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Ryan’s Journal: Losing The Forest For The Trees

Thursday, May 25th, 2017

https://www.flickr.com/photos/arturtula/15564944217/I was having a conversation this week about Silicon Valley companies. Some of them are doing amazing things.

When I was job hunting I would look at several and imagine myself there changing the world.

There were several though that also had great funding, great people, but I could not understand for the life of me what they did. They had a great list of customers, but I could not understand the value they brought.

There are two possible solutions to that conundrum.

One, I am just not savvy enough to understand (a very real possibility).

Two, they were full of hype and energy, but not substance. I can imagine that both statements are true when you look at the vast array of companies in the valley.

With that said, have we lost the forest for the trees? Have some companies been so hyped that people continue to pour money into them hoping for a huge payday that may never come to fruition?

Uber is in the news for a variety of reasons, some good, some bad. I recently read an article that Uber and Google are working on flying cars. While the concept of flying cars seems cool… I guess, I am more concerned with the participating companies.

Google provides value, products and that elusive quality, profit. They are well established, have multiple streams of income and could fail at this endeavor and live another day. It’s exciting to see them using their money for grand ideas, but it won’t decimate them either.

Uber provides value and services, but zero profit.

In fact, if Uber was run like a traditional company or household, they would have never even gone to market.

They operate more like a country that can print its own money. They take on debt, lose billions every year, yet keep on trucking.

Venture capital and perhaps greed are what allow this to occur. If they fail at the flying car concept what does it mean for the rest of the business?

I know there are very smart folks who are there and who are invested. I often wonder what their long game is. Do they believe they will become profitable at some point if they hang on long enough?

Another thing to consider is the economy. We have easy money right now with very low rates of interest.

For an investor it makes more sense to go with a high risk investment versus storing it in savings, because they essentially lose money due to inflation.

When the markets tighten does that mean Uber cannot seek out another round of funding?

My point is this.

Have we lost sight of the incremental steps it takes for us to achieve greatness by thinking we can accelerate the whole process with enough capital or am I the Luddite here?

I am a believer that debt can be good when there is a viable business model. I am less impressed though when a company has never turned a profit and had no projections to do so at any point soon, but can be valued so highly. What makes Uber so unique?

I say we need to keep dreaming the big dreams, but also look at the foundation.

Is it built on sand or rock?

Image credit: Artur (RUS) Potosi

Ducks In A Row: What Reaction Will You Choose?

Tuesday, September 15th, 2009

In a comment on my September 11 post Kate Lavender said, “I have always believed that quote “we are not made, or unmade, by the things that happen to us but by our reactions to them” – I had lost sight of that of late and your story brings the importance of personal choices being who we are back full force.”

I’m grateful to Kate; it’s good to know my point was made with at least one person.

This is as true for companies as it is for individuals and especially true in the current economic environment.

We can use this economic debacle to change the way we live, do business and innovate; we can stop up-sizing and down-sizing and learn to right-size; we can learn that keeping all our balls in the air isn’t the same as having all the balls existent.

We can start by recognizing that the current mess is substantially of our own making. It started years ago as we turned our personal responsibility over to our leaders, whether political, religious or business. (See Jim Stroup’s excellent post on this subject.)

Along with this abdication of responsibility we chose decades ago to forget/ignore another bit of ancient wisdom, “if it sounds too good to be true it probably is.”

How else to explain the number of Ponzi schemes unraveling, the most recent is 30 years old, not because the good guys caught the bad guys, but as fallout from the recession.

Returning to Kate’s quote, will our reactions to what is going on make or unmake us?

What do you think?

Your comments—priceless

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Image credit: ZedBee|Zoë Power on flickr

Are Women Catching Up To The Wrong Men?

Thursday, June 25th, 2009

There’s a lot of talk that women wouldn’t have taken the same risks if they had been running Wall Street. According to Betty Spence, president of the National Association for Female Executives, that’s because “women don’t tend to bet the farm because their children live there.”

Don’t be too sure.

Perhaps women just haven’t been in a position to bet it, but they’re getting there.

“As early as this week, though, an American start-up company, AltaRock Energy, will begin using nearly the same method [that caused earthquakes in Basel, Switzerland]  to drill deep into ground laced with fault lines in an area two hours’ drive north of San Francisco.”

Susan Petty, a veteran geothermal researcher, founded Alta Rock to do geo-thermal research.

“In a report on seismic impact that AltaRock was required to file, the company failed to mention that the Basel program was shut down because of the earthquake it caused. AltaRock claimed it was uncertain that the project had caused the quake, even though Swiss government seismologists and officials on the Basel project agreed that it did.”

Am I the only one who is reminded of the expert warnings that were disregarded from people such as Warren Buffet regarding derivatives 5 years before they blew up or Harry Markopolos warnings a decade before the lid blew off Bernie Madoff’s Ponzi scheme?

Maybe Bella Abzug’s comment that “our struggle today…is for a woman schlemiel to get as quickly promoted as a male schlemiel” is finally coming true.

Image credit: doug88888 on flickr

Saturday Odd Bits Roundup: Money: Earn, Invest, Steal

Saturday, February 7th, 2009

Just three short goodies today.

Profits guaranteed. Isn’t it nice to know that some folks will make money as a result of the current disaster—and it isn’t even off stock options. All you need is a law degree and a spot at the right firm. Of course, you know who’s going to foot the bill, right?

Two other bits from Business Week; one could be considered investment intel and the other answers the question of why Ponzi schemes are popping up like mushrooms after a heavy rain.

Let Them Eat Big Macs

The swelling ranks of jobless can’t afford to dine out like they used to. While that’s bruising full-service restaurants, austerity is usually a plus for McDonald’s. The chain, which has been playing up its cheap eats, said on Jan. 26 that same-store sales jumped 7.2% worldwide in the fourth quarter, while operating income rose 11%. To pump up its numbers further in 2009, McDonald’s said it will spend $2.1 billion on construction, including 1,000 new outlets.

Ponzi, Ponzi Everywhere

Bernard Madoff may have pulled off the mother of all Ponzi schemes, but the downturn seems to be exposing lots of smaller-fry variants. On Jan. 26, for example, Nicholas Cosmo, suspected in a $380 million scam, surrendered to federal authorities on Long Island. The next day, FBI agents arrested Arthur Nadel, a Florida hedge fund adviser accused of bilking clients of tens of millions of dollars. Other cases in Florida, Georgia, Idaho, and Pennsylvania have recently come to light. Why now? Because in a downturn, investors often try to get their money out—and there’s no new cash coming in to pay them.

Image credit: flickr

Quotable Quotes: Bernard L. Madoff

Sunday, December 21st, 2008

The sound you heard a few weeks ago was the largest Ponzi scheme in history crashing down on the heads of investors around the world.

As with the banks and auto companies there were plenty of warning signs, but people ignored or rationalized them—trust does funny things to usually savvy people.

But who is Bernard L. Madoff, other than being a crook? What’s he like? Why was he so trusted?

I found this video, which gave me a much better understanding of why people gave him their money—he seems far more of a cuddly, smart, financial grandpa than the crook who’s been in the headlines.

Your comments—priceless

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