors the world over, with Bitcoin emerging as a frontrunner in the quest for alternatives investment avenues.
Why Bitcoin?
Since its inception in 2009, Bitcoin has been subject to skepticism and harsh criticism. At the start of 2020, it was still considered a fringe investment and even trivialized by billionaire investor Warren Buffet who stated that it held "no value."
However, as debt and money supplies continue to rise steadily, Bitcoin's potential as a viable alternative to the current system and a way to hedge against expansionist monetary policies is rapidly being recognized.
Built on a cryptography-based blockchain network, Bitcoin is a decentralized cryptocurrency that supports direct peer-to-peer electronic payments globally. It is not subject to the tracking or control of any individual, organization or government. It has a verifiably limited supply of just 21 million coins that can exist, which means it cannot be inflated.
Essentially, Bitcoin eliminates intermediaries and restores financial sovereignty and privacy to its users, an increasingly attractive prospect in uncertain times.
These factors, coupled with the cryptocurrency's track record of gaining over time, and its stellar outperformance of every mainstream asset class in 2020, captured Wall Street's attention and placed it firmly back on the radar of investment groups that may have once dismissed it. Renowned digital asset advisors, Fidelity even produced an investment thesis for it. Respected companies in the fields of business intelligence like MicroStrategy, asset management groups like Stone Ridge Holdings and the world's wealthy joined its ranks of investors.
Bitcoin and family offices
It is no secret that family offices view strategic asset allocation and diversification as the cornerstones of long-term wealth preservation and accumulation. Many subscribe to modern portfolio theory (MPT) methodologies, which encourage diversification and minimize risk without reducing returns. But even these strategies cannot protect against systemic risk.
The traditional concern surrounding Bitcoin has always been the associated risk. However, in the face of the market-wide volatility encountered over the past year, it has proven that as an uncorrelated asset showing a correlation coefficient of around zero over its lifetime, it may ironically be a viable risk mitigation solution.
According to Andrew Howard, Chief Business Development Officer, Bitcoin Reserve, "Bitcoin and family offices very logically compliment each other: Family offices aim for long-term wealth preservation throughout generations, while bitcoin is a form of money that can’t be inflated, and can therefore retain its value over time." This is a very appealing prospect for families considering diversification into decentralized finance as part of their investment and risk mitigation strategies in the current low yield environment.
It also provides an alternative to cash, and according to analysts at JP Morgan and Deutsche Bank, even gold, both of which formed part of many family offices' mid-2020s portfolio rebalancing.
While Bitcoin's volatility is flagged as a concern for those entering the market, family office capital is traditionally patient, with many investments executed with a long term view. This makes the cryptocurrency's volatility less of a concern to families than those with shorter investment timelines.
Still, Minier advises that before investing in Bitcoin or cryptoinvestments, families should be aware that the history, security, community involvement and expertise of a crypto partner are all vitally important. Therefore family offices should be diligent in who they choose to work with. The right partner is not just a place to perform a transaction but should have a truly knowledgeable and weathered team. He adds, "Custody issues are an underlying factor in family offices - in order for families to not use a custodian, they have to be comfortable with holding their own private keys."
It's just a matter of time before new technologies will be able to help navigate the risks and overcome the various challenges. One example is Multi-Party Computation (MPC) technology that can help eliminate the need to hold keys. Companies like Qredo, Unbound and Copper are bringing this enterprise-grade wallets to market, built on MPC technology. Similarly, other companies are coming online to tackle other challenges around custody, trading, brokerage, liquidity and asset management.
With growing global uncertainty and instability, a looming financial crisis and inflation concerns and increasing adoption by UHNWIs, investors and organizations, there is a very compelling case for family offices to take their place in the new financial revolution. At least part of this should involve the consideration of investments in cryptocurrencies like Bitcoin.
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069a78fe4caf9809a7c6dfc6de700e30 | https://www.forbes.com/sites/frankarmstrong/2019/02/20/revocable-trusts-the-swiss-army-knife-of-financial-planning/?sh=2ab4a94a29eb | Revocable Trusts: The Swiss Army Knife Of Financial Planning | Revocable Trusts: The Swiss Army Knife Of Financial Planning
Trusts are one of the most versatile items of the financial planning toolkit. But, they are not just for rich people. With the new higher estate tax exemptions avoiding or reducing estate tax is not a concern for most of us. But, there is so much more trusts can do to solve critical problems for most families.
Trusts are a key building block of a proper estate plan. But, today, let’s just explore the simplest type of trust and the benefits that you might enjoy during your lifetime.
What is a trust?
First let’s examine what trusts are. We have had trusts for almost 1000 years since the English knights rode off to the Crusades and left their property in the hands of trusted individuals to manage during their absence. And key concepts go back another thousand years. Beginning in the 12th century a large body of English common law evolved all of which was later adopted by the colonies when they declared independence.
Trusts are a unique concept evolved from English common law. Countries based on civil law don’t have them and have struggled to provide alternative vehicles with comparable utility.
Lawyers love to explain that trusts are not entities like persons or corporations. That’s a distinction without meaning for most of us. Who cares? The less said about that the better.
There are three parties to a trust: The owner of some property (settler or grantor) turns it over to a trusted person or organization (trustee) under a trust arrangement to hold and manage for the benefit of a person or persons (beneficiaries). Normally a written trust document (the trust) sets out the terms of the arrangement.
Trusts can hold many different kinds of assets including but not limited to stocks, bonds, homes and other real estate, business interests, and art work.
The Revocable Trust
One of the most useful trusts for many of our clients is a revocable trust (inter vivos) where the grantor creates a trust, funds it, manages it by him or herself, and has unrestricted rights to the trust assets (corpus).
The client has the right at any time to revoke the trust by simply tearing up the document and reclaiming the assets, or perhaps amend the document to accomplish alternative financial planning goals.
You don’t need a trust company or bank as trustee. You just draw up a trust document and re-title some property to the trust. Life goes on pretty much like it did before. You give up nothing in the way of rights, and you remain captain of your own ship.
Assets transferred to a revocable trust are not a gift. They can be reclaimed at any time. You have unrestricted rights to the property. But, during your life the trust gives you a very useful shell to provide management if and when needed.
OK, I get it. It sounds pretty strange until we start looking at the potential lifetime and estate planning benefits that can be incorporated into the trust:
Lifetime Benefits
If the grantor is unable or uninterested in managing the trust, the grantor can hire an investment advisor to manage the account in one of the major discount brokerages like Schwab, TD Ameritrade or Fidelity.
Or, for an additional charge the donor can appoint a trust company to act for him/herself. Trust company professionals provide administrative, investment, accounting, legal and tax management for the beneficiaries.
Incapacity
During any incapacity, a trusted spouse, child, personal friend or other person (contingent trustee) can be appointed to step in to care for and represent the needs of the grantor/beneficiary. That person will manage your assets during your incapacity and take care of you without having to declare you incompetent and invoke a guardianship. Upon recovery you can resume your duties as trustee.
Guardianship is a nightmare legal proceeding that makes you a ward of the state. It’s expensive, public, humiliating, restrictive, and burdensome. You don’t want to go there. A well drafted trust (along with powers of appointment) avoids that problem.
If you are a member of the sandwich generation, trusts may be a convenient way for you to manages assets for your parents, in-laws, and/or children. Your parents may need and/or appreciate the help, and the trust gives you a structure to provide for them. Again, this heads off any potential need for a guardianship.
As the key provision of an estate plan
The revocable trust is an invaluable tool for estate planning. Bypassing probate is a primary benefit.
Importantly, when the grantor of the trust dies property held by the trust bypasses probate. This should result in considerable reduction of cost, aggravation and time.
The estate will still have to be settled, but you won’t be charged for collecting and distributing the property in the trust. Trust property, along with insurance proceeds, jointly titled property, and some other assets are excluded from probate. Preplanning pays off big time.
Conclusion
Even reasonably simple revocable trusts often form the basis for more complex advanced estate planning. The uses are almost endless.
It goes without saying that a proper estate plan will also include wills, powers of appointment, medical directives and other considerations. That’s beyond this discussion.
Part two will provide a few examples of how trusts routinely solve common family problems as property passes to future generations.
As always, don’t try this at home. Any trust should be created by a very competent attorney after much thought about what you wish to accomplish.
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6c30d72584703def2e0037212e04937f | https://www.forbes.com/sites/frankbi/2014/11/18/the-10-most-profitable-industries-according-to-big-data/ | The 10 Most Profitable Industries According To Big Data | The 10 Most Profitable Industries According To Big Data
Forget what you may have previously heard about the most profitable industries, because big data analytics has a new answer.
The most profitable sector in the United States is electrical equipment manufacturing, according to Powerlytics, a big data analytics company that offers financial insights into millions of businesses.
While similar lists are using secondary surveys and a sample of businesses in determining their list, Powerlytics is using data that’s already publicly available.
“There’s some selection bias [in other lists],” said Powerlytics CEO Kevin Sheetz. “They’re getting components of the population and not the complete population.”
Using a combination of more than 20 public data sets, including the Census and the Department of Labor, Powerlytics was able to create a profile of all 27 million businesses in the U.S.
The challenge was taking a disperse set of data and putting it together to create the profiles.
“A lot of public data sets don’t talk well together, so our expertise was to take these data sets and make them meaningful information both on the business side and the consumer side,” said Sheetz.
The rankings were determined by earnings before interest, taxes and amortization as a percentage of sales.
Follow Frank Bi on Twitter at @FrankieBi
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f1d81877b284b959ffd110e475445caf | https://www.forbes.com/sites/frankbi/2014/12/05/heres-what-6-billion-tweets-looks-like-mapped/ | Here's What 6 Billion Tweets Looks Like Mapped | Here's What 6 Billion Tweets Looks Like Mapped
What do you do with three terabytes of geotagged tweets? You map them if you’re a cartographer like Eric Fischer.
A data artist and developer at Mapbox, Fischer has been collecting geotagged tweets for the last three and a half years using Twitter’s public API. With more than 6.3 billion tweets (6,341,973,478 to be exact) in his database, Fischer made an interactive map that’s detailed to street level.
Ultimately, only nine percent of the six billion tweets were represented as dots on the map. This is due to filtering that removed duplicate coordinates, mapping unique latitude and longitudes only once on the map.
Interestingly, with or without filtering, a large visible stripe that’s apparently devoid of tweets appears over the prime meridian in London. Fischer suggests in a blog post that Twitter is likely responsible for filtering the tweets in that area, for reasons not known.
Here’s a screenshot of John F. Kennedy International Airport near New York City. Zooming in to see the individual dots, you can see that some gates tweet more than others.
Sporting events also generate a lot of tweets. But because the map doesn’t allow for a user to search for a particular address, I chose to look up Target Field in Minneapolis – the home of the Minnesota Twins and a stadium I’m familiar with, having gone to school in the Twin Cities.
From a zoomed-out view above Minneapolis, Target Field is lit up with dots, but zooming in on the ballpark, a majority of the dots are shown on the playing field, with a high concentration over second base.
Surely Minnesota’s second baseman has better things to do than to tweet during games, but there are a few other logical explanations to the data. For one, Target Field isn’t just a baseball stadium; it’s also a concert venue that’s seen the likes of Paul McCartney and Kenny Chesney in recent years.
The most logical explanation, however, could be the coordinate data itself. As Fischer acknowledged in his post, tweets from iPhones seemingly blur latitude and longitude intentionally to avoid giving away a user’s exact location. So what may seem as tweets sent from second base could just be tweets that sent Twitter the general coordinates of Target Field.
The data that Fischer used to create his map is accessible to anyone with the know-how of using the Twitter API. Fischer also provides links to the code he used to filter the data as well as instructions on how to map the data in case anyone wants to recreate a similar map.
Follow Frank Bi on Twitter at @FrankieBi
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6c8b444bf2ab75b83bbaa81ceaef1262 | https://www.forbes.com/sites/frankdavid/2015/10/04/superforecasting/ | Can Businesses Learn 'Superforecasting'? Easier Said Than Done | Can Businesses Learn 'Superforecasting'? Easier Said Than Done
Many business decisions hinge on fact-based predictions of the future, and careers are made or broken by the outcomes. No wonder, then, that companies value “expertise” at all levels – after all, more experience and education should lead to more informed guesses, and hence better decisions.
But how reliable are the forecasts of so-called “experts”? Not very, it turns out. About a decade ago, Wharton professor Philip Tetlock analyzed the predictions that almost 300 respected authorities in politics and economics made over two decades – and as The New Yorker’s Louis Menand summed up the results, “Human beings who spend their lives studying the state of the world … are poorer forecasters than dart-throwing monkeys.”
Tetlock spent the next phase of his career questioning that simplistic summary of his earlier work. Even if the “experts” are essentially guessing, are some spear-slinging simians more accurate than others? The title of his latest book, Superforecasting (Crown), which he co-authored with Dan Gardner, foreshadows the answer: “superforecasters” do, in fact, walk among us – and despite their lack of “expertise” in any traditionally-defined sense, they consistently out-perform on predicting the future.
Tetlock based his conclusion on findings from the Good Judgment Project, a multi-year study in which he and his colleagues asked thousands of crowdsourced subjects to predict the likelihood of a slew of future political and economic events: Would North Korea invade South Korea by January 1? Would gold fall below $1,200 per ounce by September? Would revolution break out in Syria by the end of April? The judgers assigned percentage odds to each prediction coming true, updated their forecasts over time as new details emerged, and were scored as their forecasts came true (or didn’t).
Sure enough, among these non-experts, a small cadre significantly out-predicted both their peers and, when parts of the GJP were incorporated into a larger U.S. national intelligence effort, teams of top professional researchers. And their “superforecasting” wasn’t just beginner’s luck – over time, their advantage over their competitors not only persisted, but grew. In analyzing the commonalities of these “superforecasters”, Tetlock found that “[i]t’s not really who they are. It is what they do.” Among other traits, they break complex problems into smaller, more tractable ones, search for comparators to guide their views, and try to avoid over-reacting to particular pieces of evidence. And perhaps most importantly, they rigorously analyze their past performances to figure out how to avoid repeating mistakes or over-interpreting successes.
If these behaviors sound challenging to adopt, that’s because they are – which is why not everyone is a “superforecaster”. But one of Tetlock’s key points is that these aren’t innate skills: they can be both taught and learned. A 60-minute tutorial on the traits of high-performance predictors increased participants’ accuracy by about 10 percent over the course of the entire subsequent year. That may not sound like a big deal, but compounded over time, it would yield a huge impact from a relatively low-effort intervention – one that may be within reach not only of most individuals, but of many organizations as well. In fact, based on these data alone, Tetlock’s “Ten Commandments For Aspiring Superforecasters” should probably have a place of honor in most business meeting rooms, right next to (or in place of?) the ubiquitous “corporate values” posters.
So, companies may be able to nurture more “superforecasters” – but how can they maximize their impact within the organization? One logical strategy might be to assemble these lone-wolf prediction savants into “superteams” – and in fact, coalitions of the highest-performing predictors did outperform individual “superforecasters”. However, this was only true if the groups also had additional attributes, like a “culture of sharing” and diligent attention to avoiding “groupthink” among their members, none of which can be taken for granted, especially in a large organization. “A busy executive might think “I want some of those” and imagine the recipe is straightforward,” Tetlock wryly observes about these “superteams”. “Sadly, it isn’t that simple.” A bigger question for companies is whether even individual “superforecasters” could survive the toxic trappings of modern corporate life. The GJP’s experimental bubble lacked the competitive promotion policies, dysfunctional managers, bonus-defining annual reviews and forced rankings that complicate the pure, single-minded quest for fact-based decision-making in many organizations. All too often, as Tetlock ruefully notes, “the goal of forecasting is not to see what’s coming. It is to advance the interest of the forecaster and the forecaster’s tribe,” [original emphasis] and it’s likely many would find it difficult to reconcile the key tenets of “superforecasting” with their personal and professional aspirations.
This challenge is perhaps most pronounced at the highest levels of management, where there is a perceived (and possibly quite real) conflict between thoughtful, humble open-mindedness and decisive leadership. In a chapter aptly-titled “The Leader’s Dilemma," Tetlock describes how the German Wehrmacht harmonized those divergent mandates by eschewing rigid top-down control in favor of a system where senior leaders set the strategic course, but empowered troops in the field to use their best powers of fact-based analysis and judgment to make decisions on the fly. Tetlock suggests (with all appropriate apologies and caveats) that this could be a path forward in modern organizations – which is logical, but neither particularly novel nor supported by any new experimental data from the GJP. Although this chapter on reconciling “superforecasting” with the challenges of leadership is pleasing to read, it’s more anecdotal than analytical – and thus somewhat less satisfying than the rest of the book.
But these difficulties don’t make the main findings of Superforecasting any less relevant in the corporate world. To the contrary, Tetlock’s book shows that good analytical judgment depends not on any external trappings of expertise, but on a set of discrete skills and approaches that can be learned and taught – and any business that is serious about improving the quality of its decision-making should invest in discussing and disseminating its key messages. It's not easy to create analytical powerhouses, but Superforecasting could be the foundation to help individuals and organizations bring more rigor to how they use data to predict the future.
[Disclosure: Thanks to Crown Publishing for generously providing me with a review copy of Superforecasting.]
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3abe3b44488581b4b44594dee11606cc | https://www.forbes.com/sites/frankdavid/2015/10/22/theranos/ | What Is Theranos's Business Model, Anyway? | What Is Theranos's Business Model, Anyway?
Elizabeth Holmes, Founder & CEO of Theranos, being interviewed by Matthew Herper, Senior Editor,... [+] Pharma & Healthcare, Forbes Media at Forbes Under 30 Summit on October 5, 2015 in Philadelphia. (Photo by Lisa Lake/Getty Images)
Lost in the ongoing kerfuffle over Theranos, the embattled diagnostics newco, is a more basic question: What does it take to win in clinical diagnostics, let alone “disrupt” it?
This isn’t a simple question, because on the whole, lab testing is a well-served sector. Clinical questions arise, samples are taken, tests are run, results are reported, decisions get made – and it all happens pretty quickly, cheaply, and reliably, millions of times each day. That’s not to say there’s not room for improvement, but in general, the system works pretty darned well.
That means – at the risk of being Captain Obvious – that Theranos, or any new player in the clinical lab space, needs to answer three questions: What's the need in the market? How does the company plan to meet it? And, what's the potential reward for succeeding? Any other details – technologic novelty, intellectual property, FDA compliance, and so forth – are only worth investigating after you've addressed these fundamental questions about the company's business model and strategy.
So, what is Theranos's business model, anyway?
There are basically three ways for a new lab company like Theranos to succeed:
Satisfy an unmet clinical need. A new lab company can win by meaningfully addressing a diagnostic problem that affects patient management. Is the problem lack of speed? Be faster. Is it insufficient sensitivity or specificity? Solve that problem. Is it the lack of appropriate analytes? Discover and test for them. There’s no “one solution” for all clinical needs – but each clinical need has a specific solution that one could provide. Satisfy an unmet business need. Lab testing is a service industry, so like all service industries, there’s almost always an opportunity for better/faster/cheaper/higher-touch/lower-friction options. “Disrupt” the market. It’s also possible to win by somehow changing the entire way the diagnostics business operates – by eliminating a middleman, reaching new classes of customers, or some other means – and coming out on top in the new world order.
On the clinical side, there are certainly unmet needs in lab testing – but it's not clear Theranos is addressing them. The company’s “nanotainers," which reportedly run multiple tests off a single drop of blood, could help patients who currently avoid big needles and cumbersome blood draws – but needle-phobia doesn’t strike me as a significant unmet clinical need per se. (No patients with serious medical needs forgo lab tests just because they require a conventional needle stick, and I haven't found any published studies showing that fear of needles impacts adults' compliance with routine preventive testing.) Absent compelling data, providing a new option for needle-phobes is more of a business opportunity (see below) than a clinical one.
Similarly, the faster turnaround that Theranos reportedly delivers isn’t a burning clinical need for the routine clinical lab tests the company is running. If you get the results of your basic metabolic, hematologic, or lipid profile back a day earlier (or a day later), it won’t change clinical management – which is the main thing that matters in diagnostic testing. (There are some limited data on anxiety from delayed or ambiguous test results in specific settings, but their clinical impact and relevance to Theranos are unclear.) Sure, there are situations where diagnosis speed affects patients' outcomes, but they’re mostly in the inpatient or emergency settings (where time is measured in minutes and hours, not days), which are not areas where Theranos appears to be focusing.
What about succeeding on the business side? Being cheaper is a reasonable strategy – as long as your total costs (including consumables, labor, equipment, administration, customer sales and support, etc.) are low enough to enable you to beat giants like LabCorp and Quest, with their tremendous economies of scale. (And remember: just because Theranos has set cheaper prices so far doesn't mean they’re sustainable in the long run.) Price is unlikely to trump other key qualities in lab services – most patients and physicians wouldn’t trade analytic accuracy and reliability for lower cost, for example – but if diagnostic performance is equivalent, undercutting competitors on price is certainly a viable business approach.
There’s also a business case to be made for gaining customers by improving the whole experience of getting one’s blood drawn. That includes not just the company’s spa-like “wellness centers,” but also the nanotainer technology (which, as discussed above, is more of a market differentiator than a clinical need), easy scheduling, rapid and simple results reporting and so forth. I'm not sure how big or attractive this general strategy is, but in theory at least, it's a potential option for Theranos as well – again, provided one can meet basic standards of accuracy and reliability.
Finally, there’s the opportunity to “disrupt” lab testing – which, to Theranos, seems to mean offering tests, results, or both directly to patients, without physician intermediates at either end. Personally, I question whether allowing healthy folks to test their own cholesterol ad libitum (and ad nauseum) is a large, clinically meaningful, or socially transformative opportunity – that’s a whole other discussion, beyond the scope of this post – but it’s not illogical for Theranos to make a bet on that future state, and for investors to back it.
Theranos is far from the first company that has sought to unseat the main lab testing players – and for all of them, the questions are the same: What is the need you’re addressing? How do you plan to address it? What is the reward for success?
If Theranos hasn’t figured out the company’s key value proposition and business strategy, the company needs to do so, and quickly. Not for the public, mind you – after all, if you’ve raised as much money as Theranos has, who cares what the nattering nabobs say? – but to know where to focus efforts and resources. And "all of the above" isn't the best answer. Clinical labs are a tough business, and to beat its entrenched competitors, Theranos needs to figure out its “killer app” – needle-free blood draws, low-priced tests, patient empowerment, quick turnaround, high-touch service, whatever – and then the team needs to focus, put their heads down,\ and crush it.
Importantly, only some of Theranos's strategic options depend on any differentiated technologic advances per se. If the "killer app" is delivering faster results directly to patients, for example, and this can be accomplished using standard equipment, then it doesn't matter whether the company has is using a new machine, let alone how that machine compares with the established platforms. In that case, all considerations of Theranos's so-called "Edison" technology would be an irrelevant distraction – not only for the the public and the media, but more importantly, for the company itself.
Regardless of what path the team takes, though, there’s one more critical thing Theranos needs to do besides nail its business model: Nip in the bud any lingering doubts about the company’s ability to provide high-quality lab data. Day after day, established labs provide reliable results to patients and doctors within established standards of performance that impact clinical decisions. And if you can't nail that in diagnostics, you’re finished – no matter whether you're using a new technology or an established one, whether the test is ordered by a doctor or provided self-serve, or whether you drew five milliliters of blood from a syringe or 50 microliters from a fingerstick. Whether through hubris, ignorance, or incompetence, Theranos has led folks to question whether they can be trusted analytically – and that's a disaster in this industry, because at its core, lab testing is a trust-based service business: send me your sample, and I'll send you a reliable, clinically actionable answer. So my advice to Theranos is: Release data, publish papers, partner with independent academic or clinical centers, whatever – just fix this perceived analytical quality issue. Otherwise, all the microtainers, wellness centers and online results in the world can't help you.
Addendum (10/23/2015): Theranos has issued a detailed rebuttal to the Wall Street Journal's coverage of the company - and as a public service, I've posted it on Genius so folks can provide line-by-line annotation / comments. Visit the Genius site here and contribute your insights!
Thanks to Matthew Herper and Danielle Newnham for inspiring me to write this piece, and to Matt for reviewing it and providing feedback. On Matt's recommendation, I sent a draft of this post to Theranos's PR team, a member of which provided informal comments (related to the "clinical value proposition").
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156e757003b3e5764ee4f5d4f8abdef5 | https://www.forbes.com/sites/franklavin/2018/11/11/alibabas-singles-day-shopping-festival-three-key-takeaways-for-brands/ | Alibaba's Singles Day Shopping Festival: Three Key Takeaways For Brands | Alibaba's Singles Day Shopping Festival: Three Key Takeaways For Brands
Singles Day 2018 final results, showing 213.5 billion yuan ($30.8 billion) in sales Alibaba
The largest e-commerce day in the world has just concluded -- China’s 11.11, or Singles Day -- and Alibaba has already reported record-breaking sales of $30.8 billion within the past 24 hours. As I noted previously in Forbes, China's e-commerce industry accounts for more sales in one day than most countries sell in an entire year. I just wrapped up several days of senior-level presentations and discussions in Shanghai, courtesy of Alibaba, and I have identified three key takeaways for brands, retailers and others who follow e-commerce.
First, the China consumer market is roaring along. We have seen occasional press reports that China’s economy is softening or that consumer confidence is under pressure. (The New York Times story on Singles Day is grimly fatalistic: “The Party May Not Last.”) Yes, Chinese consumers are taking on more debt. Yes, consumer spending is probably past peak growth rates. Yes, Alibaba has revised its forecast down to 5% (and still hit a 50% year-on-year growth rate last quarter.) But the good news in the Chinese consumer sector continues to outweigh any bad news. Singles Day went from from $25.3 billion in 2017 to $30.8 billion in 2018, a jump of 20%, which is the highest growth rate for e-commerce from any major economy.
Second, American brands are dazzling. Chinese consumers are hungry for international brands, and U.S. brands are front and center. The growth in international brands should not be surprising given the ongoing improvement in purchasing power in China and the rising level of sophistication of consumers there. What might surprise some, however, is the complete absence of any shadow from the recent U.S.-China trade friction. We should not ignore the seriousness of the trade war and other bilateral issues, but it is gratifying that whatever problems that do exist they have not had a significant impact on consumer behavior. And whether it is Mars launching a new Snickers bar with Chinese peppers or Listerine with a Rosemary mouthwash, the American brands are quick at adapting their products to reach Chinese consumers.
Lastly, more bells and whistles. Chinese consumers have a penchant for novelty, and the Chinese e-commerce platforms do not disappoint. JD is building out its drone fleet. Alibaba is working on New Retail with its Hema supermarkets, including robot servers, 30-minute home delivery, cashless transactions and digital transparency on food origins and freshness. The new Alibaba-Starbucks partnership means coffee can now be delivered from Starbucks' 3,500 locations in China.
True enough, no party lasts forever. But the e-commerce explosion in China is driven by two long-term trends: the booming consumer demand of China’s emerging middle class, and a secular move to e-commerce from traditional channels. Go ahead and set your clocks for 2038 because these two trends will carry on for at least the next two decades.
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d39f9daad64701fdddb73c78137e0d85 | https://www.forbes.com/sites/franklavin/2020/11/09/is-biden-ready-chinas-tonya-harding-view/?sh=1e1f034e509b | Is Biden Ready? China’s Tonya Harding View | Is Biden Ready? China’s Tonya Harding View
President-elect Joe Biden and Jill Biden wave to the crowd after Biden's address to the nation from ... [+] Wilmington, Delaware. Tasos Katopodis/Getty Images
I was on a discussion panel with a senior policy person from China, all off the record, so no names or titles please. This policy person made an acute if unsettling analogy: Many Chinese view Donald Trump’s criticisms of China akin to the attack on U.S. figure skater Nancy Kerrigan by people connected to her longtime rival Tonya Harding. For those readers with short memories, Harding was involved in an attack intended to injure Kerrigan’s leg just prior to the 1994 Olympic Games, when she had been favored to win the gold medal. In other words, Trump’s moves against China were born out of malice and jealousy over China’s rise. China expert Julian Gewirtz explains, “China’s rulers believe that the past four years have shown that the United States is rapidly declining and that this deterioration has caused Washington to frantically try to suppress China’s rise.”
My Chinese colleague closed his comment with words to the effect that no matter how many times you attack us, we will continue to grow and prosper, and in perhaps a decade, China will be the largest economy in the world.
Given Trump’s pugnacity, I did not find this statement surprising, for who among us would enjoy being on the receiving end of Trump’s criticism? But that attitude also holds a challenge for both the U.S. and China.
The challenge for the U.S. would be if its policymakers to assume that problems with China are intractable and is therefore destined to be some sort of adversary. Fortunately, Biden’s victory provides an opportunity for a reset. Some of these issues are long-term and have much to do with U.S.-China geostrategic competition. These issues will not be easily solved, though improved communication and a commitment to stability would at least make ongoing deterioration unlikely. Relations might not easily improve, but let’s at least make sure they don’t fall apart.
China has a somewhat similar challenge: not to view relations with the U.S. through a lens of historical determinism. Can China take advantage of this change in the U.S. to show flexibility on some issues? Let’s think about the key China goals in its relations with the U.S.: Reducing the rancor and day-to-day criticism of China and stopping ongoing deterioration in the relationship; Not showing weakness toward the U.S. or making concessions in the face of pressure. Thus form and presentation style might be as important as the specific move.
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The Rise of the Declinists
As Gewirtz notes, some China hands speculate that China leadership is so wedded to a belief in the inevitably of a U.S. decline that no accommodation or gestures is thought necessary. But shouldn’t we look at gratuitous friction in international affairs as a standalone cost, regardless of whether China’s position is strengthening or not? In other words, a relative rise of China speaks only to its ability to have its way. Can it have its way with as little friction or cost as possible is a largely unrelated point. Regardless of how China feels regarding its relative strength, it should still believe in advancing its agenda with minimal ill will.
China might want to develop a menu of policy options that might carry goodwill with the U.S., but would not be costly to China, either substantively or in terms of reputation.
Here are a few ideas.
Support Taiwan’s membership in the World Health Organization. China does not like the idea of giving the current Taiwan government a victory of any sorts, so this might be too much to ask. But China has supported (or tolerated) Taiwan membership in the WTO, APEC, and other international bodies, so this seems at a minimum plausible—and it would be a signal to the world community that China is not reflexively placing its cross-straits policy ahead of global health concerns.
Release the Canadian prisoners for health reasons. China arrested two Canadians working in China, Michael Kovrig and Michael Spavor, when Canada arrested Meng Wanzhou, the CFO of Huawei, indicating it placed a higher value on tit-for-tat politics than for rule of law, and damaging its relations with Canada to boot. Unwinding that move would help China.
Grant visas to journalists. China has signaled disfavor with various media outlets and individuals by withholding or not renewing visas, which seems to work against China’s long-term interests. Despite the occasional tough or critical article, the international media is China’s best opportunity to get a fair hearing internationally.
Announce on-going tariff reductions to eliminate gaps between China and other major trading powers. President Xi Jinping has announced and carried out tariff reductions in autos and other sectors. Keeping that process going would do much to improve China’s standing, and help China’s economy to boot.
(Oh, and for those readers who might ask what steps the U.S. could take: I have repeatedly called for the U.S. to revoke the tariffs President Trump imposed, consistent with China also removing the tariffs it put in place to retaliate.)
If the U.S. views problems with China as an immutable aspect of foreign policy, there is no reason to try to tackle some of the challenges and the prospect of ongoing deterioration becomes a self-fulfilling prophecy. Similarly, if China views all U.S. criticism as illegitimate or bad faith, if the U.S. is perceived only as a gang of assailants, China will not try to tackle the substantive points—leaving both China and the U.S. the worse for it.
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bb1981f7c2742de5a22f384cd39169b1 | https://www.forbes.com/sites/frankminiter/2012/07/05/google-sadly-joins-the-anti-gun-brigade/ | Google Sadly Joins The Anti-Gun Brigade | Google Sadly Joins The Anti-Gun Brigade
Why is Google censoring products used for self-protection by America’s gun owners? (Photo credit:... [+] dannysullivan)
Google is censuring information on guns and other products from Google Shopping. Sure, we know they once gave in to the Chinese government, but why are they censoring products used for self-protection by America’s gun owners?
Google announced this new policy on May 31. Now firearms manufacturers and others are pointing out Google’s hypocrisy. Meanwhile, the media has mostly ignored the story.
Ironically, Google’s own policy for “Freedom of Expression” says, “We’ve pressed governments to make combating Internet censorship a top priority in human rights and economic agendas.” And they say, “We regularly assist research efforts like the Open Net Initiative, the premier monitor of global trends on Internet censorship, by providing funds for their work.”
Maybe so, but they don’t think the Second Amendment in the Bill of Rights is acceptable in the U.S.
Specifically, they’ve banned results related to firearms and other products that they don’t deem to be “family safe.” Until recently, gun-related products appeared with other products in search results on the shopping section. Many of America’s 80 million gun owners have used Google as a powerful price-comparison tool. Not anymore.
Google’s new, anti-gun policy, assigns a “family status” to all products. Products that are “non-family safe” are blocked from Google Shopping. This includes guns, ammunition and knives, as well as vehicles, tobacco and radar scramblers.
Larry Keane, Senior Vice President & General Counsel, for the National Shooting Sports Foundation (NSSF), the trade group that represents firearm and related companies, asks, “How can a company that supports the First Amendment with such zeal be so hostile to the Second Amendment?”
Keane says, we’re “attempting to reach Google to urge the company to reconsider this discriminatory policy that is hostile to the Second Amendment. We also plan to remind the company and emphasize that firearms cannot be purchased online and be transferred directly to the purchaser. A firearm that is purchased online must be physically sent from one federal firearms licensee to another, with the latter conducting the mandatory FBI background check on the purchaser (represented in person) and then transferring the firearm only after the purchaser has passed a background check.”
Several years ago eBay kicked guns off its site. The eBay policy now allows the sale of “some personal defense items, such as pepper spray and mace,” as well as BB gun ammunition and some other items, but not firearms and ammunition. eBay’s policy change led to robust growth at sites that do sell guns, such as gunbroker.com. eBay, however, hasn’t changed its anti-gun policy.
These new rules from Google actually come at a time when the sales of firearms and ammunition is one of the bright spots in the U.S. economy. Firearms and ammunition sales are at all-time highs. In fact, the NSSF says firearms manufacturers increased their workforces by 30.6 percent from 2008 through 2011. This is an “overall economic impact of nearly $32 billion to the nation,” says Keane.
Smith & Wesson Holding Corporation, an American-made firearm manufacturer, announced record financial results for the fourth quarter and fiscal year ended April 30, 2012. S&W says its fourth-quarter sales were up 28 percent compared to the same period last year.
S&W has not been an exception. In general, firearms manufacturers have been beating the downturn. In another American-made example, last March Sturm, Ruger & Company, Inc. received so many orders for its firearms they “had to stop taking orders.” A notice on the company’s website stated: “Despite the company’s continuing successful efforts to increase production rates, the incoming order rate exceeds our capacity to rapidly fulfill these orders. Consequently, the company has temporarily suspended the acceptance of new orders.”
Nevertheless, Google is in the process of censoring guns from its shopping function. A search on July 5th showed guns from Remington still showing on the shopping site, but searches for “Browning shotguns,” “Springfield Armory,” and “Smith and Wesson” drew a page that says, “Your search … did not match any shopping results.
In late June HamLund Tactical, which sells firearms accessories and other items, received an email from the “Google Shopping Team” that told them its products would soon be censured. The email said, “We do not allow the promotion or sale of weapons and any related products such as ammunitions or accessory kits on Google Shopping. In order to comply with our new policies, please remove any weapon-related products from your data feed and then re-submit your feed in the Merchant Center.”
Google stated a few reasons to HamLund Tactical, such as, “1) Google Shopping should provide a positive experience to users… 2 ) Google Shopping should besafe for all users. User safety is everyone’s business, and we can’t do business with those who don’t agree…. 3) Google Shopping should comply with local laws and regulations. Many products and services are regulated by law, which can vary from country to country.”
After public criticism of Google’s dalliance with China over censoring data, it seems especially odd that Google would censor legal, and in many cases American-made, products because it doesn’t deem them to be politically correct in the U.S.
This belief actually runs counter to how Americans feel about guns. Just consider that from the mid-1980s to today America has become a mostly “shall-issue” nation with regards to concealed-carry permits. A “shall-issue” jurisdiction is one where a person must obtain a permit to carry a concealed handgun, but where the granting of such permits is subject only to meeting certain established criteria. Shall-issue laws typically prevent local governments from arbitrarily refusing to give permits.
In fact, 41 states now have right-to-carry laws (RTC) and 38 had “shall-issue” laws. Also, a total of 49 states had laws that, to varying degrees, solidified citizens’ right to carry certain concealed firearms in public, either without a permit or after obtaining a permit. Only Illinois stops citizens to protect themselves when out of their homes.
For example, Florida has issued more than two million concealed-carry licenses since adopting its law in 1987, and had 919,831 licensed permit holders as of March 2012. Nationally, the NSSF estimates there are 6.8 million concealed-carry holders today. This is up from about one million in the mid-1980s.
According to Bureau of Alcohol Tobacco, Firearms, and Explosives, the number of privately owned guns has risen by about 100 million since the early 1990s. As the National Rifle Association continues to lobby for the right to bear arms, as of 2010, the nation’s murder rate had fallen 52 percent to a 47-year low, according to FBI statistics.
Despite all that, Google is censuring firearms and other products from its shopping function?
Even worse, given this policy of complying “with local laws and regulations” in other nations, does this precedent mean that Google’s search engine will one day be subject to the whims of Middle Eastern oligarchs and Russian presidents? Or is this just another case of a company getting so big and powerful it arrogantly forgets it’s not running a monopoly.
Keane says as much. He says Google’s “anti-gun policy has rightly caused firearms owners to reconsider having Google be their search engine of choice.” He notes that Bing.com doesn’t appear to ban firearms and ammunition.
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2a538c61bb8bf19438127f969422d0e7 | https://www.forbes.com/sites/frankminiter/2012/07/24/what-president-obama-doesnt-want-you-to-know-about-canada/ | What President Obama Doesn't Want You To Know About Canada | What President Obama Doesn't Want You To Know About Canada
(Photo credit: Cindy Andrie)
With President Barack Obama claiming the government builds success, not individuals, Mitt Romney should look north to a story Obama would rather Americans didn’t notice. Canada is outperforming the U.S. on every economic front and they’re doing it with policies Republicans say they’d like to implement.
For the inside scoop I interviewed Tony Clement, Canada’s President of the Treasury Board (the COO for the Government of Canada who is responsible for managing spending among other duties) and a Member of Parliament with the Conservative Party of Canada.
He was enthusiastic. This is a story he wants to tell. A story that people south of the border should be paying attention to. According to senior Canadian officials who’ve had closed-door meetings with Obama administration officials, the White House has been curious about how Canada is growing. When Canadian’s told them how, they even toyed with implementing some of the same policies.
First, for context, we need to do a numbers comparison with the U.S.
Canada’s unemployment rate is now 7.3%, whereas the current U.S. unemployment rate is 8.2%. Canada’s combined federal and provincial debt to GDP ratio is 57.9%, while Canada’s federal debt to GDP ratio is 34%. Meanwhile, the U.S. debt to GDP ratio reached 101.5% in 2011.
Then there is the Canadian banking system. Canada’s banks are among the best capitalized in the world and far exceed the norms outlined by the Bank for International Settlements. During the financial crisis, no Canadian banking institutions had to be bailed out. The rest of this article, of course, could be filled with details about the troubles with U.S. banks and the Democrats’ Dodd-Frank Wall Street Reform and Consumer Protection Act, but I’ll let all that be addressed in other articles.
It’s worth noting here that homeowners are also in better shape in Canada. Today just 0.35% of Canadian mortgages are behind on their payments, whereas TransUnion reported that in the January-March 2012 quarter 5.78% of U.S. mortgage holders were behind on their payments by 60 days or more (that’s more than 10 times more than in Canada).
Canada also has a better credit rating than the U.S. Standard & Poor’s gives Canada a “AAA” rating and a “stable” outlook, but gives the U.S. an “AA+” rating and a “negative” outlook. Moody’s Investors Service Inc. lists the U.S. as triple-A but gives it a “negative” outlook. Meanwhile, Moody’s gives Canada an “AAA” rating and a “stable” outlook.
How Canada is Getting Results
So how is Canada outperforming the U.S.?
First of all, the Conservative Party of Canada has reduced its federal corporate tax rate from 22% in 2006 to 15% in January 2012. (It was cut to 18% in January 2010 and 16.5% in January 2011.) Meanwhile, U.S. rates have been consistently higher than the average of all major industrialized nations. In April 2012, Japan reduced its corporate tax rate to 36.8%, making the U.S. total corporate tax rate (39.26%) the highest.
The Conservative Party of Canada, led by Prime Minister Stephen Harper, also passed a budget loaded with real cuts last March. Clement explained, “We cut 2% from the overall budget, but we didn’t touch health care and other entitlement spending, as we’d promised not to. Our overall budget is about $250 billion. We focused on the $80 billion that’s outside of health care and other social programs. Of this portion our goal was to cut between 5% and 10%. We ended up cutting 6.9%.”
These cuts are real reductions, not just cuts in the expected growth of government as so often is touted in Washington, D.C.
To achieve this the Harper government did something you might more expect to see in the private sector. Clement made history in Canada by tying bonuses of senior bureaucrats to the success of government-wide objectives for reducing expenditures. Get this, about 40% of the bureaucrats’ bonuses were linked to a “Deficit Reduction Action Plan.” Yeah, bureaucrats got bigger bonuses when they proposed ways to make bigger cuts.
Clement explained, “Forty percent of this at-risk pay for senior managers was based on how much they contributed to the target of least $4 billion a year in permanent savings. This is just part of how we’re changing the attitude of government officials from spending enablers to cost containers.”
Meanwhile, the Obama administration’s budget proposal for 2012 failed to pass both the U.S. Senate and the U.S. House of Representatives, marking the third straight year that the U.S. has not had a budget. Obama’s last budget went down 97-0 in the Senate. The president’s budget was so flippant, even his own party voted against it.
In Canada, the government created the “Strategic and Operating Review Committee,” led by Clement to oversee a yearlong hunt for cuts and efficiencies. Their proposal led to the 6.9% decrease in the area of government spending they’d targeted.
Meanwhile in the U.S., the “Super Committee” created out of the Budget Control Act of 2011 was also a committee of elected officials tasked with finding direct savings in government spending; however, if you recall, the Super Committee wasn’t able to agree on a solution.
Of course, the Canadians do have an advantage here. They don’t have the checks and balances purposely enumerated in the U.S. Constitution to inhibit them. In fact, senior sources in the Canadian government who’ve met with Obama administration officials say their impression is that the White House is jealous of the Canadian government’s power to have their way.
The Canadian parliamentary system certainly does give a majority government more unilateral power. Just imagine if the Speaker of the House could pass legislation into law without the Senate or White House to contend with and you get the picture. (As I discussed this with Clement he was thankful they could make the changes, but I kept picturing Rep. Nancy Pelosi (D-CA) with her gavel and Botox smile.)
But the thing is, until 2010, the Democratic Party did have majorities in the U.S. House Representatives and the U.S. Senate. This is how Democrats passed The American Recovery and Reinvestment Act of 2009 (the “Stimulus” bill) without Republican input or support. Whereas the Harper government has used its political power to trim the budget to grow out of the downturn, the Obama administration spent $787 billion.
And Canada got the growth!
Clement says, “Our Economic Action Plan is working. We have already seen the creation of nearly 760,000 net new jobs across Canada since July 2009. And nine out of ten of these are full-time positions.”
Now, while it is true that a lot of Canada’s job growth is coming from oil-rich areas, the Obama administration has again done the opposite of what the Harper government has been doing. While Canada gets barrels of oil from places such as the Athabasca oil sands region in northeastern Alberta, the Obama administration has reduced drilling permits on public lands and has stalled authorization of the Keystone Pipeline from Canada.
White House Chief of Staff, when serving as Budget Director, Jack Lew did instruct U.S. government agencies to submit budgets with cuts of at least 5% and 10%—just like Minister Clement did in Canada—to reduce federal spending. (Bloomberg reported this in Aug. 2011.) Again Clement’s yearlong work resulted in savings of 6.9%; meanwhile, the Obama administration never followed up on the cuts. They were just never mentioned again.
So while President Obama ignores cuts and repeatedly says he wants to raise taxes on the “top earners,” Prime Minister Harper is cutting taxes and streamlining government. Whereas Obama endorsed the “Occupy Wall Street” war on the “top 1%” and wants “everyone to pay their fair share,” the Harper government is cutting waste and taxes and more of its people are working and staying in their homes—are you listening now Romney?
Different Relationships with Public Unions
Another key difference is that, while Obama’s stimulus bill largely funded public unions, the Harper government asked unions to make cuts.
Clement said, “We showed public unions the olive branch by asking them to suggest where we could cut waste, but they didn’t come back with one suggestion. They only wanted the status quo. Families know that when money is tight cuts in the household budget must to be made. This is why a lot of Canadians understand why we’re working to get expenditures under control in these challenging times. Nevertheless, public unions wouldn’t agree to cut anything. The people of Canada gave us a mandate to get our finances in order, so we made the cuts without their help.”
Last fall, while Clement was drafting their 2012 budget, Canadian unions lashed out by saying they were being cut out of the conversation. Clement responded in writing. He sent a letter to Public Service Alliance of Canada (PSAC) President John Gordon and said, “To date, I have not received a single constructive recommendation from you as to how we can make the federal government more efficient and provide better value for Canadian taxpayers. Your silence … leads me to conclude that the PSAC believes there is no room for streamlining government….”
Clement was pointing out that the unions had cut themselves out of the conversation. But though Clement’s letter went public, most of the Canadian press ignored it. The Canadian press is sympathetic to the public unions’ interests. For example, on June 18, 2012 the Ottawa Citizen reported: “One of Canada’s largest federal unions could face extinction as an independent organization unless its members accept a 42-percent dues increase to forestall a financial crisis triggered by the Conservatives’ job cuts.”
They were talking about The Canadian Association of Professional Employees (CAPE) proposal to increase dues by $15-a-month because some of their members had been laid off. CAPE said they needed the money to make up for an expected 10-percent drop in membership because of government spending cuts. Ironically, CAPE mostly represents government economists, research assistants at the Library of Parliament and social scientists. Austerity, it seems, is particularly distasteful to those who teach Keynesian economics.
When asked about this Clement said he would soon be meeting with new union leadership and he hopes they’ll be more reasonable than the last union bosses. He then said, “We repeatedly asked federal public unions for constructive advice to help our government achieve necessary cuts, but the union leadership didn’t respond with a single proposal for savings. Instead, union bosses called for higher taxes, more spending, bigger government and increased debt. We couldn’t do that, especially during a worldwide downturn.”
No, but that’s the Obama administration’s recipe for success.
A New Way of Seeing Government “Service”
At the end of the interview Clement had one more thing to add. He says they’re now moving from a “vertical review of expenditures to a horizontal review, namely to a culture shift from spending enabling to cost containment.”
Basically Clement wants federal bureaucrats to ask themselves how they can do their jobs well at a lower cost to taxpayers. This is why he linked senior civil servants’ bonuses to cuts.
“We have to ingrain this idea of efficient and constrained use of tax dollars on a day-to-day basis at every level—from the politician, all the way down to the proverbial mail clerk, to every level of bureaucracy,” Clement said. “This is not simply a case of making do with less. It is about doing more with what you have. And it will demand a new way of working.”
As Clement spoke, he sounded more like a CEO than a politician. That’s refreshing. That is something Mitt Romney should understand.
“Let me give you an example,” said Clement. “Up here we have the Veterans Independence Program. It provides housekeeping services and grounds maintenance for eligible veterans to help them remain healthy and independent in their own homes or communities. Currently, these veterans must obtain and submit receipts in order to receive reimbursements for these expenses. Frankly, it’s a hassle and it results in millions of transactions that are costly.
“One of the proposals we received as part of the Strategic and Operating Review addressed this situation. The suggestion was to replace the system with up front payments made in two installments each year. Change the system. Change the process. Change the way the work is designed. Everybody wins. Government employees can focus on more productive activities—no longer counting receipts! This idea eliminates the financial costs associated with processing millions of transactions.”
That’s a small change, but one of many small reforms to government Clement is looking for that’ll add up to big savings for taxpayers. Clement had a lot of other examples, but you get the point.
Though one last comparison is worth your time. Remember the spending scandal where employees with the General Services Administration (GSA) partied on the taxpayer’s dime in Las Vegas? They were having such a good time with public money videos surfaced of David Foley, a deputy commissioner of the Public Buildings Service, an arm of the GSA, mocking congressional oversight. In the video, Foley gave a “talent show award” to an employee whose video featured a rap about spending too much with no oversight.
Jeff Neely, the GSA official who organized the 2010 Vegas conference that cost $800,000, pled the Fifth last April before a congressional committee.
In comparison, Canada annually bestows “Public Service Award of Excellence” on people in the public sector who’ve done praiseworthy things. Ministers have spoken in the past at these awards functions. Last June, however, Clement wasn’t pleased with how much the gala was costing, so he asked them to trim costs in these times of need. When the departments wouldn’t cut back, he declined to speak at the event and instead offered to personally call the recipients.
That’s a change in how government is managed Americans might appreciate and that Romney, who is sometimes referred as a possible “CEO in chief,” might be able to bring to the States.
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4a04938b5ad02452fcee7759dacc31a1 | https://www.forbes.com/sites/frankminiter/2013/01/27/eastern-sports-and-outdoor-show-what-postponement-of-the-u-s-s-largest-gun-show-says-about-america/ | Eastern Sports and Outdoor Show: What Postponement of the U.S.'s Largest Gun Show Says About America | Eastern Sports and Outdoor Show: What Postponement of the U.S.'s Largest Gun Show Says About America
(Photo credit: M Glasgow)
The media is missing the real story behind the “postponement” of the largest outdoor show in America. This is a story of ignorance, bias and a gross misunderstanding of America and Americans.
This unfortunate fight began when Reed Exhibitions, a British events organizing company, announced that firearms and products associated with modern sporting rifles (guns the media has given the dubious label “assault rifles”) wouldn’t be allowed at the Eastern Sports and Outdoor Show. The show was scheduled to begin on February 2 in Harrisburg, Penn.
Reed Exhibitions prohibition also extended to images of modern sporting rifles. They wanted to whitewash a firearm category with Orwellian zeal from the show because they deem these semi-automatic rifles to be too militaristic for civilian use. They mandated this ban at America’s largest outdoor show, a show that regularly attracts 200,000 outdoor enthusiasts and pumps an estimated $44 million into the region’s economy.
Outdoor product manufacturers, outfitters from across the country and world, conservation organizations and more come to Harrisburg each year for it. Many find it so overwhelming they complain about it. It’s nine-days long and is a very busy show that can be grueling for an exhibitor.
For perspective, consider that Pennsylvania has about one million active deer hunters. Many more are in surrounding states. Many other gun owners, fishermen and more come to see new firearms, book with outfitters or just to see the show. The people who come pay an entry fee before entering the miles of aisles to look at new gear, buy products and to attend outdoor seminars on duck calling, elk hunting and fly tying. They are a dedicated consumer base in ball caps, camo jackets, and with pictures of last year’s bucks in their wallets.
Years ago when I first started editing for Outdoor Life magazine my boss urged me to go. He said, “People drive for hundreds of miles to go to the Harrisburg show. Go and you’ll see the America we put out a magazine for each month. You’ll see the America the media here in New York City and more doesn’t understand.”
He was right. Families come together and friends gather in groups to walk the crowded aisles and fantasize about buying the latest firearms or booking a hunt in Colorado, Alaska or Africa. Some save all year, even plan years in advance, before arriving to book that hunting or fishing trip. This is an event where Americans come together to enjoy outdoor pastimes and share stories and see what’s new. This is the swath of America Reed Exhibitions put its heel on.
Now it seems to me that many in the media should go—if, that is, the event is held this year. They should drop their preconceptions and interview these people. They’d be shocked what they’d find. These are people who cherish their Second Amendment to be sure. They love an America that stays out of their way so they can use firearms in the field or to defend themselves and their loved ones. They cherish outdoor experiences with family and friends. They kill deer and eat the venison. They’re connected to the land and go to game commission meetings to give them hell if they don’t think the deer herd is being managed properly or the streams kept clean. They get tears in their eyes when a son or daughter catches a first fish or tags a first deer. They plant food plots to feed deer and hang game cameras to keep track of local bucks. They’re very involved in their outdoor resources and everything they do is taxed to fund conservation.
Reed Exhibitions’ leadership should go, too. Sure, they do over 500 events in 39 countries every year. But clearly they’re out of touch with Americans. Clearly they hadn’t a clue what they were doing when in some corporate boardroom—perhaps at their headquarters in England—they decided to ban modern sporting rifles from this show.
The backlash was fast and grassroots. Reports that companies were pulling out of the show quickly began to snowball. Cabela’s, a major sponsor (Cabela’s has a store in Harrisburg), was one of the first to announce it wouldn't participate. Soon groups like the National Rifle Association, the National Wild Turkey Federation, the Rocky Mountain Elk Foundation, and companies like Ruger, Smith & Wesson, Crimson Trace, Trijicon and many more started to publically announce they were cancelling plans to attend in protest—this despite real costs to their bottom lines.
Seeming shell-shocked and still out of touch, Chet Burchett, of Reed Exhibitions President for the Americas, responded by saying, “Our original decision not to include certain products in the Eastern Sports and Outdoor Show this year was made in order to preserve the event’s historical focus on the hunting and fishing traditions enjoyed by American families…. In the current climate, we felt that the presence of MSRs would distract from the theme of hunting and fishing, disrupting the broader experience of our guests. This was intended simply as a product decision, of the type event organizers need to make every day.”
Talk about being out of touch. Modern sporting rifles are among America’s top-selling firearms. Many, such as Remington’s R-15, are chambered in calibers used by deer hunters. Predator hunters have long used them. The companies that make them are working around the clock to fill months, even years, of backorders. These firearms are mainstream among hunters and in high demand. How would the presence of these firearms “distract from the theme of hunting and fishing”? Saying that is like banning sports cars from a car show while saying sporty, fast, cool and expensive autos aren’t popular or even particularly useful.
Perhaps Reed Exhibitions’ leadership has only been watching the BBC and reading the London Times and The Washington Post. Maybe they need to reacquaint themselves with the people they serve.
Too bad they haven’t, as this decision is harming a lot of people. Many of the more than 1,000 exhibitors come from out of state and provide a huge boost to hotels, restaurants and other services during the a slow winter season. Also, many small exhibitors depend on sales at the show to stay afloat—though many of these small companies nevertheless pulled out too.
The NRA officially announced: “We had called on Reed Exhibitions to reconsider their decision; unfortunately they have steadfastly refused to do so. As a result, the NRA will not be participating in the upcoming show in Harrisburg or in any other shows hosted by Reed Exhibitions that maintain this policy. We are disappointed that Reed Exhibitions has ignored the concerns expressed by attendees, the outdoor industry and the NRA in not reconsidering their position to ban the display of Modern Sporting Rifles.”
The NRA’s announcement was a tipping point. Soon many more companies were pulling out and then Reed Exhibitions announced the postponement of the show. This very public fight highlights the fundamental mistake Reed Exhibitions made: They failed to note that America’s gun owners are sticking together as they fight for the America they know and love.
Meanwhile, other shows across the country are announcing they are not banning modern sporting rifles from their conventions. For example, The Portland Sportsman’s Show—the second largest consumer sportsmen’s gathering in the country—contacted The Outdoor Wire to say they have “no intention of outlawing any legal sporting product from their exhibit floor.”
This is further complicated by the fact that Reed Exhibitions has long worked with the National Shooting Sports Foundation (NSSF) to put on the SHOT Show, an annual trade show for firearms and related companies. Now it’s uncertain whether Reed Exhibitions will continue to put on SHOT. The NSSF announced in a statement that “intense, frank discussions” with Reed Exhibitions management over the Harrisburg show were unsuccessful. Now the NSSF says it is “considering all options regarding the management of future SHOT events.”
All this says a lot about the ongoing battles started by legislators who want to ban the modern sporting rifle with “assault weapons” bans. Instead of bringing gun owners to the table and seriously considering advice and proposals from people who understand firearms safety and more—ideas like getting armed officers into schools, shoring up the National Instant Criminal Background Check System (NICS), and finding ways to ensure that those with severe mental-health issues don’t have access to guns—President Barack Obama, Senator Dianne Feinstein (D-CA) and others are relying on a populist turn against the right to own, hunt with, and shoot modern sporting rifles to get their guns bans and more. They think they can use the term “assault rifle” to win a public debate to ban semi-automatic firearms that look a certain way. They’re trying to divide hunters from those who own modern sporting rifles when hunters own and use these rifles.
Instead of bringing groups together to come up with real solutions, they’re using horrific events as ammunition in an ideological war against the right to bear arms. It’s not surprising that a British company might fail to understand the American people by picking such a fight, but it’s a shame the White House doesn’t. This debate didn’t have to be a divisive and ideological conflict harming American companies, local economies and affecting freedoms safeguarded in the U.S. Bill of Rights. A centrist president could have had a real discussion and then backed policy positions that really would help stop homicidal maniacs.
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ff75bd946096e2f70acf85655eb20432 | https://www.forbes.com/sites/frankminiter/2014/01/30/goodbye-maryland-beretta-says-its-opening-a-factory-in-a-freer-state/ | Goodbye Maryland, Beretta Says It's Opening a Factory In A Freer State | Goodbye Maryland, Beretta Says It's Opening a Factory In A Freer State
After 35 years in Accokeek, Maryland, Beretta announced it will open a factory in Gallatin, Tennessee. They are constructing a $45 million dollar state-of-the-art manufacturing and research and development facility in Tennessee’s Gallatin Industrial Park. Beretta had warned Maryland’s Governor Martin O’Malley (D) they would find it difficult to stay or expand in a state where their employees can’t buy the products they’re making for citizens, law enforcement and the U.S. military.
O’Malley pushed for and signed the Firearm Safety Act of 2013 anyway. O’Malley had said in a statement that the bill strikes “a balance between protecting the safety of law enforcement and our children, and respecting the traditions of hunters and law-abiding citizens to purchase handguns for self-protection.”
Senate Minority Leader E.J. Pipkin (R-Cecil) disagrees. He said, “The fact is the Firearm Safety Act of 2013 provides no safety. It says, if you own guns, we’re coming for you. That’s the message.”
The legislation bans the sale 45 types of semiautomatic rifles (what some in the media calls “assault weapons”), requires citizens who follow the law to be fingerprinted and more before they can purchase a handgun, limits magazine capacity to 10 rounds, requires gun owners to report lost or stolen firearms to police and empowers state police to audit gun dealers.
Sheriff Mike Lewis of Wicomico County, Maryland, told me, “The law won’t do anything to stop criminals. All the law will do is infringe upon the constitutional rights of law-abiding residents of Maryland.”
While I toured Beretta’s Maryland plant in December 2012, just days before the horror in Newtown, Matteo Recanatini, web & social media manager for Beretta in the U.S., said to me, “Beretta is almost 500 years old and still strong because they invest in people. We have a skilled workforce here in this ‘blue’ state so we’re staying and investing in the future.”
That optimism was soon crushed under the weight of anti-gun politics.
Jeff Reh, Beretta USA’s general counsel and vice-general manager, spoke during public comment periods in Annapolis as the state legislature debated the gun-control laws. Reh warned lawmakers that Beretta could only take so much. He reminded them that the last time Maryland ratcheted up Second Amendment restrictions in the 1990s Beretta responded by moving its warehouse operation to Virginia.
“I think they thought we were bluffing” in the 1990s, Reh told the Washington Post. “But Berettas don’t bluff.”
After the gun-control legislation passed, Beretta officials visited 80 potential sites in seven states. Reh says 20 grading criteria were applied to those sites and that Gallatin, Tenn., came up the winner. The decision, however, wasn’t finalized until Ugo Beretta visited the site on December 30, 2013.
Reh said, “When Beretta chooses a location for its business, we start with the possibility that we will be in that location for decades, if not hundreds of years, to come. We move forward with confidence knowing that Tennessee is a great place to do business. We look forward to our opportunities here and we look forward to working side-by-side with our new Tennessee neighbors.”
During this fight against a law that targets those with legal guns, Reh said many times: “Why expand in a place where the people who built the gun couldn’t buy it?”
Other firearms companies have been forced to make the same decision. In December of 2012, for example, Magpul Industries had been preparing to break ground on a new facility in Colorado. Magpul’s PMAG magazines, AR stocks, grips and other products have been in high demand. Started in a home basement in 1999, by 2012 Magpul had grown passed 200 employees and the future looked bright. But then the state’s Democratic-led legislature and its governor, John Hickenlooper, decided the way to stop sociopaths from taking advantage of “gun-free zones” is to restrict law-abiding citizen’s freedom. The Colorado Senate’s President, John Morse, then stood on the Senate floor and argued that new gun restrictions were needed as a way of “cleansing a sickness from our souls.”
Magpul, and other companies, immediately responded to this emotionally charged anti-gun ideology by saying they’d take their jobs out of Colorado if the state banned the sale of some of its products. A lot of freedom-loving Coloradoans protested the proposed gun-control legislation and many pointed out that all the facts show the proposed Second Amendment infringements wouldn’t stop the bad guys with guns.
The legislature and governor went ahead and banned so-called “high-capacity” magazines (in this case those holding more than 15 rounds); required “universal background checks” that make it illegal for a grandfather to give his grandson his shotgun; forced gun buyers to pay for their own background checks; and so much more.
In this political climate, Magpul reversed its plans to build in Colorado, opposed legislation that made some of its products illegal for residents of Colorado and, after the gun-control legislation passed, pivoted and began looking for locations out of state. Last January Richard Fitzpatrick, chief executive officer of Magpul, said in a news release: “Moving operations to states that support our culture of individual liberties and personal responsibility is important.” Then he explained that Magpul is relocating manufacturing, distribution and shipping operations to Cheyenne, Wyo. “The Wyoming relocation is being completed with support from Governor Matt Mead, the Wyoming Business Council and Cheyenne LEADS,” said Magpul’s press release. Magpul’s corporate office will be moved to Texas. Texas Governor Rick Perry quickly gave Magpul a big Texas welcome. In a statement Perry said, “In Texas, we understand that freedom breeds prosperity, which is why we’ve built our economy around principles that allow employers to innovate, keep more of what they earn and create jobs.”
Magpul’s corporate creed—located on its website—shows it to be a company that takes its freedom seriously. In a section titled “Annoy the Establishment” Magpul declares, “Just as America’s Founding Fathers sought to promote individual rights and freedoms over those of the collective, Magpul also stands on the side of the individual. The natural enemy of the individual and innovation is the establishment and bureaucracy (which literally means “the power of the desk”). When we are annoying the establishment, we know we are effectively upholding our principles.”
Such is the feeling of gun makers and many of America’s 100-plus-million gun owners. Legal challenges to gun-control laws passed in 2013 are under way in New York, Colorado and Maryland. After these laws passed many gun manufactures have moved or are considering moving from various states. These aren’t easy decisions, as companies are loyal to their employees and often have deep historical roots in their states. Also, moving CNC machines and building factory floors to take them is an expensive and time-consuming ordeal.
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7abd3540790a077f8aba47c55615a85d | https://www.forbes.com/sites/frankminiter/2014/08/26/the-second-amendments-defining-moment/ | The Second Amendment's Defining Moment | The Second Amendment's Defining Moment
In March 2008 I chatted with a silver-haired law school professor under the marble pillars of the U.S. Supreme Court building. He was very excited. The court was to about hear Heller v. D.C. The case would decide whether the Second Amendment to the U.S. Constitution protects an individual right to own and carry guns. He had 20 law students with him. He said anxiously, “When I put in the paperwork to get seats months ago I didn’t know we’d get to see one of the last unresolved constitutional questions debated.” He said this while looking at a line of people hoping to get seats that went down the block, around a corner and out of sight.
Hours later a mainstream reporter next to me in the press section gasped, "Oh no," when Justice Anthony Kennedy hinted that he believed the Second Amendment to be an individual right while asking the government's attorney a question. Months later, when the high court ruled 5-4 that the Second Amendment protects an individual right from government infringement, the media was paying attention. Many, however, are missing what’s happening now. The Second Amendment is having its defining moment in history. The decisions now percolating up to the Supreme Court are deciding what guns the Second Amendment covers, when requirements become infringements and more.
Gun-rights and gun-control groups understand that these court decisions illustrate how much elections matter, as the federal judges making these decisions are nominated by the president and voted on by the senate. However, two recent federal court decisions from judges appointed by former president Bill Clinton show how difficult these decisions can be to handicap.
In one just-decided case, California Senior U.S. District Court Judge Anthony W. Ishii found that “10-day waiting periods of Penal Code violate the Second Amendment” as applied to people who fall into certain classifications. He found this arbitrary wait time “burdens the Second Amendment rights of the plaintiffs.” (The decision can be read here.) This court decision orders the California Department of Justice to allow the “unobstructed release” of guns to those who pass a background check and possess a California license to carry a handgun, or who hold a Department of Justice-issued Certificate of Eligibility and already possess at least one firearm known to the state. Basically, it says if someone already legally has a gun in California the state can’t make that person wait 10 days for a second gun just because it wants to. If that sounds like common sense to you, you’re right, but common sense isn’t a given in the courts.
Brandon Combs, a plaintiff in the case who is also director of the executive director of the Calguns Foundation, said the decision clears the way for them to challenge “other irrational and unconstitutional gun-control laws…. We look forward to doing just that.”
United States Supreme Court building. (Photo credit: Wikipedia)
A flurry of such challenges began right after Heller, led to McDonald v. Chicago (2010) and are still ongoing. In an important example, in February 2014 the Ninth Circuit Court of Appeals confirmed that the Second Amendment protects an individual right to carry firearms for self-defense in public. The decision came in Peruta v. San Diego County. The majority opinion in Peruta said, “We are called upon to decide whether a responsible, law-abiding citizen has a right under the Second Amendment to carry a firearm in public for self-defense.”
The California Rifle and Pistol Association Foundation brought the case on behalf of five individuals who were denied the right to carry a handgun by the San Diego sheriff. According to California law, a person applying for their Second Amendment right to carry a concealed handgun must: (1) be a resident of their respective city or county; (2) be of “good moral character”; (3) have “good cause” for such a license; and (4) pass a firearms training course. Many rural California counties accept self-defense as “good cause” for a person to get a license to carry a handgun, but some urban sheriffs and chiefs of police disagreed. In those jurisdictions the few who attain permits had to beg, plead, and show imminent danger to their lives before they could exercise their right to bear arms.
The Ninth Circuit decided 2 to 1 that the restrictive “good cause” policy of the San Diego County Sheriff’s Department was unconstitutional. The majority opinion accepted that “the Second Amendment right is ‘not unlimited.’ It is ‘not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose.’ Rather, it is a right subject to ‘traditional restrictions,’ which themselves—and this is a critical point—tend ‘to show the scope of the right.’”
The majority decision in Peruta said, “Our reading of the Second Amendment is akin to the Seventh Circuit’s interpretation [in Shepard v. Madigan] … and at odds with the approach of the Second, Third, and Fourth Circuits…. We are unpersuaded by the decisions of the Second, Third, and Fourth Circuits for several reasons. First, contrary to the approach in Heller, all three courts declined to undertake a complete historical analysis of the scope and nature of the Second Amendment right outside the home…. As a result, they misapprehend both the nature of the Second Amendment right and the implications of state laws that prevent the vast majority of responsible, law-abiding citizens from carrying in public for lawful self-defense purposes.”
When circuit courts begin calling each other out on constitutional questions like this, the U.S. Supreme Court usually takes a case to settle the dispute. Perhaps, however, the high court is waiting for the fighting to reach a bigger impasse—if so, another federal judge just gave them a big reason to weigh in.
Gun owners are now perplexed with a ruling by U.S. Federal Judge Catherine C. Blake. She based her ruling that Maryland’s 2013 “assault weapons” ban is constitutional on the premise that these particular semiautomatic firearms are “dangerous and unusual.” She can’t be entirely ignorant of the facts, as the plaintiffs did a very thorough job showing how common and popular AR-15s and other such rifles are with U.S. citizens. Instead her politics seems to have clouded her judicial decision. (You can read her decision here.)
In her 47-page decision Judge Blake systematically presented the facts and then judged them, not by the facts, but by her politics. In Heller v. D.C. (2008) the Supreme Court found that “law-abiding, responsible citizens [have the right] to use arms in defense of hearth and home.” By determining that law-abiding citizens have the right to bear arms, the Supreme Court found that D.C.’s complete ban on handguns, which it said was the class of arms “overwhelmingly chosen by American society for [the] lawful purpose [of self-defense],” infringed on the core principle of the Second Amendment.
Now, in Heller, the Supreme Court also recognized that the right to bear arms is not unlimited—by comparison, neither is the First Amendment’s protections of free speech. What Heller found is that the Second Amendment protects guns that are “in common use” and that are “typically possessed by law-abiding citizens for lawful purposes.”
Judge Blake noted all this but then wrote: “First, the court is not persuaded that assault weapons are commonly possessed based on the absolute number of those weapons owned by the public. Even accepting that there are 8.2 million assault weapons in the civilian gun stock, as the plaintiffs claim, assault weapons represent no more than 3% of the current civilian gun stock, and ownership of those weapons is highly concentrated in less than 1% of the U.S. population.”
She concluded that “assault weapons” are not used for self defense; are frequently used in mass shootings; are more offensive in nature than their fully-automatic military counterparts; and pose a heightened risk to law enforcement and civilians.
For all of this Judge Blake drew on data provided by two anti-gun groups. To her the numbers and substantial data supplied by the National Shooting Sports Foundation (NSSF), the trade association for firearms manufacturers, the National Rifle Association (NRA) and others was inconvenient.
She didn’t care that figures from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) show that between 1990 and 2012, U.S. manufacturers produced approximately 4,796,400 AR-15-type rifles (what she deemed “assault weapons”) for sale to U.S. citizens. Also during 2012, some 3,415,000 of these semiautomatic rifles were imported into the U.S. for sale to citizens. In Maryland specifically, from 1994 to 2012, there were a total of 604,051 transfers of regulated firearms, of which some 46,577 were so-called “assault weapons.” (I say “so called” because the term can only be defined politically.) This, of course, doesn’t count any private sales of these firearms that have grown so popular most manufacturers had been back ordered for years and are just now starting to meet demand.
Judge Blake then concluded: “Upon review of all the parties’ evidence, the court seriously doubts that the banned assault long guns are commonly possessed for lawful purposes, particularly self-defense in the home, which is at the core of the Second Amendment right, and is inclined to find the weapons fall outside Second Amendment protection as dangerous and unusual.”
She call’s them “unusual” even though a consumer study done by the NSSF found that about five million Americans own them. Also, results from retail studies show that nationally these semiautomatic firearms make up 20 percent of gun sales. By comparison sales of bolt-action and lever-action rifles made up 14 percent of overall sales.
She doubts they’re used for “lawful purposes” even though an NSSF survey that asked 20,000 gun owners about their AR-type rifles said they top reason they own them is for “recreational target shooting.”
The true American history Judge Blake is clearly evading of is that the AR-15 is merely the latest example of private citizens using and helping to develop a firearm type that is closely related to those used by the military. Every major firearm type used by the U.S. military has also been owned and used by civilians. This goes for lever-action Winchesters, bolt-action Krags, pump-action shotguns from Browning, and the modern AR-15. Anti-gun politicians who’re fond of saying that “weapons of war have no place in civilian hands” are either unaware of American history or are dishonest.
Demonizing this category of guns doesn’t even make sense statistically. According to FBI crime statistics, only about 2.5 percent of murders are committed with any type of rifle. AR-15-type rifles make up an even smaller fraction of that percentage. In 2011, for example, almost four times as many murderers used knives (323 used rifles whereas 1,694 used knives or another sharp object in 2011) to kill someone.
Actually, the semiautomatic technology used in the AR-15 was invented in the late 19th century and perfected by civilian gun makers in the early 20th century. Mark A. Keefe IV, editor of American Rifleman, tells me, “What’s really interesting is that from about 1900 to 1940 semiautomatic rifles were more often used by civilians than the U.S. military. It was the civilian market that drove and tweaked semiautomatic rifle designs that made it possible for the M1 Garand.”
It was those guns that led to the development of the AR-15. When, in 1963, the U.S. military finally ordered 85,000 of these rifles (which would soon be dubbed the M16) Colt had already begun selling semiautomatic AR-15s to U.S. consumers.
All that’s just the beginning of the truth about the past, present and future of America’s guns that Judge Blake got wrong, but all the rest is in my just-released book The Future of the Gun.
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bd81c08f8972929620c0becfaf758ffd | https://www.forbes.com/sites/frankminiter/2015/02/24/why-is-the-atf-moving-to-ban-common-rifle-ammo/ | Why Is The ATF Moving To Ban Common Rifle Ammo? | Why Is The ATF Moving To Ban Common Rifle Ammo?
Gun-rights groups are in an uproar over an ammunition ban proposed by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The ATF says it wants to ban M855 ball ammunition, a .223 (or 5.56 mm) rifle bullet that has been used by American citizens for decades. The ATF says it wants to ban this popular bullet because it is “armor piercing.”
The law at the basis of this debate is the Gun Control Act of 1968 (GCA). As amended, the GCA prohibits the import, manufacture and distribution of “armor piercing ammunition” as defined by a few terms Attorney General Eric Holder’s Department of Justice (DOJ) is attempting to broaden.
The definition for what constitutes “armor piercing” reads: “a projectile or projectile core which may be used in a handgun and which is constructed entirely ... from one or a combination of tungsten alloys, steel, iron, brass, bronze, beryllium copper, or depleted uranium.”
Now, to be as nitpicky as the law, the M855 ball ammunition the ATF wants to ban as “armor piercing” doesn’t have a core made of the metals listed in what legally makes a bullet “armor piercing.” The M855 actually has a lead core with a steel tip. Also, the M855 is traditionally a rifle cartridge and the ban only covers handgun ammunition. The DOJ argues this doesn’t stop them because the law stipulates they can ban a bullet that “may be used in a handgun.” And, after all, any cartridge may be used in a handgun.
Still, the definition has another condition. According to law, when ammo is made for “sporting purposes” (hunting, recreation shooting and so on) it is exempt from this ban. According to the DOJ the “GCA exempts ammunition that would otherwise be considered armor piercing if the Attorney General determines that the specific ammunition at issue is ‘primarily intended to be used for sporting purposes.’” So, according to the DOJ, they simply get to decide on this condition.
The “sporting purposes” caveat is an important exemption, as every bullet designed to ethically kill a deer or other big-game animal (whether from a pistol, rifle or shotgun) will also shoot through a bulletproof vest. If all bullets that could potentially shoot through a cop’s bulletproof vest were banned, then hunting—at least ethical hunting with firearms—would cease. Also, shooting competitions and more would effectively be terminated. (For a behind-the-scenes expose of where gun rights and gun design is headed see my book The Future of the Gun.)
Now, the ATF isn’t saying they want to do all that, but this regulatory move would certainly take us in that direction. Also, you can’t blame people for questioning the politics behind this move when the attorney general behind this proposed ban has said his failure to further restrict Second Amendment rights is his greatest failure.
This approval process, of course, isn’t new. In 1986, the ATF actually exempted the .223 ammo it now wants to ban. Also, in 1992, the ATF exempted .30-06 M2AP cartridges (the .30-06 is a widely used and highly regarded big-game hunting round and has also long been used by the U.S. military).
So okay, if only bullets made out of a specific list of materials, used in handguns not for sporting purposes are subject to the ban, why are we talking about rifle ammo? The ATF says the reason rifles chambered in .223 are being lumped with handguns is that some manufacturers have introduced AR-type rifles (also known as “modern sporting rifles” in the firearms community and as “assault weapons” to much of the media) with short barrels and sometimes folding (or even nonexistent) butt stocks. As these guns are too short to be classified as rifles (or “long guns”), according to ATF regulations, they are regulated as “pistols.”
So the definition of what was once a pistol has become even blurrier; also, the calibers a pistol can be chambered in have grown to include many cartridges that have been traditionally considered to be rifle cartridges. This is hardly a new development. Handguns (see the G2 Contender) have long used cartridges considered to be rifle calibers. (As an historical aside: When gun makers in the 19th century developed lever-action Spencers, Winchesters and more, they started by chambering them in pistol cartridges.)
Meanwhile, bullet development has sped up as manufacturers use new materials and technologies to design bullets that reliably penetrate and kill deer, elk, bears…. Also, ammo makers have been designing specific bullets for home defense, for long-range accuracy and for many other categories.
Ammo makers have also been responding to lead-ammo bans in California and on lands in other states. Since guns were invented lead has been the go-to material for bullet design. This has been changing as some states and land agencies are being pressured to force hunters and recreational shooters to use “nontoxic” bullets. The science behind the “nontoxic” debate is dubious and very political; nevertheless, manufacturers have to respond to trends whether they are from government mandates or consumer choice.
As lead has become political, ammo makers have increased research and development into other materials. The ATF has noticed this. The ATF reports that since 2011 it has “received approximately 30 exemption requests for armor piercing ammunition.” (Most of these are simply lead-free bullet designs made for many different consumer and law-enforcement applications.)
So here we have ammunition manufacturers and America’s 100-million-plus gun owners driving innovation as a regulatory agency (in this case the ATF) is trying to keep up. That’s to be expected—laws have to be applied and, when outdated, rewritten. However, this takes a hard turn toward politics when you read the reasoning within this latest ATF move.
Well, let’s step back a second. Before getting into that, it’s important to note that though the GCA’s ban on “armor piercing” handgun ammo is certainly outdated, the reasoning behind it is not. This ban was designed to save the lives of police officers. If commonly sold handgun ammo designed for the self-defense and target market can shoot through a bulletproof vest then our police officers will have lost a potentially critical protection. But this begs the question: Is .223 M855 ball ammunition currently a problem for law enforcement? Or, more precisely, is M855 ball ammunition when shot from handguns killing law-enforcement officers? According to the FBI’s “uniform crime reports” about 2.5 percent of all murders are committed with rifles of any caliber. The FBI does not break out its statistics by caliber. I was also not able to uncover a single murder of a police officer in a shooting where someone used a handgun chambered in .223—much less one using M855 ball ammunition. (The spokesperson for the ATF has thus far failed to respond to questions.)
Given that this seems to be a solution in search of a problem, it doesn’t seem conspiratorial to wonder if this is a political move orchestrated to make it more expensive to shoot AR-15s, which are traditionally chambered in .223. In its argument for this rule change, the ATF is clearly justifying expanding the ammo ban to traditional rifle calibers. So then, might the ATF’s next move be to ban ammo for other popular military/civilian calibers like the .308 and .30-06? How about the bullets used for the .500 S&W or other large handgun calibers? If this goes forward the ATF would be assuming this regulatory authority.
In fact, while arguing that definitions of what bullets are banned shouldn’t be decided by the ammunition’s intended use, but instead should be solely determined at ATF’s discretion, the ATF says, “the intent of one group of potential consumers (criminals) is no more determinative than the intent of manufacturers.” The ATF’s lumping of law-abiding gun owners as a group of “potential consumers” with “criminals” rankled many in the gun-rights community. This and other language in the proposal is leading many to argue this is all about an end-run around Congress to implement gun control.
Whatever the motivation for this change might be, as the ATF attempts to define its way to a larger regulatory role over a constitutional right, it’s clearly time for Congress to clarify its legislation or risk being left meaningless. (The ATF has opened a public-comment period until March 16. Email APAComments@atf.gov to give your opinion.)
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df60e15ac00edb6aedd942db0aac84f1 | https://www.forbes.com/sites/frankminiter/2015/05/25/the-scariest-rifle-company-on-earth-is-dying-but-guns-are-still-leaping-into-the-digital-world/ | The Scariest Rifle Company On Earth Is Dying, But Guns Are Still Leaping Into The Digital World | The Scariest Rifle Company On Earth Is Dying, But Guns Are Still Leaping Into The Digital World
Across the top of TrackingPoint’s website is the statement: “Due to financial difficulty TrackingPoint will no longer be accepting orders.” This is the company that made news in 2013 when it used “fighter jet technology” to make rifles even an amateur could hit targets with at 1,000 yards. Worries that this shooting system—sold to civilians—might fall into a terrorist’s or mass murderer’s hands have been aired on cable news shows and printed in major publications ever since.
None of that has yet happened, and there are a lot of reasons why those scenarios are a little far-fetched. For example, the TrackingPoint system had to be manually adjusted to compensate for estimated wind drift. At long range, even a light wind can push a bullet far off target. Adjusting for the wind and other variables still requires that a shooter have a lot of experience.
Nevertheless, just because TrackingPoint seems to be going under doesn't mean guns aren't still in the process of making a massive leap into the digital age. Here’s what everyone should know.
Despite its controversial nature and a genuine interest in this technology, it wasn’t hard to predict this end for TrackingPoint. Last August I’d reported that TrackingPoint would likely go belly up in my book The Future of the Gun. Still, what the media won’t be savvy enough to see is how TrackingPoint’s advances—and those from other competing companies—are still changing guns and will, inevitably, alter the world we live in.
TrackingPoint was founded as a tech company in Austin, Texas. Soon after its digital sighting systems were introduced the company got so much media attention management decided to relocate to a bigger facility. They took their then 100 employees to a 48,000-square-foot building in nearby Pflugerville, Texas. TrackingPoint’s new facility included what they said would be the world’s longest underground shooting range. They were ambitious.
TrackingPoint soon developed what it called “fighter jet technology,” but it immediately priced-out most consumers. Its first bolt-action rifles sold for $22,500 to $27,500. That price point wasn’t realistic. A small subset of America’s gun owners enjoy extreme long-range shooting, but even if everyone in that category decided to forgo buying a new vehicle so that they could purchase one of these shooting systems the consumer base still would have been too small.
In early 2014 Tracking Point did show they were trying to find a larger segment of the private market. They introduced a new line of AR-15s priced at $9,950. Those AR-15 could lock onto and hit moving targets at distances up to 500 yards. TrackingPoint said, “With stabilized target selection, target tracking and guided firing the 500 Series semiautomatic AR products enable anyone to be an expert marksman out to the 500 yard effective range of the firearm, even from difficult firing positions, such as kneeling, standing, or even lying beneath an automobile.”
But again, the consumer base for this product was miniscule.
Still, after it was introduced some pundits immediately began saying TrackingPoint’s technology was so scary it should be banned. Even Field & Stream’s longtime rifles editor, David E. Petzal, told me, “My own personal feeling is these devices are going to be a PR catastrophe for hunters once the general media becomes aware of them.”
This continued to give the company a lot of media attention, which they hoped would translate to sales.
Here’s why so many felt so strongly about this shooting system. The TrackingPoint’s product was a video-screen scope (you don’t look through its scope, instead you see a video image of what’s downrange). It used a laser rangefinder to measure the distance to the target and other instruments to measure temperature, barometric pressure, incline/decline, cant, air density, magnus effect drift (spin drift), target movement, and Coriolis effect drift from the spinning of the Earth. The riflescope’s computer then took all that data and used stored ballistic and firearm information including lock time, ignition time, rate and direction of barrel-rifling twist, muzzle velocity, and ballistic coefficient to calculate a shooting solution. Basically, the scope would figure out where the rifle needs to be held for the bullet to hit the target.
To put all that in motion the shooter placed a “tag” on a target by centering a crosshair on the target and pushing a red button located on top of the scope. The tag then starts the calculation, which is automatically updated 52 times per second. The scope used all this data to calculate a ballistic solution.
Now here was the cool-scary part. TrackingPoint married a rifle’s trigger with the digital scope, so that when someone pulled the trigger the rifle wouldn’t fire until the crosshair was precisely in line with the tag. This theoretically would take shooter error out of the equation. With a traditional rifle/scope a marksman must learn to breath properly and to apply pressure to a trigger perfectly so that gun goes off at precisely the right moment—even your heart beat can make the rifle shake noticeably at extreme long range—but with TrackingPoint’s system none of that theoretically mattered. A novice could use this shooting system to hit targets placed 10 football fields away with very little training.
Bryce Towsley, a gun writer who reviews rifles and optics for American Rifleman and many other publications, told me: “I let my 15-year-old nephew try out the TrackingPoint. He was on target so fast it shocked me. He’s not an experienced long-range marksman; in fact, his mother is anti-gun. But he had no problem hitting 10-inch steel targets at 300 yards. He said, ‘Uncle Bryce, this so easy. It’s just like a video game.”
Petzal was sure this would change the future of the gun. He said, “If the past is any indicator, the size and weight of the TrackingPoint rifle system will come way down in the future, as will the price. The other questions—concerning the sportsmanship of using such a firearm, and if it should be in civilian hands at all—will also be resolved, or forgotten, at some point. But for better or for worse, the Tracking Point—or something very much like it—is where we’re going.”
TrackingPoint was hoping a military contract would make up for the lack of consumer demand. And the U.S. military did publically say they were testing the TrackingPoint’s system. But the U.S. Armed Forces has long had similar and more advanced sniper-rifle programs.
In 2007 the U.S. Defense Advanced Research Projects Agency (DARPA) in Arlington, Va., funded Lockheed Martin to develop a technology that can automatically account for wind speed and other factors. It’s called the “One-Shot” program. In 2008 Lockheed Martin acquired fiber laser specialist Aculight Corp., located in Bothell, Wash., to help build this system. They reported that a sniper, using a system they’re working on, will one day be able to use fiber-laser technology—using wavelength’s invisible to the human eye—to illuminate a target at night from over a mile away. The fiber laser could even theoretically measure bullet drift caused by wind, as it would use light reflections from moving particles between the sniper and the target to determine wind direction and speed.
Lockheed Martin is also utilizing optics technology developed by private companies for cameras and other commercial optics to digitally zoom in on distant objects to make it possible for a sniper to shoot a bullet at night across vast distances. Meanwhile, Lockheed Martin scientists are using the technology they’re creating with the One-Shot program to build a rifle sight called the “Dynamic Image Gun Sight Optic” (DInGO) to help soldiers shoot more accurately at ranges from 10 to 2,000 feet.
Also, the DARPA reported that they successfully tested self-guided, .50-caliber bullets. DARPA’s Extreme Accuracy Tasked Ordnance (EXACTO) program has been working for some time on sniper bullets that make in-flight corrections as they zoom toward a distant target.
All this quickly put TrackingPoint behind advances in military technology.
Nevertheless, TrackingPoint’s technology will likely get picked up by someone else and turned into something cheaper. Hunters and those who enjoy shooting competitions may embrace future technology if it works and is much more affordable.
These electronic shooting systems also appeal to today’s soldiers and younger marksmen who can’t imagine life without smart phones and iPads—or many without their PlayStation or Xbox. The Tracking Point system, for example, had built-in Wi-Fi and ShotView that streams video. A mobile app let shooters share their experiences with others in real time with a smartphone or tablet. The scope also recorded each shot with video and audio that could be downloaded to an iPhone or Android device and shared on social media like Facebook and Twitter. Anyone who doesn’t get how all that will help grow and establish this technology isn’t in touch with this generation. It’s not hard to foresee Internet forums and chat room set up for marksmen to share data and video they recorded at ranges.
What if soldiers one-day carry a chip or other device a TrackingPoint-style shooting system could sense and thereby read as good guys in a combat zone? Hollywood screenwriters thought of this for the 1973 movie “Westworld.” In the movie there are guns that can only be fired only at humanoid robots. In the movie the robots rebel, override the restrictions and begin shooting people with the guns. In another example of fiction meeting reality, science-fiction thinkers took this to another level in the videogame series “Metal Gear Solid.” In the game there are “nanomite computers” in peoples’ bloodstreams that have an imprint of who the person is.
Still, long-range marksman I interviewed told me they’re excited but skeptical about the development of precision-guided firearms. They think it would be better if a sniper could switch to traditional optics if the electronic system fails. Many hunters feel the same way, as they’re reluctant to rely too heavily on technology.
Despite TrackingPoint’s likely demise, the future of firearms seems irrevocably linked to digital technology. Just consider that a low-end Nikon digital camera can now find a human face in the frame and set the exposure for that face. An electronic sight on a pistol linked to its firing mechanism could do the same thing. It could find someone’s heart or it could be set to wound. The possibilities are just starting to present themselves.
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be0b0e4a48dbc0ff6ceabacc4de06b96 | https://www.forbes.com/sites/frankminiter/2015/07/27/the-number-of-guns-made-have-doubled-during-obamas-years-in-office-heres-why/ | The Number Of Guns Made Has Doubled During Obama's Years In Office -- Here's Why | The Number Of Guns Made Has Doubled During Obama's Years In Office -- Here's Why
The Hill reported that “[g]un production has more than doubled over the course of the Obama administration, according to a new report from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).” They note that this manufacturing boom has come “in the face of the president’s push to expand background checks and place new restrictions on guns in the wake of high-profile shootings like the recent mass-killing in Charleston, S.C., and the 2012 massacre at a Newtown, Conn., elementary school.”
All that’s true, but it’s only part of the story.
The Hill does report that the “number of guns manufactured increased by 18 percent during the George W. Bush administration, while the Clinton administration actually saw a 9 percent reduction. But under President Obama, gun production has spiked 140 percent to 10.8 million firearms in 2013, the most recent year for which data is available.”
Still, even that’s only part of the story.
The often-unreported truth that bewilders the mainstream media can be seen in the way American’s view guns. In 1959 some 60 percent of the American public favored handgun bans, according to Gallup, whereas in October 2013, a total of 74 percent of U.S. citizens opposed handgun bans—only 25 percent wanted handguns banned. That’s more than a complete reversal in public opinion nationally.
The growth and variety of gun competitions is one of the many reasons why gun sales have been... [+] rising. (Photo by David Ramos/Getty Images for BEGOC)
To see this from another angle, consider that according to a report done by the Congressional Research Service, “Per capita, the civilian gun stock has roughly doubled since 1968, from one gun per every two persons to one gun per person.”
Other Gallup polls are show that the number of women gun owners in America rose from 13 percent in 2005 to 23 percent in late 2013. Also, the number Democratic households with firearms in their homes rose from 30 percent in 2009 to 40 percent in 2013.
Many factors changed public opinion about guns and handguns in particular since 1959. Advocacy and research from the NRA (Full disclosure: I’m a former employee of the NRA and I still write for them.), the National Shooting Sports Foundation, the Second Amendment Foundation, and by academics such as John Lott (see Lott’s 1998 book More Guns, Less Crime) began to show that gun freedom doesn’t make communities less safe, but actually can reduce violent crime. Meanwhile, gun-rights groups have been busy fighting for Second Amendment rights in courts and legislatures, increasing the number of gun ranges, and adding courses to train new gun owners all over America. In 2013 the number of NRA-certified firearms instructors in the U.S. surpassed 80,000. These people teach gun-safety courses and self-defense classes all over America.
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You can see this growth reflected in the number of concealed-carry permits. From the mid-1980s to today America has become a mostly “shall-issue” nation with regards to concealed-carry permits. (Shall-issue laws typically prevent local governments from arbitrarily refusing to give concealed-carry permits.)Today all or parts of at least 41 states have “shall-issue” laws. In fact, all 50 states now have laws that, to varying degrees, solidify citizens’ right to carry certain concealed firearms in public, either without a permit or after obtaining a permit. (A court forced Illinois to make it unanimous in 2013.) Nationally, the NSSF estimates that in 2013 there were at least 9 million concealed-carry holders in the U.S., according to Jim Curcuruto, the NSSF’s director, industry research & analysis. This is up from about one million in the mid-1980s.
All these developments led to more handgun sales. The number of U.S. semiautomatic pistols produced (imported and exported) was in the 900,000-range from 1998 to 2000, but then fell to a low of 626,836 in 2001. Since then, this category has risen nearly every year. In 2009, some 1,868,268 pistols were imported or exported by U.S. manufacturers, according to ATF data. In 2012 the total number of pistols imported or exported by U.S. manufacturers rose to 3,487,883, more than three times what it was a decade earlier.
Many gun makers have been American success stories during the last decade. American firearm manufacturers produced about 8.3 million guns for sale in the U.S. in 2012. This was a record and was an increase of 33 percent from 6.2 million in 2011, according to the ATF.
Changes in popular culture have also helped drive gun sales. The History Channel’s show “Top Shots” and Discovery Channel’s “Sons of Guns” showed this wave of interest in guns and shooting. It’s also difficult to measure how much the video game industry is affecting the cool factor of guns, but it is certainly having some affect. The video game industry made about $9.5 billion in the U.S. in 2007, $11.7 billion in 2008, and $25.1 billion in 2010, according to the Entertainment Software Association. I saw video game’s gun influence while at a BBQ in suburban America when I heard kids laughing in the house. I stepped in to see what all the fun was and stopped short.
Frank Miniter is the author of The Future of the Gun.
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87ce755b0bf372fcb5ef939e5b3c1208 | https://www.forbes.com/sites/frankminiter/2015/11/18/did-terrorists-have-a-91-success-rate-with-buying-guns-in-america/ | Did Terrorists Have A 91% Success Rate With Buying Guns In America? | Did Terrorists Have A 91% Success Rate With Buying Guns In America?
In the wake of the terrorist attacks in Paris, and the ongoing hunt for other armed terrorists across Europe, many are asking how terrorists are getting AK-47 assault rifles into France, which has very restrictive gun-control laws in place. Meanwhile, the media is again talking about a 2010 GAO (U.S. Government Accountability Office) report that found that 1,119 people on the U.S. “Terrorist Watch List” were able to buy guns or explosives from U.S. gun dealers between February 2004 and February 2010. As the media often jumps over sober explanations or misunderstands issues related to guns altogether, here are the facts behind both concerns.
How Europe’s terrorists get AK-47s
The English newspaper The Guardian reported: “[France] has extremely strict weapons laws, but Europe’s open borders and growing trade in illegal weapons means assault rifles are relatively easy to come by on the black market.” They then note that the “western Balkans are awash with guns left over from the wars of the 1990s.”
According to the UN’s “Small Arms Survey,” there are 4 to 6 million unregistered guns (many of them being the ubiquitous AK-47) in the Balkans. This makes it fairly easy for criminals to smuggle guns from this region into open-border Europe. Some guns are also smuggled from other parts of the world—the AK-47 is a fairly cheap and common commodity in much of the Middle East and Africa. (Now, as a journalist who questions sources, I don’t trust the figures in this UN survey; and neither does the UN: In the report they write: “This Global Study on Firearms has not been formally edited.” They later say, “Research on trafficking in firearms usually tends to be suggestive rather than conclusive. It mostly relies on case studies, a few statistics which are publicly available, and secondary evidence such as media reports.”)
Nevertheless, the basic reality here is that AK-47s and other arms are common and cheap in many parts of the world. Gun-control laws in the European Union are not likely to change this fact. Also, a little oil and commonsense will keep an AK-47 operable for generations. This makes guns a very easy commodity to smuggle and sell. The point is: officials aren’t likely to crush this illegal market by simply targeting the illegal product; they need, as they are doing, to target the terrorists.
An armed member of the French armed forces stands guard as commuters make their way to work at the... [+] La Defense business district in Paris. (Photographer: Simon Dawson/Bloomberg)
How “terrorists” buy guns in U.S. gun stores
A 2010 GAO report found: “From February 2004 through February 2010, FBI data show that individuals on the terrorist watchlist were involved in firearm or explosives background checks 1,228 times; 1,119 (about 91 percent) of these transactions were allowed to proceed because no prohibiting information was found—such as felony convictions, illegal immigrant status, or other disqualifying factors—and 109 of the transactions were denied.”
This does not mean that 1,119 terrorists found a loophole so they could openly buy guns and/or explosives in America. The “Terrorist Watch List,” like the “No-Fly List” and other secret government black lists, includes the names of suspects, relatives of suspects, friends of suspects, former college roommates of suspects, and more. No doubt these inclusions are useful for FBI agents and other officials as they search for terrorists and their accomplices, but they are not vetted lists of bad guys.
Nevertheless, the Obama administration has attempted to add these government black lists to the National Instant Criminal Background Check System (NICS) before. In the spring of 2010, for example, former Attorney General Eric Holder and President Barack Obama’s adviser Rahm Emanuel (now the mayor of Chicago) wanted NICS to reject people whose names appear on the secret FBI watch lists.
The problem with this unconstitutional idea is that you can find yourself on one of these lists by having the same name as a suspected criminal or terrorist or by simply traveling to Turkey, and if you are on a list, you may not be able to determine which one you are on, much less get yourself removed. Basically, such a power would give the federal government the ability to make secret lists that could be used to take away a constitutionally protected right from anyone it chose—even the late Senator Ted Kennedy once ended up on a “no-fly list” for reasons that were never made public.
This is why gun-rights groups are watchful of this area even as they advocate for more legitimate records—those where a person received a court hearing and has a legal way to have their rights restored if they’re lost—being included in the NICS database. This is because, as I uncovered in my book The Future of the Gun, the NICS system does have gaping holes that need to be filled and filling them in doesn’t have to impact American citizens’ civil liberties. A good example of what needs to be done is outlined in the FixNICS campaign, which is being lobbied for by the National Shooting Sports Foundation—yes, by the gun lobby.
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344f5429212fffcec2e1d376c433c459 | https://www.forbes.com/sites/frankminiter/2016/08/11/proof-that-hillary-does-want-to-make-the-second-amendment-meaningless/?sh=1ea2d95c297c | Proof That Hillary Does Want To Make The Second Amendment Meaningless | Proof That Hillary Does Want To Make The Second Amendment Meaningless
Democratic presidential candidate Hillary Clinton speaks about gun control during her campaign stop... [+] at the Broward College. (Photo by Joe Raedle/Getty Images)
According to The Washington Post, we are supposed to forget that in the early autumn of 2015 Hillary Clinton said the Supreme Court got it “wrong on the Second Amendment.” In point of fact, we weren’t even supposed to hear her say this. Someone leaked an audio recording from a private fundraiser hosted in Greenwich Village. Better known as “the Village” in New York City, this is an upscale neighborhood on the west side of Lower Manhattan known for being stuffed with wealthy, liberal-progressives. It is a place where President Barack Obama and Hillary have gone, again and again, to raise money for their campaigns.
When Hillary said this, she was at the home of John Zaccaro, who is the widower of the late Geraldine Ferraro. Ferraro was a congresswoman and, in 1984, the Democratic Party’s vice-presidential nominee. On the recording you can hear these wealthy and/or connected people applaud after Hillary says, “I was proud when my husband took [the National Rifle Association] on, and we were able to ban assault weapons, but he had to put a sunset on so 10 years later. Of course [President George W.] Bush wouldn’t agree to reinstate them…. And here again, the Supreme Court is wrong on the Second Amendment. And I am going to make that case every chance I get.”
Instead of making the “case every chance” she gets, we are now supposed to forget we heard her say this, says the mainstream media and Clinton-supporting pundits. They say Hillary doesn’t really want to nominate U.S. Supreme Court justices who would reverse District of Columbia v. Heller (2008) and thereby drain the life out of the Second Amendment of the U.S. Bill of Rights. They say you are a conspiracy theorist if you say as much.
An article in The Washington Post last May titled “Hillary Clinton doesn’t want to repeal the 2nd Amendment. But in 1991, George Will did.” began by saying, “No stranger to exaggeration, well-coiffed billionaire Donald Trump told an audience at a National Rifle Association event that his likely general election opponent Hillary Clinton planned to ‘abolish the Second Amendment’ to the Constitution. There's no truth to that claim, as has been noted repeatedly—and as Clinton herself had noted in a tweet.”
The Washington Post repeated this claim again this week with an op-ed titled “No, Hillary Clinton does not want to ‘abolish’ the Second Amendment.”
They say this even though Hillary Clinton said the Supreme Court got it “wrong on the Second Amendment.” When she said this Hillary must have been talking about the Heller and McDonald (2010) decisions. Both were 5-4 rulings by the Supreme Court. In Heller, the Court determined that the Second Amendment is indeed an individual right. In McDonald, the Court ruled that the individual right to bear arms also restricts state and local governments (not just the federal government). If Hillary thinks the high court got it wrong on these basic questions about the U.S. Bill of Rights, then she clearly would nominate Supreme Court justices who would agree with the minority opinions in both of those rulings. Both of those minority opinions argued vociferously that there is no individual right to bear arms. If a future Supreme Court rules that way then the Second Amendment will be gutted of meaning, or as Donald Trump says, “Abolished.”
Sure, more recently, at the Democratic National Convention, Hillary said, “I’m not here to repeal the Second Amendment. I’m not here to take away your guns.”
The trouble for her isn’t just what she said in that closed fundraiser in Manhattan, but that she is or has previously been in favor of gun bans, for laws that prevent law-abiding Americans from carrying concealed, for adding secret government black lists to the National Instant Criminal Background Check System (NICS), for national gun registration and for Australian-style gun confiscation. There are videos, audio recordings and more showing she is or has been for just about every type of gun ban or other gun-control idea proposed in the U.S. in the last three decades.
Those in the media who don’t want Hillary Clinton’s obvious positions on this fundamental civil-rights issue to cost her votes in places like Pennsylvania and Ohio are doing all they can to ignore and talk away her record. The thing is, the evidence of her record is so overwhelming that mainstream media outlets like The Washington Post are only embarrassing themselves by denying the obvious truth. To regain their integrity, they should instead call for Hillary Clinton to run openly on what is obviously her position on gun rights.
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2ae9ae6a2cfd523cca17cd202fd52e3f | https://www.forbes.com/sites/frankminiter/2016/11/17/beware-of-the-mainstream-medias-solution-to-fake-news/ | Beware Of The Mainstream Media's Solution To 'Fake News' | Beware Of The Mainstream Media's Solution To 'Fake News'
The Twitter symbol appears above a trading post on the floor of the New York Stock Exchange.... [+] Twitter, long criticized as a hotbed for online harassment, is expanding ways to curb the amount of abuse users see and making it easier to report such conduct. (AP Photo/Richard Drew, File)
Anyone reading the front pages of The Washington Post and The New York Times leading up to Election Day has to see the irony is the mainstream media’s gripe about “fake news” on social media influencing the election.
At the basis of why such premiere, left-leaning publications are concerned is the fact that their power to influence has diminished.
When The New York Times’ publisher Arthur O. Sulzberger Jr. wrote a letter to the paper’s subscribers saying “[we] rededicate ourselves to the fundamental mission of Times journalism. That is to report America and the world honestly, without fear or favor…” but then said, “[y]ou can rely on The New York Times to bring the same fairness, the same level of scrutiny, the same independence to our coverage of the new president and his team….” he gave a classic non-apology apology that has since drawn snickers across social media.
So it is hard to take their concerns seriously, but we should for two reasons. First, there have been a lot of fake stories, conspiracy theories and more masquerading as fact-based news. The solution to this is the open marketplace of ideas. Readers should call them out and challenge their sources and claims—and they often do.
The second reason we need to pay attention is that some on the Left are suggesting a new “Fairness Doctrine” or “net neutrality” regulations for the Internet as a solution.
After arguing we need a new Fairness Doctrine for the Internet, Brian Hughes, a professor of media studies at Queens College, wrote for CNN,“Big Data analytics like Facebook's social graph are notorious for their ability to identify consumer niches. It should therefore be possible to individually program our news feeds for balance and accuracy. If services like Facebook and Google are allowed to become news-aggregating monopolies, it's only reasonable to expect them to serve the public good as well as the bottom line.”
Sounds nice. He’s talking about “balance and accuracy.” But what does he mean?
The Fairness Doctrine, which President Ronald Reagan’s FCC terminated, allowed the government to decide what was content neutral. This allowed the FCC to fine radio and TV stations, or even to revoke their licenses, if it didn’t think broadcasts were fair and balanced or if the station aired profanity, hate speech or other offenses; as a result, many radio stations simply stayed out of politics. The result was less speech, not more. It is no accident that conservative talk radio bloomed soon after Reagan’s FCC killed the Fairness Doctrine. In retrospect, it is no surprise that this unleashing of freedom led to the creation of FOX News.
The classical libertarian John Stuart Mill, in his book On Liberty (1859), outlined the importance of this freedom by writing:
First, if any opinion is compelled to silence, that opinion may, for all we can certainly know, be true. To deny this is to assume our own infallibility.
Secondly, though the silenced opinion is an error, it may, and very well commonly does, contain a portion of the truth; and since the general or prevailing opinion on any object is rarely or never the whole truth, it is only by the collision of adverse opinions that the remainder of the truth has any chance of being supplied.
Thirdly, even if the received opinion is not only true, but the whole truth; unless it is suffered to be, and actually is, vigorously and earnestly contested, it will, by most of those who receive it, be held in the manner of prejudice, with little comprehension or feeling of its rational grounds.
Stuart’s third point brings the once dominant views of the networks and the newspapers like The New York Times into focus, as at one time their point of view went almost unchallenged.
On February 16, 2009, Mark S. Fowler, who served as President Reagan’s FCC chairman, told conservative radio talk-show host Mark Levin that his work toward revoking the Fairness Doctrine had been a matter of principle, not partisanship. Fowler said Reagan’s White House staff thought repealing the policy would be politically unwise. Fowler said that the White House staff thought the Fairness Doctrine was the “only thing that really protects you [Reagan] from the savageness of the three networks … and Fowler is proposing to repeal it.”
Instead of doing the politically expedient thing, President Reagan supported Fowler’s struggle to repeal the Fairness Doctrine’s gag order on free speech. Reagan later even vetoed a Democratic-controlled Congress’s effort to make the Fairness Doctrine federal law.
Many Democrats have long seen it differently. They think government is a fair arbitrator that can neutrally decide when someone can speak, even on a privately owned station; in fact, after the 2006 midterm elections, Democrats began pushing to allow government regulators to act again as censors by listening to broadcasts and fining those it doesn’t think presents both sides fairly.
Now some are using the “fake news” phenomena as an excuse to re-invite this kind of government control over First Amendment-protected speech or by asking Facebook and Twitter to become even bigger censors of certain views.
To be fair, some notable journalists on the Left are critical of this idea.
The Atlantic’s David Frum, for example, wrote: “So long as they refrain from incitement and harassment, the right way to deal with social media’s neo-Nazis is not by taking away their platforms, but by taking away their audiences, by welcoming a more open and more intelligent discussion of what Americans yearn most to hear about.”
That’s a First Amendment-friendly approach that is in step with our freedom. (I am the author of a just-released book This Will Make a Man of You—One Man’s Search for Hemingway and Manhood in a Changing World.)
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c4b6b311a52802e712beb17d5b112202 | https://www.forbes.com/sites/franksorrentino/2012/09/10/why-one-size-fits-all-capital-rules-will-not-prevent-bank-failure/ | Why 'One Size Fits All' Capital Rules Will Not Prevent Bank Failures | Why 'One Size Fits All' Capital Rules Will Not Prevent Bank Failures
(Photo credit: Wikipedia)
Basel III - scheduled to roll out its first phase in 2015 is leading headlines in the banking industry and has sparked heated conversations among industry leaders for good reason. Crafted after the financial meltdown, Basel III was created to prevent failure of large complex international financial institutions. It is however now being applied to all institutions - regardless of size or complexity – and poses a real risk to all small businesses that access credit.
Basel III will enforce higher capital ratios, higher cost of capital, and significantly increase compliance costs. This will result in less lending and higher pricing for debt, which will negatively impact the small business owner. If the banks that lend as their primary business cannot leverage their balance sheets to the extent that they currently do, then a combination of reduced lending, coupled with more expensive pricing, will be necessary in order to attract capital for the financial industry.
Risk Weightings Will Cloud Lending Decisions
Risk-weighting under Basel III will force many banks to reconsider the types of loans they make. This quest for ultimate safety may take away character decisions made by community banks. Community banks take risks; they are not systemic organizations. Like any other business, community banks evaluate each client and their lending needs, assess the risk, and make a decision accordingly. And like any other business, if a bank is not built on a profitable model, it should be allowed to fail, either by being acquired or closing.
There will be no capital available for increasing loan portfolios which will lead to the demise of most community banks, and as a result, dramatically tilt the playing field for the largest institutions.
Small Businesses Will Have No Options To Grow
The larger banks will shun riskier assets, and instead focus on what are considered assets with lower risk. Those needing lines of credit or commercial mortgages will find it more difficult to obtain these “riskier” loan types. Businesses without two-way relationships with their banks will find themselves left out in the cold, as even some community banks will begin to shun certain one-sided “transactions” in favor of long-term commitments that involve the entire banking relationship – not only loans, but deposits, residential mortgages and the like. While this sounds like a good thing, pricing may suffer, and the cost of lending will rise.
More capital sounds to most like a good thing, but the devil is in the details here, and we will likely not be happy with the unintended consequences. What we need is regulation with varying standards based on complexity and risk, and not necessarily the size of a financial institution in order to develop a realistic level playing field.
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47334533c7fe49807257fdc45ba86616 | https://www.forbes.com/sites/franksorrentino/2014/04/30/has-this-economic-recovery-left-common-sense-by-the-wayside/ | Has This Economic Recovery Left Common Sense By The Wayside? | Has This Economic Recovery Left Common Sense By The Wayside?
Business Cycle (Photo credit: Wikipedia)
Today’s post-crisis world is sprinkled with glimmers of economic hope as we witness positive upticks in the auto, retail and construction industries. Economic confidence is on the rise and consumer spending and borrowing are increasing. While we are seeing the fundamental changes of a recovery, less unemployment, a decreasing federal deficit, we have to remember – and operate – knowing we are not in a completely stable environment just yet. Both business owners and financial institutions need to continue to be disciplined in their approach to growth, and in some cases, that may mean a more conservative approach.
For business owners, it’s especially important to supplement this microeconomic view with an eye toward the big picture at all times. Yes, low interest rates along with positive trends create an ideal scenario to invest in your business; however, being strategic with how you invest is imperative. Assess the macroeconomic view of your environment and take calculated risk to protect your business over the long term. Positive growth doesn’t necessarily ensure stability. The fact remains, today’s environment isn’t necessarily black and white. The Fed is holding interest rates artificially low and continues to pump stimulus into the economy.
Is your business ready for when these factors are removed and the economy begins its balancing act? Can your business survive a more volatile environment? What if we move into a vastly different economic cycle?
Businesses need to be disciplined in their operating principles, fully understand the shifting risk environment and potential for economic bubbles in different sectors, and act not on assumption, but on long-term realities. Assess what makes your business prosper and whether you are prepared to react to economic turbulence or uncertainty.
While this environment of constant change and uncertainty brings so many complex questions to the table, the solutions come down to basic common sense principles we learned growing up: Save for a rainy day. Don’t make decisions for the now. Expect change. Know there are going to be bumps in the road. Plan for things that can go wrong...and don’t assume the tree grows to the sky.
We live in a time when there is incredible opportunity for those who plan strategically, with discipline and controlled caution in every situation and economic environment. Adding a dose of common sense can put you another step ahead.
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718e1e19d9c6da47d7c130afd94d834c | https://www.forbes.com/sites/franksorrentino/2014/09/12/the-art-of-ma-creating-a-whole-thats-greater-than-the-sum-of-its-parts/ | The Art of M&A: Creating A Whole That's Greater Than The Sum of its Parts | The Art of M&A: Creating A Whole That's Greater Than The Sum of its Parts
M&A in the community banking sector is heating up right now, and for good reason. While the big banks have been focused primarily on cleaning up their balance sheets, for smaller financial institutions, consolidation can help with capital and compliance hurdles brought on by increasing liquidity and regulatory pressures, or fill gaps in customer, product, and geographic portfolios.
Having just gone through the process, we learned that merger success hinges on a well-executed integration plan that places equal emphasis on the tangibles and intangibles, so that your combined organization is stronger in every aspect than it could ever be alone. After all, isn’t that the end goal?
While there is no magic handbook to ensuring a successful merger outcome, there are a few foundational guidelines that will help to manage the process in a way that benefits your employees, customers and investors.
1. Crystallize your vision and shared goals. In any merger, both companies need to come together with agreed upon aspirations for the combined entity. Before embarking on the integration process, it’s critical to solidify the combined company’s vision and ensure that everyone involved has a shared outlook on chief issues that impact the market’s perception of your brand, as well as what the merger will achieve.
For us, this merger was about creating a premier community bank in the NY/NJ metro area. It was important for us to maintain the client-first, sense of urgency culture that ConnectOne has built while adding value to our clients by providing more access, technology, opportunity and support. Our mission is to be “a better place to be” and every decision made throughout the merger was challenged against the question, “Will this make us an even better place to be?”
2. Start integrating from day one with a clearly defined strategy and execution plan. Our deal was completed in six months. We attribute our ability to be so efficient to the fact that we began working on integration the moment the agreement was signed.
And we set up checkpoints for ourselves throughout the process, ensuring that we were staying consistent with our strategy and aligned with our common goals within every facet of the organization.
With constant collaboration, planning, and consideration of our customers, employees, communities, and shareholders, we held steadfast to our commitment to creating a stronger company – one that is better equipped to support our customers as they grow and facilitates new opportunities for shareholders and the communities we serve.
3. Don’t overlook the intangibles. Culture matters – a lot. While converting one company to the other’s operating platform, technology systems, and business processes is a major component of the integration process, fully integrating culture and values is just as, or even more important. In fact, studies have shown that 30 percent of M&A deals fail due to disparities in organizational culture and ineffective integrations, as cited by Deloitte’s “Cultural Issues in Mergers and Acquisitions” white paper. Consider holding cultural training events, meetings, and other forms of hands-on training to integrate two cultures and establish a mutual understanding of the principles your company embodies.
It takes the trust of your employees and their belief in your company’s values to inspire loyalty and promote collaboration. Making the concerted effort to not only educate, but excite employees, both current and potential, fosters an urgency to move forward as a united organization poised for growth.
4. Be transparent and over-communicate.
Just as transparency and communication are essential in any business or new relationship, they are fundamental to the successful union of two companies. From mailed letters to customers and proactive emails and calls, to communicating and answering questions though social media channels, to launching a call center to handle increased volume of inquiries, the importance of constantly keeping customers abreast of updates and anticipated changes cannot be underestimated.
And the same goes for employees and investors. At a time of uncertainty when changes are being made and people aren’t sure how they’ll fit into the puzzle, over-communication is the comforting presence they need. If you think you’re being excessive, you’re doing something right.
In an environment ripe for consolidation where M&A is the name of the game, it’s not just about finding a compatible match; it’s about understanding the actions and attitudes needed to successfully integrate two companies into one that’s greater than the sum of its parts.
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f9799bd9a66a800bde87fc3c48ad96d7 | https://www.forbes.com/sites/franksorrentino/2015/06/02/why-banks-should-stop-fighting-and-learn-to-love-regulators/ | Why Banks Should Stop Fighting And Learn To Love Regulators | Why Banks Should Stop Fighting And Learn To Love Regulators
Many bankers have likely gasped upon reading the title of this blog.
Let’s face it: the natural reaction is to challenge the regulators. It’s not an easy time for financial institutions of all sizes that are grappling with increased scrutiny, especially the smaller community banks which must adhere to many of the same rules as the largest institutions.
But the reality is, regulations are not going to disappear – and for good reason. After the financial crisis, the need for increased regulatory oversight is clear. As the backbone of the US economy, our nation’s growth depends on community banks figuring out how to operate in this ever-increasing regulatory environment. Because regulators are so deeply sewn into the fabric of our business, it’s time to recalibrate our approach to how we work with them (emphasis on with them vs. around them).
Why? It can mean the difference between struggling to merely meet regulatory requirements and uncovering opportunities
Federal Reserve Bank Chair Janet Yellen at the central bank's Community Development Research... [+] conference in April (Chip Somodevilla/Getty Images)
otherwise deemed impossible. But it doesn’t happen by doing nothing. Like any successful relationship, this one requires consistent, transparent communication and consideration of your regulators pertaining to every decision your bank makes.
Start thinking about this audience like you do any other key constituent – customers, employees, investors. When your regulators step into your bank to conduct an exam, they shouldn’t be faced with any surprises. They should understand exactly what you’re trying to achieve and how you’re achieving it.
That means not just letting the regulators come to you. Call them with questions, bounce ideas off them, and ask for feedback. Keep them informed throughout your everyday course of business, and seek out their consultation rather than waiting for it – because no relationship thrives when one party holds back.
While most banks aren’t accustomed to having an open dialogue with their regulators, this relationship is more important to nurture than ever. The banks that recognize the need to not only embrace regulators, but develop a positive relationship with them, are the institutions that will be poised to prosper as industry leaders.
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519478aea987f91b4bc074bfb1e0582c | https://www.forbes.com/sites/franksorrentino/2015/11/20/heard-at-the-2015-aba-national-convention/ | Millennials & FinTech Are Top Of Mind For Traditional Banks | Millennials & FinTech Are Top Of Mind For Traditional Banks
Disruption was the overarching theme at the 2015 ABA National Convention. The banking industry is ripe for change with the rise of fintech startups, the growing popularity of blockchain technology, and the dominance of millennials. The industry is evolving and the ever-increasing need to prepare for cybersecurity threats remains top of mind, as banks continue evaluating new threats and potential fraud risks.
The discussions brought forth by the panels and sessions at this year’s conference left bankers reconsidering current practices and challenged many conceptions of what we consider the banking business model to be. The theme of the conference, “A Tradition of Innovation,” provided a backdrop for attendees to gain insight on today’s most prevalent disruptors as well as to assess some key indicators of where the future of banking may be headed.
Here were the key takeaways:
Banks should take a note from startups.
Startups have experienced massive growth in a short amount of time for a variety of reasons. First and foremost, they know how to run lean and have mastered the art of streamlining their operational processes on both the front end and back end. As one panelist put it, “If your operations department isn’t shrinking – even as you grow – you’re going to have a problem.” They work to provide both their clients and employees frictionless experiences by effectively utilizing technology to eliminate manual processes.
The most innovative startups are also investing in something that very few banks have historically paid much attention to: branding. Consumers buy into brands, and startups know that an investment in branding can serve as a key differentiator for a company. Branding is much more than just a logo and company colors; it is a highly-developed roadmap of a company’s identity, defining the manner in which that company communicates, what they believe in as an organization, and providing context for how they operate and why. Investing in branding allows companies to become more “human,” allowing them to resonate with key audiences in an authentic manner and build trust and loyalty among their consumer base.
Bail On Your Bank! An eBook From Forbes Your cash belongs to you, not your bank. Fintech startups are challenging the big banks—and already saving people thousands.
Lastly, startups regularly invest in data collection and data management. For all decisions, whether minor or of great importance, startups use data to make strategic decisions that result in profitable outcomes. They are able to profile their client base and target audiences through data analysis and in turn, make valuable assessments about behaviors and spending habits. Banks have access to enormous amounts of client (and demographic) data, but many of them aren't utilizing these informational goldmines to their advantage.
Millennials aren’t coming – they’re here.
As they have been society’s fastest-growing demographic in recent years, Millennials have continuously been a hot topic of conversation in the banking industry. As the Boomers begin to retire, Millennials have established their place at the forefront of the economy, surpassing Generation X in the first quarter of 2015 to become the largest share of the American workforce. Given the dominance of the Millennials, banks must now prioritize their approach to attracting constituents of this key demographic – both as clients and as employees. If they haven’t yet asked themselves, bankers should focus on this one question: are we speaking to the Millennial audience and offering them the mobility, growth and development they are looking for?
FinTech companies are very real competitors.
Given the rapid evolution of FinTech, these companies have the potential to become a verifiable threat to the banking industry. ABA President Rob Nichols estimates that in the next year, venture capitalists will invest anywhere between $20 billion to $40 billion in FinTech. This funding offers huge potential to escalate growth and development of new financial technologies, further advancing the prevalence of the industry. If a bank does not have the infrastructure or expertise to build out its own financial technology division, they could consider a partnership with a FinTech company that aligns with their business model.
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Ultimately, the 2015 ABA convention left bankers with a great deal of intellectual fodder regarding the way things have traditionally been done, the current state of the industry, and how its continued evolution will affect the way things may be done tomorrow.
Though the discussions inspired numerous questions on current matters relevant to the industry, I walked away from the conference with one overarching inquiry: are bankers willing and ready to take on new and innovative approaches to banking, and to challenge the traditional business models they are so comfortable operating with today?
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982fd639e189bf65e5b34c83f74d0edc | https://www.forbes.com/sites/franksorrentino/2016/01/12/cyber-security-small-business-and-the-2015-trends-that-will-matter-more-in-2016/ | Cyber Security, Small Business And The 2015 Trends That Will Matter More In 2016 | Cyber Security, Small Business And The 2015 Trends That Will Matter More In 2016
One year ago, we stepped into 2015 with relatively high hopes for a brighter economic future, with unemployment on the decline and job growth stimulating various industries. Though promising, the U.S. and global economies still felt the pressure of persisting, emerging and evolving challenges that would continue to color the economic landscape in the months to come.
As we head into a new year, I’m taking some time to reflect on my commentary from the past 12 months, examining the top three themes that influenced banks, small businesses and the economy at large – many of which still remain top-of-mind today.
Tackling Evolving Cyber Security Risks
The first of the challenges I remarked on in 2015 was the threat of cybersecurity – an issue that continues to disseminate new risks and hazards across all industries. At the start of the year, I gave my two cents on what we all individually should be doing to protect ourselves in an increasingly hyper-connected world, including keeping our private data private, being vigilant about phishing emails, regularly monitoring our bank account activity, and becoming educated about the fraud protection measures at our disposal.
In October, I also provided some tips for small businesses – the most susceptible targets for cyber-attacks – to protect themselves from this escalating threat, including increasing understanding and preparedness, developing enforceable security policies and protocols, and implementing and practicing action plans so employees know what to do in the event of a breach.
As we look to 2016, cybersecurity threats continue to prevail, particularly with the rise of fintech and the growing push to develop faster methods of payment and innovative ways to transact. While these advancements are undeniably valuable, new technology breeds new security and fraud risks – thus, we should all make sure to carry over this sense of vigilance and responsibility regarding cyber protection into the new year.
Prioritizing Small Business Growth in a Post-Crisis Era
2015 was a year of marked economic progress, with the economy making a gradual shift out of recovery mode and into growth mode. Though the past year has been fraught with its fair share of challenges, uncertainty, and economic turmoil in various markets, we have settled into a post-financial crisis state of relative normalcy and are positioned to continue improving.
Earlier this year, I encouraged small business owners to shift their mindsets and evaluate their business operations in light of these improvements, so that we are no longer focused on merely staying afloat, but on reaching new horizons. I encouraged small business owners to prepare for rising interest rates – as expected, the Federal Reserve increased rates by 25 basis points on December 16 – and a more competitive economic environment, structure plans to secure funding for future growth, make an effort to attract and retain valuable talent, and proactively assess their business concerns and vulnerabilities.
In order to significantly strengthen our financial situation, we need small businesses – the backbone of our economy – to not only keep their doors open, but to thrive. As we forge ahead to a more stable financial status quo, small businesses should keep an eye towards growth and continue making progress a priority for the year ahead.
Continuing to Play by the Rules
Operating in a post-crisis environment has meant substantial new considerations for banks as well, who continue to grapple with a high volume of regulatory measures and reporting requirements. In some cases, the regulations designed to stimulate economic growth can end up doing the very opposite – crippling community banks who fold under the regulatory burden, thereby limiting the financing and banking options for the small businesses who need them.
Despite the drawbacks of an ultra-regulated environment, earlier this year I urged banks to stop struggling against the regulators and instead learn to work with them, by engaging in open dialogue and viewing them a key constituency. As we head into 2016, it’s clear that heavy regulations will continue to pose challenges, as M&A activity steps up among community and mid-level banks and the convergence of banking and technology continues pushing on. As growth continues and the influx of fintech becomes more prevalent, the regulatory environment will ultimately have to catch up and keep expanding its reach.
2015 was a challenging year, indicative of the turbulence that can occur when you start gaining momentum. Closing the year with the first hike in interest rates in nearly a decade shows that we are, in many ways, well positioned for progress. But with growth comes the inevitable growing pains, as banks and businesses continue dealing with a highly-regulated, low-interest rate environment, and assessing the challenges that stem from more competition, more partnerships, and more technology.
As we begin 2016 with an optimistic view, we should not forget to look back – and use the lessons of 2015 to guide us towards a better, brighter banking future.
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5c9cc5031cfabde99e9d52d9fede8378 | https://www.forbes.com/sites/franksorrentino/2016/02/18/2020-a-landmark-year-for-banks/ | 2020: A Landmark Year For Banks | 2020: A Landmark Year For Banks
Recently, the Wall Street Journal released a series of graphics that gave us a window into how dramatically the global landscape will change by the year 2050. We’re faced with just how powerful the forces of increased urbanization, the aging population and rapid innovation are when it comes to our everyday lives.
For many of us who are inundated by news of volatility in the global market, plummeting commodity prices and questions about another recession, it can be a difficult exercise to pull away from “watch mode” and shift to thoughts about the future. So I’m not focusing on the next 50 years, I’m zeroing in on the not-so-distant future, to the next four, specifically in the banking industry.
Here is my forecast of what we’ll see in banking by the year 2020.
Bigger players, smaller field
We’ve been experiencing a steady and significant decline in the number of banks overall, with one in four community banks disappearing since 2008 In the next three to five years, I expect we’ll see these banks further condense and remain with about half as many banks as we have in existence today. While we’ll have a fewer number of banks, what we consider a “small” bank will become much bigger . These larger banks will be better equipped to digest the increasing regulatory demands banks are faced with while offering increased capability to their clients
Overall, there will be much less differentiation between the largest and smaller banks, as the entire banking system becomes more uniform. Technology is, for better or for worse, the great leveler of playing fields – and widespread advancements in tech stand to benefit the smallest institutions the most while inevitably increasing their size and scope.
Convergence through innovation
Expanding banking capabilities through fintech is a theme I’ve discussed regularly, as its implications continue to become more apparent. We are moving toward a widespread unification of banks and fintech companies, and increasingly, convergence will be key. 2020’s bankers will rely on innovations that meet the distinct needs of their client base and conform to their operating systems, as the already-outdated notion of technology for banking being ‘one-size-fits-all’ slips further into obscurity. This dependence is not a one-way street, however – fintech companies will continue to rely on banks as the ultimate source of capital/liquidity to make their loans.
In terms of innovation in lending, among the most considerable changes I expect to see by 2020 is the impact of new technologies on small dollar loans. New technologies in this space will allow for a more automated process, removing cost and allowing for a more efficient and speedier process without affecting credit guidelines. Increased technology will allow banks to handle hundreds of thousands or millions of loans at once, no longer viewing small clients through an individualized lens, but rather as components of one great, substantial whole.
On the payment side, anything and everything is up for grabs. Banks are constantly looking for new technology solutions that transform the way we manage and move our money, with an avid focus on safety and security. With many consumers turning to popular apps like Venmo while others continue writing paper checks, we haven’t reached the apex of innovation yet – but by 2020, I anticipate a significant amount of banking’s technology to be dependent on fitech platforms with virtually all transaction based activity moving running on these technologies.
New means to the same ends
The greatest changes to come for the banking system will most likely not be derived from shifts in the needs of its key constituencies. Volatility within the global market will not significantly impact the “man on the street,” who stands to benefit from a low-interest rate environment and a relatively healthy U.S. economy in terms of job creation and wages. While the basic customer requirements – the ability to accept deposits, manage assets and sales, help with expansion, etc. – will remain more or less the same in the next few years, the channels through which banks meet these fundamental needs will inevitably change.
Banks need to be especially attuned to how the Millennial population operates; currently standing at over 75 million strong and comprising the largest U.S. demographic group, they are widely categorized as a tech-savvy generation that demands simplicity, speed and efficiency.
With the oldest Millennials in their late 30s by 2020, I foresee some of the same needs and characteristics of previous generations resurfacing as they form households, buy cars and create families. We can even expect to see these hyper-urban apartment dwellers head back to the suburbs to buy and build homes, helping construction lending maintain its steady pulse. In fact, 2015 survey results show that 66 percent of Millennials plan to live in single-family suburban homes.
2020 stands to be a landmark year for banking – not because the vital components of the industry are changing, but because of the ways in which we approach these fundamental aspects of business most certainly are. With technology serving as the great unifier, we’ll see increased capability in the size and scope of banks, their processes and operations, and among fintech companies and banks themselves. And as banks rise to meet the needs of their most tech-obsessed clientele, we’ll find that the “typical banker” will still exist – just a shinier, new version of him, her or even “it” self.
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bd7e22e691b33676de3896cbe9f35539 | https://www.forbes.com/sites/franksorrentino/2016/05/24/for-fintech-disruptors-regulatory-freedom-will-be-fleeting/ | For Fintech Disruptors, Regulatory Freedom Will Be Fleeting | For Fintech Disruptors, Regulatory Freedom Will Be Fleeting
As long as there has been business, there has been disruption. A recent Harvard Business Review article discussed the concept of “spontaneous deregulation,” when a shiny new technology or innovative business model emerges onto the scene, disrupts its industry and – temporarily – renders existing rules and regulations obsolete. The invention of the airplane transformed travel, forcing us to rethink the laws that up until then governed only what occurred on solid ground. For the music industry, it was first Napster, then Spotify, that caused a complete overhaul of our approach to music sharing and licensing. And perhaps most noticeably today, Airbnb is shaking up the hotel industry; Uber and Lyft the traditional taxi industry.
Gallery: Fintech 50: The Future Of Your Money 51 images View gallery
Disruption has led to some of the greatest advancements and most transformative innovations of our time. But just because something new doesn’t fit neatly within the confines of existing legislation doesn’t mean it is exempt from it. It just means the rules will have to change.
For the banking industry, fintech is that square peg in the round hole. Financial technology companies have recently burst onto the scene, offering faster and more efficient ways of doing the things banks have done for a hundred years. While fintech companies may not be doing anything drastically different from banks, the key differentiator is that they are not banks. Lacking their size, scope, geography, capital or insurance; fintech companies have established themselves as free, to an extent, from the regulatory scrutiny that governs traditional financial institutions. But this can’t and won’t last forever.
It’s no question that fintech has a lot of promise for banks, business owners and consumers at large. A bank that partners with a fintech company gains an opportunity to more effectively streamline processes both internally and externally, whether automating large volumes of individual loans or transforming the way customers pay and transact. But with all the benefits of innovation come the threats of unintended consequences, and with fintech, the potential risks should not be ignored.
Consider innovator LendingClub, where the CEO and founder resigned after the peer-to-peer lender discovered a sale of loans that violated company policy, raising questions about the relatively light touch such firms have gotten from regulators to date.
I wrote earlier this month about the importance of the “human” banking relationship for small business owners – but it’s not just about having a trusted advisor to turn to. Banks, unlike online lenders, have government-guaranteed liquidity. A business owner might be ecstatic about how easy it is to get a loan from an online lender, but few think about the reverse scenario – how easily that credit can go away.
In a downdraft, liquidity freezes up, and if your company’s survival depends on money that suddenly becomes unavailable, you’re left in a despondent place with only an algorithm to turn to. We saw what happened in 2009 when liquidity evaporated, tossing the economy into the greatest recession since the Great Depression.
What happens if interests rate rise? Will these firms receive less funding? How will they continue to lend if this scenario plays out?
That’s not to say we’re headed down this path – just that we should recognize the risks we’re taking, and be aware of the potential consequences.
Now more and more, we’re seeing that awareness level build. Rather than just news of the latest and greatest in fintech, we’re hearing about regulatory pressures heating up in the space. Online lending companies are facing tremendous amount of competition, issues with liquidity, and increased scrutiny over their business models. Just this month, the chairman and chief executive of the largest online lending service stepped down over a violation of the company’s business practices. All the swirl around online lending recently caused the U.S. Treasury Department to release a white paper calling for greater transparency in the sector and more action from regulators in overseeing this rapidly expanding industry.
It’s clear that the fintech revolution won’t be slowing down anytime soon – over the past year and a half, investors have poured over $20 billion into the sector – but no industry can play by its own rules forever. Ultimately, convergence between fintech and traditional banking will be the key to ensuring that lending processes are both streamlined and secure. Because if deregulation can be spontaneous, regulation has proven itself to be anything but. The guidelines followed stringently by today’s financial institutions are the result of 100 years of regulatory scrutiny in the space, and they exist for a reason. History always repeats itself, or more accurately said - rhymes.. There’s no need for regulators to rewrite the rulebook just for fintech, but rather reassess the guidelines already in place and find the way to bring innovation under the existing umbrella.
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0b204f8f894b5b661318c6910db6e54b | https://www.forbes.com/sites/franksorrentino/2020/04/24/community-banks-play-critical-role-in-helping-americas-small-businesses-get-back-to-business/ | Community Banks Play Critical Role In Helping America’s Small Businesses Get Back To Business | Community Banks Play Critical Role In Helping America’s Small Businesses Get Back To Business
Saving America’s small businesses requires banks at every level and all sizes to work together to deploy the much-needed, on-going relief during the pandemic of COVID-19. Some big banks and lenders are better poised to process larger loans while other smaller banks have shown strength in their ‘community intelligence.’ As of April 16, when the first round of funding for the Paycheck Protection Program (PPP) from the Small Business Administration (SBA) was exhausted, the SBA had approved 1.66 million loans totaling more than $300 billion in relief. And according to the SBA, approximately 60% of those loans were made by community banks of $10 billion in assets or less.
Yet, with the SBA estimating that there were 30.7 million small businesses in the U.S. in 2019, those 1.66 million loans only account for 5 percent of small businesses in America. If we’re going to restart the American economy and help small businesses to survive, we cannot forget there are still so many small, private businesses that require help and ongoing assistance now.
We are all in this together and it’s going to require as many financial institutions, banks and lenders working to help our country’s small business get the capital they need to persevere.
In the first round of funding, it’s no surprise that community and regional banks were better positioned to service their clients efficiently amidst COVID-19. Community banks have established relationships with clients, can be nimble and operate through a relationship banking model, have deep personal knowledge of clients and the communities they serve, which in turn allows faster and more efficient engagement.
This relationship banking model gave way for many community banks to have proactive and personalized communications with clients during the first phase of PPP, getting ahead of application processes and helping customers navigate every step of the way. We were proud to be one of the first to fund a loan within one week of the program being announced. While nearly every financial institution faced hiccups along the way, personal relationships ease the burden of a constantly evolving process.
Relationship banking requires a mutually supportive relationship between business owners and their bankers. It’s critical for a business owner, especially a small business owner, to identify a bank that understands their business and needs and evaluates that bank like it would any other critical partner. Business owners should evaluate the different factors that are important to them in good times and bad and make decisions based on what is needed to support their business.
A business’ banking relationship matters, and the community bank model is built for resiliency. Community banks will continue to play a key role in deploying the stimulus relief and the future recovery and revitalization of our country’s economy. With another round of $320 billion in funding just approved and $60 billion set aside for community banks and smaller credit unions, community banks will continue to be on the front lines ensuring the businesses that are the engine of our economy are not left behind.
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093ff2c14cc0754d96ea7ab85f259b4c | https://www.forbes.com/sites/fraserseitel/2014/10/20/rebuilding-a-reputation-scorched-by-ebola/ | Rebuilding A Reputation Scorched By Ebola | Rebuilding A Reputation Scorched By Ebola
On October 15, Dallas Texas Health Presbyterian Hospital hired Burson-Marsteller for crisis management counsel.
Four days later, apparently following Burson’s advice, the hospital took out a full-page ad apologizing for not living up “to the high standards that are the heart of our hospital’s history, mission and commitment,” in botching the initial treatment and subsequent public relations surrounding Thomas Eric Duncan, the first person in the United States to die of Ebola.
Predictably, the mea culpa ad was immediately picked up on social and national media and equally predictably, it backfired.
Not only did it remind people-in-the-know of the hospital’s earlier ineptitude, but it also introduced that ineptitude to a whole new group of observers who heard about the ad.
Stated another way, the ad was unnecessary, unwise and counterproductive. Yet another mistake for a snake-bit hospital, that heretofore had been known for competence.
In fairness to Burson – where, full disclosure, I once worked – there wasn’t much in the short-term that any public relations agency could do to win back Dallas Presbyterian’s formerly pristine image.
Indeed, short of the hospital successfully treating another Ebola patient – which appears unlikely, since the US government is now steering Ebola victims away from local hospitals – Texas Presbyterian is stuck with a damaged reputation. And no amount mea-culping or hand-wringing or public relations can change that.
The fact is that restoring a reputation after such a high profile screw-up takes time.
What Dallas Presbyterian must do now – and Burson can help – is first, fix its internal protocols, then communicate those fixes to the public, and finally, over time, demonstrate that these new protocols work.
In other words, forget the ads. Focus on fixing the performance first. That’s the key to positive public relations, action not cosmetics. Once you’ve fixed the internal performance, then talk about it.
For other hospitals, thankful that they weren’t the ones who wound up in the Ebola barrel, the Dallas Presby case is an object lesson in the necessity of preparing for crisis before it happens. Obviously, no hospital could contemplate confronting a disaster the magnitude of Ebola. But a good hospital can ensure that its communications protocols – of adopting a philosophy of transparency, identifying an internal approval process for breaking news , appointing one designated spokesperson, and ensuring that “facts” are vetted before released – are in place and ready should the critical need arise.
Sadly, none of this was the case at Dallas Presbyterian. The hospital originally erred in its diagnosis of Mr.. Duncan, fumbled the internal communication of his West Africa travel history, and bungled the explanation of its mistake by incorrectly blaming faulty electronic health records.
As the saying goes, “You never get a second chance to make a first impression.” And alas for Dallas Presbyterian, its “first impression” wasn’t a good one. And just as Bill Clinton will forever be linked with Monica Lewinsky, so, too, will Dallas Presbyterian be inextricably intertwined with Ebola.
In the months and years ahead, if the hospital learns from its unhappy experience in the crucible, its reputation for quality healthcare will gradually return. Just not right away.
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87f632f76f4cd4abee6775eb07afe179 | https://www.forbes.com/sites/fraserseitel/2015/10/09/a-proper-apology/ | A Proper Apology | A Proper Apology
U.S. Army Gen. John Campbell commander of the Resolute Support Mission and United States Force... [+] Afghanistan, prepares to testify during a Senate Armed Services Committee hearing on Capitol Hill September 6, 2015 in Washington, DC.(Photo by Mark Wilson/Getty Images)
Over the course of his presidency, Barack Obama has been chastised by Republicans for a quick-trigger propensity to publicly apologize for all manner of American mistakes, from burning Qurans in Afghanistan, to harsh treatment of prisoners in Iraq, to producing a moronic film that made fun of the Prophet Mohammed.
Republicans have a good point as to whether many of these unfortunate blunders rose to the level of a Presidential apology.
But what no one should question is Obama’s apology last week to the director of Doctors Without Borders, for the American botched bombing of a field hospital in Kunduz, Afghanistan, that resulted in the deaths of 12 staff members and seven patients.
After two days of fact-finding, and a tough and torturous press conference and Congressional appearance by the prickly and defensive American commander in Afghanistan, Gen. John F. Campbell, the President concluded that an American AC-130 gunship had, indeed, bombed the restricted facility, and he expressed his “deepest condolences.”
The president of Doctors Without Borders wasn’t impressed and acknowledged the president’s apology with dismissiveness. As awkward as the apology might have been, it was nonetheless absolutely necessary. As the man with the second toughest job in America, Presidential Press Secretary Josh Earnest correctly put it, “When the United States makes a mistake, we own up to it; we apologize.”
So, too, should any organization—from General Motors to the Fédération Internationale de Football Association (FIFA) to Volkswagen—when they “screw up,” as the latter’s new CEO bluntly put it.
The apology, however, is only the imperative first step. To demonstrate to the world that the U.S. backs up the principles for which it stands, three additional steps are necessary.
1. Allow an independent investigation
In “receiving” the Obama apology, Doctors Without Borders called for an independent investigation by the International Humanitarian Fact-Finding Commission to find out what happened in Kunduz. Obama passed on that idea, arguing that investigations by the U.S. Defense Department, NATO and others would reveal all facts.
The president should rethink the Doctors Without Borders request. The International Humanitarian Fact-Finding Commission was created by the Geneva Conventions to investigate violations of international humanitarian law. Its current members are from 15 different nations, but not America.
Nonetheless, to demonstrate that the U.S. is serious about finding the truth in this awful incident, President Obama should consent to Doctors Without Borders’ call for this particular body to investigate the Kunduz bombing.
2. Quickly investigate and announce the findings
Regardless of the pace of other investigations, the Defense Department’s investigation should be concluded quickly, and the findings should be announced in detail, answering the perplexing questions that already have been aired.
Did the Afghans ask the Americans to bomb the area, as Gen. Campbell suggested?
Were both Afghan and American commanders notified during the bombardment that the hospital was under fire, as Doctors Without Borders contended?
How high up the military chain of command were the decisions made to bomb the hospital?
These pressing questions need to be answered quickly by the U.S., letting the chips fall where they may.
3. Deal with those responsible
Finally, since this tragedy appears to be such a blatant violation of international law, not to mention a stain on the integrity of the U.S. military and on the humanitarian record of the U.S. itself—heads should roll.
Gen. Campbell adamantly refused to name names in his testimony, allowing that one purpose of the investigations would be to identify those responsible. Once those individuals—particularly the commanders who gave the orders to bomb the hospital—are singled out, they should be dealt with appropriately.
There is no way to sugar coat America’s bombing of the Kunduz hospital. It was a fatal mistake, pure and simple. America’s apology for this occurrence was the proper response. Now we need to get to the bottom of what happened and take action against those responsible.
That’s how a nation retains its credibility, even in the face of incomprehensible tragedy.
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89f8aa4ebbf4be19e2aab047114325ad | https://www.forbes.com/sites/fredcampbell/2016/10/20/the-real-story-behind-the-fcc-sex-scandal/?utm_source=akdart | The Real Story Behind The FCC Sex Scandal | The Real Story Behind The FCC Sex Scandal
Though a lawsuit’s revelation that Thomas Reed, the director of the FCC’s Office for Communications Business Opportunities, had sex with a Washington Post reporter in his office is salacious, that’s not what should get Congress’s attention. The far more serious revelation involves the FCC’s official legal response to a female employee’s allegation that she was subjected to a hostile work environment due to management inaction when a male coworker repeatedly invited other male coworkers to watch porn with him in the cubicle adjacent to hers, from which she would “hear groans – mmm, mmm, ahh – in response to the pornography viewings,” while having one “stand guard looking for her.”
In today’s environment of heightened concern regarding gender issues, these allegations should have raised red flags about the prevailing institutional culture at the FCC and prompted swift remedial action. Instead, FCC chairman Tom Wheeler’s legal team attempted to dismiss the case in federal court by arguing that these allegations amounted to nothing more than the “mere existence of pornography in the workplace” that was not sufficiently “severe or pervasive” to create a hostile work environment.
Federal Communications Commisison (FCC) Chairman Tom Wheeler. (AP Photo/Lauren Victoria Burke)
As common sense suggests, the court disagreed. Judge Colleen Kollar-Kotelly recognized that the female employee alleged more than the “mere existence of pornography in the workplace,” as the FCC contended. The court determined the allegations were sufficient to demonstrate that the female employee “frequently had ‘no way to avoid’ the groups of men watching pornography in the adjacent cubicle,” that “she felt ‘surrounded by’ the pornography being viewed nearby,” and that “the hostile conduct could be considered to be ‘directed at [her].’” In short, the court found it plausible that the FCC subjected the female employee to “discriminatory intimidation, ridicule, and insult” that is sufficiently “severe or pervasive” to alter the conditions of her employment and “create an abusive working environment.”
Chairman Wheeler’s dismissive response to these activities is especially troubling when the social context of these events is considered. The FCC’s Office for Communications Business Opportunities (known as OCBO) “serves as the principal advisor to the Chairman and the Commissioners on issues, rulemakings, and policies affecting small, women, and minority-owned communications businesses.” And the female employee, who worked at the FCC for over thirty years, was working as a “Women’s Outreach Specialist” at the time of the alleged harassment. When the head of the FCC office responsible for promoting business opportunities for women condones loud and conspicuous porn watching by a group of males in a cubicle adjacent to a female employee and admits to using his own office in the FCC as a location for sex, there is evidence of a problem that should be addressed by more than an aggressive legal defense.
An internal investigation indicates the female employee’s allegations were more than merely plausible. According to a memorandum the female employee filed in her legal case against the FCC, after Reed failed to take action on her behalf and her male coworkers’ behavior escalated, she reported the pornography issue to the agency’s Inspector General in February 2012. Though it doesn’t name any employees specifically, pages 17-18 of the Inspector General’s March 2016 report to the agency’s commissioners describe the results of a “lengthy investigation” into the misuse of FCC facilities to conduct personal business and view pornography. The report states that the investigation, “which included referrals of potential criminal activity to the Internal Revenue Service that were ultimately declined, revealed that four FCC employees violated various ethical and administrative rules, including the FCC’s Computer System Rules of Behavior, the FCC’s Cyber Security Policy, and the Standard of Ethical Conduct for Employees of the Executive Branch, 5 CFR § 2635 et seq.” Among other violations, the report noted there was “substantial evidence” that the employees used FCC equipment to “view, store, and send pornographic material,” and that the Inspector General had referred the case to “the appropriate Bureaus and Offices within the Commission for action.”
Sadly, it appears Wheeler has decided to do “nothing” to address the hostile culture and management issues at the agency. Thomas Reed remains the director of OCBO, a highly-paid management position at the FCC, and it appears no action has been taken in response to the Inspector General’s investigative findings (published nearly 4 years after the female employee alleges she first reported the issue to the IG). During a congressional hearing on September 17, 2014, the FCC’s inspector general testified that the agency “got [a] person to resign” who had been watching porn “8 hours a week” rather than terminate him (which apparently allowed him to keep his federal benefits), but made no mention of the other (or perhaps additional) employees in the 2016 report.
The FCC’s attempt to paper over allegations of abusive behavior toward a female employee would be disturbing in any context. But the pattern of denial, delay, and inaction in this case is positively outrageous. The next administration should make cleaning this mess up a top priority.
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9481dc775a2447fd1c7040683bdf4700 | https://www.forbes.com/sites/fredcampbell/2016/11/15/fccs-number-one-priority-should-be-facilitating-transition/ | FCC's Number One Priority Should Be Facilitating Transition | FCC's Number One Priority Should Be Facilitating Transition
President Obama has chosen the high road as he prepares for his departure from office. After meeting with president-elect Donald Trump, Obama said his “number one priority in the coming two months is to try to facilitate a transition that ensures our president-elect is successful,” noting that if Trump succeeds the U.S. will succeed. If only the outgoing chairman of the Federal Communications Commission, Tom Wheeler, were so noble.
WASHINGTON, DC - SEPTEMBER 15: Chairman John Thune, (R-SD), speaks during a Senate Commerce, Science... [+] and Transportation Committee hearing on Capitol Hill, September 15, 2016. (Photo by Mark Wilson/Getty Images)
Rather than focus on a smooth transition, Wheeler intends to keep pushing his partisan agenda to futility and beyond. Two days after the election, Wheeler gave notice that later this week the FCC will vote on his controversial plan to impose heavy-handed price regulations on highly-competitive business data services. Neither of the Republican commissioners have supported this idea and there is no reason to believe they’ll vote in favor of it now.
If Hillary Clinton had won the election, this wouldn’t be surprising. As Senator John Thune (R-SD) recently noted in an oversight hearing, during Wheeler’s brief 3-year stint at the FCC, he’s presided over “nearly twice as many partisan votes than in the previous 20 years combined” and has used agency information “as a political weapon.” For Wheeler, party-line votes have been par for the course.
Now that his party has lost the presidency and has no majority in either the House or Senate, it should be game over for his brand of partisanship. After Obama’s win in 2008, the incoming Democratic chairmen of the Senate and House Commerce Committees wrote a letter to outgoing FCC chairman Kevin Martin advising him that it would be “counterproductive for the FCC to consider … complex and controversial items that the new Congress and new administration will have an interest in reviewing.” Martin responded by cancelling the agency’s last open meeting under Republican leadership.
One has to wonder what Wheeler is trying to accomplish. Any party-line vote the agency makes now can be reversed when the new administration takes office with little or no chance of prior court review.
Wheeler himself understands this. In August he acknowledged “there are those … who have pledged to undo” his partisan rulings “if given the opportunity.” It also appeared that he understood a Clinton loss would give rise to that opportunity. “The American people will decide which path to follow; elections do have consequences,” said Wheeler.
Wheeler’s insistence on pursuing the partisan agenda he announced in August now indicates something very different — that Wheeler believes elections only have consequences when his party wins.
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4129042495abf04607dec5afcf620eca | https://www.forbes.com/sites/fredcampbell/2018/03/14/how-capable-is-googles-bristlecone-quantum-processor/ | How Capable Is Google's Bristlecone Quantum Processor? | How Capable Is Google's Bristlecone Quantum Processor?
The race to commercialize quantum computing is heating up and so is the rhetoric. Last week Google previewed its new quantum processor, Bristlecone, a 72-qubit chip that will serve as a testbed for research regarding the system error rates and scalability of Google’s qubit technology. In a post on its research blog, Google said it’s “cautiously optimistic that quantum supremacy can be achieved with Bristlecone.”
Shutterstock
Caution is warranted. Bristlecone is a scaled up version of a 9-qubit Google design that has failed to yield acceptable error rates for a commercially viable quantum system. In real-world settings, quantum processors must have a two-qubit error rate of less than 0.5 percent. According to Google, its best result has been a 0.6 percent error rate using its much smaller 9-qubit hardware.
Google’s blog post didn’t mention a tested or expected error rate for Bristlecone or attempt to explain how adding 8 times the number of qubits to its existing design would lower its error rate to tolerable levels. It would seem more difficult to ensure that a high-qubit processor can work seamlessly together with software and control electronics while decreasing error rates than with a low-qubit processor.
The commercial success of quantum computing will require more than high qubit numbers. It will depend on quality qubits with low error rates and long-lasting circuit connectivity in a system with the ability to outperform classic computers in complex problem solving, i.e., “quantum supremacy”. As Google acknowledged in its blog, “operating a device such as Bristlecone at low system error requires harmony between a full stack of technology ranging from software and control electronics to the processor itself.”
It’s unclear from its blog whether Google is testing Bristlecone on a functioning system or is merely planning to develop a functional chip at some point in the future. It doesn’t appear that Google has published any operational statistics or data on how the chip performs. Without evidence that an actual quantum system using Bristlecone is currently operational in any lab setting, the chip appears to be largely vaporware rather than a chip capable of achieving quantum supremacy.
Google did not respond to my request for comment.
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de08341a8ab833144640159bbad4115c | https://www.forbes.com/sites/fredcavazza/2012/03/12/an-overview-of-the-social-media-ecosystem/ | An overview of the social media ecosystem | An overview of the social media ecosystem
Nowadays, the web is all about Facebook, Twitter, YouTube, Tumblr... But seven years ago, all these services didn't exist, portals and search engines where still king. So what happened during this period? To make a long story short: users took the control of the web. Or, to be more accurate: the market shifted to a click-based engagement model to a fan-based engagement model. Which means, clicks are no longer the premium currency for advisers, fans are: they want to be followed, to be shared, to be mentioned, even to be pined! Fan is the new click.
With the advent of user generated content and sharing features, social platforms are the new kings of the web. This being said, and I assume you already knew it, not every social platform are the same. Within the last seven years, we have been through three waves of social domination: The publishing wave (with blogs), the sharing wave (with Facebook and Twitter), and the curating wave (with Quora, Pinterest and alike). The main reason for this shift in users' behavior is the amount of content: the more content, the more precious it is to find the value-added content, this is why we are currently in the curating wave. The second reason is the evolution of users' expectations: the more they use social media, the more sophisticated their needs are. Thus, every six month, we are witnessing the arrival of "the new Facebook". But as you can experience it every day, we still have the same three dominant players (Facebook, Twitter, Google) and a dense ecosystem of niche players.
As I have been doing it for the last four years (try to search for "social media landscape" in Google), let me introduce you to this overview of the social media ecosystem:
In this graph, you will find a summary of the social media ecosystem : Users involved in conversations and interactions with various device type (laptop, desktop, tablet, smartphones) as well as more sophisticated usages (publishing, sharing, playing, networking, buying, localization) on various niche services or on generic social platforms (Facebook, Twitter, Google+).
Once we have an overview of the social media ecosystem, I guess the question you are formulating in your mind is: which one is right for me (or my brand)? Knowing the ecosystem is not stabilized, and I doubt it will ever be, choosing one or several platforms is not a long term strategy, it is a short term tactic. The important is not to choose the right platform, it is to build a consistent social architecture. Installing your brand on social media is not about choosing one or several social platforms and opening profiles, it is about defining objectives and allocating resources. The platform choice is only the tactical declination of your strategy. Furthermore, the only truly viable social platforms on the long run are the ones you host and manage (bear in mind that you do not own your Facebook profile or the content published on it).
There are numerous articles, books, conferences and training program to help you define your social architecture, and I do not have the ambition to explain you the right way to do it (at least not in this article), but if you are looking for more explanations and advices, you should read the original post here: Social Media Landscape 2012.
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470f29d46b49572415d17fc5851baece | https://www.forbes.com/sites/freddiedawson/2014/07/31/how-to-get-your-business-noticed-by-venture-capital/ | How To Get Your Business Noticed By Venture Capital | How To Get Your Business Noticed By Venture Capital
For every successful start-up, umpteen entrepreneurs will fail - despite having brilliant ideas. Many of these failures will be down to one major problem that faces new businesses anywhere in the world: finding finance.
One solution, with added potency in a time of reduced bank lending, is Venture Capital (VC) – finance provided to early-stage companies, usually through dedicated management funds in return for an equity stake in the business.
But securing VC funding is not as simple as turning up and asking for a blank cheque. Funds have no end of potential suitors. For example, Mercia Fund Management, a multi-million UK-based VC fund, estimates that it receives 50 full business plans and as many as 200 website enquiries each month but only does 10-15 major investments each year.
The most important part of getting noticed is doing the initial research. There are many funds out there specialising in different sectors or geographical areas and it is a matter of finding the best fit for a business rather than attempting to blanket the market with proposals and applications.
Mercia, for example, is mostly interested in UK-based businesses involved in sectors such as medical research, disruptive technology, financial technology and e-commerce. Mercia is particularly interested in businesses that do not require a significant capital investment before producing revenue, says Mark Payton, managing director of Mercia Fund Management. For instance, this means it prefers to invest in companies that offer services to the medical research industry as opposed to those involved directly in drug discovery, which can be a capital intensive enterprise.
“We love a business that can offer a tweak of services to the pharmaceutical industry and get into revenue quickly,” Payton adds. “Cash generation and growth are important. We don’t want it to be capital intensive just for it to prove its point.”
The VC fund finds universities to be a rich seam of potential. Mercia has partnerships with eight UK universities located in the West Midlands – the University of Birmingham; Aston University; Staffordshire University; Coventry University; The University of Warwick; Birmingham City University; Keele University; and the University of Wolverhampton.
Location of the ceremonial county of the West Midlands within England. (Photo credit: Wikipedia)
These partnerships form the basis for the fund’s early-stage entrepreneurial investments, using funds garnered through the UK’s Seed Investment Scheme (SEIS) - a government scheme giving significant tax relief to private investors that back early-stage entrepreneurship. For example, an investor can claim back all but 14p from every £1 invested through tax relief if a business was to fail, says Payton. And if it was to succeed, the investment would be exempt from capital gains taxation, he adds.
This has given Mercia more money than ever before to play with and means that the fund managers can spend more time evaluating businesses instead of running around looking for new sources of capital. “The founders aren’t scrambling around looking for money,” he says. “They’re looking at businesses that will start earning.”
But Mercia also looks further afield when trying to find more established businesses. It uses a network of contacts and experts to find and evaluate a variety of start-ups from many different sectors. For example, it invested in Canary Care, through a later-stage equity crowd-funding site called Syndicate Room.
Mercia is also looking to expand its investments in the digital sector. In August, it is raising a new fund that will run alongside its pre-existing growth funds and co-invest specifically in businesses operating in this area. Other funds in other parts of the world are also quite excited about new ideas in the digital sphere. This is especially true in still-developing markets where businesses are springing up to cater to a middle class that is growing in wealth and technological familiarity.
For example, in Latin America another VC fund called Kaszek is snapping up stakes in start-ups involved in areas such as mobile technology, driven by growth in smart-phone and internet use. “Mobile is where we’re seeing acceleration and we’re seeing opportunities,” says Nicolás Szekasy, Kaszek partner. “In general access and quality of broadband and penetration of smart-phones is growing a significant tail-wind for certain businesses, creating a regional opportunity.”
Kaszek has invested in mobile- and internet-based companies such as Restorando, an online reservation service, Safertaxi, a cab booking app and Comparaonline, a financial comparison website.
TechCrunch Disrupt (Photo credit: Kevin Krejci)
But it too is heavily subscribed. The fund has done around 24 investments but has looked at more than 2,000 companies in order to do so, says Szekasy. “We get a lot of in-bound interest. Most entrepreneurs in Latin America are in the technology sector and in most cases know us from Mercado Libre.” (A Latin American auction site like eBay where a number of the Kaszek founders got started)
The VC fund continues to look for companies that have a strong entrepreneurial and technological team in place and operate in areas where a virtual marketplace can be created. One of the newest and most interesting of these is online education services, he adds.
“Typically when you have a platform that a company develops and needs to attract supply and demand to – buyers and sellers of goods – you’ve got something worth investing in,” says Szekasy. Kazek has invested in many ideas such as this including OpenEnglish, in the online education sector and VivaReal in real estate.
In the end every VC fund will be looking for different things. But the one thing they will have in common is a desire for a clearly thought out business plan. A start-up must have a commercially viable idea. But it also needs to be able to find the fund that matches it best and then present its idea in a clear and concise manner.
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03a0743c46bf1ac01b964ac1e84c4e3b | https://www.forbes.com/sites/freddiedawson/2014/08/31/how-disruptive-are-disruptive-financial-innovations-really/ | How Disruptive Are Disruptive Financial Innovations Really? | How Disruptive Are Disruptive Financial Innovations Really?
Much has been made of the role entrepreneurship plays in the development of ‘disruptive innovations’ – new ideas or technologies capable of transforming how a sector or area operates. Sceptics remain unconvinced about the true impact of these innovations on systems and processes – or at least whether a unifying theory from which business lessons can be derived can be applied. Optimists see few limitations on transforming the way society works when they look at the potential of things like online innovations or 3D printing.
It’s true that the internet has already transformed the way modern society operates. At the start of the growth explosion in internet use, not many people would have been able to predict just how far it’s gone in transforming society – particularly by bring people closer together.
“The internet’s connected people,” says Brett Meyers, chief executive officer of foreign exchange website, Currency Fair. “The first thing was email, which transformed normal channels of communications and now there’s more and more. Sharing and social barriers fell with social media, buyers and sellers were brought together in areas such as travel and e-commerce and we’re now seeing trust barriers being lowered, which will see a similar transformation in financial services. After all, why go through a finance intermediary when technology can connect people together directly?”
Meyer’s area of specialism – currency exchange – could be seeing exactly that kind of transformation. It is an area where companies have stagnated and grown complacent in service provision because of easy profits, leading to extreme customer dissatisfaction.
Historically, banks padded exchange rates as a way to minimise the risk of rates changing while physically moving money, says Kristo Käärmann, co-founder of currency exchange site, Transferwise. As technology improved and money could be transferred quicker and quicker, risk minimisation became a padded profit margin and banks saw little point in changing. “The world moved on and banks didn’t and why should they?” asks Käärmann. “What was a risk buffer became revenue and why change that if you’re a bank?”
English: Berlin's aiport Berlin Schönefeld; currency exchange Deutsch: Flughafen Berlin Schönefeld;... [+] Geldwechselstube im Abflugsterminal (Photo credit: Wikipedia)
For customers, currency transfers only played a small role in banking decisions – far below checking, credit cards or mortgages in importance, he says. “Even if you needed international transfers, it was rarely going to be the leading reason for changing banks. Banks knew this and knew they could keep the higher margins without people going anywhere because the hassles of changing a bank is quite high – less than it used to be but still a difficulty.”
“Banks thought they could charge whatever they wanted,” agrees Meyers. “In financial services, consumers don’t vote with their feet as much as they do in other areas. For instance, I’ve complained about my bank for years but do I get off my arse? No it’s a real pain.”
It may be that banks will have to re-examine this business decision. “The trust premium banks had as been eroded in the crisis of the last few years,” says Meyers. “We’ve seen a big spring-up in competing companies and more interest from consumers in looking at these new companies.”
This has led to a change in financial services such as currency exchange. Currency Fair analysed its recent growth rate as well as that of similar competitors in the field. It estimated that banks would be minority players in the currency exchange market in five years if nothing was to change. “It’s not just our own efforts or those of others, but the whole P2P and sharing economy helps to get into people’s heads and change how they think about these things,” adds Meyers. “People want to do it anyway to feel like they’re getting back at their bank now.”
But 500% growth rates are unlikely to be a constant for five straight years and even if they were to continue progressing at high rates, banks will be forced to respond. So how much transformational impact do these kind of products really have?
For example both Transferwise and Currency Fair estimate that they have facilitated the conversion of around £1 billion and €1 billion respectively since their inception in 2011 and 2010. But considering the size of the whole currency exchange market – where the Bank for International Settlements has estimated a daily global turnover of $5.3 trillion in April 2013 – isn’t the impact of sites such as these a drop in the ocean?
English: Zimbabwe £8 in local currency in 2003 (Photo credit: Wikipedia)
Banks are definitely starting to take notice and feel the heat, says Meyers. But there is a limit to what they can do. For instance a drop in pricing could mean a loss in revenue being used to keep other areas afloat. And with 90% of consumers still using banks for exchange, there is little incentive for a bank to change policies to win back a minority of consumers. “If I was a bank, why would I charge less to all those still using me to win back the few others that left?” he asks.
So will the internet be successful in transforming financial services the way it has for communication, commerce and social interaction? There is no clear answer. Success as demonstrated by continued growth in areas such as currency exchange and financing – where an inventor just raised $13 million on the crowd-funding website, Kickstarter – certainly seems to say things are headed in that direction. But the real test will be to see whether there is staying power in these ideas or whether consumers will over the longer-term.
This article forms part one of a look at the power of ‘disruptive technology’. Keep an eye out for part two – looking at 3D printing.
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6a911a642ce2770d3d031eb95a3e7b52 | https://www.forbes.com/sites/freddiedawson/2014/11/29/will-affordable-3d-scanning-lead-to-3d-printing-disrupting-ip/ | Will Affordable 3D Scanning Lead To 3D Printing Disrupting IP? | Will Affordable 3D Scanning Lead To 3D Printing Disrupting IP?
A new product from an entrepreneurial technology company has the potential to open up 3D printing by providing consumers with easy access to high-level 3D scanning technology.
ItSeez3D is a new programme that works with mobile technology to provide a 3D scanning programme that can be run off a handheld device such as a tablet.
ItSeez3D combines technology from Microsoft’s Kinect with image data from a camera and combines it into a single colour model. It was released in June last year and has seen interest from consumers and industry, according to Victor Erukhimov, co-founder and chief executive officer of ItSeez, the company behind ItSeez3D.
“It makes scanning affordable to those that do not have access to expensive industrial scanning,” he says.
Industrial applications include the production of orthopaedic in-soles and other medical devices. Currently producing a custom-fit medical device is a difficult and time-consuming process involving the creation of individual moulds. 3D scanning would eliminate much of the complication and delay in the process, says Erukhimov.
Other applications could include 3D modelling for architecture and as a tool in the creation of prototypes - for example creating a model in one material and then scanning it to develop 3D design files that can be more easily used in other processes.
Currently consumer use has been more limited to the creation of photo-realistic 3D models and busts, Erukhimov adds.
“We’re partnering with print shops to have scanning locations across the US and EU that allow people to scan and then 3D print a model of themselves,” he says.
The technology could have significantly greater potential for consumers and for industry but it also creates a number of concerns about intellectual property (IP) rights when mishandled by either.
Improvements in scanning technology could make policing IP rights a nightmare for companies, says Professor John Bryson, professor in enterprise and competitiveness at the University of Birmingham.
There are essentially three methods for IP protection - trademarks, copyrights and patents - each of which offer slightly different protections and may only be usable in certain situations and territories.
A trademark is a word, phrase, symbol or design that distinguishes goods from one another. Various countries will grant and protect trademarks differently. Copyrights generally protect creative works and can differ between jurisdictions. Patents protect an invention for a limited duration of time and can also vary from country to country in terms of protections given and qualifications necessary.
3D printing will add complication to plans to protect IP through these methods. For example if a firm was to 3D print and market a product patented by another company, the onus would be on the patent holder to prove that the new product contains each structure included in the patent in order for them to be successful in declaring it infringement, says Peter Yim, head of the electronics & software patent group at law firm, Morrison & Foerster.
This makes the production of near-identical products through 3D printing a potential security hole, he adds.
“3D printing is slightly wild-west at the moment. As it takes off, it’ll become more mainstream and we’ll see lots of parallels to music and movies,” says David Knight, partner at law firm Field Fisher Waterhouse.
How patent law will develop protections in a 3D printing world remains to be seen but copyrights may prove to be the most effective deterrent, says Marc Hankin, founder of law firm, Hankin Patent Law.
Copyright in the US provides a bundle of 8-10 protections, including prevention of derivative works. The EU is similar, although it takes a much broader view, he adds.
As long as the original product contained some unique element of design, it could qualify for a copyright and this could potentially provide better protection than a trademark or patent, he says.
But as things develop, it could lead to some interesting case law. For example, function is not copyrightable but sculpture is. You could see firms argue that their chair is, in fact, a distinctive sculpture that can be sat on, says Hankin.
If firms do struggle to protect their IP, expect to see more turn towards rapid innovation models, says Professor Bryson. Already some companies in rapidly developing sectors do this - make money and move onto a new project or design as quickly as imitators can bring out copies.
“This is not necessarily a bad plan. They can be protected from competition through innovation,” Bryson says. “Three or four new innovations each year and they can stay ahead. By the time someone’s figured out how to copy their product they’d be onto making money from the next thing.”
The development of ItSeez3D signals a significant advancement in the 3D printing world. Erukhimov intends to soon bring out an update that upgrades the resolution from three to five mega-pixels. It also plans to make 3D printing from the programme much more convenient.
It will be very interesting to see how companies and consumers adopt, use and react to these, and other, developments that advance the 3D printing sector.
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aa496f601147db2c3c4bc4bdd40d6e52 | https://www.forbes.com/sites/freddiedawson/2015/07/31/consolidation-sign-of-maturation-in-fintech-sub-sector/ | Consolidation Sign Of Maturation In Fintech Sub-Sector | Consolidation Sign Of Maturation In Fintech Sub-Sector
Much has been made about the changes in currency transfer brought about by new start-ups. But, overall, they still constitute a minor part of an overall global transfer market that is still dominated by the traditional major players - including banks and companies like Western Union .
The market remains highly fragmented. Fxcompared.com, a currency transfer research and comparison website, has counted 320 independent alternative money transfer firms and there are almost certainly even more out there.
However, a new trend can now be spotted in the sector, says Daniel Webber, co-founder and managing director of Fxcompared.com. Recent takeovers - such as Paypal's $890 million acquisition of transfer start-up Xoom - and private equity investments - such as transfer start-up Azimo raising £20 million on a $100 million valuation - demonstrate how the sector is ready to enter a time of consolidation and fortification.
Companies are beginning to prove their models and get very strong investor backing in the process -whether through private investment, public flotation or M&A activity, Webber says. Meanwhile larger players - both those directly involved and some on the periphery have begun to acquire rivals, either to cut down on competition or to bring in innovative new ideas.
"All the major start-up players, although I don't know if you should call them that anymore, are now very well backed by private funding, or in few cases, public companies," says Webber. "Expect to see more consolidation with some of the better players being bought out."
A foreign exchange employee hands Indonesian rupiah in Jakarta on July 24, 2015. The Indonesian... [+] currency weakened to 13,405 rupiah per US dollar on July 23, local reports said. AFP PHOTO / ROMEO GACAD (Photo credit should read ROMEO GACAD/AFP/Getty Images)
The big question now is whether one of the major exchange firms - either a bank or perhaps Western Union - makes a move to takeover an upcoming rival, he adds. "What we're waiting for is to see if someone buys one of the other players that has a tech platform more developed than what the bigger firm currently has."
Webber still thinks all indications point to banks moving entirely out of the currency exchange sector due to the high regulatory compliance risks and having other more lucrative opportunities. If that is the case, there will be more market share available for new start-up growth without companies having to butt heads with the likes of Western Union.
How Western Union decides to respond - it certainly has the war chest to make some serious waves if it wanted - will signal how profitable it considers the, sometimes niche, areas occupied by transfer start-ups.
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421d903ccdc86425c840f89de20de60a | https://www.forbes.com/sites/freddiedawson/2015/11/30/too-soon-for-smart-home-startups/ | Too Soon For Smart Home Startups? | Too Soon For Smart Home Startups?
A new survey suggests that the smart home revolution in the UK may still be some ways off.
A small survey of 500 people that is not representative of the UK population as a whole, found that current adoption rates of connected or ‘smart’ home technology – essentially consumer devices interconnected for communication – hovers between 5 and 7% as of October this year.
Meanwhile the majority (52.4%) of surveyed consumers were not going to buy a smart home product in the next year. This compares to the U.S. where a similar survey found the opposite result – with 54% if American consumers saying they planned to buy at least one smart home product in the next year.
The most popular reasons for not wanting a connected home device were still that consumers either could not see a real need for them and that they were still too expensive. According to a recent report from Deutsche Telekom (DT), a German telecommunications company with an interest in the smart home sector, companies working in the industry know about this problem. It is anticipated that smart home sector firms will move more resources to addressing consumer ignorance as it has been demonstrated that once benefits have been explained, consumer opinion on whether they need a smart home products dramatically changes, DT’s report says.
However, it is still early in the product adaptation cycle for smart home products and there is optimism about all of the numbers. There is still a big market gap as 80% of our respondents said that they have not bought any CH devices yet, says a spokesperson for CP Consulting, the company behind the UK survey.
And the fact that as much as 7% of the total UK population has bought one suggests that “devices are progressively being used by a broader segment of the population,” adds CP Consulting managing director, Carlo Palmieri.
Furthermore, CP Consulting is also optimistic about half of consumers already forming an opinion – as demonstrated by nearly half of the surveyed consumers saying they were going to buy a smart home device in the next 12 months. “The general attitudes is hence positive,” the spokesperson says.
In particular, CP Consulting sees potential in security, lighting, hub and thermostat smart home products. These were the most popular categories for early adopters, says Palmieri. “Consumers who have not purchased Connected Home devices are mostly planning to buy the Smart Thermostat and Home Hub as their priorities are to save money on energy bills and monitoring their homes remotely,” he adds.
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90ae1748272fc3005e6413f5e14a79a2 | https://www.forbes.com/sites/freddiedawson/2016/04/28/startups-terrified-brexit-means-end-of-entrepreneurial-london/ | Startups Terrified Brexit Means End Of Entrepreneurial London | Startups Terrified Brexit Means End Of Entrepreneurial London
London entrepreneurs are seriously worried over the prospect of Britain leaving the EU.
A referendum on the decision – commonly termed ‘Brexit’ is set to take place on 23 June. If the country was to vote in favour of leaving, it would have serious ramifications for start-ups a number of entrepreneurs have said.
The opinion counters a recent article on the website of The Telegraph, a UK national paper, that framed the debate as one between larger companies that want the UK to maintain the status-quo by staying in the EU and smaller firms that would like to see the UK leave in order to cut their burden of red tape and regulation.
However, no entrepreneurs contacted independently for this article were supporters of the leave vote. Instead they voiced their support for remaining a part of the EU due to the difficulties leaving would create for recruitment, the resultant diminished access to markets, and the potential impact leaving would have on the economy as well as the UK’s Pound Sterling currency.
"We believe it would be crazy for the UK to leave to EU, both for businesses and consumers," says Taavet Hinrikus, chief executive officer (CEO) and co-founder of TransferWise, a currency exchange site.
TransferWise employs people from more than 40 different countries and does business all across Europe. Being regulated in the UK means having equivalency across Europe – something that will not be the case without negotiation in a non-EU UK world.
"Like many businesses in London we chose to headquarter here because of the access to global talent and global markets. If the UK leaves the EU, we’ll have to consider whether it makes business sense to stay headquartered here. It’s a decision we don’t want to make but one that we’re having to consider,” he adds.
Similar sentiments were expressed by Harry Briggs, former entrepreneur and current partner at BGF Ventures, a London-based venture capital (VC) fund. One of the reasons London is a world leader in entrepreneurial culture is down to its vibrancy and that is partly due to the variety of people from different nationalities that mix ideas and skills here, he says.
Many of them choose to come to London over the opportunities offered in Silicon Valley due to the headache of applying for a U.S. visa. If the UK was to leave and these EU citizens required visas, there would be less reason for them to come and study or work here instead of the U.S.
“Tech companies have always thrived in places that are open to immigration and rich in talent – and a vote to leave would be disastrous to the UK's tech ecosystem,” he warns. “It would severely damage one of the UK's biggest engines of growth.”
This view was also echoed by Sacha Nasan, a student entrepreneur at the University of Nottingham and co-founder of charity start-up GiverThree. As a Belgian studying and working in the UK he worries that an exit would either be a hindrance or an end to much of the business creation undertaken by Europeans coming into the country.
“If getting a visa would be a hindrance, then many EU entrepreneurs would consider moving to Berlin or Madrid, where no visa for Europeans is required, rather than London in the quest to find a strong start-up ecosystem,” he says.
The Old Street roundabout, also referred to as 'Silicon Roundabout,' is home to many London... [+] startups. Will a vote to leave the EU leave it significantly less busy? Photographer: Chris Ratcliffe/Bloomberg
Other start-ups also worry about the impact a decision to leave would have on the UK economy and the pound. Changes created by an exit would make it difficult for UK-based fintech companies to continue serving across Europe, says Daniel Webber co-Founder and Managing Director of Fxcompared.com, an exchange comparison website.
This includes regulatory changes like those mentioned by Transferwise as well as changes to the market. The UK is currently part of The Single Euro Payments Area (SEPA), which is a payment-integration initiative of EU to simplify bank-to-bank transfers, says Webber. If an independent UK is unable to quickly negotiate new terms for SEPA, it would leave fintech firms at a competitive disadvantage and may force some of them to consider moving to another EU country such as Ireland with its already excellent technological capacities, he adds.
Overall a decision to leave would cast significant uncertainty over the market, which in turn would more than likely lead to a devaluation of the pound, says John Cameron, currency analyst at TorFX.
“The market abhors uncertainty and a vote to leave the European Union would inject a shot of doubt into the British economic system the like of which would not have been seen in modern history,” he explains. “The news would represent a major blow for holders of Pound Sterling. Analysts at Goldman Sachs forecast earlier this year that a vote for Brexit would see the Pound lose 20% of its value against the other major global tenders.”
This analysis is supported by a survey conducted by Fxcompared. The survey looked at UK consumer worry over what would happen to the pound in light of a decision to leave the EU. It found that 55% of the people surveyed feared that the pound would fall in value.
However this is the problem with the campaign for the UK to remain a part of the EU. It is advocating for the status quo and thus largely points to a fear of the unknown as the main motivating factor for a voting decision.
A few entrepreneurs offer slightly different reasons for voting to stay in. For example, Alex Hoye, co-founder of a number of entrepreneurial ventures including Runway East, a London co-working space, and Faction Skis, a designer and online retailer of winter sports goods, says the UK must stay in not due to fear of what may happen to it if it leaves but because it is the only country that can save Europe from falling into turmoil and economic stagnation.
Arguments over barriers to trade and problems with smoothing legislation miss the point. “The reality is that good businesses can deal with frontiers relatively well,” he says. “My company's top markets are France, the U.S., Switzerland and Britain and I would not see that changing in or out of Europe.”
Instead the UK must stay part of Europe in order to save the continent from itself, and thus save the UK. “A weak Europe will likely see civil strife on the streets escalate to arms in my opinion. It's not about clever negotiation, it's not about cultural pride or even bureaucracy,” he adds. “To me, it's not that Britain cannot live without Europe, but that Europe cannot live without Britain. And if Europe falls into real turmoil, no matter what sovereignty Britain has, it's screwed.”
Will London still boom independent of the EU? Some entrepreneurs do think so. Photographer: Chris... [+] Ratcliffe/Bloomberg
Of course, not every entrepreneur wants the UK to stay part of the EU. A group of 200 entrepreneurs and small business owners did write a letter sent to Prime Minister David Cameron showing their support of the leave campaign. By the time of publication multiple requests sent to Leave.eu – organisers of the letter – asking for a list of signatories had not been answered.
The publicised text says that the entrepreneurs behind it worry about EU regulation reducing flexibility and cutting into their bottom line by increasing the cost of doing business. It accuses the EU of being tone-deaf to UK business needs.
And there is something to that accusation. For example in the midst of the debate about whether the UK should remain part of the EU, the European Commission (the executive body of the EU) announced it planned to sue the UK over what it considers unfair road tolls levied on foreign heavy-goods vehicles. Whether or not the case has merit, the timing does show a certain disdain about the ongoing debate and its ramifications.
Nonetheless, in parallel, a campaign organised by Entrepreneurs for In – a new pro-EU vote pressure group – also secured the signatures of 200 entrepreneurs in support of a decision to remain part of the EU.
“Every day, as we build our companies, we see the benefits of being able to do business within Europe’s single market of 500 million consumers, with one set of regulations across 28 countries, and the ability to recruit the brightest people here and across Europe,” the entrepreneurs said in their letter.
And for those looking to stay, the signs are currently still good. Opinion polls are close but the vast majority still show a higher percentage wanting to stay than leave. And crowd prediction website, Almanis also had a small advantage to the EU side, predicting a 56.54% chance at time of publication that the UK would remain in the EU. But perhaps more tellingly, both the bookies and the gamblers in futures markets are putting the house money on a pro-EU vote.
Futures markets are pricing in an implied 75% chance that the remain campaign will win, according to TorFx’s analysis. Meanwhile the bookie website Betfair currently has odds of 3/10 in favour of staying as opposed to 5/2 in favour of leaving.
So the safe money is on staying, but will that still be the case come the vote on 23 June?
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0939825500cee7a2540e28400dd650df | https://www.forbes.com/sites/frederickallen/2010/09/11/forbes-leadership-highlights-of-the-week-5/?boxes=Homepagechannels | Forbes Leadership Highlights of the Week | Forbes Leadership Highlights of the Week
Our big play this week was Wednesday's special report package on Change Management, which brings together an array of experts to address the riddle of how you keep ahead of competitors in a world where nothing stays the same for more than a moment and how you get a workforce and a company to shift directions fast to face a future that is almost unknowable. The report leads off with David Whelan's startling and engrossing article about how a hospital chain on Long Island is in effect bribing non-hospital doctors to go electronic, so that it can swiftly and effectively bring about the technological revolution that the times and new laws are requiring across the health care world.
Other must-reads in the package include Adam Hartung's characteristically sharp and cutting "Fire The Status Quo Police"; Erika Andersen's brisk, incisive "The Basics Of Being Strategic"; Michael Jacobides' "When A New Playscript Transforms A Business," which offers specific examples of how big businesses have turned on a dime by mastering a particular way of understanding the scope and extent of the changes they've had to go through; John Torinus's account of the innovative things he did to keep health care costs at the company he ran rising at well under half the national average rate, year after year; and Tuck professor Vijay Govindarajan's revelation of exactly why Apple does so much better than Microsoft at innovation over and over again. Vijay also discusses the essentials of successful corporate change management in three fascinating video interviews, conducted by yours truly, which you can find all of in one place by going here and scrolling down.
Elsewhere on Forbes Leadership this week, Shaun Rein surprised us once again with "China's Surprising Unemployment Problem." Susan Adams provided advice for people on both sides of every workplace's least favorite activity, with "What To Do Right After You Get Laid Off" and, on the other hand, "How To Fire Someone." In case you're among the fired rather than the firing, Sara Peck let you know what will be "The Best And Worst Cities For Jobs This Fall." In support of happier relations in the business world, Tim van Biesen and Norbert Hueltenschmidt, of Bain & Company, broke past the conventional wisdom to reveal the real truth about "What Makes Health Care Mergers Succeed."
For even more from Forbes Leadership, click here.
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4226ce6f520311c7b485eabbebb8b3ac | https://www.forbes.com/sites/frederickallen/2011/01/10/gabrielle-giffords-and-media-vitriol/?boxes=Homepagechannels | Gabrielle Giffords and Media Vitriol | Gabrielle Giffords and Media Vitriol
Image via Wikipedia
Is inflammatory rhetoric in the media and among politicians really in some way to blame for the tragedy in Tucson this weekend, the attempted assassination of Rep. Gabrielle Giffords and the killing of federal Judge John M. Roll and five others?
As the first reports of the hideous news unfolded, I perused Facebook. I saw friends of mine, before we had any word about the perpetrator, react with comments like "I'm so tired of the insane inflammatory rhetoric that is now used by pundits and politicians alike" and, from an Arizonan, "This makes me embarrassed to live in this state," even though this was an as yet completely unexplained tragedy that no matter what could never reflect on a whole state. Then it began to emerge that the shooter was a deranged paranoid with no consistent political leanings.
That made a lot of that early reaction strike me as utterly knee-jerk—momentarily. Then people were reminding us that Sarah Palin had acually had Gabrielle Giffords' congressional district in the crosshairs of a gunsight on her notorious target map of representatives to defeat. (An advisor to Palin has since claimed, with an ugly disingenuousness, that the image represented not a gunsight but a surveyor's sight.) Giffords' opponent in the race had run an ad inviting followers to "Get on target for Victory in November Help remove Gabrielle Giffords from office Shoot a fully automatic M16 with Jessie Kelly." And observers not only among my Facebook acquaintances but across the media began pointing out that deranged paranoids are exactly who you have to worry about when you issue such poisonous incitements. You're never going to get ordinary citizens to go out and shoot political candidates. But when you even hint at such a thing, and begin doing so often, and make it an accepted tone of discourse, sooner or later the truly crazed will sit up and listen, and you will reap the whirlwind.
Remember when Sharron Angle was running for senator from Utah last year and said, "I hope that's not where we're going, but you know if this Congress keeps going the way it is, people are really looking toward those Second Amendment remedies and saying my goodness what can we do to turn this country around? I'll tell you the first thing we need to do is take Harry Reid out"? Of course the First Amendment protected her right to say that, and that is part of what makes this nation great, but of course it was at the same time an utterly indefensible and reckless thing to say.
As George Packer, of The New Yorker, wrote on his blog this weekend, in a posting titled "It Doesn't Matter Why He Did It": "For the past two years, many conservative leaders, activists, and media figures have made a habit of . . . not just arguing against their opponents, but doing everything possible to turn them into enemies of the country and cast them out beyond the pale. Instead of 'soft on defense,' one routinely hears the words 'treason' and 'traitor.' The President isn't a big-government liberal—he's a socialist who wants to impose tyranny. He's also, according to a minority of Republicans, including elected officials, an impostor. Even the reading of the Constitution on the first day of the 112th Congress was conceived as an assault on the legitimacy of the Democratic Administration and Congress.
"This relentlessly hostile rhetoric has become standard issue on the right. (On the left it appears in anonymous comment threads, not congressional speeches and national T.V. programs.)"
On the right much more than on the left? Of course. As Paul Krugman points out in The New York Times this morning, "there’s a huge contrast in the media. Listen to Rachel Maddow or Keith Olbermann, and you’ll hear a lot of caustic remarks and mockery aimed at Republicans. But you won’t hear jokes about shooting government officials or beheading a journalist at The Washington Post. Listen to Glenn Beck or Bill O’Reilly, and you will."
Isn't time for some soul-searching across the land, and a real change in behavior?
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09aa41f2006169681d55c109754fecc4 | https://www.forbes.com/sites/frederickallen/2011/05/05/youve-never-heard-of-them-but-theyve-changed-your-life/ | You've Never Heard of Them, but They've Changed Your Life | You've Never Heard of Them, but They've Changed Your Life
Steven Sasson at the White House with President Obama earlier this year. Image by AFP/Getty Images... [+] via @daylife
Steven Sasson, Eric Fossum, Joseph Woodland, Bernard Silver. You've almost definitely never heard of them, but they've changed your life in ways that affect you just about every day. They are among the inventors who were inducted into the National Inventors Hall of Fame at its 29th annual induction ceremony in Washington last night.
Joseph Woodland and Bernard Silver developed the very first bar code scanning system, in the late 1940s, after Woodland heard a food chain executive say he wished he had a way to capture product information at checkout. Two decades later Woodland went on to help devise the UPC system in universal use today. Woodland is 89 and couldn't attend the ceremony, but his daughter fondly recalled how when she was a girl he would read to here and her sister from a four-volume mathematics treatise, the essays of the mathematician Alan Turing, and tales of self-made child prodigies.
Eric Fossum, working for NASA's Jet Propulsion Laboratory, had the job of miniaturizing camera to fit on interplanetary spacecraft, and he wound up inventing the "camera on a chip" that is now in 90% of all cell phones and amounts to a $6 billion-a-year industry. Steven Sasson invented the digital camera itself, starting at Kodak in the 1970s with an eight-and-a-half-pound box connected to a magnetic tape drive and a TV set, which produced a .01 megapixel image.
Other remarkable inductees included George Devol, who has been called the father, grandfather, and great grandfather of industrial robotics. He is 99 and invented the automatic door opener even before setting out to launch the age of industrial robotics; he received his most recent patent just last year, for an improvement to miniaturized camera equipment that he thought of while the technology was being used on him during heart surgery. Esther Takeuchi gave the world the batteries that make it possible to implant defibrillators and never have to take them out. Gary Michelson was set on his path when as a child he was distressed by his grandmother's suffering from spinal disease. He has devised minimally invasive techniques that have transformed spinal surgery and made him a billionaire. Whitfield Diffie, Martin Hellman, and Ralph Merkle developed public key cryptology, the basis of all Internet encryption. Each realized that encoding could be possible without exchanging a decoding key between sender and receiver; this seemed so unlikely that they were each scoffed at by everyone they described the idea to until they found one another.
The Hall of Fame also inducted 29 long-deceased historical inventors, bringing its total roster to 460. (Disclosure: I am on the board of the Hall and help run the process of selecting its inductees.) They include Mary Anderson, for the windshield wiper; Edwin Binney, who figured out the carbon black used in all automobile tires and went on to co-found Binney & Smith, the maker of Crayola crayons; Henry Phillips, for the Phillips screw; and Eugene Sullivan, for Pyrex. Full information about them and all the inductees can be found at www.invent.org.
What does it feel like to invent something that becomes universal and invaluable and even taken for granted? Steven Sasson, in his acceptance remarks, described how when he showed his unwieldy first camera around Kodak, the people there saw the future destroyer of the photographic film business as "interesting"--and they also wondered how anyone could ever want to see their pictures on a TV screen. He also recalled the exact moment when he knew he had changed the world. He was visiting Yellowstone National Park in 1998 and, standing in the crowd of people waiting to shoot Old Faithful, realized that a startling number of them were using digital cameras.
He turned to his wife and simply said, "It's happening."
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f6a189f6ddfe31ee7b700a4d042d9fc7 | https://www.forbes.com/sites/frederickallen/2011/05/27/mark-zuckerberg-is-a-genuine-geek-quite-the-opposite/ | Mark Zuckerberg Is a Genuine Geek? Quite the Opposite! | Mark Zuckerberg Is a Genuine Geek? Quite the Opposite!
Image via Wikipedia
Mark Zuckerberg tells Fortune that he has taken on a new "personal challenge": "The only meat I'm eating is from animals I've killed myself." That doesn't mean actually biting the heads off of chickens, but it does mean he has killed chickens, pigs, and goats. The billionaire founder of Facebook told Fortune:
I started thinking about this last year when I had a pig roast at my house. A bunch of people told me that even though they loved eating pork, they really didn't want to think about the fact that the pig used to be alive. That just seemed irresponsible to me. I don't have an issue with anything people choose to eat, but I do think they should take responsibility and be thankful for what they eat rather than trying to ignore where it came from.
He started with a lobster before moving on to chicken, and he has sought expert advice in how to kill as efficiently and painlessly as possible. One result: "This year I've basically become a vegetarian since the only meat I'm eating is from animals I've killed myself. So far, this has been a good experience. I'm eating a lot healthier foods and I've learned a lot about sustainable farming and raising of animals."
Zuckerberg says he has taken on a new big challenge every year. Last year it was learning Chinese, which he says "has been a very humbling experience."
He does has a reputation as a geek, in the more conventional sense. The movie The Social Network wrongly portrayed him as having founded Facebook because he couldn't get a girlfriend, and one's initial reaction to the news that he has made a habit of killing animals is one of revulsion or grim humor. Geek.com itself has joked, "He’s mentioned that he’s interested in hunting, and we’re okay with that as long as it doesn’t turn into another GoDaddy CEO/elephant-killer situation."
But Zuckerberg must be admired for what he has done. First, he has looked squarely in the face of a morally unsettling situation that we all (except vegeterians) find ourselves in but look away from. We all eat animals that are raised and slaughtered in arguably indefensible ways, and almost every one of us simply refuses to think about that fact. But there's a more important lesson here too.
The news of Zuckerberg's annual "personal challenge" confirms that he is not someone who believes in taking on a challenge. Rather, he is someone who lives to take on challenges, who thrives on it, who exults in it. It is part of his nature. And that is bad news for most of the rest of us. Because it reminds us that all the leadership training and executive coaching in the world can help us rise better to challenges, and understand the virtue and power of rising to them, and deal with them more confidently and fearlessly, but it can not make it our nature to charge toward them and grasp at them and work with almost superhuman resolve to overcome them and keep looking for new even tougher ones to replace them.
Most people don't have that and never will. A few seem to be born with it. Mark Zuckerberg is unquestionably one of the latter.
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d00cf9c822291959676b4d7e3aa4c8f2 | https://www.forbes.com/sites/frederickallen/2011/11/15/the-worlds-most-influential-business-thinkers/ | The World's Most Influential Business Thinkers | The World's Most Influential Business Thinkers
Clayton Christensen
The most influential business thinker on earth right now is Clayton Christensen, according to Thinkers 50, a just-released ranking done every two years by the consulting team Crainer Dearlove.
Christensen, a professor at Harvard Business School and the author of best-sellers including The Innovator's Dilemma, is a name familiar to many Forbes readers. He has written often for the magazine and was profiled in a recent cover story. The Thinkers 50 awarders say his
influence on the business world has been profound. In The Innovator's Dilemma, he looked at why companies struggle with radical innovation in their markets. The book introduced the idea of disruptive technologies and disruptive innovation to a generation of managers. The innovator's dilemma is that the very management practices that have allowed them to become industry leaders also make it hard for companies to develop the disruptive technologies that ultimately steal away their markets. Gallery: The World’s Most Influential Business Thinkers 10 images View gallery More recently, Christensen has applied his ideas to health care and education to show how enlightened management thinking can tackle the big issues facing society.
The top runners-up, sharing the No. 2 spot: W. Chan Kim and Renée Maborgne, two professors at INSEAD business school whose book Blue Ocean Strategy lays out a system for developing and executing large-scale plans that has been adopted by businesses, nonprofits, and governments worldwide.
In Pictures: The World's Most Influential Business Thinkers
No. 3 is Prof. Vijay Govindarajan, a professor at the Tuck School of Business at Dartmouth. He is known for his theory of reverse innovation and has been chief innovation consultant to General Electric. I interviewed him in videos you can see here, here, and here.
Crainer Dearlove bases its ranking on voting at its website and by a team of advisers from around the world who include high-level officials at IE Business School, McGraw Hill, Oxford University, Financial Times Prentice Hall, and elsewhere. More than 10,000 votes were cast to arrive at this year's rankings. Here are the remainder of the top 10:
4. Jim Collins, former Stanford professor and author most recently of Great by Choice.
5. Michael Porter, Harvard professor and creator of the Five Forces Framework.
6. Roger Martin, dean of the Joseph L. Rotman School of Management, in Toronto, and author most recently of Fixing the Game.
7. Marshall Goldsmith, executive coach and author of books including What Got You Here Won't Get You There.
8. Marcus Buckingham, consultant whose books include First, Break All the Rules and Now Discover Your Strengths.
9. Don Tapscott, author of Wikinomics: How Mass Collaboration Changes Everything and Macrowikinomics: Rebooting Business and the World.
10. Malcolm Gladwell, the New Yorker writer, whose books include The Tipping Point, Blink, and Outliers.
This year there are 11 women among the 50, up from five two years ago. and seven thinkers born in India. The full list of all 50 of the Thinkers 50 can be found here.
In Pictures: The World's Most Influential Business Thinkers
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18d65a3f68f66e688a67bd11a3e35314 | https://www.forbes.com/sites/frederickallen/2011/12/23/forbes-leadership-highlights-of-the-week-looking-ahead-and-looking-back/ | Forbes Leadership Highlights of the Week: Looking Ahead, and Looking Back | Forbes Leadership Highlights of the Week: Looking Ahead, and Looking Back
Be someone this man would invest in.
This week at Forbes Leadership we worked hard to scout out the future for you. Mike Myatt gave us a valuable "Five Leadership Tips for 2012"; Rita McGrath identified "Five Big Trends for Business Innovation in 2012"; Avi Savar added "Social Media Predictions for 2012"; Shawn O'Connor offered Part 1 of "12 Steps to Improve Your Career in 2012"; and Scott Goodson advised on "How to Have Power and Influence on the Web in 2012." Looking back, on the other hand, Susan Adams nailed "The Biggest CEO Screw-Ups of
2011," Jacquelyn Smith called out "The Most Unforgettable Ad Campaigns of 2011," Christopher Barger listed "The Top 10 Social Media Lessons of 2011," Part 1 and Part 2, John Kotter took the measure of "Health Care Innovators: The Past Year and a Look Ahead," and Peter Daboll picked "The Best Auto Ads of the Fourth Quarter."
As for the present moment, with the holidays hard upon us, we had plenty about that, too. Trish Gorman took on the dilemma of "Playing Santa: How Bosses Should Approach the Annual Gift Giving Challenge," and Eric Mosley unblinkingly asked, "Is It Time to Ditch the Annual Bonus in Favor of Recognition Programs?" Nick Morgan still felt the spirit of giving, though. He recommended "Five Last-Minute Gifts for the Public Speaker in Your Life," and also shared "Morgan's 10 Holiday-Inspired Rules for Surviving Public Speaking Disasters—or Avoiding Them." Christine Riordan suggested we "Give the Holiday Gift of a Remarkable Customer Experience," and told us how. Rob Schwartz carolled "'Tis the Season for Agency Self-Promos," and Chris Perry answered the question "What Should Top Brands' New Year Resolutions Be? 'Flawsome.'" Lisa Arthur even went so far as to single out "The One Thing Marketers Need to Do While They're on Vacation Next Week."
The holidays aside, Glenn Llopis spotted "Five Signs That Employees Are in Survival Mode," and no wonder, as the workplace is full of tough challenges at the moment. Erika Morphy noted that "Congress Lurched Its Way to a Payroll Tax Deal After All. Now It's Just the Accountants Who Need to Sweat." Steve Denning advised us on "Kicking the Addiction to Managerial Heroin: The New Bottom Line of Business." Karen Armstrong warned that "Workplace Graffiti Can Be Detrimental to Your Culture," and Ron Ashkenas explained "Why Your Communications May Not Be Communicating." Erika Andersen even felt required to tell us "How Not to Suck as a Manager." If you can't help that, maybe you should at least read Steve Denning's "Nine Books to Read Before Your Organization Dies."
Simon Graj showed just "How Blur Devours Brands." Patrick Hanlon marked the passing of a great corporate name with "What Every Marketer Can Learn From Saab's Crash and Burn," and I added a consideration of "Why Saab Had to Die." (I kept on the car theme with "How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much.") Adam Hartung took on two flailing businesses at once, with "Avoid the Oracle, Best Buy Hangover: Don't Stay at the (Holiday) Party Too Late." And Carmine Gallo found that "RIM Needs Courage to Escape Clutter and Confusion."
Want something more upbeat for the holidays? "This One Leadership Quality Will Make You or Break You," Mike Myatt told us. Just be sure to get it right, and you're there. Robert Reiss gave us "Bernie Marcus' Advice for Being a Great CEO." Peter Bregman celebrated "The Power of Workplace Do-It-Yourself." George Bradt recommended "Leading by Example With Flames of Giving." (Along similar lines, Karl Moore espoused "Volunteering: A Great Way to Learn Real Executive Leadership.") And Christine Comaford told us how to "Be Someone Warren Buffett Would Invest In."
Now, that would make just about anybody's Christmas merry. Here's hoping all your holidays are wonderful, even if Warren Buffett doesn't invest in you. Season's greetings to all from Forbes Leadership.
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3b16cf342ed89cf0ce3191cb57ebfbd5 | https://www.forbes.com/sites/frederickallen/2011/12/27/like-spotify-mog-blows-it-away/ | Like Spotify? MOG Is Even Better | Like Spotify? MOG Is Even Better
MOG on an iPhone. Yes, you get Bob Dylan.
When Spotify introduced its streaming music service in the U.S. a few months ago, I raved about it. It gives you access to about 15 million tracks of music, on demand, where and when and on what device you want them, as long as you have an Internet or cell phone connection, and you can download tracks too. It's almost like owning most of the record albums in existence, and for that reason I wrote that it made a music purchase service like iTunes feel obsolete. Why buy a track at a time when you can have all of them at once? And Spotify costs, in its fullest version, with no advertising interruptions and usable on all mobile devices, just $9.99 a month.
Well, move over Spotify. Make way for MOG.
MOG is a service like Spotify. It may have slightly fewer tracks—14 million or so, its people say*—but it offers several advantages that to my mind make it altogether a better deal than Spotify at the same $9.99 top rate a month.
First and foremost, everything on MOG streams at a highest-level 320 kbps bitrate. That means every track is just about CD quality. Spotify, which began in Europe and has been around longer as a subscription service, has said for years that it is upgrading its songs from its older standard of 160kbs, but an awful lot of them have still been coming across at the lower bitrate. That makes a real difference if you're plugging into a good sound system. Sometimes you'll get great sound from Spotify, sometimes you won't. With MOG you don't have to worry. It really is like owning all those CDs. [MAJOR UPDATE: Jim Butcher, communications manager at Spotify, tells me that the service now offers 320kbps streaming on 99% of its tracks, and that that bitrate is available to all premium ($9.99 a month) users on all platforms, including mobile. They're hoping to achieve 100% soon. That's a huge very new improvement. It greatly narrows the edge MOG has had over Spotify, so I am changing the title of this post from "Like Spotify? MOG Blows It Away" to "Like Spotify? MOG Is Even Better." Other differences, such as the gaps in the Universal catalog, remain, however, but Spotify is clearly working hard to catch up. (12/28/11)]
Second, MOG has a better collection in certain important, to me, areas. In pop music, it has all of Bob Dylan and Pink Floyd, where Spotify has almost nothing. In classics, it has the great Universal Classics catalog, meaning recordings by artists like Herbert Von Karajan, Maurizio Pollini, the Emerson String Quartet, and other best-in-the-world acts. Spotify has those, but with tracks missing from every album, having apparently not negotiated as good a deal with Universal. If you care at all for classical music, you should be far happier with MOG.
Third, MOG has true gapless play between tracks, at least on mobile devices, which are what, if your'e like me, you're most likely to use to plug into a good sound system. In music where one track bleeds right into the next, Spotify imposes a jarring break of a second or two. MOG plays just like a CD.
There are other advantages to MOG, too. You can download an unlimited number of tracks from MOG; Spotify isn't as generous. MOG offers wonderful playlists, so for instance when you search for "Ella Fitzgerald" you get not only hundreds of songs and dozens of albums but also about 20 playlists people have put together that include songs of hers. That's a nice way to discover new music and artists, with great mixes of tunes someone has lovingly compiled. Also, MOG gives you a a radio player with a slider where you can choose anything from a Pandora-like mix of related material to 100% the artist you're asking for.
Spotify made me very happy. But now MOG thrills me. As Chris Connaker wrote for Computer Audiophile, "MOG has nailed it with simplicity, a relevant song selection, and better sound quality. The MOG desktop interface and mobile application are incredibly intuitive and without distracting features. MOG's catalog is not only more relevant it's streamed and stored in higher quality. MOG has made the deliberation over what service to keep and what service to cancel very easy. It's really no contest."
Find out more about MOG versus Spotify here and here and here.
*Corrected: I originally had 11 million here. (These numbers seem to be impossible to verify, but both services have amazing catalogs.)
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e843e6a487ebc4c82c18bc42b5a49933 | https://www.forbes.com/sites/frederickallen/2012/01/18/how-to-access-wikipedia-today/?feed=rss_home | How to Access Wikipedia Today | How to Access Wikipedia Today
Image by Getty Images via @daylife
Wikipedia, the world's encylopedia, has very publicly shut down for 24 hours today to protest the Stop Online Piracy Act and the Protect IP Act, bills before Congress that media companies are pushing to protect their intellectual property but that others say will stifle free online speech. Every student with a term paper due and every barfly in an argument over drinks is stuck. But you can get through, at least so far, I've found.
Go to Wikipedia's mobile site. Instead of en.wikipedia.org, the full English-language site, use en.m.wikipedia.org (with an m for mobile).Using its search window on a desktop will flip you back to the shutdown notice, but on a mobile device (or at least on my iPhone), you'll find the page you wanted. And if you're stuck on a desktop machine, see if you can figure out the usually straightforward address of the mobile version of the page you want, "en.m.wikipedia.org/wiki/" followed by the topic. Thus if you're searching for the National Space and Aeronautics Administration, go to en.m.wikipedia.org/wiki/nasa. Even on your desktop that will get you an unblocked page.
There. Now go finish your homework.
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fbacd108118ce6b65c08f4325f919e4c | https://www.forbes.com/sites/frederickallen/2012/03/20/the-zen-at-the-heart-of-steve-jobs-genius/ | The Zen at the Heart of Steve Jobs' Genius | The Zen at the Heart of Steve Jobs' Genius
Walter Isaacson, the biographer of Steve Jobs, has a terrific 6,000-word article out at hbr.org today, and in the forthcoming issue of Harvard Business Review, titled "The Real Leadership Lessons of Steve Jobs."
He discusses the many qualities that set Steve Jobs apart from all other innovators ever, but what most struck me reading the piece is the repeated mention of Jobs' involvement with Zen Buddhism. After a while, I found myself reading that part of Jobs' experience and personality into sections of the article where Isaacson didn't bring it up.
The first element of Jobs' leadership that Isaacson discusses is the man's sometimes terrifyingly sharp focus. He writes that "Focus was ingrained in Jobs's personality and had been honed by his Zen training. He relentlessly filtered out what he considered distractions." Then Isaacson moves on to Jobs' passion for simplification, and writes, "Jobs's Zenlike ability to focus was accompanied by the related instinct to simplify things by zeroing in on their essence and eliminating unnecessary components. . . . Jobs aimed for the simplicity that comes from conquering, rather than merely ignoring, complexity."
Next up, Jobs' passion for taking responsibility for every element of a product. Isaacson writes, "Part of Jobs's compulsion to take responsibility for what he called 'the whole widget' stemmed from his personality, which was very controlling. But it was also driven by his passion for perfection. . . . Being in the Apple ecosystem could be as sublime as walking in one of the Zen gardens of Kyoto that Jobs loved, and neither experience was created by worshipping at the altar of openness or by letting a thousand flowers bloom."
Jobs' insistence that he should show consumers what they wanted, rather than finding it out from them? Isaacson writes: "Instead of relying on market research, he honed his version of empathy—an intimate intuition about the desires of his customers. He developed his appreciation for intuition—feelings that are based on accumulated experiential wisdom—while he was studying Buddhism in India as a college dropout."
In his concluding paragraphs Isaacson notes that "Jobs stayed hungry and foolish throughout his career by making sure that the business and engineering aspect of his personality was always complemented by a hippie nonconformist side from his days as an artistic, acid-dropping, enlightenment-seeking rebel." Many have questioned how deep Zen could run in Jobs when the man was so high-strung and temperamental. Well, he was clearly a man of contradictions—and Zen is about nothing if not embracing contradictions. I'd say he was Zen through and through, even if he was the furthest thing from a calm pool of reflection and egolessness.
Read the complete Walter Isaacson article here (and also, don't miss the graphic novella The Zen of Steve Jobs, produced by Forbes and JESS3, which you can learn about here and buy from Amazon here).
Coates: I’m not sure what this means. Did you not forward all you meant to? Thanks. Fred
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df75cf1ac22bbd985d29a26fb59fc92d | https://www.forbes.com/sites/frederickallen/2012/05/09/if-you-want-honest-investment-advice-get-it-one-on-one/ | If You Want Honest Investment Advice, Only Get It One-on-One | If You Want Honest Investment Advice, Only Get It One-on-One
Are you being told the truth?
You might have guessed that you'd do better with an individual advisor than with one speaking to a crowd. Now there's scientific proof of it.
A study conducted by Sunita Sah, a post-doctoral researcher at the Duke University's Fuqua School of Business, and George Loewenstein, a professor of economics and psychology at Carnegie Mellon, had a bunch of people look at a part of a grid that was covered with filled and unfilled dots and guess how many filled dots there were on the whole grid. To help them, they were given advice by another bunch of people who could see all 900 dots. The first group, "estimators," got rewarded if they guessed the number of filled dots accurately; the second group, "advisors," sometimes had a conflict of interest, getting paid more if the estimators overestimated.
The advisors with a conflict tended to give biased advice, of course, but their advice turned out to be much less biased if they were giving it to just one person than if it was for a group. It was also much less biased if they were told a recipient's name and age.
As Sah and Loewenstein summarize,
When advice affects a larger number of people, if anything, greater care should be taken to ensure its accuracy. Yet, contrary to this logic and consistent with research on the identifiable victim effect [where people are generally more sympathetic and generous toward individual victims than toward statistical ones], results from two experimental studies demonstrate that advisors confronting a financial conflict of interest give more biased advice to multiple than single recipients and to unidentified than identified single recipients. Increased intensity of feeling toward single identified recipients appears to drive this process; advisors experience more empathy and appear to have greater awareness and motivation to reduce bias in their advice when the recipient is single and identified.
So you're much more likely to get honest, or nearly honest, investment advice from an individual you know than from, say, a newsletter or a website. Or, as Sah puts it, "The research can shed light on the behavior of stock analysts who gave recommendations they themselves didn't believe during the dot-com boom, that of auditors during the Enron debacle, and of bond raters during the housing market bubble. In all of these cases, these advisors were giving biased advice to large numbers of investors who were anonymous to them, so the damage they were causing had little reality for them."
You can see the full study (at an extravagant price), published in the May issue of the scholarly journal Social Psychological and Personality Science, here.
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0dc98cddaa2dccaccbbe09958fe66786 | https://www.forbes.com/sites/frederickallen/2012/05/11/why-romneys-teenage-bullying-actually-matters/ | Why Romney's Teenage Bullying Actually Matters | Why Romney's Teenage Bullying Actually Matters
We all now know that as an 18-year-old prep school student in the 1960s, Mitt Romney rounded up a group of friends, assaulted a student who would later come out as gay, pinned him to the ground, and hacked off the hair he had grown long and dyed blond over vacation. Does it really matter what Romney did as a kid almost half a century ago?
No. Not by itself. Almost every teenage boy is a jerk. We all do things in adolescence that we can be ashamed of. The problem is that the story doesn't end there. In the hours since the story came out, Romney has made it worse, in characteristic fashion.
He has laughed it off. He has also insisted he doesn't remember it. Five of his classmates all remembered it. Phillip Maxwell, a fellow student who was there when it happened, told ABC News, "It’s a haunting memory. . . . because when you see somebody who is simply different taken down that way and is terrified and you see that look in their eye you never forget it. And that was what we all walked away with.” The Washington Post article that broke the story quoted several students who remembered the incident all too well. Who could ever forget such a thing? Andrew Sullivan writes, "We have two options: this man is so callous that, unlike all those others involved in this assault, he has forgotten it. Or he is a liar."
It is unbelievable that he couldn't remember at all, but he is definitely callous, too. For a response to the story yesterday, the best he could come up with was, “As to pranks that were played back then, I don’t remember them all, but again, high school days, if I did stupid things, why, I’m afraid I’ve got to say sorry for it.” If I did stupid things. He didn't take the opportunity to say something like, as Joe Klein suggests, "I did a really stupid and terrible thing. Teenage boys sometimes do such things, and deserve to be punished for them. What I most regret is that I never apologized to John, and won’t be able to now that he’s gone, but let me apologize to his family and friends."
Romney's reaction not only seems almost certainly dishonest, it also, together with the anecdote itself, adds to his solid reputation as almost reptilian in his lack of warmth and sympathy for anyone unlike himself or in a situation unlike his own. He has fought that problem throughout his candidacy, but he keeps on only making it worse. And so he again raises questions about his character as a person and therefore as a leader. Furthermore, as Joe Klein writes, Romney's denial of memory and feeble apology
comes during the same week that he claims credit for saving the auto industry, even though he opposed the bailout that made possible the “structured bankruptcy” he favored. It comes the same week that he expresses his opposition to gay marriage, even though he promised to be a more aggressive proponent of gay rights than Ted Kennedy when he ran for the Senate in 1994–of course, it’s possible that Romney has “evolved” in the opposite direction from President Obama, and most Americans, on this issue, but I doubt it. It seems that a day can’t go by without some Romney embarrassment, or bald-faced reversal of a former position. . . . Romney has a near-perfect record of cowardice, obfuscation and downright lies. It shows enormous disrespect for the intelligence of the public.
Many have wondered if the Washington Post didn't cycnically exploit its research by publishing it right after President Obama came out in favor of gay marriage. But whether or not that is true, and beyond whatever a damage an isolated incident so long ago can do on its own, Romney himself has certainly made it worse.
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2d8ded7e6e6d07349ec7832433ccea91 | https://www.forbes.com/sites/frederickallen/2012/06/08/forbes-leadership-highlights-of-the-week-do-these-five-things/ | Forbes Leadership Highlights of the Week: Do These Five Things! | Forbes Leadership Highlights of the Week: Do These Five Things!
Is this Mayor Michael Bloomberg? (Photo credit: Wikipedia)
This week at Forbes Leadership, a lot of wisdom came in bundles of five. August Turak unleashed "The Power of Why: Five Keys to Getting Business Right." Meghan Biro identified an essential "Five Leadership Behaviors Loyal Employees Trust." Dorie Clark sketched out "Five Ways to Become a Global Leader" and then, for after you've become one, added "Five Tips to Maximize Your International Business Travel." Carol Kinsey Goman nailed "Five Tips for Virtual Collaboration." And Verena Sisa let us in on "Five Realities Marketers Need to Know About Hispanics."
Not that we limited ourselves. Mike Myatt counted no fewer than "15 Ways to Transform Useless Ideas Into Innovation." Jacquelyn Smith offered "So You Hate Your Summer Job: Here are 12 Things You Can Do." Glenn Llopis counted out "The Top Nine Things That Ultimately Motivate Employees to Achieve." John Mayo-Smith summed up "Six Tips for Forging a Strong CMO-CIO Partnership." And, distilling the numbers down, Christine Riordan suggested you "Take These Four Steps if You Want to Lead Big Change," and Dorie Clark found "Four Steps to Becoming a Corporate Thought Leader" and "Three Ways to Harness the Power of Your Intuition." Lisa Arthur whittled down to "Three Books for CMOs to Read This Summer." And Avi Dan zeroed in (so to speak) on "The Single Most Powerful Word in New Business," just as Victor Lipman revealed the "One Easy Way to Reduce Workplace Stress and Enhance Productivity." We'll take it.
We looked hard at a lot of leaders and their doings this week. Christine Comaford considered "Leo Apotheker, Jack Griffin, Michael Woodford: Beware the Boardroom Ninja and Prevent Being Blindsided." Duane Hansen reported that "Steve Blank Cracked the Code on Entrepreneurship—and the Economy." Ken Makovsky celebrated a no-hitter with "Unleashing a Hero: Johan Santana," and also in the realm of sports, Karl Moore drew together "Duke's Coach K and Building a Leadership Legacy." Kasia Moreno asked, "Mayor Bloomberg: Oppressor or Mary Poppins?" (along similar lines, Robert Passikoff saw where "Big Gulp Meets Big Brother"). Geoff Loftus singled out Jamie Dimon in proclaiming this "The Golden Age of Mismanagement." Rahim Kanani interviewed "Alicia Keys: Up Close and Personal on Making a Difference." James Marshall Crotty marveled at how the "Intrepid Nine-Year-Old Behind Cain's Arcade Has Inspired a Film, a Foundation, and Now a Curriculum," and he also wrote a stirring eulogy: "Ray Bradbury Dies at 91. His Dystopian Classic, Fahrenheit 451, Speaks to Us Today."
We had a few big lists this week. Jacquelyn Smith ranked "The World's Most Reputable Companies," with BMW emerging as No. 1 for the first time ever this year. She also found out and shared with us "America's Best-Paying Blue Collar Jobs" and "The Best and Worst Master's Degrees for Jobs."
In company news, Erika Morphy reported that "Salesforce.com Buys Buddy Media for $689M; Oracle Took Vitrue. Who's Left for Microsoft CRM?" Simon Graj assessed "The Facebook Glitch: Will Brands Turn Social Media Shy?," and David Cooperstein told us "How Facebook Can Avoid Being the Next Yahoo!" Rahim Kanani explained "Why YouTube Is the Ultimate Platform for Global Social Change." Steve Olenski found that "American Express Looks to Shake Up Mobile Advertising." Will Burns rebuked "Apple: Borrowing Interest Only Makes You Less Interesting," but Erika Morphy revealed that "Apple's Getting Ready to Spring Something Big at WWDC Next Week." Carmine Gallo admired an "Extreme Business Makeover, Foursquare Style." Paul Hodgson saw just deserts at "Chesapeake: The Governance Ravens Come Home to Roost." And David Vinjamuri wanted you to eat the right desserts: "Disney Rejects Junk Food, and Other Brands Should Too."
No matter what kind of desserts you eat, don't sit inside reading Forbes Leadership articles all weekend, as tempting as that may be. After all, we just got this good news from Victor Lipman: "New Study Links Exercise to Higher Pay."
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333337ca3d7f86bb6cfb412303f95a05 | https://www.forbes.com/sites/frederickallen/2012/07/12/how-mitt-romney-invested-millions-in-outsourcing/ | How Mitt Romney Invested Millions in Outsourcing | How Mitt Romney Invested Millions in Outsourcing
(Image credit: Getty Images via @daylife)
David Corn of Mother Jones reports that "according to government documents . . . Romney, when he was in charge of Bain [Capital], invested heavily in a Chinese manufacturing company that depended on US outsourcing for its profits—and that explicitly stated that such outsourcing was crucial to its success."
This didn't happen after 1999, when Mitt Romney says he left Bain Capital to run the Salt Lake City Olympics (Corn was one of the first reporters to raise questions, now gaining wide exposure, of whether Romney really left Bain then), but the year before. On April 17, 1998, Brookside Capital Partners Fund, a Bain Capital affiliate of which Romney was the sole shareholder, sole director, president, and chief executive, invested an estimated $14.2 million in Global-Tech, an appliance maker in Dongguan, China. Global-Tech made products for American companies like Sunbeam, Hamilton Beach, Mr. Coffee, and Proctor-Silex. In September 1998 Global-Tech's CEO announced that the company was postponing a factory expansion because Sunbeam was slowing its rate of outsourcing, and said, "Although it appears that customers such as Sunbeam are not outsourcing their manufacturing as quickly as we had anticipated, we still believe that the long-term trend toward outsourcing will continue."
By the end of 1998, Brookside was sharing its piece of Global-Tech with Sankaty High Yield Asset Investors, the mysterious Romney-owned Bermuda corporation discussed in the recent Vanity Fair article on the candidate's finances. In August 2000, Brookside and Sankaty sold their shares in Global-Tech.
Of course globalization is here to stay, and macroeconomic forces have sent much American manufacturing to China, probably never to return. What makes this investment by Romney news is what Romney himself has said about outsourcing. He demanded, and failed to get, a retraction from The Washington Post after it reported that Bain Capital, while he was there, invested in companies that outsourced, and, as David Corn writes,
This previously unreported deal runs counter to Romney's tough talk on the campaign trail regarding China. "We will not let China continue to steal jobs from the United States of America," Romney declared in February. But with this investment, Romney sought to make money off a foreign company that banked on American firms outsourcing manufacturing overseas.
Read the full Mother Jones article here.
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2af94b1adbe60aeec312b5f94b8d9779 | https://www.forbes.com/sites/frederickallen/2012/08/14/you-can-only-win-in-sports-or-anywhere-else-if-youre-ready-for-chaos/ | You Can Only Win in Sports, or Anywhere Else, if You're Ready for Chaos | You Can Only Win in Sports, or Anywhere Else, if You're Ready for Chaos
This is a guest post by Sanyin Siang, the founding executive director of the Fuqua/Coach K Center on Leadership and Ethics, at Duke University.
Michael Phelps triumphed partly because his coach sabotaged him. (Photo credit: Wikipedia)
The 2012 Olympic Games reminded us again and again that there are no guaranteed outcomes in sports and that athletic talent alone does not secure the gold. Rather, winning requires an ability to adapt to ever shifting realities and uncertainties. And this is just as true outside of the sports arena.
Throughout the Olympics, the physical prowess among the competitors within each event varied little. At that level of competition, every contender is a potential gold medalist on a perfect day, and no athlete is immune from loss in less than ideal situations. In women’s gymnastics, for example, Gabby Douglas surprised many by winning the all-around; Sandra Izbasa bested heavy favorite McKayla Maroney in the vault; and Aly Raisman surpassed the leading contenders in the floor exercise. Furthermore, many of the gymnasts lacked consistency within the same event throughout the various stages of the three-part competition.
In gymnastics as in other sports, physical fundamentals were key, but the athletes’ mental discipline and comfort with the pressures and real-life chaos of competition separated the medalists from their competitors. That meant building up the capacity to adapt to the unexpected during practice and preparation.
Following Michael Phelps’ record medal win and pioneering triple consecutive gold in the 200 individual medley, his coach of 16 years, Bob Bowman, shared some of the techniques he had used to make the world’s greatest swimmer “familiar with chaos.”
Before meets, Bowman hid goggles, so that Phelps had to swim without them; he deliberately arranged late pickups, so that Phelps would miss meals and swim with hunger; he cracked goggles, so they would fill up with water and obstruct Phelps’ vision in the pool. We don’t know how Phelps did in those earlier meets, but we know that Bowman created uncertainties for him in lower-risk situations so that when it really mattered he had familiarity with the unexpected and a mental adaptability that gave him the best shot at winning. His past dealings with water-filled goggles came in handy when that recurred during the 2008 Olympics in Beijing in the 200-meter butterfly. He won despite the goggle mishap, adding to his record gold medal streak.
Today more than ever, uncertainties in sports mirror what we face in business and society. Success in any endeavor requires not only technical fundamentals but mental adaptability and comfort with the unexpected.
Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, continues to transform the education of the U.S. military for a 21st-century world. He has shared with our Coach K Center on Leadership & Ethics, at Duke’s Fuqua School of Business, his belief in the necessity of “injecting chaos into the developmental experience.” In his Joint Education White Paper, released last month, he highlights “operational adaptability” and the “ability to deal with the unexpected” as competitive learning advantages.
In business education, many MBA programs are adjusting their curricula to include more experiential field-based learning that simulates reality. Students are immersed in real-life situations that force them to develop fresh technical knowledge, interpersonal skills, and mental fortitude.
How can we develop that adaptability, and foster that comfort with uncertainty within our organizations and within ourselves, so that we can have the best shot at success when it really matters?
Simulate chaos by creating conditions with a high chance of failure. We often want to shield our teams and ourselves from failure. However, if we have the chance to fail when failure has the least ramifications, then we have the opportunity for the greatest growth. We should ask ourselves what the equivalent of Phelps’ missed meals and cracked goggles are in our situations, and prepare accordingly. Use the outcomes of these situations to gain a better awareness of ourselves and how we work. It isn't enough just to go through simulations. We must reflect on why we succeed or fail in those practice situations. What is it about how we emotionally reacted that either helped us win or threw us off of our A-game? Do we perform better or worse under pressure and with shorter deadlines? Are we better competing against others or with ourselves? Are we better working with others or solo, and in what situations? Do tough challenges fuel us or discourage us? Once we unlock the factors that determine which way we react, simulate and imagine those factors for success during the real run.
In ideal, pristine situations where we can focus without distraction, winning with the technical fundamentals alone is pretty easy. But in out in the complex world where uncertainty is the only certainty, preparing with and developing a familiarity with chaos is where the real competitive advantage lies.
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37850f91fcffe60f397b7fcaf18183d7 | https://www.forbes.com/sites/frederickallen/2013/01/11/forbes-leadership-highlights-of-the-week-hold-onto-those-resolutions/?ss=ceo-network | Forbes Leadership Highlights of the Week: Hold Onto Those Resolutions! | Forbes Leadership Highlights of the Week: Hold Onto Those Resolutions!
Our greatest living CEO. (Image via CrunchBase)
It's almost mid-January, but at Forbes Leadership we still haven't given up on our New Year's resolutions. This week Scott Edinger presented us with "Nine Leadership Resolutions for the New Year." Bill Fischer shared his "Innovation Resolutions 2013: Innovation Without Investment or Permission!" Also in the spirit of seasonal self-improvement Jacquelyn Smith offered "12 Tips for Staying Productive Through the Bleak Winter Months." Paul Klein detailed "10 Ways to Make a Bigger Difference in 2013." Carol Kinsey Goman listed "10 Simple and Powerful Body Language Tips for 2013." Jenna Goudreau honed in on "Seven Strategies to Reboot Your Job Search in 2013." Nick Morgan asked, "Thinking of Self-Publishing Your Book in 2013? Here's What You Need to Know," and also "What's Coming at You in 2013? Five Communications Predictions for the New Year." Speaking of predictions, Patrick Hanlon saw how "Gangnam Style Hits 1 Billion Views: Social Videos to Skyrocket in 2013." Brandon Gutman served up three rounds of "CMO Predictions for 2013," while Lisa Arthur explained "Why 2013 Is the Year of the Marketer." Let 2013 be the year of making it happen, we say.
We had plenty of reports of people already making it happen this week. Like Will Burns' "Beck's Song Reader Ignites Social Media Deluge." And Adam Hartung on "Why Jeff Bezos Is Our Greatest Living CEO." And Robert Passikoff's "National Hockey League Skates Back to Business." And Jim Camp on "Lance Armstrong: Negotiating With the Public Through Oprah" and on "Joaquin Phoenix: Negotiating an Oscar Nomination by Walking Away." And Jenna Goudreau's interview in which the "New Director of Senate Finance Committee Warns of Looming Debt Crisis."
Not that everyone was making it happen. John Baldoni found a cautionary tale in the sorry end of Robert Griffin's season, with "Don't Let Your Young Employees Act Like RGIII." Susan Adams explained "How the Military Squanders Its Management Talent." Jonathan Salem Baskin charged that "Boeing Has an Airplane Problem, Not a P.R. Problem." Steve Olenski had to ask, "Is Brand Loyalty Dying a Slow and Painful Death?" Richard Levick cautioned that "Bank of America Is at the Crossroads (Again)."
We found ourselves cautioning you, yourself, too. Christine Riordan pointed out "Three Ways Overconfidence Can Make a Fool of You." Dorie Clark identified "Four Things You're Doing Wrong on Social Media—and How to Fix Them." Patrick Spenner got out in front of "What Not to Do as a New-to-Role CMO." Susan Adams drew up "10 Questions You'd Better Ask Your Boss." On the brighter side, Erika Anderson gave us "Three Things You Can Do to Think Like a Genius." Matt Symonds vouchsafed "10 Tips for Acing the MBA Interview," and Jacquelyn Smith laid out "How to Ace the 50 Most Common Intervew Questions." She also suggested "10 Things to Do on a Slow Day at Work." Susan Adams reassured us that "It Still Pays to Get a College Degree"—even before she discovered that "Starting Salaries Jump 3.4% for New Grads."
Other unmissable articles this week: John T. Harvey's "Why Social Security Can't Go Bankrupt: Rerun." Steve Denning's prophecy of doom, "Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable," and also his "P&G Now a Dog and Unilever a Star? Are They Nuts?" Bill Aulet and Matt Marx's "U.S. Immigration Policy Is Killing Entrepreneurship. Here's What to Do About It." Geoff Loftus' "The Risky Business School of Leadership." Paul Hodgson's condemnation of "Pyramid CEO Compensation at Herbalife." Michael Salinger's defense of "Why the FTC Was Right Not to Sue Google." Bain's prescription for "How Europe's Banks Can Return to Health." Mike Myatt's "Eight Tips for Leading Those Who Don't Want to Follow." Roberta Matuson's "How to Become a Master Talent Wrangler." Carmen Nobel's "How Economics Can Fix Your Life."
And now that your life is fixed, have a swell weekend, and keep on enjoying Forbes Leadership.
Gallery: 10 Popular Career-Related New Year’s Resolutions 10 images View gallery
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15ffc982c7476edac9422d98aad8ec1d | https://www.forbes.com/sites/frederickallen/2015/05/13/anger-is-the-mother-of-invention-the-amazing-accomplishments-of-this-years-inductees-into-the-national-inventors-hall-of-fame/ | Anger Is the Mother of Invention: The Amazing Accomplishments of This Year's Inductees Into the National Inventors Hall of Fame | Anger Is the Mother of Invention: The Amazing Accomplishments of This Year's Inductees Into the National Inventors Hall of Fame
How do you become one of the world’s greatest living inventors? By being “always angry,” says Shuji Nakamura, and “asking why, why, why?” His boss told him there could be no such thing blue light-emitting diodes, and “I became so angry at my boss I told him to let me do it.” He found a way, and thereby made possible every flat-screen display and LED light bulb in existence. He won a Nobel Prize for that late last year, and last night he was inducted into the National Hall of Fame, which recognizes the greatest inventors who hold U.S. patents.
Shuji Nakamura in 2014. (JONATHAN NACKSTRAND/AFP/Getty Images)
Another inductee was Jaap Haartsen, who developed the Bluetooth wireless technology we all use to connect our phones to our ears and our cars and now our watches, and to connect so many of our other devices to one another, too. He compared inventing to making music. “When you build something, invent something, everything fits together” to make a kind of deeply satisfying harmony, he said. Yet as someone who has done as much as anyone living to tether us online, he also talked of the virtue of disconnecting. Get out into nature with everything unplugged, he urged the audience at the Washington, D.C., induction ceremony.
Kristina Johnson and Gary Sharp , before they ever met, had a lot in common with each other and with probably almost no one else alive: “We each separately made holograms as teenagers,” she said. Later, he became her graduate student at the University of Colorado (she says she got a Ph.D. because she felt she had to to get ahead as a woman in engineering and because “I just don’t like to be told what to do”). They went on to create the technology that makes digital 3D movies possible.
Disclosure: I am very much involved myself in the National Inventors Hall of Fame, a nonprofit organization. I am its chairman of the board.
Ioannis Yannas and the late John Burke developed the first reproducible regenerated skin, which has saved the lives of thousands of burn victims. George Alcorn led breakthroughs in X-ray technology that “gave NASA X-ray vision,” as he put it, while working at companies in the 1960s where he was often the only black employee. And Mary- Dell Chilton created the first genetically modified plant (a tobacco plant). As one of the pioneers of GMOs she has led the way to greatly improved agricultural productivity—and thus made it easier to feed the world—yet she felt she had to close her acceptance remarks by plaintively saying, “It is my greatest hope that we will see acceptance of this technology in my lifetime.”
This year’s deceased inductees were Edith Clarke, who developed a pathbreaking early graphical calculator; Marion Donovan, for a waterproof diaper cover that became the predecessor to disposable diapers; Charles Drew, the father of modern blood plasma preservation technology; Thomas Jennings, the first African-American patent holder, who invented a method of dry cleaning in 1821; Paul MacCready, who built and flew the Gossamer Condor and the Gossamer Albatross; and Stanford Ovshinsky, a high school dropout who gave the world the nickel-metal hydride (NiMH) battery.
How can you become an inventor great enough to join those ranks? Well, Kristina Johnson has an invention she’d really like to see you make happen. She has been spurred by her passion for fighting global climate change to move from 3D technology to running a business, Cube Hydro Partners, that modernizes hydroelectric facilities. She says she really, really wants an app that will tell you just how much energy you’re using, and all the emissions you’re creating, in everything you do every day, from driving in your car to turning on the lights at home. No one has invented it yet.
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368b4c16482d966a115aff133d463f27 | https://www.forbes.com/sites/frederickdaso/2018/08/03/the-first-position-you-hire-for-sets-the-tone-of-your-startup/ | The First Position You Hire For Sets The Tone Of Your Startup | The First Position You Hire For Sets The Tone Of Your Startup
The movement to get American students coding at an earlier age continues to grow as politicians, celebrities, and tech CEOs support youth programming initiatives such as Black Girls Code, Code 2040, and Hour of Code. Jon Mattingly, 27, and Grechen Huebner, 28, founded Kodable to develop a coding curriculum for students in elementary school. The Y Combinator startup's lesson plans are currently used by over 50% of U.S. elementary schools, training kids from learning to think like a programmer in kindergarten to writing JavaScript by the fifth grade. The Sunnyvale, California-based team has raised funding from Sinnovation Ventures, 500 Startups, Chmod Ventures and Imagine K12/YC.
Kodable cofounders Jon Mattingly (left) and Grechen Huebner (right). Jon Mattingly
Frederick Daso: Given the area your startup is working in, who is your first hire, and why?
Jon Mattingly: Our first hire was a teacher for many reasons. We started to focus on building something for schools as we were searching for our first hire. Therefore, it was imperative for us to have someone with that domain expertise. That teacher was our first hire because we wanted someone to tell us what it was like using our product in the classroom and knowing how to build something with some pedagogy behind it. At the time, we were winging developing our product. Bringing the teacher on board as our first hire helped give us the expertise to evolve our product in the right direction.
Daso: I see. When I think of a first hire for a startup, I think of a software engineer, or business development specialist, not a teacher. How did you sell this teacher on Kodable’s vision?
Mattingly: Surpringsly, there wasn’t a ton of selling needed to convince this teacher to join us. She found us and applied. We almost messed up our application – it suffered from a glitch, so she ended up emailing both of us out of the blue, saying that she applied, but the application ran into an error. She believed in Kodable already, seeing from her effort to contact us urgently!
Daso: Right. It seems like the perfect hire for your startup came up to your front door and was knocking until you let her join the team. She had the domain expertise and a passion for what your startup is doing, but what else did you look for either in her or another first hire?
Mattingly: A couple of big things, one being communication. The people we had worked with before, we had problems because of the lack of communication. In a small startup, you all are married to each other. You have to be comfortable talking with people and having difficult conversations. We’re working long hours in a high-stress environment in a tiny room together. We are all going to do things that will piss you off. It’s going to happen. You got to find a way to accept that and keep those communication channels open, or otherwise, you’ll breed resentment, which leads to a big blowup. That can kill the company when there are three people.
The other quality I look for is resilience. Being able to weather the tough times is incredibly important in a startup. If we are running low on money, can I bring into a room and say, “Look, we have three months of runway left, we need to make this work and figure out a way to make money,” are you going to take that as a challenge and want to succeed, or just leave and go to the next startup?
Those are the two primary qualities we look for: resilience and communication.
Daso: Your answer to the last question just spawned two more in my mind. The first question relates to Jeff Bezos’s comments about hiring. According to him, you should hire someone that is better than you and will raise the standards of your team. Do you feel his sentiment is an appropriate metric for hiring someone for a startup, especially the first hire?
Mattingly: Yes and no. So yes, I’ve always said if I do my job well as a CEO, I will be the least talented person in every aspect of the things that I have done for Kodable so far. One of the things I kind of pride myself on is the fact that I have worked on every single aspect of this company. I’ve done sales, marketing, programming, customer support – I’ve done all of it. I’m not best at any of it. We’ve hired a programmer, a designer and a marketer who all are better than me in their respective areas.
However, there are specific tasks that you need to be the best at as a CEO. For example, setting a company mission is a crucial duty for a CEO to fulfill. If you have someone who is as good as you in establishing a company mission, you might sometimes have where you two clash and disagree. That’s not the talent you want to hire for since it’s your role.
Daso: Right, right.
Mattingly: As a CEO, you have a specific subset of things that you need to do well. For someone like Jeff Bezos who’s just answering e-mail and promoting Amazon, setting the company mission is his job. He needs to be the best at that, not whoever is hired. They can help, which is fine. The other essential ability as a CEO is to be able to hop into multiple roles, especially when you’re small. Bezos will never be asked to go down and work on AWS servers. However, I might. I might need to hop into programming, do some customer support, and make sales calls. I did all of that last week. That’s a talent that founders need to have.
Daso: Wow. Second question: do you think that the first hire sets the tone for all the other hires to come through, or is every hire just an isolated, individual case?
Mattingly: It’s not the only the first hire that sets the tone, more like the first two. It depends on how quickly you hire them as well. There’s a group of four people that we call the ‘Core Four’ at Kodable. The ‘Core Four’ is me, my cofounder and our first two employees. We’ve all been here for three years together. The four of us set the tone for everything moving forward since we have been here for so long. Honestly, I believe that founders set the tone more than the first employee, but the latter is, by extension, an addition founder. Half-a-founder.
Daso: Half-a-founder.
Mattingly: To be clear, it depends on the first employee’s personality. Some people are more open, boisterous, and vocal in the office. You can hire someone like that.
Back to your original question, I do think that the role you hire for first sets the tone more than the actual person that gets hired. When we hired a teacher, our priority was is making something that teaches things well. If we had employed a salesperson first, that indicates our priority is to make money at all costs.
This interview has been edited and condensed for clarity and brevity.
If you enjoyed this article, feel free to check out my other work on LinkedIn and my personal website, frederickdaso.com. Follow me on Twitter @fredsoda, on Medium @fredsoda, and on Instagram @fred_soda.
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b9718d9e81a7b1afe20d7854b30ff2d2 | https://www.forbes.com/sites/frederickdaso/2020/02/10/quo-a-stanford-consumer-fintech-startup-leverages-ai-to-provide-financial-security/?sh=575e393d72e6 | Quo, A Stanford Consumer Fintech Startup, Leverages AI To Provide Financial Security | Quo, A Stanford Consumer Fintech Startup, Leverages AI To Provide Financial Security
The car payment is due in seven days. The electric bill is past due. The cable service has been shut off. You need to go to the doctor, but you're uninsured.
You also found out that your house needs significant repairs. You've hit your credit card limit, and your next paycheck doesn't come for another week and a half.
These challenges are all too familiar in the United States of America. In the midst of an unprecedented stock market rally and record-low unemployment, many Americans still struggle to meet their financial needs. CNBC reports that roughly 40% of Americans can't handle a $400 emergency. Anyone can fall behind on these recurring bills, and unexpected expenses can make the financial constraints even worse. Payday loans are used to bridge the gap between paychecks, but end up making a cash-flow issue worse due to their usurious interest rates. Financial disaster can happen to anyone in the United States.
"My family, like other families across the country, suffered our fair share of economic hardship," says Tucker Haas. "In 2002, my younger sister was born with Kernicterus, a rare form of preventable brain damage caused by newborn jaundice. Her condition meant lots of expensive medical care, which resulted in a large amount of medical debt for my family. On top of that, my father’s business took a slight turn for the worse. The two unexpected financial emergencies drove my parents to file for bankruptcy. Eventually, my parents were able to recover, but they found themselves haunted by the impact of this period. One of the worst effects was the damage it did to their credit. These financial emergencies made it nearly impossible for them to get any credit even after their income and debt repayment was back on track. Even today, almost 15 years later, they still have trouble getting a loan."
Haas tells me those harrowing, precarious family financial experiences have made him "passionate about personal finance." "Personal finance needs to be more active and provide real financial tools to aid in those times of crisis. People don't need another budgeting app that tells you to save a little more," he emphasizes. Haas went and partnered with Neel Yerneni to create Quo. Quo is an artificial intelligence (AI) fintech app that provides users with secure financial backup plans. The San Francisco-based startup has recently raised a $2.5 million seed round from lead investors Global Founders Capital, with participation from Soma Capital and a few angel investors.
Kendrick Kho, the investor who spearheaded Global Founders Capital's investment in the consumer fintech company, says, "I was impressed by Neel's and Tucker's passion for space. From the firm's point of view, our considerations to invest in them were not a question of ability, but whether they would stay the course. Given their talent and numerous opportunities for employment, it spoke volumes to their drive to create a positive outcome in the personal finance space."
Quo cofounders Neel Yerneni (left) and Tucker Haas (right). Neel Yerneni.
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For most Americans, personal finance is a sensitive and troubling topic. The fact that a majority of the U.S. struggles to handle an emergency has already been established. Recent employment statistics show that a plurality of the jobs created in the U.S. are low-wage positions. In other words, most Americans are not even earning enough to meet their regular bills and surprise financial emergencies. The lack of wage growth in the U.S. naturally drives those in low-wage jobs to be reliant on credit cards and payday loans. However, these financial products end up doing more harm than good. Payday loans carry exorbitant (but legal) interest rates for borrowing amounts on the order of hundreds or thousands of dollars.
In some cases, payday loan borrowers end up owing more in interest than the principal amount they agreed to in their lending agreement. Credit card users are not much better off either. The interest rates on credits cards are lower than payday loans, but they are still 20-30% APR.
"Products like payday loans and high-interest credit cards are built to exploit people when they're most desperate or in times of need," Yerneni says. "Personal finance is one of the least disrupted spaces with some of the largest potential to improve people's financial lives. Some of the solutions/products people build in fintech only scratch the surface. These solutions take legacy infrastructure/business models and digitize it for the modern era. Instead, we've asked how technology can change the underlying logic itself. It's primarily reflected in the backgrounds of the founders, who previously worked in finance and consulting."
In these desperate times of financial need, the market opportunity for short-term financial products continues to grow. Consumer credit card debt continues to increase at the tune of 4-5% per year, with U.S. total credit card debt clocking in at $1.088 trillion in 2019. The founders claim they are targeting young, risk-averse millennials that represent an initial beachhead market of $10 billion. Adding in low-income individuals looking to change their financial habits, Haas and Yerneni estimate their initial market grows to $50 billion. The absence of a commercial product aligned with the interests of borrowers leaves a huge opportunity to take market share from payday lenders.
"Throughout this entire experience, my parents hammered into my sisters and me the importance of personal finance. They constantly encouraged us to save, to be mindful of budgets, to invest, and to live below our means. But even more so, they exemplified why traditional personal finance still fails many Americans. Even if you do everything right as they did and build towards the American dream, emergencies like my sister's health condition can cause that to come crashing down. At that point, saving more or cutting costs is not enough. Instead, getting access to affordable and flexible capital is what can keep households afloat," Haas stresses.
Quo relies on using AI to sort through a user's financial transactions to understand their spending habits. Once a user's economic history is compiled and interpreted, the startup sends a debit card to the user for financial use. The debit card allows access to two types of loans via a monthly subscription: $5.99/month for $400 at 5% APR or $9.99/month for $700 at 2% APR. Those interest rates are dramatically lower compared to credit cards and payday loans. The startup providing these loans from a small-monthly fee with borrower-friendly APRs reflects their mission of not wanting their users to be in debt. Unlike the conventional credit business models, profit is not made by keeping users spending and perpetually in debt to pay interest, but by getting them out of debt to build savings. These loans come with user-specified constraints, such as the money only being used at merchants that are relevant to the purpose of the loan. If someone is taking out the loan to make a car payment, then the user could only spend that money to pay off the vehicle for that month. More importantly, if a user falls behind on their loan repayment, Quo is able to restructure the loan in real time to adjust to a person’s immediate financial constraints. Quo's financial innovation is the result of a stellar and passionate founding team.
"I saw much potential with Tucker and me having highly technical backgrounds to build something truly revolutionary. Robinhood's founders had math and physics backgrounds, and they singlehandedly changed the landscape of personal investing. They didn't just build a nicer looking trading platform - they rewrote the business model. There were enough people from my class going to the Facebook's and Google's, so I thought why not try and have a more direct social impact," Yerneni tells me.
The two Stanford graduates initially met in the spring of 2018 in Berlin, Germany. Yerneni was interning at N26, one of the European Union's largest mobile banks, while Haas was studying abroad at a university in Berlin. After the start of their friendship, the two interned at Facebook together. Haas and Yerneni discussed the shortcomings the traditional U.S. personal financial services. The two felt strongly about their ability to drive positive change in the personal finance space. They left their return offers to the social media giant on the table and started Quo.
The status Quo of personal finance in the U.S. is changing for the better with Haas and Yerneni providing financial security, one transaction at a time.
If you enjoyed this article, feel free to check out my other work on LinkedIn and my personal website, frederickdaso.com. Follow me on Twitter @fredsoda, on Medium @fredsoda, and on Instagram @fred_soda.
Correction: Kendrick Kho's last name was incorrectly spelled. This has been corrected.
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bba1e1c5278684919345ee82f1d8352b | https://www.forbes.com/sites/frederickdaso/2020/04/13/floating-point-group-an-mit-crypto-fintech-startup-modernizes-digital-currency-trading/?sh=637c5a3a6740 | Floating Point Group, An MIT Crypto Fintech Startup, Modernizes Digital Currency Trading | Floating Point Group, An MIT Crypto Fintech Startup, Modernizes Digital Currency Trading
The advent of cryptocurrencies has brought decentralization to finance. These types of coinage are entirely digital and not backed by central finance authorities. Despite the legal and financial risks, cryptocurrencies such as Bitcoin and Etherium are used every day in commerce. However, there are a greater number of esoteric coins that are not traded in enormous volumes. For someone interested in purchasing cryptocurrencies, they may face problems associated with liquidity when trading. John Peurifoy, Kevin March, and Van Phu recognized the demand for a safe, compliant, and accessible platform to exchange cryptocurrencies at stable prices and created Floating Point Group (FPG). Floating Point Group is a cryptocurrency trading platform leveraging smart order routing to provide a “single point of access to digital currency markets.” The New York City-based startup has recently raised $2 million from venture capital firms, serial angel investor Naval Ravikant, and many mainstream financial institutions.
Floating Point Group cofounders Kevin March (left), John Peurifoy (middle), and Van Phu (right). Kevin March
In modern, everyday finance, the trading of securities, or financial instruments signifying monetary value, is done on public exchanges such as the New York Stock Exchange or the NASDAQ, or privately through alternative trading systems such as dark pools. Buyers and sellers of securities are matched through the exchange or trading system, and the orders are executed. The fulfillment of these trades is done through a technique called smart order routing. Smart order routing allows for trades to be optimized across multiple exchanges with respect to time, price and order volume. The key innovation that smart order trading brought to modern finance was the ability to avoid the fragmentation of liquidity by accessing multiple exchanges or trading systems simultaneously.
In trading, liquidity is a measure of whether an order can be executed with minimal effect on the price of the security being exchanged. If supply equals demand, the price ideally should be the same during a trade. However, this rarely happens in developed markets because of fragmentation and the reduction of larger orders willing to stand still at a particular price in the market. Instead, many institutional firms will opt to slice their order up into smaller digestible pieces to not tip their hand as to their true intentions and have another participant trade ahead of them. Later executed smaller orders also may occur at a different price than the original single large order. The difference between these prices is called slippage. A physics analogy suggests slippage is the equivalent of friction in trading securities.
Smart order routing is taken for granted when trading securities today, as it minimizes the slippage of executing an order. However, with cryptocurrencies, it is sorely needed. For lesser-traded coins, there is a corresponding lack of liquidity in their respective markets. Stringent and evolving regulations combined with the necessity for sophisticated technologies to produce and trade these digital coins complicate matters more. Thus, buyers and sellers of these cryptocurrencies must interface with one another directly to establish the exchange price rather than through a centralized, modern trading platform. The absence of a centralized trading system leaves cryptocurrency trading in a state similar to pre-smart order routing finance, where slippage occurs in nearly every trade. These current barriers prevent the growth of these digital coin markets and their broader mass adoption in everyday commerce between individuals and institutions.
The size of the cryptocurrency market is challenging to estimate. The vast selection of cryptocurrencies worldwide and their respective values when compared to the U.S. dollar directly complicate matters. Nevertheless, the market capitalization of the most stable and popular digital coins provides a benchmark for the current and future prospects of cryptocurrencies as a whole. Bitcoin, the most prominent and well-known digital currency, has a market cap of $123.02 billion (at the time of writing). The next two largest crypto market caps, Ethereum and Ripple, have respective values of $15.72 and $7.79 billion. These cryptocurrencies' respective market capitalizations reflect the immense value and enormous growth of using digital currencies to transact as mass adoption increases. FPG is working towards a future where cryptocurrency trading is more accessible for accredited and retail investors alike.
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FPG has built critical infrastructure to allow cryptocurrency trading at scale between various actors. Their core product is an application programming interface (API) that is used as a single point of access for customers to perform all of their trading needs. The API has three main features. First, it allows customers to connect directly to exchanges. Second, customers are automatically linked to FPGs internal database containing critical market data. Third, the API provides the option for automatic cold-storage trade settlement or executing an order directly from an offline digital wallet. The cofounders believe that a single point of access approach for cryptocurrency trading simplifies the technological burden traders have to take on just to execute simple trades. More importantly, the fragmentation of liquidity problem is now solved, as liquidity becomes centralized through their API-facilitated platform.
As liquidity aggregates, the potential slippage that can occur minimizes, saving both FPG and its customers' money on order execution fees. The lower costs, the lower the barrier for traders who do not use FPG to enter its ecosystem. This virtuous cycle is FPG's network effect at scale, simultaneously lowering costs while increasing revenue through exponential growth in exchange volume.
Developing a scalable trading platform with increasing utility required the combination of Peurifoy's, Phu's, and March's technical and business acumen. Peurifoy is an MIT graduate with dual Bachelor's of Science (S.B.) degrees in Computer Science and Physics. Before FPG, Peurifoy worked as a physics researcher. Phu also obtained his S.B. in Computer Science from MIT as well. He was previously on the founding team of ZenBusiness, a high-performing legal tech startup. March dropped out of his Bachelor's of Science degree in Entrepreneurship and Biotechnology from the University of Missouri-Kansas City to start FPG. Before founding the startup, he performed bacterial genetics and cancer research. The experiences of the three cofounders blend to produce the best-in-class platform for the digital currency markets.
Disclosure: I was previously an investor at Rough Draft Ventures, which has invested in Floating Point Group.
If you enjoyed this article, feel free to check out my other work on LinkedIn and my personal website, frederickdaso.com. Follow me on Twitter @fredsoda, on Medium @fredsoda, and on Instagram @fred_soda.
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aeb4c36cac17adf55ef0dee12d654c0e | https://www.forbes.com/sites/frederickdaso/2020/04/25/new-and-growing-startups-use-branch-to-furnish-their-ideal-workspace/?sh=759f40a3163a | New And Growing Startups Use Branch To Furnish Their Ideal Workspace | New And Growing Startups Use Branch To Furnish Their Ideal Workspace
From open office designs to closed-off cubicles, office furniture plays a more significant role than having surfaces to sit on or conference rooms for large gathers. The furniture in an office space often reflects the culture and aesthetic that a company wants to project at large. However, the process of acquiring office furniture has not changed for a long time. Greg Hayes, Sib Mahapatra, and Verity Sylvester have made it easier to obtain office furniture to design a workplace to one's liking through Branch. Branch is a direct-to-business office furniture startup, selling premium equipment to other growing companies. The startup is based in New York City.
Branch cofounders Greg Hayes (middle), Sib Mahapatra (right), and Verity Sylvester (left). Sib Mahapatra
Frederick Daso: What's the current process for procuring office furniture? Why is it complicated, slow, and burdensome?
Greg Hayes, Sib Mahapatra, and Verity Sylvester: Right now, there are two bad options when it comes to furnishing office space. On the one hand, "fast furniture" retailers like IKEA and Amazon are fast and affordable but lack the quality and service to scale to the needs of growing business (try asking a TaskRabbit to coordinate with a landlord on freight elevator access or insurance requirements).
On the other hand, high-end "contract furniture" manufacturers like Herman Miller make beautiful products. Yet, they are priced opaquely and exorbitantly and take 6-12 weeks to deliver. The root of these evils is that most contract furniture is sold through middlemen—local furniture dealers—that offer decidedly analog transaction and project management experiences while marking up prices to 50%.
In deciding to found Branch, we realized there wasn't a right solution combining the speed, value, and convenience of fast furniture with the quality and comprehensive service of contract furniture. And neither option offered customers much flexibility or support after the transaction; you buy it, it's yours.
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Daso: Are there current D2B office furniture vendors? If so, why haven't they sufficiently addressed the procurement process problem yet?
Hayes, Mahapatra, and Sylvester: Most online office furniture retailers target the consumer market with home office solutions. But furnishing for a business is as much a service as it is retailing a physical product. Branch addresses needs from producing 3D space plans to help our clients visualize their spaces, to coordinating with idiosyncratic landlord requirements, to orchestrating delivery, and assembly of literal tons of furniture at a time.
Of our competitors that do target the enterprise market, none offer flexibility. In the era of managed real estate services like WeWork and Knotel, traditional landlords have started to offer more flexible lease terms and scalable spaces that better meet the needs of modern companies experiencing rapid growth and variable on-premise headcount. Companies (and landlords) that lease or lease out these spaces will want a furniture solution to match: an accessible, comprehensive way to switch up floor plans and add/remove/upgrade furniture on demand. With our Flex program, Branch customers can trade used Branch furniture for credit toward their next purchase, which makes swapping a conference room for a pod of desks as easy as a few clicks.
Daso: What slice of the market have you decided to target initially, and why?
Hayes, Mahapatra, and Sylvester: Our typical customer is a growing business (often a startup, but not always) between 25 and 300 people. We segment this target market further by size, growth trajectory, and budget, but broadly speaking, teams in this extensive stage experience the most pain with existing solutions. They're big enough to demand serious service and quality in furnishing an office their team will love, but too small to shell out $2-3K per head for office furniture only to be stuck with it when they double in size and move into a new office eighteen months later.
Our combination of ease, value, and flexibility resonates with each segment within this market in distinct ways. "WeWork Graduates" moving into their first standalone office place a premium on the speed and flexibility we offer, while larger companies love our value and depth of service. Beyond selling directly to companies, we also collaborate frequently with landlords, brokers, and other partners in the real estate community in addressing the growing demand for flexible, turnkey office solutions.
Daso: How has Branch managed to sell premium office furniture products at half the price of competitors? Is bringing manufacturing in-house/being vertically integrated a significant driver in lowering your cost structure, or are there other advantages you've managed to develop in other areas of your product lifecycle?
Hayes, Mahapatra, and Sylvester: We save money in three significant ways relative to our competitors. As you noted, cutting out dealers and selling our furniture direct to business eliminates one of the most considerable costs in the traditional contract furniture value chain. Second, we maintain a lean line of modular inventory; interchangeable components between our core SKUs limit the amount of inventory we carry, which helps reduce warehousing and working capital expense. Finally, we're starting to use technology to create operating efficiencies in the project management process, which encompasses tasks from complying with building insurance requirements to booking the elevator.
We pass these savings to our customers, which lets us charge about a thousand dollars per head for a standing desk, ergonomic chair, and filing cabinet—or roughly the cost of a single Aeron chair from Herman Miller.
Daso: What led to the development of offering used furniture trade-in? Why haven't other vendors offered this before? Do you offer refurbished products as well?
Hayes, Mahapatra, and Sylvester: Not too long ago, the average office lease in NYC was five years long, and flexibility in office furniture wasn't relevant. Now the average lease is closer to three years in length; for companies that came of age in the post-WeWork era, flexibility has become a key driver of decision-making around office space.
Traditional contract furniture lines would be challenged to take advantage of this opportunity for a few reasons. In essence, dealers are loathing to stock inventory of any kind (which is why lead times are so long). High-end contract furniture is typically customized, making it harder to assemble enough inventory in any single variant to fuel a liquid market of refurbished products.
With a lean and modular line, Branch is designed for trade-in; as more of our customers take advantage of our Flex product, we plan to offer a refurb line to address price-sensitive customers at the smaller end of our target market.
Daso: How does the data your end-to-end service help inform and drive your current and future product offerings?
Hayes, Mahapatra, and Sylvester: We rely on both internal (customer surveys, funnel analysis) and external (search trends, advertising ROI) data to drive our furniture and digital roadmap. As we grow, striking the right balance between efficiency and completeness in our furniture line is a crucial objective—we want to build the one-stop stop for office furnishing in our target market, no more and no less.
Daso: Given your backgrounds in real estate, how painful was it to furnish your corporate spaces? Is Branch the company you wish you had when you all when in your previous roles?
Hayes, Mahapatra, and Sylvester: Our CEO Greg managed the furnishing process for dozens of offices while leading asset management on the East Coast for the flexible office space company Breather, and saw firsthand how growing teams were underserved by existing options.
Sib, our co-founder and head of product, made the same observation from the other side of the table while working with startups that resorted to creative methods in furnishing their offices, built his share of desks, and saw the opportunity in creating a simple, API-like experience for an office furnishing. Our co-founder and head of operations Verity brought deep real estate relationships and an instinct for design to the table, helping us understand that landlords and companies alike increasingly value flexibility when it comes to office furnishings.
Branch is the intersection of our visions for helping teams of all kinds create a professional home they'll love, and we're proud of our progress so far—but there's much more to come!
If you enjoyed this article, feel free to check out my other work on LinkedIn and my personal website, frederickdaso.com. Follow me on Twitter @fredsoda, on Medium @fredsoda, and on Instagram @fred_soda.
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6a29a00704616b617e4e29a56e54452f | https://www.forbes.com/sites/frederickdaso/2020/12/02/promorepublic-helps-corporations-keep-their-sales-messaging-consistent/?sh=2f6cf32e7d00 | PromoRepublic Raises $1.5M To Help Corporations Keep Their Sales Messaging Consistent | PromoRepublic Raises $1.5M To Help Corporations Keep Their Sales Messaging Consistent
For franchise run businesses such as McDonald’s and Aaron’s, it’s important to the main corporation to have communications centralized and consistent across all branches. Misaligned messaging can cost a franchise-run firm millions in revenue. Thus, it’s a challenge for the corporate headquarters of these businesses to keep a consistent message across storefronts that are geographically spread out. Fortunately, Max Pecherskyi has built PromoRepublic to address this problem. PromoRepublic creates social media marketing tools for multi-location brands, helping them maintain a consistent identity and message across their franchises. The startup is headquartered in Palo Alto, California, and has raised $1.5m in a recent fundraising round. PromoRepublic also brought on former Hootsuite VP Steve Johnson to their team.
PromoRepublic founder and CEO Max Pecherskyi. Max Pecherskyi
Frederick Daso: Why is it challenging for marketing executives to have a consistent storytelling experience across multiple locations?
Max Pecherskyi: Global companies such as Starbucks and Dominos are prominent examples of consistent storytelling experiences across multiple locations. No matter where consumers are in the world, Starbucks and Dominos have established associations and a consistent level of brand experience worldwide. Storytelling is the force through which a company communicates what benefits and values consumers should expect from its products or services. In addition to a marketing strategy and brand standards, these businesses use unified storytelling to become what they are - well-known franchise brands that offer a consistent interaction experience with the brand.
Storytelling promotes brand awareness and enables a company to become more visible and generate more sales globally. This is especially relevant for franchises: such companies sell brand ownership to potential franchisees, and these entrepreneurs (franchisees) consistently further invest resources in brand awareness and stimulate local sales.
One of the top priorities for executives in such companies is ensuring that all locations follow specific instructions for brand messaging and cohesively participate in seasonal and other planned marketing campaigns. Marketing executives need to invest expertise and time in coordinating efforts globally and considering the cultural specifics of regions, especially when not all franchisees are experienced marketers. Furthermore, marketing professionals at the head office must ensure that their franchisees gain local communities' trust and remain authentic and specific to the local context.
Thus, the actual challenge is balancing corporate principles with local trust, which is where distributed marketing technology comes in.
Daso: What's the economic impact of misaligned, inconsistent advertising and branding for these businesses?
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Pecherskyi: A franchise brand with inconsistent storytelling has a high risk of losing authenticity, blurring the brand image, and providing consumers with disparate brand interaction experiences. It is a severe concern for business integrity if a franchisee acts as an independent small business owner and ceases to represent the brand's promises of value, quality, speed, and service standards.
LucidPress data says consistent branding can increase a company's revenue by up to 23%. Thus, inconsistency in brand storytelling leads to global profitability loss. Moreover, when consumers aren't informed about product offerings or news via advertising or cross-network social media posting, a brand markedly loses in sales and awareness on the local level too. The franchisee who does not communicate using corporate brand guidelines and the proposed strategy will likely get a lower return on investment into the franchisee license.
Daso: What is driving the growth in the distributed marketing software market? How is PromoRepublic either contributing or taking advantage of such growth?
Pecherskyi: Globally, 75% of all world trade today is indirect, and distributed MarTech solutions frequently demand growth. According to Forrester's latest research, the distributed marketing software market will reach $1.18 billion by 2023. Moreover, the market of Enterprise social media management SaaS is going to reach $17.7 Bn. In other words, the entrepreneurial community is smoothly moving towards the transfer of sales and marketing to independent representatives, field sales teams, agents, and franchisees as the new normal.
Managing multi-location touchpoints requires both effort and resources, so nearly 50% of all brands have invested in distributed marketing in some capacity, Forrester says. Distributed Marketing is growing because marketing professionals see local marketing as a key to influencing new buyers and a considerable opportunity for scaling up and expanding into new markets.
PromoRepublic's team does believe that the key to winning in the customer experience race is at the local level and that HQs need to focus on improving communication from that point onward. We provide simple, easy-to-use software for both HQs and regional sales teams and devote our efforts to maintaining our solution and supporting market growth. Partners leverage corporate content, messaging, branding, and demand generation initiatives in their local markets to drive a successful customer experience.
Different multi-location brands have dozens of ways of selling to the end customers via various partners. Service models (e.g., New American Funding) use agents, franchises (e.g., Starbucks) sell their brand to entrepreneurs, and product direct sellers (e.g., Amway) have representatives and consultants. Each of these business models needs a solution tailored to their needs. Therefore, we researched, crafted and improved continuously tailored solutions for each of these areas: from franchise and direct selling to multi-location businesses.
Daso: How has the growth of indirect trade influenced or shaped the distributed marketing software industry?
Pecherskyi: The Forrester team says there are many more partnerships than people think: 75% of all world trade is done indirectly. That means that $60 trillion of the $80 trillion world GDP is sold indirectly. If we think about our daily lives, we realize that our last car was probably purchased from a dealer. That's a channel. The previous TV was from a retailer.
On the contrary, it might be challenging to remember the products and services you bought directly, but world trade occurs in this way. And this world model has driven innovation. Distributed marketing technology turns the complicated (chaotic at times), indirect, through-partner sales and marketing channels into automated, effective processes for such business models to rely on.
Daso: Why did you focus on content distribution, campaign management, and metric dashboards as the features to help your customers ensure a consistent brand story across its franchisees?
Pecherskyi: We have been striving to empower companies to share their brand stories through promotion campaigns and content that flow from global management to local representation consistently and coherently. Key messages such as new product launches (go-to-market) and promo campaigns are usually approved at the headquarters as part of the marketing strategy and then dispersed across the network to local end customers.
Social networks have long been a reliable and powerful tool for reaching large audiences and distributing local networks' messages. Via social media content campaigns, our customers can consistently share information and align their teams worldwide concerning branded books, manuals, new product launches, and promotions.
In addition to coordinating communication before and during content distribution, we also ensure the tracking of results. Our analytical dashboard collects data on campaign effectiveness in different regions in illustrative and easy to navigate charts. Marketing executives have a bird's-eye view of how their franchise networks do or don't actively use suggested content and overall campaign performance on social media.
Daso: What shaped the PromoRepublic feature set at the field level to integrate with the core product at the organizational level seamlessly?
Pecherskyi: We have dedicated a significant amount of effort and resources to developing functions for the field level from the very start. Our experience with small businesses has been beneficial. We have always advocated building local marketing to increase sales and believed this strategy was the most effective.
We are continually progressing, and now we're working on developing an exciting product stack for corporate offices. We're about to introduce dashboards for data tracking, advanced asset management that will enable the distribution of content across any network, be it a franchise of representatives. The proposed solution has a more tailored system of permissions for the different roles the field level consists of. Our reputation management tool makes it possible to check ratings and oversee reviews per location to minimize the risk of damaging brand experiences.
Daso: What's your greatest advantage of your having a team distributed across multiple countries?
Pecherskyi: We don't just accept diversity — we celebrate and value the opportunity to stay connected globally and work as a team from different parts of the world. In addition to the obvious cultural enrichment and mindset expansion of our team members, we generate diverse experiences, thoughts, and ideas. We're lucky to have this versatility, both in expertise and culture.
Any manager will agree that a multicultural team is always the most resilient, as multinational colleagues' experience contributes significantly to risk assessment and effective strategic planning. Our growth opportunities are not limited — and this applies to both the personal development of team members and international team expansion.
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fcf1dd0eba588143a409060834566038 | https://www.forbes.com/sites/frederickdaso/2021/02/09/aviron-delivers-a-phenomenal-intense-rowing-workout-at-home/ | Aviron Delivers A Phenomenal, Intense Rowing Workout At Home | Aviron Delivers A Phenomenal, Intense Rowing Workout At Home
With gyms being closed or operating with limited capacity amid the COVID-19 pandemic, getting in your workout has never been more challenging. Home fitness equipment and classes provide exercise from the comfort of your home, but lack intensity or competition. Andy Hoang saw an opportunity to provide high-intensity internval training-styled (HIIT) workouts and competitive exercise games through Aviron. Aviron is an interactive rowing machine designed to provide you with powerful, captivating workouts from the comfort of your home. The startup is based in Toronto, Ontario, Canada.
Aviron founder and CEO Andy Hoang. Andy Hoang
Frederick Daso: One could easily argue that the pandemic has been a massive driver in fitness hobbyists opting for in-home workout machines versus going to the gym. However, once the pandemic is over, do you think this will still be the case?
Andy Hoang: Yes, I think that even when the pandemic is over, people will continue to upgrade their home gyms. Pre-Covid Peloton was growing at 300 - 400% year over year. The growth of in-home equipment purchase, although accelerated by Covid, is not solely driven by it.
Some studies indicate that nine in 10 Americans plan to continue at-home workouts even once gyms fully reopen. I think we will see a new normal vs. a shift back to how things used to be, meaning our lives and our old gym routines will never be the same.
Daso: For those searching for high-intensity, competitive workouts, are there any workout machines that offer this via software? If not, why hasn’t the broader market addressed this pain point yet?
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Hoang: Some options on the market achieve competitive workouts and sometimes only via software. High intensity is where Aviron is a differentiator when it comes to in-home fitness equipment. A resistance component must be present to achieve high-intensity interval training workouts, i.e., HIIT in the home. Aviron utilizes hardware programmed to work along with software to perform the difficulty and intensity that HIIT requires.
A vital feature of the Aviron rower is the highest resistance settings that allow users to pull up to 100+ lbs. Each stroke is three times the resistance of any comparable rowing machine. The high resistance provides for short and intense workouts, varying intervals, strength development, and explosive movements, fundamental in high-intensity training. It is further elevated with the content built around these principles. Thus, it is difficult, if not impossible, to achieve this experience with software alone.
Female rower using an Aviron machine. Andy Hoang
Daso: What are the underlying trends driving the growth of the connected fitness equipment industry?
Hoang: Like with anything, people are always looking for time and are conscious of price. People also get bored of the “same old” routine. The underlying trend is people are always looking for more “good.”
Traveling to the gym or a class takes time - even a relatively short 15-minute commute can add up to 40+ minutes if it takes a couple of minutes to find parking. Making sure to think ahead and book a slot before the class fills up is more time (and more brain space). Ultimately people value their time.
Gyms and studios start to get expensive over time, especially for families. On the other hand, the cost of one Aviron rowing machine and membership is very cost-effective.
Lastly, people start to get bored and crave variety. Connected fitness like Aviron has an ever-growing catalog of content options that appeal to different workout types and moods. Play a fully animated video game one day, do a high-intensity strength workout the next and take it easy with a leisurely row on a lake in Thailand for your “off day.”
Daso: Diving deeper, how did you discover an unaddressed market of individuals looking for more competitive workouts but couldn’t find them at the gym or other public fitness settings?
Hoang: I couldn’t find a solution that filled my needs, so I assumed others like me. Like many people, I work long hours, and I need something convenient for me - my go to was always late night gym sessions, but after a while, you realize you’re spending more time on your phone than working out. I’m competitive by nature, so in an ideal world, CrossFit or MMA are great - super engaging, competitive with the added benefit of a great community. But the time, money and mental commitment are pretty significant.
Peloton checked many boxes except long-form aerobic, and instructor-led classes didn’t resonate with me. I’m more interested in a short, exhausting race against someone.
Once you see something in yourself, you start to talk to other people, and I’m lucky I found a few people who agreed, understood and became supporters of what I set out to build.
Male rower using an Aviron machine. Andy Hoang
Daso: What drove the Aviron’s design to be minimal, compact, yet attractive enough to pull you towards a workout every day? How did you capture the aesthetics of your target audience into the product design?
Hoang: The first thing we focused on was functionality. Rowing machines have been around for a long time, but they haven’t changed. They are loud, challenging to use, and even ugly. We started with these factors, because as a non-rower myself, I knew these were some of the reasons I avoided the rower at the gym.
We used a nylon belt instead of a chain, which made it quieter. A fan and flywheel combination for resistance made the rowing motion feel more realistic and a better imitation of the on-the-water feel. The dual resistance technology also allows for heavy resistance, which is used in high-intensity training. At eight feet, like most rowing machines, Aviron is long. So it needed to be able to fold in half to save space.
The aesthetic design was next. We didn’t like how most connected fitness equipment had wires dangling behind the screen as if the screen and equipment were designed separately and “put together.” Aviron has a clean look, there are no wires, and there is only one power cord exiting the frame. To ensure a durable yet comfortable product, we constructed Aviron with gym durability and home comfort in mind. Steel and aluminum are used throughout the structure, which gives Aviron an industrial yet modern look. The screen is encased in a custom-molded plastic again to ensure clean lines and durability.
Ultimately, it’s the experience that pulls people into a workout every day. Users navigate a 22” touchscreen to browse hundreds of workout options to suit their fitness level, mood and style, like rowing away from Zombies in a fully animated end-of-the-world inspired game or racing against Olympic athletes - all while connecting to others in the Aviron community.
Daso: How did you design the sales process and go-to-market strategy to reach your target audience best and ultimate end user?
Hoang: In July, we pivoted away from selling to mainly gyms, hotels, universities and other businesses to selling directly to consumers via eCommerce. It has been a journey to figuring out the right go-to-market strategy, but it does feel like things are starting to click. There was a lot of trial and error, trying things that didn’t work and a couple of costly mistakes, but ultimately I would attribute our success to a couple of things. First, building the team. I wanted to ensure that everyone was committed to Aviron and its success, more so than the direct skills or know how. People who share the vision and can learn quickly what works and what doesn’t. We are never married to ideas, only to success and moving as soon as possible. Next, we needed a constant learning mentality. We are always reading, sharing, and discussing blogs, articles and courses.
We got lucky with a few good calls to work with some great external resources - both advisors and experts - to ensure our strategy and execution were on point.
Daso: What were the fundamental tenets you stuck by when building your team to execute in a notoriously capital intensive space?
Hoang: My parents are refugees from the Vietnam War who came to this country with nothing. Somehow my father managed to build that nothing into a successful business with over 150 employees. He taught me a principle I use almost every single day: If you need to spend $1M, then finish it, but if you can save even $1, save it. Building a hardware business is expensive, so being smart with how you spend your money is critical. Mistakes are costly; you can’t just write a new code to fix a bug. You may need to change the hardware design, which can take months and hundreds of thousands (if not millions) to improve.
It’s essential that my team understands this and is comfortable sharing these principles and executing them in mind. Ownership and accountability are qualities that I look out for because they will treat the role (and, as a result, the company) as their own and ultimately make wise decisions.
Again, because hardware can be slow (compared to software), it’s vital that my team moves and works quickly. On the flip side of that coin, my goal is that the same team stays with Aviron past the three-year mark. A culture of family and stability exists at my father’s company that I think has contributed to a large portion of the workforce staying with the company 10+ years. And in many cases, 20+. My goal is to achieve something similar.
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d05835bacea66f01229ad582abe24f54 | https://www.forbes.com/sites/frederickdaso/2021/03/04/after-growing-6000-since-their-last-fundraising-round-doppler-raises-another-65-million-to-accelerate-building-the-first-universal-secrets-manager-for-developers/ | After Growing 6,000% Since Their Last Fundraising Round, Doppler Raises Another $6.5 Million To Accelerate Building The First Universal Secrets Manager For Developers | After Growing 6,000% Since Their Last Fundraising Round, Doppler Raises Another $6.5 Million To Accelerate Building The First Universal Secrets Manager For Developers
Modern software development continues to increase in pace. Developers optimize for speed, but more of them are not willing to trade off security as a result. The need to share confidential information and manage access between different parts of a project while iterating fast is paramount. Brian Vallelunga faced this problem first hand as a software engineer himself and created Doppler as a solution. Doppler is the first Universal Secrets Manager for developers to seamlessly manage and secure their app secrets while rapidly writing and deploying code. Since first closing their seed round, the startup has grown over 6,000% and has recently raised an additional $6.5M in a fundraising round led by Google Ventures, with participation from Sequoia Capital, Y Combinator, Addition, BoxGroup, Peak State, Lachy Groom, Chapter One, and notable angel investors such as Todd Goldberg and Rahul Vohra (cofounders of Superhuman).
Doppler team from left to right: Ruud Visser (founding engineer), Brian Vallelunga (Doppler CEO) and ... [+] Thomas Piccirello (founding engineer). Visser and Piccirello worked at Instagram and BlackRock, respectively. Anthony Thornton
"Modern secrets management is a rapidly growing market, and Doppler is the first product built to serve it that's truly developer-first," said Brian Bendett, partner at GV. "Doppler provides an intelligent hub for all the secrets in an organization, allowing developers to focus on the agility and functionality of modern development without being weighed down by secrets management."
Author's Note: The following interview was conducted over a live call and was transcribed into text.
Frederick Daso: What drives developers to have to make a trade-off between development speed and application security?
Brian Vallelunga: If you look back, say five to eight years ago, there were multiple separate teams, with security being its own. Developers, when building stuff, would pull in security for approval and spec review on things. The burden of, or maybe the responsibility of, securing applications is becoming more focused on the developer. Just like dev-ops is, for example, which is why clouds like Netlify exist. A lot of these topics, including security, are converging onto the developer space. What that means is developers have to make more and more trade-offs continuously. Frequently, their chief concern is producing the product first at a relatively high speed.
Thus, security becomes an afterthought. That's why we're seeing this trend of developers wanting not to balance thinking about security, moving fast, and building products with high quality.
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Daso: Building off of that, what specific developer behaviors among SMBs did you notice from your customers that necessarily necessitated Doppler Share's development?
Vallelunga: You would think it'd be something like, customers are becoming more 'enterprisey' or something like that, but it was the opposite. Developers would say, 'Hey, we love using Doppler, and we store all of our secrets with Doppler, but there are a set of secrets, like a Wi-Fi passcode or a lockbox, or maybe a key to your office.' Where should that live in Doppler? It shouldn't live in Doppler because it's not an engineering secret for a software application. It's sharing sensitive information from human to human.
A good example of this would be a scenario of a founder raising for a company. At some point, he's going to have to send out his wire information, such as the ACH details. You wouldn't expect a law firm involved or the investors involved to have Doppler accounts.
There is this need to share sensitive information across channels, like email, Slack, and so on, but those secrets didn't belong in Doppler's secrets manager. The idea is that there is an easy way to share very sensitive things like bank account information or a lockbox pin code, or a Wi-Fi passcode, securely without it living directly in the Doppler secrets manager.
Daso: One can assume that enterprise customers, unlike SMBs, have more stringent security requirements for their projects, which takes time and labor to address adequately. How did you reduce the mental overhead to allow enterprises to immediately derive value from Doppler's newer security features like Hybrid On-Prem?
Vallelunga: We're focused on our roadmap towards ramping our support enterprise needs. The big thing that we focus on lifting the mental overhead, making the installation as simple as possible. Unlike most startups have like in the SMB space where they're, they create an account, they install quickly, and they're up and operational within like 10 minutes or 15 minutes on Doppler. Enterprise companies have much higher security constraints. They typically want to own their data. They want to own the hosting of that. They want to be able to cut the cord at any time. They'll have a whole bunch of security checklists, and they want the data encrypted in this way, encryption keys rotated on this frequency, and so on.
One of the big things that we're building is Hybrid On-Prem, which you touched on initially in your question. It allows someone to double or bear the burden of hosting it and making sure it's available for that company, but the company gets to own the data. The company can cut the cord at any time. They can choose all the encryption, details and configuration. They can benefit from all of the controls that they want. We set the base features, and they can get started very quickly on Doppler. If you look at the time to start or go live in an enterprise deal, usually it's months; maybe a couple of weeks of will be the integration/installation period. With Doppler Hybrid On-Prem, they can go live within thirty minutes.
We're doing other things that we're building that will come out very soon, like user groups and seeking that with your identity providers. Let's say you have a couple of hundred engineers or even a thousand. With three button clicks, you can import all those engineers onto Doppler with the right permissions and access to the right projects. If you ever need to change something, instead of changing each user one by one, which you get hundred or thousands, you can make one change, and they'll propagate out to the entire user groups that they're part of. These are just some of the features that we're building. The goal is to reduce the overhead and the number of actions that enterprises have to take.
Daso: There must be other important developer needs currently going unaddressed in the universal secret management space. If so, how does Doppler plan to tackle these challenges for future enterprise customers?
Vallelunga: There are many, so I'll start with the three that we hear all the time. The first one is secrets rotation. Let's say you want to configure access to a database. It's a good security philosophy to change the key very often. Imagine you have a key to a door. If you have just one key that never changes, if someone gets access to that key by copying it for some reason, they have access to that door. What if you change the lock every 30 days every day, then even if someone could steal your key, that key will only work for one day. That's the same thing that people want; what secrets they want to rotate their key. In this case, it's a database URL or an API key on some frequency.
They want that completely managed by Doppler. That's one of the big things we're going to be building. Another one, in a similar vein, is called dynamic secrets. The idea is, what if I want to generate a key only for when I need to access that door? Instead of giving you a key and you hold onto this and, for like months or years, or maybe it rotating every 30 days instead, we will generate the key just when you're in front of that door. This is another big one we're building. The last one is called identity authentication. Imagine you have a server or an application talking to Doppler and saying, 'Hey, give me my secrets because I have this API key is bad because if the key is leaked, the secrets can be as well.'
There's a thing in cloud infrastructure called identity. It means that every server you're running has an identity within AWS, Google Cloud or Azure. You can map those identities back to Doppler. Instead of having this key that opens the door, you have an identity that opens the door. What that allows for is nothing for there to be breached or stolen. So no one can take your API key if the way to open the door is just not based on an API; it's based on identity. It's a fingerprint versus a key. I'm the only one with the fingerprint. Thus, I will be the only one who ever has it unless someone could like do something nefarious to my thumb. Within these constraints, my fingerprint is my own.
That's identity versus a key. A key is much easier to steal than a cloud identity.
Daso: With all these new features that you're currently building and the ones that you will build in the future to address these unmet needs, you’re generating a lot of growth for Doppler. What recent actions have you taken to refine your hiring process, to get the right type of people onto your team who can meet the needs of hypergrowth startups such as yours?
Vallelunga: There are three key things that we did. The first was hiring an internal recruiter. I think that this is super important because I think hiring is a very time-intensive job. You can very quickly get burnt out of being focused on that. Imagine if you're sending a thousand emails a day to perspective candidates to work on, to work at your company, hiring a recruiter that has refined their internal processes and maybe has sourcing behind them, helps a lot.
They can get to a higher volume of people and also make sure that you have a very pleasant process the entire way through. The second thing we've done is we kind of overhauled our hiring process based on risk. You're first getting to meet a candidate, and you're doing your resume screen. You should be very sensitive to a bad hire while you're still in information collection mode.
At the very end of the process, after you've just done an onsite and you have to make a decision, the question is should we hire this person? You should either be what we call a hell yes, or hell no. There is no middle ground. You are either extremely excited to hire this person, or you're not at all. As a candidate moves through this process, you need to be stricter about how much risk you're willing to bear about them being a bad hire or not. That was one of the big things we did. The other was we ensured that we're always selling to the candidates across the entire part of the interview process. The thinking behind that is that we want to create our experience would be great for our candidates, even if they don't get a job at Doppler. The hope is they still really want to work with us either as a customer or want to work for us someday, but they came out with a very positive experience.
If you look at our interview process, we don't do brain teasers. You will never find a brain teaser with Doppler. We only do one technical screen. Think about this as a multi-day interview process. You're you do multiple phone screens, each one for like, three, two phone screens. So that's two days right there. We have an onsite in that there was only one technical screen, and the rest of them, they're just conversations. In those conversations, we probe into areas and capture signals, like, tell me about experience building XYZ, or tell us about the common pain points you experienced. Through that, we get information about how senior they are and how much they were involved in projects we worked on, but we're not giving them a brain teaser to get there. We're staying in conversation as humans. It also gives them a chance to see who we are as people.
I would say the bulk of the interview, though, the interviews that we do, roughly 80%, are just conversations. That gives us a chance to sell Doppler as a company through various forms.
Daso: The last question I have for you is, from our last conversation, you mentioned that documentation is a key to scaling, which few would think about when growing a startup at speed? How has documentation made the difference in Doppler's growth?
Vallelunga: I would say there are like two types of developers. We primarily sell to developers or offer services to developers. There is the type that will try it out very quickly and decide within like 15 minutes if they will use this product. Another class of developers wants to read everything possible of the product. If they're going to buy a car, they're the people who read the owner's manual before buying the car. If they don't want the owner's manual, then they won't purchase the car.
Those types of developers, if they're going to look at your documentation, because documentation is one of the things that are the most overlooked about a product, right? If you're like, if you're an engineer, you want to build things and ship things, you don't want to write a ton of documentation. So documentation is typically overlooked. The fact that developers see that we have high-quality documentation shows that we care about everything else about the product. An analogy would be because Apple creates such a good user experience on the Mac, you trust them to get everything else, right? Such as the security and the hardware. Developers see high-quality documentation. Because of that, they trust that we pay attention to detail on every other part of our product, which means that they can trust us and they'll have a pleasant experience throughout.
That's accelerated our growth rate because now we're capturing both the window shoppers and the people who read the manual first.
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fb2c71f195e70d6f1e31531395b0afc1 | https://www.forbes.com/sites/frederickdaso/2021/03/04/hightouch-ushers-in-the-era-of-operational-analytics/ | Hightouch Ushers In The Era Of Operational Analytics | Hightouch Ushers In The Era Of Operational Analytics
From small startups to big tech companies, each corporation now builds its culture and strategy around data. The rise of the data scientist’s role within a technology firm reflects the necessity to have data-driven decision-making as the standard. However, it’s not enough for a company’s data scientists to store and analyze the information stored in a typical data warehouse. That data needs to be delivered and ingested into sales, marketing, and support teams’ tools for firms to adapt to evolving customer behavior in real-time.
Unfortunately, building the key integrations with these tools requires significant engineering labor, which takes away from higher-priority, revenue-generating tasks. Kashish Gupta, Josh Curl and Tejas Manohar have built Hightouch.io to address this unmet need. Hightouch.io allows users to effortlessly sync data from their data warehouse to their customer-facing teams’ tools. The startup is based in San Francisco and has raised venture funding (which includes a large undisclosed round) from Calvin French-Owen (cofounder of Segment), Y Combinator, Afore Capital, Mathilde Colin (Front CEO), Olivier Pomer (Datadog CEO), Fareed Mosavat, Slack Fund, Leo Polovets, Brianne Kimmel, Allison Pickens, Todd/Rahul Vohra (cofounders of Superhuman), Ryan Carlson (CMO of Okta), Matt Sornson (Clearbit CEO), Guillermo Rauch (Vercel CEO), Frederic Kerrest (cofounder and COO of Okta) and others.
Calvin French-Owen, cofounder of Segment (acquired by Twilio for $3.2 billion) and an angel investor in Hightouch, says, “I invested in Hightouch because I believe in the founders and the opportunity. They are former Segment folks and have a great perspective on the data space as a whole. I think we’re going to see more and more tools built around the data warehouse ecosystem over the next few years. Hightouch fills the key gap of taking action on the data in the warehouse.”
Hightouch cofounders from left to right: Kashish Gupta, Josh Curl and Tejas Manohar. Kashish Gupta
Business-oriented groups within a company, such as sales and marketing, rely on customer data to rapidly adapt their selling and outreach strategies for current and future customers. However, these teams lack the engineering resources to sync data from the company’s data warehouse to their internal tools. Usually, they must request an engineer’s help to build a pipeline from the database to the software-as-a-service (SaaS) tool, which can take anywhere from weeks to months. The engineer’s time spent on this task slows down developing other value-added features to a company’s existing products or services. More importantly, these hacked-together-solutions from the engineer are not robust, flexible and secure enough to account for future functionality that a business-oriented team may need. The absence of a service enabling sales and marketing organizations to connect their internal tools to the data warehouses on their own implies the presence of a large market.
Gupta explains, “Traditionally, work done by the BI or Analytics teams ends up in reports and dashboards like Looker or Tableau. Operational Analytics gives companies the ability to use this analysis to power operational workflows and inform business decisions during the fact, rather than analyze the results after the fact. The idea is to take action on data.”
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While it’s difficult to estimate the operational analytics market’s size directly, one can infer its size and growth from other relevant public companies and private startups operating in adjacent verticals. Cloud-based data warehouses and customer data platforms (CDPs) perform critical functions in a tech company’s modern data stack. Snowflake, the popular cloud-based data warehouse company, had the largest initial public offering (IPO) for a software company in history and now sports a $73 billion market cap (at the time of writing). More companies are relying on the SQL-based “data warehouse-as-a-service” and its competitors to store and analyze their customer data due to the provider’s higher performance and low costs. Segment, the leading CDP, was recently acquired by Twilio for $3.2 billion. While Segment’s customer usage increases exponentially (over 1 billion Segment API calls were made in November 2020 alone) to aggregate and control customer data, there is a growing need for the Twilio subsidiary’s customers to direct that data internally to the right business tools. Using Segment’s and Snowflake’s market value as lower and upper bounds, respectively, one can confidently say that the emerging operational analytics market is a multi-billion dollar industry in need of the best solutions.
Hightouch's visual diagram showing how the startup's tool uses SQL to sync information from the data ... [+] warehouse to SaaS tools. Hightouch
Hightouch’s solution allows users to use SQL queries to sync their customer data in their data warehouse to their SaaS sales and marketing tools such as Hubspot, Salesforce, Marketo, Zendesk, Gainsight and others. Before diving deeper into how Hightouch works, the founders made three key assumptions as they built their service. First, Snowflake and other cloud data warehouses like Google BigQuery will be the gold standard for cloud-based data warehousing solutions, which generates the impetus for a tool to sync data between the data warehouse and one’s SaaS tools via SQL rather than APIs. Next, Snowflake’s novel separation of computing and storage makes data warehousing a faster, more accessible, and less expensive datastore option. Before Snowflake, customers of cloud service providers would have to pay for more computing to get more storage, as storage was linearly coupled with computing resources as they exist within the same physical server.
Curl says, “The separation of storage and compute model, made popular by Snowflake, allows data teams to perform complex queries and transformations faster and without having to think about hitting resource limits. As a result, the warehouse has become the de facto place to compute business metrics like LTV or health score.”
However, since Snowflake innovated in decoupling computing resources from data storage, now its customers can scale up their computing resources as needed while storing as much or as little data with the provider. The price for cloud storage has decreased by a factor of 100 over the past decade. Therefore, potential customers are not as concerned about the cost of moving all their information to a Snowflake data warehouse. More importantly, because Snowflake uses “virtual warehouses” or distributed compute clusters, customers can access computing resources orders of magnitude greater than traditional providers that still couple their computing and storage together. Furthermore, Snowflake’s ability to offer this service relies on shared computing between all customers - or read another away - computing resources are elastic rather than inelastic. As of September 2020, Snowflake has 146 customers out of the Fortune 500, reflecting the cloud providers increasing popularity among reputable firms for its services; thus, it would make sense to build an operational analytics tool on top of these data warehouses for data and business teams.
Lastly, the most critical assumption is that companies desire complete ownership of their data. Currently, SaaS tools aim to be the source of truth and facilitating key workflows for their respective business teams. For example, if a company relies on Salesforce as its source of truth, it would query the SaaS tool’s data, assuming the software is the central authority on the information. The problem with relying on Salesforce and other SaaS tools as sources of truth is that they do not collect or contain all of the customer data that a data warehouse does. Each SaaS tool is essentially an individual silo of information that only includes a part of the whole customer data picture. However, given that companies are already capturing and storing all the relevant, large, structured volumes of customer data in their databases, the database’s potential for serving as the central source of truth exists. Using the database as a system of record gives companies greater flexibility in switching between SaaS tools as their needs change, and provides them with a single, centralized source of truth, and allows them to own their data fully. These three critical assumptions are the foundation of Hightouch’s design and functionality within modern data stacks.
Manohar adds, “Over the last decade, the data warehouse has become the the single source of truth for most businesses. Our vision at Hightouch is to activate the data warehouse as the system of record for all SaaS tools, and to make it an operational center rather than an analytics center.”
Extract, Transfer, and Load (ETL) processes, executed via Fivetran or Airbyte, usually take information from the source, manipulate it, and load the data into a data warehouse such as Google BigQuery, Amazon Redshift, or Snowflake. However, sales and marketing teams want to take that information out of the data warehouse and into a SaaS tool. The process of doing so is referred to as “reverse ETL.” Hightouch exists as the bridge between the data warehouse and a company’s internal SaaS tools by facilitating the “reverse ETL” process. Hightouch syncs data at the user’s specified frequency. Their tool only syncs rows of data that have changed since the latest call, thus avoiding data transfer limits imposed by SaaS tools’ APIs.
A visual mapping of data warehouse columns to the Salesforce columns. Hightouch
Hightouch can be used by anyone with varying technical skill, from an engineer to a sales or marketing employee. For data teams, Hightouch is built on SQL to write as complex of a SQL query as they need directly via dbt and Airflow. For individuals in the sales, marketing, and support teams, they can map the columns in the data warehouse to the SaaS tool’s columns, and with the necessary SQL query, data will begin syncing without having written any code. Hightouch differentiates itself from the competition by powering the data team to be the central source of truth to service other teams throughout the company. Also, the cofounders claim that Hightouch’s offering provides a transparent, secure view of the company’s data syncs more robustly than in-house solutions, which are usually hastily written Python scripts to provide immediate functionality. The tool’s user interface abstracts away the need to write code to alter data integrations, which leaves anyone who can write a SQL query to make the changes they need.
Gupta states, “Hightouch empowers users who know SQL or understand data to get things done without waiting on engineering. The product helps data and analytics teams focus on modeling data and doing analysis, while helping business team pull data into their tool of choice to power workflows and campaigns.”
The Hightouch cofounders view their startup as providing a “purpose-built tool for data teams,” and stress that their software allows data teams to better communicate with business groups. Thematically, their design philosophy aligns with the way that they’ve built the tool. Hightouch enables data teams to speak a similar language as their business group counterparts, allowing both to combine in forming a complete picture of the company in real-time, instead of building separate tools that allow each siloed group to function better but not improve communication and coordination between one another. The founders’ approach in building Hightouch reflects their overall vision of “turning Snowflake into your CDP,” or having your data warehouse serve as the central hub of truth that feeds synced data to all of your SaaS tool spokes. Their simple yet technically-challenging goal requires a well-rounded team to manifest it into reality.
Hightouch graphic depicting a SQL query's results being sent to various SaaS tools. Hightouch
Gupta’s, Curl’s, and Manohar’s diverse educational and professional backgrounds cover the various technical skills and business acumen needed to succeed at scale in this new space. Gupta is a graduate of the University of Pennsylvania’s Wharton School, obtaining a Bachelor’s of Science in Economics, Management and Computer Science and a Master’s of Science in Robotics and Machine Learning. He has experience as a former product manager at LYNK and as a venture capital investor at Bessemer Venture Partners. Curl, a graduate of Michigan State University with a Bachelor’s in Computer Science, was a Kleiner Perkins Caufield Byers Engineering Fellow who worked at Rancher Labs and Segment as a software engineer, and founded Deviceplane (backed by Y Combinator, Accel, and Coatue). Manohar was also a KPCB Engineering Fellow who has worked at various software companies, the most recent being Segment. At Segment, he started as a software engineer helping build the Segment Sources product and ended as an engineering manager of the Segment Platform team. Together, these three cofounders unite to pioneer a new era of operational analytics through Hightouch.
Gupta shares more about his outlook on Hightouch’s prospects: "We're lucky to be supported by a large group of angels and institutional investors who we work with closely. We recently raised a large undisclosed amount of funding, and grew the team from 5 to 13. We're still hiring across all parts of the business including engineering, design, and growth!"
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d7c9211a969a5433390a9d074e863e0d | https://www.forbes.com/sites/frederickdaso/2021/04/01/magic-makes-data-breaches-a-thing-of-the-past/?sh=297f50027271 | Magic Makes Data Breaches A Thing Of The Past | Magic Makes Data Breaches A Thing Of The Past
Individuals and corporations are constant targets of hackers. Despite both entities spending billions of dollars a year protecting their data with cybersecurity solutions, data breaches occur on a routine basis. Sean Li recognized that the intrinsic flaws within using passwords can only be eliminated by getting rid of passwords all together, thus starting Magic. Magic provides developers with a “plug-and-play” software development kit (SDK) to simply implement passwordless authentication methods. The startup is based in San Francisco, California.
Magic cofounder and CEO Sean Li. Sean Li
Frederick Daso: Password-based security has been the norm for quite some time now. What are the intrinsic flaws to authenticate oneself using a password?
Sean Li: Passwords are a huge vector for security breaches precisely because they place the burden of choosing unique and secure secrets on the user. Given the proliferation of apps and services over the years, users can wrestle with upwards of 100 passwords daily. As a result, a whopping 59% of people re-use their passwords across services, which means a leak anywhere quickly becomes a liability for the whole web.
Even if a website is equipped with a password strength tool, the results can be inconsistent and inaccurate, often leading users to a false sense of security. People turn to password managers to track their secrets and avoid needing to memorize each one. But, the reality is, a password manager is just a notepad where you use a password to guard your other passwords.
Beyond risk, passwords introduce unnecessary friction during user onboarding. Every failed attempt to log in is a step closer to a locked account. The stakes of bungling passwords are so high that users likely admit defeat before even getting to the third try. According to Gartner, the “reset password” option accounts for up to 50% of support tickets. Passwords cost time and money for businesses of all sizes. The average total cost of a data breach has skyrocketed to $3.86 million as of 2020.
Ultimately, user trust is on the line.
The more times users enter passwords, the more exposure for their secrets to be compromised. Large-scale hacks have deep implications for companies worldwide; 48% of customers never come back after a data breach. Because of prevalent password re-use, hackers get more mileage out of a single stolen secret—accessing not one but multiple apps. Users also assume companies store their secrets securely and responsibly, while behind the scenes, many companies roll their authentication with no prior knowledge on security.
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The risks of passwords compound now that many centralized identity providers authenticate for users. Digital identities are therefore tied to and controlled by a handful of large companies, making lock-in for businesses and end-users even more problematic.
Daso: Who are the entities at risk as passwords are created, used, and shared? Are these risks shared equally, that is, who has more to lose given how authentication is mediated through passwords?
Li: Password-related vulnerabilities add up to excessive risk for developers, businesses, and end-users — all in varying degrees. One way to think about this is a domino effect.
Identity has been predominantly gated by centralized identity providers, tech oligopolies such as Apple and Facebook. Developers are highly dependent on these providers for user access, which directly impacts their businesses’ livelihoods. We see this dependency in action when a platform abuses its lock-in status, subjecting developers to new policies or when user privacy is exploited for profit.
To hedge against this risk, many developers will choose to roll their own authentication. Since rolling authentication and security from scratch is extremely challenging, leaked user data and credentials effectively become collateral damage. And with more and more information being stored digitally, what cybercriminals can do with people’s information keeps getting worse (fueling fraud, monetization). Attacks on companies — along with the disclosure and recovery — can erode digital trust in the long run, beyond just a business’ bottom line.
Daso: From our prior conversations, you suggest that the era of password-based security is over. Why is that the case? What new trends or user behavior you’ve observed gives credence to your point?
Li: Over 90% of records from all major recorded data breaches happened in the last eight years alone, and the size of breaches is getting larger as more people are going online. This is becoming especially concerning as digital transformation has also accelerated in light of COVID-19.
To get a feel for the severity, head over to HaveIBeenPwned and type in your email address. Sensitive data has been stolen in many high-profile data breaches impacting companies like Dropbox, Adobe, Kickstarter, LinkedIn, and many, many more. If there’s a database with passwords in it, it’s only a matter of time before it gets stolen.
Developers are familiar with hashing passwords to protect their users. Still, many are not aware that once a database of passwords has been stolen, hackers can leverage incredible amounts of distributed computing power at those databases. They’ll use parallel GPUs or giant botnets with hundreds of thousands of nodes to try hundreds of billions of password combinations per second to brute-force passwords in plaintext.
If an attacker can discover a password that hashes to the same hash as the one stored in your database, they’ll try it on other important online services that you use, like bank accounts. Even a salted, hashed password database will leak another valid password every minute or so in many cases. That’s about half a million leaked passwords per year — and that rate is doubling every few years.
Daso: In the emerging post-password security era, what will drive the mass adoption of passwordless solutions among enterprises?
Li: A higher standard for security, user experience, and developers enthusiastic about passwordless auth will all drive adoption above and beyond critical mass.
Enterprises recognize passwords are at the heart of the data breach problem, and movement away from password-based security is already happening. It is gaining more attention and momentum with global businesses investing further in cybersecurity programs. As companies continue their rapid digital transformation, reducing cyber risk exposure will remain a top priority for strategic leaders, CIOs, and CSOs alike. A modern authentication system is not only a necessity from a security perspective; it is also a key digital enabler.
Relying on passwords as the primary means of authentication no longer provides the user experience that consumers demand. Fewer points of friction will improve user conversion rate, reduce shopping cart abandonment and reduce user support overhead. Forward-looking companies are going passwordless, contributing to solving password-related data breaches at their roots. We are optimistic broader adoption is on the horizon.
Daso: What was your core philosophy behind Magic’s design to provide your customers with a variety of passwordless authentication methods?
Li: The core product design philosophy is to provide the simplest possible solution for developers to implement a wide range of passwordless auth methods in their applications and achieve “set it and forget it” status after integrating Magic.
Given the status quo of user authentication is still username/email and passwords. We understand that it’s a big commitment for companies to adopt a new model that they are not used to. Beyond effectively communicating the benefits of going passwordless for companies and users, the least we can do is to make the process of implementing passwordless auth completely painless, with a few lines of code and zero configurations needed.
On top of email-based magic links, we also provide other user auth methods, such as social login, WebAuthn, with SMS and multi-factor auth coming soon. It’s important to provide more optionality for developers to implement. It will let them decide which auth methods will be the most familiar to their end-users, therefore increasing the conversion of user onboarding flows.
Daso: Even though Magic removes the necessity of a password for its passwordless authentication methods, how does your startup remove a customer’s need for security and infrastructure maintenance surrounding passwordless authentication?
Li: Magic takes care of authentication overhead, freeing up time for developers to focus on building great experiences for their users. Customers no longer have to worry about rolling their own auth and all the effort and complexity related to future-proof security and privacy.
Our team takes this responsibility very seriously and goes to great lengths to ensure comprehensive protection, effectiveness, and reliability for customers. The infrastructure has been thoroughly audited by NCC Group and A-LIGN and is SOC 2 Type 1 compliant (SOC 2 Type 2, GDPR, HIPAA, and ISO 27001 in progress).
Rigorous measures, including regular red-team testing, ensure everything from ongoing security and privacy compliance to scalability and reliability, email deliverability, encryption and key management, vulnerability management, information privacy, security governance, identity and access management, and more are prioritized and actively maintained.
With just a few lines of code, customers can confidently implement passwordless auth and get the best user experience with long-term security and scalability infrastructure right out of the box.
Daso: There is an implied high-level of trust to switch from password-based to passwordless authentication between Magic and its customers. What specific actions have you taken to ensure the startup’s customers can rest assured that they will be safer than before they integrate Magic’s authentications into their day-to-day operations?
Li: To start, it’s important to communicate to the public and our customers that the traditional password model is inherently flawed. Storing passwords will always expose companies to risks of credential leaks and leave an opening for hackers to brute-force password combinations and take over user accounts. The only solution for companies to prevent this is to not store passwords at all and offer only passwordless login options to end-users. As more reports of major breaches seep into the mainstream consciousness, companies will also become more vigilant and take proactive measures towards reducing risk and liability.
To further communicate trust, Magic is very proactive on obtaining security and privacy compliances. So far, we’ve obtained the SOC 2 Type 1 compliance, with SOC 2 Type 2, GDPR, HIPAA, and ISO 27001 currently in progress. These combined with continuous red-team penetration testing efforts will help give our customers the peace of mind they need regarding Magic’s stance of security and privacy.
Lastly, having marquee customers from various stages and categories also helps build trust. Whether they are an enterprise, a startup, or a blockchain app, Magic can provide reliable service and take care of our customers’ needs.
Daso: We’ve lived with passwords and their shortcomings since the dawn of the Internet age. How do you convince potential Magic employees and the lay public that how we identify and access resources on the Internet is based in a passwordless future?
Li: Fortunately, the convincing doesn’t need to come from a vacuum. A few trailblazing companies have shown us the power of passwordless for many years now. Recognizable brands like Slack and Medium were some of the first companies that pioneered the implementation of magic links for user onboarding and were praised for the ease of use. The traction speaks volumes. As more companies start adopting passwordless authentication, the public will get more accustomed to this new way of signing up or logging into applications and accept it as the status quo — leading to more developer adoption for Magic. This creates a virtuous cycle that eventually renders passwords obsolete and brings about a more secure internet.
Despite how seamless passwordless login is for users, there are many challenges to implementing it in an app yourself. You’d have to wrestle with scalability and reliability, ensure your emails are delivered to end-users, optimize UX for best user conversion, obtain security and privacy compliance, and protect your users from constant cyber threats. All of these are massive responsibilities and highly resource-intensive. The beauty of Magic is that we abstract away all of the complexities and provide a simple, plug-and-play SDK that you can drop in your app and enable passwordless login for your users. Thus, giving you the peace of mind to just “set it and forget it”, so you can focus on what matters most to your business (instead of user authentication).
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6b6e63d3d0535c3ece54e1c0908f0f7c | https://www.forbes.com/sites/frederickhess/2020/04/07/spotty-transcripts-no-test-scores-how-should-colleges-select-students-next-year/?sh=608f24ae3270 | Why Pandemic Problems Should Get Colleges Like Harvard To Admit Students By Lottery Next Year | Why Pandemic Problems Should Get Colleges Like Harvard To Admit Students By Lottery Next Year
The coronavirus crisis has added momentum to the push for colleges to abandon the SAT and ACT (i.e. “go test optional” in the argot of the day). Scores of colleges have already made the switch, driven by concerns about accessibility, test preparation, and the rest. Meanwhile, disruptions caused by the pandemic mean that huge numbers of high school juniors will be applying to college next year with spotty transcripts from this spring—and next fall’s grades will need to be handled gingerly as well.
The University of California announced this week that students will not be required to submit SAT ... [+] and ACT scores for admissions next year. More than 35 schools have gone "test-optional" amid the coronavirus pandemic. Getty Images
This creates an unprecedented challenge for selective colleges. Admissions staffs will have to make decisions without their usual trove of test score and transcript data to guide them. Since most colleges are leery of putting too much weight on ninth-grade performance, a remarkable amount of weight will have to be placed on the grades from just three semesters of high school.
Other admissions factors colleges typically lean on will likely be unreliable. Admissions staff could look to letters of recommendation, but truncated spring semesters and potential disruptions this fall may hinder the ability of many students to develop relationships or get knowledgeable, compelling letters. A student’s participation in sports, extracurricular activities, and the community would normally be an important factor, but participation is impossible for many students amid “shelter-in-place” orders.
What’s left? Mostly essays, interviews, and connections. Even setting aside concerns about the impact that parental wealth and connections typically have on admissions, this puts immense weight on the admissions staff and the alumni who conduct interviews.
As things stand, the default setting will be to give admissions staff extraordinary discretion. That should give us pause. After all, these individuals can be prone to the same sorts of biases as anyone else. Unleashed from the discipline imposed by an applicant’s grades, test scores, and demonstrated accomplishment, college officials and admissions staff may be tempted to favor applicants with deep-pocketed parents, those who reflect their own personal or political biases, and those able to assemble a compelling file even when the world is in pieces (read: the privileged and connected).
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When it comes to campus admissions, skepticism is warranted. After all, colleges struggle to fairly evaluate applicants even in the best of times. Last spring, the FBI’s “Varsity Blues” operation showed that admissions offices, for nearly a decade, had failed to detect rampant corruption even when pursued via Mickey Mouse deceptions. Campus officials failed to perform minimal diligence as athletic coaches sold slots, while applicants fabricated athletic deeds and photoshopped their faces onto the bodies of actual athletes. You might think that the renowned interview process might’ve turned up discordant notes or raised questions. Nope. A single phone call would have exposed the machinations. Those calls were never made.
And this all happened at the same colleges where leaders seem unable to stop themselves from offering “legacy admissions” or selling seats to those donors who’ll pledge a new building or a big gift to the campus capital campaign. I’ll pick on USC here, but only because the legal sparring prompted by “Varsity Blues” revealed a bunch of admissions documents that other universities have been able to keep hidden. As I noted last fall, “The admissions file of one such applicant endorsed by the USC athletic department noted a ‘25,000 check and more later.’ Another listed a $3 million donation to the men’s golf team. Yet another mentioned, ‘father is surgeon.’ Email exchanges point to numerous instances where admissions officers’ qualms about the academic qualifications of ‘VIP’ applicants were dismissed by university officials on account of their parents’ wealth.”
This should all give us pause about admissions processes almost completely unmoored by concrete, independent measures of student performance. That’s a lot of power to shape futures and dictate opportunity, with precious few guardrails. And recent performance has not suggested that colleges are deserving of such trust.
In that spirit, let me suggest an alternative. It’s time for an experiment as unprecedented as the moment. Rather than trying to engage in the usual guesswork about the merit of candidates based on scanty records, colleges should throw open their doors and treat this as a remarkable opportunity to see whether the entire selection process actually works as intended.
Colleges should take a page out of the K-12 book and conduct next year’s admissions process as a lottery, of the sort routinely utilized by charter schools and magnet schools. Applicants should be required to have a high school diploma (or the equivalent)—and nothing else. If colleges do this, in a few years, we’ll be able to see how much of the value of that vaunted “selective” degree is due to what colleges actually do for students and how much is simply students borrowing a lot of money in order to be able to tell people that they got admitted by Ivy League U.
We’ll see if unlikely students actually benefit more from elite campuses than the usual suspects do. We’ll learn a great deal about how capable selective colleges really are at knowing who will benefit from their offerings. And we’ll see if loosening the relationship between where students go to school and how talented they’re presumed to be alters how students are treated on campus and where they ultimately wind up after graduation.
This isn’t as radical as it might sound. For one thing, most American colleges aren’t selective—so we’re only talking about a small (if highly visible) slice of higher education. For another, public charter schools and magnet schools—including some of the best K-12 schools in the nation—already use lottery admissions. And, keep in mind that we have zero evidence that “elite” students benefit the most from the offerings at selective campuses. Indeed, research raises the possibility that the students who end up going to school elsewhere may especially benefit from attending prestigious colleges.
College admissions are a complicated, fraught challenge in the best of times. And these are not the best of times. If colleges are going to struggle to judge students fairly, in any event, it just may be time to try another approach to admissions—and to make a virtue out of necessity.
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5c05f73037e7a8b61c22ea2f77f8853c | https://www.forbes.com/sites/frederickhess/2020/05/20/the-case-against-school-choice-is-unraveling/?emci=5ca83870-709b-ea11-86e9-00155d03b5dd&emdi=b406ab8c-719b-ea11-86e9-00155d03b5dd&ceid=4711929 | The Case Against School Choice Is Unraveling | The Case Against School Choice Is Unraveling
The most effective argument made by opponents of school choice has long been the simple assertion that we can’t trust choice to yield decent options for every child. And since every child has a right to be schooled, it’s important to protect traditional public school systems in order to assure an acceptable default education for every child.
There are many responses to this line of argument—including that the default option may be a lousy one for many kids. But it’s true that school choice can’t guarantee that every child will wind up in a decent school. And that’s allowed opponents to caricature what choice entails.
School choice critics have long argued that choice can't guarantee that every child will end up in a ... [+] decent school—and that the public school system must be protected to ensure an acceptable default education for every child. Getty
Well, one of the things about crises is that they can be clarifying. And in the great coronavirus school shutdown, it’s become clear that what this universal, public system actually guarantees is a lot less than we imagined.
Let me be clear: When the coronavirus hit this spring, no one was prepared. And no one expected schools to be, either. The acid test is how urgently public education leaders approach the task of getting schools up and running again. And the data from this spring’s remote learning experiment are not impressive. The Center for Reinventing Public Education has reported that one-third of districts still aren’t expecting schools to provide instruction—two months after the shutdown. An Education Week poll of teachers found that one-fourth of students went absent without a trace when schools closed. And, for what it’s worth, the evidence is pretty clear that remote learning is a poor substitute for in-person school.
We’ve seen schools opt to limit—or even forbid—instruction out of a fear of lawsuits. In a letter issued as schools closed in March, the Philadelphia School District ordered educators not to teach in order to “ensure equity.” In mid-March, Oregon’s Department of Education hit pause on building virtual learning systems; searching for an analogy, the department spokesman rationalized, “You cannot open a brick-and-mortar school in Oregon unless it is accessible to every student in their school district.”
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What districts are mostly providing right now are packets of materials, websites of resources, and some canned lessons. As AEI’s Nat Malkus reports, even now, fewer than half of schools have any real-time online instruction. And, even where it is happening, such interaction tends to be highly limited and somewhat sporadic.
And I’m concerned about a lack of commitment to ensuring that schools do a lot more. A couple weeks ago, along with a bipartisan group of seasoned district, state, and school leaders and federal officials, I helped author AEI’s “A Blueprint for Back to School.” We discussed the many complexities of planning for school this fall, but noted that educational leaders need to tackle that work with a fierce sense of resolve.
In too many places, that kind of planning is not yet underway. There’s an insistence that, even if schools in some places don’t physically reopen in September, kids will still be “in school.” There are frequent reminders that many staff may not be comfortable being in school this fall, and that parents may not be comfortable sending their children to school.
When push comes to shove, public school systems are defining “universal provision of schooling” as doing their best to provide online materials to as many students as possible. They’re asking overwhelmed parents to bear with them and homeschool as directed. Leaders are saying they’d like to reopen, but can’t make any promises about when—and insisting that they may only be able to open if they get big new infusions of cash.
Okay. But it cuts both ways. If the status quo represents a good-faith provision of a default public education, then the bar is a whole lot lower than choice critics usually suggest. States and communities could provide a bunch of online materials—along with a device for every child and better connectivity—for a small fraction of the $700 billion a year we currently spend on K-12 schooling. They could then use the bulk of that funding to empower parents to choose the option—local district school, charter school, private school, online provider, or what have you—that seems right for them.
It used to be that school choice critics could argue that this kind of tapestry was insufficiently universal or personal. Now, not so much.
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2bb0627cbf10d7c05e4a43fffb51741b | https://www.forbes.com/sites/frederickhess/2020/11/18/the-cost-of-educations-blue-tinted-glasses/?sh=6f233db863c2 | The Cost Of Education’s Blue-Tinted Glasses | The Cost Of Education’s Blue-Tinted Glasses
Reporters have been calling to discuss what’s ahead for education under the Biden administration and to do postmortems on Secretary of Education Betsy DeVos’s tenure. The conversations have been a stark reminder of just how far left American education really is. The questions have shared a similar theme: Is it a devastating critique of DeVos that she’s been sued so often by states’ attorneys general? How can one justify her efforts to set new guidelines governing Title IX enforcement? Will Biden be able to double spending on Pell Grants, triple spending on Title I, and forgive student debt?
The edu-sphere's misapprehension that Biden usher in a new era of radical change and transformative ... [+] lawmaking will result in bewilderment and disappointment. MediaNews Group via Getty Images
At least two things are notable here. The first is that DeVos is being judged by standards very different from those used to evaluate her Obama administration counterparts. In 2016, the postmortems treated pushback from Republican state officials as an inconsequential story of small-minded obstruction; now, lawsuits by blue states are an indictment of DeVos. In 2016, the Obama administration’s use of “Dear Colleague” letters to unilaterally rewrite federal policy was depicted as bold leadership; now, DeVos’s orderly, rule-bound moves to reassert established interpretations of legislation are treated as suspect.
The second, which helps explain that asymmetry, is how uniformly Biden’s win was cheered by people who are putatively interested in education rather than partisan politics. Biden’s win was greeted not with the measured curiosity of those whose first concern is education—an area where a reasonable observer can find bones to pick with either Trump or Biden—but with the unbridled enthusiasm of fanboys.
The Chronicle of Higher Education’s daily newsletter reported, “Major news outlets on Saturday morning pronounced Joseph R. Biden Jr. the president-elect of the United States. In sharp contrast to President Trump, who spent much of the past four years attacking higher education, Biden—whose wife, Jill, is a longtime community-college educator—has signaled his support for the sector. His extensive Plan for Education Beyond High School promises to ‘strengthen college as a reliable pathway to the middle class.’”
My inbox was filled with statements from purportedly nonpartisan outfits celebrating Biden’s victory. The Emerson Collective, bank-rolled by multibillionaire founder Laurene Powell Jobs, blasted out a statement from Jobs cheering Biden’s “remarkable breadth of support from across the nation,” asserting that “we now have the opportunity to work for the systemic solutions we know we need,” and allowing “we will let out the breath we have been holding in for so long.”
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The Nellie Mae Foundation intoned, “Democracy has spoken—voters have selected new leaders to move us forward to a better future.” The Foundation explained that, “The current administration has sought to institute ‘patriotic education’ that whitewashes and misleads our young people,” but promised, “We remain committed to standing up and behind our partners in the fight against white supremacy and anti-Blackness, especially in our education system.”
The Leadership Academy, a major New York City-based school leadership training program, wrote, “The election is over. In about 10 weeks, we will have a new President and Vice President— the first woman and woman of color in that role, a Black South Asian daughter of immigrants—who seem to be more aligned to The Leadership Academy’s work and organizational values. Rather than taking a colorblind approach to governing, their proposed policies suggest the importance of using critical race theory to identify and dismantle racist systems and structures that undergird our nation.”
None of this is surprising. As University of Arkansas’s Jay Greene and I observed in early 2019, “Their political giving suggests that the people who work at the education-reform organizations that the biggest and best-known education-reform foundations support are almost uniformly left-leaning. In other words, education reform turns out to be neither a red nor a purple enterprise—but a deep blue one.”
For a number of years, I lived in Cambridge, Massachusetts, the Harvard-centric islet where every trope, conversational tic, and narrative is lifted from the progressive imagination. The thing I always found most striking about Cambridge was the self-assured naiveté born of its insularity. In Cambridge, Obama is remembered as a conservative, big-government never went out of style, and churches are festooned with placards full of progressive nostrums. Of course, this proud monoculture causes problems—the denizens of Cambridge are constantly frustrated that their favored candidates lose statewide elections and their enthusiasms are mocked beyond the boundaries of their little fiefdom.
Well, that’s the culture that’s evolved in education, where educational leaders, advocates, funders, and pundits routinely say things that would seem astonishingly ideological or tone-deaf in any other context—but that are regarded as unexceptional in the cloistered world of education.
This matters.
It means that much of the edu-sphere is often out of step with large swaths of the nation without ever realizing it. This is how the education community can be consistently surprised that things it imagines to be obviously unobjectionable—like the “1619 Project’s” insistence that the U.S. is a “slavocracy”—are deemed kooky and extreme by many outsiders. This is a recipe for frustration whenever one ventures beyond the bubble, especially when seeking to drive change in red states, purple states, or a federal government under anything other than iron-clad Democratic control.
It’s also produced an embarrassing naiveté. Expecting that Biden’s win will usher in a new era of radical change and transformative lawmaking, the edu-sphere is primed for disappointment. Ignoring Biden’s narrow margin in key states, Democratic losses in the House and their resulting wafer-thin majority, and the likelihood that Biden will be the first new president in decades to lack a Senate majority, they talk as if Biden had claimed the sweeping victory that many had anticipated. This is reflected in the vilification of Mitch McConnell, the casual depiction of Republicans as hateful bigots, and a seeming disinterest in understanding Republican principles and priorities.
And it can leave little room for those who would bridge the chasm between the edu-bubble and the larger world. Indeed, education’s deep blue hue means that those who question doctrinaire assumptions regarding white supremacy, the need for more spending, or the evils of for-profit provision are regarded with deep suspicion. The result is that few can help the forces of the edu-sphere understand their plight.
This state of affairs will fuel bewilderment and bitterness as the education vanguard wonders why they’re encountering unanticipated obstacles. You know, it’s ironic to hear so many in K-12 and higher education complain that Republicans have become more hostile over time; it’s a lot like hearing a local activist in the “People’s Republic of Cambridge” complain that a Republican governor is unsupportive. It’s more accurate to say that the world of education has positioned itself as a fortress of progressivism, and the right has responded in kind. That can change, of course, but there aren’t a lot of signs that change is in the offing.
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0097feaf2b142e1bf5ff803dcdb4d6e0 | https://www.forbes.com/sites/fredkennedy/2020/07/22/its-time-to-equip-the-us-space-force-with-the-ability-to-project-force/?sh=19fc672d4518 | It’s Time To Equip The U.S. Space Force With The Ability To Project Force | It’s Time To Equip The U.S. Space Force With The Ability To Project Force
After what can only be described as an exceptionally long incubation period, the United States suddenly finds itself the proud owner of its sixth military service. Unfortunately, we have a problem. The U.S. Space Force is not institutionally “ready” in the way our air service was when it was stood up in 1947.
The U.S. Army Air Forces only became the U.S. Air Force after the end of the greatest conflict the world had ever known – one in which the air war figured prominently. At its peak in 1943, the Army Air Forces comprised over two million airmen and upwards of 80,000 aircraft – conducting historic raids on Axis industrial centers, providing essential intelligence, supplying close air support to troops on the ground, and arguably ending the war with the dropping of atomic weapons on the Japanese cities of Hiroshima and Nagasaki in 1945. The organizations, the people, and the toolkit were repeatedly tried, broken, tested and re-tested.
In contrast, the nation’s space systems have served only in supporting communications and surveillance roles, albeit extremely important ones. Satellites provide users with near-instantaneous worldwide communications. They allow anyone on the globe to know their (and others’) precise position with an accuracy of just a few meters. Some offer the ability to detect and track ballistic missiles and other threats by their heat signatures. And some peer down at the planet in many spectra, keeping track of tank formations in garrison or on the move, ships plying international waters, or the odd mobile launcher scooting about the Korean peninsula.
A notional spacecraft in orbit over the Earth. Getty
These missions have not fundamentally changed character since they were first proposed in the 1950s and ‘60s. And the spacecraft we fly, while measurably superior to the systems we orbited 60 years ago, nevertheless provide similar data, are launched and operated in a similar manner, and – most importantly – do not (in the parlance) achieve effects independently.
In many respects, a better historical parallel than the 1947 Air Force for the Space Force’s current stage of development is the earliest ancestor of the Air Force, the circa 1907 Army Signal Corps Aeronautical Division, which was set up as an intelligence-collecting unit (and which itself capitalized on lessons learned from Civil War-era balloonists who ascended into the air to sketch out the arrangement of enemy formations before commencing battle).
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An illustration of men at work after the US civil war, circa 1865. The Union Army's hydrogen gas ... [+] balloon 'Intrepid' can be seen in the background. Getty Images
We’ve rested on our laurels for two decades. We no longer have the luxury of time to refine the problem statement – our potential adversaries have seen to that. We are simply going to have to jam force into the Space Force. The current toolkit is utterly lacking. Since we were not bequeathed a true warfighting arm, we will have to create it out of whole cloth. This will be – with apologies for the understatement – a daunting task.
What form this new service’s architecture must take and how to transition to it will have to be decided soon. The outcome is going to hinge on the consensus answer to the question, “to what extent does space differ from any other domain of potential conflict?” There are several schools of thought:
(1) Space is (or should ideally be) a high-frontier Antarctica, a pristine domain protected by international treaties – preferably not to be exploited to serve any specific nation’s interests, and certainly not to be used by any nation to prevail over another in war;
(2) Despite assertions to the contrary, space was effectively militarized in 1957 and has ably served various nations’ armed forces ever since. The U.S. holds a distinct advantage over potential adversaries’ militaries as a result of its space capabilities. Safeguarding that advantage – the on-orbit assets, launch sites, and operations centers – should be the key task facing the Space Force’s founding generation; and
(3) Space is a domain like any other – air, sea, and land, and we should treat it as such. Conflict will occur in space as it has in every other domain; to believe otherwise would be shockingly naïve and irresponsible. The U.S. must prepare now to deter bad actors from taking actions which threaten our space capabilities, or resoundingly defeat them (in the space domain and elsewhere) should deterrence fail.
You cannot safely dismiss the Antarctica argument. It drives a long-standing diplomatic conversation that continues to the present day. Its adherents seek to define and proscribe the use of “space weapons,” but little meaningful progress has been made on this front. The United Nations’ Committee on the Peaceful Uses of Outer Space (COPUOS) and Committee for Disarmament have debated measures that would require member states to refrain from deploying weapons in space, or to commit to “no first placement.” These deliberations continue despite their increasingly academic character: The Chinese fired a direct-ascent weapon at one of their own satellites in 2007, destroying it and creating a cloud of debris in low earth orbit that persists to the present day. The next year, the U.S. shot down one of its own satellites with a Standard Missile. India conducted a similar test in 2019, prompting condemnation from NASA Administrator Jim Bridenstine when it was determined that debris from the Indian demonstration might pose a threat to the International Space Station. Russia followed suit in April of this year with a test of its own. Multiple nations, including the U.S., have experimented with techniques for close inspection of satellites, which can serve peaceful purposes (e.g., refueling or repair) or more bellicose ones. For better or worse, this genie is now out of its bottle.
A fully distributed and disaggregated satellite fleet consisting of many hundreds of small ... [+] spacecraft - one potential future for the Space Force. Getty
As a result, the real debate has drifted beyond non-proliferation to the more practical question: Should the U.S. protect or re-architect its fleet? Few would dispute that our national security space assets are scarce, expensive, exquisite devices which require years to design, build, and test. Replacing them would take the better part of a decade (perhaps more) – so, goes the theory, it makes sense to spend our treasure on means to secure them against attack. And yet this “bird in the hand” argument has a serious flaw: any defense of the status quo ante only adds to the expense and complexity of our architecture – an extremely asymmetric and unfavorable scenario for the U.S., considering that offensive weapons such as the Chinese anti-satellite rocket can likely be had for a small fraction of the investment needed for the spacecraft it would destroy. General John Hyten famously referred to our satellites in 2017 as “big, fat, juicy targets.” It behooves us not to perpetuate this situation for any longer than necessary.
The alternative is re-architecture. Overturn the sixty-year run of ever costlier Battlestar Galactica-style behemoths and replace them with fleets of inexpensive small satellites based on commercial designs. Distribute them so that the destruction of single or even multiple spacecraft will have minimal effect on a constellation’s capabilities. Accurately track everything that moves between here and the moon. Look for ways to rapidly reconstitute our systems from launch sites other than Cape Canaveral and California’s Vandenberg Air Force Base, and augment constellations with defensive and offensive options – this sends a message to our adversaries that that any attempt at disruption will not only be futile, but will be met with forceful counters. Finally, build vehicles that can move quickly and efficiently between key orbital regimes – first responders whose very existence will give enemies pause.
In short, spend as little time as practical worrying about how to safeguard our collection of soon-to-be-obsolete assets, and get about the business of rapidly building the new Space Force – one that’s mobile, resilient, and powerful. Our nation, our allies, and our partners around the world will be the ultimate beneficiaries. Arguing over the details of organizational constructs, basing, or doctrine at this early date misses the point (all of these things are going to change).
We have one chance to get this right the first time.
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fc784eeab0d32077a603167533e0c112 | https://www.forbes.com/sites/fredminnick/2019/03/24/best-whiskey-how-bourbon-dominated-the-2019-san-francisco-world-spirits-competition/ | Best Whiskey: How Bourbon Dominated The 2019 San Francisco World Spirits Competition | Best Whiskey: How Bourbon Dominated The 2019 San Francisco World Spirits Competition
As I put Glass 40 upon my lips, taking in an assortment of fruit, caramel and roasted nuts, I noted the words,“delicate” and “complex.” This was extraordinary bourbon whiskey; and yet, I told my friend and fellow judge Max Solano there’s no way this could win it all.
The San Francisco World Spirit's Competition showcased the world's best spirits and it was a battle... [+] for Best Whiskey this year. Glass 40 had a shot. Fred Minnick
“Why not? It’s brilliant,” he said.
We were preparing to anoint the Best Whiskey at the San Francisco World Spirits Competition. Since 2012, I’ve had the distinguished honor of serving as a judge and captain here, tasting alongside the world’s best palates. Only once in the competition’s 19-year history has a bourbon won Best Whiskey, which was why I genuinely doubted that this one, despite its beautiful nature, could defeat the bold and rich Scotch. Over the years, I’ve seen bourbon continually lose to Irish, Scotch, Japanese and even rye whiskeys—all of which are great in their own ways. But as my heart is in bourbon, I always vote bourbon.
And Glass 40, I believed, was the best whiskey on the table.
Would my fellow judges agree? Would Glass 40 be the second bourbon to win it all?
[Read past competition results on my blog, FredMinnick.com]
How it Works
The San Francisco World Spirits Competition is the world’s largest, with entries and judges from all over the world. More than 40 judges are split among tables or panels, while wonderful volunteers cart more than 3,000 spirits to the panels. We wear smocks with name tags and are asked to not wear perfumes or colognes, to prevent somebody’s charming scent from throwing off another judge’s nose. Imagine trying to take in the aromatic properties of a 25-year-old Highland Scotch while your buddy’s Brut Cologne is just overpowering you.
The competition exclusively uses the Neat glass, and every table will taste a variety of spirits. We taste everything blind, meaning we know not what we are tasting. We are given proof, age statement and barrel information if it’s notated on the label, but we do not know the brand. We are allowed to ask our pourers questions. For example, if we suspect something is in the wrong category, we can ask them to validate the spirit is indeed in the right class.
We assess the spirit by the glass, considering each one for a bronze, silver or gold designation. This is what makes San Francisco unique and is why you might see a lot of medals from this competition: As judges, we must analyze the spirit for its category. If it meets basic expectations of that category and is good, more often than not a judge will bestow a Bronze. If it’s very good, I’m likely to award it a Silver. And if it’s great or excellent, I will give it a gold. We also do not give out actual medals, but these are not widely publicized, as who wants to brag about not winning anything?
When every panelist at a table awards Gold to a glass, the product earns a Double Gold and can then go on to compete for best in its class, such as Small Batch bourbon.
The panel stage is also a debate, with judges jockeying for what they want to win. Frequently, there will be intense, yet respectful, discussions over the merits of a product. For example, this year, Solano and I were at odds over the Lowlands whiskies. One was bright, full of honey and beautiful. My other panelists—longtime spirits writer David Mahoney and longtime brand ambassador Tony Devencenzi —agreed with my take. But Solano wouldn’t budge, blocking it from getting a Gold. That was Bladnoch 'Talia' 27 Year Old Bourbon Cask Finish Single Malt Scotch.
Our panel was perfect. Just enough discourse for proper checks and balances. And when we really liked something, our notes were in unison.
In the Special Barrel Finish bourbon category, we all had the same thought—barrel finishes have gone too far. We were tasting things finished in more than one barrel and they were so far away from bourbon that they took a wrong turn. After tasting a sherry finished one, Mahoney noted, “it tastes more like Macallan to me than bourbon.” And so when we all tasted a bourbon finished in a honey barrel, meaning the barrel once actually stored honey, we were all delighted to vote it to Double Gold and send it on to compete for best barrel finish. While you could taste a hint of honey, the product was clearly a flavorful bourbon, shining with notes of nutmeg and cinnamon. I loved it, but Belle Mead’s Honey Barrel finish didn't have the legs to compete for Best Bourbon. Still an exceptional, highly recommended product, though!
My panel also tasted vodkas, flavored vodkas, gins, rums, Scotch, tequilas, craft whiskeys and brandies. Of all these, I was the most disappointed in the brandies. For most of them, it was like somebody poured an entire box of sugar in the glass. They were far too sweet. So, when Glass D came in a Spanish Brandy flight, assuredly unadulturated and layered in flavor, Tony blurted out, “I want this in a big snifter with a steak and cigar.” We gave it a Double Gold, and Torres 20-year-old later won best Spanish Grape Brandy.
We did get an incredible Campbeltown flight that wowed me to my core. The glass I later learned was Glen Scotia 25-year-old was one of the most complicated whiskies I had in this competition, but it was far too subtle to stand up to its bolder Scotches.
But the interesting story of my table was the bourbons.
In Straight Bourbon flight 9, we were wowed by Glass D, a 58.5% ABV 7-year-old that was loaded with chocolate, marzipan, graham cracker and pie crust. It was delightful; we Double Golded it and sent it to complete for the next round. We did the same for Glass F, a 100 proof 10-year-old with a single note from me: “beautiful and walnuts.” Sometimes you are tasting so much and processing these glasses so quickly that you focus on one note. And for this glass, we’re talking about walnuts!
As we concluded our two day panel, we left on a high note, knowing that we sent forth some great bourbons, brandies and more. From our panel, we selected what ended up winning Best Craft Distiller Whiskey—Rogue Rolling Thunder Stout, which was a beautiful expression and exemplary study of the spirit of craft. We also selected Best Reposado Tequila (Vikera Tequila), Best Flavored Vodka (Dixie Black Pepper Vodka) and Best Straight Bourbon (more on that later).
Now, funny story on the vodka- while my panel analyzed several flights of that spirit, I didn’t taste any of them. My literal plane flight was delayed and I missed the vodka tasting altogether. A coincidence? I’ll never tell.
But I can tell you this, my whiskey palate was sharp and I was eager to taste the very best.
Super Tasting
Following the panel rounds, the best from each table are then sent on to compete for Best in their class, such as Small Batch, Straight Bourbon, Single Barrel, etc. When there’s a plethora sent forward, a group of Super Tasters will narrow down the field, so we are not assessing 15 contenders for Best Straight Bourbon.
We had eight Straight Bourbons to assess, and it was a murderer’s row of goodness.
Glass 3, a complex beast with nuttiness, shined for me, along with glass 4, a marzipan bomb with hints of vanilla. I found Glass 7 to be the fruitiest with great nuance, but my colleagues disagreed and W.L. Weller 12-year-old did not go on to compete for Best Straight Bourbon.
Glass 4 won Best Straight Bourbon, narrowly defeating the bourbon we later learned was William Heavenhill 6th Edition.
I also super tasted the rye whiskey, which unlike bourbon, is not unique to the United States. So, narrowing down ryes from all over the world was my first introduction to the rye at this year’s competition. I loved one rye in particular. It was nuanced with spice and hints of sweetness, but my colleagues didn’t agree. Pikesville was just one vote away from winning best rye.
But that’s how these things go. It’s a democracy. We vote. The one you love may not always win, and that’s okay, because we respect one another and know that the winner usually has support of your colleagues behind it.
We are also only human and must condition our palates to take on the brunt of these spirits. While we spit—consuming all these spirits would be deadly!—we must keep our palates tuned and, for me, soda water is the perfect palate cleanser.
I swished a few times during the ryes. For whatever reason, rye whiskey took a toll on my palate this year. Perhaps they shocked my palate after a day’s worth of bourbon.
Fortunately, it was my final tasting of this day.
Sagamore Rye’s Port Finish won best rye. Also in the running were New Riff’s Bottled-in-Bond Kentucky Straight Rye, King’s County Empire Rye and Glennavyn Novia Scotia 12-year-old Rye.
New to the competition scene, Northern Kentucky distillery New Riff also earned Double Gold in the single barrel bourbons, with a shot to win Best Single Barrel. Buffalo Trace distillery’s Elmer T. Lee and E.H. Taylor were also in the running for Best Single Barrel, but these all fell to one of the most delicious whiskeys I’ve ever tasted in competition.
Nonetheless, if New Riff is not on your radar, you need to follow them. They’re one of the most exciting new distilleries in the world.
The Finals
The finals are always a bittersweet ending for us.
The judges are all friends, and this is the day we part. Our bags fill up corners of the meeting room, seemingly enough rollerbags to fill a Boeing 747. We hug one another like old time friends. Laugh and even say “I love you, man,” as we say goodbye.
Because we’re all such good friends, it doesn’t feel like work. But it is indeed a job, and we are paid to select the best.
We are greeted by numbered glasses and a sheet outlining the categories we must vote on.
It begins with vodka, gin, aquavit, tequila, baijiu and more. After selecting the best of those categories, we pick Best in Show for clear spirit. This was really a three way race and baijiu, a Chinese spirit from grain, had a real shot.
I’ve generally been dismissive of baijiu even as the Western world becomes more interested in it. But this product changed my mind. It had the funk of a Jamaican rum and spice of a good unaged rye, with a peppery note you find in tequila. I quite enjoyed it and voted for baijiu for the first time in my career. Kinmen Kaoliang Liqour came in third, losing to the beautiful Arctic Blue Navy Strength Gin, the winner, and the runner-up, Norden Aquavit.
After plowing through the tequilas, mezcal and rums, I was ready—eager, really—to select Best Bourbon.
For this honor, it was really a stylistic battle. Glass 32 won Best Straight Bourbon from the super tasting, and it was big, bold and demanding of every inch of your palate. It stood ready to take on the Best Small Batch. In pursuit of Best Small Batch, Redemption Wheated Bourbon (Best Small Batch up to 5 years old), Barrell Batch 18 (Best Small Batch over 11 years) and Traverse City Bourbon Full Proof (Best Small Batch and Best Small Batch 5 to 10 years old) all fell to the Single Barrel.
The Single Barrel, Glass No. 40, though, just knocked over the Best Straight Bourbon, Old Ezra Brooks 7 years old (which won my best everyday whiskey last year) along with the Best Small Batch, Barrell Bourbon Batch No. 18.
Barrell Bourbon Batch 18 was in the running for Best Bourbon. It won best Small Batch for over 11... [+] years old. Barrell Bourbon
After the vote for Best Bourbon, I applauded.
It’s a weird tradition we have: When we vote for something we truly love and it wins big, we applaud, as if the glass can hear us. But keep in mind we drink for a living, so we may not be right in the head. Who claps for a bottle of whiskey?
Ok, moving onto the fate of Glass 40, it faced big competition for Best Whiskey.
Canadian whisky didn’t even have a glass for consideration in the finals, so it was not a good year for them, while rye likewise posed no threat. It was the Irish, Scotch and Other whiskeys this year that really offered the Best in Show quality causing me to think bourbon didn’t have a shot.
In a close vote, Glass 66, a 21 year old single malt, won Best Scotch. It was glorious, filled with, well, to be honest: At this point in the day, my notes aren’t as articulate as they were at 10 a.m. I wrote, “good stuff.”
While I liked Glass 66 a lot, I found Glass 49, Best Other Whiskey, to be a touch more vibrant and stood out more on my palate. I had no idea what it was, so when I learned I preferred Westland 5th Annual Peat Week Single Malt Whiskey over so many others, I was enthused. Westland is a rising star distillery not just for the United States, but for the world. They are doing great things in whiskey, but they didn’t have the votes for Best in Show… this year.
Also without enough votes was the Best Irish Single Malt—Jack Ryan Toomevara 10 Year Old Single Malt Irish Whiskey—but damn, it delivered some nuance.
So, it came down to Glass 40 vs. Glass 66. The Best in Show Whiskey was American vs. Scotland, New Age vs. Old World and bourbon vs. single malt.
I had been here before: Hopeful that a bourbon could defeat a mighty and very tasty Scotch, only to see a death blow of hands rise for Scotch over bourbon.
So, when the vote was called for Glass 40, I looked down, raised my hand, and just kind of expected only one-third of the room to vote for bourbon.
I was wrong.
Nearly every hand was raised.
My heart was beating through my chest. Could it be? Was this about to happen?
When Glass 66 came to the vote, I was nervous. In the finals, we can vote for as many as we want, so a bourbon lover could also vote for Scotch here. If it had the same amount of votes, Scotch would force a runoff vote and judges could only vote once. As the hands were counted, Glass 66, otherwise known as BenRiach Temporis Aged 21 Years Single Malt Scotch, had eight fewer votes than Glass No. 40.
I couldn’t believe it.
For just the second time in the competition’s history, a bourbon won Best in Show for whiskey.
When Glass No. 40 was announced as the winner, I screamed, hooped and hollered. For years, bourbon’s played second fiddle in the blind competitions. Not anymore.
Henry McKenna 10-year-old Bottled-in-Bond, a 20,000-case bourbon for $30 a bottle, won San Francisco’s Best Bourbon last year. And now, Henry McKenna is the world’s best whiskey. Heaven Hill, McKenna's distiller, also made the other bourbon that won the competition in 2009--Parker's Heritage Collection.
Henry McKenna Bottled-in-Bond won it all. Fred Minnick
For me, this victory is more than just bourbon. The man who would have distilled this 10 years ago was the late great Heaven Hill master distiller Parker Beam, one of the greatest bourbon distillers of the past century.
When he died of ALS in 2017, we lost one of our greatest, and bourbon hasn’t been the same since.
I’d like to think Parker’s looking down from above, sitting on a bail of hay with other late legends Lincoln Henderson, Elmer T. Lee and Booker Noe, sipping a little McKenna to celebrate, and saying, “we did it. We beat Scotch.”
Fred Minnick is the author of Bourbon and editor-in-chief of Bourbon+ Magazine. Follow him on Instagram and YouTube. Subscribe to his free drinks newsletter.
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44d000f6ebf3f2f7530c1efc34911f7e | https://www.forbes.com/sites/fredoltarsh/2016/05/17/trading-places-why-stock-etf-and-futures-options-are-so-difficult-to-trade/ | Trading Places: Why Stock, ETF And Futures Options Are So Difficult To Trade | Trading Places: Why Stock, ETF And Futures Options Are So Difficult To Trade
As an Options Trader in today’s electronic markets you have the advantage of transparency. Market Prices are in front of you all of the time. You can use a live feed of Options Prices to evaluate numerous Options Trading Strategies and determine which Strategy meets your risk/reward requirements. In addition, you can quickly evaluate the Liquidity of the Market and whether algorithms are competing with you.
Whether you are Trading Stock, ETF or Futures Options, there is a high probability that the opposite side of your transaction is not a customer like you but more likely a market-maker or algorithmic trader. Market makers can provide tremendous liquidity to markets. In contracts like SPY, AAPL and GLD (representing SPDR S&P 500 Trust ETF, Apple, Inc. and SPDR Gold Trust ETF) it doesn’t matter who is providing the Liquidity because the markets, in most cases are reasonably tight. In other markets, however, Speculators and Hedgers are required to compete in an environment that is not particularly competitive and therefore a long-term burden to the cost effectiveness of Trading Options.
If you have ever put in an order in an illiquid market, you are likely to have seen the actions of the algorithms. Typically, if you offer an Option at a Price less than the current Offer the algorithm will Offer the Option at an even cheaper price. This is an attempt to get you to Sell the Option for even less. This is where an algorithm is able to make enormous profits by trading with Options Traders who are not aware of value. Imagine that each and every order to either Buy or Sell an Options Contract meets this scrutiny; the individual trader has a distinct disadvantage. It is for this reason that trading contracts with the greatest liquidity is essential.
In the movie Trading Places the open-outcry market provided transparency and liquidity. While it may not have been a perfect system, open-outcry in its purest sense provided each customer transaction with the opportunity for full disclosure. Now, with computerized trading and algorithms dominating the markets, your order is gobbled up long before it can be exposed to numerous market participants.
NEW YORK, NY - MAY 16: Traders work on the floor of the New York Stock Exchange (NYSE) on May 16,... [+] 2016 in New York, New York. (Photo by Spencer Platt/Getty Images)
The Table below provides the Bid and Offer and liquidity percentages of a multitude of instruments just before the close on Tuesday, May 17th. The markets with the lowest liquidity percentage are most likely to provide the best value in terms of trading.
While evaluating Liquidity Percentage is important to be sure you are getting good value, using the market’s Implied Volatility Skew to determine the best Options Trading Strategy to meet your objectives is also essential. For those who are interested in getting Short the Stock Market and would like to avoid the syndrome of Buying expensive out-of-the money Puts and Selling comparatively inexpensive out-of-the money Calls, the attached Options Trading Strategy provides the combination of Liquidity and Excellent Value. It is a Strategy that is most effective for traders that are interested in Hedging or being Short Stocks for at least a period of several weeks. The example shown below is for the July Options Expiration on SPY (SPDR S&P 500 Trust ETF).
The Strategy involves taking advantage of the Implied Volatility Skew of SPY Options to generate a Short Position with excellent value. The Table clearly provides the transactions that are necessary to initiate the position and while now may not be the time to implement it, the technique is available most of the time when you are trading SPY Options or those of the E-mini S&P. If you have questions about this Strategy or what we consider the essential part of any Options Trading analysis: 1) Liquidity, 2) Historical Volatility, 3) Implied Volatility, 4) the Implied Volatility Skew and 5) Options Strategies, take a look at our website at Options Strategy Network for PowerPoint Presentations and a Syllabus to evaluate your level of Options Trading expertise.
Options trading involves significant risk and is not suitable for every investor. The information is obtained from sources believed to be reliable, but is in no way guaranteed. Past results are not indicative of future results.
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653f91e6bada67e976c973327cf3aee3 | https://www.forbes.com/sites/fredoltarsh/2016/05/23/fed-chair-yellen-has-the-stock-market-on-edge-contrarians-look-for-a-rally-option-trade-included/ | Fed Chair Yellen Has The Stock Market On Edge, Contrarians Look For A Rally (Option Trade Included) | Fed Chair Yellen Has The Stock Market On Edge, Contrarians Look For A Rally (Option Trade Included)
There is uncertainty in the markets over the outcome of this week’s pending talk by Fed Chair Janet Yellen. Announcements typically provide the opportunity for everyone to provide their opinion. It’s like waiting for the Preakness Stakes or the Western Conference Basketball Playoffs. Opinions abound, but the uncertainty remains. The uncertainty of the next Fed move provides an opportunity for contrarians to excel.
Chair of the Board of Governors of the Federal Reserve System Janet L Yellen attends the first... [+] session of the G7 Finance Ministers and Central Bank Governors' Meeting in Sendai, northern Japan, on May 20, 2016.Finance ministers and central bankers from the G7 kicked off meetings in Japan on May 20 as they look to breathe life into the wheezing global economy. / AFP / KAZUHIRO NOGI (Photo credit should read KAZUHIRO NOGI/AFP/Getty Images)
I’m certainly no expert on Fed policy; however, the Implied Volatility of the E-mini S&P Options gives me an indication of the possibility for a Stock Market Rally. Normally, in times of uncertainty there is a dramatic increase in Implied Volatility. Recently, however, the Implied Volatility of the E-mini S&P has remained relatively stable. If the Stock Market receives Fed news that is deemed to be favorable, there is an opportunity for a move to the upside.
For those of you who have cash waiting to put to work in the market at the appropriate time, the current environment may be good for an Options Strategy Called a Ratio Long Fence. It’s always a good idea to average into your longs and this strategy provides an opportunity to do just that. It involves Selling an out-of-the money Put and using that money to Purchase out-of-the money Calls. Although the Implied Volatility of the Put you Sell is relatively low, the Calls that you Purchase have an even lower Implied Volatility. If you’re looking to Purchase Stocks at Lower Levels, this might be an Options Trading Strategy for you. Be sure that you are looking at the nominal value of the Option you Sell and be prepared to make another, similar trade, if the market goes lower. That way you will be able to put more money to work at even lower levels.
The Table below shows the details of the Strategy. Due to the Implied Volatility Skew of the Options the Strategy requires Selling One June 1950 Put and Buying Ten 2150 Calls. The net expenditure on the Trade is zero. If the market should drop, you will be able to get Long the market about 100 points lower than its current trading price. At that point your nominal exposure is to $97,500 worth of Stock. Should the market rally, the Calls you purchase, 10 of them, would lead you to exposure of $1,075,000 of Stock through the E-mini S&P Futures.
Creative Options Strategies provide traders with the opportunity to develop positions that meet their risk/reward requirements. The Options Guide PDF can help you get a better understanding of what background is needed for effective Options Trading. If your desire is to get long stock at lower levels, in this case approximately 5% below the current trading level, the Ratio Long Fence may be perfect for you. Contact Us to gain clarity on this and any other Options Trading Assistance you may need. Our Options Training Webinars can advance you to the next level of trading.
The Options Trading Strategy, shown in the Table above, takes advantage of:
Providing a Strategy to add additional Long Equity Positions at Lower Levels Using the Implied Volatility Skew to provide additional value An acceptable level of liquidity, although not fantastic , to execute the strategy A favorable comparison of Historical and Implied Volatility
Options trading involves significant risk and is not suitable for every investor. The information is obtained from sources believed to be reliable, but is in no way guaranteed. Past results are not indicative of future results.
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0a3c6fb2fee2e577447bdb32bcc4c82b | https://www.forbes.com/sites/fredpeters/2019/04/08/the-american-dream-of-homeownership-is-still-very-much-alive/?sh=5b40aafa3e80 | The American Dream Of Homeownership Is Still Very Much Alive | The American Dream Of Homeownership Is Still Very Much Alive
With interest rates low, and home prices throughout much of the country still affordable for those... [+] earning little more than the median income, ownership grounds Americans in their communities like nothing else. Adobe Stock Photo
Doesn’t everyone want to own their own home? That sense of belonging, the feeling that you and your place have somehow adapted to each other, remains much more difficult to achieve in a rental. While home prices have notably outstripped incomes in many parts of the country, the dream of home (or, in New York, apartment) ownership remains a potent part of the American story. I think there are a number of reasons why that still holds true.
The idea of a place of one’s own drives the American story. We became a nation out of a desire to slip the bonds of Europe, which was still in many respects a collection of feudal societies. Old rich families, or the church, owned all the land and, with few exceptions, everyone else was a tenant. The magic of America lay not only in its sense of opportunity, but also in the belief that life could in every way be shaped by the individual. People traveled here not just for religious freedom, but because in America anything seemed possible. As the East became more crowded, the pioneers pushed further and further west, lured again by the sense that that way lay freedom, independence and the possibility of land ownership.
Although today no western frontier exists towards which to aspire, the lure of America as a place in which one’s destiny is one’s own remains as powerful as ever. And what more powerful expression of arrival, of equal opportunity harnessed, than the ability to cross the threshold of a dwelling which actually belongs to you?
Furthermore, as homeowners discover, living in an owned home feels different from living in a rented home. It’s not just that an owner can personalize the space; it touches a chord even more fundamental than that. Home ownership enhances the longing for self-determination at the heart of the American Dream. First-time home owners, young or old, radiate not only pride but also a sense of arrival, a sense of being where they belong. It cannot be duplicated by owning a 99-year lease.
Millennials, I am told, seek experiences rather than possessions. They mistrust the economy (not hard to understand after experiencing the recession of 2008-2009) and prefer not to be overly burdened with stuff. But things change when, no matter how many years delayed, these 20- and 30-somethings advance in their careers or decide to choose a partner and create a family. Then the itch to own, like a final gateway into the adult world, tends to set in.
As we become a country more polarized between the haves and the have-nots, homeownership can serve as a fundamental equalizer. With interest rates low, and home prices throughout much of the country still affordable for those earning little more than the median income, ownership grounds Americans in their communities like nothing else. In those cities like San Francisco and my own New York, where homeownership can be financially out of reach for the majority of residents, we look to more creative private/public partnerships to create additional middle class and lower middle class housing for sale, not just for rent. That way we work together as a nation to keep the dream alive.
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b38f6cde5ad386aa6b2ffa70e72c7cbd | https://www.forbes.com/sites/fredpeters/2021/01/29/derailed-not-disrupted-new-york-citys-real-estate-market-is-rising-from-the-ashes/?sh=c04d4d2458f0 | Disrupted, Not Derailed: New York City’s Real Estate Market Is Rising From The Ashes | Disrupted, Not Derailed: New York City’s Real Estate Market Is Rising From The Ashes
The pandemic misaligned those expectations for a while but now, a year later, we are once again at a ... [+] moment of equilibrium in which deal flow is accelerating across New York City. getty
New York buyers are feeling shocked to discover that half the properties they saw last week have accepted offers. Sellers, equally surprised but more pleasantly so, are discovering that the first offer they receive may well be followed by a second one. While this phenomenon is particularly true in the market for properties costing $2 million or less, New York City agents are seeing signs of it throughout our marketplace. Stability, long postponed by the terrible early months of the pandemic and the flight from town by many potential buyers, arrives in our market at last.
The New York market began to see early signs of improvement in late fall/early winter of last year. The months of lockdown, and all the reporting about local families leaving town, pushed many sellers towards an acknowledgment of the new 2020 realities. They reluctantly understood that, if they were to sell their properties, their prices needed to be adjusted. As that was happening, buyers were, for a variety of reasons, becoming more active in their home searches. For some, committed New Yorkers that they were, the later months of 2020 offered the opportunity to trade up to a better space for a less daunting price. For some, proximity to schools and/or jobs became paramount. For others, staying at home for so long forced a realization that home was not all they might want it to be going forward. Everyone wants a home office now. Many people want outdoor space. A different world refocuses everyone’s priorities.
Even as the market for one and two-bedroom apartments began to heat up, deals also began to blossom for more expensive properties. Especially in the condominium market below 42nd Street, penthouses and large units have been going into contract at substantially discounted prices. Numerous deals have been struck for these showpiece apartments, many of which have been available for one, two, even three years at enormous prices. Developers, many of whom face moments of reckoning with their lenders or simply want to stop the bleeding, have been going into contract and making strong deals for buyers with renovation allowances, payment of closing costs, and other enticements.
Sooner or later, markets find an equilibrium. That is taking place, long after the rest of the country, in Manhattan today. In Brooklyn, the market never slowed quite as much and picked up more quickly. 2021 has brought optimism to the New York market for the first time in years. As sellers adjust prices to acknowledge the COVID realities, buyers feel the hope engendered by a new President (Donald Trump was never a popular guy in his hometown) and a vaccine that promises a return to some kind of normalcy during this calendar year. Sales inventory is shrinking in the city; from a mid-October peak of around 9,500 units to fewer than 7,500 during the week which ended Friday, January 22 (courtesy of UrbanDigs).There is thus a sense that, looking forward, this moment can offer real estate opportunities that already threaten to become more elusive.
The pandemic disrupted but did not derail the larger meta-cycle of New York’s residential real estate flow. At this time last year, we had a busy market as buyer and seller expectations came into alignment. The pandemic misaligned those expectations for a while but now, a year later, we are once again at a moment of equilibrium in which deal flow is accelerating across New York City. Assuming the vaccine rollout continues (and hopefully becomes more organized) and stimulus dollars arrive to help our public transport system and our small businesses, optimism is palpable even as we all don double masks. For the New York City residential market, the stars look auspicious.
MORE FROMFORBES ADVISORThe Pros And Cons Of An Off-Market Home ListingByBob MusinskicontributorAre Urban Apartments Good Buys Now?ByMark HenricksContributor
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858578a6ec2e1f314a209d6c0efdc5e6 | https://www.forbes.com/sites/fredpeters/2021/02/25/buying-real-estate-in-new-york-city-buyers-need-representation/ | Buying Real Estate In New York City: Buyers Need Representation | Buying Real Estate In New York City: Buyers Need Representation
A well-chosen buyer’s agent can provide both negotiating expertise and deal and building savvy. ... [+] Buyers’ brokers almost always pay for themselves. getty
A buyer clicks on her computer. She googles “Real Estate New York City”. Below the slew of ads, several citywide search engines appear, with Realtor.com and Zillow atop the list. The buyer chooses one and refines her search: she wants to live in Manhattan, on the Upper West Side, in a nice roomy two-bedroom apartment. She likes the older buildings with solid walls and high ceilings, so she zeroes in on those. She finds two or three she deems appropriate and emails the agents whose names appear prominently beside the photos. Because she is probably looking on Zillow, she almost certainly doesn’t understand that the name featured prominently beside the listing photos is NOT that of the listing agent, the one the seller has hired to represent the property. It’s another agent, likely one with minimal knowledge of the apartment or the building, who has paid to have his name placed there. Nonetheless, she contacts that person, the one who paid to have his name there, and sits back, thinking, “This was so easy. I can just search on my own.”
And yet…was it so easy? First of all, the broker whom she contacted was NOT the seller’s agent; he is an agent who bought that spot in order to attract buyers. He will want to represent her as a buyer’s agent, regardless of whether he knows anything about the unit, the building, or anything else. Second, even if she drops him, there are a number of other issues. Most buyers are actually ill-equipped to appreciate the subtle differences between the apartments they see and the buildings in which those apartments sit. They generally don’t understand the arcane rules of co-op boards, which vary substantially from one building to the next, or the complicated relationship between renovation and resale value. And finally, almost no one represents themselves well in a negotiation. A well-chosen buyer’s agent can do all these things. In providing both negotiating expertise and deal and building savvy, buyers’ brokers almost always pay for themselves.
In this past Sunday’s New York Times, one of the lead articles (“Are Broker Commissions Too High?”) focused on the issue of agent commissions which, as the writer accurately said, are considerably lower in most European countries. What the article did not note, however, is the primary difference between the U.S. and those countries: co-brokerage. Buyer brokerage does not exist in most European markets. If a buyer wishes to purchase a property in London or Paris, there is no MLS or other complete repository of listing data. Buyers must contact numerous different real estate agencies to make sure they see an appropriate random sampling of properties. And all of those agencies represent the seller.
Many buyers believe that working directly with the listing agent will save them money. Typically, when a seller negotiates commissions upfront with his agent, the agent concedes a one-point difference between a co-broked sale and one with a direct buyer (who is not represented by a buyer’s agent.) On a million-dollar deal, that 1% comes to $10,000. For most buyers, a buyer’s agent can save them that and more between negotiating a better price and more favorable terms. And in a co-op, there is almost no buyer who can put together a well-crafted board package without expert help.
One of my agents was recently hired by buyers who, confident that they didn’t require representation, assembled a board package to present to the co-op in which they had chosen to buy. Fortunately for them, the Board did not simply reject them based on their submission. Instead, the Board returned the package, indicating that they were unable to review it due to its overall lack of organization and clarity. The buyers panicked. Not knowing how to provide the clarity the Board clearly required, they hired my colleague to assist them in the process of sculpting a more complete and elegant presentation.
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The internet provides listing information, which enables any prospective purchaser to inform themselves about availability in the market, to look at photos and/or videos, and to read about the building. Agents gain knowledge from working for years in the business, learning the nuances which distinguish one micro-neighborhood from another, one building from another, and one buyer’s needs and order of priorities from another. Often buyers do not themselves understand their priorities until an expert agent teases them out as they travel between properties. Increasingly, buyers in complex markets like New York believe that their transparent access to information about availability enables them to become do-it-yourselfers. Without guidance, these buyers are much more susceptible to making mistakes in both price and property. Information is readily available. But information and expertise are not the same.
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ea7a286fbf9be68c58d5d8a45406890e | https://www.forbes.com/sites/fredsmith/2015/06/15/the-pope-poverty-and-global-warming/ | The Pope, Poverty And Global Warming | The Pope, Poverty And Global Warming
The world waits in anticipation as Pope Francis and his advisers finalize an official Vatican statement on climate change and the environment - expected out this week. The Pope is reportedly worried about how climate change might impact the poor, and he is quite right to be concerned. But it is the environmental proposals currently being championed as solutions, however, that are the real threat. The most frequently cited policies for allegedly “dealing with climate change” – like raising prices on fossil fuels and taxing carbon dioxide emissions – would actually cause harm to energy-starved and impoverished nations around the world.
Environmental activists argue the continued use of fossil fuels will produce dramatic changes in the climate that will harm future generations. Therefore, if we succeed in capping greenhouse gases, many, especially the most vulnerable, will benefit. Opponents counter that restricting fossil fuel use will harm poor people today both by slowing economic growth and by denying them access to more efficient, dependable fuels.
Asking the poor of today to sacrifice their livelihoods and hopes in the name of reducing energy use would be a great injustice. Faster growth means more wealth and greater knowledge for future generations. Whatever challenges climate change may bring, our smarter, richer great-grandchildren will have better tools and more abundant resources to deal with them than we have today.
The Catholic Church has a history of resolving complex risk situations. For example, to ensure that saints were properly selected, the Church ensured that both sides of the case were heard. The Advocatus Dei made the case favoring that decision; the Advocatus Diablo – “Devil’s Advocate” – made the opposing case. One hopes that in addressing the morality of energy restrictions, both sides will be heard. The Vatican has heard the case for conventional environmental policies, having recently hosted a conference on this topic. Have they heard the opposing view?
Long before the theoretical effects of climate change are ever felt, the alarmist policies favored by United Nations agencies and major environmental advocacy groups would severely hobble developing countries’ economies. Replacing affordable and reliable fossil fuels with more expensive, less reliable alternative sources would increase the cost of energy around the world. That would be bad enough for low income people in developed nations. If forced on developing countries, it would be a humanitarian disaster.
The world’s poorest people already spend a disproportionate amount of their income on energy. Increasing prices would block the shift in poorer nations from “biomass” fuels like dried animal dung to much healthier alternatives like propane and natural gas.
Increasing energy costs will slow the process of replacing backbreaking human labor with mechanical devices, as occurred over the past century in now-wealthy Western countries. The next stage of industrialization and prosperity will be blocked, as the factories and processes that the United States and Europe used to grow their economies in the 19th and 20th centuries will no longer be affordable—or possibly even allowed under international law.
The impact on individuals and families in poor countries will also be enormous. When a key economic input like fossil fuel energy artificially increases in price, virtually everything becomes more expensive. For the 1.2 billion people living on less than $1 a day, making everything they need to survive even marginally more expensive would be catastrophic.
None of this is to say that potential threats from future climate change should simply be ignored. If the world’s leaders—from heads of state to spiritual leaders like Pope Francis—want to help make the world a safer place, they should champion policies that improve society’s ability to cope with disasters, environmental and otherwise, and avoid those that hamper economic growth and innovation.
A wealthier world is a healthier world, and it’s the people at the bottom of the economic ladder who will benefit most from rising global prosperity. People of good faith have innumerable ways to help our fellow humans flourish and protect themselves from harm. Forcing them into perpetual energy poverty is not one of them. I hope Pope Francis will agree.
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8c5f7ee95cddf4a8804bde9d807db8f3 | https://www.forbes.com/sites/freekvermeulen/2010/11/16/the-hidden-dangers-of-outsourcing/ | The hidden dangers of outsourcing | The hidden dangers of outsourcing
Image by Esparta via Flickr
Outsourcing is one of those words that have become hideously fashionable in corporate lingo in the last 5 to 10 years. A business cynic – which obviously I am not! – might conjecture that perhaps it is popular because it appeals to some fundamental human desires for shirking and procrastination, finally telling managers “to stop doing certain stuff” rather than always pushing them “to do more”. I, as a more thoughtful business observer, on the contrary, think that outsourcing often makes sense, simply because you cannot, and should not try to do everything yourself. Other companies can sometimes do a particular thing better and more efficiently than you, if alone because they can bundle and specialize in it, and then you’re better off buying it from them.
Giving up control
Some companies take it a bit far though… Some time ago I was talking to a senior executive of a major airline and they actually had the idea that in the future they might be able to get rid of all their staff, facilities, pilots, planes, and so forth, and concentrate on “being the director of the chain”; that is, not actually do anything but tie together all the activities conducted by others. Hence, outsource everything accept for the coordination between all the parts. Well… here is my opinion: You can forget about that. Try that, and it won’t be long before nobody needs you anymore.
The classic example of that is IBM’s PC in the 1980s. It was IBM’s plan to outsource everything, add its brand name and just one little microchip connecting all the PC’s ingredients. They outsourced the PC’s microprocessors to some geeky guys who owned one of those founded-in-a-garage little companies in Palo Alto (the little company’s name was Intel) and the operating system to yet another geeky guy with big glasses heading a founded-in-a-garage little company in Seattle (the geeky guy’s name was Billy Gates), in the process provoking the genesis of the most powerful alliance the world of business has ever witnessed: Wintel (Windows and Intel).
Because following in IBM’s footsteps towards Palo Alto and Seattle were all the other computer manufacturers which copied the PC; hence buying their microprocessors from Intel and their operating system from Microsoft. And not for long, Intel, Microsoft and end users alike could not quite remember why they needed IBM in the first place and completely “disintermediated” them. It were Intel and Microsoft that reaped the great big benefits of the booming computer market and not grandfather Big Blue IBM, which ended up in a severe crisis as a result of it.
Giving up knowledge
I’d say there are even more hidden dangers to outsourcing than giving up control of key activities. What is also a major risk, is that of the loss of particular capabilities which – and you might not quite realize this at present – are crucial to your performance in further downstream activities.
Let me give you an example. My colleague at the London Business School Markus Reitzig, together with his co-author Stefan Wagner, examined outsourcing in one particular process; a firm’s filing and enforcement of patents. Firms that do R&D usually try to protect their inventions by getting a patent. Once the patent is granted they often need to engage in enforcing it, for example through proactive and reactive litigation. These different types of activities – patent filing and patent enforcement – are such specialized activities that usually they are carried out by different individuals within an organization.
And now comes the trick: Quite often, firms would choose to outsource the patent filing to some external, specialized law firm – “because they’re the experts and can do it more efficiently than we can”. At first sight, that seems to make sense. However, one of the crucial activities conducted for patent filing is the identification of “prior art”. Prior art encompasses all knowledge disclosed to the public before the patent is applied for. And if a firm outsources the entire patent-filing activity, it also leaves this identification and interpretation of prior art to the external solicitors. The problem is that, in the process, the firm will also lose a rather important “by-product”, namely knowledge about the firm’s technology competitors. That is because, as a result of investigating prior art, firms usually learn an awful lot about competitors working on similar issues. And that knowledge is rather relevant further down the line…
Markus and Stefan examined the firms that had outsourced patent filing and statistically compared them to a bunch of firms which continued to do both activities in-house (despite many telling them “you should really stop doing that, you know; it’s old-fashioned; haven’t you ever heard of outsourcing?!”). And they found that the firms that had not outsourced their patent filing activities were much better at identifying potential technology competitors (and their weaknesses) early on. This gave them the possibility to successfully attack them proactively. Firms that gave up on their own in-house patent filing function, and outsourced it to some external specialist, found themselves ill-equipped for patent enforcement activities. Consequently, their downstream performance plummeted.
My guess is that what Markus and Stefan found for patenting is true for many activities; outsourcing one sub-process might have undesirable (hidden) consequences for some other function somewhere else within the firm. These linkages are largely unknown and often impossible to observe, quantify and measure. However, that does not mean that the costs are not very real!
You have to be careful with outsourcing. What may seem like a relatively tangential activity to you, which you could safely put in some externals’ hands, might accidentally make you lose control and a capability which is critical further down the line. And once you’ve lost that, it will be very hard to get it back.
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fcd03d723c8eaf486944759d351bb9da | https://www.forbes.com/sites/freekvermeulen/2011/03/22/the-price-of-obesity-how-your-salary-depends-on-your-weight/ | The price of obesity: How your salary depends on your weight | The price of obesity: How your salary depends on your weight
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The world of business is still rife with discrimination. Women get paid less than men, people who are physically attractive earn more and are more likely to be seen as suitable leaders, and race determines chances of promotion. The business world in that sense is no different than other walks of life.
And the latter category – obesity – seems one of the nastier ones. Where discrimination based on race, religion or gender are at least generally looked upon as despicable, it seems much more socially acceptable to look different upon people based on their weight.
Obesity and income
Various studies have shown that overweight people are seen as less conscientious, less agreeable, less emotionally stable, less productive, lazy, lacking in self-discipline, and even dishonest, sloppy, ugly, socially unattractive, and sexually unskilled; the list goes on and on.* The stereotypes run so deep that even obese people hold these same discriminatory beliefs about other obese people. Therefore, it may come as no surprise that research has provided strong evidence that obese people are paid less than their slimmer counterparts.
However, my colleague at the London Business School, Dan Cable, and his co-author Timothy Judge from the University of Florida, suspected that this (generally) negative body weight–remuneration relationship might be different for men than for women. After all, as their overview of prior research on the topic revealed, the body weight standards that our media portray for women are considerably thinner than the actual female population, and often even thinner than the criteria for anorexia. Instead, the body weight standards for men represent a much proportional physique.
In order to examine this conjecture, they carefully collected weight and income data on 11,253 German employees and, in another study, on 12,686 American workers; the latter who were measured no less than 15 times over a period of 25 years, to also see how change in weight was related to changes in income. Then, they split the data and their statistical models into men and women. And the results clearly showed that men were treated differently than women; also when it comes to their income and weight.
Skinny women versus skinny men
Skinny women got paid substantially higher salaries than heavier women, yet this relationship was much less pronounced at the higher ends of the scale. Meaning that a female employee weighing 50 kilograms would get paid substantially more than someone weighing 60 kilograms, but the difference between 70 and 80 was much less severe. That’s probably because – as Dan and Tim put it – “the social preferences for a feminine body have already been violated”; you’re either skinny or not, but once you’re over the (rather extreme) threshold, we don’t care much anymore about the number on your scale.
Yet, this relationship looked very different for men. In contrast to the women in the sample, men of moderate weight would get paid substantially more than skinny men. But such a man of average weight would also get paid quite a bit more than an obese person. Hence, being skinny for a woman would mean more dosh, but for men it would mean less money – all in the order of magnitude of $10,000-15,000 per year.
Skinny men, indeed, are often regarded as nervous, sneaky, afraid, sad, weak, and sick, where men of well-proportioned build are associated with traits such as having lots of friends, being happy, polite, helpful, brave, smart, and neat. Dan and Timothy concluded that the media – in the broad form of magazines, fashion shows, actors and actresses, beauty pageants, Barbie dolls and GI Joes – distort our views of what is to be considered normal, and that the ripples of these views can be felt all the way onto our pay slip and bank account.
* For a thorough overview of all these findings, see Judge & Cable. Journal of Applied Psychology. 2010.
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d51a60032f83b88d4402583e871b9c10 | https://www.forbes.com/sites/freekvermeulen/2011/03/30/in-praise-of-hr-the-soft-stuff-can-actually-lead-to-some-hard-competitive-advantage/ | In Praise of HR: The Soft Stuff Can Actually Lead to Some Hard Competitive Advantage | In Praise of HR: The Soft Stuff Can Actually Lead to Some Hard Competitive Advantage
It’s not easy being an HR executive. Just when you are about to applaud the cultural compatibility of a proposed merger someone starts talking about upstream synergies in the value chain. Or you unveil an innovative executive training programmed and boardroom colleagues question its net present value and pay-back time calculation. Or there is a crisis and the company needs to cut costs, so your desk is their first stop, since surely training, recruitment and work-life programmers are easily expendable?
Such attitudes are common, but they are also evidence of startling business naivety. A company’s real, sustainable competitive advantage is almost always based on the softer, intangible parts that HR executives care about – and very seldom on the hard stuff that’s easier to capture in numbers, such as production capacity, cash reserves or even brand recognition.
The hard stuff is often also the easiest to imitate. Production capacity, stock and sales points are things money can buy. A skilled and motivated workforce, a company culture which draws commitment and loyalty and effective informal networks and processes, are much harder to emulate, no matter how much money you have.
In fact the world of business is full of habits and beliefs which are taken for granted and rarely questioned. As an academic, I like to examine the research evidence about what actually happens in the real world of business – rather than what executives and consultants think should happen. Much of the evidence shows that HR practices do indeed have bottom line value. Here are a few of my favorite examples.
Downsizing (almost) never works. But good HR practices will be one of the success factors
Firms engage in downsizing to boost their profitability. But does it work? It has obvious advantages – waving the hatchet lowers headcount quite effectively and leaves you with lower staff costs. But there are some risky potential disadvantages, such as lower commitment and loyalty among the survivors. Academic studies indicate unwelcome rises in voluntary turnover rates after downsizing, often leaving a company leaner (and lamer) than intended.
Professors Charlie Trevor and Anthony Nyberg from the University of Wisconsin-Madison decided to examine who could get away with a downsizing programmed or, put differently, what sort of companies did not suffer from a surge in voluntary turnover following a downsizing programmed. The answer was pretty clear: companies that had a history of HR practices that were aimed at assuring procedural fairness and justice – such as having an ombudsman who is designated to address employee complaints; confidential hotlines for problem resolution; the existence of grievance or appeal processes for non-union employees, etc. – did not see their turnover heighten after a downsizing effort. Companies with good work-life balance benefits – such as paid sabbaticals, on-site childcare, defined benefit plans, and flexible working patterns – also did much better. The surviving employees were more understanding of the company’s efforts, had higher commitment, and were confident that the downsizing effort had been fair and unavoidable.
So downsizing can work; but only if you have previously taken commitment to your people seriously.
The individual star never outweighs the organizational environment
Another myth which non-HR executives tend to harbor, is that star employees can easily take their virtual Rolodex and join a competitor – where they will make them just as much money as they did for you.
This is a painful underestimation of the value of a well-designed organization, and overplays the supposed portability of many star employees. Professor Boris Groysberg from the Harvard Business School examined top performing security analysts and what happened to their performance when they moved to another firm (for an even higher pay cheque); it pretty much always plummeted.
Even security analysts (who are often thought to be able to take their skills anywhere) were much more dependent on the specifics of the organization in which they were embedded than they, and their employers, realized. Hence, careful, firm-specific HR practices help certain individuals perform better – and they can’t just replicate that business in another company.
Losing a star performer can be a good thing – especially if they go to a client
Many top executives are just as frightened of clients or customers poaching their top employees, as they are of competitors’ advances. And, of course, losing your well-trained, top-performing employees is hardly ideal.
However, there is definitely a potential upside – as Professors Deepak Somaya, Ian Williamson and Natalia Lorinkova discovered. They examined the movement of patent attorneys between 123 US law firms and 109 Fortune 500 companies from a variety of industries. And they found strong evidence that if a client company recruited a patent attorney from a law firm, that law firm would start to get significantly more business from that company.
Hence, your employees leaving for your clients can be a good thing; they bring you valuable business. McKinsey understands and manages this process particularly well; when you leave McKinsey you automatically become an alumnus of the firm (rather than a deserter). The firm carefully nourishes its relationship with alumni, because they subsequently bring a large chunk of their business through the door.
Soft initiatives have real shareholder value
The final persistent myth that HR skeptics favor, is that HR costs money and that shareholders do not appreciate all sorts of soft measures, such as work-life programs. That used to be true in a bygone era, but no more.
For example, Professor Michelle Arthur, from the University of New Mexico, set out to examine stock market reactions to the announcement of Fortune 500 firms adopting such work-family initiatives. The results were very clear. In the early 1980s, the stock market would hardly react at all to such soft and fluffy initiatives; if anything the effect of the announcement on a firm’s share price was slightly negative (-.35%). However, that changed into the 1990s, when announcement of a work-family initiative caused an immediate rise in stock price by, on average, .48%. That may seem peanuts at first sight, but if you are a £5 billion company, it implies that even one such initiative would immediately increase the value of your firm by £24 million.
So executives who question the (shareholder) value of work-life initiatives are simply stuck in the 1980s; nowadays even the stock market recognizes their value.
Why isn’t this HR wisdom more widely accepted?
You may know the story of the inebriated cyclist searching for his bicycle keys under the lamppost, although he knows he lost them somewhere else. He tells a passer-by that he is looking for them under the lamppost because “it is light there, and I will never be able to find them in the dark” (where he had actually lost them). The story reminds me of the executive who is trying to solve a company crisis or gain a competitive advantage by managing the things that can easily be measured (production capacity, headcount, profit & loss). Those things may be easy to observe and influence but they are seldom the real root of the problem, nor do they really harness your competitive advantage.
To do that, you have to look where things are much more difficult to measure and manage – to the loyalty of your workforce, their motivation and job skills. Manage those things well and you are truly entering the light.
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1c3e638e5cced3201535d269a83b52ff | https://www.forbes.com/sites/freekvermeulen/2012/05/24/cant-believe-it-we-deny-research-findings-that-defy-our-beliefs/ | 'Can't Believe It' (We Deny Research Findings That Defy Our Beliefs) | 'Can't Believe It' (We Deny Research Findings That Defy Our Beliefs)
So, I have been running a little experiment on twitter. Oh well, it doesn’t really deserve the term “experiment” – at least in an academic vocabulary – because there certainly are no treatment effects or control groups. It does deserve the term “little” though, because there are only four observations.
My experiment was to post a few recent findings from academic research that some might find mildly controversial or – as it turns out – offending. These four hair raising findings were 1) selling junk food in schools does not lead to increased obesity, 2) family-friendly workplace practices do not improve firm performance (although they do not decrease them either), 3) girls take longer to heal from concussions, 4) firms headed up by CEOs with broader faces show higher profitability.
Only mildly controversial I’d say, and only to some. I was just curious to see what reactions it would trigger. Because I have noticed in the past that people seem inclined to dismiss academic evidence if they don’t like the results. If the results are in line with their own beliefs and preconceptions, its methods and validity are much less likely to be called stupid.
Selling junk food in schools does not lead to increased obesity is the finding of a very careful study by professors Jennifer Van Hook and Claire Altman. It provides strong evidence that selling junk food in schools does not lead to more fat kids. One can then speculate why this is – and their explanation that children’s food patterns and dietary preferences get established well before adolescence may be a plausible one – but you can’t deny their facts. Yet, it did lead to “clever” reactions such as “says more about academic research than junk food, I fear...”, by people who clearly hadn’t actually read the study.
Family-friendly workplace practices do not improve firm performance is another finding that is not welcomed by all. This large and competent study, by professors Nick Bloom, Toby Kretschmer and John van Reenen, was actually read by some, be it clearly without a proper understanding of its methodology (which, indeed, it being an academic paper, is hard to fully appreciate without proper research methodology training). It led to reactions that the study was “in fact, wrong”, made “no sense”, or even that it really showed the opposite; these silly professors just didn’t realise it.
Girls take longer to heal from concussions is the empirical fact established by Professor Tracey Covassin and colleagues.. Of course there is no denying that girls and boys are physiologically different (one cursory look at my sister in the bathtub already taught me that at an early age), but the aforementioned finding still led to swift denials such as “speculation”!
That firms headed up by CEOs with broader faces achieve higher profitability – a careful (and, in my view, quite intriguing) empirical find by my colleague Margaret Ormiston and colleagues – triggered reactions such as “sometimes a study tells you more about the interests of the researcher, than about the object of the study” and “total nonsense”.
So I have to conclude from my little (academically invalid) mini-experiment that some people are inclined to dismiss results from research if they do not like them – and even without reading the research or without the skills to properly understand it. In contrast, other, nicer findings that I had posted in the past, which people did want to believe, never led to outcries of bad methodology and mentally retarded academics and, in fact, were often eagerly retweeted.
We all look for confirmation of our pre-existing beliefs and don’t like it much if these comfortable convictions are challenged. I have little doubt that this also heavily influences the type of research that companies conduct, condone, publish and pay attention to. Even if the findings are nicer than we preconceived (e.g. the availability of junk food does not make kids consume more of it), we prefer to stick to our old beliefs. And I guess that’s simply human; people’s convictions don’t change easily.
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85fd6250ee4c184f530acdce463a6e2a | https://www.forbes.com/sites/freekvermeulen/2015/09/22/in-praise-of-thinking-five-strategic-question-to-help-you-reflect/ | Leadership Is About Thinking: Make Time For It | Leadership Is About Thinking: Make Time For It
Have you ever noticed that when you ask someone in your company “how are you?” they are more likely to answer “busy” than “very well, thank you”? That is because the norm in most companies is that you are supposed to be very busy – or otherwise at least pretend to be – because otherwise you can’t be all that important. The answer “I am not up to much” and “I have some time on my hands, actually” is not going to do much for your internal status and career.
However, that you are very busy all of the time is actually a bit of problem when you are in charge of your company or unit’s strategy, and responsible for organizing it. Because it means that you don’t have much time to think and reflect. And thinking is in fact quite an important activity when it comes to assessing and developing a strategy.
The CEO of a large, global bank once told me: “It is very easy for someone in my position to be very busy all the time. There is always another meeting you really have to attend, and you can fly somewhere else pretty every other day. However, I feel that that is not what I am paid to do. It is my job to carefully think about our strategy”.
I believe his view is spot-on. And there are other, successful business leaders who understand the value of making time to think. Bill Gates, for example, was famous for taking a week off twice a year – spent in a secret waterfront cottage – just to think and reflect deeply about Microsoft and its future without any interruption. Similarly, Warren Buffet commented “I insist on a lot of time being spent, almost every day, to just sit and think”.
If you can’t find time to think, it probably means that you haven’t organized your firm, unit or team very well, and you are busy putting out little fires all the time. It also means that you are at risk of leading your company astray. As the famous Management professor Henry Mintzberg described, much of strategy is “emergent”; it is often not the result of a strategic plan just being implemented, but driven by opportunistic responses to unexpected events. Stuff happens. Companies often engage in new activities – customers, markets, products, and business models – serendipitously, in response to external events and lucky breaks. But this also means that business leaders need to make ample time to reflect on the configuration that has emerged. They need to systematically analyze and carefully think it through, and make adjustments where necessary. Many leaders don’t make that time – at least not enough of it.
If you are in charge of an organization, force yourself to have regular and long stretches of uninterrupted time just to think things through. When you do so – and you should – here are five guiding questions that could help you reflect on the big picture.
1. What does not fit? Ask yourself, of the various activities and businesses that you have moved into, do they make sense together? Individually, each of them may seem attractive, but can you explain why they would work well together; why the sum is greater than the parts? As the late Steve Jobs explained to Apple’s employees when he axed a seemingly attractive business line, “Although micro-cosmically it made sense, macro-cosmically it didn’t add up; the sum was less than the parts”. If you can’t explain how the sum is greater than the parts, re-assess its components.
2. What would others do? Firms often suffer from legacy products, projects or beliefs. Things they do or deliberately have not done. Some of them can be the result of what in Organization Theory we call “escalation of commitment”; we have committed to something, and determinedly fought for it – and perhaps for all the right reasons – but now that things have changed and it no longer makes sense, we may still be inclined to persist. A good question to ask yourself is “what would other, external people do, if they found themselves in charge of this company?” Intel’s Andy Grove called it “the revolving door”, when discussing strategy with then CEO Gordon Moore; let’s pretend we are outsiders coming new to the job, ask ourselves what they would do, and then do it ourselves. It led Intel to withdraw from the business of memory chips, and focus on microprocessors. This resulted in more than a decade of 30 percent annual growth in revenue and 40 percent increase in net income.
3. Is my organization consistent with my strategy? In 1990, Al West, the founder and CEO of SEI – the wealth management company that, at the time, was worth $195 million – found himself in a hospital bed for three months after a skiing accident. With not much more to do than stare at the ceiling and reflect on his company’s present and future, he realized that although they had declared innovation to be key in their strategy, the underlying organizational architecture was wholly unsuited for the job. When he went back to work, he slashed bureaucracy, implemented a team structure, and abandoned many company rules. The company started growing rapidly and is now worth about $8 billion. As a consequence of his involuntary thinking time, West did what all business leaders should do: he asked himself whether the way his company was set up was ideal for its strategic aspirations. What would your organization look like if you could design it from scratch?
4. Do I understand why we do it this way? When I am getting to know a new firm, for instance because I am writing a case study on them, I make it a habit to not only find out how they do things but also explicitly ask why. Why do you do it this way? You’d be surprised how often I get the answer “that’s how we have always done it” [while shrugging shoulders] and “everybody in our industry does it this way”. The problem is that if you can’t even explain why your own company does it this way, I am quite unconvinced that it could not be done better. For example, when more than a decade ago I worked with a large British newspaper company, I asked why their newspapers were so big. Their answer was “all quality newspapers are big; customers would not want it any other way”. A few years later, a rival company – the Independent – halved the size of its newspaper, and saw a surge in circulation. Subsequently, many competitors followed, to similar effect. Yes, customers did want it. Later, I found out that the practice of large newspapers had begun in London, in 1712, because the English government started taxing newspapers by the number of pages they printed — the publishers responded by printing their stories on so-called broadsheets to minimize the number of sheets required. This tax law was abolished in 1855 but newspapers just continued printing on the impractically large sheets of paper. Many practices and habits are like that; they once started for perfectly good reasons but then companies just continued doing it that way, even when circumstances changed. Take time to think it through, and ask yourself: Do I really understand why we (still) do it this way? If you can’t answer this question, I am pretty sure it can be done better.
5. What might be the long-term consequences?The final question to ask yourself, when carefully reflecting on your company’s strategy and organization, is what could possibly be the long-term consequences of your key strategic actions. Often we judge things by their short-term results, since these are most salient, and if they look good, persist in our course of action. However, for many strategic actions, the long-term effects may be different. Consider a practice adopted by many of the UK’s IVF clinics – of selecting only relatively easy patients to treat, in order to boost short-term success rates (measured in terms of number of births resulting from the treatment). The practice seems to make commercial sense, because it (initially) makes a clinic look good in the industry’s “League Table”. But, as my research with Mihaela Stan from University College London showed, it backfires in the long run because it deprives an organization of valuable learning opportunities (in the form of patients with challenging underlying etiologies), which in the long run leads to a lower relative success rate. When you start a new strategy or practice it is of course impossible to measure such long-term consequences ex-ante, however, you can think them through. For instance, when we asked various medical professionals in these clinics what might be the benefits of treating difficult patients, they could understand and articulate the learning effects very well. They could not measure them, but with some careful thought they could understand the potential long-term consequences before even engaging in the strategic action. Actions often have different effects in the short and long run. Sit down and think them through.
Strategy, by definition, is about making complex decisions under uncertainty, with substantive, long-term consequences. Therefore, it requires substantial periods of careful, undisturbed reflection and consideration. Don’t just accept the situation and business constellation you have arrived at. Leadership is not just about doing things, it is also about thinking. Make time for it.
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5ed54f97010f75d98d230b37b6d3a3cf | https://www.forbes.com/sites/freylindsay/2020/02/27/eu-migration-is-still-falling-in-the-uk-as-the-government-unveils-tighter-restrictions/?sh=23c37e483c8e | EU Migration Is Still Falling In The U.K. As The Government Unveils Tighter Restrictions | EU Migration Is Still Falling In The U.K. As The Government Unveils Tighter Restrictions
Border Force check the passports of passengers arriving at Gatwick Airport on May 28, 2014 in ... [+] London, England. Photo credit: Oli Scarff/Getty Images. Getty Images
The U.K. Office for National Statistics (ONS) has released its latest quarterly report on migration in and out of the country. The results are not much of a surprise: net migration is stable, with a continuing fall in EU migration balanced out by non-EU arrivals.
The ONS Migration Statistics Quarterly Report looks at a variety of sources to measure net migration. The office counts how many people come to the U.K. with a long-term plan to stay (longer than 12 months) versus how many people leave. Subtract one from the other and that’s the net migration estimate. This report, which looks at the year ending September 2019, found that in that time period around 642,000 people moved to the U.K and 402,000 people left, putting net migration for the year at 240,000.
This is broadly in line, though slightly higher, than the previous few quarters. Migration overall remains stable in terms of absolute number but this obscures changing trends beneath.
To begin with, the regions of origin for migrants are changing. Since the U.K. voted to leave the European Union in 2016, and particularly in the last few years, fewer EU migrants are coming to the U.K. to live and work. At the same time, non-EU migration is increasing.
“While long-term net migration, immigration and emigration have remained broadly stable since the end of 2016, different trends have emerged,” said Jay Lindop, Director of the Center for International Migration at the ONS. “EU net migration has fallen, while non-EU net migration has gradually increased since 2013 and is now at the highest level since 2004.”
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One of the reasons for this will be clear. Since 2016 anti-EU rhetoric has increased in the U.K. and successive Conservative governments have sought to make EU citizens, who had enjoyed freedom of movement within the U.K., feel less like they have a future in the country. The Home Office, responsible for immigration, has introduced a settlement scheme for EU citizens already living in the U.K. (though not without controversy) but for those who are yet to arrive it is becoming increasingly unlikely they will be allowed to make a life in the U.K.
This decline in EU workers coming to the U.K. is one of the main factors behind another shift in the migration pattern, said the ONS’ Lindop: “Since 2016, immigration for work has decreased because of fewer EU citizens arriving for a job. Meanwhile, immigration for study has gone up and is now the main reason for migration. This is driven by more non-EU students arriving, specifically Chinese and Indian.”
In late 2019 the Home Office announced plans to extend the time given to international students to look for a job after graduating, something that will likely attract more students over time. This all fits into the government’s desire to change the U.K. economy from one reliant on “cheap” EU labor to one driven by high-skilled immigration, by offering non-EU citizens a path to working in skilled sectors provided they meet certain requirements.
The plan will likely leave many of those sectors staffed by low-skilled EU workers struggling with labor shortages. As Louis MacWilliam, immigration solicitor at Truth Legal said: “This trend of decreasing numbers of EU arrivals will be highly concerning to the likes of the care and hospitality sectors, who will already be wondering who will fill their vacancies in 2021, when the new changes take effect.”
The labor shortages seem less a concern for the government of Boris Johnson than appearing to deliver on promises made during the Brexit referendum. That is to say, reducing EU migration. MacWilliam at Truth Legal said the latest numbers suggest this continued anti-EU stance might be off the mark: “Today’s stats suggest that the focus of last week’s immigration policy which highlighted ‘high skill’ might be misplaced. Whilst free movement of EU nationals will end, EU nationals now represent a small proportion of new arrivals.”
The new immigration does seem like it would continue to reduce EU migration, for better or worse, but Madeleine Sumption, Director of the Migration Observatory at the University of Oxford, warned against drawing any strong conclusions: “Because it’s so hard to predict future migration levels, the overall impact of the government’s policy plan on numbers is anyone’s guess.”
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67f6eaa425220d10dc2e0b91381435bb | https://www.forbes.com/sites/friedaklotz/2011/11/30/why-being-successful-and-independent-will-ruin-your-marriage-prospects-and-why-the-media-love-to-tell-you-this/ | Why Being Successful And Independent Will Ruin Your Marriage Prospects (And Why The Media Love To Tell You This) | Why Being Successful And Independent Will Ruin Your Marriage Prospects (And Why The Media Love To Tell You This)
Image by epSos.de via Flickr
“IT is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife.
However little known the feelings or views of such a man may be on his first entering a neighbourhood, this truth is so well fixed in the minds of the surrounding families, that he is considered as the rightful property of some one or other of their daughters.”
There’s something beautiful about the hard-nosed frankness of the opening lines of Jane Austen's Pride and Prejudice. Posessions, fortune, rightful property – just in case her readers are romantics, she reminds them her themes will be marriage and money.
When it comes to marriage, little has changed since 1813 -- or that is what you might be forgiven for thinking if you have been swept up in the furore over Kate Bolick’s article in the November edition of the Atlantic. Bolick tells how she rejected a series of perfectly nice suitors when she was younger. Now, at 39, she wonders if she will ever marry. She goes on to argue not only that the institution of marriage is dying, but even more worrying, that because of economic shifts, the "high-status American urban male" is becoming increasingly hard to find.
It's ironic that in a piece examining shifting marriage trends, the attitude that comes through is that of Jane Austen’s England. Apparently in modern American society, tying the knot remains yoked to notions of money and social standing. Bolick tells readers that as women attain parity with men -- they are more likely than men to go to to college and are (maybe) starting to earn similar amounts -- the number of traditionally “marriageable” men is shrinking. Her high status men are all media folk: a writer, an editor, and a "prominent academic." Status is the key term in Bolick's choices. As Hadley Freeman put it in a typically insightful piece in the Guardian -- Single Women: An American Obsession -- Bolick's take on the institution of marriage is “weirdly monetized and loveless.”
When I saw the article in the Atlantic, my first thought was "Here we go again." The Atlantic may be a venerable literary institution, more than 150 years old -- but it has cornered the market in wildly popular anti-feminist articles that are written, of course, by women. Only last year (well, 2008 but it feels like last year) Lori Gottlieb made the case for "settling for Mr. Good Enough" in the same pages of that magazine. Gottlieb caused a stir by arguing that women’s value sinks when she has hit about 35. Even before that there is cause for worry. As Gottlieb revealed, "Every woman I know—no matter how successful and ambitious, how financially and emotionally secure—feels panic, occasionally coupled with desperation, if she hits 30 and finds herself unmarried."
(In the interests of full disclosure, I am single and 33).
For their authors, these articles bring a goldrush of success, though it is tempered with a loss of dignity. Astonishingly a studio has already approached Kate Bolick about making her tale the basis for a TV series. Gottlieb got a book deal after her article (it came out just before Valentine's Day) and her attractive visage became familiar on TV interviews and newspaper profiles; but her admission that she's willing to settle must have made dating that bit more awkward for a while.
The problem is that polemical writers exaggerate and skew the facts. Maybe they have to. Gottlieb's article relied on seeing just two types of marriage: one model of total passion (the unattainable dream), and another, of utter tedium (the unavoidable reality for most women). Gottlieb's Mr. Good Enough was a bland creature, falling somewhere between a provider of cash and a babysitter. And her approach to men was starkly utilitarian: "If you rarely see your husband—but he’s a decent guy who takes out the trash and sets up the baby gear, and he provides a second income that allows you to spend time with your child instead of working 60 hours a week to support a family on your own—how much does it matter whether the guy you marry is The One?”
Bolick’s argument, like Gottlieb's, depends on the reader's acceptance of false dichotomies: you’re going to be either desperately single or smugly married! A man is high status and unavailable, or an ugly (available) chump! If you don’t have kids, you might as well live in a feminist commune in Holland!
Bolick freaks out about marriage statistics but does not explore the numbers of committed couples who may be bringing up families and living together. She notes the disappearance of the desirable high status male, but foregoes a look at the fate of the “low-status” leftovers. Since the ratio of men to women in the US is 49.2 to 50.8 there must be a whole community of undesirable men out there, looking for love. But they're uneducated and not rich, so who cares?
Here are some examples Bolick gives of women who married beneath them:
My friend B., who is tall and gorgeous, jokes that she could have married an NBA player, but decided to go with the guy she can talk to all night—a graphic artist who comes up to her shoulder. C., the editorial force behind some of today’s most celebrated novels, is a modern-day Venus de Milo—with a boyfriend 14 years her junior. Then there are those women who choose to forgo men altogether.
Along the way there are subtle digs at feminism. Bolick hints at the errors of the second wavers, explaining that it was her mother who urged her to place independence before coupling. She quotes Gloria Steinem three times, as an advocate of female freedoms that now seem misplaced.
The undeniable implication of all this is that being self-sufficient and successful will probably wreck your love-life. Hadley Freeman encapsulates the point brilliantly: “the media love any stories that suggest independent women will be punished and ... many women readers, in my experience, glob on to articles that voice their worst fears.”
From the response to Bolick’s article – it garnered 1788 comments on the Atlantic, was reprinted in the British paper, the Observer last weekend, and don't forget the TV series – it looks as though we can expect more of this in the future.
It makes me yearn for Austen. Some of her characters married well, others badly. Ms. Austen herself remained single but felt no need to generalize from that fact.
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7061b5e1724aafafe2270fce13fb58de | https://www.forbes.com/sites/friedaklotz/2012/01/27/the-challenges-facing-young-women-of-gen-x/ | The Challenges Facing Gen X Women | The Challenges Facing Gen X Women
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One morning a few weeks ago I was innocently listening to the radio when I heard something that stopped me in my tracks. A pastor who runs a job support club near London was speaking to a reporter. He said, "Our aim when we started was to go through the process of job seeking -- people who've been made unemployed or redundant. ... We wanted to provide support for them while they're going through the very challenging process of finding new work, especially if you happen to be anything over thirty years of age."
Thirty?! That put a shadow over my hopes of returning to the UK, where I've lived before, and where many of my friends still are. I'm 34.
Do you remember "Reality Bites," the nineties slacker movie starring a doe-eyed Winona Ryder and goatee sporting Ethan Hawke? That's my generation. I was born in 1977, which puts me at the tail-end of Generation X. When I look around me -- considering my own situation and that of my friends -- I don't quite know what happened.
After a career switch at the age of 27, I'm faring well in a job of my dreams. But have I made it? Has any of my female friends? I'm afraid the answer is no, not yet.
One friend, in academia, is wondering if she'll ever get tenure and agonizing over whether to try for yet another postdoc or leave the field for good. Another is starting her own business after being let go from a previous job, and struggling financially while undertaking that daunting task. We are ambitious, over-educated and highly trained women; but despite spending a decade in the workforce our future career paths remain far from smooth.
The Gen X label covers a large swathe of people, including anyone who was born between 1961 and 1981. We are currently between thirty and fifty years of age, and there are 84 million of us in the United States. Characterizations of us tend towards the negative and the ambivalent. According to the Pew Research Center Gen X are "savvy entrepreneurial loners". Meanwhile Millennials (also known as Gen Y) are "Confident. Connected. Open to Change."
When I googled Gen X I found some interesting headlines. Gen-X: The Ignored Generation? in Time Magazine. What about Generation X? in BusinessFinance.com. And this gem from a site called Advisor One -- Gen X: Lonely Hearts, Empty Wallets. (In contrast, articles about Millennials note the "rise" of this "next great generation" and focus on how to retain them in the workplace).
There are good reasons why companies should pay attention to Gen X. A University of Michigan study found that we are better educated than any generation that came before, we work longer hours (indeed, the more education people have, the longer hours they work), and we read a lot. Many of us have children and most of us are employed.
Still, it's fair to say that I don't fully recognize myself in this picture. Part of the problem may be the breadth of the definition. I'm likely to have as much in common with a 29-year-old millennial as I have with someone who's 49. Like many young women I know, I don't yet have children. On the border between two generations, the younger cohort in Gen X risks falling through the cracks when it comes to assessments of our needs and indeed discussions of our fate.
Last night I met two friends from high school who have just moved to New York. One is beginning an internship after a career change, the other had recently got a new job; neither had kids.
We hadn't seen one another in 15 years or so but to me they looked almost the same as they had in school. That's the paradox for women of Gen X. We're not entirely young any more, but we're not old either and many of us are still starting (or starting again) on the journey. And we still need our voices to be heard.
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b097e0bdbc1486bd96aea21216b88f26 | https://www.forbes.com/sites/frontline/2015/04/20/the-rise-of-the-chief-security-officer-what-it-means-for-corporations-and-customers/ | The Rise of the Chief Security Officer: What It Means for Corporations and Customers | The Rise of the Chief Security Officer: What It Means for Corporations and Customers
For business leaders today, no task is more important than ensuring confidence and trust in the organizations they lead. The boardroom has woken up to the importance of security – and to the enormity of what it will take to protect company and consumer data from attacks.Bank of America CEO Brian Moynihan recently explained why cybersecurity is the one function within the company with no budget constraints. In pointing out his own firm is now spending more than $400 million per year, he said simply, “You’ve got to be willing to do what it takes at this point.”At the urging of the board, CEOs are putting a premium on hiring a first-rate Chief Security Officer (CSO) to lead the charge to protect company and consumer data.I often say that the CSO is the “corporate rock-star of the future” because exceptional ones possess a combination of skills that rarely appear in one person. The qualities that boards are looking for in today’s CSOs reflect the complexities of safeguarding company and consumer data in this new threat environment.Technical Curiosity is as Important as AptitudeFirst, of course, the CSO must be technically adept, with an intuitive understanding of a company’s systems, how hackers might penetrate them, and how to defend against attacks. And because no company, no matter how invested it is in cybersecurity, is fully immune from cyber threats, the CSO must also understand how to detect, contain, and remediate the attacks that do occur.Beyond technical skill, the CSO must be technically curious. The biggest mistake that CSOs make is when they become complacent and think they’ve solved the problem they are facing. In this business, you’ve never solved the problem. Instead, great CSOs are always scanning the horizon: They consider what mistakes they may be making and learn from the mistakes that others in their position make. They also never believe that trusting one vendor will solve all problems. While it’s convenient to hand off all responsibilities to a Symantec or McAfee, the CSO role is not about convenience. As I tell CSOs: “You have to try new stuff.” The best-in-breed solution that enables you to quickly detect, contain, and remediate an attack is only useful if you can find it and adopt it. Only the CSO can do that.The CSO is Chief Politician, Communicator, and Crisis ManagerTechnical skill and curiosity are necessary but they’re not enough. The CSO needs to be politically adept too. CSOs must be organizationally skilled-- in carving out the security budget, in influencing other verticals within the company, and in earning the trust of top executives. The best CSOs get the company to build in security as a core feature from the earliest stage of product development. We hear this about designers too, but you can have bad design and stay in business; if you have bad security, you’re out of business. So if a company’s task is “selling shoes online,” it’s the CSO’s job to tell the company that the task is now “selling shoes online securely” and to get the company moving quickly in that direction. The CSO must also strike a careful balance with the board, acknowledging the security risks but explaining how they will be managed.Finally, the CSO must inspire confidence when speaking with reporters and to the public when the inevitable breach occurs. I often say that there are two kinds of companies in the world: Those who’ve been breached and know it, and those who’ve been breached and don’t know it. Customers have demanded more transparency, and President Obama recently proposed a national mandate that would require notifying customers of a breach within 30 days. So the CSO of the future must be a crisis manager, adept at handling the type of breach that spills onto the front pages, solving the problem while projecting calm and keeping the public informed. Put all of this together, and you see why CSOs may soon be the highest-paid executives in the C-suite.CSOs are Rare – But There’s No Mold for the Model CSOThe good news is that there is no single set of experiences that a great CSO must have. Just as the role of data scientist barely existed a few years ago, the CSO role is evolving. I’ve seen successful candidates from a number of backgrounds. Some come from government, combining experience handling classified data with the know-how from working in agencies with tens or even hundreds of thousands of people. Others have long backgrounds in the corporate world. A few have been in the trenches with startups developing the best-in-breed solutions of the future. So focus less on whether CSO candidates fit a specified checklist and more on how they combine a security background with the attributes needed to push change in the organization.
And while the list of attributes is daunting, know that there are great examples out there – CSOs like Jim Routh at Aetna, James Shira at Zurich Insurance, Phil Venables at Goldman Sachs, and Richard Hale at the Defense Department. They work in different industries, but all are well respected and well spoken, technically adept, progressive with trying new technologies, and committed to holding themselves accountable. Just as the U.S. Air Force began as a unit within the other military services before evolving into the unique fighting force it is today, security has now moved from an organizational feature to an organization in its own right, with companies committing hundreds of millions of dollars to the challenge.In the current threat environment, with the dangers of cyber attacks rising every day, business leaders must do more to restore trust. It’s time to seek out the CSOs of the future to lead the way.
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2a6149311cc2b955fa7e1fbbb820bed8 | https://www.forbes.com/sites/frontline/2015/06/22/why-its-worth-divorcing-information-security-from-it/ | Why It's Worth Divorcing Information Security From IT | Why It's Worth Divorcing Information Security From IT
Back in the 1990s, it made perfect sense for security to be an IT function. Corporate networks had a hard perimeter, firewalls were the foundation of IT Security, Kevin Mitnick was the face of corporate hacking, and corporate owned laptops – and Palm Pilots – were a status symbol. These days, enterprise-computing environments are global, borderless, fully mobile, and extremely complex. Despite all this change, the cyber security function has yet to scale and evolve accordingly.
With record breaking breaches occurring on a regular basis it’s clear that corporate cyber security requires a major overhaul. The good news is that the needed changes do not require magic fairy dust or genie lamps. They require the confidence and willingness to re-engineer corporate organizational charts and business processes to account for how quickly enterprise computing environments – and the threat landscape – have evolved. And a great first step towards modernizing corporate cyber security is to consider “divorcing” it from IT.
Modern day IT organizations are primarily service-oriented, tasked with managing and maintaining the infrastructure and technology resources workers rely on to do their jobs. As such, the mindset of IT operations is all about time and productivity: The time it takes to resolve and close a ticket, the time and cost of delivering and maintaining applications and other resources quickly and reliably, and ensuring end-user satisfaction.
Today’s threat landscape requires security professionals to adopt a post-breach mindset and assume their organization has already been compromised. Security professionals must adopt the mindset of a detective, never taking anything at face value, looking for links between malicious events and intent behind seemingly innocent ones, in order to solve a crime that has already occurred. If security teams continue to operate in a culture dominated by the IT mindset, they will be more likely to miss important clues and hinder the ability to detect cyber-attacks,
Too often, when Security reports to IT, we find the IT mentality interferes with security processes and priorities. These days, there is little to no common ground between keeping IT systems up and running for authorized users and monitoring them for signs of compromise by smart, stealthy criminals. Identifying and securing an already compromised system requires the capability to differentiate malicious activity from normal behavior, and hackers are very good at making their activity look normal. The only way to find them is through a combination of new technologies and human judgment.
Being a subdivision of the IT department makes security blind to important business processes and to decision making at the corporate and department level. For example, security teams often don’t have visibility into planning processes in HR, Marketing, and R&D departments, making them, at best, late to know about technologies that are being deployed and project sunder development, and at worst, blind to the risks that already exist.
Even on their own home ground - the IT department - security rarely gets to review investments early enough. Being late for the game, security teams have no other choice than acting as showstoppers to reduce risk. Bringing security in earlier to the planning stage will enable them to identify and mitigate IT risk pre-deployment, transforming security from “the folks who say no,” to those who enable the business to move forward with minimal risk.
Today’s security pros are no longer sentries guarding clear, digital borders – they are risk managers and strategists. As such, it makes sense for them to sit outside of IT and be involved in strategic planning. Ideally they would be affiliated with those functions that oversee and manage business risk and report into the CFO or CEO (or both). The only way the security team can foresee information security risks across the entire organization is to have full visibility into all enterprise risk vectors, including those the organization has little to no control over (e.g. cloud service providers, business partners, customers, etc.).
With barely a week passing without a data breach making headlines, business leaders are finally paying attention to cyber security. Many organizations have recently started inviting CISOs to boardroom discussions. But this is only the start of making security the priority it should be. Organizations must be willing to integrate security to every aspect of operations in order to better address the complexity of today’s cyber threats.
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0b145e80881328dddb8c81f5cf64bc55 | https://www.forbes.com/sites/frontline/2015/07/13/why-cybersecurity-leadership-must-start-at-the-top/ | Why Cybersecurity Leadership Must Start At The Top | Why Cybersecurity Leadership Must Start At The Top
If the past year has shown us anything, it’s that companies should no longer ask if they are going to be hacked and instead when. With every company becoming digital, the pace of change is only accelerating and our ability to make the right decisions on cybersecurity needs to move even faster. Some estimate that between $9 and $21 trillion of global economic value creation could be at risk if companies and governments are unable to successfully combat cyber threats.
As cities, countries and companies navigate at the fast pace of change in this new era of the internet, security will become more essential to the business and in many cases, will help drive growth. Businesses will be driven by security embedded in the network, architecture, data at the edge and convergence of applications. Transformations such as the one we are experiencing now will also require smart leadership from the board and the c-suite.
We predict connected devices will grow to 50 billion by the year 2020. The average connected device has over 20 identified security vulnerabilities. Cyber-attacks are gaining the ability to become more and more complex, increasing the risk they pose for companies everywhere. The pace of change, as businesses continue to transform, will require boards and the C-Suite to make fast and effective security decisions that protect the company business – both from a market perspective and a reputation perspective. Security is no longer just about protecting a business’s information. It is critical to maintaining trust with the public and customers, building company reputation, as well as safeguarding data, IP and critical infrastructure. This can all influence higher-level issues like maintaining competitiveness in the market, stock price, and shareholder value.
With no common set of standards in place, Internet security is lagging behind the sophistication of hackers. The global economy is not adequately protected. Of companies that were attacked in 2014, 81 percent were not able to identify the breach themselves and on average it took them 188 days to realize their security had been compromised. For companies to take action now, security needs to become an issue from the top down. Both the board and CEO must ensure that they are making the right decisions about security through the following ways.
Understand cybersecurity as a risk
In a recent ISACA report, 55 percent of corporate directors said that they must personally understand and manage security as a risk area. The board’s involvement with cyber risk may be growing, but many members still do not understand key areas. The board should start by asking questions about the company’s approach to security and readiness to face an attack and the CEO should be prepared to answer them. Critical areas include whether or not the company understands the cybersecurity landscape and how it can affect its key business sectors. They should also ask about how cybersecurity fits into the overall corporate planning process and whether executives take ownership of this. Additionally, the board should know the company’s process for disclosing security breaches and if there is a set plan in place.
Combine business and technology architectures
The CEO must make it clear that security is not just an IT problem – it is a priority for the business that is top of mind. Business and technology leadership must work together to discuss potential risks and find solutions that protect intellectual property and financials alike. A security strategy should focus on the critical services that enable the company. CEOs need to be able to answer tough questions and prove that they are leading a security strategy that works through testing and explanation.
Manage breaches before they happen
While breaches seem inevitable, managing them – long before they happen, while they are happening, and after they have happened is critical to maintaining shareholder, customer, and employee trust. Right now, boards and CEOs play the most crucial role in getting this right, and we must lead.
When a security breach happens, it’s the CEO’s job to be the voice of calm amidst the firestorm. They should take charge to explain the action plan that is in place and what steps are being taken to investigate and fix the situation. The CEO’s ability to understand the technology they are using and the security industry as a whole is critical.
In today’s connected world, making security a top priority for the business is no longer a choice for CEOs and board members – it’s a must. As we’ve seen in recent news headlines, security breaches can bring entire multi-billion dollar organizations to their knees. In 2014, companies experienced 783 major data breaches, an increase of 27.5 percent from 2013. These incidents cost companies on average $3.5 million, or 15 percent more than the year before. In this new threat landscape, security will contribute to whether or not companies will successfully navigate market transitions. Board members are in the driver’s seat and must take action now to build sound security strategies that protect companies from an attack.
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0d15cf6db99dc4f43f24959637532043 | https://www.forbes.com/sites/gabbyshacknai/2021/02/01/how-cnns-kaitlan-collins-built-a-career-covering-trump-and-became-the-networks-youngest-chief-white-house-correspondent/?sh=7b433d71546a | How CNN’s Kaitlan Collins Built A Career Covering Trump And Became The Network’s Youngest Chief White House Correspondent | How CNN’s Kaitlan Collins Built A Career Covering Trump And Became The Network’s Youngest Chief White House Correspondent
Courtesy of Kaitlan Collins
The first time Kaitlan Collins set foot inside the White House Briefing Room, she was utterly enthralled. As she stood in the back and watched Josh Earnest call on reporters and answer their questions over the course of an hour, she found herself fantasizing of the days when she would be among them, raising her hand from the first row. In January 2017, Collins’s dreams became reality when The Daily Caller named her White House correspondent following her coverage of the 2016 presidential campaign for the site. But the White House she was now in was nothing like the one she’d glimpsed just a year earlier, and as Sean Spicer stepped down from the lectern for the first time, it was obvious that chaos was afoot.
“I think the people who explained the craziness best to me were not other correspondents or reporters but were photojournalists, who had covered multiple presidencies,” Collins recalls. “I remember being at the Trump White House in the early days, and one of them was like, ‘This just doesn’t happen. The pool doesn’t get called at the last minute to go to the Oval Office to hear from the President, where he takes 10 questions and makes so much news that you don’t even know where to start when you go to report it.’” As the rest of the country adapted to Trump’s large-scale changes, like a sweeping travel ban and repealing the Affordable Care Act, the rookie reporter and her colleagues were facing more localized shifts within the White House, from the logistics of his briefings to the way he spoke to and about the press.
Despite the unexpected circumstances of her new job, however, Collins rose to the challenge, even as other journalists shied away from it. “I think one of the key aspects of being a good reporter, apart from knowing where the story is and what the news is, is knowing where your skills are best fit, and for me, that was Trump,” she says. “I never even thought about not covering every minute of him.” But doing so, she knew, would be no walk in the park. “People who worked in the Trump White House were incredibly manipulative and would straight up lie to you, so you had to filter through that,” she explains. “Then there were the personal attacks, where it wasn’t just the standard fare of an administration thinking they hadn’t been treated fairly, and it got incredibly personal, which, in my opinion, it never should.” While others were turned off or exhausted by Trump and the new normal of the White House, though, Collins was convinced it was the best story in town and knew from day one that she couldn’t walk away from it.
Soon enough, her dedication to her work caught the eye of CNN, and she was invited on the network on several occasions. “Obviously, The Daily Caller is a more ideologically aligned organization than CNN, which is worldwide and has such a range of coverage,” Collins says of the right-wing news site founded by Tucker Carlson. “It was pretty rare for a Daily Caller reporter to be invited on CNN, and I knew that at the time and felt very grateful that they didn’t care about that. They just saw me as a reporter and wanted me to come on because they thought I asked good questions in the briefings.” But it wasn’t until that spring, when Collins met the network’s president, Jeff Zucker, at a White House Correspondents event, that the prospect of working at CNN really crossed her mind. “I just said, ‘thanks for having me on, I really appreciate that, and I know it’s not a given that I’d be on, and I’m super grateful,’” she remembers. “And just from that meeting, it turned into some interviews, and a month later, they hired me and brought me onto the White House team.”
It was clear to Collins from the minute she joined the network in June 2017 that she was now in the big leagues. “When you go on CNN and give a report from the White House, people from all walks of life are listening to you to see what’s going on, and they’re counting on you to know what you’re talking about and to present it fairly,” she says. It was a lot of pressure, but pressure is in fact Collins’s biggest driving force, and it’s what enabled her to flourish in this new role. “I think that the best way to earn the respect of your colleagues—not just within your own team but within the entire White House press corps—is to be well-read on what’s going on and to have good reporting,” she notes. “I think that’s what I tried to do as soon as I joined the team, and I really just hit the ground running.”
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Collins was privy to the Trump White House’s distaste for the press from the start, but as a member of CNN, a network the president denounced almost daily, she saw a whole new side of it. “I think what really caught me off guard when I first started was how much you could become the story—not by your own making but by what the White House decided to do,” she says. Just over a year into her new job, Collins was representing all the television networks as the ‘pool reporter’ during an Oval Office photo op when she asked Trump about Vladimir Putin and Michael Cohen. The president refused to answer, and a few hours later, Collins found out she was banned from a Rose Garden event that afternoon. “I quickly became the story when they kicked me out of that event and then tried to dispute that they’d banned us,” the CNN reporter recalls. “You had to really make sure you were always on your game so that no one could question you or your credibility.”
The attacks against Collins and the network she represented continued throughout the Trump presidency, and just last year, she was once again the focal point of news coverage when White House Press Secretary Kayleigh McEnany refused to take her questions, citing that she doesn’t “call on activists.” Yet, the reporter managed to keep her coverage impartial through it all. “In addition to being clear and transparent in your reporting, you also need to make sure that you’re not personally involved in it; it really is the main pillar of journalism,” Collins says. “And I think with Trump, it helped that I’m not a very emotional person, so even though I was getting so many calls and messages asking if I was okay, it truly didn’t faze me at all. It was just what you came to expect from the Trump White House.”
But, even as she remains above the fray, Collins doesn’t deny the partisan divide that’s spread across the country over the last four years. “It's always existed to a degree,” she says, “but I think he exacerbated it and inflamed it.” As an Alabama native with family members and friends who’ve supported Trump, the reporter has frequently found herself having to defend the network and explain that it isn’t, as the president has long suggested, ‘fake news.’ “It was something that we knew he didn’t really mean because he watches CNN, but it did really shape how his supporters view things because they listen to him and internalize what he says,” Collins remembers. “We see, as we have in the last two months, how dangerous that is and how dangerous this mentality of right versus left can be.”
It’s this behavior, she believes, that’s responsible for the recent attacks on democracy, including January’s insurrection. “So many people got spun up by these lies that they attacked the U.S. Capitol and threatened to kill the House Speaker and the Vice President,” Collins explains. “You see just how far it can go, and what people think is innocuous or just spin has real-life effects, so you’re abusing your supporters’ trust when you feed them lies.”
Courtesy of Kaitlan Collins
Collins saw the buildup to this while reporting from the campaign trail last year, but it was also what reminded her why her work is so critical. While covering Trump’s packed rallies, where she was often one of only a handful of people wearing a mask and social-distancing, she was forced to risk her own health and safety simply by doing her job. “But I think the most jaw-dropping aspect was hearing people say that they don’t believe the pandemic is real or that masks help you,” she says. “It was hard to stomach that, and you really do realize how important the coverage is and how important what you’re saying is because people do listen. This year has made us all realize just how important it is to get things right.”
While her journalistic savvy and allegiance to truthful and transparent storytelling have been obvious throughout her time at CNN, it was Collins’s reporting over the last year that really secured her fate as a star on the network and prompted her promotion to Chief White House Correspondent. The announcement came on January 11, making the 28-year old one of the youngest Chief Correspondents in history for a major media network. But her new job also comes at a time when everything Collins knows of White House reporting is being turned on its head. “It's a transition coming amidst another transition, which is covering a whole new White House with brand new officials, a brand new president, and a brand new cabinet,” she notes. “And it’s hitting the reset button on all this knowledge that I’ve stored away for the last four years.”
The Biden White House has already initiated a return to more traditional media relations, and Press Secretary Jen Psaki has shown a clear commitment to continuing this trend. Collins, like many of her fellow political journalists, is letting out a sigh of relief as a result, but she also knows it will take some time to fully acclimate to the new (old) normal. “It’s a shock to my system because I don’t know anything else. All I knew was Trump, so I’m in for this whole new reality,” she says. “I think most people see Trump as the aberration and this as a return to what we used to see, but this is actually entirely new to me.”
Collins is ready to move past the personal attacks on the media and the disputes of reality that have marked the last four years, but she vows that even as the White House changes, CNN’s coverage of it will not. “I think it’s important that we’re covering this just as toughly as we would any other White House and that it gets the same level of scrutiny that any other administration would,” she insists. “That’s our goal with our coverage, and that’s where we’ll move going forward.” But for now, with no reason to start her day patrolling Twitter or looking for sudden firings, Collins is enjoying a little extra sleep.
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