Ged Carroll

Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

  • My Rugged 211 and other books

    I am currently reading My Rugged 211, The Quest, Reamde and New Rules for  The New Economy.

    My Rugged 211 by Minoru Onozato – To be honest with you I am more leafing through this than avidly reading it for reasons that will become apparent. Onozato-san is editor-in-chief of Free&Easy; a Japanese style magazine that has been a driving force since the late 1990s in Japanese style circles. The magazine focuses on European and American work-wear and former fashions. This is one of the reasons why Japan is the home of brands that look to bring authenticity into their clothing from reproduction brands like Buzz Rickson, Iron Heart and Sugarcane to the likes of Neighborhood. It’s this movement that made Sperry Topsiders and Red Wing boots popular again – Hoxton was a johnny-come-lately to these trends.

    In the same way that i-D magazine, Paul Smith, Shawn Stüssy and Vivienne Westwood were held dear by the Japanese fashion industry during the 1980s and early 1990s; Free&Easy shares a similar role in western stylists today. My Rugged 211 is a trip into Onozato-san’s wardrobe: my rugged actually means fashion staples for what Stüssy called Burly Gear. Everything from vintage Ray-Ban glasses and US Air Force service shoes to items from street-wear brands like Tenderloin. A lot of it is the clothing equivalent crate-digging for vinyl record fans. I have been surprised by the amount of Ralph Lauren that he liked.

    Like the fashion items that Onozato-san outlines, My Rugged 211 is easiest ordered from eBay and costs about 60 quid. Why My Rugged 211? Onozato-san isn’t a collector in the conventional sense but a curator. A year only has 365 days in it, so the larger the collection, the less likely it was to be worn. So he alighted on 211 as the cut off number of items. Over time he would refine the collection, when the item count ran over 211, he sold or gave away items that no longer ‘sparked joy’ as Mari Kondo would say.

    The Quest by Daniel Yergin. The Quest is a sequel to his history of the energy sector The Prize which is the de-facto account of the oil and gas industry gracing the bookshelves of pretty much everyone I knew in the industry. The Quest picks up the story from the break up of the Soviet Union onwards. Providing an in-depth view of the events around this helps to explain recent history from before and through 9/11. Its a big dense book and it is compelling but slow-going.

    Energy is linked to world events because it is the glue and the building blocks of our modern world – from the circuit board of my laptop to fueling the air cargo flight that brought my MacBook Pro in from the Foxconn factory in Shenzhen.

    Reamde by Neal Stephenson. Reamde is the latest book by Neal Stephenson – its relatively uncomplicated cyberpunk book more akin of William Gibson’s recent work than Stephenson’s closest work Cryptonomicon. As with most of Stephenson’s other work it pulls in the reader. More on this once I have finished it.

    New Rules for the New Economy by Kevin Kelly. Alongside the Wired reprint pamphlet Encyclopedia of the New Economy by John Browning and Spencer Reiss were probably some of the best books written in the late 1990s about how the interest was going to change things. New Rules for the New Economy is a book that I like to revisit now and again to take stock of things. Part of the reason is that Kelly was smart enough to put in caveats around his discussions of those changes which people tend to forget, like a former American colleague of mine who used to berate anyone whose clients wouldn’t put the budgets into social media as giving into scarcity thinking rather than plenty thinking like it was a demented new age mantra to ward off evil spirits.

    Of course the tone of the book needs to be taken with a pinch of salt; it has a Gilderesque sense of boundless optimism that infused American writing from the end of the cold war until 9/11. It also failed to take account technical issues of network build-out, the limited capacity of wireless spectrum and buffer bloat; or the developing world’s desire to give over legislative powers to the media industry lobbyists and attempt to strangle the ‘net. Regardless of these issues it is a great read, and out of all the books, the one that I am making the most progress on. More on books that I have been reading.

  • CES 2012 trends

    Early January means CES 2012 in the tech calendar as the media gives its full attention to the consumer electronics sector. With some 2,600 exhibitors there was a lot of news coming out of the event. But I was more interested in some of the more macro trends that you could see from the coverage and hear from friends that attended the event. Here’s my three big things:

    Size zero design

    Size zero design – Motorola was responsible for move towards size zero design with its original SLVR and RAZR feature phone designs and Apple has turned it into a must-have design feature across both smartphones and computers. It was only natural that up and coming young Turks like Huawei with their Ascend P1 smartphone should attempt to demonstrate their technical prowess and superiority with the current thinnest phone.
    Huawei-Ascend P1-smartphones
    I also found it interesting that Fast Company wrote an article pointing out the design rabbit hole that size zero design is for device manufacturers and consumers. Pretty good, and only almost two years after this blog (^.^)

    Austerity designs

    Austerity designs – a general observation from a couple of the people I knew had gone to CES 2012 was that manufacturers generally had a lower average ticket price on the items that they were displaying. In the past manufacturers would bring different ranges into different markets, for instance Sony would bring higher end hi-fi products into France and Germany that they wouldn’t bring into the UK. There was less aspirationly priced items than in previous years, probably as manufacturers look to deal with the current economic climate. CES products are not only about drumming sales for the coming year, but also setting the tone for a next few years ahead. This pricing strategy indicates that many of the manufacturers probably aren’t expecting a huge economic bounce back in the West.

    Smart everything

    Smart everything – one of the things that struck me about CES 2012 is the way that technology was been shoehorned into every facet of life  from the car, to the wall thermostat and the wall plug. The only thing is I am not convinced that the electronics will last as long as the useful life of the car or the electro-mechanical Honeywell wall thermostat that would have been used previously. This phenomenon has become its own meme: the internet of (shit) things. Secondly do you really want your home heating or your car dashboard to need rebooting every so often so that it keeps working? I have even heard of the volume disappearing on Sony TVs until they they were updated

  • Product design stalemate?

    Kurt Anderson wrote an essay in Vanity Fair where he argued that product design in everything from fashion to homewares has stood still over the past two decades. It was an interesting that got me thinking about hypothetical reasons why his theory maybe true.
    Why hasn't design changed
    There were a number of possible factors that I came up with:

    Design – product design education has gone global – design professionals now know more about product design than they ever have done before. You now have product designers who can access the same influences from all over the world from the same place. The design computerised tools haven’t changed radically from the early 1990s but they have become more pervasive. Product design and culture are inextricably linked and culture as we previously knew it has been disrupted.

    Culture – The structure of culture has changed. Where the mass-media, publishers like Taschen and (often hard-to-get) style magazines or fanzines were the arbitors of the latest tribe, high and low culture trends, now Google is likely to turn up images and blogs about what whatever you want. This has meant that fashion is no longer linear in its timeline, but massively parallel: from cosplay and rockabilly  to ‘rugged’ style – fashion sensibilities resonates around the world in a self-sustaining loop with more power than previously.

    The pressures on culture have also changed; in the west there is no longer a sense that progress is inevitable. Even up to the 1990s with the Hubble space telescope and the Channel tunnel; big exciting things were being done and aspects of technology were interesting or exciting. You still have this; only its in China, Brazil and India. Environmental concerns and a wider anti-science movement that has gained momentum have squeezed the joy out of progress.

    Societal change – seems on some levels to be going at an ever faster pace, which means that culture values things like authenticity, by looking to simpler times in the near past. Authenticity comes from:

    • Simplicity
    • Heritage
    • Esoterism
    • Quality

    Globalisation – Autenticity can also be seen to be a backlash against the tyranny of choice that globalsiation has provided. Retailers in the west have created giant sheds to handle their massively expanded but similar product lines. This has promoted a homogeneity in many product lines and product design in those product categories. It has also promoted a throwaway culture: H&M clothing for instance – which is at odds with environmental concerns, particularly when you think about what goes into growing cotton. On the plus side it has also created opportunities for mass bespoke manufacture – supporting various subcultures through ecommerce and better logistics.

    Marketing – finally marketing has changed from being intuitative and demand-driven to being much more data and insights driven in nature and this has affected the product development process with every aspect of it undergoing scrutiny. The key challenge is that often people don’t really know that they want, but the space for vision is now lacking.

    You can find more design related content here.

  • Zynga and the IPO

    I had held off writing on the ‘failed’ Zynga’s IPO at the end of last year. I am not going to say that Zynga is a great business; in many respects I don’t think it is, without even looking at its numbers I think that Zynga has three big challenges:

    • Facebook owns their customer base
    • Facebook owns their payment system
    • Facebook owns their customer acquisition strategy

    But was the Zynga IPO really a failure? Before I answer that I wanted to talk about another IPO.

    VA Linux IPO case study

    Back in 2000, I had the experience agencyside running the European launch of a company called VA Linux and took its then CEO Larry Augustin around the media. At the time VA Linux’s primary busness was building specialist workstations and servers were optimised for Linux and had Linux pre-installed. This meant that they thought carefully about component choices for instance the ethernet card (network interface card or NIC) in the computer was from Intel rather than 3Com because Intel did a better job in supporting Linux  in terms of the quality of its drivers.

    My experience of Augustin was of someone who was whip smart, with a dry wit and a genuinely nice guy – which made my job a hell of a lot easier to do. Life was good, Augustin gave good copy on the Judge Jackson finding of fact that had happened the previous November, Linux was building momentum in the enterprise and with web servers because it performed better than Windows, required less skill than the BSD distributions and was more of an entry level product than Sun Microsystems, SGI or IBM Unix hardware on specialised RISC architectures. One of the things that audiences wanted to talk about was VA Linux’s at the time record-breaking IPO.

    VA Linux’s underwriters had priced its IPO at US$30 per share, on the first day of trading the price topped US$320 per share. It was described as a stunning success but that success was double-edged. In economic terms, the bank staff working on the IPO had obviously under-priced it because the price had surged so much – depriving the company of a substantial amount of potential capital that it could have raised. Admittedly it was crazy times and VA Linux wasn’t worth the absurdly high valuation in the end, as businesses like Dell started competing with them head-on. But one has to ask what difference would the extra capital have made? How big does the pop have to be to go beyond rewarding initial investors and become negligent underpricing of a company’s stock?

    The Zynga comparison

    Back to Zynga, which had the opposite challenge, the bank staff working on the IPO had optimally priced the stock so that the company got pretty much the full amount that at least some people were prepared to pay. Rather than a pop, a price decline occurred which investors got upset about as late arrivals to the Zynga party made a financial loss. The underwriters for the IPO earned their money on this occasion. If you want to be the first kid on the block in a new set of the latest Nike Air Jordans, the latest gadget or the season’s must-have handbag, you have two choice get in early enough or pay over the odds. Who is to say if you’ve overpaid, once the heat goes those items are then likely to become cheaper again. And so it goes with Zynga, this shouldn’t be your pension fund; it is part of the new hotness, a fashion stock if you will and was priced and paid for as such.

    Disclaimer: this doesn’t constitute investment advice or a recommendation to buy stocks. I am not a financial services professional nor do I profess to be. If you want investment advice, pay someone who does this for a living for it.

    More information

    THE TRUTH ABOUT ZYNGA: The Only Reason The IPO ‘Flopped’ Is Because Idiot Investors Paid Too Much

  • Workampers

    The Wall Street Journal had an article that introduced me to the idea of workampers. The article was on the seasonal workers that Amazon.com uses in the US to help it with the surge in demand in the run up to Christmas.

    Who were these elves to Amazon’s Santa Claus?

    The article describes them as workampers. Older retired people who live a transient lifestyle by choice in an RV (recreational vehicle) for at least part of the year.
    CIMG1091
    Their motivations were diverse in nature. Some of the workers are similar to their ancestors during the Great Depression, who moved across the country following work were it was available.

    For others the reasons are diverse, from money to help with expenses to camaraderie with similarly nomadic peers or proving to themselves that they could still hack a task. A mix of forced earlier retirement and improvements in health mean that many seniors still have decades of potential work still in them that they want to take advantage of.

    A mix of ageism and globalisation have meant that there is a growing body of workampers. Future workampers might be in a worse financial state due to less generous pensions and health insurance, higher personal debt and automation. The move to a lower carbon economy will also impact the ability of a workampers to live out of an RV and transverse large distances at a reasonable cost.

    Workamper futures

    With an aging population and the decimation of working class communities due to the opioid epidemic we are likely to see more demographics like workampers as companies adapt to tap into an older work pool. With Amazon in particular, one has to wonder if more of their warehouse and logistics work can be automated and how it will be affected by a low carbon future.

    More explanations of of jargon terms can be found here.

    More information

    Seasonal Amazon ‘Workampers’ Flock to Remote Towns for Temporary Gigs – WSJ.com (paywall)