Life at Shopster.com

This is the Season to bring out the worst in people

2009-12-21T16:23:00.005-07:00

I received an email this past week that pissed me off.

It pissed me off because it was unethical.

It pissed me off because it was a blatant attempt to encourage theft by employees.

It pissed me off because I know people will fall for it.

And most of all it pissed me off because I know that when I call them out on it, they will blame the poor employee they tempted.

I am talking about a company called Internet Retailer and this was their offer:

As an Internet Retailer subscriber or previous IRCE attendee, we are sending you this pre-launch notice that the 2010 Internet Retailer Conference & Exhibition web site is now live with complete details of IRCE 2010, which will be held at McCormick Place West in Chicago on June 8-11. As a special holiday offer to the Internet Retailer community, if you register between now and January 15 to the world’s largest e-commerce event, you will receive a $100 cash rebate (presented to you when you pick up your pass at the show) in addition to the $200 early-bird discount. This rebate offer applies only to conference registrations and not to Exhibit Hall only or Workshop Only registrations. Happy Holidays from the staff of Internet Retailer.

$100 CASH to the attendee?

So as an employer I pay a bill for a supposedly legitimate business event.

And they then slip an C-note back to my employee?

If you want to give a discount - give a discount, this $100 cash back is just a kickback.

Shameful business practices Internet Retailer.

Things must be tough at IR if they have to resort to bribes... I wonder if the show is going under? What happens to all the 'early bird' buyers if the show goes under, my guess is that their money is lost forever.

So even if you don't mind the cash bribe... think its worth risking your entire fee?

Calgary Stampede 2009

2009-07-13T09:29:00.005-06:00

Some of the Shopster gang at the 2009 Calgary Stampede.

The Tough Guys... L to R

Sarath "Smiley" Samarasekera, Paul "too tanned" McCluskey, Mike "Danger"Barrette, Peter "Can't muss my Hair" Koizumi, Mitchell "Peter is stepping on my toes"Cowie

The Lovely Ladies

Suzy "yes that is a gun in my pocket" Vadori, Sarah "my bottle is empty"McVean, Suzanne "No I am not the shortest, I am just sitting" Lucas

pancakes again...?

2009-07-09T11:25:00.003-06:00

For those of you unfamiliar with Calgary and the Stampede you will also be unfamiliar with a grand tradition called the Stampede Breakfast.

First of all, the stampede is a time where the entire city shuts down and revisits our frontier roots for 10 days. these 10 Days of bull riding, roping and other frontier skills are shown off and keenly contested in pursuit of a million dollars in prize money, but frankly that has just become a backdrop a motif for a 10 day paid vacation and publicly condoned extravaganza of excess. Too much alcohol, too many parties, too many rides, too many things deep fried, and too many pancakes.

Ahh the stampede breakfast. For 10 days breakfast is free. Ranging from the basic sausage and pancake breakfast to a full blown buffet, the stampede breakfast is free for any and all passerby,and forms the nutritional foundation on which the non-stop parties are built.

Yep free, yep open to the public, and 200,000 of them are served up each year.

The breakfast is more than just a moochers paradise... its a place where Calgarians meet each other. The great equalizer at the stampede is the cowboy dress code. This ranges from John Wayne copycats, to pink hat/skirt / boot combo monstrosities, to the urbane jeans and cowboy shirt. In the cowboy guise CEOs and interns mix and discuss the world at large... though in my experience rarely are cowboy events such as the rodeo discussed.

In the cowboy guise, everyone is approachable. The beautiful girl you wish you could say hello too. The VP whom you wish would notice that you are the perfect candidate for a promotion and the the CEO you want your company to do a deal with. Under the cowboy guise it just takes a casual "howdy" and anyone can start up a conversation. Under the cowboy guise you can buy anyone a drink and start up a conversation.

So for anyone serious about networking in Calgary, the stampede is a must, and many breakfasts, lunches and party appearances are a must.

Having said that i have had enough pancakes this week, the 6 pancake breakfasts put on by Shopster's lawyers, accountants, investors, friends and would be partners were great... but now 7 days into the Stampede... its just too many. I swear, no more pancakes for at least 6 months, no more sausages, no more lukewarm coffee, well except for tomorrow morning, but that's for sure it - I swear!

Remembering Robert McNamara

2009-07-06T07:38:00.003-06:00

Today at 93 Robert S. McNamara died.

Some of us read history, and for a few hours I was lucky enough to meet someone who had created it.

I could write volumes on that meeting, it deeply impacted the way I think about the world. More than any other story, McNamara's personal recounting of the dark days of the Cuban missile crisis stands in vivid relief to the haze of all the books and movies on the subject that I have consumed over the years.

McNamara told me that they would have invaded Cuba if not for John F. Kennedy. That they believed that they had to seize the island before nuclear weapons became operational. The invasion strategy was in place not knowing that local Cuban commanders had both tactical nuclear weapons in the field AND the authorization to use them.

What would the world look like today if a US battle group was nuked in the 1962?

I think that McNamara realized that one man can change the course of world history the way JFK did, which is why he dedicated the last decades of his life fighting not just against proliferation of nuclear weapons, but for those who have them to vow never to use them.

The species above the nation. A pioneering humanist, a defender of all humanity.

Social Networking for your Products? What the Heck is that?

2009-06-30T10:43:00.002-06:00

Social Networking for Products, Merchant Network... what is that?

Frankly they are terms that I hope will provoke questions. And they are terms that will define a new way of doing business in the future.

Social networks are all the rage because they allow us to understand how people are connected to each other and how those connections influence behavior - knowledge which we can then sell - or we at least that is the hope.

Social networks however are far more than that. due to sites like Facebook, my network or profile is not a mirror of my network rather a network that is creating deeper connections in ways that were unattainable in the past. There are reams of data, blogs, and epiphanies on this, so I won't share mine at this time.

What Shopster is doing is acknowledging that relationships are more than just social, that in fact we have many types of relationships in our life that can benefit from the deepening and enriching of the possible interactions.

In commerce, relationships cost money. Money to develop, money to maintain and money to extend. We are willing t expend this money on certain relationships because they create more money than they cost. (enter caveats re: time and geography and goals)

Implied in this is that some relationships cost more than they create, and the astute business person will abandon these.

Also implied, though less obvious, is that some relationships will have such high up front costs, that even if they are net positive, the entry level cost is beyond our means and so we don't attempt to start. An example might be a franchise - $500K to buy in is beyond many people so they don't start a coffee shop franchise. The coffee shop franchise however has a 100% success rate of returning 15% ROI. This is just a lost opportunity for the individual because they can't meet the entry requirements.

Back to social networking for products.

This same issue arises in business. I may wish to enter the retail clothing business. The cost of start up inventory may price me out of the market. Does that mean i am less capable of running the business, or does that mean I am less capable of raising financing? If we create a system which allows individuals to leverage their strengths and support their weaknesses, then the entire system is more valuable.

simply put, the social network for products is about getting products to people who have the skills to sell. Those that can make - make, those that can sell - sell - but more so.

Let me give you an example of the extreme power of networking for products. Manufacturer A builds high end baby cribs in Michigan. They sell these cribs on their website and have a small sales force that travels from one retail location to the next trying to get in store product placement or floor space.

This is a typical small manufacturing business model.

Using Shopster's Merchant Network to run their website they can sell online. As they do today. They can also extend their online offering to sell linens, mattresses, children's toys - anything that a customer who is looking for high end cribs might also want. And with Shopster there is no inventory management of these other items, and no upfront capital costs of buying these items.

Result: Potential to earn more per customer than without Shopster.

But there is more. Manufacturer A can also decide to allow others to resell their cribs. So another Shopster user who sells children's toys can now add those fabulous cribs to their store.

Result: A new distribution channel. One more place they can make a sale.

Collaboration in a space with real exchanges of product and money is tough. Depending on your network for your inventory, for your fulfillment and eventually your reputation is also tough. The value of the network is in managing these collaboration risks and the sharing of resources. Your marketing talents no longer just serve you, they help someone else. Your manufacturing skill no longer just helps you they help someone else. Your financial abilities no longer just help you, they help someone else.

Social networking for retailing wont just be on online version of existing retailing relationships - they will deepen and change and intertwine merchants with each other, enriching the entire community.

Those outside the network will begin to suffer because they, as individuals, will know less, will have less, and can make less than those with the support of the network.

Going it alone will be increasingly difficult in a future world where all your competitors are working together.

The little things...about marketing

2009-06-15T10:58:00.006-06:00

I am trying to understand marketing. I don't, and I realize that most people who claim too don't either.

5 years ago, we opened our first Shopster office in a not quite dilapidated building where the heating rarely worked and maintenance was ad hoc at best.

Lots of little offices around a central kitchen. Home to host of transient companies the kitchen had build up quite an inventory of partially consumed foodstuffs. Exploring amongst these leftover treasures I found a can of Nabob coffee. The coffee was old and seem to be of a non-consumable nature, however within the stale grounds was what I would later come to regard as a rare gem.. it was a coffee scoop.

The vast importance of this was lost on me at the time. As with most startups, coffee was the fuel we ran on, and so we bought a commercial grade coffee maker several tins of Folgers coffee - it was the cheapest at the local store.

Alas, whether as a cost savings effort, or a an environmental initiative, Folgers did not provide a scoop for the coffee. Then I remembered seeing one in that old can... which not being sure it was mine to throw out, put back in the cupboard to become more stale (if possible). I then stole the scoop and put it in my Folgers tin!

Just this morning I reached into the coffee can and pulled out that old broken scoop to make coffee. I know its a Nabob scoop and I see it on a daily basis. But I don't ever think about buying Nabob - you know, as a brand.

Not that I wouldn't buy Nabob, in fact I have. I just don't seek it out.

So - marketing Nabob

coffee.... good (enough)

everyday front of mind - good

tangible item - good

no brand loyalty... bad

I'm no coffee snob - just need my caffeine fix in the AM... so I should be somewhat susceptible to a brand like Nabob since its right in front of me.. right?

So what am I missing.

At least I have the scoop... it measures the right amount every time, of someone elses coffee.

Life lessons #316

2009-06-04T00:14:00.001-06:00

The best tip I ever got was to assume that kids will take everything you say literally. This evening I was at my good friend's house for dinner. At 2 and a half Blake was becoming quite a character. he had a huge vocabulary and his proud parents were showing it off. When asked his name, Blake would respond Blakey... in the affectionette tone used by his mother. When asked what his long name was - in an attempt to have him say his full name - Blake responded "Blake Everett Trudel come here!"

Walking a mile in her shoes

2009-05-27T16:10:00.003-06:00

Part of starting something new is nostalgia.

As we get closer to the next big product release from Shopster, one which I know will change online commerce and how we think about it, I am forced to assess the past, and our journey here. The Shopster merchant network is not an epiphany, rather the culmination of years of learning and a rapidly evolving market.

Customer support and supporting the customer are, to my chagrin, quite different ideas. When the first alpha version of the Shopster platform went to market in 2005 it failed to meet several aspirations we had. We wanted a store system that was intuitive and simple to use, the reality was less so. To bridge the gap - our customers need support - we decided to offer enhanced customer support. 1800 numbers, email, and live chat. Heck, if you wanted to, you could even come to our office and we would sit down with you and walk you through any issues you had (yes, they did come, from as far away as Austria even)

those early days there were 8 of us, and we all took turns doing lots of jobs. One of my most interesting jobs was to be on live help chat.

Talking to customers first hand was important, made me understand what was working and what wasn't. I was also witness to the full gamut of personalities. The serious entrepreneur, the casual entrepreneur, the user looking for some social interaction, the crooks who were looking for a quick scam, the dreamer looking to get rich without effort, the surreal customer who thought that $29.95 guaranteed success and millions in profit, and the hero, who unexpectedly found us, and made themselves successful. The full rich potpurri of internet users can overwhelm the senses.

The name Sarath is interesting. Interesting because it is very close to Sarah. "smart" software often catches the "t" error and auto deletes it - which really really helps me sort spam and junk mail. This auto deletion of the "t" also happens with people.

Back in the day, 90% of the people I chatted with would repeatedly refer to me as Sarah, despite the fact that each time I responded, Sarath would appear next to my chat.

Many a time I was propositioned, and flirted with, and insulted with vulger language. None of this made sense at first since there was no picture, we were talking about highly non-sexual topics such as importing graphics to a store template... but yet, there it was, the 'you sound like a very nice person, you wouldn't happen to live near XXXX would you?"

As a test, I would sometimes login as "Steve" and miraculously, my experience was quite different. No more flirting, seems 'Steve' is not an attractive name, and I also realized that the customers, especially those with grievances were far more aggressive in dealing with Steve. Steve got ultimatums and Sarah got commiseration. Steve got yelled at, Sarah was asked to put her supervisor on the line...

I don't get to do customer support as often, but still do some occasionally - but at least now i feel like i understand what our customer support people go through.

For those of you who propositioned Sarah, sorry to disapoint.

There and Back again...

2009-05-21T09:00:00.002-06:00

Five years ago in a galaxy far far away an idea was being conceived over the course of several happy hours in some of the most pocket book friendly taverns in Calgary.

It was exciting, it was new, it was such a simple idea… shhh… don’t tell anyone or they might steal it. The best part was, that after each beer the idea became easier, better and more brilliant. Make retailing easy by solving the supply chain issue, make building stores simple so our users could focus on the part of retailing they were best at. I am of course talking about Shopster.com.

Looking back on 2004, when an idea became a company, I see the delusion in all its glory, the delusion of entrepreneurs about to start a bold adventure. Delusion? Sure! We thought it was going to be easy. We thought we had all the problems thought out. We thought this would be quick and successful and like the conquering heroes, three young(ish?) men would shake up the retailing world.

Over the next few months Shopster is going to undergo a massive transition. I will be sharing the goings on here on this blog, if for no one else, than my mom. (As always, with each major new release, our existing customers get to move onto the new product with bonuses. We don’t forget where we came from.)

The next release of Shopster is the culmination of 5 years of tireless effort to create a retail business system that transforms the entire industry. Many facets of retailing haven’t been sustainable. The recent crash and upheaval in the industry has been a catalyst for Shopster, driving both our customers and us faster towards the Shopster Power Merchant Network… more on this later. Today I want to talk about delusion and those first days.

Our first real (lots of test orders before) sale didn’t occur till October 29, 2005. One of our websites – gamingforless.com – sold an iPod – yes an apple iPod – the classic, the first and already a global phenomenon. The website went live and magically out of the internet forest someone found us and went shopping.

In 12 not so easy steps…

They looked around and added an iPod to cart. Check

They hit checkout. Check

They entered their personal info. Check

They entered their credit card. Check

All done… nope, not yet

Order came to Shopster. Check

Order passed fraud review. Check

All done… nope, not yet

Order was sent to supplier. Check

All done… nope.

Order cancelled by supplier – out of stock. Oh crap

When will supplier get next shipment of iPods – 2 - 4 weeks…? Oh crap.

Now what? Cancel the order? Not our first one!!

So, pull out personal credit card. Check

Go to Amazon.com. Check

Buy more expensive iPod. Check

Ship it to the customer. Check

That was our first order.

The heady rush of going live, of watching our first customer buy something, followed quickly by anger and dejection of being out of stock, followed by a rueful acceptance of having to pay more for an iPod than your customer paid you just so you don’t let the customer down. Followed 42 months later by regret at realizing that the company never did repay you for buying an iPod on your personal credit card.

That wouldn’t be the first time or the last we lost money on a sale… but there were some valuable lessons all along the way and today we have custom fraud detection system to protect customers, real time integrated ordering with suppliers, and detailed reporting on supplier performance, which allows us to identify potential problems before them become serious.

Even when you try to do the right thing, customers can get mad, but many times, sometimes quite unexpectedly customers shower you with praise. Getting into business isn’t for those that can’t deal with emotional ups and downs.

Hockey Pools and Fools

2009-04-15T10:47:00.003-06:00

April 15th... time to take your money.

Shopster's annual hockey pool draft begins at 12MST.

Today's pool is being preceded with significant smack talk... considering it is a winner take all, then it can only end with 1 winner and many many fools.

so then the cheats come out.

Suzy is bringing her husband in to make her picks.

A quick review of the web logs show a surprising amount of activity hitting Vegas betting sites for "tips" coming out of the Shopster office

And then there is the ultimate cheat... begging the almighty to help them with their picks. You can see it in the scrunched up faces as each punter adds one excruciating name after another on their list.

2 things are certain... there will be a winner... and the winner will inundate the Internet with odes to their individual glory on any website that will let them...

When it comes to the pool their is no team here at Shopster, just a lot of me's.

More than likely I will spend a lot of time later this spring letting the world know how many fools and their money were parted.

Social Retailing

2009-04-15T08:29:00.002-06:00

The concept of social retailing has existed as long as retailing has existed. Social retailing is merely the the blending of the social circle recommendations with retailing. Consider the last time you went out and bought a shirt with a friend tagging along... did you get their opinion? That is essentially social retailing.

A few parasites and trolls and out there trying and patent this concept - they are either too stupid to realize they haven't created a new concept or so dishonest that they try and manipulate the legal system in order to extort money out of legitimate businesses.

Some new twists to social retailing involve application of specific technologies or managing the feedback loop in defined spaces - such as having a website where a social group can post items for their group to vote on, helping them decide.

I've seen literally hundreds of Facebook widget concepts to this affect, not to mention every combination of SMS/Photo/Video/conference call/IM "solutions"

Social retailing is however in its infancy... recommendation engines share data.. which can lead to buying but does not ensure it. Social retailing hasn't much changed in several hundred years, but will see a significant jump forward when my social circle is able to predetermine what kind of jeans i would like, share that with a retailer before I initiate contact, and for the retailer to know to present it to me as an option when i decide want it.

Figure out what i want before I want it... and then let me know about it... that would be powerful.

Super Volcano

2009-04-13T16:00:00.003-06:00

Last night I finally got around to watching a docudrama called Super Volcano on the Discovery Channel which I had recorded some weeks ago.

The premise of the story is about Yellowstone, and what would happen if whole thing blew up... which it had done previously about 640,000 years ago. The usual cataclysmic / armageddon predictions came heavy and fast. Its not that I don't even believe the preditions its that I don't care... If it happens it happens... I am pretty sure the 3 days of emergency supplies I have won't help me survive the ice age that follows.

I do find geology fascinating and that's why I watched. What I found most interesting was the tipping point. The movie postulates that a series of small events (ie - mount st. helen's) would lead to a much more serious catacalysmic event due. One volcano begets another when fueled by the same resevoir... until the whole thing goes and the total effect is much bigger than the sum of the parts.

All closed systems have a tipping point, where one more isn't just one more.

That is a powerful call for pushing just a little harder and a little longer for whatever you want to achieve.

hell is too crowded

2009-02-05T11:42:00.006-07:00

Economics is called the dismal science - I have heard several variations on the source of this moniker but recently I have come to believe it just might be because all our experts in this field are so dismal at it.

Obviously the best economic brains are at work on our global crisis but unfortunately they are not the ones who matter - and it seems like they aren't smart enough to figure it out.

Fiscal policy alternative versus monetary policy alternatives, market guidance versus market intervention... all these things can and do impact the economy, but not it the way we expect.

Why, because the economists are out gunned and outsmarted in the private sector.

Governments, economists and the public mostly want a smooth functioning economy. however we have created a new industry in recent years that is very powerful, very rich and dedicated to anarchy.

We call them traders.

A good friend of mine is one of these anarchists. Not a bad sort to be fair, in fact one of best people I know. His problem is that he gets rewarded for anarchy and is so far away from the results of anarchy he can't quite comprehend it.

Let's call him Oli, Oli the oil trader.

How does Oli make a living? Oli buys and sells oil, physical oil and oil futures. IF he does it right he buys low and sells high and then he pockets the difference.

Does Oli care about the actual price of oil - NOPE - he only cares that it is volatile so that there are opportunities to get in to the market and get out. steady growth in prices is bad and so are steady declines, because it means there are no trading opportunities.

Volatility is the key!

Traders want volatility, because it means more trading opportunities.

That is very different from what economist want, which is growth and stability. Economic theory suggest that trading should actually contribute to stability but absorbing market information and providing long term price structures to a market.

Economic theory isn't wrong in this, its just talking about a hypothetical reality where those involved in trading are actually interested in supply/demand issues. Trading today is not about supply or demand it is about immediate financial gain. This gain is derived from the provision of insurance (the hedge) against volatility. The fundamental flaw in this system is that those providing the insurance benefit the most from the risk (volatility) they are insuring. To finish this tawdry tale they are able to influence the market to create volatility.

The fox is guarding the chickens.

The solution isn't to build a better chicken coop, we need to kill the fox.

Pure free markets don't meet the needs of anyone, and in fact don't exist anywhere. Free markets are a myth.

Since we agree free markets both don't work and actually don't exist (any assertion otherwise is pure naivity or willful fraud) then all that remains is to decide how much in the market we will intervene. The lessons of the past 6 months is that derivative markets and futures markets need significantly more oversight. Perhaps Obama's stimulous package should divert 10 or 20 billion to creating jobs in market regulation and oversight?

Sitting in a coffee shop I overheard an elderly couple lamenting the meltdown and discussing a bank CEO's multimillion dollar golden parachute. The anger was palpable and the fervent belief that somoene like that would go to hell was obvious.

Which brings me back to economics... seems to me that heaven is a mighty big space going off in every direction for ever and ever. Hell, on the other hand is a relatively small round place - being underfoot and all.

Supply and demand would dictate that getting into hell would be much more competitive. Considering all the bad things humans' have done to each other over over the centuries, I wonder, where does decimating a pensioners 401K rank?

Retailing Inflection Point

2008-12-30T14:10:00.003-07:00

Managing a service for online retailers has one really really great perk. You can take the holiday off.

Unlike bricks and mortar operations, people stop ordering online a week before Christmas day due to shipping times. So the few days before and after the 25th are relatively quiet.

After a week long break I came back to the real world. For the last week I tried to stay off the Internet, not read the news, just enjoy my daughters first Christmas and let the economic and retail chaos of 2008 become background noise, if only for a few days.

On October 21 I wrote that there was an impending retail crisis coming. Today the newspapers caught up with that article:

Chicago Sun Times

Barron's

MSNBC

But they still missed the boat. The horrible holiday sales are just the tip of the iceberg. The savvy investor will take a look at when the "survivors" started their steep discounting and will get a head start on how bad the "survivors" balance sheets will look in February.

That's is all well and good, and will allow a few savvy investors to pick up a few dollars, but the what the news has missed is any analysis of the source of the problem. Its easy to point to the economic downturn say that's the issue, easy and wrong.

The economic downturn merely accelerated a trend in retail. Retailing is on the cusp of a major change.

Product information is becoming universally accessible - exit the sales associate.

Products can be delivered anywhere - exit the need for mass presence

Product prices are being driven lower and lower - exit the ability to pass on overhead to the consumer

People will still need things

People will still want things

Retail isn't dead, its just changing.

The savvy retailer will:

provide lots of information

deliver anywhere

not have huge overhead

This is the retail model of the future - the inflexion point is now, those that get it will be grow and consolidate market share, those that don't... well we won't even have to remember their names.

Online shopping - Now with Super Improved Safety

2008-11-28T19:05:00.005-07:00

As all of involved in the retail industry, I too watched how Shopster's dropship stores were doing today. I too wondered how our retailers would compare to the other retailers. Were our stores better? Were the worse? Did we have good prices? Could we compete with retailers selling below cost?

This year was going to be terrible! We had to compete with retailers who were about to go bankrupt. It meant that they were selling at a loss, anything, desperate for cash... if those losers were going down, they were going to take the rest of the market with them. Running retail businesses these days was tough and this only made it worse. At least my retailers didn't have to worry about the high cost of inventory, at least they didn't worry about fraud or "shrinkage" as retailers indulgently refer to theft.

Then I read the news about the poor Walmart employee that was trampled to death in Nassau. Then the shooting in the Toys R Us....

These are crazy times..., but what kind of people have we become when a sale is worth ignoring a dying man under your foot.

So now not only are your credit cards safer when you shop online, but you as a person are also safer.

One of my employees who always can see the good in anything thought use this in our advertising... It just made me sad to think that was the silver lining at Thanksgiving this year.

Medicare for the financial system

2008-11-25T10:56:00.004-07:00

there are a lot of statistics on spending which occurs during the last stages of a person's life... a broad overview can be found at:

http://www.thirteen.org/bid/sb-howmuch.html

What got me thinking was this quote " Slightly more than half of Medicare dollars are spent on patients who die within two months."

I wonder if that will not also be true of the current financial rescue package?

Sure companies like AIG and Citi Corp. aren't dead and likely won't be let to die...technically.

Frankly they are already dead.

What kind of business will they be with government shareholders? How will they operate in the future considering they now are clearly identified as affecting the public good, and therefore must be regulated, or one step further "managed"

If banking and insurance is so critical to a well functioning society will governments manage them in the same way we manage roads, public utilities, or the police? Hell I am even rolling my eyes, but the more I think about it the more it seems likely (AND WORSE FOR THE BANKS - necessary) . Banking will become regulated far more than ever before. Everything has happened so fast that its hard to imagine a regulated system and what it would look like, so I am going to take a stab.

It will be an evolution. It won't happen this year... but the preferred shares will become a foundation for regulation and nationalization.

Free market champions will fight the regulation and nationalization of banks, and the taxpaying public will demand it. At the end of the day, the multi-trillion dollar bailout will force governments to bow to the public demands. Taxpayers paid for the banks, not because they want the banks to be profitable, but because they need the banks to provide stability.

A shared resource and shared funding of the resource means shared ownership and shared governance - the board now must respond to their shareholders, the public.

We will have 2 tiers of banking - lrge public banks regulated and supported up by government and small private banks, unregulated and unprotected. Commercial banks, large corporate finance and retail banking will be of the first kind, venture finance and investment will be of the second. The second will be severely restricted in the types of investments it can make and not be allowed to deal with the common retail consumer.

The sheer size of the bailout means there is no going back. Deregulation failed in banking for a simple reason. Banking affects everyone and people look out for themselves. Its the same reason we don't have private companies deciding our cities' road building programs or pollution standards. There is an inherent conflict of interest.

Why did banking fail? Why must it be regulated.

Banking didn't fail because bankers were stupid, banking failed because the institutions couldn't keep up with the technology and social changes happening.

Technology was making everything go faster - faster in banking means less time to evaluate and decide. Technology meant more information. Technology meant more people getting involved in a financial transactions.

All of this meant the fundamental philosophies underpinning modern banking and modern economics has fallen apart.

Too many zero or negative value participants...

If capitalism is supposed to better allocate resources than say alternative systems, how do quants make the allocation better? Quants are parsites that take advantage of psychological trends. They exagerate trends but add no value.

How does the retail investor, for that matter, better allocate capital. Most retail investors are inept and lack even a minimal education and knowledge of companies they invest in. And that won't change because the retail investor does not have the time or education to invest knowledgeably - its only a small

And now anyone working out of their home can day trade... day trade? What the hell is that? How is that allocating capital efficiently? My 60 year old aunt day trades. After watching her I realized that she wasn't trading as much as gambling online. The problem with gambling is that you can lose big.

So now the banks have to invest their deposited capital in the same pool that is filled with retail investors, quants, and my dear aunt.

Banks AND their shareholders stupidly held themselves to playing te same game this army of retail investors played and for years the gamble paid off. In the end, all that information, all that speed, and so many different players meant that no one could actually understand what was going on. And then... we all lost big.

So here's the problem. the banks we are saving today are dead. Its going to be expensive and painful but in the end they are dead.

Out of their death something else will be born, something else that if we had the good sense and fortitude we could build it right now for far less. But we won't. We can't let go of the dead. In these dying breaths of the old banking system we will pay exorbitant medical bills without changing the outcome.

An unhappy union...

2008-11-20T23:22:00.004-07:00

I'm sure the list is long and deep on what the auto industry did wrong to find itself on the verge of annhiliation.

I was listening to a few pundits rant about executive pay and perks and found myself bored and the superficiality of CNN and Fox commentator analysis. I also found myself annoyed by generations of Americans who shot themselves in the foot and are now looking for a handout.

I'm annoyed at the unions, and more so at its members for their lack of foresight, lack of thoughtfulness and lack of responsibility.

Unions played an important role in shaping a fair and safe workplace and now have played an equally important role in destroying that workplace.

1998 - Livonia Michigan, Automatic Transmission Plant, Ford Motor Company.

A young consultant - ME - was placed at this transmission plant to work on a process reengineering team. First day I was given a desk by the window as it was the only empty desk. When I got to my desk my computer was set up and ready to go, and I got down to work.

1 week later, a Ford employee complained that a 'consultant' was given such a good desk so I was told to move. That evening after everyone had left and only us 'consultants' were remaining I decided to use my own time (time I didn't bill for even) to set myself up in my new desk.

Next day I was summoned to the Directors office. It seems the Union had filed a grievance. By moving my own computer I had taken Union jobs away! So I was told to fix it. That evening I moved my computer BACK to my old sunny desk.

In the morning an "union communications tech" came by and unplugged my ethernet cable - so now I was not on the network.

Next morning an 'electrician' came by and unplugged my power cord for my machine from the wall.

Two days later, a "packing guy" came by and stacked my computer and monitor onto a trolley.

Later that day someone else came and moved the trolley.

Then the weekend came... and then Monday the packing guy came back and unpacked my machine and put it on my new desk.

Next day the electricion came and plugged my machine in.

And towards the end of wednesday the communications guy came and plugged my ethernet in.

So 9 days later I had moved 4 cubicles.

My company was paid for 9 days of "work" during which time I hung out in the coffee room or wandered the plant.

4 different people and 2 undproductive weeks were involved in the move of a single desktop computer and mine was a "rush job."

When we look around to cast stones at why the auto industry in North America is failing, hopefully those thousands of unemployed workers will realize they and their union should be on the receiving end.

Collective bargaining has a rightful place in corporate governance. Greed and stupidity do not.

Google - the smartest guys in the room?

2008-11-06T13:43:00.003-07:00

Am I giving Google too much credit? Let's look at the evidence.

Microsoft launches a bid to buy Yahoo!

Google launches a protest to the bid.

Yahoo! executives reject offer outright.

Microsoft threatens to oust Yahoo! board.

Yahoo says its looking for other buyers..., Google participates in talks

Yahoo! executives pass poison pill makin Yahoo! more expensive and less valuable.

Yahoo! executives pretend it was all part of bid to raise price.

Microsoft abandons bid to buy Yahoo!

Yahoo! shareholders rebel against executives

Yahoo! announces Joint advertising partnership with Google.

Market Crashes

Google abandons partnership.

Shareholders lose $15 Billion.

Soooo... the subtle machinations of Google are successful in blocking the only credible challenge to their search business delay merger by at least a year.

The problem that Yang and co. have to answer for is whether they were just naive or purposefully misleading of shareholders.

No rational investor or plebe actually believed that yahoo/google partnership would pass anti-trust regulators - so even involving them in discussions was at best a transparent bluff.

This has all the makings of a great movie if the outcome wasn't so anti-hollywood.

The little guys (investors of Yahoo!) get screwed, the fools who messed it up got to walk free and protest their innocence, the challenger was beaten and had to walk away and the market is still dominated by a singular force...

Watching from the sidelines... seems to me that the guys over at Google showed everyone that they were the smartest guys at that table.

(full disclosure - I just bought Google)

Inspired to change?

2008-11-05T10:37:00.006-07:00

Last night I watchd a mostly unsmiling black president-elect walk back and forth across a stage in Chicago. A sharp contrast to the jubliant adoring crowd at his feet and even the beaming face of his vice president.

I listened in rapt attention to his speech about hope and the strength of conviction which would help America climb out of current crises. I felt a sense of hope.

I wonder, was the lack of smiling purposeful? To me Barack Obama seemed to be a serious man, a man of purpose, and a man that could get the job done. (Which is in direct contrast to any evidence of such capacity or capability.)

It made me think...

How much control does the president have over the direction, the health or success of his nation? I suspect not as much as all those hopeful eyes in the crowd actually believe is the case.

Perhaps control is not the issue, perhaps a nation can change course if everyone wants to change course. Perhaps charisma alone can convince people to change the way they behave.

America needs to change.

The hard leassons of the last few years is that even the most powerful nation cannot dictate world policy. The world has changed, the borders are porus, money is tangled web we are all trapped in, and that a single fired bullet is felt in many places for a long time.

We all effect each other whether we want to or not, whether we intend to or not...

The change that is needed is one of attitude. That there is value to helping your fellow man, that capitalism must become more than a darwinian game of survival for today.

It is about understanding that we are all connected, that we can't go it alone and expect to be successful, and that the greatest successes will come out of cooperation.

We as a world are coming to better understand this, and America as a country has the ability to lead down this path if they choose. I hope that Barack Obama does choose.

Doom...Gloom and Boom

2008-10-23T15:34:00.003-06:00

Lots of bad news on the internet and on the news... but I think that perhaps we aren't seeing the silver lining.

My friends at Akamai recently sent me an interesting presentation... some of the more salient pieces I will share here:

GE started during the panic of 1873
HP began during the Great Depression
Disney started during the recession of 1923-24
Orbitz founded in 2000 and survived tech bust
Revlon founded in 1932, during Great Depression
Google gained traction during the tech bust 2001+
Microsoft founded during the recession of 1975.

Powerful brands can be built during any type of of economy.

"Procter & Gamble. To this day, P&G maintains a philosophy of not reducing advertising budgets during times of recession… It's not a coincidence that P&G has made progress during every one of the major recessions."

This crisis is an opportunity for bold companies to make their mark. While everyone else is hiding and licking their wounds no one is out hunting. The message is clear. Do not become withdrawn and defensive, be lean and focused and there are huge market opportunities.

The Coming Retailing Crisis

2008-10-21T14:13:00.006-06:00

Over the last few weeks I have had several uncomfortable discussions with major retailing and supply chain insiders about the problems the industry is facing.

The deepening recession in the US will obviously have an impact on retailing but I wonder if analysts and 'joe-six-pack-investor' fully understand the challenges facing the retailers.

Consider the average retailer. Q4 accounts for the vast majority of their sales, Q4 is when they become profitable after selling all year, Q4 is when people come to them looking for 'stuff' to buy.

So by Q4 most retailers have bulging warehouses, inventory at maximum and by necessity cash at a minimum. Then comes the Crisis 2008....

First slowing sales for retailers... depressing retailing stock prices.

Effect: Retailers begin to squeeze down margins, early seasonal discounts... less revenue

Then the credit crisis... inventory heavy retailers were forced to liquidate inventory to cover basic operating costs when banks shut down their credit lifelines. Cash became king - needed to pay for things like electricity and salaries.

Effect: Relative Cost of Goods jumps dramatically as inventory is liquidated, income is lost permanently, short term liquidity bought by reducing Balance Sheet items and other assets.

Recession... Fear and uncertainty cause consumers to avoid the malls and shops.

Effect: Sales drop further, and steeper discounts being offered to create sales

January 2009 - Retailers will report lower than expected retail sales, companies will miss targets. Share prices will drop, credit ratings will drop.

March 2009 - Retailers will report losses due to their lowered margin and inventory liquidation financing activities of October 2008. Weak balance sheets will need to attract new equity in a weak equity market, or find long term debt which will appear on the books, further weakening and driving down profitability due to carrying costs of the debt.

And I am going to make this difficult situation for some of these suppliers even worse. At Shopster, our retailers create sales and we send these sales to manufacturers and suppliers to fulfill. Suppliers with weak balance sheets are risky. What happens if they don't fulfill the order? Then my retailer gets the blame, its our reputation at risk, its our loss.

So we don't send them orders, we cut them out of our supply chain on the worry they might not fulfill. Cutting them out makes them even weaker and more risky...

And so the credit crisis shifts into the broader market. This isn't just happening here, its happening all across the country.

The Forest Can be Found Near all Those Trees

2008-10-14T14:49:00.008-06:00

The last 2 days the world bounced back to life. Markets around the world gained 10 - 15%, erasing the chaos of the last few weeks. Or it seems.

The financial crisis did not have its roots in mortgages and self indulgent consumers as some would have you believe, those are mere symptoms and mirages that make all this simple to understand and simple to not have to understand.

Something transformational is happening to our economy and just like the Industrial Revolution, we aren't recognizing it for what it is.

The technology revolution isn't about technology, it is about how technology changes the way we behave.

1.) More Connections

2.) Faster Connections

More Connections

The emergent technologies allow us to handle far more relationships than ever before. The now ubiquitous cell phone keeps us in contact with more people not just merely for the fact that it is with you, but because it stores phone numbers. No longer encumbered by a little black book or our limited memory, we all carry dozens, if not hundreds of numbers with us. If not for the cell phone, we likely would have forgotten or lost touch with these connections.

For the first time in history, humanity is able to create new connections without losing the old. Consider Facebook... 20 years later, I am "friends" with people I went to high school with but haven't actually seen in person since. And its more than just occasional voyeurism into their lives, these 'friends' send me business, send me employees, and ask favors... we now interact and our relationship thrives in a way it never could 15 years ago.

Networks used to evolve as you moved through various stages of your life. Childhood friends gave way to university friends which gave way to professional collegues and then to adult friendships. Now we can just stack them on top of each other, we collect them and them can remain accessible and valuable years into the future.

The number of connections also means we can have influence far beyond our geography and far longer than ever before. I recently advised an old college friend to not buy a car from an high school acquaintance. In hindsight I am not sure who a I did a disservice to. My college friend found out that the seller went to the same high school I did and called me to ask about this person. My recollctions of a adrenaline junky daredevil doing spin outs in his 1985 Chevy station wagon were the best and most honest information I could share. 20 years later, and 3000 miles away, a middle aged father of 2 was unable to sell his 2005 BMW.

We are now connected to hundreds and thousands of people whom we really have no insight into and no clear lines of communication. The securitization of mortages and subsequant sale and purchase of those securities meant that I made money from my bank stock 2 years ago from thousands of people I would never do business with and then just lost it all when those same people whom I would not do business with defaulted. Unknowingly we are more deeply connected with more people than ever before, with real impact and relevance to our lives.

Faster Connections

The effect of speed on our lives is, at best, poorly understood. Things happen faster today than ever before. My grandfather learned about the world months after events happened. My father read newspapers about things that happened a few days ago and I get news sent to me the second someone writes about it.

I learn about things faster but must also react to them faster. I and the millions of "I's" around the world sold our shares very quickly when we heard things were not going well in the market, and we all brought the market crashing down last week.

The nature of speed is not that things happen fast but different things happen. If I had time I might have spent time learning about the crisis and and moving my money to safer stocks. But I didn't have time, so I cashed it all in. Instead of the money moving to better companies and instead of capital be allocated efficiently - as all my economic texts would have me believe - the speed of the economic changes made me pull out of the system all together. When we all pulled out, naturally it collapsed.

The speed of light is not about speed, fundamentally it is about time and so it is with our ever faster world. As technological changes increase the speed of our interactions it changes the meaning of time. Time creates its own demands and pressures and our current systems are unable to adequately deal with these pressures.

One of the key underlying principles of our financial system is that of market efficiency. The price of a stock reflects all public information about the company and we even have agencies to monitor for cheating. Granting that some leakage has occurred, this system operated well enough till recent years. Market efficiency theory is failing us because the speed and accessiblity of information is far outstripping our ability to process it.

At some point speed stops making things faster, it stops us from doing anything at all.

That is, until we can create new systems to help us organize and manage the data that is streaming towards us faster and faster.

The financial chaos of the past weeks took a long time to build, and it is has been temporarily tamed. It is however just the first in a series of fundamental shifts occuring throughout our economic system. Our ability to connect more and to connect faster has antiquated many existing business models... they just haven't realized it yet.

Like my professor used say; "I'm sure the very last buggy whip company made excellent buggy whips... but the world changed around them"

Brave New World

2008-10-08T22:18:00.004-06:00

The last few weeks have been devastating to many people. The unfolding financial crisis has engulfed the world like a fog and we are trying to feel our way out of it.

The deep, culture changing ramifications of the crisis are yet barely perceived by most. I see people wandering around shell shocked by the blast way of the economic collapse unaware of or even just uncaring of the fallout that will last generations.

Consider a basic concept that to most North Americans meant something last month - "blue chip." These were supposed to be companies we could count on, companies of a certain quality, companies brokers felt compfortable investing in for "widows and orphans."

In the last month, stalwart 'blue chips' like GE lost 33% of their value, financial giants like AIG, Lehman Brothers, Bear Sterns, Washington Mutual...and many more toppled one by one.

Like any good nuclear holocaust, the initial blast wave is levels everything in its path - bank after bank has toppled, but wait...aren't blasts always followed by a firestorm of heat and destruction.

What will our firestorm look like? The credit crisis is creating long term weakness in our economy. The holidays are upon on and retailers everywhere are inventory heavy and cash poor. Traditionally this is the time they borrow to pay everyday bills while gearing up for the single most important quarter of the year. If you can't borrow... it means you can't pay salaries, heating, rent.... things that could kill the whole business outright. So what are your options? Beg, borrow, steal... or liquidate inventory

Sell now, at any price, to just get cash flow. Already, months in advance holiday products are on sale...survival now in exchange for long term weakness. COGS will rise as a % of sales, profitability will be far lower, margins, already thin will disappear. If they survive, they will either need to borrow long term, further deteriorating their prospects for profitability or find new equity from a greatly diminished pool, in order to shore up their balance sheets.

This will also trickle down into the rest of the economy. Inventory levels will need to be cut, staffing will be cut and that will lead to lower factory orders... the pain gets passed down throught the economy.

Many worry about the recession, about the lost jobs, about interest rates... We are undergoing a major realignment of finance and that will quickly translate to industry and to commerce. Successful businesses will be the ones that quickly shift to embrace this brave new world.

We now have less control over our finances, over our means of production and distribution. On top of this the world can shift overnight. New business models will focus on speed and flexibility or monopolization... those caught in between are just fodder for economic shredder.

Monopolies will focus on gaining control of their entire business environment through the removal of options - we need their product and they are the only source. Governments will be more willing than ever to sanction monopolies in key areas of finance, industry and commerce if it will guarantee delivery of those services to the public.

The vast majority of successful new enterprises will focus on speed and agility and a deeper more pervasive form of "just in time" investment in all aspects of their business.

Less capital

Less fixed assets

Less employees

They will however need more flexible business arrangements. No locked in contracts, rather a portfolio of resources and services that they can tap into as their business needs it and be able to release when they don't.

Those willing to provide resources and services need to find broad range of customers across industries and geographies. Stable businesses will be built on a multiplicity of flexible relationships not on a few deep relationships.

The wise won't wait and see, they will boldly march forth into the new economic reality and take advantage of all the chaos around them.

What is e-commerce?

2008-10-07T15:27:00.005-06:00

A while back I was asked to give a lecture at the on the future of e-commerce to fourth year Haskayne School of Business students at the at the University of Calgary.

I posed to these students a simple question. "What about e-commerce is so manifestly different that we don't just call it commerce?"

Someone catcalled "... it happens on computers"

Did everyone agree...? Some heads nodded then slowed, then stopped. The room looked at me with distrust, was the question a trap? Yes, that was obvious, but what kind of trap eluded them.

So I asked "What 'happens' on computers?"

..."commerce"

hmmm... so e-commerce is commerce that happens on a computer?

"YES!!" and the room seemed to relax... the over 30 guy got it finally.

Out comes my Blackberry and wikipedia, and I say "Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer. It comprises the trading of something of economic value such as goods, services, information or money between two or more entities."

So we do this on a computer? "yes!"

The whole thing? "huh?" Does the whole "commerce thingy" need to happen on a computer to be "e" commerce? Pause... silence...

If I buy an iTune on Apples's website? e-commerce? "Yes!"

If I buy an iPod on Apples's website? e-commerce? "Yes!"

...Really... its delivered by a guy in a truck? "that's fine."

Ok... now we are getting somewhere. So everyone is agreed that if only PART of the "exchange of goods" happens on a computer then its e-commmerce? No answer... here was a trap again right?

I put the idea to the class that credit cards are ALL processed by computers, so under the earlier condition all credit card transactions would be "e" commerce. Hmmm... going to my local 7/11 and buying a slurpee on credit is e-commerce? Can't be... can it?

What's a computer???? oh oh... maybe I am being too pedantic. Yes and no... I want to get down to the heart of the matter. Everyone talks about e-commerce like they know what it means, but perhaps we aren't even thinking the same thing when we use that word?

I don't think e-commerce has anything at all to do with computers, well at least not directly. I think e-commerce is being used to define something that is like commerce but different. Not being able identify the difference clearly, we gravitated to a generic term - "e" commerce. So no more...

Velocity - e-commerce is about velocity.

People who want to engage in commerce today are the same as yesterday... but

They can get information faster
They can identify partners to exchange with faster
They can access resources (credit, cash) faster
They can exchange faster and further

E-commerce is about velocity... we engage in commerce, just faster than ever before.

Now we use computers to show me a picture... rather than mail me a catalog
We use computers to send payment rather than a check
We use computers to track where my package is rather than a phone

We have always used some sort of technology... the things we use today are faster.

E-commerce is simple - its about about commerce taking place faster than ever before. If you want to succeed, you need to understand how speed affects all aspects of your business. You need to understand and embrace the idea of velocity.

Moving Day!

2008-08-13T11:37:00.005-06:00

This past week we moved offices. We uprooted ourselves from the trendy upscale 17th ave district in Calgary and set up new roots in the Ramsay Design Centre in the historic Inglewood district.

Just east of the downtown core, natural and manmade barriers have allowed Inglewood to escape the fate of most of Calgary's modernization efforts. Historic buildings here are still standing and even used. Calgary's penchant for bulldozing anything that is not concrete, steel, and glass and replacing it with concrete, steel and glass is oddly and desirably missing here.

Old converted warehouses in this city are a rarity, but we found one for our use. This was the former home of another Calgary success story - iStockphoto, who have moved up to bigger and better things. The energy or chi of this wide open space is so different from the corporate, madison avenue advertising style of space we were in previously. I definately prefer this.

We now have space to grow, and in the meantime the wide open spaces means rolling chair races, games of catch and tossing of the frisbee can occur relatively unhindered and not interfere with the people who are not on a break.

Our new home just feels right.

Patience

2008-08-11T17:35:00.004-06:00

Seth Godin had an interesting blog today.

http://sethgodin.typepad.com/seths_blog/2008/08/the-secret-of-t.html

He talked about patience which is more about the fallacy of the overnight success. Success takes patience. Nothing worthwhile is simple or easy... if it were perhaps we wouldn't notice it enough to describe as worthwhile (like how most of us in North America take clean water for granted?)

At Shopster we have customers like that. Whenever a customer leaves Shopster I like to read their reasons why. One particular customer was on our site for 2 hours... then cancelled their account and gave the reason too much work. After 2 hours they hadn't built a business and made any money so they quit...

I hate losing customers, but in hindsight i don't think that person was ever truly a customer, just a window shopper perhaps?

4 years ago we were working on starting Shopster, 3 years ago we released our free alpha trial version... each year it becomes better.

"Listen instead to your real customers, to your vision and make something for the long haul. Because that's how long it's going to take, guys." - Seth

Its good advice, I think I'm going to take it.

Independence Day

2008-07-04T12:12:00.002-06:00

Today is July the 4th - Independence Day across the USA.

We have many Americans in the Shopster family but also many others from all over the world. Many nations have similar types of holidays, which they mark their emancipation and graduation to the world stage. I wanted to share my experience with my Shopster family about one 4th which has etched itself in my memory.

I will always remember that particular 4th in 2001. I was in Ann Arbor, Michigan, when 15 friends and I decided to head north to Mackinaw, a resort area famous for its historic town and lifestyle. I had had a tough few months at work. We were behind schedule and my clients weren’t happy. Several 100-hour weeks in a row and I was burnt out and was starting to question my own ability to fix the situation – time for a break. I was winding slowly up the I75, stifled by the heavy holiday traffic and decided to find a shortcut on one of the back roads - quickly I found myself in a different world, the world of rural America, of small towns with a main street, with ice cream parlors, with kids running freely through the town center.

One particular place stood out to me, fascinated me, mystified me and eventually won me over… the name of the town has long eluded me, but not the memories. A small town draped in flags. Flags on each house, flags planted every 10 feet along every street I could see… flags and streamers and balloons, so many that it would have been comical if not for the intense sense of purpose and pride that the people of the town carried out their celebration.

In my car I travelled with a friend from France, one from the Czech Republic and of course a fellow Canadian. Fascinated (Canadians rarely show this kind of nationalistic fervor… well actually any kind of fervor for that matter) we decided to stop, to indulge in the experience that is the 4th. We stopped and found ourselves an ice cream cone and a flag. Seated on the curb, we watched the local high school band march, by while being chased by little girls waving their own little flags. For us it was like a scene from a movie. Not for the first time I found myself saying… wow there really are places like this, its not just on TV.

The energy and excitement reached a crescendo when the local high school football team paraded past. Football is a religion in this part of the US.

As I watched the small parade walk by my cone fell to the ground. Next to me a pigtailed 5 year old took all of this in with sympathetic eyes. Looking down at her own sticky hands then back up at me she suddenly thrust forth her mostly eaten strawberry cone; she said I could have a lick.

There is a certain greatness of spirit I found there that day on Main Street USA. These small town people strode like giants through their world, in search of lemonade, cotton candy and firecrackers…all with an unencumbered sense of self, with a sense of purpose and the assuredness only available to a people at the apex of the world stage.

Looking around I better understood what the 4th means... it is about an unflagging belief in themselves and their ability to rise to any challenge, to succeed. It is about seeing the opportunities to be successful. It’s about taking the things you have and making your world better. It’s about responsibility; taking responsibility for your own life, for not blaming others for your failures and taking full ownership of your successes. The 4th is the American dream.

I left that small oasis of flags, football heros and pigtails, heading north in search of a camp site and the company of friends long past sobriety. I was looking forward to a week of fun and relaxation… but I was also looking forward to getting back to work. I had this new found sense of purpose. The problems which seemed so daunting just hours before seemed less somehow. I had found my independence from my own self doubts. I just knew I would succeed.

the Long weekend

2008-07-03T09:34:00.005-06:00

In Canada, our long weekend just passed and for you south of the border yours is just starting. Long weekends conjures up many different images for different people, mine tend to involve a lake in the middle of the mountains, a cooler, a boat, a bbq, and a beer.

This past weekend I actually did something I haven't done in years. I unplugged totally from Shopster- well only for 1 day, but for 24 hours I did not even read an email... and frankly it wasn't fun. I constantly had to check myself and remind myself that I wouldn't look at my blackberry, so the next day I turned it back on.

One beautiful evening in the Shuswap I did get this overwhelming sense that I was experiencing something rare and significant. I looked over a clear lake to a setting sun, I watched my daughter bouncing on a good friends knee gurgling in delight, my beautiful wife next to me was chatting quietly to another friend about when to feed infants solid food... and the entire patio was heavy with smell of barbequing ribs and a secret sauce (which I was told not to inquire about if I did not want to put my life in jeopardy).

Take 2 steps back, this wasn't a mansion, it was a comfortable clean little cabin on the lake though. I wasn't drinking champagne but rather a tasty Alberta brew. I was dressed in a t-shirt from 10 years earlier that was a give-away... but I felt on top of the world.

I was happy, happy with my family, my friends and my life... as these thoughts were passing through my head I knew that there was no other place I would rather be.

Then my blackberry startled me out of my introspection. Unexpected and sudden it caused me to knock my beer into my lap... I leapt out of my chair to grab a relatively new dishcloth to clean off my very old t-shirt and in the process knocked over a bowl of chips which clattered to the floor scaring my daughter who let out terrible wail... my wife looked at me with that "you are a big clumsy oaf look" and apologized to my friends that she can't take me anywhere without me spilling on myself.

To those of you starting your long weekend... learn from me and unplug.

Foosball interviewing

2008-06-20T12:23:00.003-06:00

In Shopster's early days - think grungy office, used tables as desks, retro chairs as found in the alley - we had all the grand ambitions of any new startup. Many things that a startup aspires to, things like a product and revenue were of course very far away but our ability to purchase an used foosball table was readily achievable.

The foosball table, the venerated hallmark of college dorms, casual pubs, and of course the technology startup.

And so and as any keen startup, we spent an inordinate amount of time and effort trying to locate this prize at price we could afford, and eventually one was found. So let the games begin.

To say I was terrible at the game elevates my skill far above where it actually resides.

In order to share how "cool" shopster.com was with potential hires we advertised that any offer of employment required that the candidate beat the CEO in a game of foosball... Obviously everyone at Shopster realized that this wasn't really a test, or rather not a test that anyone should fail.

Funny at the time... Now I wonder, did anyone not apply because their foosball skill were rusty?

Today I am much better... (better in no way implies good by the way)

Today I beat Mike T (our second employee) - the undisputed Shopster foosball champion.

Sometimes luck is of better use than skill - lucky for him, I wasn't this lucky when he joined Shopster.

This post is also my announcement I am officially retiring from professional foosball competition with Mike. I retire in all my glory, having utterly destroyed Mike in a game so utterly sacred to him... this is important information that the world should...nay must know.

Defeating the CEO at foosball is no longer an employment requirement, but failure to do so is a clear sign your game needs work... and perhaps opens you up to ridicule by the other employees.

Internet Retailer

2008-06-10T05:54:00.003-06:00

Shopster set up its first tradeshow booth ever this week at Internet Retailer flagship show in Chicago this week.

I've been to a few shows before - but not as someone IN the booth before. A few things really made an impression on me. Its pretty amazing how a show room transforms from a chaotic jumble of boxes on a Sunday morning to a slick presentation space next day.

my team was a little nervous as the show opened, were they ready? would they be able to answer people's questions? would people come to the booth?

The first 3 hours on the opening evening were a whirlwind of activity. Frankly we had a less than desirable spot at the back corner of the tradeshow floor and expected a lot less traffic. We were wrong, conference goers were seeking us out and we had to be on our toes.

A few things started to be very clear as the conversations progressed. People were not looking for technology - there were lots of e-commerce software providers, enough payment gateways, enough accounting software.... etc. Everyone was looking for a business solution - how could they sell more?

The e-tailing industry has matured, it isn't about cool technology, new concepts or early adopters. People sell and shop online and it is a part of the modern retail landscape. People were smarter, more educated and looking for solutions to their problems.

This is a major shift in the market. a few years ago, this show was full of companies selling "cool" technologies... and even today there were a few there. Bells and whistles don't sell products and most people are figuring that out.

e-Tailing is easy. People want to quickly and easily find what they want on the website they are shopping on. They want to enter the least amount of information online as physically possible - BUT understand but understand that they must give some. They want someone to tell them where there stuff is and when its getting to them, and they want the what they ordered to arrive as described and in good shape.

They DON'T want you to call them, pester them, sell them more... and they DON'T want to talk to customer service. Talking to customer service means something went wrong.

Simple - give someone what they order and they will order again.

Day one... simple is better and more profitable.

The team learned a lot... we won't spend too much time talking about HOW we do everything we do... we just show them how we make online retailing simple and profitable.

crowdsourcing in the deadpool?

2008-05-16T12:07:00.006-06:00

This week techcrunch announced that a Calgary based start-up Cambrian House was going to close its doors. CH is expected to make an annoucement soon.

Cambrian house was a shooting star on the tech scene. CEO, MJ Sikorsky quickly rose to prominence around the world as an industry expert and CH started to the tone of crowdsourcing dialogue.

Unfortunately CH has yet to deliver a model that works, and it spent 7 million dollars in the process.

The tech community is a small one and so words, both good and bad, travels fast. The commentary took a pretty personal tone very quickly largely against Cambrian House's CEO, and that got me thinking.

I believe that in any company the buck stops at the CEO - no matter where the problem originates, ultimately the CEO is that someone who is responsible. I would like to put some of the comments in perspective though. The CEO works for Shareholders not the employees, and a lot of the commentary seems to come from former employees who are displeased with their former CEO.

As a CEO, keeping employees happy might be a requirement to keeping shareholders happy, but it definately is not a forgone conclusion. In that light, perhaps some of the critics are overstating their case.

Are shareholders happy or at least satisfied with the performance of CH? Hard to say quite yet, as Cambrian House has yet to confirm how the dissolution of the original business will impact shareholders. I for one am looking forward to seeing how Cambrian House handles this.

Cambrian House tried to pioneer a concept and failed at its original goal. The concept is still intriguing, we just haven't found the right model and a way to execute on it.

This event does impact the tech community though. How will other crowdsourcing plays be viewed in light of this. Will financing a crowdsourcing company be easier or harder given the outcome of CH? I suspect it will be harder.

There is a lesson to be learned though... don't leak what you are doing to the press before you announce it.

what's in a choice...

2008-04-30T09:50:00.003-06:00

15 years ago, when I was a much younger and idealistic man, I signed up to donate bone marrow... and then over the years forgot about it. This past week the RCMP called me to let me know that I had become a "priority 1" match for a potential marrow recipient.

I guess it was important... they had tracked me from my parent's home through my several homes in the US and the UK and now back to Canada.

Relatively quickly I was conducting interviews with blood services and donating more blood for additional testing and being educated on the marrow donation process. A lot of this was new to me as I had not donated blood ever since they had banned anyone who had lived in the UK from donating.

Several times throughout the process I was being advised that there were side effects (mostly temporary physical discomfort and/or pain) to the procedure and I could choose not to participate if I was uncomfortable with that.

Of course, unspoken was the fact that someone I didn't know would likely die without this transplant. Knowing this, I have to say, it doesn't feel like a choice. Is it possible, is it ethical to make that choice on behalf of someone else? No, I don't have a choice in this - it is something I must do.

It did get me thinking about this issue (something I am embarrased to say I rarely paid head to). Blood banks across north america are desperate for volunteers and donors. How many people like me choose not to give blood, how many choose not to donate organs, how many choose death for someone in need? Perhaps we don't have a right to deny life to someone because its inconvenient... what would our society look like if we added "giving" to "death & taxes" as things in life that we are certain about.

Google Land

2008-04-24T15:48:00.003-06:00

Driving down the 101 in the middle of the valley is a huge thrill and a massive disappointment all at the same time. The first time I found myself leaving San Francisco on my way to the Valley it was exciting, unknown and full of expectation... like a first date. Out of my car window you can see the iconic internet and computer industry names of Yahoo!, Oracle, Sun, and the challengers to the throne like salesforce.com... this is the world of the McAfee, the Intuit, the Facebook... and yes Google.

With so many cool companies I think that somewhere in the back of mind i was expecting something. I'm not sure what though. Far from meeting my expectations I found myself in a endless suburbia of strip malls and office parks, of starbucks and mini vans. If this was cool, then I didn't give my mother enough credit.

Then a thought occurred to me... could someone who had mastered 128 bit encryption and cloud networking really be 'cool?'

That thought has stayed with me for the last couple of years.

I've had a busy morning, meetings in San Jose, then Palo Alto and now I am in a Starbucks waiting for my next meeting at Google. Being emersed in the Valley culture even for a few days forces you to see the world differently. Across the US, and now the world, the talk of recession, of depression, of food shortages, of gas prices, all rage on but here optimism reigns supreme.

Behind me a young entrepreneaur is feverishly pitching his idea on social networking to an obviously uninterested junior associate at some VC. To everyone around and I think to the young man its obvious this conversaton isn going anywhere..., but he is. His passion is palpable, and he can, no.. he will change the world, he is sure of it... and now maybe I also am sure.

Optimism unfettered by economics, by technology, by reason... and its infectious.

Perhaps it is due to the boundless sun, the long beaches, the mountains at the edge of the horizon. Maybe. One thing is certain though, there is heart here, there is a sense of adventure, and there are no limitations. That's what makes the valley cool. Here anyone can do anything... its here that the American dream is realized each day.

Power of the State

2008-04-14T11:31:00.003-06:00

I remember my foreign poicy professor elucidating the differences in the types of power and how they matter. Power is somewhat a nebulous concept to most of us and I, like many usually only think about it when I see its effects.

Power ranges from weak - that of an influencer, to strong such as that of the bomb, one coerces your behavior the other defines it.

In recent times it has become common place to over emphasize the power of influence. We talk about the spread of ideas on the internet and the pervasive nature of capitalism as defining the new world order. It becomes easy to think that the power of influence is the most important.

The reason I was thinking of this today was because of China. The Chinese government did something that no other country could do. Without deploying a single military unit it ordered half the cars off the street and construction to stop for 2 months.

Whenever you think that capitalism is taking over in China, think of today. An entire society can only stop what comes naturally only in the face of extreme force. Consider now, that the threat of force was not used. Consider that no more military units were deployed. How fearful a society must you have created if just the unspoken threat is enough to stop 10s of millions of people from going about their lives.

This is more than nationalism, this is more than a unified population behind a public spectacle. This is about a population that understands and fear state coercion based in physical violence. China may be moving towards a more open society, but perhaps its time for the world to take a close look at how far back they are starting from.

Pockets of sunshine

2008-03-20T13:38:00.002-06:00

Being a new father and running a fast growing startup means some things are going to drop, but then something happens and you remember that you were writing a blog.

This past week I spent a few days in the valley between meetings i found myself furiously working away in my hotel... and in the background the TV droned on and on about the election and the recession.

Every now and then I would emerge from my self stylized cavern for food or conversation... Mid afternoon on Monday I stepped out into the brightest sunshine I could imagine in the middle of Menlo Park and walked down the street to grab a coffee. All around me people were on the move, the starbuck's was bustling with mom's and their kids and business men talking in hushed tones about the next google they were developing in secret in their basement.

In this vibrant space there was no sign of a recession... in fact business seemed to be in overdrive. It reminded me of home. Calgary is also in overdrive. Oil continues to push the economy further and faster. Housing in in short supply, so are talented employees, and there isn't anything we can't do.

Later that day I spoke with an old friend in Michigan, where the the rust belt is rusting at a faster rate, the auto industry is lurching to and fro like a confused zombie and you can't give away your house. He said it was like that in many places, and that I am lucky to have found the one or 2 pockets of sunshine that exist.

I then asked him why he doesn't leave Detroit, why stay and suffer when the sun was shining over here. He didn't answer, he didn't know how to answer, and I suspect he didn't know why. He just didn't think he could.

Its not all doom and gloom out there... if you want something better you have to reach out and grab it. We can't control the economy but perhaps if we realize we can control ourselves then our world would seem a little brighter. The sun is out there, maybe you just have to want it bad enough to go get it?

Bring back the death sentence

2008-02-08T10:08:00.000-07:00

Security software testing organisation AV Test reported that they recorded 5.49 million unique samples of malicious software in 2007, this is about five times more than the 972,606 it recorded in 2006.

One of the reasons that this epidemic continues and is rapidly growing, is that lawmakers continue to treat cyber crime as less than real world crimes. One of the key reasons for this is that our lawmakers are manifestly ignorant of the true cost in both money and lives of cyber crime.

Billions of dollars are stolen each year, and even more is lost in productivity, and there are almost no measurements of how much progress as a society we have lost by trying to protect ourselves from crime rather than using our time and resources to advance our society

Governements alone spend hundreds of millions of dollars protecting their computer systems and having increase their own computing resources to cover the parasitic loss to criminals.

At the same time how many lives are lost each year due to underfunding of health care? Of foregone research? Of delayed preventive measures such as traffic safety. As a society we have limited resources and we allocate them according to availability and need. When we dedicate resources to protection against cyber security we give up something else.. and that costs lives.

Like war, you can spend money in combat or spend money ensuring that war doesn't happen. Fighting the fight costs much more than prevention.

It is more than another fight, cyber crime is undermines our societies.

When will our lawmakers wake up and realize that cybercrime is just as devastating to our societies as murder and rape? Peoples lives are ruined and devastated, not in a single violent event, but more insidiously over time.

If a million people were robbed at gunpoint today there would be a massive outcry... BUT a million people WERE robbed today, but because it happens online we ignore it.

Consider this...

http://www.theregister.co.uk/2007/02/01/london_police_cybercrime/

in this article, The Register reported that the cost of cyber crime exceeded USD $2,000,000,000,000 per YEAR. 2 TRILLION DOLLARS!!!

In order to combat this monumental threat to the very fabric our society, the Government of Canada thought that $100,000 would be an adequate investment. Recognizing that Canada's share of the global economy is only 1.7% And ignoring the fact that we are one of the most computer intensive societies.... our share of the loss is in the $200,000,000,000 (200Billion) range... in light of this, our government thinks that $100,000 is not only adequate but worthy of announcing.

http://www.publicsafety.gc.ca/media/nr/2007/nr20070818-eng.aspx

For those of you too lazy to read the article, let me paraphrase:

"Canada has decided to make our country more accessible to criminals. We do not intend to even try and understand how you are robbing us. Please feel free to set up your criminal organizations here." - Steven 'stick my head in the sand' Harper, PM

If my government thinks that $100,000 is adequate to understand the issue, AND thinks that the weak tools, powers and penalities it has in place are sufficient to prevent the consequences of cyber crime THEN it is likely they employ similar thinking in protecting themselves.

Perhaps its time for someone to steal Steven Harper's identity, use his personal home computer to distribute child pornography, transfer the contents of his personal bank account to Nigeria, and buy $10,000 worth of electronics on his credit card?

It costs Canadian's $57,000/year to heat the PM's home, and we spend $100,000 to research cyber crime...?

This is a serious issue, worthy of the most serious laws, most serious punishments, and most serious consideration. How do we hammer this message home?

hey kettle... you sooo black

2008-02-04T10:20:00.000-07:00

"Microsoft's hostile bid for Yahoo raises troubling questions,...This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the internet: openness and innovation,"

- David Drummond, Google's SVP Corporate Development and Chief Legal Officer.

Drummond has hit on the key issue that concerns consumers - will the merger make things better? Microsoft abuses its monopoly in certain areas as a matter of course, it uses a tried and true business strategy that has served people and companies since antiquity, and that most companies would love to be able to do.

The MSFT and YHOO merger has multiple business implications - in one aspect though - online advertising, it is obvious that Google's dominance, not Microsoft's, is problematic. Consider its management of trademark issues in AdWords. For large corporations with deep legal pockets the options are much broader. For the millions of small and medium sized enterprises they are stuck with accepting Google's policies or not advertising because the resolution process is not accessible - they very obviously have 2 sets of policies on trademark protection, one for the little guy and one for the big.

So is this a legal issue or a cultural issue? Legally the issues on advertising will take decades to resolve. The slow pace of change though frustrating many times is a prerequisite to a stable society. We as a society need to legislate our interaction if we can't agree to it - legislating too much too fast presumes too much about what is acceptable to society.

Agree to it? Yes, we can as a society agree and abide by a code of conduct among reasonable people. The issues around Google's advertising policies are cultural. They think and continue to breed a sense of intellectual superiority internally(but let's face it, they hire some really smart people). They think they know what is best for society and you can see this play out in their products. Using AdWords as an example again, we can see how this product epitomizes this mentality. Google scan's your website and decides for you what to display. They know best.

Without a choice, we are forced to use the monopolistic player, and our usage is then used as justification for thier policies. Only a viable option will elevate popular policies and services. Companies will always do what is best for them, not their users.

Google's dominance in search and advertising gives them tremendous leverage, which to their credit, they could abuse far more than they actually do. On the other hand Microsoft has a history of abusing its dominant market position. So Google can legitimately (at least for now) point the tar brush at Microsoft.

As a consumer and a skeptic, I can't blindly trust Google. Google's lock on the market and avalanche of new products will reach a tipping point in the next few years that if not countered now will give them a defacto monoply. Since Google will keep getting stronger for the forseeable future, will they continue to "do no evil" , will their leadership remain the same and still champion open competition, will they continue to make huge profits and be able to repress the corporate imperitive of money in favor of their belief systems and values? We can hope, but to expect it would be a serious folly. Once a monoply is established, it is infinitly more difficult to dismantle. The damage to innovation and progress can never be recouped and our society will be the worse for it.

On the other hand, the assets that allow Microsoft to be a bully; its Windows platform and Office software are already being eroded. True, it is a slow erosion, but one which will only pick up speed. Then we will have nobody with the ability to challenge Google.

Better to have 2 giants fighting it out and driving the market faster through innovation and competition than to have Google replace Microsoft as the next monopoly with a host of vassal companies' vying for the scraps on the periphery.

The kettle is definately black, but I'm not sure what the colour of the pot is yet.

Life lessons

2008-01-25T11:24:00.000-07:00

This week i understood more about myself and the world around me than ever before. I think up until this week I undervalued the contribution on emotion and overvalued logic and reason.

This week I became a father. How do I express how profound to me that change was? I'm not sure. What I am sure about is that the exact second I saw my daughters face for the first time I felt different, unlike anything I've experience before. I find myself deeply caring about and concerned for the well being of a person I just met, a person I don't know at all. What if she has a cruel spirit, what if she's uncaring and selfish, what if...what if... so what? I have great hopes and dreams for her, but I know deep down that no matter how her life turns out, that I will be there to support her.

My mother tells me all parents feel that way.

I'm back in the office now and I find myself looking at life through a different lense. I find myself asking "how do my customers feel about that" rather than what do they "think."

I suppose the academic part of me remembers my marketing classes, remembers being taught about the overpowering nature of emotion and how to use it in business. I'm sure I knew all about it. Now I understand it.

I have shelves of books, lots of little black and white toys, piles of classical music CD's, a soccer ball...all the things I was going to teach my daughter. It turns out that I was the one in need of an education.

Crossing the Chasm

2007-12-04T08:36:00.000-07:00

Running a startup has so many ups and downs. 4 weeks ago, my business partner threw at me a huge number and said, wouldn't it be great if by christmas we hit $XX in sales in one day? Well the next day we beat that number by 20%.

We kept reaching new highs as the days went on and now its like an addiction. In order for me to feel normal, we have to set a new record. As Matt put it, new sales records are like crack for us... we need a bigger fix each day.

Its an interesting transition from one of "can we make it work?" to "how do we make it better?"

The word "better" is the crux, where do we focus? When it wasn't working we had places that we needed to focus on. When business is good, its easy to lose the focus.

This week my "better" took the form a young employee. For a while now this employee was stuck in the world of doing what what was asked. Great employee that way, did their job, was diligent, and punctual.

Something happened this week that changed all that. Instead of an answer to a question. I got an opinion and supporting research. This employee not only understood the question, but understood why the question was being asked and proposed a solution AND the reasoning behind it.

They had crossed the chasm that many never do. Moving from follower to leader.

I love it.

Watching the transformation in front of me, from shy obedient employee to self assured trailblazer, I realized that the successes in business are not always about the business.

E-Commerce is Finished

2007-12-02T14:45:00.000-07:00

Last week Yahoo! Stores suffered a massive system failure and went offline... why? Too many people were shopping. As I read through some of the stories by Yahoo! Stores owners my mind wandered to what this means.

The owners, and rightly so, were angry and dissapointed that during the busiest time of the retail year that they were offline. Consider that Yahoo! is the biggest internet company in the worlds... yes even bigger than Google and consider that Yahoo! has been running online stores for close to a decade now. Why would they not be ready for Holiday Shopping?

Obviously shopping is growing at a rate that even they didn't predict or were ready for. I think it's time to throw out some of the well intentioned but narrow minded research on shopping. E-commerce isn't growing its becoming something less, it's becoming commerce.

Traditional views of e-commerce and 'other' commerce as two distinctly different activities is an outdated mindset. Find yourself an 18 year old and watch them shop. They effortlessly and without a thought switch back and forth between different buying behaviors.

The academic in me tried to define an experiment that might support this conclusion. Assume that a buyers needs or wants are the same irrespective of whether they buy online or off. Then we could safely assume that if the internet were unavailable that the buyer would fulfill their need/want by shopping at their local mall. Therefore total buying would be the same, just the method would differ - making e-commerce a zero sum game.

For the net generation this is not the case. This past week I found myself holiday shopping in a local mall and left without buying anything. Why? my phone was not working properly and I couldn't get my web browser working. Every store I went into I found I wanted more product information than the store could provide. I wasn't looking for a better deal, just better information and without the web... I just wasn't comfortable shopping. Without the web, I don't just go to the mall, I just don't buy.

I suspect that e-commerce is a term that won't last. The differences in commerce and e-commerce are just in our head now. The real change is in the consumer and their expectations. They are no longer content with what's available when they walk into a store. They want something more and i think we are just begininng to understand that.

Retailing Trends, Here comes David

2007-11-15T09:44:00.000-07:00

Back in June I was attending the Internet Retailing Conference in San Jose. It was an interesting mix of industry movers and shakers and mom and pops - all competeing for a piece of the internet retail pie.

At one point during the conference, the VP of Walmart came up to the stage and explained Walmart's new strategy and the success they were having. The room was buzzing with unhappy whispers - seems no one really wanted to hear about Walmart or the successes they were having. No one wanted the 800000000lb gorilla moving into their market space.

What made me think about this speech 6 months later? This past week I was looking over the sales reports for Shopster.com - each day was a new sales record, and I saw some incredible trends. Brand new store owners were doing some amazing sales. Each week we are signing up hundreds of users, and considering that they weren't even online a few weeks earlier, the rapidly growing sales was very intriguing.

So I started to look a little closer - how do you go from $0 to $10,000/week in 2 weeks? What made these retailers so successful right out of the gate while others struggled? Was it pricing? Actually not at all - the successful retailers DID NOT pursue a low price strategy to gain market share, they were pursuing an "industry expert" market strategy. The most successful new retailers had a sharp industry and product focus. They provided their customer with significant useful content on their website and then provided them with a buying opportunity that matched the content. They showed the consumer that they were exerts in a particular field and once that trust was established, have the consumer buy from them was much easier.

Combine that with a fantastic (disclaimer: As CEO, I'm a fan of Shopster) storefront and back end logistics system and all of a sudden you have a highly competative e-commerce system.

I joke all the time that Shopster.com will take on the Walmart's and Amazon's of the world eventually. Together, Shopster and its growing army of Davids might make that a reality sooner rather than later.

Booms are Bad

2007-11-05T11:51:00.000-07:00

Calgary is undergoing a Boom of epic proportions. As a town largely built on oil wealth, today's sky high price of black gold is creating an enormous surplus of wealth, which is creating the kind of economy few even dream of, let alone find themselves part of.

Labour is very hard to come by. Even places like McDonalds are offering workers $12 - $17/hour to work there. Gas stations and restaurants close by 6 due to lack of staff and housing prices have doubled in the last 18 months.

This is bringing thousands of new workers to Alberta and if you go out on a Friday night you can literally feel the electricity of prosperity crackle all around you.

I think, however, that this is a very bad thing for us.

Why would wealth and full employment be a bad thing?

I've wrestled with my thoughts on this subject for quite while now and the arguements for and against are numerous. The worst offence caused by a boom is that it ingrains within a society that mediocrity - no - that inferior performance is acceptable.

Take housing and construction. The requirements and skill to work on a construction site can be as low as having the ability to recognize a hammer. Construction crews can't find help, let alone good help, but the demand for housing remains very strong - so they hire anyone who shows up. Recently a crew chief for a large housing company advised me not to buy anything built in the last 3 years as the craftsmanship was the worst he had ever seen.

Think about that. The shoddy workmanship we created today will be a legacy we have to live with for the next 20 to 50 years. The problems these houses will have won't go away in my lifetime. And we just keep making more of it.

I have talked to many business owners who find the labour market more than just difficult, they find it aggravating. 20 year olds demanding $80K to 100K without any experience - oh and they want every other Friday off, 5 weeks vacation, 15 - 20 'flex' days and a salary review in 6 months. Oh and by the way they won't start before 9 and must be out of the office by 5, and no, no overtime thank you. And companies are paying it... for now.

The real trajedy here is that these young employees will find themselves OUT of a boom economy sometime in the near future and the world won't have a place for workers who demand a lot and aren't willing to work. They will spend the rest of their life trying to find that comfortable place where they earned lots for barely working... those jobs just won't exist in 5 years when the population and jobs catch up to the boom, then a whole generation will be in for a shock. As a society we will have to carry these under achievers and deal with social consequences of a dissaffected middle aged population.

A boom means more demand than supply, and when anything is unbalanced it creates problems and a void. We are building into the very fabric of our society the problems caused by this imbalance.

Halloween, the one day its ok to break the rules

2007-10-31T11:12:00.000-06:00

Today is Halloween and all around me I see kids of all generations in costumes running up and down the streets. I find Halloween to be an ironic holiday. It just doesn't fit.

As a belief system, i don't believe Paganism is even a minor force in our society, but Halloween must be in the top 5 most recognized annual events - though admittedly that is a self made up statistic and suffers from a serious lack of scientific method.

Apart from spiritual belief systems it seems to me that Halloween is an anathema to how we raise our children.

Consider these 3 common lessons that parents the world over teach their children.

Don't go out at night wearing dark clothing
Don't talk to strangers
Don't take candy from strangers

We teach them these things to keep them safe, yet on Halloween we send out our little ghouls and goblins to knock on strangers doors to ask for candy. Then when we get them home we carefully search their bags for possible poisoned candy and throw much of it out.

Also, isn't North America suffering from chronic widespread obesity? Is this is part not due to the fact that our sugar consumption as a society is far above any time in human history? Yet, we feel its is necessary to both buy and collect more candy?

Personally I love Halloween. You get to dress up and act silly and everyone expects this.

So that got me thinking...maybe Halloween serves another purpose, maybe its a chance for us to challenge our traditional norms and values? Maybe it serves to release us from our self made shackles and at least for a few hours do what we would not otherwise do?

Phishing without Borders

2007-10-16T09:42:00.000-06:00

Everyone gets these. Notice from XYZ Bank that your account has been compromised and that you should confirm your password now to keep your account... something along those lines.

These criminals are hoping to trick the naive or uneducated into giving them access to that bank account.

I recently recieved one and was curious enough to track it back a little.

So the email was cleverly crafted so that all links went back to the REAL bank's homepage, all except the link to verify th security.

that link went to:

http://securelogin-09315516.moneymanagergps.com.bib49.com/Online_Form.htm

Searching for bib49.com I found that after a few days they were offline.

Recently however I was swamped with a host of similar phishing emails, all to short nonsnsical .com domains. Curious still, I decided to find out who was registering these domains and came across 2 companies as per the http://www.who.is/ website:

Domain Discreet
ATTN: bib49.com
P.O. Box 278
Yarmouth, NS
B5A 4B2
CANADA

AND

Registercom
Domain Registrar
575 8th Avenue
New York, NY 10018
USA

Previously I had assumed that a lot of these were coming from overseas, but here they were in my own back yard.

I am curious, why do law enforcement officials allow these kinds of companies to persist? Difficult to identify - I just did it.

Let's do a quick walk through...

Domain registered to a company - who and how are domains registered? How do you get the right to register domains? Well you have to apply to a governing body to get this license, and every country has one. These primary or tier 1 registrars then act as brokers and allow tier 2 and even tier 3 companies to regeister domains.

So - if we can identify the registering company or companies hiding the actual registering company why don't we turn them off? Domain Discreet is making money by hosting and hiding phishing sites. I have receieved at least 5 emails in the past month which lead back to them.

Seems to me, its not the technology to stop phishing sites that we lack, but the political will. These criminals are not hiding, they are standing in plain site and we ignore the problem.

The same issue exists with spammers. Spamming isn't an arbitray act of email graffiti. It is an economic activity. The vast majority of spammers generate an income from affiliate programs of other companies. They get paid for lead generation, and spamming is an effective lead generation tool. We could go after the 'spammer' and try and stop their army of zombie computers or we could go after the compies which pay these people to do it. The tired arguement of "well we didn't know that the affiliate was using spam" just doesn't cut it. If you are going to buy a service then you had better understand how it works. Ignorance of the law and how you are breaking it shouldn't protect you.

IF it was actually done without their tacit approval, then at the very least these large corporations, which pay for the spam, should have to prove that once they have been provided with the evidence that they took steps to stop supporting it. Again, this is not the complex technology issue governments like to portray it as - it is at its heart a lack of political will.

Poker

2007-10-12T13:43:00.000-06:00

One of the best things about running your own company is you get to set the rules, or at least play some of the games.

Today is Friday, time for the weekly Shopster.com poker tournament.

After the initial excitement the field has narrowed to about 10 hardcore players you can always count on showing up and a random showing of other employees depending on the week.

What's interesting is for the most part I have a gotten to know a little about how the regulars play and that actually makes the game less interesting - the random players add the element of the unknown.

Well except for Johnny, who as far as I can tell bets randomly irrespective of his cards. In fact I have bet into and have been eliminated from more tournaments because of Johnny than anyone else... That said, betting into Johnny is tried and true method of doubling up.

Essentially betting against Johny involves playing your cards and hoping that he's sitting on a 2/7 offsuit and not pocket Aces - both of which are equally likely if he goes all in.

Anyhow, I'm off, hopefully I will be taking a few bucks off my employees. Today is payday so we should have a full house.

Trust Marks

2007-10-10T16:41:00.000-06:00

Trust Marks are those little symbols that pop up at the bottom of the page or on the sides of websites "validating" that someone else looked at the page and they deem it trustworthy. So if you trust the company providing the mark you can trust the website.

Trust Marks fall into 3 major categories;

Service providers - you use this company for a specific service - like PayPal
Validation Service - company A valiadates that you do XYZ properly - like Verisign
Advertising Trustmarks - company A says you are good because they say so - like...hmm in order avoid being sued I will leave blank... keep reading

Makes you wonder how trust worthy are the companies that provided the marks? Shopster.com enables 1000's of people to have their own web store, and as a provider we get approached all the time by companies which sell the use of their trustmark - this is how trust mark companies make money, websites PAY to have the mark.

Let's think about this a little - if you PAY for the mark, who is the Trustmark co. working for? The customer or the website? The customer never pays, only the website... There is an inherent conflict of interest here that got my gears turning. What if the trustmark is a nothing more than a symbol, what if the trust mark doesn't validate anything and falls into the "advertising trustmark" I mention above.

Recently several companies have called me wanting to sell me their trustmark for use on Shopster. These trustmarks proclaim to the world that my website is safe from evil doers and that my user will have a great experience. And for this certification, would like anywhere from several 100 dollars to 10's of thousands a month. Many even have great stats on how their mark increase sales and conversions by X% per month.

So of course I am curious - increase my sales? Fantastic? Then my paranoia takes hold? Maybe I won't pass their scrutiny, maybe my website is deficient somehow? Then I think, if that's the case, this scrutiny, this examination will help me make a better website, and I get more sales... WIN - WIN.

Now for sure I'm in.

So I ask the question, what kind of testing do we need to pass, and the answer really pisses me off. They have a 'test' BUT no one really fails. The Trust Mark is just an advertising gimmick. They do a low level almost arbitrary test of the website that EVERYONE passes. The company's only value add is that they spend money on advertising to convince the public that they provide a valuable 'website audit service' and then the call me to sell me that public goodwill they bought through advertising false claims.

Now I'm out.

Its a scam and its fraud. You can't go around advertising that you provide an service which audit's websites and then not actually audit them, can you?

I suspect they get around this legal issue by performing the farcical website analysis, but to me its still a fraud, a con. I wonder how the owners, shareholders and employees at these companies live with themselves.

Anyone know of companies that have been caught doing this? Is there anything that stops them from continuing this kind of false advertising?

Learning from the Customer

2007-10-09T09:56:00.000-06:00

While I was doing my undergraduate degree at the University of Calgary, I had the opportunity to sit on planning committee as a student representative. This particular year the University had just finished the construction of two new buildings and we were reviewing the finishing requirements to fully integrate the new facilities into the rest of campus.

As a student who was already using the building, I pointed out to the VP of Finance - the guy in charge of the new buildings - that no sidewalks had been built to the new building. Students were exiting the building and walking across the lawn to their next class, and this heavy traffic had worn away the grass AND was getting rather muddy.

The VPs response was that it was all part of the plan. Rather than trying to predict student behavior, they allowed students to walk where they wanted to for 2 years and after that they would pave over the most heavily worn area - thus creating 'natural sidewalks.' Sidewalks that reflected natural predelictions of the students. That made a lot of sense.

Just this past week I had this very same story (in the context of a south Florida college) repeated to me at Online Market World - an ecommerce conference in San Francisco. The message was the same. Rather than telling your customers how to behave, you learn from them.

I also recently had the opportunity to learn more and understand better about the ACSI - American Consumer Satisfaction Index. Originating out of the Ross School of Business at the University of Michigan, the ACSI is an organization taht is focused on understanding customer satisfaction and how this effects company performance. Interestingly, a professor involved in the project decided to create an investment portfolio based on high ACSI scores and compared it to the the S&P index. Over test period his portfolio gain 135% and the S&P 34%.

The conclusion was, of course, that without having a deep understanding of each of the businesses, the investor could still generate substantial returns just by knowing if the customer was satisfied with the performance of the business.

Learning from the customer should be part of each and every company's DNA.

That's an easy thing to say and do early in a company's lifecycle. It becomes much more difficult as a company gets older, more entrenched in its own processes, employees, and culture.

I wonder, how are the best companies in world doing and maintaining this over time?

The switch...

2007-09-28T08:31:00.000-06:00

I tried a few other blogging tools and nothing has quite yet managed to get my loyalty. Either too restricting, to clumsy an interface, or one even decided if I was allowed to edit or delete my posts??

So now on to Blogger...