Every once in a while you just need to re-set yourself.  Some things are stale, the problem at work is not being addressed, the market for your services seems saturated, the product dev cycle is slow, etc.

For me that means time to do two things; reading and thinking.

READING:

I do not mean reading the onslaught of e-mails or industry press…I mean read some leisure books and  read some blogs of favorite writers.  Get re-invigorated about something or get absorbed by a good piece of fiction.  Take a trip; flights and sunrises in different settings always help me think BIG.

Re-read your own blog posts, read through your old notebooks (digital or other).  See what successes you have had.  See what issues you gave up on.  Re-visit that which excited you a year ago, is there something still there?  Or were you wise to move on?  Is now the time?

THINKING:

We all think every day.  What to have for breakfast?  Answering mundane e-mail questions.  How can I close that sale?

What I mean is think BIG.  What issues are out there waiting to be solved?  Can I be a part of any of those solutions?  Global issues like healthcare delivery, national issues such as tax reform, local issues such as deciding to become involved with the kid’s school committees.  Can I have a positive impact on the issue and if so, do I have the time to make it happen?

Take time to think and visualize what, where and why your life will be in 10 years.  Am I on track to move to that mountain town or beach community once the kids hit college?  What can I do to be a better xxxxx? (whatever your XXX may be)

Or maybe just write and post a blog about the steps I like to take to re-invigorate myself.  Like I seem to have just done.  Time to get back after it.

Below is a good list sent by a friend that got me thinking about what is next; for the world, for business, for me?  Start with a grandiose goal and find a way to take a bite out of that elephant.

In reading this list there are a number of avenues that are appealing but not at all applicable to me and my skill set, some that are interesting but not something I think I can positively effect in my lifetime, and some that I say….hmmm, I wonder how I could implement the following xxxxxxx.  Have a look and think big.

32 Markets Ready for Disruption

1. Education: There is a ton of value created by educating the masses in emerging and under-developed markets and those able to capture this value will do very well.
2. Construction: 3D printing is on the cusp of becoming a mainstream phenomenon. And yet, contractors are still driving their big trucks over to Home Depot.
3. Insurance: Micro and Peer insurance (everything can be insured, and people can insure other people)
4. Water rights and distribution: the clean water we are polluting for natural gas wells will soon be worth more than any form of gas.
5. Loans: who gives them and how people get them (micro and peer financing)
6. Prime Time TV lineup: this will be all on demand and will change TV advertising forever and in reality, already has.
7. The legal profession: Simple contracts could be generated and processed by machine at far, far lower cost than a lawyer’s hourly rate. Some legal documents could be modeled as graphs of conditions and outcomes, which could then be compared with tree-diff algorithms and annotated with other data.
8. Intellectual Property: Consider the black box of patent applications, as well as the aftermarket for IP. “Patent Trolls” is the latest buzz word; individuals or firms pick up bulk lots of IP on the secondary market and file suit against major companies for infringement, hoping for a big win. However, what if there were a more transparent and readily accessible market for IP?
9. Financial Services & Wall Street: Read what Chris Dixon says about disrupting Wall Street.
10. Data Informatics: Corporations and professional services firms can pay upwards of six-figures for limited access to certain specialized data stores. While some data pools are proprietary, pulling information from truly unique sources that cannot be duplicated is very valuable.
11. Politics: Campaign spending alone stretches into the billions when looking at the top 2-3 levels of government. Consider aggregate spending on campaigns at all levels, in addition to significant sums spent on lobbying and other related activities. Disruption would certainly be difficult in this space, but there are examples of companies already attempting, and succeeding in some cases, to disrupt particular verticals.
12. Real Estate: The fact that a 5% commission is extracted by the brokers for matching buyers and sellers is today’s information age is outrageous. The buy side of the market is very opaque with little visibility into who is interested in buying what and where.
13. Moving industry: A $16 billion/year industry formed mostly from small players. 50 companies have 45% of the market. The rest are small players, companies with under 10 employees. Frogbox has been disrupting this space recently.
14. Packaging: In USA alone the CPG industry is $2 Trillion! Anywhere between 10% to 40% of that money is spent for the packaging of the product. That is the cardboard, polythene, plastic, paper etc. meant for covering the actual product. Environmentally focused products could win significant market share in the space if done right.
15. Recycling: There’s still so much we can do to recycle effectively. There’s a huge opportunity here, but I wonder if we’ll capitalize on it only after we reach a higher level of scarcity.
16. Landfill Resource Reclamation: As we continue to come to terms with resource scarcity, we’ll dig deeper into our own trash heaps to reclaim re-usable materials. In Indonesia, some people are literally living off the landfill.
17. Battery Technology: If we can make tiny batteries that never have to be recharged and that don’t cause a nuclear meltdown we will advance tremendously.
18. Fast Food: The fast food industry is known to deliver more than a quick ready to go meal. Fast food also delivers some of the highest calorie foods eaten during a typical day. Fast healthy food will change this industry. These guys are doing it.
19. Software Operating Systems: The cloud is gaining ground quickly. OS’s that don’t require booting, installing, or updating by the user are surely preferred over those that do. Of course, you already will find Google & Microsoft here.
20. Rare Earth Metals: This enormous industry has mostly been pushed into China were extraction labor costs are low enough to be economical. However, with >50lbs of rare earth metals under the hood of your typical Prius or EV – substitutes are needed as China cuts supply (recently announced that <50% of China-mined rare earth metals were available for export).
21. Payments: While PayPal never quite lived up to its vision of displacing the major processors (Amex, Visa, MasterCard), this area is beginning to heat up again. 2%+ cost for each transaction is the reason $24T of B2B transactions are still completed using paper check. Bitcoin is poised to disrupt payments in a very big way too. This is a crowded space with lots of capital already working to disrupt it.
22. Low Cost Distributed Energy and Sanitation solutions: Developing countries have a large need for dirt cheap, compact local energy and sanitation solutions, but the same applies to many of the developed countries too. Who wouldn’t like the prospect of generating their own energy with small solar panel or other green energy solution? This is especially true when the electric grid becomes unreliable or cost of energy hikes up rapidly.
23. Diamond retailing: No major disruptions as of yet. This is a $72 billion a year market. Bluenile.com, the biggest online player, does about $350 million a year in revenues.
24. The gambling industry: Currently unregulated in half the world (Thailand, India, etc.) and most bettors go through bookmakers with high fixed odds. With online betting exchanges (Betfair, Smarkets) you get the best prices because of efficient markets and high volume/liquidity.
25. Sewing garment factories: as clothing companies get into “fast fashion”, there needs to be a better way to find, vet and analyze factory capacity and order.
26. Medical Devices: Most big companies have commoditized existing equipment (esp. Surgical Devices). Much of the new features being added are bells and whistles to justify a price hike or reduce liability. There are a lot of opportunities in their improvement and total replacement.
27. Healthcare: Simply put, healthcare is not working and it will get worse as the population ages. Efficiencies need to be created or this will bankrupt governments.
28. Weddings: A $74+ Billion dollar industry that’s fragmented and highly inefficient, probably the last industry left where consumers still shop from a trade show, magazine or Google search.
29. Business productivity software: Right now, 100s of millions of people are using Microsoft Office on PCs, while their kids are using smartphones, tablets and web applications. The future belongs to collaboration and productivity apps designed for this new reality.
30. Taxation: The tax system is another system designed for and by accountants. If the congress can get a more simple tax system designed and implemented, the entire accounting system as we know it today will be turned on its head.
31. Automobile sales and marketing: Particularly at the dealer levels – if you’ve ever purchased a car you’ll realize this industry is completely broken. Car dealers are packed full of sales people who don’t understand the difference between sales and marketing, particularly online advertising and when states are trying to ban the direct to consumer model, you know there is disruption coming.
32. Mattresses: They cost too much for what they are. Someone needs to disrupt this market. I’m getting a little tired of paying 1000’s for some foam and springs. 😉

Congress snubbing their collective nose at the SEC when asked about insider trading by Congress and Congressional staff members.

There are a few potential titles to this post…….”Pivoting For Success”?, “Dilbert’s Creator With Inside Commentary on Silicon Valley”?

But in this blog post by Scott Adams, the creator of the Dilbert cartoon as well as a co-founder of Calendar Tree (www.calendartree.com) has an interesting take on “pivoting” for technology start-ups.  Prior to joining the team at oneZero (www.oneZero.com), I had launched two non-technology start-ups.  What is different from my experience is the concept that when pivoting within the technology field you keep the same core team, company name and structure and just change the product.  But that is what is great about technology; the ease of changing the product.  The servers that hosted one product or source code can still serve the same purpose for new code and/or products.  The programmers who were coding to build a specific outcome can change their direction and product goal.

In my past experience in financial services, a failed product usually meant closing down the business entity and the associated dissolution of the management team.  Any new concept had to be restarted from the ground up with a new entity, management team and employees.  I am not saying that there is not management and employee turnover within a pivoting technology firm, just that there is less need for personnel with different skill sets and that they change of product can be made quickly and much easier than with a traditional manufactured product or even a financial service.

http://dilbert.com/blog/entry/the_pivot/

** Thanks to Chris Dixon’s Twitter feed (@cdixon) for the find**

Pretty simple….Unions are dinosaurs.  They protect seniority rather than advocate for meritocracy.  And the world is now much more merit-based than ever before.  See my previous post about unions failing their members here.  In fact many regulatory agencies (National Futures Association  www.nfa.futures.org) are killing their member base too, but that is a story for another time.

As for this round of unions being dinosaurs, its simple.  Look at two stories from the NYT in the last week.  The first article discusses the plans for a national cabbie union.  At present each city and even each dispatcher have de-facto union structures to their workplace.  Seniority rules, close association with regulators benefit company owners, and oligopolies are the norm.  This is the model that Uber is murdering.  Yet the workers in this industry seem to think that a national,  more formal version of their current paradigm will save their jobs.

The second story is an analysis of Uber’s recent valuation and the opportunities Uber can unlock with their distributed “call and retrieve” paradigm.  Flexible work hours, outsourced labor, very low fixed costs are hallmarks of Uber’s business model.  There is no room for unions here as the workforce have the flexibility they need to work for themselves.

Maybe I will finally short the technology sector when tech employees start looking to unionize.

http://www.businessinsider.com/bill-mcraven-commencement-speech-at-ut-2014-5

Read the text or watch the video.  Either way, his message is clear.  I will summarize his points below:

If you want to change the world, start off by making your bed.
If you make your bed every morning you will have accomplished the first task of the day. It will give you a small sense of pride and it will encourage you to do another task and another and another.   By the end of the day, that one task completed will have turned into many tasks completed. Making your bed will also reinforce the fact that little things in life matter.  If you can’t do the little things right, you will never do the big things right.  And, if by chance you have a miserable day, you will come home to a bed that is made—that you made—and a made bed gives you encouragement that tomorrow will be better.

If you want to change the world, find someone to help you paddle.
You can’t change the world alone—you will need some help— and to truly get from your starting point to your destination takes friends, colleagues, the good will of strangers and a strong coxswain to guide them.

If you want to change the world, measure a person by the size of their heart, not the size of their flippers.
SEAL training was a great equalizer. Nothing mattered but your will to succeed. Not your color, not your ethnic background, not your education and not your social status.

If you want to change the world get over being a sugar cookie and keep moving forward.

Sometimes no matter how well you prepare or how well you perform you still end up as a sugar cookie.  You will get chewed up and swallowed.    It’s just the way life is sometimes.  Get up, move on.

But if you want to change the world, don’t be afraid of the circuses.
A circus to a SEAL trainee means that for a single period of time you didn’t measure up. A circus meant more fatigue—and more fatigue meant that the following day would be more difficult—and more circuses were likely.  This ties into Marcus Luttrell’s (“Lone Survivor”) mental attitude of “just get to lunch”.  Do not dwell on the last challenge, and do not think forward to the sum of all the challenges.  Just do what you have to do to get to lunch that day.  And then do what you have to do to get to dinner that day…

But an interesting thing happened to those who were constantly on the circus list. Overtime those students—who did two hours of extra calisthenics—got stronger and stronger.  The pain of the circuses built inner strength-built physical resiliency.  Life is filled with circuses.  You will fail. You will likely fail often. It will be painful. It will be discouraging. At times it will test you to your very core.

If you want to change the world sometimes you have to slide down the obstacle head first.

Instead of swinging his body underneath the rope and inching his way down as all the others had done, the trainee  bravely mounted the TOP of the rope and thrust himself forward.  It was a dangerous move—seemingly foolish, and fraught with risk. Failure could mean injury and being dropped from the training.  Without hesitation—the student slid down the rope—perilously fast, instead of several minutes, it only took him half that time and by the end of the course he had broken the record.

If you want to change the world, don’t back down from the sharks.
There are a lot of sharks in the world. If you hope to complete the swim you will have to deal with them.

If you want to change the world, you must be your very best in the darkest moment.
Every SEAL knows that under the keel, at the darkest moment of the mission—is the time when you must be calm, composed—when all your tactical skills, your physical power and all your inner strength must be brought to bear.  In business it is the presentation for which your projector fails, or the negotiation when you are in a position of weakness.  The best of the best recognize the situation for what it is, accept that, and continue on.

If you want to change the world, start singing when you’re up to your neck in mud.
The chattering teeth and shivering moans of the trainees were so loud it was hard to hear anything and then, one voice began to echo through the night—one voice raised in song.  We knew that if one man could rise above the misery then others could as well.
If I have learned anything in my time traveling the world, it is the power of hope. The power of one person—Washington, Lincoln, King, Mandela and even a young girl from Pakistan—Malala—one person can change the world by giving people hope.

If you want to change the world don’t ever, ever ring the bell.

Finally, in SEAL training there is a bell. A brass bell that hangs in the center of the compound for all the students to see.  All you have to do to quit—is ring the bell. Ring the bell and you no longer have to wake up at 5 o’clock. Ring the bell and you no longer have to do the freezing cold swims.  Ring the bell and you no longer have to do the runs, the obstacle course, the PT—and you no longer have to endure the hardships of training.

In summary……

Start each day with a task completed.

Find someone to help you through life.

Respect everyone.

Know that life is not fair and that you will fail often, but if take you take some risks, step up when the times are toughest, face down the bullies, lift up the downtrodden and never, ever give up—if you do these things, then next generation and the generations that follow will live in a world far better than the one we have today and—what started here will indeed have changed the world—for the better.

Help stop the FCC from caving in to the lobbying efforts of the ISP companies and keep the Net Neutral

Fred Wilson says it better than I can.  Read http://www.avc.com today and click on the banner to urge Congress and the FCC towards correct action!

www.avc.com

Good post by David Jaxon (not surprising) about Eric Schonfield’s, “Don’t Be fooled By Vanity Metrics”:

Vanity metrics are things like registered users, downloads, and raw pageviews. They are easily manipulated, and do not necessarily correlate to the numbers that really matter: active users, engagement, the cost of getting new customers, and ultimately revenues and profits. The latter are more actionable metrics. As First Round Capital’s Josh Kopelman recently advised on Founder Office Hours, “The real data is retention and repeat usage.” Startups that focus on the real metrics can make their products better, attract more customers, and make them happier.

It is important for startups to properly instrument the data they track so that they can get a handle on the true health of their business. If they track only the vanity metrics, they can get a false sense of success. Just because a startup can produce a chart that is up and to the right does not mean it has a great business. A mobile app could have millions of downloads but only a few hundred thousand active users, or a freemium website might see exploding traffic growth but barely any conversions to paying users.

I see this in the Margin trading Products (“MTP”) industry every day.  Firms, especially smaller firms, tend to trumpet their Monthly Volume (meaning the total notional USD of client trading).  It has been this way for a while.  There are a number of problems with this metric.  The first problem is the lack of validation of the number.  They are completely self reported numbers and therefore most observers would read these numbers and discount them significantly.  Also, Monthly Volume is highly correlated to market volatility which no broker has control over.  So the bigger problem is that Monthly Volume is not a great way to track the two valuable metrics of a brokerage; their growth and their profitability.

A single metric that encompasses the performance of the major drivers of growth would actually be “active client assets on deposit“.    That metric, which I do not see publicly noted for any firms, shows the results of the sales and marketing teams efforts.  Note that it is active client accounts as opposed to client accounts.  There are too many client accounts with small deposits that are no longer trading and therefore no longer generating any revenues for the firm.  So lets call an active client account an account that executes at least one trade per week.  Maybe if/when interest rates climb again and those aggregate client deposits are generating interest revenues we should revisit the definition of active client accounts.

Profitability is the next valuable metric.  And this is not a standalone, net income number.  Rather it is a measure of revenues as a percentage of the total assets in the active client accounts.  This percentage shows the effectiveness of the broker in generating revenues.  This metric would help an outsider value a company.  For a large broker with $20 mio in Net Income, but a Profitability Percentage of 5% may not be as valuable as a smaller broker with Net Income of $5 mio but a Profitability Percentage of 10%.

I will post a follow up article on this Profitability Percentage metric in the near future.